gutenberg. (this file was produced from images generously made available by the internet archive.) [transcriber's note: every effort has been made to replicate this text as faithfully as possible, including obsolete and variant spellings and other inconsistencies. text that has been changed to correct an obvious error is noted at the end of this ebook.] the proper limits of the government's interference with the affairs of the east-india company, attempted to be assigned. with some few reflections extorted by, and on, the distracted state of the times. by john, earl of stair. ----and beshrew my soul, but i do love the favour and the form of this most fair occasion; by the which we will untread the steps of damned flight, and, like a 'bated and retiring flood, leaving our rankness and irregular course, stoop low within these bounds we have o'erlook'd, and calmly run on in obedience. london: printed for j. stockdale, opposite burlington-house, piccadilly. mdcc lxxxiv. entered at stationers' hall. the proper limits of the government's interference with the affairs of the east-india company, &c. each day's experience proves the fallibility of conjecture, even when established on apparently the surest foundations. having stated, indeed materially and substantially proved, that the annual peace expenditure of the state, if decently, not profusely, nor even amply provided for, could not be performed for less than sixteen millions five hundred thousand pounds; and having asserted, with truth, that the annual receipts have scarcely, on the most productive years of the public revenue, exceeded twelve millions; and the necessary corollary, arising out of these propositions, being an annual surplus or sinking fund to the amount (if at all proportional) of at least fifteen hundred thousand pounds, as a provision for great civil emergencies or future wars, without which no system of finance can be either respectable or assuredly permanent; and it following of necessary consequence from these premises, that the proper peace revenue, from something more than twelve millions, which is its present amount, ought to be raised to eighteen millions yearly:--these matters, i say, being as i have represented them, i firmly believed the public affairs of this country were tolerably embarrassed, and weakly imagined ministers might find full employment in extricating them, without courting, and eagerly, through right and through wrong, aspiring and grasping at the management of affairs fully in as great a state of confusion as our own. but i find i greatly under-rated the cravings of the appetite of our late rulers, who seem to have had stomach for all difficulties, however remote from the natural and needful course of their public functions, and however averse the parties interested were to trust their concerns to their direction. in consequence of this canine hunger and thirst after regulation, a bill was brought in and passed by a very great majority of the house of commons, to virtually consolidate the embarrassed concerns of the east-india company, in direct opposition to the desires of the proprietors, with the no less embarrassed affairs of this unhappy country. this bill has been thrown out by a wise and virtuous majority in the house of peers; but as the majority there was but small, and threats are thrown out (in order to make it still smaller) against peers, for exercising their indispensable distinctive prerogative duty of giving honest counsel to their king; and as the same majority, leagued to promote their own advancement and the ruin of the state, still exists and exults in the house of commons; i doubt not but the same strange destructive measure will be resumed. it therefore becomes the business of every well-wisher to the prosperity of britain, to oppose and to refute the specious nothings offered to blind and to conceal from the public the designs of a dark and fatal tendency attached to it; and i think it my duty, moreover, and a justice due to the creditors of the public in particular, at least, to such as shall adhere to me, to protest and enter my dissent in their name against any increase of the public debt, by the addition and incorporation of the debts of the east-india company with those of the public, in any manner, whether openly, or by implication and management. i now proceed to consider the reasons offered in vindication of the bill by which so daring a violation of every thing the laws hold most sacred was attempted. the first plea that was insisted on, was, that the company was bankrupt; but this argument defeats itself. if they are bankrupt, the law has provided a due course of proceeding: ministers, or the deputies of ministers, are not the proper assignees to the bankrupt's estate: the trade is, moreover, by the civil death of the company, open to every adventurer. but this pretext of bankruptcy is but a flimsy disguise easily seen through: ministers are not so eager to obtain the administration of the affairs of a bankrupt: the virtuous majority in the house of commons, increased without any visible cause, or known success, or advantage of any kind, real or pretended, obtained to the public from the cares of the late administration;--increased, i say, from a small doubtful few in the disapprobation of the peace, to a steady, triumphant majority of one hundred and fourteen in the business of the east-india company; gives no note or appearance of a present bankruptcy in the company's affairs; but to those that do not know the incorruptible integrity and disinterestedness of the british legislative bodies, gives an ugly hint and surmise of what is likely to happen in future. of bankruptcy i need say no more; it confutes itself. the next plea is humanity, and a wish to restore in india a better and a juster system of government, less rapacious, and less oppressive to the natives. this is certainly a fair and generous object; but how do the means correspond with the end, or, what solid proof have we that excesses do exist, or, at least, have been carried to the singular and unnatural extent each parliamentary declaimer is pleased to assign to them? having forced the company to bear a share in all the foolish wars britain involved herself in, money must be found. the smooth swindling methods of funding, without giving the creditors adequate securities for either principal or interest, are not practicable in cina. self-preservation enforced the necessity of violence, more obnoxious in the beginning, but, perhaps, in the end, less ruinous than the soft, sly deceits of europe. those violent measures, palliated by the necessity of self-preservation, excepted, what remains but an _ex parte_ charge, in reports to the house of commons, curious and voluminous indeed, but without confrontation of the accused, or any other necessary preliminary to condemnation, sought by private equity, or required by public justice? we have only an inform mass of matter, where disappointment, vanity, and malevolence, are too often prompted by management and design to accuse, and every accusation is held forth as compleat evidence of guilt. indeed, some accounts scattered through the vast abyss of eastern manners and customs, make by much the most useful and entertaining part of this exceedingly tedious farrago; though in this part it falls far short in beauty of style and composition, and probably does not much exceed in veracity, the arabian night's entertainments.--but grant that wrongs and injustice predominate, who are to restore the golden age in india? we know the late ministry, their habitudes, and connections; from brooks's, then, it is fair to suppose the daring argonauts were to have sailed in search of the golden fleece: from almack's our bold pizarros must have taken their course to civilize our new-acquired ministerial peru. determined minds used to set fame and fortune on the dies uncertain cast: soft souls, overflowing with christian forbearance, and the milk of human kindness suckt in at the gaming-table, from such apostles, alas! i rather should suspect, with atè by their side, come hot from hell, shall in these confines, with a monarch's voice, cry havoc! and let slip the dogs of war. yet i readily agree that it may be proper to send out a well-chosen commission of visitation and inspection, with adequate and efficient powers from parliament; though i am greatly deceived, if they do not find that matters are much exaggerated. the reports to the house of commons from committees are generally very false mediums to view the object they treat of through: they are moved for common by persons interested in the event, sedulously attended by them, and the materials are too often modelled and made up according to their views, and to serve their purposes. i have therefore ever greatly regretted the abolition of the board of trade, the fair, candid judges in these matters, or who might be made so. the argument from the abuse to the use, is not a fair consequence; and i sincerely and earnestly recommend the re-establishment of that board. from the revenues of the duchy court of lancaster now vacant, and a small gleaning from the enormous overgrown sine-cures in the exchequer, this may be done without expence, and with great emolument to the crown and to the public. it is, besides, the height of absurdity, to think the indians are unhappy because they do not live under the same constitution as the inhabitants of this island. the government in that country, for a very long period of time, has been so unsettled, that no form of it that has any stability, or affords any degree of protection to the subjects that live under it, can be pronounced to be a bad one: in every other case, the weaker are almost sure to be exterminated by those that are stronger. i should esteem it, in such uncertainty of doing any good of any kind, extremely improper for the public to make a common cause with the east-india company, further than i have already stated, and likewise by assisting them with some necessary pecuniary aid in their present distress. the consequences of the public taking upon themselves the direction of the company's trade, or even of their territorial acquisitions, i apprehend would be most ruinous. no nation has ever attempted any thing of this kind without being greatly losers by it, even where government was carried on principles infinitely more favourable to such an enterprise than the free constitution of this country admits of. france has often been compelled, in order to preserve the trade to india and their companies from sinking, to interfere, and i believe is still concerned in the national trade to india; but this is on mere compulsion and necessity, and is, and has ever been, a very losing business to the crown of france. if this is so, then how much worse must it be here, where the advantages taken of the public in every public business are enormous: and indeed the uncertainty of the time of payment, and the difficulty of passing the account, do warrant a demand of a great latitude at any time; but at present, when the ordnance debentures are at 30 per cent. discount, and the navy bills, which carry an interest of 4 per cent. are at 17 per cent. discount, it is almost impossible to say on what terms a contract with government would be advantageous. in more settled times, i believe, 25 per cent. on estimate, and near 50 per cent. on arbitrary statements, did not vary much from the difference, to the disadvantage of the public, betwixt public and private contracts for the same performances. in this view, and it is a just one, nothing but absolute necessity, and the sure consequence of losing the trade altogether, could justify the interference of government beyond the limits already assigned, if even these could justify it. but this necessity is happily entirely out of the question at present: the company anxiously desire to go on with their trade: a forbearance of duties due, is all they ask, to the extent of, i think, a million. if it was three times as much, government would be mad, if they hesitated in the alternative betwixt indulging them in their demand, and taking their concerns into their own hands. the affairs of the company have been embarrassed before; they have borrowed large sums from government, which they have honestly repaid. their surplus in peaceable times is very large; and if tranquility is any way durable in india, and the administration of the company's affairs is continued in the hands of that powerful genius of resource, mr. hastings, i make no doubt they will extricate themselves with honour, and do justice to every creditor they have. i am at least sure, that this is giving the only chance of making them beneficial to this country; and it is what the company is highly entitled to. i have often wondered upon what principle of policy one of our two great commercial companies should be the _enfant galé_, the spoilt child of every administration whilst the other was treated like the step-son of the state, with every mark of jealousy and unkindness. the merits of the east-india company towards the nation are great and notorious. whilst every other country has been taxing their subjects, in order to support their east-india trade, the english east-india company has been the support, to a good extent directly, and in a very great and eminent degree indirectly, of the british finances; and in the late war the company maintained alone, in their dominions and enterprises, the superiority which usually attended the british arms in every quarter of the globe; and at last, in the acquisitions made by the company's arms, the material indispensable sacrifices to procure a necessary peace were found. indeed, their expences in the reduction of pondicherry, and the value of it, and of the other restitutions made to the french by the definitive treaty of peace, seem to me a very onerous and most just debt on britain, and why they are not stated as such by the company, i cannot see any shadow of a reason. it was under the direction of their own proprietary, uncontrouled by parliament, that the company rose to an unexampled height of wealth and prosperity: since the interference of parliament, their affairs have declined. possibly now the patronage is so valuable and extensive, their constitution may be defective, by the too immediate dependence of the directors on the proprietors, who, by their brigues and cabals, overawe, and often make abortive the best intentions of the directors. but matters of charter and property are of so difficult and delicate a nature, that it is hard to say, whether any attempt to remedy this might not do more harm than good. it is related, that monsieur colbert, lewis the fourteenth's very able minister of commerce and finance, and to whose memory france stands much indebted, called an assembly of the most eminent men in the french king's dominions in the commercial line, to whom he proposed the consideration, if any, and what advantages might accrue to commerce by the interference of government. the unanimous answer of the assembly was, _laisser le faire_, let it alone. a new doctrine has been likewise attempted to be established in favour of the late india bill, viz. that measures are not to be so fully and fairly canvassed as they ought, but are to rely and be supported by the responsibility of the proposer of them. the presumption and absurdity of such a proposition is too great to require an answer. the responsibility of the proposer often would not procure him ten pounds; and as to any thing sanguinary, god knows! the hazard is very, very trifling. indeed, the persons who avowedly, first by denial of justice to america, plunged us into a war, and afterwards, by obstinately persevering in it, when experience had evinced the success was impracticable, and who by so doing have irretrievably (i fear) undone their country, enjoy in pomp and serenity, even to ostentation, the honours and lucrative employments heaped upon them. if justice is demanded for glory, for wealth, for dominion lost, they pay you with an ideal jest: if you want more, a ready vote of acquittal is at hand from a packt majority, united on the most sordid principles, to promote each other's advantage, in open and abandoned violation, on one part of the coalition, of the faith a thousand times pledged to bring delinquents to justice, who now are not only protected, but represented, with a falsehood and inconsistency that degrades human nature, as great, wise, and virtuous ministers, by those very men who not very many months stigmatized them as the base undoers of their country. his majesty has, however, been pleased to nominate a new ministry: they are young and untried: i wish them well; and my poor support shall be theirs, if they deserve it. i hope their real essential bond of union is at least less dangerous than that of their predecessors, viz. through violation of charters to obtain the plunder of india for themselves and adherents. i should have thought a dissolution of parliament necessary to have preceded, in order to procure any stability in the settlement of a new ministry. the reason offered against this measure was quite trifling, viz. the delay of public business; for the parliament would have been dissolved, and a new one elected, in little more than the period of usual recess at this time of the year; which recess was not intended to have been shortened, if the late overthrow of the ministry had not taken place. should the indecent interruption of every thing that does not promote their own continuance, still prevail in a majority of the house of commons, the delay of public business will be well compensated by the facilities a new election will probably afford, and by the rapid progress of measures beneficial and necessary to the public that will take place hereafter, which, under the present jarring situation and equipoise of parties, cannot, in my poor opinion, ever be carried on with either certainty or dispatch. but i still dread the continuance of the present distractions. the politics of st. james's have had ill luck for common, and, by some fatal ascendancy, have generally backwards trod the very paths they most anxiously sought to shun. the faction has emissaries spread far and wide to pluck allegiance from men's hearts. it will demand, on the part of the king, an active, unremitting attention to replace himself in that state of pre-eminence and influence the constitution allows, and even requires. let this never be out of mind. when his majesty hunts the stag, let him reflect that he is himself the hunted stag, the royal hart held at bay by a fierce, unrelenting faction, who deny, or mean to explain away, his dearest, clearest prerogatives. a prince so virtuous, who never was even suspected to mean any foul play to the state, ought to command in every honest service, and he will command no other, those servants whom he is now obliged to sue to, and often is refused. the onward path, ingenuous openness of fair sincerity and prudent oeconomy in private life, lead to peace of mind, and to heaven's best gift, independence; they martial kings to greatness, to awe, and affectionate veneration. i know the delicate ground i tread; but i owe much to my sovereign, and, above all, truth; and i will pay the debt, tho' the most ungrateful office, yet the surest pledge of real love and respect that i can give. what have i to fear? i have lived too long; i never wished to survive the glory of my country; and i cannot form a wish so mean as to survive its liberties. whig as i am, if liberty must expire, i hold its cuthanaria to be in a mild despotism. but in all the bills of mortality, of human grandeur, never sure was so strange a catastrophe recorded, as a king taken prisoner, and a great and glorious constitution squirted to death, by the sportings of a set of prodigal, undone, gambling, friblish, impudent eton boys. _jan. 1. 1784._ finis. * * * * * [transcriber's notes: the transcriber made these changes to the text to correct obvious errors: 1. p. 3 stationers hall --> stationers' hall 2. p. 9 brankrupt --> bankrupt 3. p. 12 securites --> securities 4. p. 19 tranquiility --> tranquility end of transcriber's notes] government ownership of railroads, and war taxation otto h. kahn an address before the national industrial conference board new york, october 10, 1918 i _government ownership of railroads_ paternalistic control, even when entirely benevolent in intent, is generally harmful in effect. it is apt to be doubly so when, as sometimes occurs, it is punitive in intent. the history of our railroads in the last ten years is a case in point. in their early youth our railroads were allowed to grow up like spoiled, wilful, untamed children. they were given pretty nearly everything they asked for, and what they were not given freely they were apt to get somehow, anyhow. they fought amongst themselves and in doing so were liable to do harm to persons and objects in the neighborhood. they were overbearing and inconsiderate and did not show proper respect to their parent, i. e., the people. but the fond parent, seeing how strong and sturdy they were and on the whole, how hustling and effective in their work, and how, with all their faults of temper and demeanor, they made themselves so useful around the house that he could not really get along without them, only smiled complacently at their occasional mischief or looked the other way. moreover, he was really too busy with other matters to give proper attention to their education and upbringing. as the railroads grew towards man's estate and married and begot other railroads, they gradually sloughed off the roughness and objectionable ways of their early youth, and though they did not sprout wings, and though once in a while they still did shock the community, they were amazingly capable at their work and really rendered service of inestimable value. but meanwhile, for various reasons and owing to sundry influences, the father had grown testy and rather sour on them. he cut their allowance, he restrained them in various ways, some wise, some less so, he changed his will in their disfavor, he showed marked preference to other children of his. and one fine day, partly because he was annoyed at the discovery of some wrongdoing in which, despite his repeated warnings, a few of the railroads had indulged (though the overwhelming majority were blameless) and partly at the prompting of plausible self-seekers or well-meaning specialists in the improvement of everybody and everything--one fine day he lost his temper and with it his sense of proportion. he struck blindly at the railroads, he appointed guardians (called commissions) to whom they would have to report daily, who would prescribe certain rigid rules of conduct for them, who would henceforth determine their allowance and supervise their method of spending it, etc. and these commissions, naturally wishing to act in the spirit of the parent who had designated them, but actually being, as guardians are liable to be, more harsh and severe and unrelenting than he would have been or really meant to be, put the railroads on a starvation diet and otherwise so exercised their functions, with good intent, doubtless, in most cases, that after a while those railroads, formerly so vigorous and capable, became quite emaciated and several of them succumbed under the strain of the regime imposed upon them. and then, seeing their condition and having need, owing to special emergencies, of railroad services which required great physical strength and endurance, one fine morning the parent determined upon the drastic step of taking things into his own hands. and so forth.... ii to drop the style of story-telling: individual enterprise has given us what is admittedly the most efficient railroad system in the world. it has done so whilst making our average capitalization per mile of road less, the scale of wages higher, the average rates lower, the service and conveniences offered to the shipper and the traveler greater than in any other of the principal countries. it must be admitted that in the pioneer period of railroad development, and for some years thereafter, numerous things were done, and although generally known to be done, were tolerated by the government and the public, which should never have been permitted. but during the second administration and upon the courageous initiative of president roosevelt these evils and abuses were resolutely tackled and a definite and effective stop put to most of them. means were provided by salutary legislation, fortified by decisions of the supreme court, for adequate supervision and regulation of railroads. the railroads promptly fell in line with the countrywide summons for a more exacting standard of business ethics. the spirit and practices of railroad administration became standardized, so to speak, at a moral level certainly not inferior to that of any other calling. it is true, certain regrettable abuses and incidents of misconduct still came to light in subsequent years, but these were sporadic instances, by no means characteristic of railroading methods and practices in general, condemned by the great body of those responsible for the conduct of our railroads, no less than by the public at large, and entirely capable of being dealt with by the existing law, possibly amended in nonessential features, and by the force of public opinion. unfortunately, the law enacted under president roosevelt's administration was not allowed to stand for a sufficient length of time to test its effects. the enactment of new railroad legislation in 1909, largely shaped by congressmen and senators of very radical tendencies and hostile to the railroads, and acquiesced in by president taft with ill-advised and opportunist complacency, established, for the first time in america, paternalistic control over the railroads. it was an unscientific and ill-devised statute, gravely defective in important respects and bearing evidence of having been shaped in heat, hurry and anger. mr. taft himself, it seems, has since recognized its faultiness, for he has repeatedly and publicly protested against the over-regulation, the starvation and the oppression of the railroad which were the inevitable and easy-to-be-foreseen consequences of its enactment. the states, to extent that they had not already anticipated it, were not slow to follow the precedent set by the federal government. the resulting structure of federal and state laws under which the railroads were compelled to carry on their business, was little short of a legislative monstrosity. iii you all know the result. the spirit of enterprise in railroading was killed. subjected to an obsolete and incongruous national policy, hampered, confined, harassed by multifarious, minute, narrow, and sometimes flatly contradictory regulations and restrictions, state and federal, starved as to rates in the face of steadily mounting costs of labor and materials--that great industry began to fall away. initiative on the part of those in charge became chilled, the free flow of investment capital was halted, creative ability was stopped, growth was stifled, credit was crippled. the theory of governmental regulation and supervision was entirely right. no fair-minded man would quarrel with that. the railroads had exercised great, and in certain respects undoubtedly excessive power for a long time, and all power tends to breed abuses and requires limitations and restraints. but the practical application of that theory was wholly at fault and in defiance of both economic law and common sense. it was bound to lead to a crisis. it is not the railroads that have broken down, it is our railroad legislation and commissions which have broken down. and now the government, in the emergency of war, probably wisely and, in view of the prevailing circumstances, necessarily, has assumed the operation of the railroads. the director general of railroads, rightly and courageously, proceeded to do immediately that which the railroads for years had again and again asked in vain to be permitted to do--only more so. freight rates were raised twenty-five per cent., passenger rates in varying degrees up to fifty per cent. many wasteful and needless practices heretofore compulsorily imposed were done away with. passenger train service, for the abolition of some of which the railroads had petitioned unsuccessfully for years, was cut to the extent of an aggregate train mileage of over 47,000,000. the system of pooling for which since years many of the railroads had in vain endeavored to obtain legal sanction was promptly adopted with the natural result of greater simplicity and directness of service and of considerable savings. the whole theory under which intelligent, effective and systematic co-operation between the different railways had been made impossible formerly, was thrown into the scrap heap. incidentally, certain services and conveniences were abolished, of which the railroad managements would never have sought to deprive the public, and the very suggestion of the abrogation of which would have led to indignant and quickly effective protest had it been attempted in the days of private control. lest this remark might be misunderstood, let me say that i have no word of criticism against mr. mcadoo's administration of the railroads, as far as i have been able to observe it. i think, on the contrary, that he is entitled to great praise and that he has handled the formidable and complex task confided to him with a high degree of ability, fine courage, indefatigable energy, and with the evident determination to keep the running of the railroads clear of politics and to make them above all things effective instruments in our war effort. iv for a concise statement of the results accomplished elsewhere under government ownership i would recommend you to obtain from the public printer, and to read, a short pamphlet entitled "historical sketch of government ownership of railroads in foreign countries," presented to the joint committee of congress on interstate commerce by the great english authority, mr. w. m. acworth. it will well repay you the half hour spent in its perusal. you will learn from it that, prior to the war, about fifty per cent. of the railways in europe were state railways; that in practically every case of the substitution of government for private operation (with the exception, subject to certain reservations, of germany) the service deteriorated, the discipline and consequently the punctuality and safety of train service diminished, politics came to be a factor in the administration and the cost of operations increased vastly. (the net revenue, for example, of the western railway of france in the worst year of private ownership was $13,750,000, in the fourth year of government operation it fell to $5,350,000.) he quotes the eminent french economist, leroy-beaulieu, as follows: "one may readily see how dangerous to the liberty of citizens the extension of the industrial regime of the state would be, where the number of functionaries would be indefinitely multiplied.... from all points of view the experience of state railways in france is unfavorable as was foreseen by all those who had reflected upon the bad results given by the other industrial undertakings of the state.... the state, above all, under an elective government, cannot be a good commercial manager.... the experience which we have recently gained has provoked a very lively movement, not only against acquisition of the railways by the state, but against all extension of state industry. i hope ... that not only we, but our neighbors also may profit by the lesson of these facts." mr. acworth mentions as a characteristic indication that after years of sad experience with governmentally owned and operated railways, the italian government, just before the war, started on the new departure (or rather returned to the old system) of granting a concession to a private enterprise which was to take over a portion of the existing state railway, build an extension with the aid of state subsidies, _and then work on its own account both sections as one undertaking under private management_. i may add, as a fact within my own knowledge, that shortly before the outbreak of the war the belgian government was studying the question of returning its state railways to private enterprise and management. mr. acworth relates a resolution _unanimously_ passed by the french senate a few years after the state had taken over certain lines, beginning: "the deplorable situation of the state system, the insecurity and irregularity of its workings." he gives figures demonstrating the invariably greater efficiency, economy and superiority of service of private management as compared to state management in countries where these two systems are in operation side by side. he treats of the effect of the conflicting interests, sectional and otherwise, which necessarily come into play under government control when the question arises where new lines are to be built and what extensions to be made of existing lines. he asks: "can it be expected that they (these questions) will be decided rightly by a minister responsible to a democratic legislature, each member of which, naturally and rightly, makes the best case he can for his own constituents, while he is quite ignorant, even if not careless, of the interests, not only of his neighbor's constituency, but of the public at large?" and he replied: "the answer is written large in railway history.... the facts show that parliamentary interference has meant running the railways, not for the benefit of the people at large, but to satisfy local and sectional or even personal interests." he maintains that in a country governed on the prussian principles railroad operation and planning may be conducted by the government with a fair degree of success, as an executive function, but in democratic countries, he points out that in normal times "it is the legislative branch of the government which not only decides policy but dictates always in main outline, often down to the detail of a particular appointment or a special rate, how the policy shall be carried out." for corroboration of this latter statement we need only turn to the array of statutes in our own states, which not only fix certain railroad rates by legislative enactment, but deal with such details as the repair of equipment, the minimum movement of freight cars, the kind of headlights to be used on locomotives, the safety appliances to be installed, etc.--and all this in the face of the fact that these states have public service commissions whose function it is to supervise and regulate the railroads. the reason why the system of state railways in germany was largely free from most, though by no means all, of the unfavorable features and results produced by government ownership and operation elsewhere, is inherent in the habits and conditions created in that country by generations of autocratic and bureaucratic government. but mr. acworth points out very acutely that while german manufacturers, merchants, financiers, physicians, scientists, etc., "have taught the world a good deal in the twenty years preceding the war, german railway men have taught the world nothing." and he asks: "why is this?" his answer is: "because they were state officials, and, as such, bureaucrats and routiniers, and without incentive to invent and progress themselves or to encourage or welcome or even accept inventions and progress. it is the private railways of england and france, and particularly of america, which have led the world in improvements and new ideas, whilst it would be difficult to mention a single reform or invention for which the world is indebted to the state railways of germany." the question of the disposition to be made of the railroads after the war is one of the most important and far-reaching of the post-bellum questions which will confront us. it will be one of the great test questions, the answer to which will determine whither we are bound. v and, it seems to me, one of the duties of business men is to inform themselves accurately and carefully on this subject, so as to be ready to take their due and legitimate part in shaping public opinion, and indeed to start on that task now, before public opinion, one-sidedly informed and fed of set purpose with adroitly colored statements of half truths, crystallizes into definite judgment. my concern is not for the stock and bond holders. they will, i have no doubt, be properly and fairly taken care of in case the government were definitely to acquire the railroads. indeed, it may well be, that from the standpoint of their selfish interests, a reasonable guarantee or other fixed compensation by the government would be preferable to the financial risks and uncertainties under private railroad operation in the new and untried era which we shall enter after the war. i know, indeed, that not a few large holders of railroad securities take this view and therefore have this preference. nor do i speak as one who believes that the railroad situation can be restored just as it was before the war. the function, responsibility and obligation of the railroads as a whole are primarily to serve the interests and economic requirements of the nation. the disjointed operation of the railroads, each one considering merely its own system (and being under the law practically prevented from doing otherwise) will, i am sure, not be permitted again. the relinquishment of certain features of our existing legislation, the addition of others, a more clearly defined and purposeful relationship of the nation to the railroads, involving amongst other things possibly some financial interest of the government in the results of railroad operations, are certain to come from our experiences under government operation and from a fresh study of the subject, in case the railroads, as i hope, are returned to private management. personally i believe that in its underlying principle, the system gradually evolved in america but never as yet given a fair chance for adequate translation into practical execution, is an almost ideal one. if preserves for the country, in the conduct of its railroads, the inestimable advantage of private initiative, efficiency, resourcefulness and financial responsibility, while at the same time through governmental regulation and supervision it emphasizes the semi-public character and duties of railroads, protects the community's rights and just claims and guards against those evils and excesses of unrestrained individualism which experience has indicated. it is, i am profoundly convinced, a far better system than government ownership of railroads, which, wherever tested, has proved its inferiority except, to an extent, in the germany on which the prussian junker planted his heel and of which he made a scourge and a horrible example to the world; and the very reasons which have made state railways measurably successful in _that_ germany are the reasons which would make government ownership and operation in america a menace to our free institutions, a detriment to our racial characteristics and a grave economic disservice. i _punitive paternalism in taxation_ i have spoken of the treatment of our railroads in the past ten years as "punitive paternalism." in some respects this same term may be applied to our existing and proposed war taxation. of course, the burden of meeting the cost of the war must be laid according to capacity to bear it. it would be crass selfishness to wish it laid otherwise and fatuous folly to endeavor to have it laid otherwise. we all agree that the principal single sources of war revenue must necessarily be business and accumulated capital, but these sources should not be used excessively and to the exclusion of others. the structure of taxation should be harmonious and symmetrical. no part of it should be so planned as to produce an unscientific and dangerous strain. the science of taxation consists in raising the largest obtainable amount of needed revenue in the most equitable manner, with the least economic disturbance and, as far as possible, with the effect of promoting thrift. the house bill proposes to raise from income, excess or war profit and inheritance taxes $5,686,000,000 out of an estimated total of $8,182,000,000. in other words, almost seventy per cent. of our stupendous total taxation is to come from these few sources. it seems to me that the effect and meaning of this is to penalize capital, to fine business success, as well as thrift and self-denial practised in the past, thereby tending to discourage saving. the house bill fails, on the other hand, to impose certain taxes the effect of which is to promote saving. intentionally or not, yet effectively, it penalizes certain callings and sections of the country and favors others. let me say at the outset that my criticism does not refer to the principle of an eighty per cent. war profits tax. indeed, i have from the very beginning advocated a high tax on war profits. to permit individuals and corporations to enrich themselves out of the dreadful calamity of war is repugnant to one's sense of justice and gravely detrimental to the war morale of the people. strictly from the economic point of view, the eighty per cent. war profits tax is not entirely free from objection. whether england did wisely on the whole in fixing the tax at quite so high a rate is a debatable point, and is being questioned by some economists of high standing in that country, not from the point of view of tenderness for the beneficiaries from war profits, but from that of national advantage. moreover, conditions in america and england are not quite identical and i believe it to be a justifiable statement that british industry is better able to stand so high a tax than american industry, for reasons inherent in the respective business situations and methods. however, everything considered, circumstances being what they are, i believe the enactment of the proposed eighty per cent. war profits tax to be expedient, provided that, like in england, the standard of comparison with pre-war profits is fairly fixed and due and fair allowance made, in determining taxable profits, for such bona fide items of depreciation and other write-offs as a reasonably conservative business man would ordinarily take into account before arriving at net profits. amongst the principles of correct and effective taxation, which are axiomatic, are these: 1. no tax should be so burdensome as to extinguish or seriously jeopardize the source from which it derives its productivity. in other words, do not be so eager to secure every possible golden egg, that you kill the goose which lays them. 2. in war time, when the practice of thrift is of more vital importance than ever to the nation, one of the most valuable by-products which taxation should aim to secure is to compel reduction in individual expenditures. 3. taxation should be as widely diffused as possible, at however small a rate the minimum contribution may be fixed, if only to give the greatest possible number of citizens an interest to watch governmental expenditure, and an incentive to curb governmental extravagance. it may safely be asserted that our war taxation runs counter to every one of these tested principles. ii the characteristic difference between the house bill and the revenue measures of great britain (i am not referring to those of france and germany, because they are incomparably less drastic than ours or great britain's) is, first, that we do not resort to consumption taxes and only to a limited degree to general stamp taxes, and, secondly, that our income tax on small and moderate incomes is far smaller, on large incomes somewhat smaller and on the largest incomes a great deal heavier. the house rate of taxation on incomes up to, say, $5,000, averages only one-fifth of what it is in england; the house rate of taxation on maximum incomes is approximately fifty per cent. higher than it is in england. moreover, married men with incomes of less than $2,000 are entirely exempted from taxation in this country. in england all incomes from $650 on are subject to taxation. i believe, on the whole, our system of gradation is juster than the english system, but i think we are going to an extreme at both ends. and it must be borne in mind that our actual taxation of high incomes is not even measured by the rates fixed in the house bill, because to them must be added state and municipal taxes. there must further be added what to all intents and purposes is, though a voluntary act, yet in effect for all right-minded citizens tantamount to taxation, namely, a man's habitual expenditures for charity and his contributions to the red cross and other war relief works. the sentimental and thereby the actual effect of extreme income taxation is not confined to the relatively small number of people in possession of very large incomes directly affected by it. the apprehension caused by the contemplation of an excessively high ratio of taxation is contagious and apt to react unfavorably on constructive activity. it is highly important that taxation should not reach a point at which business would be crippled, cash resources unduly curtailed and the incentive to maximum effort and enterprise destroyed. and it should not be forgotten that both theoretically and actually the spending of money by the government cannot and does not have the same effect on the prosperity of the country as productive use of his funds by the individual. if all the european nations have stopped during the war at a certain maximum limit of individual income and inheritance taxation, even after four years of war, the reason is surely not that they love rich men more than we do or that they are all less democratic than we are. the reason is that these nations, including the financially wisest and most experienced, recognize the unwisdom and economic ill effect under existing conditions of going beyond that limit. iii the same observations hold good in the case of our proposed inheritance taxation (maximum proposed here forty per cent., as against twenty per cent. maximum in england and much less in all other countries). and again there are to be added to federal taxation the rates of state legacy and inheritance taxation. inheritance taxation, moreover, has that inevitable element of unfairness that it leaves entirely untouched the wastrel who never laid by a cent in his life, and penalizes him who practiced industry, self-denial and thrift. and it cannot be too often said that the encouragement of thrift and enterprise is of the utmost desirability under the circumstances in which the world finds itself, because it is only by the intensified creation of wealth through savings and production that the world can be re-established on an even keel after the ravages and the waste of the war. furthermore, business men, of necessity, have only a limited amount of their capital in liquid or quickly realizable form, and through the absorption by the inheritance tax of a large proportion of such assets, many a business may find itself with insufficient current capital to continue operations after the death of a partner. this effect is not only unfair in itself, but is made doubly so, as being a discrimination in favor of corporations as against private business men and business houses, inasmuch as corporations are, of course, not amenable to inheritance taxation. whilst in the case of the rich we discourage saving by the very hugeness of our taxation, or make it impossible, we fail to use the instrument of taxation to promote saving in the case of those with moderate incomes. and the enormous preponderance of saving which could and should be effected does not lie within the possibilities of the relatively small number of people with large means, but of the huge number of people with moderate incomes. moreover, while the rich, in consequence of taxation, limitation of profits, etc., have become less able to spend freely since our entrance into the war, workingmen and farmers, through increased wages, steadier employment and higher prices of crops, respectively, have become able to spend more freely. workingmen are in receipt of wages never approached in pre-war times, many of them making incomes a good deal higher than the average professional man, while the profits of business, generally speaking, are rather on a declining scale and certain branches of business have been brought virtually or even completely to a standstill. of our total national income, conservatively estimated at, say, $40,000,000,000 for the last year before our entrance into the war, i. e., the year 1916, it is safe to say that not more than $2,000,000,000 went to those with incomes of, say, $15,000 and above, whilst $38,000,000,000 went to those with lower incomes. a carefully compiled statement issued by the bankers trust company of new york estimates the total individual incomes of the nation for the fiscal year ending june 30, 1919, at about $53,000,000,000, and calculates that families with incomes of $15,000 or less receive $48,250,000 of that total; or, applying the calculation to families with incomes of $5,000 or less, it is found that they receive $46,000,000,000 of that total. iv whilst the house bill imposes luxury and semi-luxury taxes, it fails--as i have mentioned before--to resort to consumption taxes of a general kind--a deliberate but, in my opinion, unwarrantable omission. my advocacy of consumption and similar taxes, such as stamp taxes of many kinds, is not actuated by any desire to relieve those with large incomes from the maximum of contribution which may wisely and fairly be imposed on them. i advocate consumption and general stamp taxes--such as every other belligerent country without exception has found it well to impose--because of the well attested fact that while productive of very large revenues in the aggregate, they are easily borne, causing no strain or dislocation, and automatically collected; and because of the further fact that they tend to induce economy than which nothing is more important at this time and which, as far as i can observe, is not being practised by the rank and file of our people to a degree comparable to what it is in england and france. the tendency of the house bill is to rely mostly on heavy taxation--in some respects unprecedentedly heavy--of a relatively limited selection of items. i am--as i have already said--in favor of the highest possible war profits tax and of at least as high a rate of income and inheritance taxation during the war as exist in any other country. but apart from these and a few other items which can naturally support very heavy taxation, such, for instance, as cigars and tobacco, i believe that the maximum of revenue and the minimum of economic disadvantage and dislocation can be secured not by the very heavy taxation of a relatively limited selection, but by comparatively light taxation distributed over a vast number of items. i believe such taxes would be productive enough to make good the impending revenue losses from prohibition. i think, for instance, the imposition of a tax of one per cent. on every single purchase exceeding, say, two dollars (the tax to be borne by the purchaser, not by the seller) would be productive of a large amount of revenue and be harmful to none. a similar tax was imposed in the course of the civil war and appears to have functioned so well and met with such ready acceptance that it was not repealed until several years after the close of that war. there is apparently small limit to the zeal of many politicians and others when it is a question of taxing business and business men, especially those guilty of success. we are, i believe, justified in inquiring to what extent there is a relation between this tendency and political considerations which ought to be remote from the treatment of economic subjects such as taxation. let us take, as an instance, the case of the farmer. i do not pretend to judge whether in these war times the farmers of the country are bearing an equitable share of taxation in proportion to other callings or not. i certainly recognize that they are entitled to be dealt with liberally, even generously, for i know the rigors of the farmers' life, the ups and downs of their industry's productivity, and fully appreciate that their work lies at the very basis of national existence. everything that can fairly make for the contentment, well being and prosperity of the farmer is to be wholeheartedly welcomed and promoted. yet, we cannot avoid noticing that the average value of farm lands in this country is estimated to have increased between 1900 and 1918 more than 200 per cent., that the value of farm products has been vastly enhanced, but that according to the latest published details of income tax returns, the farmer contributes but a very small percentage to the total income tax collected. of twenty-two selected occupations the farmers' class contributes the least in the aggregate, although it is numerically the largest class in the country. let it be clearly understood that i have not the remotest thought of suggesting "tax dodging" on the part of the farmers. i know well how fully they are doing their part towards winning the war, and am entirely certain that they are just as ready to carry patriotically their due share of the financial cost of achieving victory as the splendid young fellows taken from the farms, many of whom i met in europe, have been ready to bear their full share of the cost in life and limb of achieving victory. the point of my question is not the action and attitude of the farmer. but here is a great industry exempt from the excess profit and war profit tax and apparently not effectively reached by the income tax, which is entirely natural, because in this case the income tax can neither be retained at the source nor are the large body of the farmers, many of whom do not keep and cannot be expected to keep books, in a position to determine their taxable income. is it conceivable that the politicians who are so rigorous in their watchfulness that no business profit shall escape the tax-gatherer, would not devise means to lay an effective tax if the same situation existed in a business industry? the point of my question is, taking the case of the farmers as an instance, whether in framing our system and method of taxation, the steady aim has been to ascertain impartially what is equitable and wisely productive of revenue and to act accordingly, or whether considerations of the anticipated effect of taxation measures upon the fortunes of individual legislators or of their party, have been permitted unduly to sway their deliberations and conclusions. v turning aside from this interrogation mark, i will only add, in returning to our general scheme of taxation, that there are numerous taxes of a tried and tested and socially just kind--some of them applied in this country during the civil war and the spanish war--which would raise a very large amount of revenue and yet would be little felt by the individual. some of them have been suggested to our legislators, but have not found favor in their eyes. their non-imposition, taken together with the entire character of our taxation program, the burden of which falls to an enormously preponderant extent upon the mainly industrial states and the business classes, not only proportionately, which, of course, is just, but discriminatingly, which is not just, seems hardly explainable except on the theory that the intention of those who were primarily in charge of framing that program was punitive and corrective and that they were influenced--though i am willing to believe unconsciously--by sectional and vocational partiality. the fact that the revenue bill was passed in the house by a unanimous vote does not mean, of course, that it met with unanimous approval on the part of congressmen. the debate shows this. the bill, as reported after months of labor, either had to be approved practically as it stood or rejected and returned to the committee. it is not possible for a body of 400 men to deal in a detailed manner with a subject so complex as a taxation measure of the magnitude of the present one. the bill could not be made over or materially amended in the house. in view of the urgency of the emergency and the vital need to raise the sum asked for by the treasury, no patriotic course was open to the house but to accept the bill and pass it up to the senate. i know it is not popular to say things in criticism of war burdens of a financial nature. one's motives are liable to be misunderstood or misinterpreted and he is very apt to have it scornfully pointed out to him how small relatively is the sacrifice asked of him, compared with the sacrifice of position, prospects, and life itself, so willingly and proudly offered by the young manhood of the land. it is a natural and effective rejoinder, but it is not a sound or logical one. heaven knows, my heart goes out to our splendid boys, and my admiration for their conduct and achievements and my reverence for the spirit which animates them knows no bounds. but i am acquainted with hundreds of business men who bemoan their gray hair and their responsibilities, which prevent them from having the privilege of fighting our foe arms in hand. and i know no american business man worthy of the name, who would not willingly give his life and all his possessions if the country's safety and honor required that sacrifice. transcriber's notes: passages in italics indicated by underscore _italics_. additional spacing after the block quotes is intentional to indicate both the end of a quotation and the beginning of a new paragraph as presented in the original text. generously made available by the internet archive/american libraries.) war taxation _some comments and letters_ otto h. kahn 1917 war taxation _contents_ some comments pages 7 to 42 letters i the income tax _pages 43 to 60_ ii return upon taxable and tax-exempt securities _pages 61 to 70_ _war taxation_ the recent publication of a little pamphlet entitled "some comments on war taxation" elicited numerous interesting comments by the readers. the points to which these comments mainly related were the statements contained in the pamphlet that: _first._ if our neighbor canada continues her present policy of not taxing incomes, or if she imposes only a moderate tax while rates of income taxation in america are fixed at oppressively and unnecessarily high rates, there can be little question that the ultimate result will be an outflow of capital to canada, and that men of enterprise will seek that country. _second._ moneyed men not having their capital engaged in active business, if they are so constituted that their consciences permit them to evade their share of monetary sacrifice, can put their funds into tax-exempt securities. in reference to the foregoing points, i have written two letters in answer to correspondents. these letters contain an elaboration of certain arguments and viewpoints set forth in the original article on war taxation and also refer to some additional phases of the subject. those who have done me the honor of perusing that article may possibly be interested in reading these letters. in order that they may be presented as a part of the argument as a whole, the original article with a few additions and slight revisions is printed in the first part of this pamphlet, followed by the letters. o. h. k. 52 william street, new york, july 5, 1917. some comments on war taxation _this is a reprint, somewhat amplified, of an article printed recently in the new york times. the original article was written before the recommendations of the ways and means committee of the house of representatives were reported._ in a time of patriotic exaltation and of universal obligation and readiness to make great sacrifices to bring a most just and righteous war to a successful conclusion, the voice of sober argument and matter of fact considerations is apt to grate upon the ears of the people. that voice is all the less likely to be popular when the arguments it puts forth may easily lend themselves to the interpretation of being actuated by solicitous care for selfish interests. i am fully aware that by publishing the following observations i am exposing myself to that interpretation and to criticism of, and attack upon, my motives. yet, seeing that certain measures now under consideration threaten to take shape in a way which, from my practical business experience and after mature deliberation, i am bound to regard as faulty and as indeed harmful to the country, i believe it to be right and proper to contribute my views to the public discussion of the subject, for whatever they may be worth. i can only hope, then, that in what i am going to say i shall be given credit for endeavoring to speak conscientiously and to the best of my knowledge and judgment from the point of view of the welfare of the entire country and not of the welfare merely of the well-to-do. i shall address myself to the practical aspect and to a few phases only of the question and shall not attempt to enter into the economic theories and the broader and deeper considerations involved. i shall assume in my argument that what congress is seeking to accomplish is to impose taxes justly, effectively and scientifically with the desire to disturb the country's trade and commerce as little as possible and to avoid as much as may be the evils of financial dislocation. i shall take it for granted that at a time when more than ever the unity of the country should be emphasized, sectional selfishness will find no place in the taxation program, and that, should it be attempted nevertheless, the congressional delegations of the states which would be unjustly affected, would resist, regardless of party affiliations, harmful discrimination against their constituents and their states. i shall assume that it is not the purpose and intent of congress, under the guise of the necessities of the war situation, to embrace the doctrines of socialism. our present economic system, our present method of wealth distribution may or may not stand in need of change; the fact remains that congress has no mandate to effect a fundamental change. the consequence of such a change would be so immensely far-reaching that no government has the right to sanction steps to bring it about until the subject has been fully discussed before the people in all its bearings and the people have pronounced judgment through a presidential or other election. i will first state what in my opinion ought not to be done: i i take it that not many words need be used to expose the fallacy of the argument, heard even in the halls of congress: "if men are to be conscripted, wealth also must be conscripted." _men will be conscripted to the extent that it is wise and just and needful. so, and no other, should wealth and the country's resources in general be conscripted._ and, are not the children of the well-to-do conscripted equally with the children of the poor? indeed, the proportion of the sons of the well-to-do on the actual fighting line is bound to be a predominating one, because vast numbers of wage workers in the industries and on the farms will necessarily have to be retained at their accustomed vocations in order to maintain the output of our factories and farms. have the children of the well-to-do been backward in volunteering? were they not, on the contrary, amongst the very first to offer to serve and to fight? ii _there appears to prevail amongst not a few people the strange delusion that america's entrance into the war was fomented by moneyed men, in part, at least, from the motive and for the purpose of gain._ _were there any such men, no public condemnation of them could be too severe, no punishment would be adequate. i am absolutely certain that no such hideous and dastardly calculation found lodgment in the brain of any american, rich or poor._ moreover, is it not perfectly manifest that any rich man in his senses must have known that his selfish interest was best promoted by the continuance of the conditions of the last three years in which america furnished funds and supplies to europe at huge profits, whilst our entering the war was bound to diminish those profits very largely (indeed, to entirely eliminate some of them), to interfere with business activity in many lines and to compel the imposition of heavy taxes on wealth? it is to the credit of our rich men that, though fully realizing the extent of the monetary loss and sacrifices which war between this country and germany must necessarily bring to them, there were but very few of them who supported the peace-at-any-price party or favored the avoidance of america entering into the war when it had become plain that our participation in that war could not be avoided with honor and with due regard for our duty to our own country, or to the cause of right and liberty throughout the world. yet, somehow, the pacifists seem to have singled out the rich as mainly responsible for the war. it may be due, consciously or unconsciously, to a resulting feeling of resentment that _the proposal to confiscate during the war all incomes beyond a certain figure is actively promoted by leading pacifists_--a proposal based upon ignorance of, or disregard for, the laws of economics, teachings of history and practical considerations. if any such scheme were to be adopted, the consequences to the country at large would be far more serious than to the victims of the proposed action. if such a measure of outright confiscation were seriously apprehended, at a time moreover and under conditions which are far as yet from calling for extreme measures, capital would cease to flow in its accustomed currents and some of it would seek other channels legitimately open to it. it would certainly cease flowing into constructive use and would instead confine itself, to an extent at least, to municipal, state and federal tax-exempt securities. enterprise would be seriously hampered and in some respects brought to a standstill entirely. many thousands of workmen would be thrown out of employment. many businesses and shops would close. there would ensue, as a natural consequence and without any conscious determination, a nation-wide strike of constructive activity and enterprise in commerce and finance, because men will not look upon it as a "square deal" if they are to take all the risk and responsibility, all the hard work and ceaseless strain and care of business effort, whilst the government would _needlessly_ take from them an unduly large share of the fruit of their labor, let alone all of it except an arbitrarily fixed sum. i say "needlessly" because, _were it really needed, business men would willingly sacrifice their entire income for the country's cause._ they would work for patriotism, without any recompense whatever, just as hard and harder than they do for gain or for ambition, if the occasion required it. but, of course, everyone knows that nothing remotely approaching such drastic taxation is required in this country at this time. it is absolutely right to proclaim and to enforce by legislation that no man, as far as it is possible to prevent it, shall make money _out of a war_ in which his country is engaged, but there is all the difference in the world between that just and moral doctrine and between the doctrine that no man shall be permitted to have more than an arbitrarily fixed income _during_ a war. if $100,000 or any fixed sum is the limit of what may be permissible income during war time, why not by and by a lesser sum? if the principle is once admitted, where will its application stop, even in time of peace? why is not the proposed plan, or anything in the nature of that plan, simply license for the materially unsuccessful to despoil the materially successful? history shows more than one instance where this road inevitably leads to when once entered upon. and who are our successful men? the vast majority of them are self-made men who started at the bottom of the ladder. it is trite to say that inequality of endowment and therefore inequality of results in human beings, as well as in inanimate things, is a law of nature. the capacity for creating, organizing, leading, etc., in short, the possession of those qualities of brain and disposition which beget success, is rare. it is in the interest of the community, whilst carefully guarding and fostering the rights, the opportunities and the well-being of all of its members, to give liberal incentives to men possessing those gifts to put them to active and intensive use. it is hardly open to doubt that, generally speaking, the work of able men, engaged in serious and legitimate business (i am not speaking of gamblers and parasites), whilst naturally benefiting them, benefits the community a great deal more. the income of hospitals, orphan asylums, institutions of learning and of art and many other altruistic enterprises depends largely upon the voluntary taxation, aggregating a great many millions annually, to which those men in america who have attained financial success have always willingly submitted themselves--more so, probably than in any other country. who is to take care of all of those institutions if extreme taxation compels the rich to cease their contributions? iii the arguments above set forth apply likewise, though naturally not quite in the same degree, to the proposal of levying an income tax rising to an excessively high level, as, for instance, the suggested tax of fifty per cent. on incomes over $500,000. there, again, the test should be whether so radical a tax is wise and required by the necessities of the country. the nations in europe have been fighting for nearly three years and have been under an infinitely greater financial strain than our country is or will be, yet none of these nations have resorted to extreme taxation of income. _even in great britain_, whose financial burden is the heaviest of all, whose debt is many times the total of ours and who has loaned about $5,000,000,000 to her allies, the highest income tax rate, the maximum percentage in the graduated scale of taxation, is to-day no more than approximately forty per cent. in the last budget, introduced a couple of weeks ago, the british chancellor of the exchequer declined, so i am informed, to consider an increase in the income tax rate, because of the damaging effect which such increase would be apt to have on the country's business and prosperity. in france and germany the burden laid on incomes is much lower than in england. _in canada_ where war loans have been raised equivalent on the basis of comparative population to what would be more than $10,000,000,000 for america, _no federal income tax exists at all_. i doubt whether this latter fact is generally known in this country and whether its significance is receiving the measure of serious consideration which it deserves. i understand that it is the deliberate policy of the dominion government to endeavor to avoid resort to an income tax in order to attract capital to canada. there can be little question that if our income taxation is fixed at unduly and unnecessarily high rates, whilst canada has no or only a very moderate income tax, men of enterprise will seek that country and there will be a large outflow to it of capital in course of time--a development which cannot be without effect upon our own prosperity, resources and economic power. the financial dislocation, the discouragement and the apprehension caused by unduly heavy taxation of incomes will not only act as a drag on enterprise and constructive activity, but will make it exceedingly difficult, if not impossible, for corporations to sell securities in sufficient volume and thus to obtain adequate funds to conduct their business--especially also as investors will be fearful that high rates of taxation once established will not easily be reduced to normal levels, even when the present emergency is passed. extravagance, log-rolling, the unwise and inefficient expenditure of money by governmental bodies are amongst the besetting sins of democracy. the formula once found, the machinery once employed for the raising of huge revenues, are apt to make the way of wasteful governmental spending all too temptingly easy. it must not be forgotten that taxation must necessarily by that much diminish the surplus income fund of the individual and that both theoretically and actually the spending of money by the government cannot and does not have the same effect upon the country's prosperity and enterprise as productive use of his surplus funds by the individual. the sentimental, and thereby the actual, effect of extreme taxation will not be confined to the relatively small number of people in possession of very large incomes. the disturbance and fear caused by the contemplation of an excessively high ratio of taxation, even when applied to a relatively few, is bound to spread to those also of more moderate incomes. capital is proverbially timid. it will not take risks, except in the expectation of commensurate reward, and if it sees the danger of its reward being unduly infringed upon by excessively rigorous income taxation, it will anticipate that menace by withdrawing from the field of constructive investment to the greatest extent possible. so much is this the case that i incline to the belief that _taxation so graded as to result in a maximum average of say 33-1/3 per cent. would produce at least as great a revenue as a maximum average of 50 per cent_. it is one of the oldest principles of taxation that an excessive impost destroys its own productivity. the flood of securities which would be coming for sale in order to escape extreme income taxation would create a grave condition of demoralization in the investment markets of the country, with the resulting inevitable effect upon the country's general business, and upon its capacity to absorb government loans. iv the tax recently enacted by congress imposing a burden of 8 per cent. on business profits over and above 8 per cent. on the capital employed, regardless of whether such profits have any relation to war conditions or not, is unscientific and unsound. (incidentally, it is a strange provision of that law that it applies only to co-partnerships and corporations, whilst an individual engaged in business, however profitable, is not taxed.) it is unquestionably right and in accordance with both good morals and good economics, to prevent, as far as possible, the enrichment of business and business men through the calamity of war. but the recently enacted so-called excess profit tax which it is now proposed to augment largely does not accomplish that. it taxes not merely the exceptional profit, _i.e._, the war profit. it lays a burden not on business due to war, but on all business. it does this at a time when it is more than ever necessary that energy, enterprise, efficiency, the commercial and financial brain and work-power of the nation, be stimulated to their utmost in order to make good, as far as possible, the waste and destruction which go with war. any scheme of taxation which imposes an unnecessary burden upon commercial enterprise and thereby handicaps the nation in its business activities--especially in world competition with other nations--is unsound and bound to be gravely detrimental, both to the business men and still more to the wage-worker; in fact, to every element of the population. it is worth noting that england, the conduct of whose finances, based upon the experience of many generations as the leading financial power, has always been a model for other nations to follow, has imposed an excess profit tax on business during the war _merely_ to the extent that such profits are attributable to the war, _i.e._, to the extent that they exceed the profits of normal years. in principle, direct taxation of business activities should be avoided as much as possible, apart from a _war profit excess_ tax. care should be taken lest the wealthy man least entitled to preferential consideration, _i.e._, he who neither works nor takes business risks or business responsibilities, be favored as against the man who puts his brains, his capacities and his money to constructive use in active business. the idle man possessing capital, much or little, if he is so constituted that his conscience permits him to evade his share of monetary sacrifice, can put his money into tax-exempt securities. the man of means who toils in business or a profession must pay a heavy income tax, an excess profit tax, etc. to an extent this undesirable differentiation is probably unavoidable, but it is neither fair nor in the interest of the community that it be accentuated. v it seems to me so manifest as to hardly require argument that a retroactive income tax, such as has been suggested, is wrong both in morals and in economics. if the foregoing reasoning is correct, these conclusions would seem to follow: 1. there ought to be a substantial and progressive increase in the rate of income taxation during the war, together probably with a lowering of the existing limit of income tax exemption. i believe that in practice the best result would be obtained if the rates of taxation were not to exceed a scale producing from maximum incomes an average tax of 33-1/3 per cent., at any rate for the first year of the war. a materially higher rate would not, in my opinion, yield a substantially higher aggregate of revenue to the government (if as high an aggregate), while at the same time, if only for sentimental reasons, and even though only applied to very large incomes, it would be apt to cause financial dislocation and retard business activity and enterprise. it would seem advisable that such portion of a person's income as is devoted to charitable and kindred purposes should be, if not entirely free from income tax, at least subject to a reduced tax only, so as to counteract the tendency which experience has shown to follow in the wake of heavy taxation, of greatly diminishing charitable contributions. 2. there _ought to be an excess profit tax which might well be at a considerably higher rate than the present 8 per cent., or even the proposed 16 per cent._, but it should only be applicable to the extent that business profits exceed the profits of say a certain average period before the war and thus may justly be held to be attributable to war conditions. in determining the basis for calculating excess profits, an offset which might be fixed at say 10 per cent. per annum, due consideration being given to the question of depreciation and to special circumstances, ought to be allowed on all new capital invested in business since the beginning of the war. i think for the purpose of figuring the excess profit tax the five, four or three years _before america's entrance into the war_ would probably form the most appropriate basis. the aggregate industrial plant of this country, the entire scale and scope of our commerce and its concomitants, have been so completely modified in the course of the european war that a comparison which leaves out of account the years 1915 and 1916 does not seem to me to fit the case. i believe, both from the point of view of economics and of public opinion, a tax of say 32 per cent. or even 40 per cent., or eventually, if needed, a still higher percentage, calculated on a reasonably high average of earnings (that is, an average including 1916) is preferable to a tax of 16 per cent. or 20 per cent. on an inordinately low average. i believe that as between the proposed 16 per cent. profit tax and an _excess_ profit tax on the british model, at the rate of say twice that figure--to begin with--the general consensus of opinion would consider the latter as much the fairer, much the less cumbersome to handle and collect, and much the less hampering upon business activities. yet, statistics seem to show that such an _excess_ profit tax would bring in a far larger return than the proposed 16 per cent. profit tax. from figures which were shown to me it would appear that a 40 per cent. tax on excess profits over and above the average earnings for the past three years would yield for the present year the amazing total of at least $800,000,000 (in addition to the yield from the corporate income tax taken at the rate of 4 per cent.). these figures are based on the assumption that the aggregate profits for 1917 will approximately equal those of 1916--a not unreasonable assumption provided always that unscientific taxation or other unwise measures do not destroy prosperity. (as a matter of fact, the profits for the first half of 1917 are likely to exceed those for the same period of 1916.) the three-year average was selected on the theory that 1914 was an exceedingly poor business year, 1915 was a year of fair prosperity and in 1916 the full effect of our stupendous war business had come to raise profits to an exceedingly high level. 3. there are very numerous forms of taxes, stamp-taxes, etc. (such as, for instance, a 2 cent tax on checks), which, whilst they would mainly fall on the well-to-do, would be in no way burdensome, and would produce a very large aggregate of revenue. what seems to me in principle a very sensible tax, has been suggested, namely, _a tax on purchases_ (_i.e._, each single purchase) of all kinds of merchandise (excepting foodstuffs, and probably raw material) of one cent for each dollar or greater part thereof, exempting single purchases of less than say five dollars. this tax, _which should be paid by the purchaser_, would produce a very large revenue. it would be borne mainly by the well-to-do, would be more widely distributed than almost any other form of taxation and would be felt but very little. it would be easily and cheaply collected and would begin to accrue much sooner than most other taxes. 4. i am not convinced that the total amount which needs to be spent or which as a matter of fact can be spent in the course of the year requires so huge a sum to be raised by taxation as our legislators appear to contemplate. the policy of raising a large portion of war expenditures by taxation is wise and sound. but to be iconoclastic in applying that policy, to make that portion so large as to chill the spirit and lame the enterprise of the country is neither good politics nor good economics. the present has its rights as well as the future. sacrifices should be reasonably averaged. an annual sinking fund of 5 per cent. would extinguish the war debt in fifteen years. 5. democratic england under two prime ministers belonging to the liberal party has shown how huge amounts of increased revenue--much greater relatively and greater even absolutely than are required in this country during the first year of the war--can be obtained by taxation without undue dislocation of the existing economic structure and without banefully affecting the country's prosperity. while it would not do for us to follow the english method of taxation in all respects, it would seem the part of wisdom for us to profit from her successful experience. and i hope it will not be deemed presumptuous if i venture to suggest that it might not be amiss for our government in this connection to permit to the practical experience and judgment of business men some recognized scope in the deliberations, as i understand was freely done in england. i am entirely certain that the spokesmen for the business community would give their time, their best thought and their disinterested service to the task of co-operating in devising a wise and fair scheme of taxation as fully, readily and patriotically as they have done and are doing to the task of placing the liberty loan. 6. in determining upon the scheme and detail of taxation, it should be borne in mind that the intent of the proceedings is not punitive, neither is it to apply practical socialism under the guise of war finance. taxation is a problem in mathematics and national economics. it cannot be tackled successfully by hit or miss methods, or upon the impulse of the moment. it needs to be approached "_sine ira et studio_" if the best results are to be obtained for the country at large. congress and public opinion might well ponder the advice recently cabled here by one of the leading financial writers in england: "you should go slow in your tax plans. too violent a financial dislocation would be caused, unless taxation is most judiciously and scientifically apportioned." the desire to place the financial burden incident to war preponderantly upon the wealthy is just and right, but even in doing things from entirely praiseworthy motives, it is well to remember the old french saying, that virtue is apt to be more dangerous than vice, because it is not subject to the restraint of conscience. * * * * * since this article was published, i have received several letters stating that, owing to the excessively high cost of living and for other reasons, men of small means could not afford and should not be asked to bear additional taxation to any appreciable extent and that therefore the proposed vast increase in the income tax is a necessity. i fully agree with the premise, but not with the conclusion. economics are stubborn things and cannot be successfully dealt with emotionally. i yield to no one in my sympathy for those who have to struggle to make both ends meet and in my desire to see their difficulties lightened. i quite agree that the financial burden of the war should be made to weigh as little as possible upon the shoulders of the poor and those of small means. will a two-cent tax on checks be a burden upon the poor and those of small means? will a five-cent tax on single purchases (excepting foodstuffs) of $5? will an excess-profit tax on the lines which i propose? the list of similar queries could easily be continued. the present cost of living is undoubtedly alarmingly high. i believe this condition of affairs, to a certain extent at least, could be alleviated by appropriate measures and that every effort should be made to that end. but a huge increase in the income tax and unwise business taxation will not accomplish this. it will, in fact, rather accomplish the opposite, apart from lessening employment. letters i the income tax dear sir: i fully agree with you in the principle of your conceptions of the duties of moneyed men towards the country. they must be willing not only to surrender such part of their income, indeed of their fortune, as the necessities of the country require, they must be ready not only to relinquish their affairs and to put their time, their energies, capacities and experience at the disposal of the government in time of war, but they must be prepared to offer their very lives if the country calls for them. those are the duties, of course, of every citizen, but they are doubly the duties of those who have won success. i am firmly convinced that capitalists as a class will not fail in them during the war. my article on war taxation was not written with any idea of questioning these manifest and uncontrovertible truths, but solely with the purpose of contributing to the discussion of the taxation proposals certain considerations which i believe to be well founded in economics and history no less than in experience and reason, and the disregard of which would be apt, i think, to lead to consequences gravely detrimental to the commonwealth. the question to which my article addressed itself was not what sacrifices capital should and would be willing to bear if called upon, but what taxes it was fair, reasonable and, above all, to the public advantage to impose on capital, seeing that there is a point at which the country's economic equilibrium would be thrown out of gear and at which the incentive to use capital constructively and productively and to take those business risks which are incident to all business activity, would be killed. i greatly regret if what i said on the subject of canada being free from income tax gave the impression of being a suggestion for the evasion by wealthy men of taxation during the war. the fact that capital is not subject to income tax in canada was, of course, well known to men of wealth. i thought it a point and a fact of sufficient importance as bearing upon our own taxation program to deserve to be made generally known. that this might be considered as either a suggestion or a threat of what capital might do during the war, never, i confess, entered my mind, _for it would, of course, be little short of treason for capital and capitalists to take advantage of canada's propinquity while the war is on._ you speak of the possibility of legislation to prevent this. if capital meant to leave the country to evade taxation, there would have been ample time and opportunity for it to do so during the past six weeks. the price of exchange would indicate if that had been done to any appreciable extent, and proves, as a matter of fact, that it is not being done. if it were being done, i quite agree with you that legislation should be sought to prevent it and to punish the attempt. but i am entirely certain that moneyed men will not think of evading whatever sacrifice may be required of them by their country under war conditions. what i meant to intimate in saying that capital and men of enterprise would seek canada if there was no income tax, or only a moderate one, in that country, whilst america at this time imposed excessive and practically punitive income taxation, was this: capital has a long memory. capital is proverbially timid. i am not referring only to large aggregations of capital but to all capital. i am not referring only to the capital and capitalists of to-day, but to those who accumulate capital by practising thrift and to those who by invention, by conspicuous organizing or other ability, by originality of method, etc., are instruments in the creation of capital and will be, presumably, amongst the future owners of capital. the possessors of capital, present and future, would not easily forget if, in the very first year of the war capital in this country were to be taxed at far higher rates than prevail in any european country after three years of war. even if such extraordinary taxation was removed at once, after the termination of the war, capital would remain disquieted by the fear that the machinery of excessively high income taxation, once used and found easy of motion, might be used again for purposes of a less serious emergency than now exists. those seeking capital for other countries--_and there is bound to be a very keen contest for capital after the war_--would not fail to make use of these arguments. moreover, experience has proved that very high rates of income taxation once adopted, are not easily reduced to the level from which they started. therefore, in the case to which my argument was addressed, _i.e._, unduly high income taxation in this country and no, or only very moderate, income taxation in canada, there can be little doubt that _after the war_ there would be an outflow of capital to canada, and that--which is still more important--men of enterprise, especially young men, will be apt to seek in that and other countries, fields for their activities if the reward of enterprise is too greatly diminished in america as compared to what it is elsewhere. such men would be doing nothing else than what many thousands of american-born farmers have done within recent years in transferring themselves, their capital and their working capacity to canada. _not a single one of the leading european nations, after three years of the most exhausting war, has an income taxation schedule as high as that adopted by the house of representatives; neither republican france, nor democratic england, nor autocratic germany._ of these three countries, england has imposed the highest income taxation; yet, _the maximum rate in england is almost fifty per cent. less than the maximum rate in the house bill. the cabinets in these countries have undergone many changes in the course of the war. they include socialists and representatives of labor._ in the determination of their taxation program, they have had the assistance of the best economic brains in europe. those nations have had far longer experience than we in the science of government financing. yet not one of them has deemed it wise and advantageous to the state to impose rates of income taxation as high as those fixed by the house of representatives. surely, this fact and the economic considerations underlying it, are deserving to be seriously weighed by our legislators. does not the attitude of all the leading countries plainly indicate their recognition of the fact that the action and reaction of excessive income taxation create a vicious circle from which the governments of all belligerent nations even in their extremity have shrunk? and is it not a manifest dictate of reason that such burden of taxation as must be borne should be imposed gradually, as was in fact done everywhere in europe, so as to give to all concerned a chance to adjust themselves to the new conditions, and not with one violent jerk? england imposed her present rate of income and excess profit taxes not in the first year of the war, but started on a much lower scale and by successive steps, in the course of nearly three years, attained the figures now prevailing. we know that man and beast are capable of carrying far heavier weights if the strain is gradually increased than if the whole of the burden is dumped on their backs at once. the same holds good of economic strain. is it not plain that if the unprecedentedly high income taxation of the house bill--exceeding as it does any rates ever imposed by any of the leading nations of the world--is enacted into law, the government will find itself crippled in respect of taxable resources during the second year of the war; the very year which, if the war does last beyond the present one, will presumably be the crucial period. of course, the cost of the war must be laid according to the capacity to bear it. it would be fatuous folly and crass selfishness to wish it laid or endeavor to have it laid otherwise. all i am advocating in effect is that in the public interest not too much be exacted at once, but that by dividing the burden over a reasonable number of years, capital in no one year and especially not during the first year of the war, should be so excessively taxed as to produce an unscientific and dangerous strain. in addition to the concrete factors, there enter into this question certain psychological elements of a somewhat subtle character, but sufficiently definite and potent to be plainly discernible to those who are experienced in dealing with business affairs and with men of business, large and small. i believe an income tax greatly increased over the rates heretofore prevailing, yet keeping within the bounds of moderation, would produce at least as large a total revenue as an exceedingly high one. and the consequences of the economic error of placing too vast a burden direct upon incomes would be more serious, i think, to the people in general than to the individuals directly concerned. the question of the individual is not the principal one. the essential thing is that no undue strain be placed upon that great fund of capital as a whole which is derived from incomes of all kinds. it is this fund which in its turn is one of the vital forces necessary for the normal activities and progress of industry. if that fund is suddenly and too greatly reduced, the effect upon commerce and industry is liable to be abrupt and withering. i yield to no one in my desire to see the burden upon the poor and those of moderate means lightened to the utmost extent possible. i realize but too well that the load weighing at this time upon wage earners and still more perhaps upon men and women with moderate salaries is almost too great to be borne and certainly much greater than it should be. i wish a commission might be appointed, consisting of those best qualified in the entire country, to apply themselves to this most serious, difficult and complex problem, indeed to the entire problem of excessively high prices. i hope they would discover means, if not to remedy the situation entirely, at least to alleviate it. but i am convinced that relief cannot be found in taxation of incomes at rates without a parallel anywhere, and in unduly burdensome imposts upon business activities. i am convinced that certain theories being urged upon congress and the people and to which the house war revenue measure is in part responsive, while doubtless meant to tend and seemingly tending to a desirable consummation, are in fact bound, in their longer effect, to bring about results harmful to the community at large, rich and poor alike. it is only that conviction which has emboldened me to state my views publicly. in doing so i fully realized that i was running the risk of having my action misunderstood or misconstrued, and to be charged with selfishness and lack of patriotism. yet, i feel certain that in the end just recognition of their motives will not be withheld from those who, in defiance of the fleeting popularity of the plausible, venture to point out the dangers of impetuous action, however well intentioned, in the present emergency, and to urge that moderation and that regard for the lessons of history and of economics which can be left aside only at the peril of the general welfare. very faithfully yours, (_signed_) otto h. kahn p.s.--that you or any one else should even for a moment attach credence to the monstrous suggestion that capitalists fomented america's entrance into the war because they feared that otherwise the amounts loaned by them to the allies might be jeopardized or lost, is a truly distressing manifestation of the willingness of some of our people--i trust not many--to believe evil of men simply because they have been materially successful. leaving aside the cruel injustice of such an imputation, it attributes to moneyed men a degree of stupidity and of ignorance as to their own interests, of which they are not usually held guilty. america loaned to the allied nations, prior to our entrance into the war, roughly speaking, $2,000,000,000, of which sum all but a small fraction was loaned to england and france. these loans were made almost entirely in the shape of bond issues which were widely distributed amongst individuals and institutions throughout this country. therefore, no very large portion of the aggregate is in the hands of any one person or institution. to any one acquainted with financial affairs it is absolutely inconceivable that england or france would have defaulted on the relatively moderate amount of their foreign debt, whatever might have been the outcome of the war, if america had not joined. let us grant, for argument's sake, the wildly far-fetched supposition that in one way or another their internal debt might have become affected; it would still be utterly inconceivable that they would have permitted a default in their foreign debt, because it is, of course, suicidal for any nation to jeopardize its world credit. but let us go still a step further and assume, in defiance of all reason, that even this totally inconceivable thing were to have happened. it would have meant, of course, not a total and irrecoverable loss to the holders of obligations of the allied countries, but merely a more or less temporary shrinkage of the value of such holdings. _a single year's war taxation will take out of the pockets of capitalists a great deal more than they could possibly have lost through depreciation in value of such amount of allied bonds or loans as they may hold._ if you add to these considerations the circumstance that, owing to the intervention of our government in financing and otherwise providing for the allies, the commissions and profits of those who have heretofore dealt with the allies will be largely cut off; that business will, quite rightly, be subjected to a large excess profits tax; that capital for years to come will have to pay increased taxes to provide for the debt incurred through the war, for pensions, etc.; if you will reflect on these and various other patent considerations, you will realize that any rich man, fomenting for selfish reasons our entrance into the war, would be a fit subject for the immediate appointment of a guardian to take care of him and of his affairs. ii _the actual return upon taxable and tax-exempt securities_ dear sir: your letter indicates that you do not sufficiently realize the enormous advantage in interest yield which under the income tax schedule as fixed in the house bill is possessed by tax-exempt securities as compared to taxable securities, especially, of course, in respect of large incomes. permit me to call your attention to the following eloquent facts: the yield of tax-exempt securities at prevailing prices ranges from 3-1/2% to nearly 4-1/2%. _under the rates fixed in the war revenue bill as it passed the house of representatives, a taxable 6% investment_ would yield: per annum 2.28% on incomes over $2,000,000 2.34% " " " 1,500,000 2.40% " " " 1,000,000 2.69% " " " 500,000 2.97% " " " 300,000 3.26% " " " 250,000 3.54% " " " 200,000 3.90% " " " 150,000 4.20% " " " 100,000 or, to put it in another way, the investment in 3-1/2% "liberty bonds" is thus equivalent to investing in a taxable security yielding: per annum 9.21% in respect of incomes over $2,000,000 8.97% " " " " " 1,500,000 8.75% " " " " " 1,000,000 7.82% " " " " " 500,000 7.07% " " " " " 300,000 6.45% " " " " " 250,000 5.93% " " " " " 200,000 5.38% " " " " " 150,000 5.02% " " " " " 100,000 the investment in, say, new york city bonds, being tax-exempt, at their present yield of 4.20%, would represent the following rates of income as compared to investments in taxable securities: per annum 11.05% in respect of incomes over $2,000,000 10.76% " " " " " 1,500,000 10.50% " " " " " 1,000,000 9.38% " " " " " 500,000 8.48% " " " " " 300,000 7.74% " " " " " 250,000 7.12% " " " " " 200,000 6.46% " " " " " 150,000 6.02% " " " " " 100,000 of course, all these figures hold good only for the period during which the proposed rates of income taxation would prevail. as the income tax rate decreases, the yield from tax-exempt securities diminishes proportionately. the volume of tax-exempt securities at present outstanding, including the new "liberty loan," is estimated at not less than $8,000,000,000. the ability of corporations to find a ready market for their securities is a prerequisite for the continuance of business prosperity or, indeed, of adequate business activity. i need not elaborate the effect which the comparison of the income yield from tax-exempt securities as against taxable securities under an excessively high income tax schedule--even if confined to larger incomes--must necessarily have upon the eligibility of corporate securities for investment purposes. the conclusion seems unescapable that the resulting degree of disinclination to invest in such securities coupled with the impulse to dispose of existing holdings would bring about liquidation, severe shrinkage of values and more or less pronounced demoralization in the investment market--a condition of things which could not fail in a measure to affect adversely the country's business in general, and which could only partially be counteracted by government expenditures, however large. as to your observations concerning the principle of tax-exempt issues, i believe the government acted wisely, considering all the elements of the situation, in making its first great war issue, the liberty loan, tax free. but in the face of the figures above quoted, the question naturally presents itself whether our traditional policy of making government issues tax-exempt should not be discontinued, which, of course, would mean that a materially higher rate of interest than 3-1/2% would have to be paid for government borrowing. in theory, it seems to me, there can be little doubt that the balance of arguments is against the tax-exemption of government loans. as an abstract proposition little can be said, i think, in favor of a policy the effect of which gives an advantage to the rich and well-to-do, militates against the widest possible distribution of government issues amongst the people, tends to facilitate governmental extravagance by concealing the true cost and establishes a fictitious basis of national credit. thus, for instance, on the $1,000,000,000, or thereabouts, which our government has loaned to the allies at 3-1/2% interest, it is losing money, because, whilst it nominally borrows this money through the liberty loan at 3-1/2%, the cost to it is actually considerably higher because it loses the revenue which would accrue to it from the income tax if the bonds were not tax-exempt. let me add that i do not wish to be understood as suggesting that our government should charge to the allied nations more than the nominal rate at which it is borrowing. they have been fighting these three years and bringing unheard of sacrifices for a cause which we have recognized to be ours no less than theirs, and if we loan them money somewhat below its actual cost to us that item weighs but very lightly in the scale, especially also if we consider the immense monetary profits which our country has reaped from the sale to them of munitions, material and supplies. however, as against the theoretical objections, some of which i have mentioned, to the tax-exemption of government loans, there are certain "imponderabilia"--things which cannot be exactly weighed--in favor of a low rate of interest for government borrowing, even if the lowness of the rate is to an extent fictitious. there are also certain practical reasons for the maintenance of our traditional policy, and various concrete facts which must be taken into account. for instance, there is the problem of how to deal with the situation that might result from the withdrawal of deposits from savings banks and similar institutions, which probably would be liable to occur in case the government offered a bond issue at the higher rate it would have to fix if the inducement of tax-exemption were removed. there is the problem of the existence of billions of municipal and state securities which offer to the holder the privilege of freedom from municipal, state _and federal_ taxes. i understand that it is the consensus of opinion of our leading lawyers that under the legal theory which treats such issues as "instrumentalities of government" that privilege cannot be abridged and that congress has no constitutional power to tax state and municipal issues. if state and municipal issues to be made during war time retain the feature of being free from taxation, can the federal government afford to make its war loans taxable, and thereby place itself in a position where it would have to borrow under conditions which would put it and its credit at a disadvantage as compared to state and municipal issues? the problem is a complex one altogether and, like all economic questions, requires to be approached in a dispassionate spirit, giving due consideration to the reasons for and against. the temper of the stump speaker is not appropriate for dealing with taxation problems. let me add, in conclusion, that i fully agree that it is "sheer fiscal stupidity" and "socially inexpedient as well" to permit "mushroom fortunes" to be built out of war profits. i believe there ought to be imposed a large excess war profits tax on the english model upon a fair and well conceived average basis of earnings so calculated as to take account of the vast difference in the country's industrial plant to-day and before the european war. such a tax may not be entirely free from objections in theory, but from the social and moral point of view it is, i am convinced, thoroughly sound and proper and called for. appropriate taxation of excess profits, together with an adequately though not exorbitantly heavy income tax would go a long way to prevent the enrichment of a class through the calamity of war, without at the same time affecting wages or laming the enterprise and business activities of the country. yours very truly, (_signed_) otto h. kahn [transcriber's note: every effort has been made to replicate this text as faithfully as possible, including obsolete and variant spellings and other inconsistencies. text that has been changed to correct an obvious error is noted at the end of this ebook.] 1797 a century in the to comptroller's 1897 office state of new york by james a. roberts comptroller albany james b. lyon, printer 1897 [illustration: _state hall_] a century in the comptroller's office. on the 17th of february, 1897, occurred the one hundredth anniversary of the establishment of the office of comptroller of the state of new york. the present incumbent of the office trusts it will not be considered unwarranted pride which has led him to collect and transcribe, in honor of its one hundredth birthday, such general facts relating more or less directly to the office, or to the former incumbents thereof, as he has gathered from unsystematic reading and in the performance of his duties. an office which has without scandal managed the financial affairs of this great state, and has otherwise borne a conspicuous part in its government for a century; an office from the thirty incumbents of which have been chosen a vice-president and a president of the united states, two united states senators, four governors of the state, one chief justice and one chief judge of its court of appeals--to say nothing of others who have achieved distinction in less conspicuous civil positions--would seem entitled to something more than a passing notice on its centennial anniversary. the office, as created, and from time to time enlarged, is a unique feature in our state government. there are auditors in nearly all of the states of the union; but the duties of comptroller are far broader, comprehending largely the ordinary duties of a state treasurer as well as many others. there had been auditors in the colony of new york from 1680 down to the time of its organization as an independent state, and that office was continued in the state until it was merged in the office of comptroller. there have been treasurers of new york with varying duties from 1706 down to the present time. from the time of the organization of the state government the offices of treasurer and auditor had not been found to work harmoniously or satisfactorily. bills might be audited which the treasurer did not wish to pay, and the treasurer might wish to pay bills which the auditor would not pass, so in a tentative, experimental way in 1797 the office of comptroller was created to combine the power to audit and the power to pay. the act creating it was framed by samuel jones, a man of note in his time (for whom samuel jones tilden, the distinguished governor of this state, was named), and on the 17th of february, 1797, it became law by the signature of that distinguished patriot, governor john jay. [illustration: samuel jones (signature) _1st comptroller_] the appointment of comptroller upon the creation of the office fell to the "council of appointment," as was the case at that time with all state, county and municipal officers, except the governor, lieutenant-governor and members of the legislature. the "council of appointment" was an anomaly in government. the article (xxiii of the constitution of 1777) establishing this "council" was framed by three as pure, patriotic and disinterested statesmen as new york has ever produced, john jay, robert r. livingston and gouverneur morris, and was designed to prevent a dangerous centralization of power in the hands of the governor. it provided "that all officers, other than those who by this constitution are directed to be otherwise appointed, shall be appointed in the manner following, to wit: the assembly shall once in every year openly nominate and appoint one of the senators from each great district" (then four in number), "which senators shall form a council for the appointment of officers, of which the governor, for the time being, or the lieutenant-governor, or the president of the senate (when they shall respectively administer the government), shall be president, and have a casting vote, but no other vote." under the power thus conferred this council appointed the heads of the various state departments; all judges, as well as justices of the peace, district attorneys, sheriffs, county clerks, mayors, and other officers throughout the entire state. the cautious and anxious gentlemen who framed this provision in 1777 could by no means have foreseen the disastrous and disgraceful spoils system that grew up under it. it remained in full effect until a disgusted people abolished it by an amendment to the constitution in 1821. at that time its power had so grown that there were 6,663 civil and 8,287 military offices which it controlled. the modern political boss must experience a feeling of profound regret as he realizes that this rich harvest can no longer be garnered by his sickle. chapter 21 of the laws of 1797, which created the office of state comptroller, provided, among other things, that "all matters and things theretofore required to be done by the auditor of the state should be done by the comptroller, and that the salary and wages of all legislative, executive, judicial and ministerial officers of the government of this state, and all moneys directed by law to be paid to any other person, should be paid by the treasurer on the warrant of the comptroller;" that the comptroller should keep an account between the state and the treasurer; that he might lend out moneys in the treasury not otherwise appropriated, and that when money was directed to be paid, and not sufficient money in the treasury to satisfy the same, he might "in the name, and on behalf of the people of this state, borrow a sum sufficient for that purpose of a bank of new york, or bank of albany." thus the important powers which have distinguished the comptroller's office--the power of audit; to draw warrants for all payments from the treasury; to keep its books of financial transactions; to invest its funds, and to borrow money--were embodied in the first act. the powers thus granted infringed so largely upon the ordinary rights and duties of a treasurer, and so largely upon those which had been theretofore exercised by the treasurer of this state, that it is not strange the then treasurer, gerardus bancker, who had held the office from april 1, 1778, resigned in disgust. his feeling was, as lossing has stated in his "empire state," that the comptroller was made "the highest financial officer of the state, and the treasurer merely a clerk to him." [illustration: john v. henry (signature) _2d comptroller_] the early history of the office is an illustration of the cautious and doubtful temper of the legislatures of the time--so unlike those of the present day. it is a well-known fact that while the legislature of the state met for the first time at albany, in the same year, 1797, in which the office of comptroller was created, it was not then made a permanent location for the capitol; and that city was maintained for upwards of twenty years as the capitol simply by the adjournment of the legislature at the end of each session to meet again at the city of albany. the original act creating the comptroller's office provided that it should continue in force for a period of three years. on the 28th day of february, 1800, eleven days after the office had expired by limitation, chapter 11 of that year went into effect, which re-established the office for another period of three years. chapter 22 of the laws of 1803 extended the office, with the powers and duties then prescribed by law, to february 28, 1805. by chapter 60 of the laws of 1805, passed march 30th, the office was continued to february 28, 1808, and the acts of the then comptroller, between the 28th day of february, 1805, and the day when this act went into effect, were ratified and confirmed. on march 11, 1808, chapter 34 of that year was passed, which continued the office to february 28, 1812, with a like confirmatory clause. the act of february 28, 1812, at last made permanent the comptroller's office, with the powers theretofore conferred upon it. by chapter 31 of the laws of 1797 the office of comptroller was to be located either in albany or watervliet. the council of appointment chose for the first comptroller samuel jones, of oyster bay, queens county. this was done by the casting vote of governor john jay, the four senatorial members of the council being a tie. he was a lawyer of high standing at the time of his appointment, a federalist in politics, and had held with credit a number of civil positions. in 1775 he had been a member of the provisional war committee, and had performed arduous services on that committee. he was a member of the convention that adopted the federal constitution, and voted for it. he was a delegate to the continental congress in 1778; a member of assembly from queens county in 1786, 1787, 1788, 1789 and 1790; a state senator from the southern district from 1791 to 1799. the honors which he had won and worthily worn were supplemented in his son who, as the chancellor of this state (succeeding nathan sanford and succeeded by reuben h. walworth), and as chief judge of the new york superior court, won for himself enviable renown in our legal annals. comptroller jones was the author of the "act for the amendment of law and better advancement of justice," passed in 1789, which was a valuable contribution and addition to our law. he was also the author of many other of the best statutes placed upon our books in those early years. he was distinguished throughout his career as an upright and useful man, though he was sometimes accused of a little uncertainty in politics. he is said to have replied to a question from judge spencer as to how he managed to secure his elections from queens county whatever party might be in the ascendant, that "if my troops will not follow me, i follow my troops." the comptroller's salary was fixed by the act at $3,000, and this was to include all clerk hire and ordinary expenses connected with the office. in 1800 the compensation was reduced to $2,500, and in consequence of this action mr. jones resigned the office. he had faithfully performed its duties, and his resignation terminated his public career. [illustration: elisha jenkins (signature) _3d comptroller_] during his term, in 1799, the legislature prohibited the payment of any money from the treasury except upon the warrant of the comptroller, and required all receipts to be countersigned by him, and this has remained a part of the duties of the comptroller from that time to this. on march 12, 1800, john v. henry, an eminent albany lawyer and a federalist, was chosen comptroller. there are some still living who know, at least by oral tradition, his great influence at the bar, and albanians have a just pride in his high reputation. he was a member of the convention called in 1801 principally to settle the question whether the governor alone could nominate persons for appointment, or whether that power also lay in the senators composing the council of appointment. he was a member of assembly from albany county in 1800, 1801 and 1802. during his term, by chapter 61 of the laws of 1801, the comptroller was made _ex-officio_ a member of the state board of canvassers, and by chapter 69 of the same year he was made one of the commissioners of the land office. in 1801 the legislature also directed the comptroller to sell lands for the payment of taxes due to the state, and this power, variously modified and enlarged, still remains in him. under it sales were held in 1808, 1811, 1812, 1814, 1815, 1821, 1826, 1830, 1834, 1839, 1843, 1848, 1853, 1859, 1866, 1871, 1877, 1881, 1885, 1890 and 1895. in 1800 the legislature authorized the comptroller to settle the credits of the state with the secretary of the treasury of the united states. the moneys derived from this source formed the basis of the general fund. the comptroller was made the custodian of this fund with power to invest it. the fund was augmented from sales of land and other sources until, in 1814, it had reached the sum of $4,396,943.97. the income of the fund together with the salt and auction duties, it was believed, in the early part of the century, would be sufficient to maintain the government. and from 1814 to 1842 no money was raised in this state by direct taxation except during the years in which the erie and champlain canals were in process of construction. to avoid a direct tax, however, it had been found necessary from time to time, to draw on the principal of the fund, and in 1834 it disappeared altogether and with it the bright dream of our forefathers of a commonwealth without taxation. before the adoption of the constitution of 1846 the fund had been succeeded by a general fund debt of $5,992,840.82. this was increased before the breaking out of the civil war to a total of $6,505,684.37. this was the high-water mark of the general fund debt if we do not include in it the bounty debt of 1865. the constitution of 1846 made provision for a sinking fund to meet this debt and its management and investment were intrusted to the comptroller. in this way the last of the debt was paid in 1878. [illustration: arch. mcintyre (signature) _4th comptroller_] mr. henry was removed from his office august 10, 1801, by reason of political changes in the council of appointment, and he then and there renounced politics forever. at the time of his death, in 1829, the leading albany paper of the period spoke of mr. henry as "the idol of his friends; the ornament of his native city; the pride of the bar; the eloquent defender of the oppressed." henry's successor in office was elisha jenkins, a merchant and a democrat (or republican as the party was then called) of hudson, who held the office from august 10, 1801, to march 26, 1806. previous to his appointment as comptroller he had served as member of assembly from columbia county for the years 1795 to 1798. after his service as comptroller he served three different periods as secretary of state, to wit: from march 16, 1806, to february 16, 1807; from february 1, 1808, to february 1, 1810, and from february 1, 1811, to february 23, 1813. during his term as comptroller there was a defalcation in the office of treasurer, then held by robert mcclellan, and a more rigid system of testing the correctness of accounts was adopted, many features of which still survive. there was not much legislation affecting the office passed during the period of his incumbency; but the work of the office would seem to have been done in a systematic and business-like manner. [illustration: john savage (signature) _5th comptroller_] mr. jenkins was succeeded by archibald mcintyre, a democrat of the clintonian order, of albany, who, besides the reputation of a most excellent officer, has left behind him the record of a term of service in the office longer than that of any person who has filled it. he was appointed on march 26, 1806, and continued in office until february 12, 1821. he had previously served as member of assembly from montgomery county for the years 1798, 1799, 1800, 1801, 1802 and 1804. the duties of the office had so far increased in 1811 as to render necessary the services of a deputy, and by chapter 78 his appointment was authorized, with substantially the same limitations which now exist. he cannot sign warrants so long as the comptroller is within the state; nor can he act on the various boards. comptroller mcintyre in 1817, under legislative authority, procured the aggregate valuation of the real estate in the several towns and wards of the state. by chapter 262 of the laws of 1817 the board of commissioners of the canal fund was created, and the comptroller made, _ex-officio_, a member of that board. this act contained a curious provision to the effect that a majority of the commissioners, with the comptroller, constitutes a quorum. no quorum of that board has ever been possible without the presence of the comptroller. this board, from that time to 1848, received and disbursed all canal moneys, audited the canal accounts, and in general transacted the financial business of the canal department. in 1848 the canal funds were turned over to the treasurer and made subject to the warrant of the canal auditor. by his audit and warrant all accounts against the canals were paid; the management of the canal debt and sinking fund remaining, as before, in the commissioners of the canal fund. in 1883 the duties devolving upon the canal auditor were transferred to the comptroller's office. the majority of the commissioners of the canal fund signed all checks on canal account prior to 1848. since 1883, the commissioners of the canal fund have had no duties to perform except to designate banks for the deposit of canal funds, and, ordinarily, to supervise the issuing of canal bonds. the first canal debt bonds were issued in 1817 under legislative authority, and their disposition and the management of the sinking fund which was provided for their payment were put in the hands of the commissioners of the canal fund. the amount of the debt that year was $200,000. as the canal system was extended, and later when the canals were enlarged, this debt was from time to time increased until in 1860 it reached the sum of $27,107,321.28. from that time it continuously decreased through the payments to, and the application of, the sinking fund, until on the 1st day of october, 1893, the last of this, the last bonded debt of the state, was paid. something of financial history may be learned from a study of the rates of interest paid on these loans to the state. on the loan of 1817 the rate of interest was six per cent. from 1820 to 1830 the highest rate was six per cent and the lowest, five. from 1830 to 1840 a rate of five was sufficient. from 1840 to 1850 the rate advanced, the lowest being six and the highest seven per cent, the latter rate being in about 1842, the period of uncertainty as to the state's financial policy. from 1850 to 1860 the rate again fell to five and six per cent. in 1861 a small loan was made at seven. from 1870 to 1880 the rate was six per cent. this was the last of the old canal loan. by vote of the people in 1895 a loan of $9,000,000 was authorized to be used in the enlargement of the canals. the amounts thus far borrowed under that authority have been at the rate of three per cent. [illustration: w. l. marcy (signature) _6th comptroller_] perhaps the most notable circumstance of comptroller mcintyre's term, and certainly one of the most notable in the whole history of the office, was his controversy with daniel d. tompkins. during the war of 1812 governor tompkins had been the agent both of the state and of the national government, and in this dual capacity he had received and disbursed very large sums of money. for much of this money he had taken, or could produce, no vouchers, and, consequently, in 1819 he stood upon the comptroller's books a debtor, if not a defaulter, to the state in the large amount of $120,000. he claimed, and his friends claimed for him, that he had honestly disbursed all the money that he had received, and that the apparent deficit was due to his acknowledged unbusiness-like methods, and in his failure to keep books of account, and to take vouchers. he was then vice-president of the united states, and it was thought by the "bucktail" republicans that he was the only man who, in the state election of 1820, could beat governor clinton for re-election. this unsettled balance, which had been standing for several years on the books of the comptroller, was a serious obstacle to the execution of their plan. accordingly, the legislature of 1819 passed an act requiring the comptroller to settle the residue of the accounts of governor tompkins, and in the settlement to allow him the same premium on the amount of money borrowed by him "on his own responsibility" as was allowed others for like service; and further requiring the comptroller to credit the governor with sums paid by him, legally, to any person, and to call upon such persons to account for the money. contrary, it was said, to what had been understood by those who had been instrumental in passing the act of 1819, vice-president tompkins, instead of presenting a claim for premium merely sufficient to offset the claim of the state against him, presented one for $250,000, and supported this claim by opinions both of experts and lawyers. this bill furnishes a commentary on the credit of the state in the perilous times of the war of 1812, or perhaps upon the value of the services of financial agents at that time. the brokerage charged by governor tompkins was at the rate of twenty-five per cent. the comptroller, feeling that this was not the legislative intent, and ever watchful as he was of the state's interests, declined to allow the claim, on the ground that the governor had not borrowed the money "on his own responsibility," but on the joint responsibility of the state and himself. the comptroller offered to submit the soundness of his position to the judges of the supreme court, and to join with the judges, if it was desired, the chancellor or the attorney-general. but this mr. tompkins declined on the ground that all of these proposed referees were politically hostile to him. correspondence relating to the matter, and marked by great bitterness of tone, took place between these eminent officials; and in this the comptroller showed not only a familiarity with accounts, but a facility with the pen, which was a surprise to those who had not known him intimately. this matter occupied much of the attention of the legislature for two years, and gave rise to protracted and animated debates, and there is no doubt that it entered largely into the defeat of governor tompkins by clinton in 1820. the controversy was finally settled under an act of the legislature of 1820, which directed the comptroller to balance the accounts upon the filing of a release from governor tompkins of all his claims against the state. it had required no small amount of courage for comptroller mcintyre to engage in a trial of strength with this idol of the state. daniel d. tompkins was four times elected governor of the state, and twice elected vice-president. he was a man of great personal magnetism; with large abilities, and he held a place in the affections of the people of this state which has scarcely been equaled by any of our citizens since his time. [illustration: silas wright jr (signature) _7th comptroller_] [illustration: a. c. flagg (signature) _8th comptroller_] at no time in the history of the state has the comptroller's office been more ably filled, and occupied a more prominent position, than during the administration of archibald mcintyre. he had the unbounded confidence of all, and although there were several councils of appointment during his term of service which were hostile to him, no one seems to have thought of removing him. he was regarded as a public servant whose services could not well be spared to the state. he was held in a measure responsible for the defeat of governor tompkins, and, although clinton was elected, the legislature and the council of appointment were decidedly hostile both to clinton and to him, and on february 12, 1821, mr. mcintyre was removed, and john savage appointed in his place. his removal would have created far greater dissatisfaction than it did, although the dissatisfaction was considerable, had not his successor been a man of concededly great ability. mr. mcintyre was, the year of his removal, nominated as the clintonian candidate for senator from the middle district, and, although strenuous efforts were made to defeat him, he was elected by a substantial majority. in 1822 he was, with john b. yates, appointed agent for the state lotteries. the constitution of 1821 had forbidden any further lotteries within the state, and authorized the legislature to pass laws preventing the sale of tickets except in the lotteries already established by law. these were mostly instituted under the law of 1814 for the purpose of aiding literary institutions. by the act appointing him, the agents were invested with sole authority to issue and sell all lottery tickets which, for the future, were to be issued to pay some hundreds of thousands of dollars due various institutions. the legislative intent was carried out by the agents to the satisfaction of the beneficiaries, and also with satisfactory pecuniary results to the agents themselves. upon his retirement from his agency mr. mcintyre was able to withdraw both from politics and business. one would hardly expect to find in the books of account in the comptroller's office anything in the nature of a history of morals, but the receipts from various lotteries forms a no inconsiderable part of the receipts of the state for a number of years. this opens up a view which almost shocks modern sensibility. lotteries were not only authorized by the state, but they were in the main devoted to beneficent purposes. union college owes no inconsiderable part of her early usefulness to money derived from state lotteries. indeed, the institution of state lotteries in new york may almost be attributed to the efforts of that truly great and good man, the rev. dr. eliphalet nott. the first moneys ever appropriated by new york for the purposes of free schools were raised by lottery. john savage, of salem, a lawyer, and a democrat of the "bucktail" stamp, was the fifth comptroller, and at the time of his appointment he was not new to public life. he had been district attorney of the fourth district from 1806 to 1811, and again from 1812 to 1813; member of assembly from washington county in 1814, and member of the fourteenth and fifteenth congresses. he rounded out his official career with eight years (from 1823 to 1831) of honored service as chief justice of the supreme court. as a public official it has been said that "he exhibited candor, industry, caution and excellent judgment." no higher qualities can be given to any official. later in life the positions of chancellor and treasurer of the united states were offered to him but declined. during his term of office there was no substantial change or enlargement of the powers and duties of the office, aside from the power given to invest money belonging to the common school fund. the common school fund had its origin in 1805, and was, as the determination for free schools became more manifest, an application to a school system of the utopian vision of the makers of the state, who sought to pay all the expenses of maintaining the government by interest from its invested funds. the common school fund has, unlike the general fund, steadily increased. by the act of 1805 the proceeds of the first 500,000 acres of vacant and unappropriated land sold by the surveyor-general were appropriated as a permanent fund for the support of common schools. other sources of revenue were from time to time turned into this fund, until from its small beginning of $58,757.24 in 1805, it has now productive investments aggregating $4,448,140.77. it is a noteworthy fact that no direct tax for school purposes was laid by the state until 1853, the interest of the fund alone being appropriated. how small a portion the income plays in maintaining the schools of the state to-day can be seen in the fact that the state for the year 1896 appropriated for educational purposes $4,970,134.53, and this is not a quarter of the amount expended in the state for the purpose of free schools, when the local contributions are taken into account. judge savage was the last comptroller who owed his selection to the council of appointment. [illustration: bates cooke (signature) _9th comptroller_] the constitutional convention of 1821, in deference to strong public demand, had abolished that disgraceful anomaly, and by section 6 of article 4 had provided that "the secretary of state, comptroller, treasurer, attorney-general, surveyor-general and commissioner-general shall be appointed as follows: the senate and assembly shall each openly nominate one person for the said offices respectively; after which they shall meet again, and if they shall agree in their nominations the person so nominated shall be appointed to the office for which he shall be nominated. if they shall disagree, the appointment shall be made by the joint ballot of the senators and members of assembly. the secretary of state, comptroller, treasurer, attorney-general, surveyor-general and commissioner-general shall hold their office for three years, unless sooner removed by concurrent resolution of the senate and assembly." [illustration: john a. collier (signature) _10th comptroller_] the legislature, on the 13th day of february, 1823, elected, in the manner provided by law, william l. marcy, a lawyer and a democrat, of albany, to succeed savage. there was a contest in the caucus over his nomination, his opponent being genl. james tallmadge, a man of conspicuous ability and influence in the senate. the power of mr. van buren, however, turned the scale in mr. marcy's favor. the only public position which he had previously held was adjutant-general, but from that time on his name is closely linked with the history of the state and union. he was comptroller for six years, judge of the supreme court for two years, and united states senator for two years. he was three times elected governor, and defeated in his fourth run for that office by william h. seward. he was appointed secretary of war by president polk in 1845, and secretary of state by president pierce in 1853. he had for years, under mr. van buren, been a leader of that most influential political body which has become known to history as the "albany regency." the remaining members are understood to have been at that time silas wright, azariah c. flagg, edwin croswell, john a. dix, james porter and benjamin knower. the records of the state show that these men, while building up a compact and powerful political organization, did not neglect their own personal and political advancement. one of the vouchers in the comptroller's office played a prominent part in the last of mr. marcy's gubernatorial campaigns--a circumstance which, thurlow weed says, mr. marcy pronounced the most disagreeable of his entire public career. while serving as supreme court judge, and on circuit in niagara county, he included in his bill of expenses an item as follows: "for mending my pantaloons, 50c." in the seward campaign thurlow weed, then the editor of the albany _evening journal_, learned of this fact and published the story. it was taken up by the press generally throughout the state, and mr. marcy, with all his fine organization and numberless friends, found himself for the time being, like spain's chivalry, "laughed away." [illustration: millard fillmore (signature) _11th comptroller_] the item, however, exhibits the scrupulous exactness of the man. instead of presenting the bill with an indefinite amount of incidentals, he itemized it thus particularly to his own disadvantage; but, as mr. weed afterward admitted, it was a credit to his honesty. it was during mr. marcy's term that much of the work on the erie canal was done, and the careful scrutiny which the bills for this work received was largely instrumental in keeping the cost within the estimates. he took ground as chief financial officer of the state against the construction of the chenango and genesee valley canals, for the reason that these canals would not, in his judgment, pay the expenses of maintenance and the interest on the debt which would be incurred in their construction. while friends of the measures endeavored to convince the legislature that the comptroller was wrong in his calculation, the result, when these works were finally completed, fully justified the comptroller's view. as governor he made some friends, and more enemies, by adhering to the same careful course he had maintained as comptroller. in 1826 the legislature created the canal board, and the comptroller was made _ex-officio_ a member of it, and he has continued to act as such member down to the present. on the 27th day of january, 1829, the legislature elected as the successor of mr. marcy a man who, in his time, made a great impression upon state and national politics--silas wright, of canton, a lawyer and a regency democrat. he had previously been surrogate of st. lawrence county, state senator from the fourth district for the years 1824, 1825, 1826 and 1827, and a member of the twentieth and twenty-first congresses. in the latter position he had achieved considerable reputation. after his five years' service as comptroller he held with high honor, for nearly twelve years, the position of united states senator. during the term of mr. van buren as president he was considered to voice the administration in his public utterances. he served faithfully and intelligently upon some of the most important committees. he resigned to take the office of governor, which office he held in 1845 and 1846, and was defeated for re-election by john young in november, 1846. mr. wright continued the careful and conservative policy of his predecessor as to expenditures. he took strong ground against the numerous and extensive raids on the treasury which were then organized. his reports were always plain, business-like papers, which set out in intelligible language the consequences of the rapidly-increasing expenses. mr. wright in many ways was a remarkable man. the public positions which he held were varied, and it was a great test of his adaptability to be able to fill the duties of these various positions with much more than ordinary success. in 1831 the financial law of the state was revised, and the provisions relating to the powers and duties of the comptroller were codified and arranged. [illustration: w. hunt (signature) _12th comptroller_] upon his election as united states senator mr. wright resigned and was succeeded by azariah c. flagg, of plattsburgh, a lawyer and a regency democrat, who was elected on january 11, 1834. he had been a member of assembly from clinton county in 1823 and 1824, and held the office of secretary of state from 1826 to 1833. he had run counter to public opinion in 1823 as the leader of the assembly opposition to the electoral law--a law designed to give to the people directly the power of chosing the presidential electors, instead of leaving that power vested in the legislature, as had been the law theretofore. the albany regency had determined to prevent any change, and succeeded in warding off legislative action. the measure, however, met the cordial approval of the people, and that fact, together with the removal of governor clinton as canal commissioner--a position in which his uncompensated services had been of the greatest value--swept clinton, whose political fortunes then seemed at their lowest ebb, triumphantly into the gubernatorial chair. but it was a principle of the albany regency, and of martin van buren, then at its head, never to forget a man who had fallen or suffered in their service; and it was in reward for mr. flagg's unpopular opposition to the electoral bill that in 1826 he was chosen secretary of state. mr. flagg has the distinction of having served longer as comptroller than any other incumbent of the office, with the exception of archibald mcintyre. he held the office from january 11, 1834, to february 4, 1839, and again from february 7, 1842, to november 7, 1847. during his first term he was a member of the commission for the erection of the state hall, and that building still stands as a monument to the commission's good judgment in architecture, and in the adaptation of means to an end. upon the completion of the state hall the old state hall, corner of lodge and state streets, was sold by the commission. by chapters 2 and 150 of the laws of 1837 the comptroller was made the custodian of moneys received from the united states, since known as the united states deposit fund. theoretically this money was not given to the several states, but was to be subject to repayment whenever called for. the national government will hardly, at this late day, call for these moneys. if it did not feel compelled to do so in the trying financial straits of the war it is not likely that it will do so in times of peace. but these moneys have always been kept as a separate fund, substantially as required by the act of 1837, and the principal, through all changes of, and losses from, investment, has been kept intact. [illustration: p c fuller (signature) _13th comptroller_] by chapter 260 of the laws of 1838 the comptroller, to guard against counterfeiting, was authorized and required to have engraved and printed in the best manner, circulating notes to be issued to the incorporated banks of the state, and to countersign the same; and a system was inaugurated for the deposit of securities in the comptroller's office which should be a guaranty for the notes issued by the banks--a system very similar to that later adopted by the united states for national banks. one feature which would be regarded as a most unwise one to-day formed a part of this plan; the banks were authorized to deposit one-half the security in bonds and mortgages. the bill also provided that banking associations should file with the comptroller a semi-annual report of the transactions of the bank. this was practically the inauguration of the supervision of the banks, which was later transferred to the banking department. the legislature had, in 1829, at the time of the creation of the safety fund, authorized the appointment of three bank commissioners, whose duty it was to visit the banks, examine their condition, and report to the legislature. the office of bank commissioner was abolished in 1843, and the power of supervision possessed by them was then transferred to the comptroller, and he continued to retain that power until 1851, when the banking department was created. it was during mr. flagg's first term that the great financial panic of 1837 took place, and the state's financial condition at that time was not all that might be desired. there was a large debt, mostly incurred in the construction of canals. the revenues had very much decreased, and a new way of raising funds must be used to meet the liabilities of the state and maintain her credit. matters financial in the state went from bad to worse. in 1842, after long debate, the legislature passed an act authorizing the laying of a tax of one mill upon every dollar of real and personal property in the state, and pledging the revenues of the state for the payment of its liabilities, and suspending all public work, except where great loss would come to the state by such suspension. in this manner the credit of the state was made secure and its obligations met. this act was prepared and advocated by mr. flagg. the significance of this legislation is found largely in the fact that from 1826 to 1842 no state tax for general purposes had been required. [illustration: j. c. wright (signature) _14th comptroller_] the long lease of power which the democrats had held in this state was broken in the fall of 1838 by the combined efforts of the whigs and anti-masons, and, accordingly, on the 4th of january, 1839, mr. flagg was removed, and bates cook, of lewiston, a lawyer and an anti-mason was chosen by the legislature in his place. mr. cook's only previous official service of note had been as member of the twenty-second congress. his appointment was largely due to the influence and representations of william h. seward, then the governor, and thurlow weed. he had been associated with these gentlemen in the prosecution of the abductors of william morgan, and, like mr. seward and mr. fillmore, received his political start from anti-masonic influence. mr. cook soon had an opportunity to show mr. weed his appreciation of the favor done him. chapter 1 of the laws of 1840 authorized the comptroller and secretary of state to enter into a contract with thurlow weed to do the printing for the legislature, executive offices and various boards, at prices not exceeding ordinary prices in albany. this seems to have been the first time these officers were intrusted with this responsibility, and it was not until 1846 that the general power was definitely conferred upon them. subsequent legislation has added to the printing board then created the attorney-general, so far as legislative printing is concerned; but as to department printing, the secretary of state and the comptroller are still clothed with the authority of letting the contract. by chapter 295 of the laws of 1840 the comptroller was assigned quarters in the state hall, together with the other state officers, and that building was made the headquarters of the canal board, and there both still remain, although the comptroller, from time to time, as the needs have compelled, has taken to himself more rooms, so that his offices now occupy the entire first floor of the building. [illustration: j m cook (signature) _15th comptroller_] on january 27, 1841, the legislature elected john a. collier, of binghamton, a leading lawyer and an anti-mason, to succeed bates cook. he had previously served as district attorney of broome county from june 11, 1818, to february 22, 1822, and had served his district in the twenty-second congress. after his retirement from the office of comptroller he was appointed, with chancellor walworth, to codify the laws, but declined to serve. this was a high tribute to his ability. during 1841 the comptroller's office was examined by a legislative committee, to ascertain if warrants had been drawn in conformity with the law, and the funds properly disbursed. the office was found able to stand the fire of a rigid investigation. mr. collier had been a federalist and a clintonian, but it was as an anti-mason that he was elected both to congress and as comptroller. he, too, was largely indebted for his appointment as comptroller to the potent influence of thurlow weed. the administration was a short but efficient one, and mr. collier proved himself through life an able and discreet man. the legislature, which for several years had been whig, in 1842 became democratic, so that by concurrent resolution, on february seventh they were enabled to remove john a. collier and re-appoint azariah c. flagg. during his second term mr. flagg performed the multiplying duties of the office with his usual fidelity, and to the satisfaction of the people of the state. there seems to have been no important enlargement of the duties of the office during this period. by various statutes, passed prior to the constitution of 1846, the state had loaned its credit to a number of corporations, mostly railroad, until, in 1845, the state debt thus incurred, called the "contingent debt," amounted to $5,235,700. provision was made for a sinking fund, and the management of this fund was placed with the comptroller. corporations have no souls, and, consequently, we find that of the credit thus loaned the state lost $3,665,700. from the additions to and accumulations of the sinking fund, the last of the contingent debt was extinguished in 1877. [illustration: l. burrows (signature) _16th comptroller_] by chapter 350 of the laws of 1847, passed during his term, the comptroller was required to make a report of the fiscal year before the close of the calendar year, and to present the same to the legislature shortly after the commencement of its session. but at this point a new method of chosing a comptroller was introduced in the organic law. section 1 of article 5 of the constitution of 1846 provides that "the secretary of state, comptroller, treasurer and attorney-general shall be chosen at a general election, and shall hold their offices for two years." the constitutional provision was supplemented by chapter 240 of the laws of 1846. the first man elected by the people to the office was millard fillmore, of buffalo, an able lawyer and a whig. he had been a member of assembly from buffalo in 1829, 1830 and 1831, and a member from his district to the twenty-third, twenty-fifth, twenty-sixth and twenty-seventh congresses. during his term as comptroller he was nominated and elected vice-president on the ticket with zachary taylor, and upon the latter's death, on july 9, 1850, he succeeded to the presidency. as president he is, perhaps, more distinguished as the signer of the "fugitive slave law" than for any other one thing. he was elected comptroller and vice-president as a whig, but by the signing of that obnoxious measure he alienated very many of his old whig associates. he was, however, a clean, able man. in politics he was thought by many to have been a favorite of fortune. some one of his acquaintances is said to have remarked, at the time of his election as vice-president, that he felt sorry for general taylor, because the general never could live out his term against fillmore's luck. mr. fillmore resigned the office of comptroller on the 17th of february, 1849, to assume the duties of vice-president. the legislature appointed washington hunt, a lawyer of prominence and a whig, of lockport, to succeed him. mr. hunt had been county judge of niagara county from 1836 to 1841, and had been a member of the twenty-eighth, twenty-ninth and thirtieth congresses. he was nominated and elected comptroller in the fall of 1849. in 1850 he was elected governor over horatio seymour, but in 1852 he was in turn defeated in his run for the second term by seymour. he made an excellent record as governor during the years 1851 and 1852. it was upon mr. hunt's recommendation that the duties of supervising and superintending the banking business of the state was transferred to the banking department, specially created for the purpose. he felt that a greater burden of responsibility was being imposed upon the office of comptroller than could be satisfactorily sustained. this is one of the rare illustrations of a desire to surrender power. but what relief was gained by the transfer of the supervision of the banks was replaced by the duty which was imposed of superintending the business of insurance in this state. all insurance companies, prior to 1846, had been incorporated by special acts, but the constitution of that year prohibited the creation of such corporations, except under general laws. in 1849 the legislature passed a general law for the incorporation of insurance companies. by the terms of the act the duty of organizing and regulating insurance companies in this state, both domestic and foreign, was conferred upon the comptroller. this was the first state supervision of insurance. the duty remained with the comptroller until january 1, 1860, when the act creating the department of insurance went into effect. the comptroller's office feels proud of its two healthy and useful children--the banking department and the insurance department, which have been efficiently serving the state and protecting the interests of its citizens for many years, and it ventures to believe that the early tuition that they received from the parent department helped to form their habits and prepare them for their career. [illustration: s e church (signature) _17th comptroller_] mr. hunt resigned the comptrollership december 18, 1850, two weeks before he was to enter upon his duties as governor, and philo c. fuller, a whig, of geneseo, was appointed in his place. mr. fuller had, in early life, been a clerk in the land office of mr. james wadsworth. thurlow weed met him at that time and recognized in him abilities of a high order. it was probably at mr. weed's suggestion that he first entered public life; it was certainly upon mr. weed's recommendation that he was appointed comptroller. it was one of the great secrets of thurlow weed's long retention of political power that whenever he saw capability he sought, and, to use a ranchman's expression, "corralled it." mr. fuller was member of assembly from livingston county in 1829 and 1830, state senator in 1831 and 1832, and member of the twenty-third and twenty-fourth congresses. later he moved to michigan, and, being elected to the legislature, he was chosen speaker. he was appointed assistant postmaster-general in the harrison administration, but, being unwilling to follow president tyler into the democratic camp, he resigned, and returned to new york. he performed the duties of his office of comptroller with ability, although doubt of his capacity was felt at the time of his appointment. for the forty years from 1840 to 1880 the comptroller's office was one of difficulty. during the first half of that period there was seldom a year when the expenditures did not exceed the appropriations, and when the comptroller was not obliged to report a deficit at the end of the year. there was also during that same period a rapidly-increasing canal debt, and the comptroller was in duty bound to find a market for bonds and the means to meet the interest when it became due. in the latter half of this period it was the comptroller's duty to see that the means were at hand to pay the principal of this and other bonded debts, and the increased expenditures caused by the war. [illustration: robert denniston (signature) _18th comptroller_] mr. fuller was succeeded january 1, 1852, by john c. wright, a democrat and lawyer, of schenectady. he had been county judge of schoharie county from 1833 to 1838, and state senator from the third district in 1843, 1844, 1845 and 1846. he was an opponent of the albany regency during his senatorial career. he was a ready debater but of impulsive temper, and at one time engaged in a personal rencounter with colonel young on the floor of the senate chamber. his administration was unmarked by any peculiar enlargement of the official power, or by distinguished executive ability. that things run so smoothly that no attention is attracted is oftentimes strong evidence of a successful working machinery. by an act of the legislature of 1851 the comptroller was authorized to borrow three millions per year for three years for the completion of the canal enlargement. mr. wright served one term, and was succeeded, january 1, 1854, by james m. cook, a lawyer and a whig, of ballston. mr. cook was a member of the constitutional convention of 1846, senator from the thirteenth district for 1848, 1849, 1850 and 1851, and from the fifteenth district in 1864 and 1865. he served as state treasurer during the years 1852 and 1853, and was bank superintendent from january 30, 1856, to january 11, 1861. he was thus continuously in the service of the state from 1848 to 1861, a period of thirteen years. in 1854 the comptroller was authorized to appoint three commissioners to investigate the state prisons and report on their financial condition, and also upon such laws as they deemed proper for their better regulation. under this abuses were corrected, and the comptroller was given closer supervision of the prisons. for a short time in 1858 the whig leaders had under favorable consideration the nomination of mr. cook for governor, but circumstances forced a change, and e. d. morgan was nominated and elected. [illustration: l. robinson (signature) _19th comptroller_] on january 1, 1856, lorenzo burrows, a banker and an "american" or "know nothing," of albion, became comptroller. he had been a member of the thirty-first and thirty-second congresses. he later served as regent of the university by appointment made february 17, 1858, and in november, 1858, was one of the candidates of the "american party" for governor against e. d. morgan. to the time of his death, many years afterward, he never failed to make at least one visit yearly to the comptroller's office, and always maintained a lively interest in its affairs. after one term of service mr. burrows was succeeded by sanford e. church, a lawyer and a democrat, also of albion. mr. church had been a member of assembly from orleans county in 1842; district attorney of the same county from 1846 to 1850; lieutenant-governor from 1850 to 1854. he ran for re-election as comptroller in 1859 and was defeated, and again in 1863 and was also defeated. he was elected one of the delegates-at-large to the constitutional convention in 1867, and was chief judge of the court of appeals from may, 1870, to may 20, 1880, when he died. in all these various positions mr. church showed a broad, liberal spirit, and great mental force. his reports as comptroller are valuable state papers, expressed in clear, strong and forcible language. it is sufficient to say of judge church, that, as comptroller, he brought the same care, attention and strong mental grasp to his duties that afterward won for him eminence and fame as chief judge of our highest court. robert denniston, a gentleman farmer and republican, of salisbury's mills, became comptroller january 1, 1860, having been elected at the november election of 1859 over sanford e. church. he had been assemblyman from orange county in 1845, and senator from the second district in 1841, 1842, 1843, 1844, 1845, 1846 and 1847, and had been an unsuccessful candidate against mr. church for the office of comptroller in november, 1857. he was thus comptroller in the first year of the war, at the inauguration of high taxes and the large expenditures of that period. his administration was wise and conservative. on january 1, 1862, lucius robinson, an able lawyer of elmira, assumed the duties of the office. mr. robinson was a democrat, but at the breaking out of the war he was strongly for the union cause, and it was on the union ticket that he was elected comptroller, and he was re-elected on the same ticket in 1863. at the close of the war, he resumed his place in the democratic party, from which he had never been fully estranged. he ran as a democrat against thomas hillhouse, in 1865, and was beaten. he had been district attorney of greene county from 1837 to 1839, and member of assembly from chemung county in 1860 and 1861. he was re-elected comptroller in november, 1863, and again in november, 1875. he was a member of the constitutional commission of 1872, governor of this state for the years 1877, 1878 and 1879, and defeated for re-election in november, 1879, by alonzo b. cornell. he was comptroller during the dark days of our civil war. at no period, however, of its history was the work of the office more carefully managed. for the six years from 1860 to 1866, the canal and general fund debts were reduced $8,000,000. in the four years of the war, the state expenditures for arms, bounties, clothing, equipments and various military purposes were upwards of $20,000,000. to meet these large and abnormal expenses, required of the comptroller resourceful ability. when specie was at a high premium in 1863 and 1864, mr. robinson earnestly recommended the payment of the state's bonded debt, both principal and interest, in specie. the legislature, however, disregarded the recommendation. there was precedent in the office for such a course. comptroller flagg, upon the suspension of specie payment in 1837, made good the difference between the depreciated currency and coin. comptroller allen followed the lead of mr. robinson, and urged the payment of these debts in coin. this was not done, however, until 1870, when the state went into the open market and bought coin to pay the interest on its bonds, and continued this policy until the resumption of specie payment in 1879. this course, however, was not pursued with reference to the bounty debt. in 1865, against the advice and almost protest of the comptroller, the legislature assumed the bounty debt of the various counties of the state, and for that purpose it became necessary for the state to issue its bonds to the amount of $27,644,000. the act authorizing the creation of the debt provided for a sinking fund, and the managing of this fund and the issuing of the bonds was given to the comptroller. this debt was extinguished year by year until it disappeared from the comptroller's books in 1877. it was during mr. robinson's term, in 1863, that $66,000 were appropriated to purchase the lands adjoining the then capitol, and bounded by state, hawk and congress streets. this was probably the first money expended on "that lofty pile where senates dictate laws." [illustration: tho hillhouse (signature) _20th comptroller_] in 1862, the legislature placed an item in the appropriation bill which still remains law. it provides that the comptroller shall not draw his warrant, except for salaries and regular expenses, until the person entitled to the money shall present a detailed account, verified by affidavit as to services; and if for traveling expenses, a detailed account specifying the distance and places from and to which, and receipted vouchers for all disbursements. by chapter 419 of the laws of 1864, the officers of all hospitals, orphan asylums, benevolent associations, educational and charitable institutions were required to report to the comptroller their financial condition, with their receipts and disbursements. the comptroller was, by concurrent resolution of the legislature, the same year appointed, with the governor and the secretary of state, to take action properly to receive the returning veterans, and for the health of the recruits. mr. robinson was a man of great executive force, strict honesty, and with the courage of his convictions. he was succeeded by thomas hillhouse on the 1st of january, 1866, mr. hillhouse having been elected in november, 1865. he was a gentleman farmer and a republican from geneva, and had been senator from the twenty-sixth district in 1860 and 1861, and adjutant-general of the state from august 19, 1861, to january 1, 1863. he still survives as the honored president of the metropolitan trust company, of new york. thurlow weed in his autobiography says: "for my direct responsibility in the selection of bates cook, john a. collier, millard fillmore, washington hunt, philo c. fuller, james m. cook, robert denniston and thomas hillhouse, i look back with pardonable pride, for in few ways could better service have been rendered to the state and people." mr. hillhouse certainly deserved the confidence reposed in him. he was careful, conservative and able. on january 1, 1868, mr. hillhouse gave way to william f. allen, a distinguished lawyer and a democrat, of oswego. mr. allen served as member of assembly from oswego in 1843 and 1844, and was appointed united states district attorney in 1845, and was appointed judge of the supreme court in the fifth district in 1847, and elected to the same position in the fall election of 1855. he was re-elected comptroller in november, 1869, but resigned june 14, 1870, to accept an appointment as judge of the court of appeals. this latter place he held with great distinction until his death, in june, 1878. in 1864 he was the slated democratic candidate for governor. horatio seymour was then governor, and mr. allen's friends at least understood that mr. seymour wished a renomination as a compliment, but would decline. to their consternation, however, mr. seymour came before the convention, thanked its members for the honor done him, and accepted. it was during mr. allen's administration that the comptroller was authorized to appoint an agent to examine into the reports submitted to him by the various charitable institutions. by chapter 281 of the laws of 1870, the comptroller was made, _ex-officio_, a member of the state commission of public charities. judge allen was distinguished by talents of the highest order, and his long public career was a useful one to the state. [illustration: w f allen (signature) _21st comptroller_] it is an interesting political fact that in the campaign of 1869 judge allen had as his opponent in the run for comptroller horace greeley. mr. greeley's election was earnestly opposed by many of the leading republicans of the state. a letter of thurlow weed was made public, in which he appealed very strongly to the people of the state to vote against mr. greeley. he based his opposition quite largely upon the fact that mr. greeley's time would have to be divided between his editorial duties in new york and the comptroller's office in albany. he then went on to say: "the office of comptroller is most laborious and responsible. i have known its incumbents for considerably more than half a century. among them were archibald mcintyre, john savage, william l. marcy, silas wright, jr., azariah c. flagg, john a. collier, washington hunt, philo a. fuller, james m. cook, thos. hillhouse and others, distinguished for ability and industry, not one of whom have attempted to attend to any other business, and all of whom found constant and full occupation, physical and mental, in the discharge of their public duties. without regard to other reasons for withholding my vote from mr. greeley, i consider those which i have stated sufficient. in his opponent, william f. allen, i found a capable and enlightened man, with some experience, much industry and peculiar fitness for the duties of the office. i have known him first, as an able and useful member of our legislature, and next as an eminently upright judge." upon the resignation of judge allen, asher p. nichols, a lawyer and democrat, of buffalo, was appointed, and, in the fall of the same year, 1870, he was elected to fill the unexpired term. he had been previously a state senator from the thirty-first district in 1868 and 1869. he ran for the office of comptroller in 1871 and again in 1873, and was defeated both times by nelson k. hopkins. mr. nichols was a man of ability, who commanded the highest respect of those who knew him. he was distinguished somewhat for an old-time formal courtesy of manner. it is fair to mr. nichols to say that the deficiency in the treasury which mr. hopkins found upon his advent was not due to him, or to lack of recommendations on his part, but rather to the attempt of the tweed _regime_ in the legislature to make a tax rate that would continue them in power. "among the faithless, faithful only he." [illustration: a. p. nichols (signature) _22d comptroller_] mr. hopkins was a lawyer and a republican from buffalo, and he entered upon the discharge of the duties of the office on january 1, 1872, and continued therein for four years. this was the beginning and the end of his career in state politics, but in those four years he left a record of splendid and faithful work. he found upon his entry into office that there had been for several years a growing deficiency in the general fund. in 1869 the excess of appropriations over receipts was $1,493,181.28; in 1870, $2,355,927.40; in 1871, $2,748,595.56; in 1872, $1,785,762.97; in 1873, $254,253.53; making for the five years an aggregate deficiency of $8,637,720.74. the money to the extent of this deficiency had been supplied to the treasury by using the moneys from the bounty debt sinking fund. heroic treatment was necessary, so disregarding political effect mr. hopkins advocated and secured the adoption of the highest tax rate in the history of the state, to wit, nine and three-eighths mills on the dollar, and three and one-half mills of this amount went to make up the deficiency. in this way the bounty debt sinking fund was again made good. in 1873 the comptroller was given power to examine into the affairs of the prisons, with the power of a court of record to subpoena witnesses, etc., and the same year he was authorized in person, or by agent, to visit the various state institutions and examine their books, papers and vouchers, both of which powers are still inherent in the comptroller's office. the same year he was authorized to set aside cancellations of tax titles made by him whenever it appeared that fraud, misrepresentation or the suppression of a fact, or a mistake of fact, had induced the cancellation. this power, with slight modification, still remains. [illustration: n k hopkins (signature) _23d comptroller_] during mr. hopkins' four years of service the bounty debt was reduced $14,401,700, and he was able to congratulate the legislature and the people of the state at the close of his term on the prospect of a substantial reduction of tax. on the 1st of january, 1876, lucius robinson again assumed the office of comptroller, which he held one year. he had defeated in the election the november preceding francis e. spinner, whose services and signature are so well known as to make comment unnecessary. his second administration of the office was distinguished by the same care-taking ability which was manifest in the first. the reduction of the bounty debt and other indebtedness of the state continued. he was elected governor in 1876. the first official act of governor robinson was the appointment of frederic p. olcott, of albany, as comptroller. it is a matter of secret political history that governor tilden had desired to appoint daniel magone to the office, and that for that reason mr. robinson would not resign until it was too late for governor tilden to act. but he had to act promptly, because, if no appointment were made before the legislature convened, the power to fill the vacancy would then be in that body. governor robinson improved the fleeting moment. mr. olcott, as the head of the firm of f. p. olcott & co., had been the state's agent in transactions relating to the bounty debt, and, to mr. robinson's mind, he had exhibited abilities which would make of him a valuable comptroller. that the governor was not mistaken, mr. olcott's career, both as comptroller, and since his retirement from that office, as president of the central trust company, abundantly proves. he served out mr. robinson's unexpired term, and was elected in november, 1877, over c. v. r. ludington, but was defeated for re-election in 1879 by james w. wadsworth. this was the only political office which he ever held. early in his term his attention was attracted to the abnormal quantities of soft soap which one of the small state charitable institutions was using, and he became satisfied that "soft soap," like pickwick's "warming pan," was a cover for something hidden. among the vouchers for may and june, 1875, were vouchers for seventy-eight barrels of soft soap at a cost of $350, which, at the same rate, would make an aggregate of $2,100 per year. the aggregate expenditure for soft soap for the institution during the six years ending june 30, 1876, had been $3,963.60. an investigation was instituted at the comptroller's request by the state board of charities, and it was found that "soft soap" in that instance meant the laying out of roads and beautifying grounds to an extent that the comptroller's office would not have paid. the designing institution learned to its surprise that the comptroller could not stand too much "soft soap." these revelations led the comptroller to ask the legislature for power to investigate thoroughly all the charitable institutions. this work was ably done by edgar k. apgar, who made an admirable report, and this report was the means of establishing a more thorough and systematic supervision of these institutions by the comptroller's department. in his report, transmitted to the legislature on the 1st of january, 1878, mr. olcott said: "each of these institutions is now separate and distinct from its fellows, and each is governed by a local board of trustees. it is evident, therefore, that there is no general system governing all, but each is a law unto itself. there is no department of government which exercises any supervision over their affairs or that has more than a superficial knowledge of the manner in which they are conducted. * * * i would recommend for your consideration the policy of abolishing all local boards of trustees and the erection of a system by which the different institutions shall be managed by one controlling power. as it is, the responsibility for losses and expensive management is not centred in any one." [illustration: f p olcott (signature) _24th comptroller_] [illustration: james wadsworth (signature) _25th comptroller_] on the 2d of may, 1878 (the good faith of olcott's work in handling the bounty bonds having been called in question), he sent a communication to the legislature which more than proved the faithful and able manner in which he had performed his duties in respect to these bonds. the report was called out by a resolution of the senate. some strongly partisan members believed that they could unearth thereby, if not crookedness, at least large compensation for services performed. the attempt failed signally. mr. olcott's administration of the office ranks with the ablest. james w. wadsworth, a gentleman farmer and republican, from geneseo, became comptroller january, 1, 1880, and was one of the youngest men who have held the office. he had as a boy served with his father, the gallant and lamented general james s. wadsworth in the civil war. he was member of assembly from livingston county in 1878 and 1879, and was distinguished in the latter year as the only republican in the legislature who would not vote for the return of roscoe conkling to the united states senate, and that, too, notwithstanding the fact that mr. conkling had been duly nominated by a republican caucus. mr. conkling and he afterwards forgot differences and became quite warmly attached. he ran again for comptroller in 1885 but was defeated. he has faithfully represented a discriminating constituency in the forty-seventh, forty-eighth, fifty-second, fifty-third and fifty-fourth congresses, and has been re-elected to the fifty-fifth. mr. wadsworth took great interest in the affairs of the office during his term, and his sterling integrity and good judgment made him a most excellent officer. in 1880, by chapter 100, the comptroller was authorized to issue bonds in anticipation of the state tax, payable on or before the fifteenth day of may following, such bonds not to exceed in amount one-half of such tax. it was necessary for mr. wadsworth to inaugurate the system of collecting taxes on corporations. the original bill for that purpose was passed in 1880. it has been amended from time to time, but the whole duty of enforcing it has remained in the comptroller. the number of corporations taxed in 1881 was 954, and the amount collected $1,539,864.27; the number in 1886 was 1,249, and the amount collected $1,239,864.16. in 1892 there were 1,780 corporations paying, and the amount collected was $1,430,719.86. in 1896 the number of corporations was 4,401, and the amount collected was $2,165,610.12. the amount of capital represented by these 4,401 corporations is believed to be fully $766,000,000. mr. wadsworth gave place on january 1, 1882, to ira davenport, a capitalist and a republican of bath. mr. davenport had represented the twenty-seventh district in the state senate in 1878, 1879, 1880 and 1881, and was elected comptroller over g. h. lapham. he was defeated for re-election as comptroller by alfred c. chapin, november 6, 1883. in 1885, he received the republican nomination for governor, but was defeated by david b. hill. he was a member of the forty-ninth and fiftieth congresses. on march 1, 1883, the duty of auditing the canal accounts, after having been performed for thirty-five years by a separate officer--the canal auditor--was placed in the comptroller's office, where it still remains. the confidence which the republican party had shown in comptroller davenport was not misplaced. he was a man of high character and attainments, and performed the duties of the office of comptroller with success. [illustration: m davenport (signature) _26th comptroller_] alfred c. chapin, a lawyer and a democrat, of brooklyn, entered upon the discharge of his duties january 1, 1884. he was member of assembly from the eleventh kings county district in 1882 and 1883, and in the latter year was chosen speaker of that body. he was re-elected comptroller in 1885 over mr. wadsworth. he has, since his service as comptroller, served four years as mayor of brooklyn, from january 1, 1888, to january 1, 1892, and is now about ending a term as state railroad commissioner. in 1891, he was a prominent candidate for governor before the democratic convention, but was beaten by roswell p. flower. mr. chapin is an educated and cultivated gentleman, and as comptroller was not afraid to run counter to established ideas. he strongly recommended, in a special message to the legislature in 1885, and subsequently in his annual reports, the abolition of the common school fund, and its transfer to the treasury. by chapter 483 of the laws of 1885, the legislature laid a tax of five per cent upon collateral inheritances. this inaugurated a system of taxing transfers at death, which has come now to yield annually about $2,000,000. the comptroller was largely intrusted with the duties of enforcing this law. it was amended in 1891 by making a tax of one per cent upon all direct inheritances. in 1886, the comptroller was authorized to approve the bonds of banks designated as depositories of the funds of state institutions. the same year, the comptroller was directed to make assessments on the various companies liable therefor to meet the expenses of the subway commissions in the cities of new york and brooklyn--a duty which still rests on the office. in 1887, he was authorized to sell or exchange detached lands in certain counties of the forest preserve, upon the recommendation of the forest commission and the attorney-general, the purpose being to consolidate the state's holding of lands in the adirondack park. the same year a tax was laid on racing associations for the benefit of agricultural societies to improve the breed of horses, etc., and the collection of this tax has since remained a part of the duty of the comptroller, notwithstanding the various vicissitudes through which racing and pool bills have passed. at the november election, in 1887, edward wemple was elected comptroller over jesse s. l'amoreaux. mr. wemple was a manufacturer and democrat, residing at fultonville. he was a member of assembly from montgomery county in 1877 and 1878, and a member of the forty-eighth congress, but was defeated for re-election to that office by george west. he served in the state senate from the eighteenth district in 1886 and 1887. he was re-elected comptroller in 1889 over martin w. cooke. in 1888 the legislature passed an act requiring the agent and warden of each of the state prisons to file with the comptroller a bond, approved by the superintendent of state prisons and comptroller, in a penalty of not less than $50,000, to be fixed by the comptroller. the same year the legislature declared that the board of claims should have no jurisdiction over private claims required to be presented to the comptroller for audit, until after his action on the claim. it further required all public officials and other persons receiving or disbursing moneys of the people of the state to deposit the same in some solvent bank or banking institution, to be designated by the comptroller, and that every bank receiving such moneys should execute a bond to the people, to be filed with and approved by the comptroller. by chapter 586 of the laws of the same year the comptroller, the superintendent of state prisons, and the president of the state board of charities, were constituted a board to fix the prices of all goods manufactured in the penal institutions of the state for the use of other state institutions. all these provisions of law are still in force, except that the board to fix prices has been changed by the addition of the state prison commission and lunacy commission, and by omitting the president of the state board of charities. in 1889 the right of the comptroller to supervise the financial affairs of the prisons was enlarged, and the agent and warden required to make monthly reports of receipts and expenditures to him. he was also allowed to revise and readjust the accounts theretofore settled under the corporation tax law. in 1890 he was made a member of the "board for the establishment of state insane asylum districts and other purposes," together with the state commission in lunacy and president of the state board of charities. in 1891 an act was passed requiring all institutions receiving moneys from the state treasury for maintenance, in full or in part, to deposit their funds in some responsible bank or banking house, to be designated by the comptroller. he was also authorized to appoint commissioners to hear evidence and take proofs on applications for cancellation of title or redemption of lands. [illustration: alfred c. chapin (signature) _27th comptroller_] on january 1, 1892, frank campbell, a banker and democrat, of bath, became comptroller. he had been chosen in the previous election over arthur c. wade. he had held no office previous to that time. he served one term, ran for re-election in 1893 and was defeated. he has held no office since. by chapter 651 of the laws of 1892 the supervision of the funds deposited in court was transferred from the general term of the supreme court to the comptroller, and this work the comptroller's office has since performed; and by chapter 681 of the laws of the same year he was required to approve all official undertakings. in 1892 the authority was given to the comptroller to license common carriers. he was relieved from this duty by the new excise law of 1896. by chapter 248 of the laws of 1893 he, with the secretary of state and treasurer, was directed, before the first day of january of each year, to designate the state paper. the largest amount thus far collected in any one year under the inheritance tax law was $3,071,687.09, in 1893, during mr. campbell's term. the amount collected under the corporation tax law was increased during his term. [illustration: edward wemple (signature) _28th comptroller_] on january 1, 1894, james a. roberts, a lawyer and republican, of buffalo, became comptroller. he had served as member of assembly from the third district of erie county in 1879, and from the fourth district of the same county in 1880. he was unanimously renominated from the fourth district in 1891, but declined. he was re-elected comptroller in 1895 over john b. judson. in 1894 the comptroller was given power to appoint appraisers in cases of tuberculosis and glanders. in the same year the chancery fund, so called, which had been managed by the clerk of the court of appeals after the abolition of the court of chancery, was turned over to the comptroller. this fund, amounting to $169,935.52 in securities and cash, besides real estate of the possible value of $10,000, was the residue and remainder of moneys that had been deposited in the old court of chancery and never called for. by a rider on the appropriation bill of that year the superintendent or other managing officer of each state charitable institution or reformatory in the state was required to estimate monthly, in detail, the articles required by his institution for the ensuing month. the expenditures were to be limited to the estimates, and the treasurers were required to make monthly reports of their expenditures. this inaugurated substantially the same system, with reference to the expenditures of other charitable institutions, that was then used by the lunacy commission with reference to the hospitals. in 1895 this last provision was made more definite and explicit. the comptroller was authorized the same year to appoint a second deputy, who was to have the same powers as the deputy comptroller. twice before in the history of the office there had been a second deputy, but, after the continuance of the office for a few years, in each case it had been abolished. chapter 79 of the laws of 1895 provided for the issuing of canal bonds and created a sinking fund for their redemption. the issuing of the bonds and the care of the sinking fund were intrusted to the comptroller. the same year the trustees of the saratoga monument were authorized to transfer the property held by them to the state, and the comptroller was made custodian of the monument. [illustration: frank campbell (signature) _29th comptroller_] while in the hundred years there have been thirty comptrollers, there have been but eleven deputy comptrollers. upon the passage of the act authorizing the appointment of a deputy, in 1811, comptroller mcintyre appointed john ely, jr., and he held the position until 1822. he was succeeded by ephraim starr, who continued in the position until 1828. in 1828 mr. marcy appointed as deputy philip phelps, and, with the exception of two years, from february 28, 1840, to february 28, 1842, this being substantially the administration of bates cook, when the office was filled by w. w. tredwell, mr. phelps held the place until 1876, or in all for forty-six years. it was long felt that his services were indispensable, and while comptrollers might come and comptrollers did go, the deputy seemed likely to go on forever. it is related that late in his official career he found himself growing footsore and lame, and no longer able to stand at his desk, as had been his custom, and scarcely able to reach the office, and there was talk of his resignation, and grave fears for the future finances of the state were expressed. in this emergency an attentive clerk found that the floor where the deputy had so long stood had been worn away so that an obdurate nail protruded, and it was standing upon this nail which had worked the woe. one blow of the hammer saved the state. mr. phelps was an able man, and his services in the office made him invaluable to the frequently-changing comptrollers. at his death high testimonies to his worth and character were given by sanford e. church, thomas hillhouse, wm. f. allen, robert h. pruyn, john v. l. pruyn, and many others. a meeting of state officers was held, at which wm. dorsheimer, then lieutenant-governor, presided, and resolutions expressing his great worth and service were adopted. it was well said that "no prospect of pecuniary advantage could swerve him from the strictest line of truth and justice." mr. phelps was succeeded by henry gallien, who worthily filled the office from 1876 to 1884, when he died. thomas e. benedict held the office from 1884 to 1886. he has since been deputy secretary of state and public printer at washington, and in all positions has acquitted himself as an able and upright man. charles r. hall succeeded to the office for a little more than a year, and was himself succeeded by zerah s. westbrook, who had the office for four years, from january 1, 1888, to january 1, 1892. calvin j. huson was deputy comptroller during mr. campbell's term. at the end of his term he was succeeded by colonel william j. morgan, who still holds the office. the custom seems to have grown up in these degenerate times to make the term of the deputy co-terminous with that of comptroller. this is of doubtful propriety. too many men of tried integrity, familiar with their duties, cannot be retained in such an office. but the danger which would naturally be expected from a frequent change in both comptroller and deputy has thus far been avoided by the retention, through succeeding administrations, of some of the most important clerks. willis e. merriman has now been in service in the comptroller's office for thirty-one years, and, having worked up from the lowest to the highest service in the department, is familiar with all its details, and his services have thus become indispensable. upon the creation of the office of second deputy comptroller, in 1895, he was appointed to that position, and he has since discharged its duties with the fidelity and intelligence with which every comptroller for many years has found him fortunately endowed. no sketch of the office is complete without mention of george h. birchall. he came into the office in 1883, at the time of the abolition of the canal auditor's office. he had served seventeen years in the last-named office. he has had charge of the canal accounts since their transfer to the comptroller's office, and has rendered most efficient service. messrs. williams and bliss came into the office in 1877, and mr. graham in 1882. several employees have been in the department's service for six or eight years or more, and no department of the state government is better equipped with honest, faithful, public servants than is the comptroller's office. [illustration: james a. roberts (signature) _30th comptroller_] it can be seen from the foregoing that the duties of the comptroller's office are varied and important. the boards of which he is a member give some indication of this fact. he is _ex-officio_ a member of the state board of canvassers; of the board of the commissioners of the land office; of the board of the commissioners of the canal fund; of the canal board; of the state commissioners of charities; of the board to fix prices for prison made products; of the board for the establishment of state insane asylum districts, etc.; of the legislative printing board; of the department printing board, and one of the officers to designate the state paper. he manages the finances of the state so far even as to supervise the expenditures of the state institutions. he designates the banks in which funds of all institutions shall be deposited. he levies and collects the tax on corporations; supervises the collection of the transfer tax, and sells the lands of delinquent taxpayers in the counties in which are included a part of the forest preserve. he audits all accounts against the state; acts as a court in applications for cancellations of tax deeds or sales, and in disputed corporation tax matters; examines the court and trust funds deposited with the treasurer of every county in the state, and regulates the form of accounts and the manner of their investment, and performs many other less important duties too numerous for mention. of the men who have held the office of comptroller nineteen were lawyers; three were gentlemen farmers; three bankers; one a merchant; one a manufacturer; one a capitalist, and two were business men. in politics two were federalists; fifteen democrats (including under the word democrats original republicans, whether clintonians or otherwise); four whigs; two anti-masons; six republicans, and one american or know nothing. [illustration: philip phelps (signature) _deputy comptroller, 46 years._] the total expenditures of the state for each tenth year since the establishment of the office were as follows: 1797 $322,831 37 1807 425,689 69 1817 1,296,590 88 1827 1,908,346 73 1837 4,926,449 04 1847 5,275,164 09 1857 10,176,939 70 1867 20,496,050 59 1877 [1]26,186,744 70 1887 16,771,448 98 1897 26,510,425 77 ================ [1] includes $10,453,805.95 bounty debt. each of these would very nearly represent the average annual expenditures for the decade which it ends. the total expenditures of the national government for the year 1797 were $8,625,877.37, and if we deduct from this the amounts paid for interest, and payments upon the public debt, it leaves the amount of ordinary expenditure but $2,836,110.52. the ordinary expenditures of the national government did not reach the amount expended in this state for the year 1896 until the year 1847, if we except the years 1813, 1814 and 1815, when the expenditures were abnormal by reason of the war of 1812, and if we except also the years 1837 and 1838, and in none of those excepted years did the annual ordinary expenditures very greatly exceed this state's expenditure for 1896. during the century, the state has expended for lands, construction, enlargement or permanent improvement: of its five canals $74,347,000 00 of its new capitol 22,254,023 60 of the twelve hospitals erected by it $15,204,099 59 of its seventeen other charitable institutions 6,369,110 70 of its forty-five armories and arsenals 3,349,543 73 of its three state prisons 4,528,058 65 of its twelve normal schools 1,826,350 06 ------------- making a total expenditure for those various purposes of $127,878,186 33 =============== [illustration: willis e. merriman. (signature) _2d deputy comptroller_ _connected with the office 31 years_ ] far the greater part of this money has been handled by, and drawn on the warrant of, the comptroller, and no suspicion has ever arisen that this duty was not honestly performed. nearly all of the sinking funds of the various bonded debts of the state have been managed by the comptrollers, who, in these 100 years, have never been the occasion of the loss of a single dollar. jenkins, in his political history of new york, says that the comptroller bears the same relation to the state that the secretary of the treasury does to the national government, and this is largely true. i cannot do better in closing this brief sketch of the comptroller's office than by quoting from thurlow weed's autobiography. his opportunities for, and keenness of, observation make his statement of peculiar value. he says: "it seems proper to say, amid all the mutations of party, and the liability under our form of popular government to occasionally find unworthy men elevated to high places, our state has ever been singularly fortunate in its highest financial officer. we have had unfaithful men in almost every other department of the state government. we have had, in two or three instances, comparatively weak men in the office of comptroller, but as a rule its incumbents have been capable, firm and incorruptible." * * * * * [transcriber's notes: the transcriber made these changes to the text to correct obvious errors: 1. p. 19 fom --> from 2. p. 41 place, mr. cook's --> place. mr. cook's 3. p. 70 james w. wadworth --> james w. wadsworth 4. p. 82 protuded, --> protruded, end of transcriber's notes] +-----------------------------------------------+ | | | bolded text has been marked =like so=. | | | +-----------------------------------------------+ london school of economics and political science an example of communal currency by j. theodore harris, b.a. with a preface by sidney webb, ll.b. 1/net london p. s. king & son orchard house, westminster 1911 people's banks a record of social and economic success by h. w. wolff _third edition, newly revised and enlarged_ _demy 8vo, cloth, 600 pp._ =6s.= _net_ contents--introduction, the general idea, the two problems, the two aspects of the question, credit to agriculture, the "credit associations" of schulze-delitzsch, raiffeisen village banks, adaptations, "assisted" co-operative credit, co-operative credit in austria and hungary, the "banche popolari" italy, the "casse rurali" of italy, co-operative credit in belgium, co-operative credit in switzerland, co-operative credit in france, offshoots and congeners, co-operative credit in india, conclusion. "we may confidently refer those who desire information on the point to the book with which mr. wolff has provided us. it will be a most useful thing if it is widely read, and the lessons which it contains are put in practice."--_athenæum._ "the book is the most systematic and intelligent account of these institutions which has been published."--_banker's magazine (new york)._ "it is the most complete book on the subject."--_mr. g. n. pierson, late dutch prime minister and minister of finance._ "there was manifest need of just such a book.... a mine of valuable information."--_review of reviews._ "this is an excellent book in every way, and thoroughly deserves the careful attention of all who are concerned for the welfare of the people."--_economic review._ london: p. s. king & son orchard house, westminster studies in economics and political science edited by the hon. w. pember reeves, director of the london school of economics no. 21 in the series of monographs by writers connected with the london school of economics and political science an example of communal currency an example of communal currency: the facts about the guernsey market house compiled from original documents by j. theodore harris, b.a. with a preface by sidney webb, ll.b. london p. s. king & son orchard house, westminster 1911 contents page preface vii introduction 1 chap. i. constitution of guernsey 4 ii. the security of the notes 6 iii. municipal enterprise--the issue of the notes 9 iv. the utility of the notes 20 v. first rumblings of opposition 25 vi. the reply of the states 30 vii. the crisis 45 viii. the end 55 conclusion 59 appendix 61 preface those who during the past thirty or forty years have frequented working men's clubs or other centres of discussion in which, here and there, an owenite survivor or a chartist veteran was to be found, will often have heard of the guernsey market house. here, it would be explained, was a building provided by the guernsey community for its own uses, without borrowing, without any toll of interest, and, indeed, without cost. to many a humble disputant the guernsey market house seemed, in some mysterious way, to have been exempt from that servitude to previously accumulated capital in which the whole creation groaneth and travaileth. by the simple expedient of paying for the work in government notes--issued to the purveyors of material, the master-workmen and the operatives, accepted as currency throughout the island, and eventually redeemed out of the annual market revenues--all tribute to the capitalist was avoided. in face of this successful experiment, the fact that we, in england, continued to raise loans and subject ourselves to "drag at each remove a lengthening chain" of interest on public debt, often seemed so perplexingly foolish as to be inexplicable, except as the outcome of some deep-laid plot of "the money power." when first i heard of this guernsey market house, as in some mysterious way exempted from the common lot, i was curious to enquire what transaction had, in fact, taken place in an island which was, after all, not so far removed in space or time from the lombard street that i knew. in all the writings of the economists (for which my estimate was at that time, as indeed it is now, such as i could not easily put into appropriate words), i found no mention of this phoenix among market-houses. i fear that, too hastily, i dismissed the story as mythical. now mr. j. theodore harris--having, i suspect, a warmer feeling for the incident than he has allowed to appear in these scientific pages--has done what perhaps i or some other economic student of the eighties or nineties ought to have done, namely, gone to guernsey to dig up, out of the official records, the incident as it actually occurred. what is interesting is that he has found that the myth of the veteran owenite or chartist is, in all essentials, confirmed by the documents. the story is true. the guernsey market house was built without a loan and without the payment of interest. it does not follow, however, that it was any more built without the aid of capital, than was st. paul's cathedral or the manchester ship canal. mr. harris, contenting himself with the austerely exact record drawn from the documents, does not indulge in any speculative hypothesis as to who provided the capital, or who bore the burden that would otherwise have been interest. let me use the fuller privilege of the preface-writer, and supply some hypothetical elucidations. what the guernsey community did was that which nearly every community has done at one time or another, namely, issue paper money. the part of the story that we do not know is (_a_) what thereupon happened to the aggregate amount of "currency" of all kinds then in circulation within the island, in relation to the work which that currency had to do; (_b_) what happened to the prices of commodities. it may well have been that the issue of paper money was promptly followed by some shipments of metallic money to england or france--perhaps even in payment for imported materials for the market house--so that the aggregate amount of "currency" in the island was not in fact increased. accordingly, no change of prices may have taken place. in such a case, guernsey would merely have substituted paper for gold in its currency. the gold-capital heretofore in use as currency, and there, of course, yielding no capitalist any toll of interest, would, in effect, have been borrowed to expend upon the building of the market house. and, as paper money probably served the purposes of the island every bit as well as gold, nobody was any the worse. by giving up the needless extravagance of using gold coins as counters, and by taking to paper counters instead, guernsey really got its market house without cost. the same resource is open to any community already possessing a gold currency, and becoming civilised and self-restrained and sensible enough to arrange to do without gold counters in its internal trade. but guernsey could not have gone on equipping itself with endless municipal buildings as out of a bottomless purse. the resource is a limited one. this is a trick which can only be played once. when the gold has once been withdrawn from the currency, and diverted to another use, there is no more left with which to repeat the apparent miracle. on the other hand, there may easily have been no special shipments of metallic money from the island, and the aggregate "currency" may have been increased, in relation to the work that it had to do, by the amount of the note issue. in that case, the economist would, for reasons into which i have no space to go on the present occasion, expect to see a gradual and silent rise of prices. such a rise would seem, to the ordinary guernsey housekeeper and shopkeeper, as inevitable, and at the same time as annoying as any other of those mysterious increases in the cost of eggs and meat that anthony trollope described with such uneconomic charm in _why frau frohmann raised her prices_--a work which i do not find prescribed, as it might well be, for undergraduate reading. there is even a third hypothesis, to which mr. harris has directed my attention. there may have been, before the note issue, an actual dearth of currency, or a growing disproportion between the amount of the currency and the work that it had to do. mr. harris infers from his reading that such a stringency had been actually experienced in guernsey, and that it was for this reason that successive attempts were made to prevent foreign coins from being gradually withdrawn from the island. such a stringency, the economist would infer, would produce a progressive fall of prices, leading, by the silent operations of external trade, to a gradual readjustment of the amount of currency in circulation, by influx of gold from outside, until a new equilibrium had been reached. if the guernsey government's note issue happened to be made at such a moment, it may well have taken the place of the hypothetical inflow of gold, so far as the island currency was concerned. it may even have averted a fall in prices that would otherwise have taken place, the economic effect on the consumer's pockets being in that case much the same as if an actual rise had occurred. but the guernsey government, on this hypothesis, would, by substituting paper for gold, have gained for the community the equivalent of the cost of the addition to the gold currency which expanding population and trade were making necessary; and this gain was expended in building the market house. unfortunately we do not know how prices behaved to the guernsey housekeeper between 1815 and 1837. perhaps another student will look this up. what is interesting to us in this argument is the fact that, _if prices generally did rise_, in consequence of the issue of the paper money, even by only one half-penny in the shilling--if eggs, for instance, sold twenty-four for a shilling, instead of twenty-five--this represented a burden laid on the guernsey people as consumers, exactly analogous to a tax (say an octroi duty) of four per cent. on all their purchases. on this hypothesis, which i carefully abstain from presenting as anything but hypothetical, because we are unable to verify it by comparison with the facts, the economist would say that this burden or tax was what they imposed on themselves, and notably upon the poor, by increasing the currency, instead of borrowing the capital from elsewhere. instead of paying interest on a loan (to be levied, perhaps, as an income tax on incomes over a certain minimum) they unwittingly chose to pay more for their bread and butter. the seriousness of this possible result lies in the definitely ascertained fact that salaries and wages rise more slowly, and usually to a smaller extent, than the prices of commodities. now, which of these speculative explanations is the true one does not greatly matter to-day when all the consumers, rich and poor, are dead and gone. what does concern us is that we should not misconstrue the guernsey example. we already use paper money in this country to a small extent. we could certainly with economic advantage save a great part of the cost (three or four millions sterling a year) that we now pay for the luxury of having so many gold sovereigns wandering about in our pockets. we may one day find the uncounted reserve of capital that in our gold currency we already possess, virtually in common ownership, come in very usefully on an emergency (which is, perhaps, what happened at guernsey). but we must beware of thinking that the issue of paper money offers some magical way of getting things without having to use capital, or we may find ourselves one day, to the unmeasured hardship of the poor among us, stupidly burdening ourselves as consumers with higher prices and increased cost of living all round. there are, of course, other reasons in favour (_a_) of paper money being issued by the government, instead of this valuable and responsible prerogative being abandoned to individual bankers or joint stock companies, to the great financial loss of the community as a whole; and (_b_) of the whole business of banking--which means the organising of credit and the custody of savings--being conducted by the government itself, in order that the power which banking gives may be exercised exclusively under public control, and for corporate instead of for individual ends, and in order that the profit which banking yields may accrue to the benefit of the community as a whole, instead of to particular capitalists. but that is another story. the guernsey government stopped short at the issue of paper money--which is not banking--and even gave up this right at the bidding of private banking companies. sidney webb. 41, grosvenor road, westminster. _december, 1910._ an example of communal currency introduction there are many persons who have heard from one source or another of the way in which the states of guernsey built their market house by means of non-interest-bearing notes. some of these--enthusiasts for the reform of the currency--can dilate for hours on the wisdom of the financial policy of daniel de lisle brock, can tell how, at the opening of the market he "sprinkled the packages (of redeemed notes) with perfume, and while the band was playing a dirge he laid them on the fire, where they were quickly consumed," and can even quote from his famous speech on that occasion. a few years ago some members of the co-operative brotherhood trust, which is a society that has among its objects a desire to revive the principles of robert owen's labour exchange, thought it worth while to make enquiries as to the guernsey scheme. they realised that an ounce of fact was worth a ton of theory. but what were the facts? were these notes circulated in the island as a medium of exchange? how were they redeemed? could a citizen demand gold for them? when the above mentioned enthusiasts were tackled with these practical questions, there was suddenly noticed a certain hesitancy; and when asked point blank what was the year in which this famous market house was built, no one could say. enquiries were then made from inhabitants of the island itself. the information gathered was vague and not much to the point. with a few notable exceptions, the average guernseyman seems to know or care little of the financial policy of the island at the beginning of the nineteenth century. even from those interested nothing very definite was to be learned. the enquirers at last came near to doubting whether the non-interest-bearing notes had ever existed except in the imagination of the enthusiasts. only first-hand enquiry on the spot would suffice. one guernseyman, a teacher, kindly encouraged the writer to visit the island himself, promising him introductions and access to all the official documents and newspapers of the time. through the courtesy of the greffier and the librarian of the guille-allés library every facility was granted to the writer and his wife to carry out their research. the politeness and kindness of these officials and other inhabitants of guernsey are hereby most cordially acknowledged. in the following pages it is the writer's desire to place the facts before the public as he has gleaned them from the official records of the states and the newspapers of the time. he feels tempted to discuss the _pros_ and _cons_ of the system adopted by the states of guernsey for over twenty years; but this little treatise will probably be of most use if it is confined to a mere narration of facts. incidentally, however, it will be seen that some of the queries which led to the research have been answered. from the nature of the case this narration will consist largely of quotations. it must inevitably fail to convey to the reader the thrilling interest aroused as the story, exceeding all the romance of the enthusiasts, led its slow but fascinating course through many volumes, and the quaint old french documents gave up their secrets in the modern well-equipped record office. chapter i constitution of guernsey. guernsey is the second in size of the four channel isles, jersey, guernsey, alderney and sark, which one used to repeat with such gusto in one's schoolboy days. the channel isles are the last remnant of our french possessions. or rather, as the islanders might claim--and as it is reported some do--england belongs by right of conquest to the channel isles. however that may be, for all practical purposes, the government of guernsey is autonomous--and very jealously does the guernseyman guard this autonomy. it has its own parliament, "the states" (les états), consisting to-day of 49 members. at the time of which we write there were 32 members, as follows:-the bailiff, who, as at the present time, acted as president. the procureur du roi, corresponding to our attorney-general. 12 jurats or magistrates, appointed for life by the "states of election." 8 rectors. 10 connétables or parishioners. the rectors as spiritual leaders and the connétables as civil functionaries represented the ten parishes of the island, and though the latter were elected to office they were always from the leading families, which formed an extremely close oligarchy. bailiff, jurats and rectors still sit in this undifferentiated parliament, to which has been added a slightly more democratic element however, nine deputies being elected by the ratepayers of the whole island. it was, and still is, the bailiff's duty to summon this "states of deliberation," formerly at his own discretion, now at regular intervals. he does this by means of issuing a _billet d'etat_, in which he comments on the business to come before the states and in which he formulates certain resolutions. on these resolutions the states only vote _for_ or _against_. this billet d'etat is in french, still the official language--the only one used in the deliberations in former days. the whole takes us back in thought to norman or early english times. probably even the norman patois of the modern rural deputies is the speech of the present time nearest to that in which our ancestors transacted their business. this legislative body represents the king's council, in the same way that the supreme judicial body, still bearing the name of la cour royale, represents the king's court. the decisions of the states are subject to the approval of the privy council, to whom there is a right of appeal. chapter ii the security of the notes guernsey, like other places, fell on evil days early in the nineteenth century, the period of history with which we have to deal; and the islanders suffered from the burden of a heavy debt and from the depression and want of employment which followed the close of the napoleonic wars. its condition at this time is graphically described in the following extracts taken from a document presented by the states to the privy council in 1829. "in this island, eminently favoured by nature, antecedently to the new roads first projected by sir john doyle, bart., nothing had been done by art or science towards the least improvement; nothing for the display or enjoyment of local beauties and advantages; not a road, not even an approach to town, where a horse and cart could pass abreast; the deep roads only four feet six inches wide, with a footway of two to three feet, from which nothing but the steep banks on each side could be seen, appeared solely calculated for drains to the waters, which running over them rendered them every year deeper and narrower. not a vehicle, hardly a horse kept for hire; no four-wheeled carriage existed of any kind, and the traveller landing in a town of lofty houses, confined and miserably paved streets, from which he could only penetrate into the country by worse roads, left the island in haste and under the most unfavourable impressions. "in 1813 the sea, which had in former times swallowed up large tracts, threatened, from the defective state of its banks, to overflow a great extent of land. the sum required to avert the danger was estimated at more than £10,000, which the adjoining parishes subject to this charge were not in a condition to raise. the state of the finance was not more consolatory with a debt of £19,137, and an annual charge for interest and ordinary expenses of £2,390, the revenue of £3,000 left only £600 for unforeseen expenses and improvements. "thus at the peace, this island found itself with little or no trade; little or no disposable revenue, no attraction for visitors, no inducement for the affluent to continue their abode, and no prospect of employment for the poor." after considering various means of raising a revenue, the states asked the privy council for permission to levy a duty on spirituous liquors. notwithstanding some opposition by the inhabitants, permission was granted by an order in council of the 23rd july, 1814, to raise 1s. per gallon on spirituous liquors consumed in the island. this was granted for a period of five years. a second order in council, dated 19th june, 1819, renewed the duty for ten years. again there was opposition from a section of the inhabitants. this made itself felt by the insertion in the order of the following words:--"that one thousand pounds per annum of the produce of the said duty be applied solely to the liquidation of the present debt, together with such surplus as shall remain out of the produce of the tax in any year after defraying the expenses of roads and embankments and unforeseen contingencies. and that the states of the said island do not exceed in any case the amount of their annual income without the consent previously obtained of his royal highness in council. and the said states are hereby directed to return annually to the privy council an account of the produce and application of the said tax." in 1825 the lieutenant-governor, sir john colborne, desired to erect a new college and to carry on other important works. but these plans could not be accomplished without the assurance of the renewal of the duty. a third order in council of 30th september, 1825, gave this permission for a period of fifteen years, that is to say, from 1829 to 1844. on this occasion there was no opposition from any of the inhabitants. as will be seen in the next chapter, it was this duty on spirituous liquors that formed the security on which the notes were issued. chapter iii municipal enterprise--the issue of notes "_guernsey should make up only one great family whose interests are common. only by union and concord can she enjoy firm and lasting prosperity._" although, as we shall see, the first notes that were issued were not for the market, it is interesting to find that there is some foundation for the tradition identifying them with it. the plan was first suggested in connection with a scheme for the enlarging of the market. this was a much needed improvement. "humanity cries out, every saturday," reports a states committee, "against the crush, which it is difficult to get out of; and every day of the week against the lack of shelter for the people who, often arriving wet or heated, remain exposed for whole hours to wind and rain, to the severity of cold and to the heat of the sun." a committee, appointed 12th april, 1815, to consider the question, having brought in a scheme for enlarging the market, recommended the issue of state notes. the bailiff submitted the following resolution for the consideration of the states at their meeting on 29th march, 1816:--"whether in order to meet the expenditure it would not be desirable to issue state notes of one pound each (_billets des états d'une livre sterling_) up to £6,000, the states undertaking not to issue any, under any pretext whatever, beyond the said sum before having previously cancelled the said £6,000." notwithstanding the committee's opinion that the enlargement of the market could not be recommended without this issue, and the precautions suggested for the issue of the notes, the states rejected the proposition. however, the promoters of the idea appear to have been nothing daunted, and to have met with success on their second attempt. for we find that on the 17th october of the same year the finance committee reported that £5,000 was wanted for roads, and a monument to the late governor, while only £1,000 was in hand. they recommended that the remaining £4,000 should be raised by state notes of £1, 1,500 of which should be payable on 15th april, 1817, or any saturday after by the receiver of the duty, 1,250 on 15th october, 1817, and 1,250 on 15th april, 1818. "in this manner, without increasing the debt of the states, we can easily succeed in finishing the works undertaken, leaving moreover in the coffers sufficient money for the other needs of the states." the states agreed to this and appointed a committee of three (nicolas maingy, senior, jean lukis and daniel de lisle), who were exclusively charged with the duty of issuing the notes, taking all the precautions they thought necessary. they were to pay them out on the order of m. le superviseur (jean guille), and to receive them back from the receiver of the duty when paid in, in order to cancel them. these notes seem to have served their purpose; for in the record of the decisions of the states on the 18th june, 1818, is found the following entry:--"the said states unanimously authorise the issue of new notes up to £1,250, to be put at the disposal of jean guille, esq., jurat, for the needs of the state; and they ask the said gentlemen, daniel de lisle, nicolas maingy and jean lukis, kindly to help in the matter. which notes shall be payable at a fixed time to be determined by the states' committee named for this purpose at the time of the last issue of notes." the need for enlarging and covering the market was meanwhile being more and more pressed, the site and certain buildings having been purchased on 10th april, 1817, for £5,000, which was borrowed at 4-½ per cent.[1] a committee reported on this subject to the meeting of the states on 6th october, 1819. in their recommendation they proposed "the issue of notes of £1 sterling, payable at different times on the receipt of the part of the duty left at the disposal of the states." notwithstanding the pathetic appeal already recorded, the proposal of the committee to enlarge and to cover the market was lost by a majority of one. the advocates for improving the market, however, persevered, and presented to the states meeting of 12th may, 1820, five plans. the plan of john savery brock at a cost of £5,500 was agreed to by a majority of 19 to 10. the following quotation from the committee's report shows the benefits which they considered would arise from their scheme for raising the £5,500 required. "the means of meeting this would be to apply to it the sums now in litigation with the town £1,000 twenty-shilling notes put at the disposal of the committee 4,500 ------ £5,500 but provision must be made for the repayment of the notes issued, and the means recommended by your committee are as follows- "the 36 shops, built for butchers according to the plan recommended, would produce at £5 sterling per annum £180 from this must be deducted £20 for hiring the house at the corner and £10 for repairs 30 ----- £150 the states should grant for 10 years after the first year 300 ----- this would give an income of £450 this sum would be spent each year in paying off and cancelling as many notes. "thus, at the end of ten years, all the notes would be cancelled and the states would be in possession of an income of £150 per annum, which would be a return for the £3,000 spent by them. "looked at from all sides the scheme shows nothing but the greatest advantage for the public and for the states. it should please those who have at heart the diminution of the debt, since the states in addition to the £1,000 set aside for this purpose, take a further £300 out of their treasury in order to increase their income (_en prenant 300l. de plus sur leurs épargnes pour accroître leur revenu_)." thus it appears that the money for building the meat market, still standing, was raised without a loan, the states paying off the notes at the rate of £450 a year as the duty on spirits and the rents came in. the market is described in jacob's _annals of the british norman isles_, part i., published in 1830, as a handsome new building, "one of the most convenient, both for the buyers and sellers, that can be found in any part of the world." "for the mode of raising the funds for its erection and support (well worth the attention of all corporate bodies)" we are referred to an appendix iv. which was to appear at the end of part ii., to be published in december, 1831.[2] diligent search in contemporary records showed no trace of the elaborate ceremony described in the tradition current among enthusiasts, though the _mercury_ of the 5th october, 1822, announced in its advertisement column that the opening would take place on saturday, 12th october, 1822. the following week the _mercury_ chronicles the handing over by the committee of the keys of the new market to the butchers. "a large crowd gathered in the square, of whom only a few succeeded in entering the enclosure. a speech was made by one of the committee, to which one of the butchers made a reply. the band of the east regiment took part and the church bells rang till five in the evening." the next issue of notes seems to have been to pay off the floating debt. on 14th june, 1820, the states authorised the issue of 4,000 £1 notes for this purpose. in recommending this course the finance committee makes some interesting reflections. "respecting the floating debt, which consists of sums payable at times more or less distant, it would be easy to discharge it by £1 notes put into circulation as need requires. the extinction of the whole of the floating debt could thus be brought about without the necessity of new loans. if loans should be raised it would be necessary to provide for payment both of the principal and of the interest. if, on the contrary, recourse is had to £1 notes, the interest alone which would have been paid will suffice." on 23rd june, 1821, the states authorise the issue of 580 £1 notes to buy a house whose site is wanted for the new market. on 15th september of the same year the issue is authorised of 4,500 £1 notes to diminish the interest-bearing debt of the states. in recommending this, the finance committee remarks:--"the states could increase the number [of notes in circulation] without danger up to 10,000 in payment of the debt, and the committee recommends this course as most advantageous to the states' finance, as well as to the public, who, far from making the slightest difficulty in taking them, look for them with eagerness." on 30th june, 1824, on the united recommendation of the market and finance committees, 5,000 £1 notes are issued to pay off the £5,000 originally paid for the market in 1817 (see p. 11). "by this means the interest of £200 (_sic_) a year will be saved and applied moreover every year to withdraw from circulation £1 notes issued for the construction of the market." on 29th march, 1826, a further issue is authorised for the purpose of elizabeth college and parochial schools, provided that the total number of notes in circulation shall not exceed £20,000. in summoning the states on this occasion, the bailiff, daniel de lisle brock,[3] expresses the opinion that paper money is of great use to the states. there is no inconvenience because the notes are issued with great care. this statement as to great care is borne out by the words of the resolution passed 12th may, 1826, authorising the issue of £5 notes, not exceeding £8,000 worth, voted for the isle of sark and other purposes. after asking nicolas maingy, jean lukis and daniel de lisle "to sign the said notes in the name and under the guarantee of the states," it goes on to say, "and in default of one or other of these gentlemen through absence or illness, the states authorise the remainder of the three, the finance committee and m. le superviseur to choose conjointly another reputable person for the signature of the said notes. which said finance committee supervisor and those authorised to sign are charged and requested to watch over and be present at (_veiller et assister à_) the destruction of the said notes at the times fixed for their repayment." extra precautions seem to have been taken 28th june, 1826, when another issue, not exceeding £2,000 worth of £5 notes was authorised. for we find that "the states appoint josias le marchant, pierre le cocq, jurats, and the rev. thomas grut, a special committee, whose duty it is to see to the liquidation of all the anticipations at the times fixed by the states, and where these anticipations consist in notes of one or five pounds to see to the destruction of the very notes or of earlier notes to the same amount. which committee is commanded to make a report to the states at least once each year certifying the liquidation and destruction of the said anticipations and of the said notes." further care is shown by the fact that on 26th march, 1828, the states appointed the finance committee "to replace the used and worn-out notes by new notes, payable at the same time as the destroyed notes would have been." testimony is borne by this wear and tear to the extent to which the notes circulated. plans for the improvements in rue de la fontaine, a street adjoining the markets, being adopted on 15th november, 1827, an issue of £1 notes up to £11,000 was authorised to be cancelled by the proceeds of rents. in 1828 and 1829 issues of notes were authorised for various purposes, including £8,500 for the college and £11,000 in connection with the rue de la fontaine scheme. at one of the sittings of the states in the year 1829, william collings, a member of the finance committee, stated that there were 48,183 notes in circulation. on 18th march, 1834, £1,000 was voted for cholera precautions, to be raised either at 3 per cent. interest or in £1 notes. the latter course seems to have been adopted. from the foregoing it will be noticed that during the 20 years over £80,000 worth of notes were authorised by the states to be issued. these were mostly of the value of £1, though some £5 notes were authorised. in 1837 there were still in circulation 55,000, which in that year were reduced, as will be seen in a subsequent chapter, by 15,000. it may be asked whether there is any evidence that the notes were destroyed as directed. from various sources we found records of at least 18,000 being destroyed. for instance, in the _gazette_ of 3rd march, 1827, there is the following:- "market accounts for 1826. notes to bearer of £1 destroyed. 22 march, 1826 £400 7 november, 1826 £420 1 march, 1827 £122 ---- £942 total of notes issued for the market, £11,296 " " destroyed " " 3,626 ------ leaving in circulation £7,670." footnotes: [1] this purchase was in itself an interesting piece of municipal history. "by an order in council," says jacob in his _annals of british norman isles_, p. 153, "the meat market company were to be allowed by the states, certain duties on all the cattle killed, so long as they remained proprietors of the market; but the states were allowed at any future time to take the same into their own possession on the payment of what the proprietors had advanced. the states did this on the 10th april, 1817, at an expense of £5,000." (see p. 16.) [2] we have been unsuccessful in our efforts to obtain part ii. either in guernsey or in london, and wonder whether it was ever published. [3] daniel de lisle brock was bailiff from 24th may, 1821, to 12th january, 1843. chapter iv the utility of the notes there is abundant evidence throughout the records that the system was appreciated. jacob's _annals_ (1830), in a chapter on currency, mentions the notes incidentally. "all these, with the one pound guernsey states' notes, are in much request, being very commodious for the internal affairs of the island." the bailiff, daniel de lisle brock, who seems undoubtedly to have been the inspiring genius of the scheme, says in his _billet d'etat_, 15th november, 1827-"an individual with an income of £9,000, who spends only half of it wishes to build a house at a cost of £13,000. he therefore makes an arrangement with his timber merchant, his mason, his carpenter and others to pay them out of his savings, so that they shall receive a part each year for five years. can it be said that he is contracting debts? will he not have at the end of the five years both his house and his original income of £9,000? "the states are precisely in the same position as regards the £13,000 which they have to pay out of their income during the five years included in the said table. this sum will be paid in instalments of £2,600 per annum, with as much ease as were much heavier engagements in 1826 and 1827. "the time has passed when the public could be frightened by exaggerated reports about the debt; most complete publicity keeps everyone acquainted with the real state of affairs; my greatest wish is that nothing should be hidden." frequent references to the saving of interest are to be found, and to the fact that improvements in the island could not have been carried out but for this system. wm. collings, speaking at the states meeting, 26th march, 1828, on a financial proposition, gives it as his opinion that interest now paid might be spared if the states issued more notes. the rev. t. brock at the same meeting supports the contention, as notes can be issued without inconvenience. in the _billet d'etat_ for 21st september, 1836, in a long discourse on the circulation, daniel de lisle brock says, "to bring about the improvements, which are the admiration of visitors and which contribute so much to the joy, the health and the well-being of the inhabitants, the states have been obliged to issue notes amounting to £55,000. if it had been necessary, and if it were still necessary to pay interest on this sum, it would be so much taken from the fund ear-marked to pay for the improvements made and to carry out new ones. this fund belongs especially to the industrious poor who execute the works and generally to the whole island which enjoys them. it ought to be sacred to all." mr. john hubert, in the debate at this meeting, is reported by the _comet_ to have referred to the fact that "the roads and other works had been constructed for the public good," and to have said that "without issuing notes for the payment of those works it would have been impossible to have executed them." mr. h. o. carré, in the same debate, said, "the states, by having notes to the amount of £55,000 in circulation, effected a saving of £1,600 per annum. here, then, was a revenue of £1,600 raised without causing a farthing's expense to any individual of the public generally, for not one could urge that he suffered a farthing's loss by it. it was therefore the interest of every one to support, not the credit, but the interest of the states. those who wished to traffic on the public property were in fact laying a tax on that public, for they were diminishing, by so much as they forced states' notes out of circulation, the public revenue, for if the states, in consequence of a diminished revenue by the effect of bank paper, have to make loans, those loans must in the end be repaid by the public--which would be a taxing of the public for the benefit of private individuals." further contemporary testimony to the estimation in which the notes were held may be gleaned from the papers of the time, of which there were three, issued at least once a week. in these occur letters from publicola, verax, vindex, un ami de son pays, un habitant, campagnard, etc. some of these were probably inspired, and sometimes they show a partisan bias. the references of most value are the incidental ones occurring in discussions on the improvements or in the criticisms of _ordonnances_ on the currency. the coinage at this time was in a confused state, there being both english and french money, some of it of very poor quality, in circulation. the _gazette_ of 22nd july, 1826, refers to allegations made by the jersey authorities as a reason for their refusing to register an act authorising the issue of £5,000 in notes. the opponents of the measure had alluded to supposed evils arising therefrom in guernsey. but the _gazette_ emphatically declares that "these notes have neither directly nor indirectly burdened commerce in any way, nor contributed to the rise in exchange that is experienced." a letter in the _gazette_ of 25th april, 1829, on the subject of "monnaie," written at the request of sir j. colborne, the lieutenant-governor, suggests that people in authority in jersey interested in banks oppose state notes, lest these should be preferred to theirs. the leader of the same issue of the _gazette_ states that "the generality of the inhabitants have confidence in the states' notes (it being always understood that the issue of notes shall be kept within just limits) because they know that the whole property of the island forms the guarantee for their payment." "campagnard" in the _gazette_ of 28th february, 1829, suggests the need of some other currency than states' notes for trade in france or with london and paris, but feels alarm at anything that might stop the public works in the island. the difficulty of getting cash for notes is alluded to only when the period of controversy referred to in the next chapter is reached. but for about the first ten years of their issue it would appear that no exception was taken to the notes nor difficulty experienced in their use. external exchange seems to have flourished side by side with this internal currency. chapter v first rumblings of opposition the feeling in favour of the system was not however entirely unanimous. in 1826 we find the first trace of opposition which gradually grew and grew until, as we shall see later, it was decided in 1837 that the states should not issue any more notes. whether the opposition was entirely due to this financial system as such is open to question. errors of judgment with reference to the fountain street improvement may have been made. self-interest on the part of some may have been one of the factors. into these questions the writer cannot enter here. all that he wishes to point out is that it seems to him from studying the records that there were various currents of opposition which centred round the issue of paper money by the states. in september, 1826, three members of the states, josias le marchant, james carey and jean le marchant, the two latter being members of the finance committee, thought that the king's consent should be obtained for works to be undertaken in fountain street. they considered that the anticipations of future revenues were "not only fatal to their credit but contrary to the order of his majesty in council, 19th june, 1819, viz., 'that the states of the said island do not exceed in any case the amount of their annual income without the consent previously obtained of his royal highness in council.'" daniel de lisle brock, after consulting la cour royale (the supreme court of judicature), writes his views in a _billet d'etat_, and summons the states to meet 22nd november, 1826. in his words, which we quote at some length, are seen both his enthusiasm and his caution. "it was not possible, as every one must admit, to do without anticipations; but these differ from a debt in that a certain clear and definite income is appropriated for meeting them, at certain fixed times. they are only assignations on assured funds ear-marked for their payment. watch must be kept, it is true, that they are paid from these same funds. for by letting the period during which they should end pass, and by spending on anything else the income appropriated to them, they would become a permanent debt. the experience of several years has shown us that these assignations may be used without danger, and that they have been fully paid off as they fell due. "the advantage which has resulted is manifest. if we had had to wait till funds were in hand to set to work at fountain street, who could have foreseen when, if ever, this moment would arrive. is it nothing, in the midst of this short life, when it is a question of an object of the first necessity among the wants of the community, to have anticipated by sixteen or seventeen years the enjoyment of this object? doubtless evil is close to good: the abuse of the best things is always possible. is this a reason for forbidding the use of what is good and profitable? is it not better to procure it as soon as possible whilst availing ourselves of the means at our disposal to avoid its abuse? whilst these means are employed, and so long as the income is sufficient, there is only one possible danger--that of allowing the time for meeting these anticipations to pass without paying them, and thus of seeing the debt increased by the amount of the non-cancelled obligations. this danger is seen to vanish when we consider the precaution taken by the states, the watchfulness of all their members, the committee which they have appointed specially for this purpose, when we think of the publicity, of the exact acquaintance from year to year which all the inhabitants have of the liabilities, the receipts and expenditure of the states. all this watchfulness and all this publicity are the strongest safeguard that could be given against any danger in this respect." the resolution to refer the matter to the king was lost, only five voting for it; and a resolution was carried expressing confidence in the present method. in the following year, 1827, the guernsey banking company, now known as the old bank, was founded from the firm of priaulx, le marchant, rougier & company. jean le marchant was vice-president of this bank. it is said that at the states meeting on 15th november, when objections were raised lest the states' notes should suffer, the bailiff seemed to foresee no danger. "good bills are better than bad coin." notwithstanding the decision of the states in 1826, the three jurats, josias le marchant, james carey and jean le marchant were still uneasy, and on 10th april, 1829, complained direct to whitehall that "the states had exceeded their annual revenues for works of public utility without the express sanction of the superior authority, and had for these same works contracted liabilities which exceeded the means of the states." the privy council on the 19th june forwarded the complaint to the states and asked for an explanation. the states, at their meeting, 27th august, 1829, instructed a committee to examine the charges, draw up a report and answer, and submit the same to the states. the committee selected was the finance committee, which was revised at this time, the chief change being the omission of the two complainants, james carey and jean le marchant. a guess may be hazarded that this committee appointed daniel de lisle brock to draft the reply. this interesting document fortunately exists not only in french but in english (doubtless for the benefit of the privy council). in characteristic language, enthusiastic and patriotic, while clear and matter of fact, it sets out the present situation and sketches the history of the island since the close of the war. the greater part of it appears in the next chapter. chapter vi the reply of the states with a few slight omissions the following is the official translation of "the answer of the states of guernsey to the complaint of three of their members dated the 10th april, and transmitted by their lordships's order of 19th june, 1829. "my lords, discarding from their minds allusions and topics of a personal nature and every sentiment of recrimination, the states of guernsey are desirous of vindicating themselves in the manner most becoming the respect due to your lordships, and the consciousness of right, by setting facts against errors, reason against fears, 'honest deeds against faltering words.' "to judge of the states by any particular act or period would be to dismiss all consideration of previous motives and future benefits, of connecting causes and effects. comprehensive views of the general policy of the states can alone enable them to prove, and your lordships to judge, of the wisdom and propriety of their measures. taking, therefore, a retrospect of the period which immediately preceded the grant of the duty on spirituous liquors first graciously conceded in 1814; they deem it necessary to lay before your lordships a summary account of the state of this island, at, and from that period. "the steps taken during the war for the prevention of smuggling had deprived this island of the trade which the supply of that traffic occasioned, and a great portion of the inhabitants of their usual occupation, consisting not in smuggling themselves, but in importing the goods and making the small packages in which those goods were sold in the island; privateering, adventurous speculations, and the great expenditure of fleets and garrisons compensated in some measure for the loss of this occupation, but when the war ceased also, a general want of employment and consequent distress ensued. * * * * * "in 1813 the sea which had in former times swallowed up large tracts, threatened from the defective state of its banks to overflow a great extent of land. the sum required to avert the danger was estimated at more than £10,000, which the adjoining parishes subject to this charge were not in a condition to raise. the state of the finance was not more consolatory, with a debt of £19,137, and an annual charge for interest and ordinary expenses of £2,390, the revenue of £3,000 left only £600 for unforeseen expenses and improvements. "thus at the peace, this island found itself with little or no trade; little or no disposable revenue; no attraction for visitors, no inducement for the affluent to continue their abode, and no prospect of employment for the poor. no wonder, therefore, if emigration became the object of the rich in search of those good roads, carriages and other comforts which they could not find at home, and the only resource of the other classes, whose distress was likely to be aggravated by the non-residence of the former. misery and depopulation appeared inevitable, from the peace to the year 1819 inclusive, more than five hundred native and other british subjects embarked for the united states, and more prepared to follow. "it is said, the powers of the human mind in society lie at times torpid for ages; at others, are roused into action by the urgency of great occasions, and astonish the world by their effects. this has, in some measure, been verified in this island, for though nothing done in so small a community can cause a general sensation, its exertions may yet produce wonderful results, within its own sphere. it is the duty of the states to show that, roused by the deplorable situation above described, they took, and have since pursued the steps best adapted to meet the exigency of the case, and that those steps have been attended with complete success. "to increase the revenue was an indispensable preliminary, but to do so, no other means lay within the power of the states than a tax on the several parishes according to the rates at which they were respectively assessed, and to this tax there were insuperable objections.... "under these circumstances was the application made for the duty on spirituous liquors: and notwithstanding the opposition of many of the inhabitants his royal highness the prince regent, was graciously pleased by an order in council of 23rd july, 1814 to authorise the states to raise 1s. per gallon on all such liquors consumed in this island for the term of 5 years. the same duty was renewed for 10 years by virtue of a second order in council of 19th june, 1819 after similar opposition. and on the declaration at your lordships' bar of the advocate deputed by the opponents that a clause to the following effect would reconcile them to the measure, and no objection being made to it on the part of the states, these words were inserted in the gracious order in question: viz.:--'that one thousand pounds per annum of the produce of the said duty be applied solely to the liquidation of the present debt, together with such surplus as shall remain out of the produce of the tax in any year after defraying the expenses of roads and embankments and unforeseen contingencies. and that the states of the said island do not exceed in any case the amount of their annual income without the consent previously obtained of his royal highness in council: and the said states are hereby directed to return annually to the privy council an account of the produce and application of the said tax.' "in 1825 the lt. governor sir john colborne, and the states, having extended their views to the erection of a new college and other important works which could not be undertaken without the assurance of a renewal of the duty, constituting the chief part of the revenue, a third order in council of the 30th september, 1825, conceded to the states the right of levying the same for 15 years, beginning on the 1st september, 1829, and this without the smallest opposition from any of the inhabitants, and without the conditions annexed to the second order. "with gratitude for the means placed at their disposal the states feel an honest pride in the recital of the manner in which those means have been applied. first, considering the danger arising from the bad state of the sea embankments, and the hardship of subjecting particular parishes to a charge for the general safety to which they were unequal, the states took on themselves the present repairs, and future maintenance of those embankments. this essential object connected with the paved slips or avenues to the beach, has been attended with an expence of £14,681 19s., without including five or six thousand for a breakwater to defend the line of houses at glatney, on the north side of the town. "independently of the sums contributed by government towards the military roads, from twenty-nine to thirty thousand pounds have been expended by the island on the roads, so that in lieu of those before described, there are now fifty-one miles of roads of the first class, as good as those of any country, with excellent footways on all of them, and 17 miles of the second class. "not only the main harbour, piers, quays, buoys and sea marks have been attended to, and at a great expense, but, in order to facilitate the exportation of the granite from the north of the island, the harbour of st. sampson has been rendered secure and convenient by a new breakwater and quay. "the situation and state of the town were thought to preclude all hopes of much amelioration, but the widening of high street, and other streets, the reducing the precipitous ascent to the government and court house, the clearing away of the unsightly buildings that obstructed the view and approach to those public edifices, the new sewers, pavements, and, above all, the public markets and new fountain street, attest the solicitude of the states towards the town, and surprise those who return to it after a few years absence. add to these the enlarging and improving of the court house and record office, where the public have daily access, and where are kept the contracts and registry of all the real property (of) the island. add also the new college, which, with the laying out of its grounds and the roads round its precincts, contributes to the embellishment of the town, induces families from other places to settle in the island, on account of their children, and affords to the inhabitants the ready means of a good education. "the advantage resulting from all these improvements has not been confined to their utility, or to the increased activity given to industry, and the circulation of money by the public expenditure: they have excited in all classes a similar spirit of improvement, which displays itself in the embellishment of the premises already built upon, and above all in the number of handsome dwellings since erected. in the town parish alone 401 houses have been built since the year 1819 at an expense of upwards of £207,000, and few towns do now present a more animated scenery around them, or one where ornament and comfort are more generally united; the same comfort and improvement are witnessed in every direction, and at the greatest distances from town. and thus it is, that the public works have not only given life and activity to every species of industry by the immediate effects of their utility, as for example to the building of a number of mills in the island, before supplied with most of its flour from abroad, and now enabled to manufacture it for exportation, but and still more by the consequent impulse communicated on all sides, prompting the wealthy to lay out for private mansions greater sums than were expended for public works and creating a permanent source of employment, by the future expenses which the repairs and occupations of those mansions will require. "the extent of benefits conferred is sufficiently attested by the concurrent testimony of inhabitants and strangers. the sole objects of his majesty and of his most honorable privy council are the public good and general happiness; the states might therefore, confidently look for indulgence, even if, in promoting those objects, they had fallen into some little deviation from the strict letter of any particular order. but implicit obedience to the royal authority in council being their paramount duty, they cannot rest satisfied under the imputation of having, even unintentionally, derogated from that duty. "the words of the second order in council have already been cited. the right of levying the duty on spirituous liquors is granted for ten years: a condition is annexed purporting that the states shall not exceed their annual income, and on the contrary that out of the produce of the duty, one thousand pounds shall be applied annually to the extinction of the debt; that condition is naturally in force for the same period, and for the same period only, as the grant to which it is annexed; it is necessarily so limited, because the means by which it is to be fulfilled, the produce of the duty, ceases at the end of the ten years for which the duty is granted. "the states are bound to prove that they have complied with the conditions of that order; they did so comply, when wishing to erect a new market, they applied for and obtained the order of 10th october, 1820, which imposed on them, at their own request, the further obligation of an annual payment of £450 for 10 years; this sum began to be paid in 1822, and has been paid for 8 years, during which the obligation amount to £3,600 0 0 the former obligation amounts, for the 10 years now elapsed to £10,000 0 0 ------------ total amount of the two obligations imposed £13,600 0 0 the debt at the commencement of the 10 years elapsed amounted in rents and money, including the cost of the market, to £43,668 15 2 the debt, rents and market included, has been reduced to £27,740 0 0 ------------ total amount of the sums actually applied to the payment of the debt £15,928 15 2 "the conditions of the second order in council have thus been more than fulfilled, by the application of £2,328 15s. 2d. to the payment of the debt over and above the obligations imposed. those conditions, incidentally introduced in the second order, do not in any way form a part of the third order now in force. "though released from the positive conditions of the former order, the states have shown no intention, and do by no means desire to depart from its general spirit; graciously offered by the third order in council to continue their improvements, they came to the following resolution on 22nd november, 1826: 'that far from entertaining any wish of augmenting the debt the states recognise the principle that it should not exceed, at the end of the 15 years for which the duty is further granted, the sum to which the debt shall amount at the end of the 10 years present duty: they impose on themselves that obligation anew, and bind themselves by the most solemn engagement not to increase the debt.' * * * * * "what cause of alarm can there then possibly exist? what prospect, on the contrary, the states humbly ask, can be more gratifying than that of remaining with our new college, new harbours built and to be built, new markets of every description, new roads in every direction, new streets, one of thirty feet instead of seven in the greatest thoroughfare between town and country, in short, with nearly all the greatest improvements that can be desired, paid for to the last shilling; and all this according to the statement of the plaintiffs themselves, with the debt reduced to £15,000, and the revenue augmented £1,700 per annum, by those very improvements. * * * * * "in the markets and fountain street, the states have undertaken works essentially necessary. the cost might be supposed to exceed the means of the states, if credit did not in the first instance furnish the chief expense without the charge of interest, and if the works themselves did not provide for the extinction of the engagements incurred. "the views of the states are to render these public improvements a source of future revenue, which shall again afford the means of further and greater improvements. "the same plan has been acted upon with success in several places, and particularly at bath and liverpool,[4] to the permanent increase of their revenues, and to the general benefit of those places, and of the country at large. it is difficult indeed to conceive whence can arise the objections to measures, which without laying the least burthen on anyone, surely and quietly operate to the general good, except it be from the disinclinations of most persons to enter into that close examination of figures necessary to a right understanding, and the distrust consequent on the need of that examination and comprehension. in our case, it may be added, that accustomed, on the subject of improvement, to a long apathy confirmed by the state of a revenue inadequate to the least undertaking, works of magnitude when first proposed created the greatest alarm. the new roads were opposed by the far greater number of those who were to derive the most benefit from their use, and who from experience are now clamorous for more. the market was only voted the third time it was offered to the consideration of the states, although it was represented that independently of its various advantages, it would in a short time permanently add to the revenue. experience has proved the correctness of that view of the question, and opening the eyes of the public, has turned their sentiments of fear and distrust to one of perfect confidence. hence it was that the public voice called on the states to realise the benefits likely to result from the substitution of a street thirty feet wide, in lieu of one of seven feet, in the heart, and connecting the two extremities of the town, and forming the principal avenue from the country to the harbour; twenty to thirty carts frequently waited at one end until those from the other had passed. such a thoroughfare in the most populous quarter could not but be fraught with danger, and the accidents that occurred were numerous, while the closeness of the street, height of the houses, and filth collected at the back of them were a constant source of nuisance and disease. never was a measure voted with so much unanimity and general satisfaction as the removal of this public nuisance, and rebuilding fountain street, notwithstanding it to be now the ground of the complaint before your lordships. * * * * * "relatively to so small a section of the empire, great things have been done with slender means; that so much has been done may with truth be ascribed to the fairness and disinterestedness which have marked every resolution of the states, and its execution; to the vigilant and gratuitous superintendence of their committees, and to the public spirit of the inhabitants. "devoted to the good of his majesty's service, and not resting on isolated facts, the states have laid open the whole of their conduct and views, and beg leave to refer to their worthy and highly respected lieutenant-governor major general ross for the correctness of their statement, and for the situation of the island. they have the approval of their fellow-subjects and of their conscience, but they would feel deeply humiliated if they did not merit and obtain the commendation of your lordships." the reply is accompanied by five appendices giving detailed figures to substantiate the argument and point out errors in the figures of the complainants. it is not necessary to weary the reader with these. appendix i., however, is interesting, as it shows that more than half the debt of the states consisted of these notes on which no interest was paid. "appendix i. debt of the states:- to the savings bank at 3 per cent. first vote £10,000 to individuals 557 ------ at 3 per cent. interest £10,557 in notes of 20s. each 14,443 135 quarters 2 bushels 8 denerels, and 18 sous 8 deniers rents equal to 2,740 ------ £27,740 deduct from this the balance still due by the market, and carried to the joint account of the market and fountain street 6,100 ------ £21,640[5]" the scope of the remaining appendices is shown by their titles:-appendix ii.: plan of finance adopted by the states and to be pursued during the fifteen years from this date, ending in 1844 inclusive. appendix iii.: remarks on the statement of account making part of the complaint presented against the states. appendix iv.: joint account of fountain street and the market. appendix v.: amount of the produce on the duty of 1s. per gal. on all spirits consumed in the island of guernsey, and the manner in which it has been expended during the ten years for which the said duty was granted, beginning september 1st, 1819. in obedience to order of h.m. in council of june, 1819. this reply was very favourably received by the states at their meeting 23rd december 1829 and adopted almost unanimously. one of the rectors spoke of it as "most judicious and consolatory, especially considering that room had been given for the exercise of opposite feelings." the leader writer in the _gazette_ recommended the reply to "the particular attention of every true guernseyman." improvements in the island were due to m. le bailiff, against whom and whom alone the complaint is directed. "as a wise administrator he has known how to contrive the means of effecting this great good without imposing the least tax or inconveniencing his fellow citizens." footnotes: [4] see appendix. [5] market. the cost was £12,748 paid off since 1822 6,648 ------ balance due on market 6,100 chapter viii the crisis no trace was found of any reply or acknowledgment by the privy council. presumably they were satisfied with the answer submitted by the states. but not so the opponents. in addition to the old bank already mentioned, another bank, the commercial bank, had been started in 1830. both of these appear to have issued notes at their own discretion. consequently the island seems to have been flooded with paper money, and an awkward situation had arisen. the commercial bank claimed an equal right with the old bank and even with the states to issue notes. the finance committee, it was stated, had refused to confer with the commercial bank. so long as the banks had a right to issue notes they appear to have had it in their power to put pressure on the states. for they could thus put into circulation a currency beyond that required for the internal needs of the island. daniel de lisle brock summoned the states to consider the matter, evidently with the intention of obtaining an injunction against the issue of notes by the banks. his message to the states meeting, held 21st september, 1836, is very spirited and defends the rights of the states as against private individuals, as will be seen from the following lengthy quotation. "if there is one incontestable principle it is that all matters relating to the current coin of any country have their source in the supreme prerogative, and that no one has the right to arrogate to himself the power of circulating a private coinage on which he imprints for his own profit an arbitrary value. if this is true for metal coins still more so is it for paper money which in itself has no value whatever. "has not experience shown us the danger of private paper money? can we have forgotten the disastrous period when payment of one hundred thousand one-pound notes put into circulation by two banks enjoying good credit was suddenly stopped? have we forgotten the ruin of some, the distress of others, the embarrassment of all? have we not quite recently seen a bank established by people considered immensely rich, advancing large sums for distilleries, steam boats and other projects, and coming to an end in less than two years with a composition with its creditors who thought themselves lucky to get a few shillings in the pound? "with these facts before our eyes we must realise the necessity of limiting the issue of paper money to the needs, the custom, and the benefit of the community in general. permission cannot be granted to certain individuals to play with the wealth and prosperity of society, to take from it its hard cash and to give it in exchange rags of paper. what incentive can they offer to persuade the public to give up to them valuable bills for worthless ones, certainty for uncertainty? what advantage can they pretend will accrue to the public from the loss of its currency and the possible depreciation of their paper? these general reflections will find their application. let no one exclaim against the possibility of the supposed danger. the wealth of the present stockholders of our banks is well known, their names suffice to inspire the greatest confidence; but apart from extraordinary events, the ordinary casualties of life may bring about in a short time the change of all these names, and there may remain in their place only men of straw. * * * * * "the states are met in order to take counsel together on measures for its defence. for an object so important they ought to count on the help of all friends of their country. "speaking of the present banks, and it is necessary to refer to them, no one desires more than i do to see them flourish, provided that it is not at the expense of the public interest. several of the stockholders seem to rely for success on the issue of paper-money, as if this were the principal aim of the business of banking. this aim, on the contrary, is quite foreign to real bankers--one finds them in all the great towns of europe enjoying colossal fortunes--they never dream of paper-money; their functions are confined to discounting bills, furnishing bills on all countries, taking money on deposit at low interest to lend it again at the legal rate on landed estates, or property of assured value, and to a number of other services required by commerce: each transaction yields a profit which should suffice. a bank of this kind was wanting in the island. the first of the two existing ones was formed under the most favourable auspices, nothing could exceed its credit: although it issued paper money it did not seem inclined to push this circulation to the point of annoyance to the states. it even made common cause with them when it was a question of replacing the old coins with new, and contributed half the expense. if it had shown itself more obliging and ready at any time to supply bills for those who, money in hand, wanted them to meet engagements in london or paris, it would have continued the only bank for all business. but as it would not put itself out in any way, the second bank was started by merchants in order to escape from the domination and caprice of the first. "the second bank should have kept, and still ought to keep, to the legitimate business of banking transactions. it appeared to have for its principal object the issue of paper money; even on its origin it suggested that the states and the two banks should weekly make a mutual exchange of their respective notes, each party paying interest for the balance of notes remaining against it; in this way all the notes of the states would have found themselves in the coffers of the banks and paying interest to them. though this proposition was not accepted, the states were not the less troubled with requests for cash in payment of their notes, and these requests are daily--not only for the ordinary household needs, as might have been expected, but for sending abroad, for if there are drafts to be cashed by the bank for anyone who wishes for money to send to france or to jersey, the drafts are paid in states notes, in order that the money shall ultimately come from this last named source. the bank makes no secret of its pretensions: there are, it says, three parties for issuing paper money; this issue cannot rise above £90,000 since the circulation in the country does not allow for more, the states ought to have only one-third of the issue, the two banks the two remaining thirds. this is a fine way of making the division, and very convenient certainly for the commercial bank. it would even have some show of justice if the parties had equal rights, and if the public had no interest in the matter; but the rights are not equal--the bank has none to put forward, that of the states is incontestable: they exercise it for the welfare and advantage of the whole island which they represent. consequently the public has the greatest interest in preserving for the states the power of issuing paper-money without interruption. let the bank reply to the questions already put; let it say what inducement it can offer the public to drive out of circulation the states notes, the profit on which benefits all, especially the productive classes, and substitute for it bank notes, the profit on which benefits only individuals of the unproductive classes? now is the time to ask the proprietors themselves and ascertain whether in starting a bank they ever had the intention of letting it work to the detriment of their country? the public treasury is the heart of the state--did they ever wish, do they to-day wish to strike it with a dagger? i know that we live in a financial age, that it is reproached with indifference to every generous sentiment, and that the love of money and the lust for gain absorb all other passions. in spite of that i have not lost all confidence in the patriotism of the members of the bank, they have the greatest personal interest in supporting the states in their efforts for the improvement of their country, efforts which contribute so greatly to the prosperity of internal commerce, to the residence of inhabitants of means, and to the wealth of strangers. finance is the pivot on which turns the administration of affairs. the least disturbance imposes on me the duty of sounding the alarm and summoning the states. what i have said will be sufficient, i hope, to persuade the bank to maintain a friendly course. the bank should feel that it is not enough to intend not to injure, but that it is necessary to abandon any step which, even without its wish, would be prejudicial to the interests of the country. it should recognise that, as regards the circulation of paper-money, the states have, for a long time and for the common good, been in possession of the ground which it seems to wish to invade, which, however, it cannot occupy without injustice. "every war, it is said, ends where it should have begun--in peace. i am firmly convinced of this truth; and experience has shown me that in civil life as in political, war might almost always be avoided to the great advantage of both parties, and that lawsuits, like wars, have for end rather the injury of the adverse party than good to oneself. the states are on the defensive, and such war is just and inevitable if any war is. it is, moreover, a war in which all the inhabitants who are the friends of their country will eagerly unite for the defence of the states in their just rights--thus united they will defend them with complete success. for this purpose the states will doubtless appoint a committee with the fullest powers to propose, in case of need, measures which may ultimately become necessary. "i do not forsee that the case will require it, and i should wish to avoid, as far as possible, any foreign intervention--but if the efforts of the states were not sufficient to defend their rights there would be no alternative, they would find themselves obliged to petition his majesty in council to consent to restrict the issue of one pound notes, and only to permit the putting into circulation of the number absolutely required by the states. under the present circumstances this would be an indispensable measure, and it can scarcely be doubted that a humble request to this effect would be graciously received." the debate, reported at length in the local papers, was a heated one. it first raged round the third proposition, which appealed in general terms to the islanders to rally round the states. the following is the proposition as translated by the _comet_ of 22nd september, 1836:--"that in execution of the numerous ameliorations that have taken place during the last 20 or 30 years, the states having put into circulation about 55,000 one pound notes, as a financial measure in favour of the public generally, if they are of opinion to defend the rights of the states against those who wish, for the advantage of a few individuals only, to hinder the circulation of the states notes, for the purpose of substituting those of private individuals in lieu thereof; and whether it would not be proper to make an appeal to all the inhabitants, who are the friends of their country, to invite them to afford their assistance in supporting with all their might the notes belonging to the states." this was carried by 18 votes to 11. the minority represented chiefly town rather than country parishes, the jurats being equally divided, and included at least two persons closely connected with the banks. the victory of states notes seemed complete, and the fourth proposition appointing a committee to give effect to the decision was carried by a large majority. it is as follows:-"if they are of opinion to name a committee that shall be authorised in a special manner to defend the rights and interests of the states, and of the public:--to do their utmost by every conciliatory measure in their power, and above all, to agree to an arrangement that shall screen the states from all interruption in the circulation of their notes, which have been issued for the benefit and advantage of the public, with the design of gradually diminishing the number annually. and in the event of such an arrangement not taking place, to adopt every measure, and make every necessary sacrifice for supporting the circulation of the states notes. and finally, should the case require it, to propose to the states the adoption of those ulterior measures deemed requisite by the committee, for the general interests of the island." the meeting ended with a fine fighting speech from the bailiff. he reiterated the principle of the states being the sovereign power in issuing currency, claimed that the cour royale had the right of stopping the private issue of notes, and pointed to the example of england, where only £5 notes were permitted in the country, and these under a heavy tax, while only the bank of england might issue notes in and around london. he showed that it was a choice between notes issued for the benefit of individuals and notes issued for the public good. he defended the improvements carried out by the states, and once again declared that they had been advantageous in giving employment to the poor, security to the rich and encouragement to commerce. chapter viii the end one can imagine the enthusiasm and the satisfaction with which the majority returned home. one anticipates a triumphant report in the bailiff's best vein; and expects that the banks will in future have to confine themselves to the operations permitted to english banks, while the states restore equilibrium by causing the withdrawal of superfluous notes and confining future issues, once again entirely in their own hands, to quantities proportioned to the needs of the island. with surprise, the subsequent proceedings are found to be on quite different lines. truth is stranger than fiction. the prosaic facts are as follows:-the bailiff in presenting his _billet d'etat_ to the states meeting, 29th march, 1837, reported on the arrangement made by the committee with the two banks. he brought forward no proposition on the matter on which the states should deliberate. he simply states that:-"after some preliminary conferences the committee received the following letter:- 'to d. de lisle brock, esq., bailiff, etc., etc., etc., guernsey, 8th oct., 1836. sir, to settle the differences now existing between the states and the banks, and to promote an amicable adjustment between them, we propose: that the states should withdraw immediately £15,000 of their notes, nor have at any time more than £40,000 in circulation, give up all banking transactions, and cease to collect the notes of the banks. in consideration thereof the banks engage whenever they draw bills either on london or paris, to take states' notes for one half at least of their amount and to pass them to the public as their own. the banks further engage to supply the states annually with £10,000 in cash, each bank to provide for one half, by payments of £250 at a time, and this free of expence and in exchange for states' notes. the above agreement to remain in force until three months notice be given by either party to the others to annul the same. we remain respectfully, sir, _signed_ for priaulx, le marchant & co. thomas d. utermarck, abraham j. le mesurier. for the commercial banking co., h. d. g. agnew } t. de putron } managers.' "and asked m. le bailiff to reply as follows:- 'court house, guernsey, 9 oct., 1836. gentlemen, the committee named by the states on the 21st september for the purpose of conferring with the banks which you represent, on the subject of the one pound notes current in this island, have taken into consideration the proposals which you have transmitted to them, under yesterday's date, 8th oct. the committee adopt those proposals as the basis of the arrangement so desirable to be entered into, and from this day to be in force between the states and the banks.--they do so, because the states may at any time, within 3 months, release themselves from the obligations which that arrangement imposes; and above all, because the sacrifice of pecuniary gain on the part of the states which it may deem to occasion, will be more than compensated by the harmony and good feeling which it will tend to promote among the inhabitants, and which constituting the chief happiness of a well regulated community, can hardly be too highly estimated. with sentiments of a like friendly nature, sincerely entertained by the committee towards yourselves, and the rest of their fellow citizens, i have the honour to be, gentlemen, your obedient humble servant daniel de lisle brock, president of the states' committee.' "in consequence of this arrangement the committee decided that £10,000 sterling of the total one pound notes in circulation on account of fountain street should be withdrawn as a savings bank loan at an interest of 3 per cent. per annum. also that five thousand of those forming part of the old debt, called the permanent debt, should be withdrawn to be converted into obligations at 3 per cent. per annum." in the discussion at the states meeting on a proposition to authorise the payment of a sum spent on repairs to the coasts, there were references by three members of the states to the fact that the expenditure of the states would be increased by having to pay interest on the 15,000 £1 notes withdrawn from circulation. the same fact is alluded to in a few words by daniel de lisle brock himself in his _billet d'etat_ to the states, 20th september, 1838. commenting on the finance committee's report, he tabulates five items of annual loss, among which is found the terse remark, "the founding of the commercial banks causes an annual loss of £450." although the states thus agreed not to issue any more notes, to complete the history it should be recorded that these £40,000--to be perfectly accurate the total amount in 1906 was £41,318--are still in circulation in the island. conclusion as stated in the introduction, the writer has determined, though somewhat tempted, not to discuss the interesting and debatable points that arise from a consideration of this subject. he is satisfied, for the present, with placing the facts before the public. he leaves those facts for abler minds than his to make such use of as they may desire. great care has been taken to record only that for which there is chapter and verse. but he would like, in conclusion, to remark that it seems to him that the states, even to-day, still derive some little benefit from having a portion of their "debt" on which they pay no interest. this may be gathered from the following table made up from facts taken from the _billet d'etat_ presented to the states 22nd august, 1906, at which meeting the writer was an interested spectator. summary of the indebtedness of the states of guernsey:- ------------------------------------+------------------+-------------- | balance 31 dec., | interest paid | 1905. | during 1905. ------------------------------------+------------------+-------------- | £ | £ states general account obligations | 68,570 | 1,953 19 3 special loan obligations | 57,500 | 2,295 0 0 notes of _20s._ each payable to | | bearer | 41,318 | nil "rentes" estimated capitalised | | indebtedness thereon | 7,059 | nil departmental borrowings | 33,000 | 965 8 0 | | paid by depts. | | to general | | account. +------------------+-------------- total indebtedness | £207,447 | --- ------------------------------------+------------------+--------------the circulation of these notes in the island to-day is, if nothing more, an interesting relic of an interesting financial policy which certainly was in vogue in guernsey for over 20 years (1816-1837). the mystery surrounding the abrupt catastrophe is yet undeciphered and is likely to remain so, as there seems no material from which to glean what took place during those few but momentous days between the 21st september and 9th october. was there treachery? was it but the inevitable fate of the "best-laid schemes o' mice and men"? or was it a unique and deplorable economic tragedy? appendix we have not yet discovered anything with reference to a successful plan at bath to which daniel de lisle brock here alludes (see page 40). we assume the reference to liverpool is to the fact that during a time of financial panic the liverpool corporation was empowered by statute 33, geo. iii., c. 31 (10th may, 1793), to issue notes of £5, £10, £50 and £100 for value received or other due security. this act entitled "an act to enable the common council of the town of liverpool in the county of lancaster on behalf of and on account of the corporation of the said town to issue negotiable notes for a limited time and to a limited amount," was passed after the corporation of liverpool had failed to obtain a loan of £100,000 from the bank of england. the £50 and £100 notes bore interest not exceeding the lawful rate and at 12 months' date. the £5 and £ 10 notes were payable to bearer on demand without interest. the total issue was at no time to exceed £300,000. returns had to be forwarded to the house of commons from time to time. from one of these returns we learn that the notes issued to 28th february, 1795, amounted to £140,390, based on security valued at £155,907 16s. 6d. in a report forwarded 23rd april, 1794, it was stated that £52,985 worth of notes were in circulation at that date. great care was taken in the issue of the notes. the committee of the corporation that was responsible for the same met daily. in order to give a wider utility to the notes, london correspondents were appointed and a large number were made payable in london. this made it possible for the corporation itself to apply to the committee for a large loan of £50,000. the security on which advances were made were very various. it included cotton, timber, iron, hops, whale oil, bills of exchange, ships on the stocks and the alt rates. * * * * * for further particulars of this interesting incident, the reader is referred to sidney and beatrice webb's _english local government_: "the manor and the borough," p. 485, and to e. c. k. gonner's article, "municipal bank notes in liverpool, 1793-95," which appeared in the _economic journal_, vol. vi., 1896, pp. 484-487, to whom the writer is largely indebted for the above facts. studies in economics and political science _a series of monographs by lecturers and students connected with the london school of economics and political science_ edited by the director of the london school of economics and political science =1. the history of local rates in england.= the substance of five lectures given at the school in november and december, 1896. by edwin cannan, m.a., ll.d. 1896; 140 pp., cr. 8vo, cloth, 2s. 6d. _p. s. king & son._ =2. select documents illustrating the history of trade unionism.= i.--the tailoring trade. by f. w. galton. with a preface by sidney webb, ll.b. 1896; 242 pp., cr. 8vo, cloth. 5s. _p. s. king & son._ =3. german social democracy.= six lectures delivered at the school in february and march, 1896. by the hon. bertrand russell, b.a., late fellow of trinity college, cambridge. with an appendix on social democracy and the woman question in germany. by alys russell, b.a. 1896; 204 pp., cr. 8vo, cloth. 3s. 6d. _p. s. king & son._ =4. the referendum in switzerland.= by m. simon deploige, university of louvain. with a letter on the referendum in belgium by m. j. van den heuvel, professor of international law in the university of louvain. translated by c. p. trevelyan, m.a., trinity college. cambridge, and edited with notes, introduction, bibliography, and appendices, by lilian tomn (mrs. knowles), of girton college, cambridge, research student at the school. 1898; x. and 334 pp., cr. 8vo, cloth. 7s. 6d. _p. s. king & son._ =5. the economic policy of colbert.= by a. j. sargent, m.a., senior hulme exhibitioner, brasenose college, oxford; and whately prizeman, 1897, trinity college, dublin. 1899; viii. and 138 pp., cr. 8vo, cloth. 2s. 6d. _p. s. king & son._ =6. local variations in wages.= (the adam smith prize, cambridge university, 1898.) by f. w. lawrence, m.a., fellow of trinity college, cambridge. 1899; viii. and 90 pp., with index and 18 maps and diagrams. quarto, 11 in. by 8-½ in., cloth. 8s. 6d. _longmans, green & co._ =7. the receipt roll of the exchequer for michaelmas term of the thirty-first year of henry ii. (1185).= a unique fragment transcribed and edited by the class in palæography and diplomatic, under the supervision of the lecturer, hubert hall, f.s.a., of h.m. public record office. with thirty-one facsimile plates in collotype and parallel readings from the contemporary pipe roll. 1899; vii. and 37 pp.; folio, 15-½ in. by 11-½ in., in green cloth; 5 copies left. apply to the director of the london school of economics. =8. elements of statistics.= by arthur l. bowley, m.a., f.s.s., cobden and adam smith prizeman, cambridge; guy silver medallist of the royal statistical society; newmarch lecturer, 1897-98. 1901; _third edition_, 1907; viii. and 336 pp. demy 8vo, cloth, 40 diagrams. 10s. 6d. net. _p. s. king & son._ =9. the place of compensation in temperance reform.= by c. p. sanger, m.a., late fellow of trinity college, cambridge; barrister-at-law. 1901; viii. and 136 pp., cr. 8vo, cloth. 2s. 6d. _p. s. king & son._ (_out of print._) =10. a history of factory legislation, 1802-1901.= by b. l. hutchins and a. harrison (mrs. spencer), b.a., d.sc. (econ.), london. second edition. with a preface by sidney webb, ll.b. 1911; xviii. and 372 pp., demy 8vo, cloth. 6s. net. _p. s. king & son._ =11. the pipe roll of the exchequer of the see of winchester for the fourth year of the episcopate of peter des roches (1207).= transcribed and edited from the original roll in the possession of the ecclesiastical commissioners by the class in palæography and diplomatic, under the supervision of the lecturer, hubert hall, f.s.a., of h.m. public record office. with a frontispiece giving a facsimile of the roll. 1903; xlviii. and 100 pp., folio, 13-½ in. by 8-½ in., green cloth. 15s. net. _p. s. king & son._ =12. self-government in canada and how it was achieved: the story of lord durham's report.= by f. bradshaw, m.a., senior hulme exhibitioner, brasenose college, oxford. 1903; 414 pp., demy 8vo, cloth. 3s. 6d. net. _p. s. king & son._ =13. history of the commercial and financial relations between england and ireland from the period of the restoration.= by alice effie murray (mrs. radice), d.sc. (econ.), former student at girton college, cambridge; research student of the london school of economics and political science. 1903; 486 pp., demy 8vo, cloth. 3s. 6d. net. _p. s. king & son._ =14. the english peasantry and the enclosure of common fields.= by gilbert slater, m.a., st. john's college, cambridge; d.sc. (econ.), london. 1906; 337 pp., demy 8vo, cloth. 10s. 6d. net. _constable & co., ltd._ =15. a history of the english agricultural labourer.= by dr. w. hasbach, professor of economics in the university of kiel. with a preface by sidney webb, ll.b. translated from the second edition (1908), by ruth kenyon. cloth, 7s. 6d. net. _p. s. king & son._ =16. a colonial autocracy: new south wales under governor macquarie, 1810-1821.= by marion phillips, b.a., melbourne, d.sc. (econ.), london. 1909; xxiii., 336 pp., demy 8vo, cloth, 10s 6d. net. _p. s. king & son._ =17. india and the tariff problem.= by professor h. b. lees smith, m.a., m.p. 1909; 120 pp., crown 8vo, cloth. 3s. 6d. net. _constable & co., ltd._ =18. practical notes on the management of elections.= three lectures delivered at the school in november, 1909, by ellis t. powell, ll.b., b.sc. (econ.), fellow of the royal historical and royal economic societies, of the inner temple, barrister-at-law. 1909; 52 pp., 8vo, paper, 1s. 6d. net. _p. s. king & son._ =19. the political development of japan.= by g. e. uyehara, b.a., washington, d.sc. (econ.) london. 1910 xxiv., 296 pp., demy 8vo, cloth. 8s. 6d. net. _constable & co., ltd._ =20. national and local finance.= by j. watson grice, b.sc. (econ.), london. with a preface by sidney webb, ll.b. 1910; 428 pp., demy 8vo, cloth. 10s. 6d. net. _p. s. king & son._ =21. an example of communal currency.= by j. theodore harris, b.a. with a preface by sidney webb, ll.b. crown 8vo. 1s. net. _p. s. king & son._ _series of bibliographies by students of the school._ =1. a bibliography of unemployment and the unemployed.= by f. isabel taylor, b.sc. (econ.), london. with a preface by sidney webb, ll.b. 1909; xix., 71 pp., demy 8vo, cloth, 2s. net; paper, 1s. 6d. net. _p. s. king & son._ _series of geographical studies._ =1. the reigate sheet of the one-inch ordnance survey.= a study in the geography of the surrey hills. by ellen smith. introduction by h. j. mackinder, m.a., m.p. 1910; xix., 110 pp., 6 maps, 23 illustrations, crown 8vo, cloth. 3s. 6d. net. _a. & c. black._ 100 years ago guernsey experimented successfully with communal currency, to-day the co-operative brotherhood trust, ltd., is experimenting with co-operative currency. it has a small circle of manufacturers, merchants and private individuals using and circulating its currency. if you believe in its practicability, join it and help to ensure its success. if you want to know more about it, write for full information to-the secretary, 37, newington green road, london, n. works by henry w. wolff co-operative banking its principles and its practice, with a chapter on co-operative mortgage credit _demy 8vo, cloth_, =7s. 6d.= _net_ "mr. wolff is the author of a successful work."--_times._ a co-operative credit handbook demy 8vo, 96 pages. 1s. net contents--preface, general remarks, banks based upon shares (limited liability societies), model rules for such (with annotations), village banks (unlimited liability societies), model rules for such (with annotations). appendix: form of application, forms of bond for borrower, form of fortnightly balance sheet, model cash book. co-operative credit banks a help for the labouring and cultivating classes. 6d. village banks how to start them--how to work them--what the rich may do to help them, etc. 6d. london: p. s. king & son orchard house, westminster +-----------------------------------------------+ | transcriber's note: | | | | inconsistent hyphenation and spelling in the | | original document have been preserved. | | | | typographical errors corrected in the text: | | | | page 11 isue changed to issue | | page 61 viii changed to vii | +-----------------------------------------------+ * * * * * international finance by hartley withers _by the same author_. our money and the state, second impression. 3s. net. stocks and shares. fifth impression. 6s. net. money changing: an introduction to foreign exchange, third edition. 6s. net. the meaning of money. fifteenth impression. 6s. net. poverty and waste. 6s. net. war and lombard street. third edition. 3s. 6d. net. international finance. 6s, net. international finance by hartley withers "while man cannot live by bread alone. he cannot go on living, even a good life if he really falls short of bread." prof. j.l. myers. _first edition_ _may_, 1916. _reprinted_ _june_, 1918. preface responsibility for the appearance of this book--but not for its contents--lies with the council for the study of international relations, which asked me to write one "explaining what the city really does, why it is the centre of the world's money market," etc. in trying to do so, i had to go over a good deal of ground that i had covered in earlier efforts to throw light on the machinery of money and the stock exchange; and the task was done amid many distractions, for which readers must make as kindly allowance as they can. hartley withers. 6, linden gardens, w. _march_, 1916. contents chapter i capital and its reward finance the machinery of money-dealing--lenders and borrowers--capital and its claim to reward--stored-up work--inherited wealth--the reward of services--questionable services--charles the second's dukedoms--modern equivalents--workers and savers chapter ii banking machinery money at a bank--bills of exchange--finance and industry--supremacy of bill on london--london's freedom--the bank of england--the great joint stock banks--the discount market--bills and trade chapter iii investments and securities stock exchange securities--government and municipal loans--machinery of loan issue--underwriting--the prospectus--sinking fund--bonds and coupons--registered stocks--companies' securities--stock exchange dealings chapter iv finance and trade why money goes abroad--trade before finance--prejudice in favour of home investments--prejudice against them--the reaction--mexico and brazil--neutral moneylenders and the war--goods and services lent and borrowed--the trade balance chapter v the benefits of international finance international finance and trade--opening up the world--exchange of products--finance as peacemaker--popular delusions concerning financiers--financiers and the present war--the cases of egypt and the transvaal--diplomacy and finance chapter vi the evils of international finance anti-semitic prejudice--the story of the honduras loans--the problem to be faced by issuing houses--their moral obligations, responsibilities, and difficulties--bad finance and big profits--the public's responsibility chapter vii nationalism and finance dangers of over-specialization--analogy between state and individual--versatility of the savage--specialization and peace--specialization and war--should the export of capital be regulated? chapter viii remedies and regulations regulation of issues by stock exchange committee--danger arising therefrom--difficulty of controlling capital--best remedy is keener appreciation by issuing houses, borrowers, and investors of evils of bad finance--candour in prospectuses--war as financial schoolmaster--war as destroyer of capital--war as stimulator of productive activity index international finance chapter i capital and its reward finance, in the sense in which it will be used in this book, means the machinery of money dealing. that is, the machinery by which money which you and i save is put together and lent out to people who want to borrow it. finance becomes international when our money is lent to borrowers in other countries, or when people in england, who want to start an enterprise, get some or all of the money that they need, in order to do so, from lenders oversea. the biggest borrowers of money, in most countries, are the governments, and so international finance is largely concerned with lending by the citizens of one country to the governments of others, for the purpose of developing their wealth, building railways and harbours or otherwise increasing their power to produce. money thus saved and lent is capital. so finance is the machinery that handles capital, collects it from those who save it and lends it to those who want to use it and will pay a price for the loan of it. this price is called the rate of interest, or profit. the borrower offers this price because he hopes to be able, after paying it, to benefit himself out of what he is going to make or grow or get with its help, or if it is a government because it hopes to improve the country's wealth by its use. sometimes borrowers want money because they have been spending more than they have been getting, and try to tide over a difficulty by paying one set of creditors with the help of another, instead of cutting down their spending. this path, if followed far enough, leads to bankruptcy for the borrower and loss to the lender. if no price were offered for capital, we should none of us save, or if we saved we should not risk our money by lending it, but hide it in a hole, or lock it up in a strong room, and so there could be no new industry. since capital thus seems to be the subject-matter of finance and it is the object of this book to make plain what finance does, and how, it will be better to begin with clear understanding of the function of capital. all the more because capital is nowadays the object of a good deal of abuse, which it only deserves when it is misused. when it is misused, let us abuse it as heartily as we like, and take any possible measures to punish it. but let us recognize that capital, when well and fairly used, is far from being a sinister and suspicious weapon in the hands of those who have somehow managed to seize it; but is in fact so necessary to all kinds of industry, that those who have amassed it, and placed it at the disposal of industry render a service to society without which society could not be kept alive. for capital, as has been said, is money saved and lent to, or employed in, industry. by being lent to, or employed in, industry it earns its rate of interest or profit. there are nowadays many wise and earnest people who think that this interest or profit taken by capital is not earned at all but is wrung out of the workers by a process of extortion. if this view is correct then all finance, international and other, is organized robbery, and instead of writing and reading books about it, we ought to be putting financiers into prison and making a bonfire of their bonds and shares and stock certificates. but, with all deference to those who hold this view, it is based on a complete misapprehension of the nature and origin of capital. capital has been described above as money put to certain purposes. this was done for the sake of clearness and because this definition fits in with the facts as they usually happen in these days. economists define capital as wealth reserved for production, and we must always remember that money is only a claim for, or a right to, a certain amount of goods or a certain amount of other people's work. money is only a title to wealth, because if i have a sovereign or a one-pound note in my pocket, i thereby have the power of buying a pound's worth of goods or of hiring a doctor to cure me or a parson to bury me or anybody else to do anything that i want, up to the buying power of that sovereign. this is the power that money carries with it. when the owner of this power, instead of exercising it in providing himself with luxuries or amusements, uses it by lending it to someone who wants to build a factory, and employ workers, then, because the owner of the money receives his rate of interest he is said to be exploiting labour, because, so it is alleged, the workers work and he, the capitalist, sits in idleness and lives on their labour. and so, in fact, he does. but we have not yet found out how he got the money that he lent. that money can only have been got by work done or services rendered, for which other people were ready to pay. capital, looked at from this point of view, is simply stored up work, and entitled to its reward just as much as the work done yesterday. the capitalist lives on the work of others, but he can only do so because he has wrought himself in days gone by or because someone else has wrought and handed on to him the fruits of his labour. let us take the case of a shopkeeper who has saved a hundred pounds. this is his pay for work done and risk taken (that the goods which he buys may not appeal to his customers) during the years in which he has saved it. he might spend his hundred pounds on a motor cycle and a side-car, or on furniture, or a piano, and nobody would deny his right to do so. on the contrary he would probably be applauded for giving employment to makers of the articles that he bought. instead of thus consuming the fruit of his work on his own amusement, and the embellishment of his home, he prefers to make provision for his old age. he invests his hundred pounds in the 5 per cent. debenture stock of a company being formed to extend a boot factory. thereby he gives employment to the people who build the extension and provide the machinery, and thereafter to the men and women who work in the factory, and moreover he is helping to supply other people with boots. he sets people to work to supply other people's wants instead of his own, and he receives as the price, of his service five pounds a year. but it is his work, that he did in the years in which he was saving, that is earning him this reward. an interesting book has lately appeared in america, called "income," in which the writer, dr. scott nearing, of the university of pennsylvania, draws a very sharp distinction between service income and property income, implying, if i read him aright, that property income is an unjust extortion. this is how he states his case:--[1] "the individual whose effort creates values for which society pays receives service income. his reward is a reward for his personality, his time, his strength. railroad president and roadmender devote themselves to activities which satisfy the wants of their fellows. their service is direct. in return for their hours of time and their calories of energy, they receive a share of the product which they have helped to produce. "the individual who receives a return because of his property ownership, receives a property income. this man has a title deed to a piece of unimproved land lying in the centre of a newly developing town. a storekeeper offers him a thousand dollars a year for the privilege of placing a store on the land. the owner of the land need make no exertion. he simply holds his title. here a man has labored for twenty years and saved ten thousand dollars by denying himself the necessaries of life. he invests the money in railroad bonds, and someone insists he thereby serves society. in one sense he does serve. in another, and a larger sense, he expects the products of his past service (the twenty years of labor), to yield him an income. from the day when he makes his investment he need never lift a finger to serve his fellows. because he has the investment, he has income. the same would hold true if the ten thousand dollars had been left him by his father or given to him by his uncle.... the fact of possession is sufficient to yield him an income." now, in all these cases of property income which dr. nearing seems to regard as examples of income received in return for no effort, there must have been an effort once, on the part of somebody, which put the maker of it in possession of the property which now yields an income to himself, or those to whom he has left or given it. first there is the case of the man who has a title deed to a piece of land. how did he get it? either he was a pioneer who came and cleared it and settled on it, or he had worked and saved and with the product of his work had bought this piece of land, or he had inherited it from the man who had cleared or bought the land. the ownership of the land implies work and saving and so is entitled to its reward. then there is the case of the man who has saved ten thousand dollars by labouring for twenty years and denying himself the necessaries of life. dr. nearing admits that this man has worked in order to get his dollars; he even goes so far as to add that he had denied himself the necessaries of life in order to save. incidentally one may wonder how a man who has denied himself the necessaries of life for twenty years can be alive at the end of them. this man has worked for his dollars, and, instead of spending them on immediate enjoyment, lends them to people who are building a railway, and so is quickening and cheapening intercourse and trade. dr. nearing seems to admit grudgingly that in a sense he thereby renders a service, but he complains because his imaginary investor expects without further exertion to get an income from the product of his past service. if he could not get an income from it, why should he save? and if he and millions of others did not save how could railways or factories be built? and if there were no railways or factories how could workers find employment? if every capitalist only got income from the product of his own work in the past, which he had spent, as in this case, on developing industry, his claim to a return on it would hardly need stating. he would have saved his ten thousand dollars or two thousand pounds, and instead of spending it on two thousand pounds' worth of amusement or pleasure for himself he would have preferred to put it at the disposal of those who are in need of capital for industry and promise to pay him 5 per cent. or £100 a year for the use of it. by so doing he increases the demand for labour, not momentarily as he would have done if he had spent his money on goods and services immediately consumed, but for all time, as long as the railway that he helps to build is running and earning an income by rendering services. he is a benefactor to humanity as long as his capital is invested in a really useful enterprise, and especially to the workers who cannot get work unless the organizers of industry are supplied with plenty of cheap capital. in fact, the more plentiful and cheap is capital, the keener will be the demand for the labour of the workers. but when dr. nearing points out that the income of the ten thousand dollars would be equally secure if the owner of them had them left him by his father or given him by his uncle, then at last he smites capital on a weak point in its armour. there, is, without question, much to be said for the view that it is unfair that a man who has worked and saved should thereby be able to hand over to his son or nephew, who has never worked or saved, this right to an income which is derived from work done by somebody else. it seems unfair to all of us, who were not blessed with equally industrious and provident fathers and uncles, and it is often bad for the man who gets the income as a reward for no effort of his own, because it gives him a false start in life and sometimes tends to make him a futile waster, who can only justify his existence and his command over other people's work, by pointing to the efforts of his deceased sire or uncle. further, unless he is very lucky, he is likely to grow up with the notion that, just because he has been left or given a certain income, he is somehow a superior person, and that it is part of the scheme of the universe that others should work for his benefit, and that any attempt on the part of other people to get a larger share, at his expense, of the good things of the earth is an attempt at robbery. he is, by being born to a competence, out of touch with the law of nature, which says that all living things must work for their living, or die, and his whole point of view is likely to be warped and narrowed by his unfortunate good fortune. these evils that spring from hereditary property are obvious. but it may be questioned whether they outweigh the advantages that arise from it. the desire to possess is a strong stimulus to activity in production, because possession is the mark of success in it, and all healthy-minded men like to feel that they have succeeded; and almost equally strong is the desire to hand on to children or heirs the possessions that the worker's energy has got for him. in fact it may almost be said that in most men's minds the motive of possession implies that of being able to hand on; they would not feel that they owned property which they were bound to surrender to the state at their deaths. if and when society is ever so organized that it can produce what it needs without spurring the citizen to work with the inducement supplied by possession, and the power to hand on property, then it may be possible to abolish the inequities that hereditary property carries with it. as things are at present arranged it seems that we are bound to put up with them if the community is to be fed and kept alive. at least we can console ourselves with the thought that property does not come into existence by magic. except in the case of the owners of land who may be enriched without any effort by the discovery of minerals or by the growth of a city, capital can only have been created by services rendered; and even in the case of owners of land, they, and those from whom they derived it, must have done something in order to get the land. it is, of course, quite possible that the something which was done was a service which would not now be looked on as meriting reward. in the medieval days mailclad robbers used to get (quite honestly and rightly according to the notions then current) large grants of land because they had ridden by the side of their feudal chiefs when they went on marauding forays. in later times, as in the days of our merry monarch, attractive ladies were able to found ducal families by placing their charms at the service of a royal debauchee. but the rewards of the freebooters have in almost all cases long ago passed into the hands of those who purchased them with the proceeds of effort with some approach to economic justification; and though some of charles the second's dukedoms are still extant, it will hardly be contended that it is possible to trace the origin of everybody's property and confiscate any that cannot show a reasonable title, granted for some true economic service. what we can do, and ought to do, if economic progress is to move along right lines, is to try to make sure that we are not, in these days of alleged enlightenment, committing out of mere stupidity and thoughtlessness, the crime which charles the second perpetrated for his own amusement. he gave large tracts of england to his mistresses because they pleased his roving fancy. now the power to dispense wealth has passed into the hands of the people, who buy the goods and services produced, and so decide what goods and services will find a market, and so will enrich their producers. are we making much better use of it? on the whole, much better; but we still make far too many mistakes. the people to whom nowadays we give big fortunes, though they include a large number of organizers of useful industry, also number within their ranks a crowd of hangers on such as bookmakers, sharepushers, and vendors of patent pills or bad stuff to read. these folk, and others, live on our vices and stupidities, and it is our fault that they can do so. because a large section of the public likes to gamble away its money on the stock exchange, substantial fortunes have been founded by those who have provided the public with this means of amusement. because the public likes to be persuaded by the clamour of cheapjack advertisement that its inside wants certain medicines, and that these medicines are worth buying at a price that makes the vendor a millionaire, there he is with his million. some people say that he has swindled the public. the public has swindled itself by allowing him to foist stuff down its throat on terms which give him, and his heirs and assigns after him, all the control over the work and wealth of the world that is implied by the possession of a million. when we buy rubbish we do not only waste our money to our own harm, but, under the conditions of modern society, we put the sellers of rubbish in command of the world, as far as the money power commands it, which is a good deal further than is pleasing. hence it is that when some of those who question the right of capital to its reward, do so on the ground that capital is often acquired by questionable means, they are barking up the wrong tree. capital can only be acquired by selling something to you and me. if you and i had more sense in the matter of what we buy, capital could not be acquired by questionable means. by our greed and wastefulness we give fortunes to bookmakers, market-riggers and money-lenders. by our preference for "brilliant" investments, with a high rate of interest and bad security, we invite the floating of rotten companies and waterlogged loans. by our readiness to be deafened by the clamour of the advertiser into buying things that we do not want, we hand industry over to the hands of the loudest shouter, and by our half-educated laziness in our selection of what we read and of the entertainments that we frequent, we open the way to opulence through the debauching of our taste and opinions. it is our fault and ours only. as soon as we have learnt and resolved to buy and enjoy only what is worth having, the sellers of rubbish may put up their shutters and burn their wares. capital, then, is stored up work, work that has been paid for by society. those who did the work and took its reward, turned the proceeds of it into making something more instead of into pleasure and gratification for themselves. by a striking metaphor capital is often described as the seed corn of industry. seed corn is the grain that the farmer, instead of making it into bread for his own table, or selling it to turn it into picture-palace tickets, or beer, or other forms of short-lived comfort, keeps to sow in the earth so that he may reap his harvest next year. if the whole world's crop were eaten, there would be no seed corn and no harvest. so it is with industry. if its whole product were turned into goods for immediate consumption, there could be no further development of industry, and no maintenance of its existing plant, which would soon wear out and perish. the man who spends less than he earns and puts his margin into industry, keeps industry alive. from the point of view of the worker--by whom i mean the man who has little or no capital of his own, and has only, or chiefly, his skill, of head or of hand, to earn his living with--those who are prepared to save and put capital at the disposal of industry ought to be given every possible encouragement to do so. for since capital is essential to industry, all those who want to earn a living in the workshops or in the countinghouse, or in the manager's office, will most of all, if they are well advised, want to see as much capital saved as possible. the more there is of it, the more demand there will be for the brains and muscles of the workers, and the better the bargain these latter will be able to make for the use of their brains and muscles. if capital is so scarce and timid that it can only be tempted by the offer of high rates for its use, organizers of industry will think twice about expanding works or opening new ones, and there will be a check to the demand for workers. if so many people are saving that capital is a drug in the market, anyone who has an enterprise in his head will put it in hand, and workers will be wanted, first for construction then for operation. it is to the interest of workers that there should be as many capitalists as possible offering as much capital as possible to industry, so that industry shall be in a state of chronic glut of capital and scarcity of workers. roughly, it is true that the product of industry is divided between the workers who carry it on, and the savers who, out of the product of past work, have built the workshop, put in the plant and advanced the money to pay the workers until the new product is marketed. the workers and the savers are at once partners and rivals. they are partners because one cannot do without the other; rivals because they compete continually concerning their share of the profit realized. if the workers are to succeed in this competition and secure for themselves an ever-increasing share of the profit of industry--and from the point of view of humanity, civilization, nationality, and common sense it is most desirable that this should be so--then this is most likely to happen if the savers are so numerous that they will be weak in bargaining and unable to stand out against the demands of the workers. if there were innumerable millions of workers and only one saver with money enough to start one factory, the one saver would be able to name his own terms in arranging his wages bill, and the salaries of his managers and clerks. if the wind were on the other cheek, and a crowd of capitalists with countless millions of money were eager to set the wheels of industry going, and could not find enough workers to man and organize and manage their workshops, then the workers would have the whip hand. to bring this state of things about it would seem to be good policy not to damn the capitalist with bell and with book and frighten him till he is so scarce that he is master of the situation, but to give him every encouragement to save his money and put it into industry. for the more plentiful he is, the stronger is the position of the workers. in fact the saver is so essential that it is nowadays fashionable to contend that the saving business ought not to be left to the whims of private individuals, but should be carried out by the state in the public interest; and there are some innocent folk who imagine that, if this were done, the fee that is now paid to the saver for the use of the capital that he has saved, would somehow or other be avoided. in fact the government would have to tax the community to produce the capital required. capital would be still, as before, the proceeds of work done. and the result would be that the taxpayers as a whole would have to pay for capital by providing it. this might be a more equitable arrangement, but as capital can only be produced by work, the taxpayers would have to do a certain amount of work with the prospect of not being allowed to keep the proceeds, but of being forced to hand it over to government. whether such a plan would be likely to be effective in keeping industry supplied with capital is a question which need not be debated until the possibility of such a system becomes a matter of practical politics. for our present purpose it is enough to have shown that the capital, which is the stock-in-trade of finance, is not a fraudulent claim to take toll of the product of industry, but an essential part of the foundation on which industry is built. a man can only become a capitalist by rendering services for which he receives payment, and spending part of his pay not on his immediate enjoyment, but in establishing industry either on his own account or through the agency of someone else to whom be lends the necessary capital. before any industry can start there must be tools and a fund out of which the workers can be paid until the work that they do begins to bring in its returns. the fund to buy these tools and pay the workers can only be found out of the proceeds of work done or services rendered. moreover, there is always a risk to be run. as soon as the primitive savage left off making everything for himself and took to doing some special work, such as arrow making, in the hope that his skill, got from concentration on one particular employment, would be rewarded by the rest of the tribe who took his arrows and gave him food and clothes in return, he began to run the risk that his customers might not want his product, if they happened to take to fishing for their food instead of shooting it. this risk is still present with the organizers of industry and it falls first on the capitalist. if an industry fails the workers cease to be employed by it; but as long as they work for it their wages are a first charge which has to be paid before capital gets a penny of interest or profit, and if the failure of the industry is complete the capital sunk in it will be gone. footnotes: [footnote 1: pages 24, 25.] chapter ii banking machinery capital, then, is wealth invested in industry, finance is the machinery by which this process of investment is carried out, and international finance is the machinery by which the wealth of one country is invested in another. let us consider the case of a doctor in a provincial town who is making an annual income of about £800 a year, living on £600 of it and saving £200. instead of spending this quarter of his income on immediate enjoyments, such as wine and cigars, and journeys to london, he invests it in different parts of the world through the mechanism of international finance, because he has been attracted by the advantages of a system of investment which was fashionable some years ago, which worked by what was called geographical distribution.[2] this meant to say that the investors who practised it put their money into as many different countries as possible, so that the risk of loss owing to climatic or other disturbances might be spread as widely as possible. so here we have this quiet country doctor spreading all over the world the money that he gets for dosing and poulticing and dieting his patients, stimulating industry in many climates and bringing some part of its proceeds to be added to his store. let us see how the process works. first of all he has a bank, into which he pays day by day the fees that he receives in coin or notes and the cheques that he gets, each half year, from those of his patients who have an account with him. as long as his money is in the bank, the bank has the use of it, and not much of it is likely to go abroad. for the banks use most of the funds entrusted to them in investments in home securities, or in loans and advances to home customers. part of them they use in buying bills of exchange drawn on london houses by merchants and financiers all over the world, so that even when he pays money into his bank it is possible that our doctor is already forming part of the machinery of international finance and involving us in the need for an explanation of one of its mysteries. a bill of exchange is an order to pay. when a merchant in argentina sells wheat to an english buyer, he draws a bill on the buyer (or some bank or firm in england whom the buyer instructs him to draw on), saying, "pay to me" (or anybody else whom he may name) "the sum of so many pounds." this bill, if it is drawn on a firm or company of well known standing, the seller of the wheat can immediately dispose of, and so has got payment for his goods. usually the bill is made payable two or three, or sometimes six months after sight, that is after it has been received by the firm on which it is drawn, and "accepted" by it, that is signed across the front to show that the firm drawn on will pay the bill when it falls due. these bills of exchange, when thus accepted, are promises to pay entered into by firms of first-rate standing, and are held as investments by english banks. bills of exchange are also drawn on english houses to finance trade transactions between foreign countries, and also as a means of borrowing money from england. when they are drawn on behalf of english customers, the credit given is given at home, but as it is (almost always) given in connection with international trade, the transaction may be considered as part of international finance. when they are drawn on behalf of foreign countries, trading with other foreigners, or using the credit to lend to other foreigners, the connection with international finance is obvious. they are readily taken all over the world, because all over the world there are people who have payments to make to england owing to the wide distribution of our trade, and it has long been england's boast that bills of exchange drawn on london firms are the currency of international commerce and finance. some people tell us that this commanding position of the english bill in the world's markets is in danger of being lost owing to the present war: in the first place because america is gaining wealth rapidly, while we are shooting away our savings, and also because the germans will make every endeavour to free themselves from dependence on english credit for the conduct of their trade. certainly this danger is a real one, but it does not follow that we shall not be able to meet it and defeat it. if the war teaches us to work hard and consume little, so that when peace comes we shall have a great volume of goods to export, there is no reason why the bill on london should not retain much if not all of its old prestige and supremacy in the marts of the world. for we must always remember that finance is only the handmaid of industry. she is often a pert handmaid who steals her mistress's clothes and tries to flaunt before the world as the mistress, and so she sometimes imposes on many people who ought to know better, who think that finance is an all-powerful influence. finance is a mighty influence, but it is a mere piece of machinery which assists, quickens, and lives on production. the men who make and grow things, and carry them from the place where they are made and grown to the place where they are wanted, these are the men who furnish the raw material of finance, without which it would have to shut up its shop. if they and their work ceased, we should all starve, and the financiers would have nothing behind the pieces of paper that they handle. if finance and the financiers were suddenly to cease, there would be a very awkward jar and jolt in our commercial machinery, but as long as the stuff and the means of carrying it were available, we should very soon patch up some other method for exchanging it between one nation and another and one citizen and another. the supremacy of the london bill of exchange was created only to a small extent by any supremacy in london's financial machinery; it was based chiefly on the supremacy of england's world-wide trade, and on our readiness to take goods from all nations. the consequence of this was that traders of all nations sold goods to us, and so had claims on us and drew bills on us, and bought goods from us, and so owed us money and wanted to buy bills drawn on us to pay their debts with. so everywhere the bill on london was known and familiar and welcome. if the americans are able and willing to develop such a world-wide trade as ours, then the bill on new york will have a vogue all over the world just as is enjoyed by the bill on london. then london and new york will have to fight the matter out by seeing which will provide the best and cheapest machinery for discounting the bill, that is, turning it into cash on arrival, so that the holder of it shall get the best possible price at the present moment, for a bill due two or three months hence. in this matter of machinery london has certain advantages which ought, if well used and applied, to stand her in good stead in any struggle that lies ahead of her. london's credit machinery has grown up in almost complete freedom from legislation, and it has consequently been able to grow, without let or hindrance, along the lines that expediency and convenience have shown to be most practical and useful. it has been too busy to be logical or theoretical, and consequently it is full of absurdities and anomalies, but it works with marvellous ease and elasticity. in its centre is the bank of england, with the prestige of antiquity and of official dignity derived from acting as banker to the british government, and with still more practical strength derived from acting as banker to all the other great banks, several of them much bigger, in certain respects, than it. the bank of england is very severely and strictly restricted by law in the matter of its note issue, but it luckily happened, when parliament was imposing these restrictions on the bank's business, that note issuing was already becoming a comparatively unimportant part of banking, owing to the development of the use of cheques. nowadays, when borrowers go to the bank of england for loans, they do not want to take them out in notes; all they want is a credit in the bank's books against which they can draw cheques. a credit in the bank of england's books is regarded by the financial community as "cash," and this pleasant fiction has given the bank the power of creating cash by a stroke of its pen and to any extent that it pleases, subject only to its own view as to what is prudent and sound business. on p.33 ("a bank return", below) is a specimen of a return that is published each week by the bank of england, showing its position in two separate accounts with regard to its note issuing business and its banking business: the return taken is an old one, published before the war, so as to show how the machine worked in normal times before war's demands had blown out the balloon of credit to many times its former size. if the commercial and financial community is short of cash, all that it has to do is to go to the bank of england and borrow a few millions, and the only effect on the bank's position is an addition of so many millions to its holding of securities and a similar addition to its deposits. it may sometimes happen that the borrowers may require the use of actual currency, and in that case part of the advances made will be taken out in the form of notes and gold, but as a general rule the bank is able to perform its function of providing emergency credit by merely making entries in its books. a bank return issue department. notes issued £56,908,235 government debt £11,015,100 other securities 7,434,900 gold coin and bullion 38,458,235 silver bullion -- ---------- ---------- £56,908,235 £56,908,235 ---------- ----------banking department. proprietors' capital £14,553,000 government securities £11,005,126 rest 3,431,484 other securities 33,623,288 public deposits 13,318,714 notes 27,592,980 other deposits 42,485,605 gold and silver coin 1,596,419 seven day and other bills 29,010 ---------- ---------- £73,817,813 £73,817,813 ---------- ----------with the bank of england thus acting as a centre to the system, there has grown up around it a circle of the great joint stock banks, which provide credit and currency for commerce and finance by lending money and taking it on deposit, or on current account. these banks work under practically no legal restrictions of any kind with regard to the amount of cash that they hold, or the use that they make of the money that is entrusted to their keeping. they are not allowed, if they have an office in london, to issue notes at all, but in all other respects they are left free to conduct their business along the lines that experience has shown them to be most profitable to themselves, and most convenient for their customers. being joint stock companies they have to publish periodically, for the information of their shareholders, a balance sheet showing their position. before the war most of them published a monthly statement of their position, but this habit has lately been given up. no legal regulations guide them in the form or extent of the information that they give in their balance sheets, and their great success and solidity is a triumph of unfettered business freedom. this absence of restriction gives great elasticity and adaptability to the credit machinery of london. here is a specimen of one of their balance sheets, slightly simplified, and dating from the days before the war:-liabilities. capital (subscribed) £14,000,000 ---------paid up 3,500,000 reserve 4,000,000 deposits 87,000,000 circular notes, etc. 3,000,000 acceptances 6,000,000 profit and loss 500,000 ---------- £104,000,000 ----------assets cash in hand and at bank of england £12,500,000 cash at call and short notice 13,000,000 bills discounted 19,000,000 govt. securities 5,000,000 other investments 4,500,000 advances and loans 42,000,000 liability of customers on account of acceptances 6,000,000 promises 2,000,000 ---------- £104,000,000 ----------on one side are the sums that the bank has received, in the shape of capital subscribed, from its shareholders, and in the shape of deposits from its customers, including dr. pillman and thousands like him; on the other the cash that it holds, in coin, notes and credit at the bank of england, its cash lent at call or short notice to bill brokers (of whom more anon) and the stock exchange, the bills of exchange that it holds, its investments in british government and other stocks, and the big item of loans and advances, through which it finances industry and commerce at home. it should be noted that the entry on the left side of the balance sheet, "acceptances," refers to bills of exchange which the bank has accepted for merchants and manufacturers who are importing goods and raw material, and have instructed the foreign exporters to draw bills on their bankers. as these merchants and manufacturers are responsible to the bank for meeting the bills when they fall due, the acceptance item is balanced by an exactly equivalent entry on the other side, showing this liability of customers as an asset in the bank's favour. this business of acceptance is done not only by the great banks, but also by a number of private firms with connections in foreign countries, and at home, through which they place their names and credit at the disposal of people less eminent for wealth and position, who pay them a commission for the use of them. other wheels in london's credit machinery are the london offices of colonial and foreign banks, and the bill brokers or discount houses which deal in bills of exchange and constitute the discount market. thus we see that there is in london a highly specialized and elaborate machinery for making and dealing in these bills, which are the currency of international trade. let us recapitulate the history of the bill and see the part contributed to its career by each wheel in the machine. we imagined a bill drawn by an argentine seller against a cargo of wheat shipped to an english merchant. the bill will be drawn on a london accepting house, to whom the english merchant is liable for its due payment. the argentine merchant, having drawn the bill, sells it to the buenos ayres branch of a south american bank, formed with english capital, and having its head office in london. it is shipped to london, to the head office of the south american bank, which presents it for acceptance to the accepting house on which it is drawn, and then sells it to a bill broker at the market rate of discount. if the bill is due three months after sight, and is for £2000, and the market rate of discount is 4 per cent. for three months' bills, the present value of the bill is obviously £1980. the bill broker, either at once or later, probably sells the bill to a bank, which holds it as an investment until its due date, by which time the importer having sold the wheat at a profit, pays the money required to meet the bill to his banker and the transaction is closed. thus by means of the bill the exporter has received immediate payment for his wheat, the importing merchant has been supplied with credit for three months in which to bring home his profit, and the bank which bought the bill has provided itself with an investment such as bankers love, because it has to be met within a short period by a house of first-rate standing. all this elaborate, but easily working machinery has grown up for the service of commerce. it is true that bills of exchange are often drawn by moneylenders abroad on moneylenders in england merely in order to raise credit, that is to say, to borrow money by means of the london discount market. sometimes these credits are used for merely speculative purposes, but in the great majority of cases they are wanted for the furtherance of production in the borrowing country. the justification of the english accepting houses, and bill brokers, and banks (in so far as they engage in this business), is the fact that they are assisting trade, and could not live without trade, and that trade if deprived of their services would be gravely inconvenienced and could only resume its present activity by making a new machinery more or less on the same lines. the bill whose imaginary history has been traced, came into being because the drawer had a claim on england through a trade transaction. he was able to sell it to the south american bank only because the bank knew that many other people in argentina would have to make payments to england and would come to it and ask it for drafts on london, which, by remitting this bill to be sold in london, it would be able to supply. international finance is so often regarded as a machinery by which paper wealth is manufactured out of nothing, that it is very important to remember that all this paper wealth only acquires value by being ultimately based on something that is grown or made and wanted to keep people alive or comfortable, or at least happy in the belief that they have got something that they thought they wanted, or which habit or convention obliged them to possess. footnotes: [footnote 2: all this imaginary picture is of events before the war. at present dr. pillman, being a patriotic citizen, is saving much faster than before, and putting every pound that he can save into the hands of the british government by subscribing to war loans and buying exchequer bonds. he is too old to go and do medical work at the front, so he does the next best thing by cutting down his expenses and finding money for the war.] chapter iii investments and securities so far we have only considered what happens to the money of those who save as long as it is left in the hands of their bankers, and we have seen that it is only likely to be employed internationally, if invested by bankers in bills of exchange which form a comparatively small part of their assets. it is true that bankers also invest money in securities, and that some of these are foreign, but here again the proportion invested abroad is so small that we may be reasonably sure that any money left by us in the hands of our bankers will be employed at home. but in actual practice those who save do not pile up a large balance at their banks. they keep what is called a current account, consisting of amounts paid in in cash or in cheques on other banks or their own bank, and against this account they draw what is needed for their weekly and monthly payments; sometimes, also, they keep a certain amount on deposit account, that is an account on which they can only draw after giving a week's notice or more. on their deposit account they receive interest, on their current account they may in some parts of the country receive interest on the average balance kept. but the deposit account is most often kept by people who have to have a reserve of cash quickly available for business purposes. the ordinary private investor, when he has got a balance at his bank big enough to make him feel comfortable about being able to meet all probable outgoings, puts any money that he may have to spare into some security dealt in on the stock exchange, and so securities and the stock exchange have to be described and examined next. they are very much to the point, because it is through them that international finance has done most of its work. securities, then, are the stocks, shares and bonds which are given to those who put money into companies, or into loans issued by governments, municipalities and other public bodies. let us take the governments and public bodies first, because the securities issued by them are in some ways simpler than those created by companies. when a government wants to borrow, it does so because it needs money. the purpose for which it needs it may be to build a railway or canal, or make a harbour, or carry out a land improvement or irrigation scheme, or otherwise work some enterprise by which the power of the country to grow and make things may be increased. enterprises of this kind are usually called reproductive, and in many cases the actual return from them in cash more than suffices to meet the interest on the debt raised to carry them out, to say nothing of the direct benefit to the country in increasing its output of wealth. in england the government has practically no debt that is represented by reproductive assets. our government has left the development of the country's resources to private enterprise, and the only assets from which it derives a revenue are the post office buildings, the crown lands and some shares in the suez canal which were bought for a political purpose. governments also borrow money because their revenue from taxes is less than the sums that they are spending. this happens most often and most markedly when they are carrying on war, or when nations are engaged in a competition in armaments, building navies or raising armies against one another so as to be ready for war if it happens. this kind of debt is called dead-weight debt, because there is no direct or indirect increase, in consequence of it, in the country's power to produce things that are wanted. this kind of borrowing is generally excused on the ground that provision for the national safety is a matter which concerns posterity quite as much as the present generation, and that it is, therefore, fair to leave posterity to pay part of the bill. municipalities likewise borrow both for reproductive purposes and for objects from which no direct revenue can be expected. they may invest money lent them in gas or electric works or water supply or tramways, and get an income from them which will more than pay the interest on the money borrowed. or they may put it into public parks and recreation grounds or municipal buildings, or improvements in sanitation, thereby beautifying and cleansing the town. if they do these things in such a way as to make the town a pleasanter and healthier place to live in, they may indirectly increase their revenue; but if they do them extravagantly and badly, they run the risk of putting a burden on the ratepayers that will make people shy of living within their borders. whatever be the object for which the loan is issued, the procedure is the same by which the money is raised. the government or municipality invites subscriptions through a bank or through some great financial house, which publishes what is called a prospectus by circular, and in the papers, giving the terms and details of the loan. people who have money to spare, or are able to borrow money from their bankers, and are attracted by the terms of the loan, sign an application form which is issued with the prospectus, and send a cheque for the sum, usually 5 per cent. of the amount that they apply for, which is payable on application. if the loan is over-subscribed, the applicants will only receive part of the sums for which they apply. if it is not fully subscribed, they will get all that they have asked for, and the balance left over will be taken up in most cases by a syndicate formed by the bank or firm that issued the loan, to "underwrite" it. underwriting means guaranteeing the success of a loan, and those who do so receive a commission of anything from 1 to 3 per cent.; if the loan is popular and goes well the underwriters take their commission and are quit; if the loan is what the city genially describes as a "frost," the underwriters may find themselves saddled with the greater part of it, and will have the pleasure of nursing it until such time as the investing public will take it off their hands. underwriting is thus a profitable business when times are good, and the public is feeding freely, but it can only be indulged in by folk with plenty of capital or credit, and so able to carry large blocks of stock if they find themselves left with them. to take a practical example, let us suppose that the king of ruritania is informed by his minister of marine that a battleship must at once be added to its fleet because his next door neighbour is thought to be thinking of making himself stronger on the water, while his minister of finance protests that it is impossible, without the risk of serious trouble, to add anything further to the burdens of the taxpayers. a loan is the easy and obvious way out. london and paris between them will find two or three millions with pleasure. that will be enough for a battleship and something over in the way of new artillery for the army which can be ordered in france so as to secure the consent of the french government, which was wont to insist that a certain proportion of any loan raised in paris must be spent in the country. (it need hardly be said that all these events are supposed to be happening in the years before the war.) negotiations are entered into with a group of french banks and an english issuing house. the french banks take over their share, and sell it to their customers who are, or were, in the habit of following the lead of their bankers in investment with a blind confidence, that gave the french banks enormous power in the international money market. the english issuing house sends round a stockbroker to underwrite the loan. if the issuing house is one that is usually successful in its issues, the privilege of underwriting anything that it brings out is eagerly sought for. banks, financial firms, insurance companies, trust companies and stockbrokers with big investment connections will take as much underwriting as they are offered, in many cases without making very searching inquiry into the terms of the security offered. the name of the issuing house and the amount of the underwriting commission --which we will suppose in this case to be 2 per cent.--is enough for them. they know that if they refuse any chance of underwriting that is offered, they are not likely to get a chance when the next loan comes out, and since underwriting is a profitable business for those who can afford to run its risks, many firms put their names down for anything that is put before them, as long as they have confidence in the firm that is handling the loan. this power in the hands of the big issuing houses, to get any loan that they choose to father underwritten in a few hours by a crowd of eager followers, gives them, of course, enormous strength and lays a heavy responsibility on them. they only preserve it by being careful in the use of it, and exercising great discrimination in the class of securities that they handle. while the underwriting is going on the prospectus is being prepared by which the subscriptions of the public are invited, and in the meantime it will probably happen that the newspapers have had a hint that a ruritanian loan is on the anvil, so that preliminary paragraphs may prepare an atmosphere of expectancy. news of a forthcoming new issue is always a welcome item in the dull routine of a city article, and the journalists are only serving their public and their papers in being eager to chronicle it. lurid stories are still handed down by city tradition of how great city journalists acquired fortunes in days gone by, by being allotted blocks of new loans so that they might expand on their merits and then sell them at a big profit when they had created a public demand for them. there seems to be no doubt that this kind of thing used to happen in the dark ages when finance and city journalism did a good deal of dirty business between them. now, the city columns of the great daily papers have for a very long time been free from any taint of this kind, and on the whole it may be said that finance is a very much cleaner affair than either law or politics. it is true that swindles still happen in the city, but their number is trivial compared with the volume of the public's money that is handled and invested. it is only in the by-ways of finance and in the gutters of city journalism that the traps are laid for the greedy and gullible public, and if the public walks in, it has itself to blame. a genuine investor who wants security and a safe return on his money can always get it. unfortunately the investor is almost always at the same time a speculator, and is apt to forget the distinction; and those who ask for a high rate of interest, absolute safety and a big rise in the prices of securities that they buy are only inviting disaster by the greed that wants the unattainable and the gullibility that deludes them into thinking they can have it. to return to our ruritanian loan, which we left being underwritten. the prospectus duly comes out and is advertised in the papers and sown broadcast over the country through the post. it offers £1,500,000 (part of £3,000,000 of which half is reserved for issue in paris), 4-1/2 per cent. bonds of the kingdom of ruritania, with interest payable on april 1st and october 1st, redeemable by a cumulative sinking fund of 1 per cent., operating by annual drawings at par, the price of issue being 97, payable as to 5 per cent. on application, 15 per cent. on allotment and the balance in instalments extending over four months. coupons and drawn bonds are payable in sterling at the countinghouse of the issuing firm. the extent of the other information given varies considerably. some firms rely so far on their own prestige and the credit of those on whose account they offer loans, that they state little more than the bare terms of the issue as given above. others deign to give details concerning the financial position of the borrowing government, such as its revenue and expenditure for a term of years, the amount of its outstanding debt, and of its assets if any. if the credit of the kingdom of ruritania is good, such a loan as here described would be, or would have been before the war, an attractive issue, since the investor would get a good rate of interest for his money, and would be certain of getting par or £100, some day, for each bond for which he now pays £97. this is ensured by the action of the sinking fund of 1 per cent. cumulative, which works as follows. each year, as long as the loan is outstanding the kingdom of ruritania will have to put £165,000 in the hands of the issuing houses, to be applied to interest and sinking fund. in the first year interest at 4-1/2 per cent. will take £135,000 and sinking fund (1 per cent. of £3,000,000) £30,000; this £30,000 will be applied to the redemption of bonds to that value, which are drawn by lot; so that next year the interest charge will be less and the amount available for sinking fund will be greater; and each year the comfortable effect of this process continues, until at last the whole loan is redeemed and every investor will have got his money back and something over. the effect of this obligation to redeem, of course, makes the market in the loan very steady, because the chance of being drawn at par in any year, and the certainty of being drawn if the investor holds it long enough, ensures that the market price will be strengthened by this consideration. such being the terms of the loan we may be justified in supposing--if ruritania has a clean record in its treatment of its creditors, and if the issuing firm is one that can be relied on to do all that can be done to safeguard their interests, that the loan is a complete success and is fully subscribed for by the public. the underwriters will consequently be relieved of all liability and will pocket their 2 per cent., which they have earned by guaranteeing the success of the issue. if some financial or political shock had occurred which made investors reluctant to put money into anything at the time when the prospectus appeared or suggested the likelihood that ruritania might be involved in war, then the underwriters would have had to take up the greater part of the loan and pay for it out of their own pockets; and this is the risk for which they are given their commission. ruritania will have got its money less the cost of underwriting, advertising, commissions, 1 per cent. stamp payable to the british government, and the profit of the issuing firm. some shipyard in the north will lay down a battleship and english shareholders and workmen will benefit by the contract, and the investors will have got well secured bonds paying them a good rate of interest and likely to be easily saleable in the market if the holders want to turn them into cash. the bonds will be large pieces of paper stating that they are 4-1/2 per cent, bonds of the kingdom of ruritania for £20, £100, £500 or £1000 as the case may be, and they will each have a sheet of coupons attached, that is, small pieces to be cut off and presented at the date of each interest payment; each one states the amount due each half year and the date when it will have to be met. bonds are called bearer securities, that is to say, possession of them entitles the bearer to receive payment of them when drawn and to collect the coupons at their several dates. they are the usual form for the debts of foreign governments and municipalities, and of foreign railway and industrial companies. in england we chiefly affect what are called registered and inscribed stocks--that is, if our government or one of our municipalities issues a loan, the subscribers have their names registered in a book by the debtor, or its banker, and merely hold a certificate which is a receipt, but the possession of which is not in itself evidence of ownership. there are no coupons, and the half-yearly interest is posted to stockholders, or to their bankers or to any one else to whom they may direct it to be sent. consequently when the holder sells it is not enough for him to hand over his certificate, as is the case with a bearer security, but the stock has to be transferred into the name of the buyer in the register kept by the debtor, or by the bank which manages the business for it. when the securities offered are not loans by public bodies, but represent an interest in a company formed to build a railway or carry on any industrial or agricultural or mining enterprise, the procedure will be on the same lines, except that the whole affair will be on a less exalted plane. such an issue would not, save in exceptional circumstances, as when a great railway is offering bonds or debenture stock, be fathered by one of the leading financial firms. industrial ventures are associated with so many risks that they are usually left to the smaller fry, and those who underwrite them expect higher rates of commission, while subscribers can only be tempted by anticipations of more mouth-filling rates of interest or profit. this distinction between interest and profit brings us to a further difference between the securities of companies and public bodies. public bodies do not offer profit, but interest, and the distinction is very important. a government asks for your money and promises to pay a rate for it, whether the object on which the money is spent be profit-earning or no, and, if it is, whether a profit be earned or no. a company asks subscribers to buy it up and become owners of it, taking its profits, that it expects to earn, and getting no return at all on their money if its business is unfortunate and the profits never make their appearance. consequently the shareholders in a company run all the risks that industrial enterprise is heir to, and the return, if any, that comes into their pockets depends on the ability of the enterprise to earn profits over and above all that it has to pay for raw material, wages and other working expenses, all of which have to be met before the shareholder gets a penny. in order to meet the objections of steady-going investors to the risks involved by thus becoming industrial adventurers, a system has grown up by which the capital of companies is subdivided into securities that rank ahead of one another. companies issue debts, like public bodies, in the shape of bonds or debenture stocks, which entitle the holders of them to a stated rate of interest, and no more, and are often repayable at a due date, by drawings or otherwise. these are the first charge on the concern after wages and other working expenses have been paid, and the shareholders do not get any profit until the interest on the company's debt has been met. further, the actual capital held by the shareholders is generally divided into two classes, preference and ordinary, of which the preference take a fixed rate before the ordinary shareholders get anything, and the ordinary shareholders take the whole of any balance left over. sometimes, the preference holders have a right to further participation after the ordinary have received a certain amount of dividend, or share of profit, and there are almost endless variations of the manner in which the different classes of holders may claim to divide the profits, by means of preference, preferred, ordinary, preferred ordinary, deferred ordinary, founders' shares, management shares, etc., etc. all these variations in the position of the shareholder, however, do not alter the great essential difference between him and the creditor, the man who lends money to a government or enterprise with a fixed rate of interest, and, in most cases, a claim for repayment sooner or later. the shareholder, whether preference or ordinary, puts his money into a venture with no claim for repayment, unless the company is wound up, in which case his claim ranks, of course, after that of every creditor. if he wants to get his money out again he can only do so by selling his stock or shares at any price that they will fetch in the stock market. thus, if we take as an example a brewery company with a total debt and capital of three millions, we may suppose that it will have a million 4-1/2 per cent, debenture stock, entitling the creditors who own it to interest at that rate, and repayment in 1935, a million of 6 per cent. cumulative preference stock, giving holders a fixed dividend, if earned, of 6 per cent, which dividend and all arrears have to be paid before the ordinary shareholders get anything, and a million in ordinary shares of £10 each, whose holders take any balance that may be left. this is the total of the money that has been received from the public when the company was floated and put into the brewery plant, tied houses, or other assets out of which the company makes its revenue. these bonds and stocks and shares are the machinery of international finance, by which moneylenders of one nation provide borrowers in others with the wherewithal to carry out enterprises, or make payments for which they have not cash available at home. it was shown in a previous chapter that bills of exchange are a means by which the movements of commodities from market to market are financed, and the gap in time is bridged between production and consumption. stock exchange securities are more permanent investments, put into industry for longer periods or for all time. midway between them are securities such as treasury bills with which governments raise the wind for a time, pending the collection of revenue, and the one or two years' notes with which american railroads lately financed themselves for short periods, in the hope that the conditions for an issue of bonds with longer periods to run, might become more favourable. so far we have only considered the machinery by which these securities are created and issued to the public, but it must not be supposed that investment is only possible when new securities are being offered. many investors have a prejudice against ever buying a new security, preferring those which have a record and a history behind them, and buying them in the market whenever they have money to invest. this market is the stock exchange in which securities of all kinds and of all countries are dealt in. following the history of the ruritanian loan, we may suppose that it will be dealt in regularly in that section of the stock exchange in which the loans of foreign governments are marketed. any original subscriber who wants to turn his bonds into money can do so by instructing his broker to sell them; anyone who wants to do so can acquire a holding in them by a purchase. the terms on which they will be bought or sold will depend on the variations in the demand for, and supply of, them. if a number of holders want to sell, either because they want cash for other purposes, or because they are nervous about the political outlook, or because they think that money is going to be scarce and so there will be better opportunities for investment later on, then the price will droop. but if the political sky is serene and people are saving money fast and investing it in stock exchange securities, then the price will go up and those who want to buy it will pay more. the price of all securities, as of everything else, depends on the extent to which people who have not got them demand them, in relation to the extent to which those who have got them are ready to part with them. price is ultimately a question of what people think about things, and this is why the fluctuations in the price of stock exchange securities are so incalculable and often so irrational. if a sufficient number of misguided people with money in their pockets think that a bad security is worth buying they will put the price of it up in the face of the logic of facts and all the arguments of reason. these wild fluctuations, of course, take place chiefly in the more speculative securities. shares in a gold mine can go to any price that the credulity of buyers dictates, since there is no limit to the amount of gold that people can imagine to be under the ground in its territory. all the stock exchanges of the world are in communication with one another by telegraph, or telephone, and so their feelings about prices react on one another's nerves and imaginations, and the stock exchange price list may be said to be the language of international finance, as the bill of exchange is its currency. chapter iv. finance and trade we have seen that finance becomes international when capital goes abroad, by being lent by investors in one country to borrowers in another, or by being invested in enterprises formed to carry on some kind of business abroad. we have next to consider why capital goes abroad and whether it is a good or a bad thing, for it to do so. capital goes abroad because it is more wanted in other countries than in the country of its origin, and consequently those who invest abroad are able to do so to greater advantage. in countries like england and france, where there have been for many centuries thrifty folk who have saved part of their income, and placed their savings at the disposal of industry, it is clear that industry is likely to be better supplied with capital than in the new countries which have been more lately peopled, and in which the store of accumulated goods is less adequate to the industrial needs of the community. for we must always remember that though we usually speak and think of capital as so much money it is really goods and property. in england money consists chiefly of credit in the books of banks, which can only be created because there is property on which the banks can make advances, or because there is property expressed in securities in which the banks can invest or against which they can lend. because our forefathers did not spend all their incomes on their own personal comfort and amusement but put a large part of them into railways and factories, and shipbuilding yards, our country is now reasonably well supplied with the machinery of production and the means of transport. whether it might not be much better so equipped is a question with which we are not at present concerned. at least it may be said that it is more fully provided in these respects than new countries like our colonies, america and argentina, or old countries like russia and china in which industrial development is a comparatively late growth, so that there has been less time for the storing up, by saving, of the necessary machinery. so it comes about that new countries are in greater need of capital than old ones and consequently are ready to pay a higher rate of interest for it to lenders or to tempt shareholders with a higher rate of profit. and so the opportunity is given to investors in england to develop the agricultural or industrial resources of all the countries under the sun to their own profit and to that of the countries that it supplies. when, for example, the government of one of the australian colonies came to london to borrow money for a railway, it said in effect to english investors, "your railways at home have covered your country with such a network that there are no more profitable lines to be built. the return that you get from investing in them is not too attractive in view of all the trade risks to which they are subject. do not put your money into them, but lend it to us. we will take it and build a railway in a country which wants them, and, whether the railway pays or no, you will be creditors of a colonial government with the whole wealth of the colony pledged to pay you interest and pay back your money when the loan falls due for repayment." for in australia the railways have all been built by the colonial governments, partly because they wished, by pledging their collective credit, to get the money as cheaply as possible, and keep the profits from them in their own hands, and partly probably because they did not wish the management of their railways to be in the hands of london boards. in argentina, on the other hand, the chief railways have been built, not by the government but by english companies, shareholders in which have taken all the risks of the enterprise, and have thereby secured handsome profits to themselves, tempered with periods of bad traffic and poor returns. for many years there was a good deal of prejudice in england against investing abroad, especially among the more sleepy classes of investors who had made their money in home trade, and liked to keep it there when they invested it. as traders, we learnt a world-wide outlook many centuries before we did so as investors. to send a ship with a cargo of english goods to a far off country to be exchanged into its products was a risk that our enterprising forefathers took readily. the ship took in its return cargo and came home, bringing its sheaves with it in a reasonable time, though the antonios of the period sometimes had awkward moments if their ships were delayed by bad weather, and they were liable on a bond to shylock. but it was quite another matter to lend money in a distant country when communication was slow and difficult, and social and political conditions had not gained the stability that is needed before contracts can be entered into extending over many years. international moneylending took place, of course, in the middle ages, and everybody knows motley's great description of the consternation that shook europe when philip the second repudiated his debts "to put an end to such financiering and unhallowed practices with bills of exchange."[3] but though there were moneylenders in those days who obliged foreign potentates with loans, the business was in the hands of expert professional specialists, and there was no medieval counterpart of the country doctor whom we have imagined to be developing industry all over the world by placing his savings in foreign countries. there could be no investing public until there were large classes that had accumulated wealth by saving, and until the discovery of the principle of limited liability enabled adventurers to put their savings into industry without running the risk of losing not only what they put in, but all else that they possessed. by means of this system, the risk of a shareholder in a company is limited to a definite amount, usually the amount that has been paid up on his shares or stock, though in some cases, such as bank and insurance shares, there is a further reserve liability which is left for the protection of the companies' customers. in the eighteenth century a great outburst of gambling in the east indian and south sea companies, and a horde of less notorious concerns was a short-lived episode which must have helped for a very long time to strengthen the natural prejudice that investors feel in favour of putting their money into enterprise at home; and it was still further strengthened by the disastrous results of another great plague of bad foreign securities that smote london just after the war that ended at waterloo. this prejudice survived up to within living memory, and i have heard myself old-fashioned stockbrokers maintain that, after all, there was no investment like home rails, because investors could always go and look at their property, which could not run away. gradually, however, the habit of foreign investment grew, under the influence of the higher rates of interest and profit offered by new countries, the greater political stability that was developed in them, and political apprehensions at home. in fact it grew so fast and so lustily that there came a time, not many years ago, when investments at home were under a cloud, and many clients, when asking their brokers where and how to place their savings, stipulated that they must be put somewhere abroad. this was at a time when mr. lloyd george's financial measures were arousing resentment and fear among the investing classes, and when preachers of the tariff reform creed were laying so much stress on our "dying industries" that they were frightening those who trusted them into the belief that the sun was setting on our industrial greatness. the effect of this belief was to bring down the prices of home securities, and to raise those of other countries, as investors changed from the former into the latter. so the theory that we were industrially and financially doomed got another argument from its own effects, and its missionaries were able to point to the fall in consols and the relative steadiness of foreign and colonial securities which their own preaching had brought about, as fresh evidence of its truth. at the same time fear of socialistic legislation at home had the humorous result of making british investors fear to touch consols, but rush eagerly to buy the securities of colonial governments which had gone much further in the direction of socialism than we had. those were great days for all who handled the machinery of oversea investment and in the last few years before the war it is estimated that england was placing some 200 millions a year in her colonies and dependencies and in foreign countries. old-fashioned folk who still believed in the industrial strength and financial stability of their native land waited for the reaction which was bound to follow when some of the countries into which we poured capital so freely, began to find a difficulty in paying the interest; and just before the war this reaction began to happen, in consequence of the default in mexico and the financial embarrassments of brazil. mexico had shown that the political stability which investors had believed it to have achieved was a very thin veneer and a series of revolutions had plunged that hapless land into anarchy. brazil was suffering from a heavy fall in the price of one of her chief staple products, rubber, owing to the competition of plantations in ceylon, straits settlements and elsewhere, and was finding difficulty in meeting the interest on the big load of debt that the free facilities given by english and french investors had encouraged her to pile up. she had promised retrenchment at home, and another big loan was being hatched to tide her over her difficulties--or perhaps increase them--when the war cloud began to gather and she has had to resort for the second time in her history to the indignity of a funding scheme. by this "new way of paying old debts" she does not pay interest to her bondholders in cash, but gives them promises to pay instead, and so increases the burden of her debt, which she hopes some day to be able to shoulder again, by resuming payments in cash. mexico and brazil were not the only countries that were showing signs, in 1914, of having indulged too freely in the opportunities given them by the eagerness of english and french investors to place money abroad. it looked as if in many parts of the earth a time of financial disillusionment was dawning, the probable result of which would have been a strong reaction in favour of investment at home. then came the war with a short sharp spell of financial chaos followed by a halcyon period for young countries, which enabled them to sell their products at greatly increased prices to the warring powers and so to meet their debt charges with an ease that they had never dreamt of, and even to find themselves lending, out of the abundance of their war profits, money to their creditors. america has led the way with a loan of £100 millions to france and england, and canada has placed 10 millions of credit at the disposal of the mother country. there can be little doubt that if the war goes on, and the neutral countries continue to pile up profits by selling food and war materials to the belligerents, many of them will find it convenient to lend some of their gains to their customers. america has also been taking the place of france and england as international moneylenders by financing argentina; and a great company has been formed in new york to promote international activity, on the part of americans, in foreign countries. "and thus the whirligig of time," assisted by the eclipse of civilization in europe, "brings in his revenges" and turns debtors into creditors. in the meantime it need hardly be said that investment at home has become for the time being a matter of patriotic duty for every englishman, since the financing of the war has the first and last claim on his savings. our present concern, however, is not with the war problems of to-day, but with the processes of international finance in the past, and perhaps, before we get to the end, with some attempt to hazard a glimpse into its arrangements in the future. what was the effect on england, and on the countries to whom she lent, of her moneylending activity in the past? as soon as we begin to look into this question we see once more how close is the connection between finance and trade, and that finance is powerless unless it is supported and in fact made possible by industrial or commercial activity behind it. england's international trade made her international finance possible and necessary. a country can only lend money to others if it has goods and services to supply, for in fact it lends not money but goods and services. in the beginnings of international trade the older countries exchange their products for the raw materials and food produced by the new ones. then, as emigrants from the old countries go out into the new ones, they want to be supplied with the comforts and appliances of the older civilizations, such as, to take an obvious example, railways. but as the productions of the new countries, at their early stage of development, do not suffice to pay for all the material and machinery needed for building railways, they borrow, in effect, these materials, in the expectation that the railways will open out their resources, enable them to put more land under the plough and bring more stuff to the seaboard, to be exchanged for the products of europe. the new country, new zealand or japan, or whichever it may be, raises a loan in england for the purpose of building a railway, but it does not take the money raised by the loan in the form of money, but in the form of goods needed for the railway, and sometimes in the form of the services of those who plan and build it. it does not follow that all the stuff and services needed for the enterprise are necessarily bought in the country that lends the money; for instance, if japan borrows money from us for a railway, she may buy some of the steel rails and locomotives in belgium, and instruct us to pay belgium for her purchases. if so, instead of sending goods to japan we shall have to send goods or services to belgium, or pay belgium with the claim on some other country that we have established by sending goods or services to it. but, however long the chain may be, the practical fact is that when we lend money we lend somebody the right to claim goods or services from us, whether they are taken from us by the borrower, or by somebody to whom the borrower gives a claim on us. if, whenever we made a loan, we had to send the money to the borrower in the form of gold, our gold store would soon be used up, and we should have to leave off lending. in other words, our financiers would have to retire from business very quickly if it were not that our manufacturers and shipowners and all the rest of our industrial army produced the goods and services to meet the claims on our industry given, or rather lent, to other countries by the machinery of finance. this obvious truism is often forgotten by those who look on finance as an independent influence that can make money power out of nothing; and those who forget it are very likely to find themselves entangled in a maze of error. we can make the matter a little clearer if we go back to the original saver, whose money, or claims on industry, is handled by the professional financier. those who save do so by going without things. instead of spending their earnings on immediate enjoyment they spend part of them in providing somebody else with goods that they need, and taking from that somebody else an annual payment for the use of these goods for a certain period, after which, if it is a case of a loan, the transaction is closed by repayment of the advance, which again is effected by a transfer of goods. when our country doctor subscribes to an australian loan raised by a colony for building a railway, he hands over to the colony money which a less thrifty citizen would have spent on pleasures and amusements, and the colony uses it to buy railway material. thus in effect the doctor is spending his money in making a railway in australia. he is induced to do so by the promise of the colony to give him £4 every year for each £100 that he lends. if there were not enough people like him to put money into industry instead of spending it on themselves, there could be no railway building or any other form of industrial growth. it is often contended that a reconstruction of society on a socialistic basis would abolish the capitalist; but in fact it would make everybody a capitalist because the state would have to make the citizens as a whole go without certain immediate enjoyments and work on the production of the machinery of industry. instead of saving being left to the individual and rewarded by a rate of interest, it would be imposed on all and rewarded by a greater productive power, and consequent increase in commodities, enjoyed by the community and distributed among all its members. the advantages, on paper, of such an arrangement over the present system are obvious. whether they would be equally obvious in practice would depend on the discretion with which the government handled the enormous responsibility placed in its hands. but the essential fact that capital can only be got by being saved, and earns the reward that it gets, would remain as strongly in force as ever, and will do so until we have learnt to make goods out of nothing and without effort. going back to our doctor, who lends railway material to an australian colony, we see that every year for each £100 lent the colony has to send him £4. this it can only do if its mines and fields and factories can turn out metals or wheat or wool, or other goods which can be shipped to england or elsewhere and be sold, so that the doctor's £4 is provided. and so though on both sides the transaction is expressed in money it is in fact carried out in goods, both when the loan is made and the interest is paid. and finally when the loan is paid back again, the colony must have sold goods to provide repayment, unless it meets its debts by raising another. but when a loan is well spent on a railway that is needed for the development of a fertile or productive district, it justifies itself by cheapening transport and quickening the output of wealth in such a manner, that the increased volume of goods that it has helped to create easily meets the interest due to lenders, provides a fund for its redemption at maturity, and leaves the borrower better off, with a more fully equipped productive system. since, then, there is this close and obvious connection between finance and trade, it is inevitable that all who partake in the activities of international finance should find their trade quickened by it. england has lent money abroad because she is a great producer, and certain classes of englishmen are savers, so that there was a balance of goods available for export, to be lent to other countries. in the early years of the nineteenth century, when our industrial power was first beginning to gather strength, we used regularly to export goods to a greater value than we imported. these were the goods that we were lending abroad, clearly showing themselves in our trade ledger. since then the account has been complicated by the growth of the amount that our debtors owe us every year for interest, and by the huge earnings of our merchant navy, which other countries pay by shipping goods to us, so that, by the growth of these items, the trade balance sheet has been turned in the other direction, and in spite of our lending larger and larger amounts all over the world we now have a balance of goods coming in. interest due to us and shipping freights and the commissions earned by our bankers and insurance companies were estimated before the war to amount to something like 350 millions a year, so that we were able to lend other countries some 200 millions or more in a year and still take from them a very large balance in goods. after the war this comfortable state of affairs will have been modified by the sales that we are making now in new york of the american railroad bonds and shares that represented the savings that we had put into america in former years, and by the extent of our war borrowings in america, and elsewhere, if we widen the circle of our creditors. the effect of this will be that we shall owe america for interest on the money that it is lending us, and that it will owe us less interest, owing to the blocks of its securities that it is buying back. against this we shall be able to set debts due to us from our allies, but if our borrowings and sales of securities exceed our lendings as the war goes on, we shall thereby be poorer. our power as a creditor country will be less, until by hard work and strict saving we have restored it. this we can very quickly do, if we remember and apply the lessons that war is teaching us about the number of people able to work, whose capacity was hitherto left fallow, that this country contained, and also about the ease with which we can dispense, when a great crisis makes us sensible, with many of the absurdities and futilities on which much of our money, and productive capacity, used to be wasted. footnotes: [footnote 3: "united netherlands," chap. xxxii.] chapter v the benefits of international finance when once we have recognized how close is the connection between finance and trade, we have gone a long way towards seeing the greatness of the service that finance renders to mankind, whether it works at home or abroad. at home we owe our factories and our railways and all the marvellous equipment of our power to make things that are wanted, to the quiet, prosaic, and often rather mean and timorous people who have saved money for a rainy day, and put it into industry instead of into satisfying their immediate wants and cravings for comfort and enjoyment it is equally, perhaps still more, true, that we owe them to the brains and energy of those who have planned and organized the equipment of industry, and the thews and sinews of those who have done the heavy work. but brain and muscle would have been alike powerless if there had not been saving folk who lent them raw material, and provided them with the means of livelihood in the interval between the beginning of an industry and the day when its product is sold and paid for. abroad, the work of finance has been even more advantageous to mankind, for since it has been shown that international finance is a necessary part of the machinery of international trade, it follows that all the benefits, economic and other, which international trade has wrought for us, are inseparably and inevitably bound up with the progress of international finance. if we had never fertilized the uttermost parts of the earth by lending them money and sending them goods in payment of the sums lent, we never could have enjoyed the stream that pours in from them of raw material and cheap food which has sustained our industry, fed our population, and given us a standard of general comfort such as our forefathers could never have imagined. it is true that at the same time we have benefited others, besides our own customers and debtors. we have opened up the world to trade and other countries reap an advantage by being able to use the openings that we have made. it is sometimes argued that we have in fact merely made the paths of our competitors straight, and that by covering argentina with a network of railways and so enormously increasing its power to grow things and so to buy things, we have been making an opportunity for german shipbuilders to send liners to the plate and for german manufacturers to undersell ours with cheap hardware and cotton goods. this is, undoubtedly, true. the great industrial expansion of germany between 1871 and 1914, has certainly been helped by the paths opened for it all over the world by english trade and finance; and america, our lusty young rival, that is gaining so much strength from the war in which europe is weakening itself industrially and financially, will owe much of the ease of her prospective expansion to spade-work done by the sleepy britishers. it may almost be said that we and france as the great providers of capital to other countries have made a world-wide trade possible on its present scale. the work we have done for our own benefit has certainly helped others, but it does not, therefore, follow that it has damaged us. looking at the matter from a purely business point of view, we see that the great forward movement in trade and finance that we have led and fostered, has helped us even by helping our rivals. in the first place, it gives us a direct benefit as the owners of the mightiest fleet of merchant ships that the world has seen. we do nearly half the world's carrying trade, and so have reason to rejoice when other nations send goods to the ports that we have opened. by our eminence in finance and the prestige of a bill of exchange drawn on london, we have also supplied the credit by which goods have been paid for in the country of their origin, and nursed until they have come to the land in which they are wanted, and even until the day when they have been turned into a finished product and passed into the hands of the final consumer. but there is also the indirect advantage that we gain, as a nation of producers and financiers, from the growing wealth of other nations. the more wealthy they grow, the more goods they produce want to sell to us, and they cannot sell to us unless they likewise buy from us. if we helped germany to grow rich, we also helped her to become one of our best customers and so to help us to grow rich. trade is nothing but an exchange of goods and services. other countries are not so philanthropic as to kill our trade by making us presents of their products and from the strictly economic point of view, it pays us to see all the world, which is our market, a thriving hive of industry eager to sell us as as it can. it may be that as other countries, with the help of our capital and example, develop industries in which we have been pre-eminent, they may force us to supply them with services of which we are less proud to be the producers. if, for example, the americans were to drive us out of the neutral markets with their cotton goods, and then spent their profits by revelling in our hotels and thronging out theatres and shooting in highland deer forests, and buying positions in english society for their daughters we should feel that the course of industry might still be profitable to us, but that it was less satisfactory. on the other hand, it would be absurd for us to expect the rest of the world to stand still industrially in order that we may make profits from producing things for it that it is quite able to make for itself. for the present we are concerned with the benefits of international finance, which have been shown to begin with its enormous importance as the handmaid of international trade. trade between nations is desirable for exactly the same reason as trade between one man and another, namely, that each is, naturally or otherwise, better fitted to grow or make certain things, and so an exchange is to their mutual advantage. if this is so, as it clearly is, in the case of two men living in the same street, it is evidently very much more so in the case of two peoples living in different climates and on different soils, and so each of them, by the nature of their surroundings, able to make and grow things that are impossible to the other. english investors, by developing the resources of other countries, through the machinery of international finance, enable us to sit at home in this inclement isle, and enjoy the fruits of tropical skies and soils. it may be true that if they had not done so we should have developed the resources of our own country more thoroughly, using it less as a pleasure ground, and more as a farm and kitchen garden, and that we should have had a larger number of our own folk working for us under our own sky. instead of thriving on the produce of foreign climes and foreign labour that comes to us to pay interest, we should have lived more on home-made stuff and had more healthy citizens at work on our soil. on the other hand, we should have been hit hard by bad seasons and we should have enjoyed a much less diversified diet. as it is, we take our tea and tobacco and coffee and sugar and wine and oranges and bananas and cheap bread and meat, all as a matter of course, but we could never have enjoyed them if international trade had not brought them to our shores, and if international finance had not quickened and cheapened their growth and transport and marketing. international trade and finance, if given a free hand, may be trusted to bring about, between them, the utmost possible development of the power of the world to grow and make things in the places where they can be grown and made most cheaply and abundantly, in other words, to secure for human effort, working on the available raw material, the greatest possible harvest as the reward of its exertions. all this is very obvious and very material, but international finance does much more, for it is a great educator and a mighty missionary of peace and goodwill between nations. this also is obvious on a moment's reflection, but it will be rejected as a flat mis-statement by many whose opinion is entitled to respect, and who regard international finance as a bloated spider which sits in the middle of a web of intrigue and chicanery, enticing hapless mankind into its toils and battening on bloodshed and war. so clear-headed a thinker as mr. philip snowden publicly expressed the view not long ago that "the war was the result of secret diplomacy carried on by diplomatists who had conducted foreign policy in the interests of militarists and financiers,"[4] now mr. snowden may possibly be right in his view that the war was produced by diplomacy of the kind that he describes, but with all deference i submit that he is wholly wrong if he thinks that the financiers, as financiers, wanted war either here or in germany or anywhere else. if they wanted war it was because they believed, rightly or wrongly, that their country had to fight for its existence, or for something equally well worth fighting for, and so as patriotic citizens, they accepted or even welcomed a calamity that could only cause them, as financiers, the greatest embarrassment and the chance of ruin. war has benefited the working classes, and enabled them to take a long stride forward, which we must all hope they will maintain, towards the improvement in their lot which is so long overdue. it has helped the farmers, put fortunes in the pockets of the shipowners, and swollen the profits of any manufacturers who have been able to turn out stuff wanted for war or for the indirect needs of war. the industrial centres are bursting with money, and the greater spending power that has been diffused by war expenditure has made the cheap jewellery trade a thriving industry and increased the consumption of beer and spirits in spite of restrictions and the absence of men at the front. picture palaces are crammed nightly, furs and finery have had a wonderful season, any one who has a motor car to sell finds plenty of ready buyers, and second-hand pianos are an article that can almost be "sold on a sunday." but in the midst of this roar of humming trade, finance, and especially international finance, lies stricken and still gasping from the shock of war. when war comes, the price of all property shrivels. this was well known to falstaff, who, when he brought the news of hotspur's rebellion, said "you may buy land now as cheap as stinking mackerel," to most financial institutions, this shrivelling process in the price of their securities and other assets, brings serious embarrassment, for there is no corresponding decline in their liabilities, and if they have not founded themselves on the rock of severest prudence in the past, their solvency is likely to be imperilled. finance knew that it must suffer. the story has often been told, and though never officially confirmed, it has at least the merit of great probability, that in 1911 when the morocco crisis made a european war probable, the german government was held back by the warning of its financiers that war would mean germany's ruin. it is more than likely that a similar warning was given in july, 1914, but that the war party brushed it aside. and now that war is upon us, we are being warned that high finance is intriguing for peace. mr. edgar crammond, a distinguished economist and statistician, published an article in the _nineteenth century_ of september, 1915, entitled "high finance and a premature peace," calling attention to this danger and urging the need for guarding against it. first too bellicose and now too pacific, high finance is buffeted and spat upon by men of peace and men of war with a unanimity that must puzzle it. it can hardly err on both sides, but of the two accusers i think that mr. crammond is much more likely to be right. but my own personal opinion is that both these accusers are mistaken, that the financiers never wanted war, that if (which i beg to doubt) diplomacy conducted in their interests produced the war, that was because diplomacy misunderstood and bungled their interests, and that now that the war is upon us, the financiers, though all their interests urge them to want peace, would never be parties to intrigues for a peace that was premature or ill-judged. perhaps i have a weakness for financiers, but if so it is entitled to some respect, because it is based on closer knowledge of them than is owned by most of their critics. for years it was my business as a city journalist, to see them day by day; and this daily intercourse with financiers has taught me that the popular delusion that depicts them as hard, cruel, ruthless men, living on the blood and sweat of humanity, and engulfed to their eyebrows in their own sordid interests, is about as absurd a hallucination as the stage irishman. financiers are quite human--quiet, mild, good-natured people as a rule, many of them spending much time and trouble on good works in their leisure hours. what they want as financiers is plenty of good business and as little as possible disturbance in the orderly course of affairs. such a cataclysm as the present war could only terrify them, especially those with interests in every country of the world. when war comes, especially such a war as this, financing in its ordinary and most profitable sense has to put up its shutters. nobody can come to london now for loans except the british, or french, governments, or, occasionally, one of our colonies. any other borrower is warned off the field by a ruthless committee whose leave has to be granted before dealings in new securities are allowed on the stock exchange. but when the british government borrows, there are no profits for the rank and file of financiers. no underwriting is necessary, and the business is carried out by the bank of england. the commissions earned by brokers are smaller, and the whole city feels that this is no time for profit-making, but for hard and ill-paid work, with depleted staffs, to help the great task of financing a great war. the stock exchange is half empty and nearly idle. it is tied and bound by all sorts of regulations in its dealings, and its members have probably suffered as severely from the war as any section of the community. the first interest of the city is unquestionably peace; and the fact that the city is nevertheless full of fine, full-flavoured patriotic fervour only shows that it is ready and eager to sink its interests in favour of those of its country. every knot that international finance ties between one country and another makes people in those two countries interested in their mutual good relations. the thing is so obvious, that, when one considers the number of these knots that have been tied since international finance first began to gather capital from one country's investors and place it at the disposal of others for the development of their resources, one can only marvel that the course of international goodwill has not made further progress. the fact that it is still a remarkably tender plant, likely to be crushed and withered by any breath of popular prejudice, is rather a comforting evidence of the slight importance that mankind attaches to the question of its bread and butter. it is clear that a purely material consideration, such as the interests of international finance, and the desire of those who have invested abroad to receive their dividends, weighs very little in the balance when the nations think that their honour or their national interests are at stake. since the gilded cords of trade and finance have knit all the world into one great market, the proposition that war does not pay has become self-evident to any one who will give the question a few minutes' thought. international finance is a peacemaker every time it sends a british pound into a foreign country. but its influence as a peacemaker is astonishingly feeble just for this reason, that its appeal is to an interest which mankind very rightly disregards whenever it feels that more weighty matters are in question. the fact that war does not pay is an argument that is listened to as little by a nation when its blood is up, as the fact that being in love does not pay would be heeded by an amorous undergraduate. if, then, the voice of international finance is so feeble when it is raised against the terrible scourge of war, can it have much force on the rare occasions when it speaks in its favour? for there is no inconsistency with the view that finance is a peacemaker, if we now acknowledge that finance may sometimes ask for the exertion of force on its behalf. as private citizens we all of us want to live at peace with our neighbours, but if one of them steals our property or makes a public nuisance of himself, we sometimes want to invoke the aid of the strong arm of the law in dealing with him. consequently, although it cannot be true that finance wanted war such as this one, it cannot be denied that wars have happened in the past, which have been furthered by financiers who believed that they suffered wrongs which only war could put right. the egyptian war of 1882 is a case in point, and the south african war of 1899 is another. in egypt international finance had lent money to a potentate ruling an economically backward people, without taking much trouble to consider how the money was to be spent, or whether the country could stand the charge on its revenues that the loans would involve. the fact that it did so was from one point of view a blunder and from another a crime, but this habit of committing blunders and crimes, which is sometimes indulged in by finance as by all other forms of human activity, will have to be dealt with in our next chapter, when we deal with the evils of international finance. the consequence of this blunder was that egypt went into default, and england's might was used on behalf of the bondholders who had made a bad investment. this fact has been put forward by mr. brailsford, in his very interesting book on "the war of steel and gold," and by other writers, to show that our diplomacy is the tool of international finance, and that the forces created by british taxpayers for the defence of their country's honour, are used for the sordid purpose of wringing interest for a set of money-grubbers in the city, out of a poor and down-trodden peasantry overburdened by the exactions and extortions of their rulers. mr. brailsford, of course, puts his case much better than i can, in any brief summary of his views. he has earned and won the highest respect by his power as a brilliant writer, and by his disinterested and consistent championship of the cause of honesty and justice, wherever and whenever he thinks it to be in danger. nevertheless, in this matter of the egyptian war i venture to think that he is mistaking the tail for the dog. diplomacy, i fancy, was not wagged by finance, but used finance as a very opportune pretext. if egypt had been brazil, it is not very likely that the british fleet would have shelled rio de janeiro. the bondholders would have been reminded of the sound doctrine, _caveat emptor_, which signifies that those who make a bad bargain have only themselves to blame, and must pocket their loss with the best grace that they can muster. as it was, egypt had long ago been marked out as a place that england wanted, because of its vitally important position on the way to india. kinglake, the historian, writing some three-quarters of a century ago, long before the suez canal was built, prophesied that egypt would some day be ours. in chapter xx. of "eothen," comes this well known passage on the sphynx (he spelt it thus):- "and we, we shall die, and islam will wither away, and the englishman, leaning far over to hold his loved india, will plant a firm foot on the banks of the nile, and sit in the seats of the faithful, and still that sleepless rock will lie watching, and watching the works of the new, busy race, with those same sad, earnest eyes, and the same tranquil mien everlasting." after the building of the canal, the command of this short cut to india made egypt still more important. england bought shares in the canal, so using finance as a means to a political object; and it did so still more effectively when it used the egyptian default and the claims of english bondholders as an excuse for taking its seat in egypt and sitting there ever since. the bondholders were certainly benefited, but it is my belief that they might have whistled for their money until the crack of doom if it had not been that their claims chimed in with imperial policy. it may have been wicked of us to take egypt, but if so let us lay the blame on the right doorstep and not abuse the poor bondholder and financier who only wanted their money and were used as a stalking horse by the machiavellis of downing street. mr brailsford's own account of the matter, indeed, shows very clearly that policy, and not finance, ruled the whole transaction. in south africa there was no question of default, or of suffering bondholders. there was a highly prosperous mining industry in a country that had formerly belonged to us, and had been given back to its dutch inhabitants under circumstances which the majority of people in this country regarded as humiliating. on this occasion even the pretext was political. it may have been that the english mine-owners thought they could earn better profits under the british flag than under the rule of mr. kruger, though i am inclined to believe that even in their case their incentive was chiefly a patriotic desire to repaint in red that part of the map in which they carried on their business. certainly their grievance, as it was put before us at home, was frankly and purely political. they said they wanted a vote and that mr. kruger would not give them one. that acute political thinker, mr. dooley of chicago, pointed out at the time that if mr. kruger "had spint his life in a rale raypublic where they burn gas," he would have given them the votes, but done the counting himself. but mr. kruger did not adopt this cynical expedient, and public opinion here, though a considerable minority detested the war, endorsed the determination of the government to restore the disputed british suzerainty over the transvaal into actual sovereignty. subsequent events, largely owing to the ample self-government given to the transvaal immediately after its conquest, have shown that the war did more good than harm; and the splendid defeat of the germans by the south african forces under general botha--our most skilful opponent fifteen years ago--has, we may hope, wiped out all traces of the former conflict. but what we are now concerned with is the fact, which will be endorsed by all whose memory goes back to those days, that the south african war, though instigated and furthered by financial interests, would never have happened if public opinion had not been in favour of it on grounds which were quite other than financial--the desire to bring back the transvaal into the british empire and to wipe out the memory of the surrender after majuba, and humanitarian feeling which believed, rightly or wrongly, that the natives would be treated better under our rule. these may or may not have been good reasons for going to war, but at least they were not financial. summing up the results of this rather discursive chapter we see that the chief benefit conferred on mankind by international finance is a quickening of the pace at which the wealth of the world is increased and multiplied, by using the capital saved by old countries for fostering the productive power of new ones. this is surely something solid on the credit side of the balance sheet, though it would be a good deal more so if mankind had made better progress with the much more difficult problem of using and distributing its wealth. if the rapid increase of wealth merely means that honest citizens, who find it as hard as ever to earn a living, are to be splashed with more mud from more motor-cars full of more road hogs, then there is little wonder if the results of international finance produce a feeling of disillusionment. but at least it must be admitted that the stuff has to be grown and made before it can be shared, and that a great advance has been made even in the general distribution of comfort. if we still find it hard to make a living, that is partly because we have very considerably expanded, during the course of the last generation or two, our notion of what we mean by a living. as to the sinister influence alleged to be wielded by international finance in the councils of diplomacy, it has been shown that war on a great scale terrifies finance and inflicts great distress on it. to suppose, therefore, that finance is interested in the promotion of such wars is to suppose that it is a power shortsighted to the point of imbecility. in the case of wars which finance is believed with some truth to have helped to instigate, we have seen that it could not have done so if other influences had not helped it. in short, both the occurrence of the present war, and the circumstances that led up to war in egypt and south africa, have shown how little power finance wields in the realm of foreign politics. in the city if one suggests that our foreign office is swayed by financial influences one is met by incredulous mockery, probably accompanied by assertions that the foreign office is, in fact, neglectful, to a fault, of british financial interests abroad, and that when it does, as in china, interfere with financial matters, it is apt to tie the hands of finance, in order to further what it believes to be the political interests of the country. the formation of the six power group in china meant that the financial strength of england and france had to be shared, for political reasons, with powers which had, on purely financial grounds, no claim whatever to participate in the business of furnishing capital to china. the introduction to the 1898 edition of "fenn on the funds," expresses the view that our government is ready to protect our traders abroad, but only helps investors when it suits it to do so. "if," it says, "a barbarian potentate's subjects rob a british trader we never hesitate to insist upon the payment of liberal compensation, which we enforce if necessary by a 'punitive expedition,' but if a civilized government robs a large number of british investors, the government does not even, so far as we know, enlist the help of its diplomatic service. only when, as in the case of egypt, there are important political objects in view, does the state protect those citizens who are creditors of foreign nations. one or two other countries, notably germany, set us a good example, with the best results as far as their investors are concerned." germany is often thus taken as the example of the state which gives its financiers the most efficient backing abroad; but even in germany finance is, like everything else, the obedient servant of the military and political authorities. for several years before the present war, the financiers of berlin were forbidden to engage in moneylending operations abroad. no doubt the government saw that the present war was coming, and so it preferred to keep german money at home. it is true that germany once shook its mailed fist with some vigour on behalf of its financial interest when it made, with us, a demonstration against venezuela. but it is at least possible that it did so chiefly with a view to the promotion of the popularity of its navy at home, and to making it easier to get the money for its upkeep and increase from the taxpayers, already oppressed by their military burden. in morocco questions of trade and finance were at the back of the quarrel, but it would not have become acute if it had not been for the expected political consequences that were feared from the financial penetration that was being attempted; and as has been already pointed out, the financiers are generally credited with having persuaded germany to agree to a settlement on that occasion. in short, finance, if left to itself, is international and peace-loving. many financiers are at the same time ardent patriots, and see in their efforts to enrich themselves and their own country a means for furthering its political greatness and diplomatic prestige. man is a jumble of contradictory crotchets, and it would be difficult to find anywhere a financier who lived, as they are all commonly supposed to do, purely for the pleasure of amassing wealth. if such a being could be discovered he would probably be a lavish subscriber to peace societies, and would show a deep mistrust of diplomatists and politicians. footnotes: [footnote 4: quoted by the _financial news_ of september 28, 1915.] chapter vi the evils of international finance no one who writes of the evils of international finance runs any risk of being "gravelled for lack of matter." the theme is one that has been copiously developed, in a variety of keys by all sorts and conditions of composers. since philip the second of spain published his views on "financiering and unhallowed practices with bills of exchange," and illustrated them by repudiating his debts, there has been a chorus of opinion singing the same tune with variations, and describing the financier as a bloodsucker who makes nothing, and consumes an inordinate amount of the good things that are made by other people. it has already been shown that capital, saved by thrifty folk, is essential to industry as society is at present built and worked; and the financiers are the people who see to the management of these savings, their collection into the great reservoir of the money market, and their placing at the disposal of industry. it seems, therefore, that, though not immediately concerned with the making of anything, the financiers actually do work which is now necessary to the making of almost everything. railway managers do not make anything that can be touched or seen, but the power to move things from the place where they are grown or made, to the place where they are eaten or otherwise consumed or enjoyed, is so important that industry could not be carried on on its present scale without them; and that is only another way of saying that, if it had not been for the railway managers, a large number of us who at present do our best to enjoy life, could never have been born. financiers are, if possible, even more necessary, to the present structure of industry than railway men. if, then, there is this general prejudice against people who turn an all important wheel in the machinery of modern production, it must either be based on some popular delusion, or if there is any truth behind it, it must be due to the fact that the financiers do their work ill, or charge the community too much for it, or both. before we can examine this interesting problem on its merits, we have to get over one nasty puddle that lies at the beginning of it. much of the prejudice against financiers is based on, or connected with, anti-semitic feeling, that miserable relic of medieval barbarism. no candid examination of the views current about finance and financiers can shirk the fact that the common prejudice against jews is at the back of them; and the absurdity of this prejudice is a very fair measure of the validity of other current notions on the subject of financiers. the jews are, chiefly, and in general, what they have been made by the alleged christianity of the so-called christians among whom they have dwelt. an obvious example of their treatment in the good old days, is given by antonio's behaviour to shylock. antonio, of whom another character in the _merchant of venice_ says that- "a kinder gentleman treads not the earth," not only makes no attempt to deny that he has spat on the wicked shylock, and called him cut-throat dog, but remarks that he is quite likely to do so again. such was the behaviour towards jews of the princely venetian merchant, whom shakespeare was portraying as a model of all the virtues.[5] compare also, for a more modern example, kinglake in a note to chapter v of "eothen." "the jews of smyrna are poor, and having little merchandize of their own to dispose of, they are sadly importunate in offering their services as intermediaries; their troublesome conduct had led to the custom of beating them in the open streets. it is usual for europeans to carry long sticks with them, for the express purpose of keeping off the chosen people. i always felt ashamed to strike the poor fellows myself, but i confess to the amusement with which i witnessed the observance of this custom by other people." originally, as we see from the hebrew scriptures, a hardy race of shepherds, farmers, and warriors, they were forced into the business of finance by the canonical law which forbade christians to lend money at interest, and also by the persecution, robbery and risk of banishment to which christian prejudice made them always liable. for these reasons they had to have their belongings in a form in which they could at any moment be concealed from robbers, or packed up and carried off if their owners suddenly found themselves told to quit their homes. so they were practically compelled to traffic in coins and precious metals and jewellery, and in many places all other trades and professions were expressly forbidden to them. this traffic in coins and metals naturally led to the business of moneylending and finance, and the centuries of practice, imposed on them by christianity, have given them a skill in this trade, which is now the envy of christians who have in the meantime found out that there is nothing wicked about moneylending, when it is honestly done. at the same time these centuries of persecution have given the jews other qualities which we have more reason to envy than their skill in finance, such as their strong family affection and the steadfastness with which they stand by one another in all countries of the world. the fact of their being scattered over the face of the earth has given them added strength since finance became international. the great jew houses have relations and connections in every business centre, and so their power has been welded, by centuries of racial prejudice, into a weapon the strength of which it is easy for popular imagination to exaggerate. christendom forced the money power into the hands of this persecuted race, and now feels sorry when it sees that in an ordered and civilized society, in which it is no longer possible to roast an awkward creditor alive, money power is a formidable force. that a large part of this power is in the hands of a family party, scattered over all lands in which finance is possible, is another reason why, as i have already shown, international finance works for peace. the fact of the existence of the present war, however, shows that the limits of its power are soon reached, at times when the nations believe that their honour and safety can only be assured by bloodshed. a large part of the popular prejudice against financiers may thus be ascribed to anti-semitic feeling. we are still like the sailor who was found beating a jew as a protest against the crucifixion, and, when told that it had happened nearly two thousand years ago, said that he had only heard of it that morning. but, when we have purged our minds of this stupid prejudice, we are still faced by the fact that international finance is often an unclean business, bad both for the borrower and for the lender and profitable only to a horde of parasites in the borrowing country, and to those who handle the loan in the lending country, and get subscriptions to it from investors who are subsequently sorry that they put their eggs into a basket with no bottom to it. under ideal conditions our money is lent by us, through a first-rate and honourable finance house, to a country which makes honest use of it in developing its resources and increasing its power to make and grow things. the loan is taken out from england in the shape of goods and services required for the equipment of a young country, and the interest comes in every year in the shape of food and raw material that feeds us and helps our industry. such, it may be asserted with confidence, is the usual course of events, and must have been so, or england could not have been so greatly enriched by her moneylending operations abroad, and the productive power of the world could not have grown as it has, under the top-dressing that our finance and trade have given it. but though it is thus clear enough that the business must have been on the whole honestly and soundly worked, there have been some ugly stains on its past, and its recent history has not been quite free from unsavoury features. in 1875 public opinion was so deeply stirred by the manner in which english investors and borrowing states had suffered from the system by which the business of international finance was handled, that a select committee of the house of commons was "appointed to inquire into the circumstances attending the making of contracts for loans with certain foreign states and also the causes which have led to the non-payment of the principal moneys and interest due in respect of such loans." its report is a very interesting document, well worth the attention of those interested in the vagaries of human folly. it will astound the reader by reason of the wickedness of the waste of good capital involved, and at the same time it is a very pleasant proof of the progress that has been made in finance during the last half century. it is almost incredible that such things should have happened so lately. it is quite impossible that they could happen now. in 1867 the republic of honduras had been for forty years in default on its portion, amounting to £27,200, of a loan issued in london in 1825, for the federal states of central america. nevertheless it contracted with messrs. b---and g---for a loan of £1,000,000 to be issued in paris and london. the loan was to be secured on a railway, to be built, or begun, out of its proceeds, and by a first mortgage on all the domains and forests of the state. the government undertook to pay £140,000 annually for fifteen years, to meet interest on and redemption of the loan. as it had been forty years in default on a loan which only involved a charge of £1632, it is hard to imagine how the state could have entered into such a liability, or how any issuing house could have had the temerity to put it before the public. the public was the only party to the proceedings which showed any sense. don c---g----, representative of the honduras government in london, relates in the record of these events that he put before the committee, that "the first honduras loan in spite of all the advantages which it offered to subscribers" [issue price, 80, interest 10 per cent., sinking fund of 3 per cent, which would redeem the whole loan at par within 17 years] "and the high respectability of the house which managed the operation, was received by the public with perfect indifference, with profound contempt; and according to the deficient and vague information which reached the legation, there were hardly any other subscriptions than one of about £10,000 made by the firm of b----itself," don g----, however, seems to have slightly exaggerated the wisdom of the public; in any case the committee found that by june 30, 1868, by some means £48,000 of the loan was held by the public, and £952,000 was in possession of the representatives of the honduras government. on that day a mr. l---undertook to take over the government's holding at £68 12s. per bond, and pay current interest. a market was made, brokers were prevailed on to interest their friends in the security, and in two years' time the bonds were disposed of. the quotation was skilfully kept above the issue price and in november, 1868, it reached 94. the story of this loan is complicated by the fact that half of it was at the time alleged to have been placed in paris, but it appears, as far as one can disentangle fact from the twisted skein of the report, that the paris placing must have resulted much as did the first effort made in london, and that practically the whole of the bonds there issued came back into the hands of the representatives of honduras. at the end of the proceedings the whole amount of the loan seemed to have been disposed of in london, £631,000 having been sold to mr. l---and passed on by him by the means described above, £200,000 having been issued to railway contractors, £10,800 having been "drawn before issue and cancelled," while £49,500 was "issued in exchange for scrip," and £108,500 was taken on account of commission and expenses. the actual cash received on account of this loan appears, though the committee's figures are difficult to follow, to have come to just over half a million. out of the half million £16,850 went in cash commission, and £106,000 in interest and sinking fund, leaving about £380,000 for the railway contractors and the government. on this loan the committee observes that the commission paid, of £108,500 bonds, and £16,850 in cash was "greatly in excess of what is usually charged by contractors for loans." so far it was only a case of a thoroughly speculative transaction carried through by means of the usual accompaniments. a defaulting state believed to be possessed of great potential wealth, thought, or was induced to think, that by building a railway it could tap that wealth. the whole thing was a pure possibility. if the loan had been successfully placed at the issue price it would have sufficed to build the first section (fifty-three miles) of railway, and to leave something over for work in the mahogany forests. it is barely possible that in time the railway might have enabled the government to produce enough stuff out of its forests to meet the charges of the loan. but the possibility was so remote that the terms offered had to be so liberal that they frightened the public, which happened to be in a sensible mood, until it was induced to buy by the creation of a market on the stock exchange; the employment of intermediaries on disastrous terms, and finally default, as soon as the loan charge could no longer be paid out of the proceeds of the loan, completed the tale. in may, 1869, the minister for honduras in paris, m. h----, "took steps" to issue a loan for 62,250,060 francs, or £2,490,000. out of it a small sum (about £62,000) was paid to the railway contractors in london, but little of it seems to have been genuinely placed, since, when the franco-german war broke out in july, 1870, m. h---sent 2,500,000 francs in cash (£100,000), and 39,000,000 francs in bonds, to messrs. b---and g---in london. messrs. b---and others made an agreement with mr. c. l----, presumably the gentleman who had taken over and dealt with the unplaced balance of the first london loan. by its terms the net price to be paid by him for each 300 francs (£12) bond issued originally at 225 francs (£9), was 124 francs (not quite £5). he succeeded in selling bonds enough to realize £408,460, and he, together with messrs. b---and g----, received £51,852 in commission for so doing. in the spring of 1870, the honduras government, still hankering after its railway and the wealth that it was to open up, determined to try again with another loan. something had to be done to encourage investors to take it. a few days before the prospectus appeared a statement was published in a london newspaper to the effect that two ships had arrived in the west india docks from truxillo (honduras) with cargoes of mahogany and fustic consigned to messrs. b---and g----on account of the honduras railway loan, and that two others were loading at truxillo with similar cargoes on the same account. these cargoes had not been cut by the honduras government. it had bought them from timber merchants, and they were found to be of most inferior quality. in the opinion of the committee "the purchase of these cargoes and the announcement of their arrival in the form above referred to, were intended to induce, and did induce, the public to believe that the hypothecated forests were providing means for paying the interest upon the loan." with the help of this fraud, and with a free and extensive market made on the stock exchange, the 1870 honduras 10 per cent. loan for £2,500,000 nominal was successfully issued at 80. it also had a sinking fund of 3 per cent., which was to pay it off in fifteen years. mr. l---again handled the operation, having taken over the contract from messrs. b---and g----. but the success of the issue was more than hollow. it was empty. for mr. l----, in the process of making the market to promote it, had bought nearly the whole loan. applicants had evidently sold nearly as fast as they applied; for on the 15th december, when the last instalment was to be paid, less than £200,000 bonds remained in the hands of the public. nevertheless by october, 1872, nearly the whole of the loan had been somehow disposed of to investors or speculators. one of the means taken to stimulate the demand for them was the announcement of extra drawings of bonds at par, over and above the operation of the 3 per cent, sinking fund, provided by the prospectus. there is no need to linger over the complicated details of this sordid story. the committee's report sums up, as follows, the net results of the 1869 and 1870 loans of honduras:-"in tracing the disposal of the proceeds of the 1869 and 1870 loans, it must be remembered that your committee had no evidence before them relating to the funds resulting from three-fifths of the loan of 1869; only two-fifths of the loan was realized in this country, the remainder was disposed of in paris before august, 1870, and no account of the application of the funds resulting from such portion of the loan could be obtained. "the two-fifths of the 1869 loan, and the whole of the loan of 1870, produced net £2,051,511; out of this sum only £145,254 has been paid to the railway contractors; a sum of £923,184 would have been sufficient to discharge the interest and sinking fund in respect of the issued bonds of the three loans, yet the trustees ... paid to mr. l----£1,339,752 or £416,568 beyond the sum so required to be paid upon the issued bonds of the loans. "there was paid to him for commissions (apart from expenses) on the three loans, out of the above proceeds, the sum of £216,852. he also received out of the same proceeds £41,090, being the difference between £370,000 cash paid to him by the trustees and £328,910 scrip returned by him to them. this £41,090 probably represents the premiums paid on the purchase of the scrip before or immediately after the allotment of the loan, and was certainly a misapplication of the proceeds of the loan. "mr. l---was also paid, out of these proceeds, a further sum of £57,318, nearly the whole of which seems to be a payment in discharge of an allowance of £8 per bond in respect of the dealings in the 1867 loan.... in addition ... it will be remembered that mr. l---received £50,000 'to maintain the credit of honduras.' "he also on the 18th of june, 1872, obtained £173,570 by delivering to the trustees ... 5042 bonds of the 1870 loan, at £75 per bond and 33,000 bonds of the 1869 loan at 104 francs per bond, and retaking them at the same time from the trustees at £50 and 104 francs per bond respectively. mr. l---had contracted to pay for these bonds and they had been issued to him at the prices of £75 and 104 francs respectively, and the remission in the price therefore amounted to a gift to him of £173,570 ... out of this portion of the loan of 1869, and the loan of 1870, mr. l----has received in cash, or by the remission of his contracts, £955,398." it is little wonder that honduras has been in default on these loans ever since. in its report the committee commented severely on the action of don c---g----, the london representative of the republic. "he sanctioned," it says, "stock exchange dealings and speculations in the loans which no minister should have sanctioned. he was a party to the purchase of the mahogany cargoes, and permitted the public to be misled by the announcements in relation to them. by express contract he authorized the 'additional drawings.' he assisted mr. l---to appropriate to himself large sums out of the proceeds of the loans to which he was not entitled." very likely he had not a notion as to what the whole thing meant, and only thought that he was doing his best to finance his country along the road to wealth. but the fact remains that by these actions he made his government a party to the proceedings that were so unfortunate for it and so ruinous to the holders of its bonds. after its examination of these and other less sensational but equally disastrous issues the committee made various recommendations, chiefly in the direction of greater publicity in prospectuses, and ended by expressing their conviction that "the best security against the recurrence of such evils as they have above described will be found, not so much in legislative enactments, as in the enlightenment of the public as to their real nature and origin." if the scandals and losses involved by loan issues were always on this gargantuan scale, there would be little difficulty about disposing of them, both on economic and moral grounds, and showing that there is, and can be, only one side to the problem. but when it is only a question, not of fraud on a great scale but of a certain amount of underhand business, such as is quite usual in some latitudes, and a certain amount of doubt as to the use that is likely to be made by the borrower of the money placed at its disposal, it is not so easy to feel sure about the duty of an issuing house in handling foreign loans. at a point, in fact, the question becomes full of subtleties and casuistical difficulties. for instance, let us suppose that an emissary of the republic of barataria approaches a london issuing house and intimates that it wants a loan for 3 millions sterling, to be spent half in increasing the republic's navy, and half in covering a deficit in its budget, and that he, the said emissary, has full power to treat for the loan, and that a commission of 2 per cent. is to be paid to him by the issuing house, which can have the loan at a price that will easily enable it to pay this commission. that is to say, we will suppose that the republic will take 85 for the price of its bonds, which are to carry 5 per cent. interest, to be secured by a lien on the customs receipts, and to be redeemed in thirty years' time by a cumulative sinking fund working by annual drawings at par, or by purchase in the market if the bonds can be bought below par. if the republic's existing 5 per cent. bonds stand, let us say, at 98 in the market, this gives the issuing house a good prospect of being able to sell the new ones easily at 95, and so it has a 10 per cent. margin out of which to pay stamps, underwriting and other expenses, and commission to the intermediary who brought the proposal, and to keep a big profit to themselves. from the point of view of their own immediate interest there is every reason why they should close with the bargain, especially if we assume that the republic is fairly rich and prosperous, and that there is little fear that its creditors will be left in the lurch by default. from the point of view of national interest there is also much to be said for concluding the transaction. we may, with very good ground, assume that it would also be intimated to the issuing house that a group of continental financiers was very willing to take the business up, that it had only been offered to it owing to old standing relations between it and the republic, and that, if it did not wish to do the business, the loan would readily be raised in paris or berlin. by refusing, the london firm would thus prevent all the profit made by the operation from coming to england instead of to a foreign centre. but there is much more behind. for we have seen that finance and trade go hand-in-hand, and that when loan-houses in the city make advances to foreign countries, the hives of industry in the north are likely to be busy. it has not been usual here to make any express stipulation to the effect that the money, or part of it, raised by a loan is to be spent in england, but it is clear that when a nation borrows in england it is thereby predisposed to giving orders to english industry for goods that it proposes to buy. and even if it does not do so, the mere fact that england promises, by making the loan, to hand over so much money, in effect obliges her to sell goods or services valued at that amount as was shown on an earlier page.[6] on the continent, this stipulation is usual. so that the issuing house would know that, if they make the loan, it is likely that english shipbuilders will get the orders on which part of it is to be spent, and that in any case english industry in one form or another will be drawn on to supply goods or services to somebody; whereas if they refuse the business it is certain that the industrial work involved will be lost to england. on the other side of the account there are plenty of good reasons against the business. in the first place the terms offered are so onerous to the borrower that it may safely be said that no respectable issuing house in london would look at them. in effect the republic would be paying nearly 6 per cent, on the money, if it sold its 5 per cent. bonds at 85, and the state of its credit, as expressed by the price of its bonds in the market, would not justify such a rate. the profit offered to the issuing house is too big, and the commission demanded by the intermediary is so large that it plainly points to evil practices in barataria. it means that interested parties have made underhand arrangements with the finance minister, and that the republic is going to be plundered, not in the fine full-flavoured style that ruled in earlier generations, but to an extent that makes the business too disreputable to handle. any honourable english house would consider that the terms offered to itself and the conditions proposed by the emissary were such that the operation was suspicious, and that being mixed up with suspicious business was a luxury that it preferred to leave alone. on other grounds the loan, well secured as it seems to be, is not of a kind to be encouraged. we have supposed its purpose to be, firstly, to meet a deficit in a budget, and secondly, to pay for naval expansion. neither of these objects is going to improve the financial position of the republic. covering a deficit by loan is bad finance in any case, but especially so when the loan is raised abroad. in the latter case it is most likely that the borrowing state is outrunning the constable, by importing more goods than it can pay for out of current production. if it imports for the purpose of increasing its productive power by buying such things as railway material, then it is making a perfectly legitimate use of its credit, as long as the money is well spent, and the railways are honestly built, with a prospect of opening up good country, and are not put into the wrong place for political or other reasons. but if this were so, the money would not be wanted to balance a budget, but on railway capital account. when a balance has to be filled by borrowing it can only mean that the state has spent more than its revenue from taxes permits, and that it is afraid to cut down its expenses by retrenchment or to increase its revenue by taxing more highly. and so it chooses the primrose path of dalliance with a moneylender. as to naval expenditure, here again we have bad finance writ large over the proposal. it is not good business for countries to borrow in order to increase their armies and navies in time of peace, and the practice is especially objectionable when the loan is raised abroad. in time of war, when expenditure has to be so great and so rapid, that the taxpayers could not be expected to have it all taken out of their pockets by the tax-gatherer, there is some excuse for borrowing for naval and military needs; though even in time of war, if we could imagine an ideal state, with every citizen truly patriotic, and properly educated in economics and finance, and with wealth so fairly distributed and taxation so fairly imposed that there would be no possibility of any feeling of grievance and irritation among any class of taxpayers, it would probably decide that the simplest and most honest way of financing war is to do so wholly out of taxation. in time of peace, borrowing for expenditure on defence simply means that the cost of a need of to-day is met by someone who is hired to meet it, by a promise of interest and repayment, the provision of which is passed on to the citizens of to-morrow. it is always urged, of course, that the citizens of to-morrow are as deeply interested in the defence of the realm that they are to inherit as those of to-day, but that argument ignores the obvious fact that to-morrow will bring its own problems of defence with it, which seem likely to be at least as costly as those of the present day. another objection to lending economically backward countries money to be invested in ships, is that we thereby encourage them to engage in shipbuilding rivalry, and to join in that race for aggressive power which has laid so sore a burden on the older peoples. the business is also complicated by the unpleasant activities of the armament firms of all countries, which are said to expend much ingenuity in inducing the governments of the backward peoples to indulge in the luxury of battleships. here, again, there is no need to paint too lurid a picture. the armament firms are manufacturers with an article to sell, which is important to the existence of any nation with a seaboard; and they are entirely justified in legitimate endeavours to push their wares. the fact that the armament firms of england, germany, and france had certain interests in common, is often used as a text for sermons on the subject of the unpatriotic cynicism of international finance. it is easy to paint them as a ring of cold-blooded devils trying to stimulate bloodthirsty feeling between the nations so that there may be a good market for weapons of destruction. from their point of view, they are providers of engines of defence which they make, in the first place, for the use of their own country, and are ready to supply also, in time of peace, to other nations in order that their plant may be kept running, and the cost of production may be kept low. this is one of the matters on which public opinion may have something to say when the war is over. in the meantime it may be noted that unsavoury scandals have occasionally arisen in connection with the placing of battleship orders, and that this is another reason why a loan to finance them is likely to have an unpleasant flavour in the nostrils of the fastidious. but if we admit the very worst that the most searching critic of international finance can allege against the proposal that we imagine to be put forward by the republic of barataria--if we admit that a loan to balance a deficit and pay for ships probably implies wastefulness, corruption, political rottenness, impecunious chauvinism and all the rest of it, the question still arises whether it is the business of an issuing house to refuse the chance of doing good business for itself and for the london money-market, because it has reason to believe that the money lent will not be well spent. in the case supposed, we have seen that the terms offered and the commission to be made by the intermediary were such that the latter would have been shown the door. but if these matters had been satisfactory, ought the proposal to have been rejected because the loan was to be raised for unproductive purposes? in other words, is it the business of an issuing house to take care of the economic morals of its clients, or is it merely concerned to see that the securities which it offers to the public are well secured? in ordinary life, and in the relations between moneylender and borrower at home, no such question could be asked. if i went to my banker and asked for a loan and gave him security that he thought good enough, it would not occur to him to ask what i was going to do with the money--whether i was going to use it in a way that would increase my earning capacity, or on building myself a billiard room and a conservatory, or on a visit to monte carlo. he would only be concerned with making sure that any of his depositors' money that he lent to me would be repaid in due course, and the manner in which i used or abused the funds lent to me would be a question in which i only was concerned. if it is the business of an international finance house to be more careful about the use to which money that it lends on behalf of clients is put, why should this be so? there are several reasons. first, because if the borrower does not see fit to pay interest on the loan or repay it when it falls due, there is no process of law by which the lender can recover. if i borrow from my banker and then default on my debt, he can put me in the bankruptcy court, and sell me up. probably he will have protected himself by making me pledge securities that he can seize if i do not pay, a safeguard which cannot be had in the case of international borrowing; but if these securities are found to be of too little value to make the debt good, everything else that i own can be attached by him. the international moneylender, on the other hand, if his debtor defaults may, if he is lucky, induce his government to bring diplomatic pressure to bear, for whatever that may be worth. if there is a political purpose to be served, as in egypt, he may even find himself used as an excuse for armed intervention, in the course of which his claims will be supported, and made good. in many cases, however, he and the bondholders who subscribed to his issue simply have to say goodbye to their money, with the best grace that they can muster, in the absence of any law by which a lender can recover moneys advanced to a sovereign state. with this essential difference in the conditions under which a banker lends his depositors' money to a local customer, and those under which an international house lends its clients' money to a borrowing country, it follows that the responsible party in the latter case ought to exercise very much more care to see that the money is well spent. in the second place, the customers to whom bankers, in economically civilized lands, lend the money entrusted to them, may fairly be presumed to know something about the use and abuse of money and to be able to take care of themselves. if they borrow money, and then waste it or spend it in riotous living, they know that they will presently impoverish themselves, and that they will be the sufferers. but in the case of a young country, with all its financial experience yet unbought, there is little or no reason for supposing that its rulers are aware that they cannot eat their cake and have it. they probably think that by borrowing to meet a deficit or to build a dreadnought they are doing something quite clever, dipping their hands into a horn of plenty that a kindly providence has designed for their behoof, and that the loan will somehow, some day, get itself paid without any trouble to anybody. moreover, if they are troubled with any forebodings, the voice of common sense is likely to be hushed by the reflection that they personally will not be the sufferers, but the great body of taxpayers, or in the case of actual default, the deluded bondholders; and that in any case, the trouble caused by over-borrowing and bad spending is not likely to come to a head for some years. its first effect is a flush of fictitious prosperity which makes everybody happy and enhances the reputation of the ministers who have arranged it. when, years after, the evil seed sown has brought to light its crops of tares, it is very unlikely that the chain of cause and effect will be recognized by its victims, who are much more likely to lay the bad harvest to the door not of the bad financier who sowed it, but of some innocent and perhaps wholly virtuous successor, merely because it was during his term of office that the crop was garnered. so many are the inducements offered to young states, with ignorant or evil (or both) rulers at their head, to abuse the facilities given them by international finance, that there is all the more reason why those who hold the strings of its purse should exercise very great caution in allowing them to dip into it. there is yet another reason why the attitude of an issuing house, to a borrowing state, should be paternal or even grand-motherly, as compared with the purely business-like attitude of a banker to a local borrower. if the bank makes a bad debt, it has to make it good to its depositors at the expense of its shareholders. it diminishes the amount that can be paid in dividends and so the bank is actually out of pocket. the international financier is in quite a different position. if he arranges a loan for barataria, he takes his profit on the transaction, sells the bonds to investors, or to the underwriters if investors do not apply, and is, from the purely business point of view, quit of the whole operation. he still remains responsible for receiving from the state, and paying to the bondholders, the sum due each half year in interest, and for seeing to the redemption of the bonds by the operation of the sinking fund, if any. but if anything goes wrong with the interest or sinking fund he is not liable to the bondholders, as the bank is liable to its depositors. they have got their bonds, and if the bonds are in default they have made a bad debt and not the issuing house, unless, as is unlikely, it has kept any of them in its own hands. but this absence of any legal liability on the part of the issuing house imposes on it a very strong moral obligation, which is fully recognized by the best of them. just because the bondholders have no right of action against it, unless it can be shown that it issued a prospectus containing incorrect statements, it is all the more bound to see that their money shall not be imperilled by any action of its own. it knows that a firm with a good reputation as an international finance house has only to put its name to an issue, and a large number of investors, who have neither the education nor the knowledge required to form a judgment on its merits, will send in subscriptions for the bonds on the strength of the name of the issuing house. this fact makes it an obvious duty on the part of the latter to see that this trust is deserved. moreover, it would obviously be bad business on their part to neglect this duty. for a good reputation as an issuing house takes years to build up, and is very easily shaken by any mistake, or even by any accident, which could not have been foreseen but yet brings a loan that it has handled into the list of doubtful payers. mr. brailsford, indeed, asserts that it may be to the advantage of bondholders to be faced by default on the part of their debtors. it may be so in those rare cases in which they can get reparation and increased security, as in the case of our seizure of egypt. but in nine cases out of ten, as is shown by the plaintive story told by the yearly reports of the council of foreign bondholders, default means loss and a shock to confidence, even if only temporary, and is generally followed by a composition involving a permanent reduction in debt and interest. investors who have suffered these unpleasantnesses are likely to remember them for many a long year, and to remember also the name of the issuing house which fathered the loan that was the cause of the trouble. there are thus many good reasons why it is the business of a careful issuing firm to see not only that any loan that it offers is well secured, but also that it is to be spent on objects that will not impair the productive capacity of the borrowing country by leading it down the path of extravagance, but will improve it by developing its resources or increasing its power to move its products. on the other hand, the temptation to undertake bad business on behalf of an importunate borrower is great. the profits are considerable for the issuing house and for all their followers in the city. the indirect advantages, in the way of trade orders, conferred on the lending country, are also profitable, and there is always the fear that if london firms take too austere a view of what is good business for them and the borrowing countries, the more accommodating loan-mongers of foreign centres may reap the benefit, and leave them with empty pockets and the somewhat chilly comfort conferred by the consciousness of a high ideal in finance. one of the most unsatisfactory features about the monetary arrangements of society, as at present constituted, is the fact that the reward of effort is so often greater with every degree of evil involved by the effort. and to some extent this is true in finance. just as big fortunes are made by the cheap-jacks who stuff the stomachs of an ignorant public with patent medicines, while doctors slave patiently for a pittance on the unsavoury task of keeping overfed people in health; just as milton got £5 for "paradise lost," while certain modern novelists are rewarded with thousands of pounds for writing romances which would never be printed in a really educated community; so in finance the more questionable--up to a certain point--be the security to be handled, the greater are the profits of the issuing house, the larger the commissions of the underwriters and brokers, and the larger are the amounts paid to the newspapers for advertising. as has already been observed, that part of the city that lives on handling new issues has been half starved since the war began, because its activities have been practically confined to loans issued by the british government. these loans have been huge in amount but there has been no underwriting, and brokerages are cut to the bone. advertising for the second war loan was on a great scale, but in proportion to the amount subscribed the cost of it was probably small, according to the ideals that ruled before the war. a colonial loan, or a first-class american railroad bond, almost places itself, and the profits on the issue to all who handle it are proportionately low. the more questionable the security, the more it has to pay for its footing, and the higher are the profits of those who father it and assist the process of delivery, as long, that is, as the birth is successfully accomplished. if there is failure, partial or complete, then the task of holding the baby is longer and more uncomfortable, the more puny and unattractive it is. if, owing to some accident in the monetary atmosphere, a colonial loan does not go off well, the underwriters who find themselves saddled with it, can easily borrow on it, in normal times, and know that sooner or later trustees and other real investors will take it off their hands. but if it is an issue of some minor european power, or of some not too opulent south american state, that is coldly received by the investing public, bankers will want a big margin before they accept it as security for an advance, and it may take years to find a home for it in the strong boxes of real investors, and then perhaps only at a price that will leave the underwriters, like sir andrew aguecheek, "a foul way out." there is thus a logical reason for the higher profits attached to the more questionable issues, and this reason is found in the greater risk attached, if failure should ensue. thus we arrive at the reply to those who criticize international finance on the ground that it puts too big profits into the pockets of those who handle it. if the profits are big, it is only in the case of loan issues which carry with them a considerable risk to the reputation of the fathering firm, and to the pockets of the underwriters, and involve a responsibility, and in the case of default, an amount of wholly unpaid work and anxiety for which the big profits made on the opening proceedings do not nearly compensate. as in the case of the big gains made by patent pill merchants, and bad novelists, it is the public, which is so fond of grumbling because other people make fortunes out of it, that is really responsible for their doing so, by reason of its own greed and stupidity. because it will not take the trouble to find out how to spend or invest its money, it asks those who are clever enough to batten on its foibles, to sell it bad stuff and bad securities, and then feels hurt because it has a pain in its inside, or a worthless bond at its banker's, while the producers thereof are founding county families. if the public would learn the a b c of investment, and also learn that there is an essential difference between investment and speculation, that they will not blend easily but are likely to spoil one another if one tries to mix them, then the whole business of loan issuing and company promotion would be on a sounder basis, with less risk to those who handle it, and less temptation to them to try for big profits out of bad ventures. but as long as "the fool multitude that choose by show" give more attention to the size of an advertisement than to the merits of the security that it offers, the profits of those who cater for its weaknesses will wax fat. when all has been said that can be urged against the record of international finance, the fact remains that from the purely material point of view it has done a great work in increasing the wealth of mankind. it is true that capital has often been wasted by being lent to corrupt or improvident borrowers for purposes which were either objectionable in themselves, or which ought to have been financed, if at all, out of current revenue. it is true, also, that crimes have been committed, as in the case of the putumayo horrors, when the money of english shareholders has been invested in the exploitation of helpless natives, accompanied by circumstances of atrocious barbarity. nevertheless if we compare the record of finance with that of religion or international politics, it stands out as by far the cleanest of the influences that have worked upon the mutual relations of the various groups of mankind. international finance makes a series of bargains between one nation and another, for the mutual benefit of each, complicated by occasional blunders, some robbery, and, in exceptional cases, horrible brutality. religion has stained history with the most ruthless massacres, and the most unspeakable ingenuity in torture, all devised for the glory of god, and the furtherance of what its devotees believed to be his word. international politics have plunged mankind into a series of bloody and destructive wars, culminating in the present cataclysm. finance can only prosper through production; its efforts are inevitably failures, if they do not tend to the growing and making of things, or the production of services, that are wanted. destruction, reduced to a fine art and embellished by the nicest ingenuities of the most carefully applied science, is the weapon of international politics. _note_.--the names of the actors in the honduras drama were printed in blank because it seemed unfair to do otherwise, in revising fifty years' old scandals, as an example of what international finance can do at its worst. footnotes: [footnote 5: _merchant of venice_, i, 3.] [footnote 6: pages 75, 76. (note: see chapter iv, "in the beginnings of international trade...")] chapter vii nationalism and finance so far we have considered the working of international finance chiefly from the point of view of its effects upon the prosperity and comfort of mankind as a whole and on this country, as the greatest trader, carrier, and financier of the world. we have seen that the benefit that it works is wrought chiefly through specialization, that is, through the production of the good things of the earth in the lands best fitted, by climate or otherwise, to grow and make them. by lending money to other lands, and the goods and service that they have bought with it, we have helped them to produce things for us to consume, or to work up into other things for our consumption or that of other peoples. thereby we have enriched ourselves and the rest of mankind. but the question still arises whether this process is one that should be left altogether unchecked, or whether it involves evils which go far to modify its benefits. in other words is it a good thing for us, socially and politically, to enrich ourselves beyond a certain point by a process which involves our dependence on other countries for food and raw material? analogy between a state and a man is often useful, if not pushed too far. the original man in a primitive state is always assumed to have been bound to find or make everything that he wanted by his own exertions. he was hut builder, hunter, cultivator, bow-maker, arrow-maker, trapper, fisherman, boat-builder, leather-dresser, tailor, fighter--a wonderfully versatile and self-sufficient person. as the process grew up of specialization, and the exchange of goods and services, all the things that were needed by man were made much better and more cheaply, but this was only brought about at the expense of each man's versatility. nowadays we can all of us do something very much better than the primitive savage, but we cannot do everything nearly as well. we have become little insignificant wheels in a mighty great machine that feeds us and clothes us and provides us with comforts and luxuries of which he could never have dreamt. he was the whole of his machine, and was thereby a far more completely developed man. the modern millionaire, in spite of his enormous indirect power over the forces of nature, is a puny and ineffective being by the side of his savage ancestor, in the matter of power to take care of himself with his own hands and feet and eyes, and with weapons made by his own ingenuity and cunning. moreover, though in the case of the millionaire and of all the comparatively well-to-do classes we can point to great intellectual and artistic advantages, and many pleasant amenities of life now enjoyed by them, thanks to the process of specialization, these advantages can only be enjoyed to the full by comparatively few. to the majority specialization has brought a life of mechanical and monotonous toil, with little or none of the pride in a job well done, such as was enjoyed by the savage when he had made his bow or caught his fish; those who work all day on some minute process necessary, among many others, to the turning out of a pin, can never feel the full joy of achievement such as is gained by a man who has made the whole of anything. pins are made much faster, but some of the men who make them remain machines, and never become men at all in the real sense of the word. and when at the same time the circumstances of their lives, apart from their work, are all that they should not be--bad food, bad clothes, bad education, bad houses, foul atmosphere and dingy and sordid surroundings, it is very obvious that to a large part of working mankind, the benefits of the much vaunted division of labour have been accompanied by very serious drawbacks. the best that can be said is that if it had not been for the division of labour a large number of them could never have come into existence at all; and the question remains whether any sort of existence is better than none. in the case of a nation the process of specialization has not, for obvious reasons, gone nearly so far. every country does a certain amount of farming and of seafaring (if it has a seaboard), and of manufacturing. but the tendency has been towards increasing specialization, and the last results of specialization, if carried to its logical end, are not nice to forecast. "it is not pleasant," wrote a distinguished statistician, "to contemplate england as one vast factory, an enlarged manchester, manufacturing in semi-darkness, continual uproar and at an intense pressure for the rest of the world. nor would the continent of america, divided into square, numbered fields, and cultivated from a central station by electricity, be an ennobling spectacle."[7] it need not be said that the horrible consequences of specialization depicted by dr. bowley need not necessarily have happened, even if its effects has been given free play. but the interesting point about his picture, at the present moment, is the fact that it was drawn from the purely economic and social point of view. he questioned whether it was really to the advantage of a nation, regarding only its own comfort and well-being, to allow specialization to go beyond a certain point. it had already arrived at a point at which land was going out of cultivation in england, and was being more and more regarded as a park, pleasure ground and sporting place for people who made, or whose forbears had made, fortunes out of commerce and finance, and less and less as a means for supplying food for our workers, and raw material for our industries. the country workers were going to the new countries that our capital was opening up, or into the towns to learn industrial crafts, or taking services as gamekeepers, grooms or chauffeurs, with the well-to-do classes who earned their profits from industry or business. even before the war there was a growing scarcity of labour to grow, and harvest, even the lessened volume of our agricultural output. dr. bowley's picture was far from being realized and even if the process of specialization had gone on, it may be hoped that we should have had sense enough to avoid the blackest of its horrors. then came the war, which went far to undermine the great underlying assumption on which the free interchange of capital among nations and the consequent specialization that proceeded from it, was taken to be a safe and sound policy. this assumption was in effect, that the world was civilized to a point at which there was no need to fear that its whole economic arrangements would be upset by war. we now know that the world was not civilized to this point, and is a very long way from being so, that the ultimate appeal is still to "arms and the man," and that we have still to be careful to see that our trade and industry are carried on in such a way as to be least likely to be hurt if ploughshares have suddenly to be beaten into swords. at first sight, this is a somewhat tragical discovery, but it carries with it certain consolations. if the apparent civilization evolved by the nineteenth century had been good and wholesome, it might have been really sad to find that it was only a thin veneer laid over a structure that man's primitive passions might at any moment overturn. in fact, the apparently achieved civilization was so grossly material in its successes, so forcibly feeble in its failures, so beset with vulgarity at its summit and undermined by destitution at its base, that even the horrors of the present war, with its appalling loss of the best lives of the chief nations of the earth, may be a blessing to mankind in the long run if they purge its notions about the things that are worth trying for. at least the war is teaching us that the wealth of a nation is not a pile of commodities to be frittered away in vulgar ostentation and stupid self-indulgence, but the number of its citizens who are able and ready to play the man as workers or fighters when a time of trial comes. "national prosperity," says cobbett, "shows itself ... in the plentiful meal, the comfortable dwelling, the decent furniture and dress, the healthy and happy countenances, and the good morals of the labouring classes of the people." so he wrote, in newgate gaol, in 1810.[8] since then many reformers have preached the same sound doctrine, but its application has made poor progress, in relation to the growth of our riches in the same period. if we now decide to put it into practice, we shall not long tolerate the existence in our midst of disease and destitution, and a system of distribution of the world's goods which gives millions of our population no chance of full development. we need not, then, stay to shed tears over the civilization, such as it was, which we thought we had and had not. its good points will endure, for evil has a comfortable habit of killing itself and those who work it. all that we are concerned with at this moment is the fact that its downfall has shaken an article in our economic faith which taught us that specialization was a cause of so much more good than evil, that its development by the free spreading of our capital all over the world, wherever the demand for it gave most profit to the owner, was a tendency to be encouraged, or at least to be left free to work out its will. this was true enough to be a platitude as long as we could rely on peace. our capital went forth and fertilized the world, and out of its growing produce the world enriched us. as the world developed its productive power, its goods poured into us, as the great free mart where all men were welcome to sell their wares. these goods came in exchange for our goods and services, and the more we bought the more we sold. when other nations took to dealing direct with one another, they wanted our capital to finance the business, and our ships to carry the goods. the world as a whole could not grow in wealth without enriching the people that was the greatest buyer and seller, the greatest moneylender and the greatest carrier. it was all quite sound, apart from the danger depicted by dr. bowley, as long as we had peace, or as long as the wars that happened were sufficiently restricted in their area and effect. but now we have seen that war may happen on such a scale as to make the interchange of products between nations a source of grave weakness to those who practise it, if it means that they are thereby in danger of finding themselves at war with the providers of things that they need for subsistence or for defence. another lesson that the war has taught us is that modern warfare enormously increases the cost of carriage by sea, because it shuts up in neutral harbours the merchant ships of the powers that are weaker on the sea, and makes huge calls, for transport purposes, on those of the powers which are in the ascendant on the water. this increase in the cost of sea carriage adds to the cost of all goods that come by sea, and is a particularly important item in the bill that we, as an island people, have to pay for the luxury of war. it is true that much of the high price of freight goes into the pockets of our shipowners, but they, being busy with transport work for the government, cannot take nearly so much advantage of it as the shipmasters of neutral countries. the economic argument, then, that it pays best to make and grow things where they can best be made and grown remains just as true as ever it was, but it has been complicated by a political objection that if one happens to go to war with a nation that has supplied raw material, or half-raw material, for industries that are essential to our commercial if not to our actual existence, the good profits made in time of peace are likely to be wiped out, or worse, by the extent of the inconvenience and paralysis that this dependence brings with it in time of war. and even if we are not at war with our providers, the greater danger and cost of carriage by sea, when war is afoot, makes us question the advantage of the process, for example, by which we have developed a foreign dairying industry with our capital, and learnt to depend on it for a large part of our supply of eggs and butter, while at home we have seen a great magnate lay waste farms in order to make fruitful land into a wilderness for himself and his deer. it may have paid us to let this be done if we were sure of peace, but now that we have seen what modern warfare means, when it breaks out on a big scale, we may surely begin to think that people who make bracken grow in place of wheat, in order to improve what auctioneers call the amenities of their rural residences, are putting their personal gratification first in a question which is of national importance. we may seem to have strayed far from the problems of international finance and the free interchange of capital between countries, but in fact we are in the very middle of them, because they are so complicated and diverse that they affect nearly every aspect of our national lives. by sending capital abroad we make other countries produce for us and so we help a tendency by which we grow less at home, and export coupons, or demands for interest, instead of the present produce of our brains and muscles; and we do much more than that, for we thereby encourage the best of our workers to leave our shores and seek their fortunes in the new lands which our capital opens up. when we export capital it goes in the shape of goods and services, and it is followed by an export of men, who go to lands where land is plentiful and cheap, and men are scarce and well paid. this process again was sound enough from the purely economic point of view. it quickened the growth of the world's wealth by putting men of enterprise in places where their work was most handsomely rewarded, and their lives were unhampered by the many bars to success that remnants of feudalism and social restrictions put in their way in old countries; and it cleared the home labour market and so helped the workers in their uphill struggle for better conditions and a chance of a real life. but when the guns begin to shoot, the question must arise whether we were wise in leaving the export of capital, which has such great and complicated effects, entirely to the influence of the higgling of the market, and the price offered by the highest bidder. much will evidently depend on the way in which the present war ends. if it should prove to be, as so many hoped at its beginning, a "war to end war," and should be followed by a peace so well and truly founded that we need have no fear for its destruction, then there will be much to be said for leaving economic forces to work themselves out by economic means, subject to any checks that their social effects may make necessary. but if, as seems to be probable, the war ends in a way that makes other such wars quite possible, when we have all recovered from the exhaustion and disgust produced by the present one, then political expediency may overrule economic advantage, and we may find it necessary to consider the policy of restricting the export of british capital to countries with which there is no chance of our ever being at war, and especially to our own dominions oversea, not necessarily by prohibitions and hard and fast rules, but rather by seeing that the countries to which it is desirable for our capital to go may have some advantage when they appeal for it. this advantage our own colonial dominions already possess, both from the sentiment of investors, which is a strong influence in their favour, and will be stronger than ever after the war, and from legal enactment which allows trustees to invest trust funds in their loans. probably the safest course would be to leave sentiment to settle the matter, and pray to providence to give us sensible sentiments. actual restraints on the export of capital would be very difficult to enforce, for capital is an elusive commodity that cannot be stopped at the customs houses. if we lent money to a friendly nation, and our friend was thereby enabled to lend to a likely foe, we should not have mended matters. the time is not yet ripe for a full discussion of this difficult and complicated question, and it is above all important that we should not jump to hasty conclusions about it while under the influence of the feverish state of mind produced by war. the war has shown us that our wealth was a sure and trusty weapon, and much of the strength of this weapon we owe to our activity in international finance. footnotes: [footnote 7: "england's foreign trade in the nineteenth century," p, 16, by dr. a.l. bowley.] [footnote 8: "paper against gold," letter iii.] chapter viii remedies and regulations apart from the political measures which may be found necessary for the regulation, after the war, of international finance, it remains to consider what can be done to amend the evils from which it suffers, and likewise what, if anything, can be done to strengthen our financial weapon, and sharpen its edge to help us in the difficult fight that will follow the present war, however it may end. it has been shown in a previous chapter that the real weaknesses in the system of international finance arise from the bad use made of its facilities by improvident and corrupt borrowers, and from the bigger profits attached, in the case of success, to the more questionable kinds of issues. with regard to the latter point it was also shown that these bigger profits may be, to a great extent, justified by the fact that the risk involved is much greater; since in the case of failure a weak security is much more difficult to finance and find a home for than a good one. it may further be asked why weak securities should be brought out at all and whether it is not the business of financial experts to see that nothing but the most water-tight issues are offered to the public. such a question evidently answers itself, for if only those borrowers were allowed to come into the market whose credit was beyond doubt, the growth of young communities and of budding enterprises would be strangled and the forward movement of material progress would be seriously checked. it is sometimes contended that much more might be done by the stock exchange committee in taking measures to see that the securities to which it grants quotations and settlements are soundly based. if this view is to prevail, its victory has been greatly helped by the events of the war, during which the stock exchange has seen itself regulated and controlled by outside authority to such an extent that it would be much readier than it was two years ago to submit to regulations imposed on it by its own committee at the bidding of the government. nevertheless, there is this great difficulty, that as soon as the stock exchange begins to impose other than merely formal rules upon the issue of securities under its authority, the public very naturally comes to the conclusion that all securities brought out under its sanction may be relied on as absolutely secure; and since it is wholly impossible that the committee's regulations could be so strict as to ensure this result without imposing limits that would have the effect of smothering enterprise, the effect of any such attempt would be to encourage the public to pursue a happy-go-lucky system of investing, and then to blame the stock exchange if ever it found that it had made a mistake and had indulged in speculation when it flattered itself that it was investing. the whole question bristles with difficulties, but it seems hardly likely that after the war the stock exchange and the business of dealing in securities will ever be quite on the old basis again. in any attempt that is made to regulate them, however, it will be very necessary to remember that capital is an extremely elusive thing, and that if too strict rules are laid down for it, it very easily evades them by transferring itself to other centres. if the authorities decide that only such and such issues are to be made, or such and such securities are to be dealt in in london, they will be inviting those who consider such regulations unfair or unwise to buy a draft on paris or new york, and invest their money in a foreign centre. capital is easily scared, and is very difficult to bottle up and control, and if any guidance of it in a certain direction is needed, the object would probably be much more easily achieved by suggestion than by any attempt at hard and fast restriction, such as worked well enough under the stress of war. any real improvement to be achieved in the system by which we have hitherto supplied other nations with capital will ultimately have to be brought about by a keener appreciation, both by issuing houses and investors, of the kind of business that is truly legitimate and profitable. it does not pay in the long run to supply young communities with opportunities for outrunning the constable, and it is possible that when this wholesome platitude is more clearly grasped by the public, no issuing house will be found to bring out a loan that is not going to be used for some definite reproductive purpose, or to float a company, even of the semi-speculative kind, the prospects of which have not been so well tested that the shareholders are at least bound to have a fair chance of success. the ideals of the issuing houses have so far advanced since the days of the honduras scandal, that in the time of the late war in the balkans none could be found to father any financial operation in london on behalf of any of the warring peoples. it only remains for the education of the investor to continue the progress that it has lately made, for the waste of capital by bad investment to be greatly curtailed. probably there will always, as long as the present financial basis of society lasts, be outbursts of speculation in which a greedy public will rush madly after certain classes of stocks and shares, with the result that a few cool-headed or lucky gamblers will be able to live happily ever after as country gentlemen, and transmit comfortable fortunes to their descendants for all time. this is the debt that society pays for its occasional lapses in finance, just as its lapses in matters of taste are paid for by the enriching of those who provide it with rubbishy stuff to read, or rubbishy shows in picture palaces. the education of the individual in the matter of spending or investing his or her money is one of the most pressing needs of the future, and only by its progress can the evils which are usually laid to the door of finance be cured by being attacked in their real home. in the meantime much might be done by more candid publicity and clearer statements in prospectuses of the objects for which money lent is to be used and of the terms on which loan issues have been arranged. any reasonable attempts that may be made to improve the working of international finance are certain to have the support of the best elements in the city. at the same time we may hope that as economic progress goes slowly ahead over the stepping stones of uncomfortable experience, borrowing countries will see that it really pays them to pay their yearly bills out of yearly taxes, and that they are only hurting themselves when they mortgage their future revenue for loans, the spending of which is not going to help them to produce more goods and so raise more revenue without effort. war is the only possible excuse for asking foreign nations to find money for other than reproductive purposes. in time of war it can be justified, even as an individual can be justified for drawing on his capital in order to pay for an operation that will save his life. but in both cases it leaves both the nation and the individual permanently poorer and with a continuous burden to meet in the shape of interest and sinking fund, until the loan has been redeemed. loans raised at home have an essentially different effect. the interest on them is raised from the taxpayers and paid back to the taxpayers, and the nation, as a whole, is none the poorer. but when one nation borrows from another it takes the loan in the form of goods or services, and unless these goods and services are used in such a way as to enrich it and help it to produce goods and services itself, it is bound to be a loser by the bargain; because it has to pay interest on the loan in goods and services and to redeem the loan by the same process, and if the loan has not been used to increase its power of turning out goods and services, it is inevitably in the same position as a spendthrift individual who has pledged his income for an advance and spent it on riotous living. one of the great benefits that the present war is working is that it is teaching young countries to do without continual drafts of fresh capital from the older ones. instead of being able to finance themselves by fresh borrowing, they have had to close their capital accounts for the time being, and develop themselves out of their own resources. it is a very useful experience for them, and is teaching them lessons that will stand them in good stead for some time to come. for the old countries, when the war is over, will have problems of their own to face at home, and will not be able at once to go back to the old system of placing money abroad, even if they should decide that the experiences of war have raised no objections to their doing so with the old indiscriminate freedom. it is easy, however, to exaggerate the effect of the war on our power to finance other peoples. pessimistic observers, with a pacifist turn of mind, who regard all war as a hideous barbarism and refuse to see that anything good can come out of it, are apt in these days to make our flesh creep by telling us that war will inevitably leave europe so exhausted and impoverished that its financial future is a prospect of unmitigated gloom. they talk of the whole cost of the war as so much destruction of capital, and maintain that by this destruction we shall be for some generations in a state of comparative destitution. these gloomy forecasts may be right, but i hope and believe that they will be found to have been nightmares, evolved by depressed and prejudiced imaginations. war destroys capital when and where actual destruction of property takes place, as now in belgium, northern france, and other scenes of actual warfare, and on the sea, where a large number of ships, though small in relation to the total tale of the merchant navies of the world, have been sunk and destroyed. destruction in this sense has only been wrought, so far, in limited areas. in so far as agricultural land has been wasted, kindly nature, aided by industry and science, will soon restore its productive power. in so far as factories, railways, houses and ships have been shattered, man's power to make, increased to a marvellous extent by modern mechanical skill, will repair the damage with an ease and rapidity such as no previous age has witnessed. in another sense it may be argued that war destroys capital in that it prevents its being accumulated, but this is a distortion of the meaning of the word destroy. if it had not been for the war, we in england should have been saving our usual three to four hundred millions a year and putting the money to productive uses, in so far as we did not lend it to spendthrift nations or throw it away on unprofitable ventures. if we had invested it well, it would have made us and the rest of the world richer. instead of doing so we are spending our savings on war and consequently we are not growing richer. but when the war is over our material productive power will be as great as ever, except for the small number of our ships that have been sunk or the small amount of damage done to us by enemy aircraft. our railways and factories may be somewhat behindhand in upkeep, but that will soon be made good, and against that item on the debit side, we may set the great new organization for munition works, part of which, we may hope, will be available for peaceful production when the time for peace is ripe. it is a complete mistake to suppose that war can be carried on out of accumulated capital, which is thereby destroyed. all the things and services needed for war have to be produced as the war goes on. the warring nations start with a stock of ships and guns and military and naval stores, but the wastage of them can only be made good by the production of new stuff and new clothes and food for the soldiers and new services rendered as the war goes on. this new production may be done either by the warring powers or by neutrals, and if it is done by neutrals, the warring powers can pay for it out of capital by selling their securities or by pledging their wealth. in so far as this is done the warring powers impoverish themselves and the neutrals are enriched, but the world's capital as a whole is not impaired. if we sell our pennsylvania railroad bonds to americans, and buy shells with the proceeds, we are thereby poorer and americans are richer, but the earning power of the pennsylvania railroad is not altered. it may be, if we conduct the war wastefully, and refuse to meet its cost by our own self-denial--going without things ourselves so that we can save, money to lend to the government for the war--that we shall pledge our property and sell what of it we can sell to neutrals, to such an extent that we shall be seriously poorer at the end of it. at present[9] we are not selling and pledging our capital wealth any faster than we are lending to our allies; and if we pull ourselves up short, and exercise the necessary self-denial, seeing that we must pay for the war in the long run out of our own pockets, and that far the cheapest and cleanest policy is to do so now, and if the war does not last too long, there is no reason why it should impoverish us to an extent that will cripple us seriously. it is true that we shall have lost an appalling number of the best of our manhood, and this is a loss that is irreparable in many of its aspects. but from the purely material point of view we may set against it the great increase in the productive power of those that are left behind, through the lessons that the war has taught us in using the store of available energy that was idle among us before. we shall have learnt to work as we never worked before, and we shall have learnt that many of the things on which we used to waste our money and energy were unworthy of us at all times and especially at a time of national crisis. if we can only recognize that the national crisis will go on after the war, and will go on until we have made this old country civilized in the real sense of the word, that is, free from destitution and the vice and dirt and degradation and disease that go with it, then our power of recovery after the war will be illimitable, and we shall go forward to a new standard of wealth and national duty that will leave the dingy ideals of the nineteenth century behind us like a bad dream. this may seem somewhat irrelevant to the question of international finance, but it is not so. we led the way in spreading our capital over the world, with little or no regard for the consequences of this policy on the condition of our population at home. we have now, in the great regeneration that this war has brought, and will bring in still greater measure, to show that we can still make and save capital faster than ever, by working harder and spending our money on improving our heritage, instead of on frivolity and self-indulgence. then we shall still be free to lend money to borrowers who will use it well, and at the same time have plenty to spare for wise use at home in clearing the blots off our civilization. footnotes: [footnote 9: written on new year's eve, 1915.] index acceptances, of banks and firms. 26, 36 america, as international financier, 73; trade expansion of, helped by england, 85 armament firms and bad finance, 135, 136 bank of england, position of, 31. 32; weekly return of, 33 banks, bills of exchange held by, 26 _seq_.; functions of, 35 _seq_.; money deposited with, 25 _seq_.; specimen balance sheet of, 35 bearer securities, 54 bill-brokers, 37, 38 bills of exchange, meaning of, 26 _seq_.; on london, popularity of, 29, 30; uses of, 39, 40 bonds, description of, 54 bowley, dr., on specialization, 156 brailsford, mr., on egypt and finance, 99 brazil, financial embarrassments of. 71; funding scheme for, 72 canada lends to england, 73 capital, bad effects of export of, 164; difficulty of controlling, 166, 171; definition of, 4, 17; function of, 3 _seq_.; how acquired, 16; plenty of, advantageous to workers, 19, 20; reward of, 2 _seq_. charles ii, dukedoms founded by. 14,15 china and international finance, 106 cobbett on national prosperity, 159 colonial investments, advantages possessed by, 166 companies' securities, classes of, 57; issue of, 55 coupons, description of, 54 crammond, mr., on financiers and peace, 93 cumulative, preference, 59; sinking fund, 52 debenture stocks, 57 discount, market rate of, 38 egypt and finance, 98 _seq_. "fenn on the funds," on diplomacy and finance, 106 finance and industry, 75, 76, 131; as peace-missionary, 90 _seq_.; benefits of, 83 _seq_.; defined, 1; dependent on industry, 28, 29, 40; effects of war on, 92, 93 foreign office and finance, 105, _seq_. france, loan issuing in, 47 freights, effect of war on, 162 geographical distribution, investment by, 24, 25 german finance and diplomacy, 107 german industry helped by english finance, 85 governments, borrowing by, 43 _seq_. honduras loans, select committee's report on, 116 _seq_. "income," dr. nearing on, 7 industry the foundation of finance, 28, 29 inherited wealth, 11 _seq_. interest, the price of capital, 2, 3 interest claims, as article of export, 80, 81 issuing houses, responsibilities of, 137 _seq_. jews and finance, 111 _seq_. journalism in the city, 49, 50 kinglake on egypt, 100; on jews of smyrna, 112 limited liability, system of, 68 loans, issue of, 45 _seq_. london, strength of, in credit matters, 30 mexico, revolution and default in, 71 morocco crisis and financiers, 93 municipalities, borrowing by, 45 nearing, dr., on capital's reward, 7, 8 new york as financial centre, 30 philip ii repudiates debts, 67 preference securities, 57, 59 profit, distinguished from interest, 56; the reward of capital, 2, 3 prospectuses, fuller statement desirable in, 173; terms of, 49 _seq_., 51 public, the, the modern dispenser of wealth, 15 _seq_. registered stocks, 55 risk, inseparable from industry, 23 sinking fund, working of, 52 snowden, mr. philip, on finance and diplomacy, 90, 91 south african war and finance, 102, 103 specialization, dangers and evils of, 153 _seq_. state, as saver of capital, 21 stock exchange, as regulator of new issues, 169, 170; effect of war on, 95; securities dealt in on, 42 _seq_. stock markets, fluctuations of, 61, 62; international relations of, 62 trade balance, 80, 81 underwriting of loans, 46, 48; risk involved by, 53 venezuela and german diplomacy, 107 war, effects of, on finance, 92, 93; lessons taught by, 161 _seq_., 175 _seq_. the end transcriber's note the punctuation and spelling from the original text have been faithfully preserved. only obvious typographical errors have been corrected. the economist: or the political, commercial, agricultural, and free-trade journal. "if we make ourselves too little for the sphere of our duty; if, on the contrary, we do not stretch and expand our minds to the compass of their object; be well assured that everything about us will dwindle by degrees, until at length our concerns are shrunk to the dimensions of our minds. _it is not a predilection to mean, sordid, home-bred cares that will avert the consequences of a false estimation of our interest, or prevent the shameful dilapidation into which a great empire must fall by mean reparation upon mighty ruins._"--burke. no. 3. saturday, september 16, 1843. price 6_d._ contents. our brazilian trade and the anti-slavery party 33 the fallacy of protection 34 agriculture (no. 2.) 35 court and aristocracy 36 music and musicales 36 the metropolis 37 the provinces 37 ireland 37 scotland 38 wales 38 foreign: france 38 spain 38 austria and italy 38 turkey 38 egypt 39 united states 39 canada 39 colonies and emigration: emigration during the last seventeen years 39 new south wales 39 australia 39 cape of good hope 39 new zealand 39 political 39 correspondence and answers to inquiries 40 postscript 41 free trade movements: messrs cobden and bright at oxford 42 public dinner to r. walker, esq. 42 dr bowring's visit to his constituents 42 anti-corn-law meeting at hampstead 43 mr ewart and his constituents 43 miscellanies of trade 43 police 43 accidents, offences, and occurrences 43 sporting intelligence 43 agricultural varieties: the best home markets 44 curious agricultural experiment 44 cultivation of waste lands 44 our library table 44 miscellanea 45 commerce and commercial markets 46 prices current 46 corn markets 46 smithfield markets 46 borough hop market 47 liverpool cotton market 47 the gazette 47 births, marriages, and deaths 47 advertisements 47 "if a writer be conscious that to gain a reception for his favourite doctrine he must combat with certain elements of opposition, in the taste, or the pride, or the indolence of those whom he is addressing, this will only serve to make him the more importunate. _there is a difference between such truths as are merely of a speculative nature and such as are allied with practice and moral feeling. with the former all repetition may be often superfluous; with the latter it may just be by earnest repetition, that their influence comes to be thoroughly established over the mind of an inquirer._"--chalmers. our brazilian trade and the anti-slavery party. since the publication of our article on the brazilian treaty, we have received several letters from individuals who, agreeing with us entirely in the free-trade view of the question, nevertheless are at variance with us as to the commercial policy which we should pursue towards that country, in order to coerce them into our views regarding slavery. we are glad to feel called upon to express our views on this subject, to which we think full justice has not yet been done. we must, however, in doing so, make a great distinction between the two classes of persons who are now found to be joined in an alliance against this application of free-trade principles; two classes who have always hitherto been so much opposed to each other, that it would have been very difficult ten years since to have conceived any possible combinations of circumstances that could have brought them to act in concert: we mean the west india interest, who so violently opposed every step of amelioration to the slave from first to last; and that body of _truly great philanthropists_ who have been unceasing in their efforts to abolish slavery wherever and in whatever form it was to be found. to the latter alone we shall address our remarks. as far as it can be collected, the argument relied upon by this party appears to be, that having once abolished slavery in our own dominions we ought to interdict the importation of articles produced by slave labour in other countries, in order to coerce them, for the sake of their trade with us, to follow our example. we trust we shall be among the last who will ever be found advocating the continuance of slavery, or opposing any _legitimate_ means for its extinction; but we feel well assured that those who have adopted the opinion quoted above, have little considered either the consequences or the tendencies of the policy they support. the first consideration is, that if this policy is to be acted upon, on principle, it must extend to the exclusion of _all_ articles produced in whatever country by slaves. it must apply with equal force to the _gold_, _silver_, and _copper_ of brazil, as it does to the _sugar_ and _coffee_ produced in that country;--it must apply with equal force to the _cotton_, the _rice_, the _indigo_, the _cochineal_, and the _tobacco_ of the southern states of america, and mexico, as it does to the _sugar_ and _coffee_ of cuba. to be in any way consistent in carrying out this principle, we must exclude the great material on which the millions of lancashire, the west of yorkshire, and lanarkshire depend for their daily subsistence; we must equally exclude tobacco, which gives revenue to the extent of 3,500,000_l._ annually; we must refuse any use of the precious metals, whether for coin, ornament, or other purposes. but even these form only one class of the obligations which the affirming of this principle would impose upon us. if we would coerce the brazilians by not buying from them, it necessarily involves the duty of not selling to them; for if we sell, we supply them with all the means of conducting their slave labour; we supply the implements of labour, or the materials from which they are made; we supply clothing for themselves and their slaves; we supply part of their foods and most of their luxuries; the wines and the spirits in which the slave-owner indulges; and we even supply the very materials of which the implements of slave punishment or coercion are made;--and thus participate much more directly in the profits of slavery than by admitting their produce into this country. but if we supply them with all these articles, which we do to the extent of nearly 3,000,000_l._ a year, and are not to receive some of their slave-tainted produce, it must follow that we are to give them without an equivalent, than which no greater encouragement could be given for a perseverance in slave-holding. but the truth is--whatever pretensions we make on this subject--we do, in exchange for our goods, buy their polluted produce; we employ our ships to convey it from their shores, and ourselves find a market for it among other countries already well supplied with cheap sugar, where it is not required, and where it only tends the more to depress the price in markets already abundantly supplied. nay, we do more; we admit it into our ports, we land it on our shores, we place it in our bonded warehouses, and our busy merchants and brokers deal as freely on our exchanges in this slave produce as in any other, only with this difference--that this cheap sugar is not permitted to be consumed by our own starving population, but can only be sold to be refined in bond for the consumption of the free labourers in our west india colonies and others, or to be re-exported, as it is, for the use of "our less scrupulous but more consistent" neighbours on the continent. consistency, therefore, requires equally the abandonment of all export trade to slave-producing countries, as it does of the import of their produce; and the effect will carry us even further. we know it is a favourite feeling with mr joseph sturge and others of that truly benevolent class, that in eschewing any connexion with slave-producing countries, we have the better reason to urge free-trading intercourse with such countries as use only free labour,--with the northern states of america, with java, and other countries similarly circumstanced. now of what does our trade to these countries, in common with others, chiefly consist? of the 51,400,000_l._ of british manufactures and produce which we exported in 1840, upwards of 24,500,000_l._ consisted of cotton goods, nearly the whole of which were manufactured from slave-grown cotton, and partly dyed and printed with the cochineal and indigo of guatamala and mexico. consistency would therefore further require that we abandon at least one-half of our present foreign trade even with free-labour countries, instead of opening any opportunity for its increase. when men are prepared and conceive it a duty to urge the accomplishment of all these results, they may then consistently oppose the introduction of brazilian sugar and coffee, and support the present west india monopoly; but not till then. but now, what effect must this argument have upon slave-producing states, in inducing them to abandon slavery? has it not long been one of the chief arguments of the anti-slavery party everywhere, that free labour is actually cheaper than slave labour? now, will the brazilians give credit to this proposition, so strongly insisted upon, when they see that the anti-slavery party conceive it needful to give support to a system which affirms the necessity of protecting free labour against slave labour, by imposing a prohibitory duty of upwards of 100 per cent. on the produce of the latter? will their opinion of the relative cheapness of the two kinds of labour not rather be determined by our actions than our professions? we firmly believe that free labour, properly exercised, is cheaper than slave labour; but there is no pretence to say that it is so at this moment in our west india colonies; and we undertake to show, in an early number, in connexion with this fact, that _the existence of the high protecting duties on our west india produce has done more than anything else to endanger the whole experiment of emancipation_. but, moreover, our west india monopoly,--the existence of the high prohibitory differential duty on sugar, is the greatest, strongest, and least answerable argument at present used by slave-holding countries against emancipation. the following was put strongly to ourselves in amsterdam a short time since by a large slave owner in dutch guiana:--"we should be glad," said he, "to follow your example, and emancipate our slaves, if it were possible; but as long as your differential duties on sugar are maintained, it will be impossible. here is an account sale of sugar produced in our colony, netting a return of 11_l._ per hogshead to the planter in surinam; and here is an account sale of similar sugar sold in london, netting a return of 33_l._ to the planter in demerara: the difference ascribable only to your differential duty. the fields of these two classes of planters are separated only by a few ditches. now such is the effort made by the planter in demerara to extend his cultivation to secure the high price of 33_l._, that he is importing free labourers from the hills of hindostan, and from the coast of africa, at great cost, and is willing to pay higher wages than labour will command even in europe. let us, then, emancipate our slaves, which, if it had any effect, would confer the privilege of a choice of employer, and dutch guiana would be depopulated in a day,--an easy means of increasing the supply of labour to the planters of demerara, at the cost of entire annihilation of the cultivation of the estates in surinam. but abandon your differential duties, give us the same price for our produce, and thus enable us to pay the same rate of wages, and i, for one, will not object to liberate my slaves to-morrow." whatever amount of credence people may be disposed to place in this willingness to abandon slavery, nothing can be more clear than that the higher rate of wages paid in our colonies, attributable solely to the high and extravagant price which, by our differential duties, their produce commands, must ever form a strong and conclusive reason with these slave-holding countries against their entertaining the question of emancipation. we believe most sincerely that an equalization of these duties--that an entire free trade would do more than any other act to encourage an adoption of our example everywhere: while the maintenance of monopoly and high prices _as an essential to the carrying out of the experiment of free labour successfully_--must be the strongest reason against its adoption with all those countries who have no means of commanding this accompanying confessed essential. but now were it otherwise:--have the professors of these opinions ever considered the huge responsibility which they arrogate to themselves by such a course? let these men remember that, by seeking to coerce the _slave-labour producer_ in distant countries, they inflict a severe punishment on the millions of hard-working, ill-fed _consumers_ among their fellow countrymen; but they seem always to overlook the fact, that there is a _consumer_ to consider as well as a _producer_;--and that this consumer is their own countryman, their own neighbour, whose condition it is their _first_ duty to consult and watch;--duty as well as charity ought to be first exercised at home. that is a very doubtful humanity which exercises itself on the uncertain result of influence indirectly produced upon governments in the other hemisphere of the globe, and neglects, nay sacrifices, the interests of the poor and helpless around our own doors,--not only by placing the necessaries of life beyond their reach, but at the same time destroying the demand for their labour by which alone they can obtain them. if _individuals_ entertain conscientious scruples against the use of slave produce--let them, if they please, act upon them themselves, but do not let them seek to inflict _certain_ punishment, and the whole train of vice and misery consequent on starvation and want of employment, upon their poorer neighbours, for the purpose of conferring some _speculative_ advantage on the slaves of the brazils or elsewhere: no man can be called upon as a duty to do so great a present evil, in order to accomplish some distant good, however great--or however certain. the fallacy of protection. all laws made for the purpose of protecting the interests of individuals or classes must mean, if they mean anything, to render the articles which such classes deal in or produce dearer than they would otherwise be if the public was left at liberty to supply itself with such commodities in the manner which their own interests and choice would dictate. in order to make them dearer it is absolutely necessary to make them scarcer; for quantity being large or small in proportion to demand, alone can regulate the price;--protection, therefore, to any commodity simply means that the quantity supplied to the community shall be less than circumstances would naturally provide, but that for the smaller quantity supplied under the restriction of law the same sum shall be paid as the larger quantity would command without such restriction. time was when the sovereigns of england relied chiefly on the granting of patents to individuals for the exclusive exercise of certain trades or occupations in particular places, as the means of rewarding the services of some, and as a provision for others of their adherents, followers, and favourites, who either held the exclusive supply in their own hands on their own terms, or who again granted to others under them that privilege, receiving from them a portion of the gains. in the course of time, however, the public began to discover that these monopolies acted upon them directly as a tax of a most odious description; that the privileged person found it needful always to keep the supply short to obtain his high price (for as soon as he admitted plenty he had no command of price)--that, in short, the sovereign, in conferring a mark of regard on a favourite, gave not that which he himself possessed, but only invested him with the power of imposing a contribution on the public. the public once awake to the true operation of such privileges, and severely suffering under the injuries which they inflicted, perseveringly struggled against these odious monopolies, until the system was entirely abandoned, and the crown was deprived of the power of granting patents of this class. but though the public saw clearly enough that these privileges granted by the sovereign to individuals operated thus prejudicially on the community, they did not see with equal clearness that the same power transferred to, and exercised by, parliament, to confer similar privileges on classes; to do for a number of men what the sovereign had before done for single men, would, to the remaining portion of the community, be just as prejudicial as the abuses against which they had struggled. that like the sovereign, the parliament, in protecting or giving privileges to a class, gave nothing which they possessed themselves, but granted only the power to such classes of raising a contribution from the remaining portion of the community, by levying a higher price for their commodity than it would otherwise command. as with individuals, it was equally necessary to make scarcity to secure price, and that could only be done by restricting the sources of supply by prohibiting, or by imposing high duties on, foreign importations. many circumstances, however, combined to render the use of this power by parliament less obvious than it had been when exercised by the sovereign, but chiefly the fact that protection was usually granted by imposing high duties, often in their effect quite prohibitory, under the plea of providing revenue for the state. many other more modern excuses have been urged, such as those of encouraging native industry, and countervailing peculiar burthens, in order to reconcile public opinion to the exactions arising out of the system, all of which we shall, on future occasions, carefully consider separately. but, above all, the great reason why these evils have been so long endured has been, that the public have believed that all classes and interests, though perhaps not exactly to the same extent, have shared in protection. we propose at present to confine our consideration to the effects of protection,--first, on the community generally; and secondly, on the individual classes protected. as it is admitted that protection ought, if granted at all, to be given to all alike, it would follow that the whole produce of the country would be raised to an artificial price; and if this were the case, as far as regarded the exchange or transactions among members of the same community, the effect would be merely nominal, of no advantage to any one, and of little disadvantage beyond the enormous public expense needed to prevent people cheating each other by smuggling and bringing in the cheaper foreign article;--but such a community must forego all notion or idea of a foreign trade;--they must have no desires to be gratified beyond themselves, and they must have within themselves the independent means of supplying every want. for even if the law be strong enough to maintain an artificial high price at home, it has no power of making other countries pay that price; and if everything we possessed commanded a higher price at home than other countries could supply the same for, we should have nothing which we could exchange for the produce of other countries, and thus no more foreign trade could exist, than in a poor country which had no surplus produce. it is therefore essential that every country should bear in mind, in adopting a system of protection to manufactures or other produce, that they thereby effectually debar themselves from all foreign trade to neutral countries in such articles; for if they require high duties at home to protect them from the produce of other countries, which could only come at considerable expense to compete with them at home, how can they withstand that competition when they meet on the same terms in every respect in a neutral market? how effectually has france stayed her export linen trade by raising the duties and the price of linen yarn, and by that act, intended as a blow to english trade, given the linen manufacturers of this country a greater advantage over france in the markets of the world than ever. how idle are the efforts of the belgian government to establish depã´ts and factories for the sale of their manufactures in st thomas add other places, while the manufacturers in ghent are only able to maintain their home trade, by high protective duties, against english, french, and german goods, and still cry out for greater protection! it is, however, abundantly plain, that the state of a country above described could not long exist, when industry and intelligence were in the course of producing wealth; for if there be one law in nature more distinct than another, it is, that while the productions of every country are less or more limited to particular things, the wants of man extend to every possible variety of products over the whole world, as soon as his means can command them. as a country advances in wealth, it will have more and more surplus produce, which under wise laws would always consist of such things as it could produce with greatest facility and profit, whether from the loom or the soil. this surplus produce would be exchanged for the productions of other climates, but it must be quite clear, as soon as we arrive at this stage, that the power of the law to protect price altogether ceases. the surplus exported must sell in the markets of the world, in competition with the same article produced under the cheapest circumstances, and that article in the home market can command only the same price. thus the whole attempt to protect all interests equally would immediately fail; every article produced in excess, and exported, would command only the lowest prices of open markets, and the fancied protection of the law would be void; while everything produced in deficiency, and of which we required to import a portion to make up the needful supply, would continue to be protected above the natural price of the world to any extent of import duty that the law imposed upon the quantity required to make up the deficiency. thus, for example, we export a large portion of the woollen, and the largest portion of the cotton goods which we manufacture, to all parts of the world, which we must sell at least as cheap as they can be bought in any other country. the same articles can only command the same price in the home market, and though the law imposed an import duty, by way of pretended protection, to any extent, upon similar foreign goods, it would not have the effect of raising the price one fraction. on the other hand, we do not produce as much wool or food as we consume, and have every year to import large quantities of each to make up the deficiency. whatever duty, therefore, is put on the import of the quantity thus required, will enable the producers at home to maintain their price so much above the natural level of the world. by this state of things the country at large is injured in two distinct and prominent ways:--first,--those articles which we can make in excess, and export, must ever be the chief means of absorbing the increasing capital and labour of the country; and the impediment thrown in our way, of importing those things which we have in deficiency, must necessarily check our power of extending the demand for the produce of such increasing labour and capital; and, secondly,--the price of such articles as we produce in deficiency, will always be maintained much above the level of the world, to the great disadvantage of the other great class of producers, the price of whose labour, and whose profits, will be regulated by competition with those who have food, &c., at the lowest price. so much as to the effect on the community at large. we will now shortly consider the effect on individual interests, which are thought to enjoy protection, and we believe we can show that there never was a condition so fraught with mischief and disappointment, with such unmitigated delusion, deception, and exposure to ruin, than is to be found in every case where protection operates. we think it can be clearly shown _that such occupations can never be more profitable; that they must usually be less profitable; and that they are always more exposed to vicissitudes than any other class_. they never can be more profitable, because capital and enterprise will always be attracted to any occupation which offers a larger profit than the usual rate, till it is reduced to a level with others; they will usually be less profitable, indeed always in a community of increasing numbers, because the price being maintained by restriction above the price of the world, prevents an extension of such trades in the same proportion as those who naturally belong to them, and look to them for occupation, increase in numbers: they will be exposed to greater vicissitudes, because, being confined to the supply of only one market, any accidental circumstance, which either increases the usual supply, or diminishes the usual demand, will cause an infinitely greater depression than if they were in a condition to avail themselves of the markets of the whole world, over which they could spread an accidental and unusual surplus. thus, previous to 1824, the silk manufacturers of this country were protected to a greater extent than any other trade, and the price of silk goods was maintained much above the rate of other countries; our silk trade was therefore necessarily confined almost exclusively to the home market and our colonies, and though they had a monopoly of those markets, it was at the cost of exclusion (on account of higher price) from all other markets. notwithstanding this monopoly, the silk manufacturers could never command at any time larger _profits_ than other trades; for had they done so, competition would have increased until the rate was reduced to the common level of the country: on the contrary, the tendency was for profits and rates of wages to be smaller than in other great manufacturing branches, requiring equal capital and skill; because, with the increasing numbers who belonged to the silk trade,--the sons of manufacturers and of weavers, who naturally, in the first instance, look to the trade of their parents for their occupation,--the trade did not proportionably increase, from the fact of our being unable to extend our exports; and, lastly, it was exposed to much greater vicissitudes than other trades; for when, either from a temporary change of fashion or taste, or from a temporary stagnation of trade in this country, the accustomed demand was lessened, the silk manufacturers were unable to obtain any relief by extending their trade in the great neutral markets of the world, being excluded by price, and the whole surplus quantity remained a dead weight on this market only; whereas other branches of manufactures, practically enjoying no protection, in the case of depressed trade at home, had an opportunity of immediate relief, by spreading the surplus thereby created, at a very trifling sacrifice, over the wide markets which they supplied. in this way the extent and duration of the vicissitudes and depressions in the silk trade were without parallel in any other; but since 1824, since this trade has been placed in a natural position by the removal of monopoly, the whole aspect of it has changed, and these peculiar evils have all disappeared. then again with regard to the products of land, which the law attempts to protect more highly than any other. here again, though the price to the community is maintained much above the prices of other countries, no one person connected with raising the produce can command a higher rate of profit, or higher wages for labour, than other trades having no protection whatever; for if they did, competition would soon reduce them to the same level; but, on the contrary, the wages, of agricultural labourers, and the profits of farmers, are always rather below than above the common rate, and simply from this fact, that the children of farm labourers, and of farmers, who first naturally look to the pursuits of their parents for a trade or occupation, increase in numbers without any corresponding extension of the means of employment, and the competition among them is therefore always greater than in other trades which have the power of extension; and the vicissitudes to which the farmer is exposed are notoriously greater than any other trade. his rent and expenses throughout are fixed by an artificial price of produce, which price can only be maintained as long as a certain scarcity exists; but the moment the markets are plentifully supplied, either from a want of demand owing to a depression of trade, or from the result of a good harvest, he finds that plenty takes out of his hand all control of price, which quickly sinks to the natural rate. with a free trade the farmer would never be exposed to such reverses. in that state, if the demand and price increased, it would be checked by an increase of imports from other countries; if the demand and price diminished, that would also be checked by a reduction or cessation of the usual imports, and, if necessary, by an export of any surplus which pressed upon the market;--and, if our space allowed, it would not be difficult to show that, with prices at the natural rate, all parties connected with land would not only be in a safer but a much better condition. no cautious man who well understands the subject will ever hazard his capital in any trade exposed to so many evils and to so much uncertainty as restriction and protection infallibly introduce into it:--but the great error which misleads all men in cherishing such trades is, that they mistake _high prices_ for _high profits_, which usually, instead of being synonymous terms, are quite the reverse. agriculture. no. ii. on the indications which are guides in judging of the fertility or barrenness of the soil. by the rev. william thorp. (_continued from no. 2._) these three signs, viz., colour, consistence, and vegetation, are named by the royal agricultural society as being pre-eminently indications of the value of lands; yet there are others of equal if not of greater consequence. for example:-_a knowledge of the geology of the land_ is of the first importance; that is, not only a knowledge of the range and extent of each formation and its subdivisions, which may be called geographical geology, but also how far and to what extent the various lands do depend upon the substratum for their soil, and the local variations in the chemical or mineralogical character of the substrata themselves, and which may be called the differential geology of soils. for not only do the qualities of land vary from one formation to another, but upon the same formation there is frequently considerable difference in the quality of land depending upon chemical difference in the substratum, or upon an intermixture of foreign debris derived from other strata. _a chemical investigation_ of the soil and subsoil will frequently afford most useful indications respecting the value of land. it may be laid down as an axiom that a soil to be fertile must contain all the chemical ingredients which a plant can only obtain from the soil, and chemistry ought to be able to inform us in unproductive soils what ingredients are wanting. it also is able to inform us if any poisonous substance exists in the soil, and how it may be neutralized; when lime, marl, and chalk are to be used, &c.[1] the royal agricultural society say that chemistry is unable to explain the productiveness of soils. but why is it unable? one reason is, that supposing everything required by the plant to be present in the soil, yet if the soil be either too wet, or too dry, too cohesive, or loose, the plant will not flourish; and chemical analysis does not declare this, for it affords no information respecting the mechanical division in which substances exist in the soil. again, the chemical analysis of soils, to be worth anything, must be conducted with more rigid accuracy than those published by english writers. to detect one cwt. of gypsum in an acre there would be only one quarter of a grain in a pound of soil, or in 100 grains only three and a half thousandth of a grain (35/10000 or,00035 grs.), or to discover if sufficient alumina existed in a field for the production of red clover there must be ascertained if it contained (one hundred thousandth),00001 per cent. the analyses even by sprengel do not afford us the quantity of nitrogen in each soil, or the capacity of the soil for this substance; while it is well known that most manures, as well as the different kinds of food, are valuable in proportion to the quantity contained by them, and it is highly probable, _ceteris paribus_, that the quantity of nitrogen found existing in soil, and the soil's capacity for containing that substance, would afford an easy indication of its immediate fertility, and also of its requiring great or small quantities of nitrogenous manures in its future cultivation.[2] chemistry, however, outsteps her province when it is attempted to explain how vegetable productions are formed in the plants by chemical forces; for the recent discoveries of schwann, henle, and schleiden, prove that all the functions of the plant are performed by the means of simple vesicles and cells--that absorption, assimilation, fixation of carbon from the atmosphere, respiration, exhalation, secretion, and reproduction are all effected by single cells, of which the lower plants almost entirely consist--that the cell absorbs alimentary matters through the spongioles of the root, and that the fluid received thus undergoes the first steps of the organizing process--that the inorganic elements are changed into the simplest proximate principles by cells--so also are the further changes into the regular secretions of the plant, the result of cell-life--that gum and sugar are converted into the organizable portion of the nutritious sap by the cells of the leaves. the starchy fluid in the grains of corn is rendered capable of nutrition to the embryo by the development of successive generations of cells, which exert upon it their peculiar vitalizing influence. albumen is converted into fibrine by the vital agency of cell life--_i.e._, cells are produced which do not form an integral part of any permanent structure in the plant, but which, after attaining a certain maturity, reproduce themselves and disappear; hence it may be stated that all the vegetable productions which are formed in the plant are effected by a series of vital actions through the agency of cells. from the different transformations which these undergo all the different tissues in vegetables are formed; for instance, the spiral and dotted ducts, woody fibre, and so on. schwann showed that the formation of tissues in animals went through exactly the same progress, a fact which has been confirmed by the microscopic observations of valentin and barry. thus vessels, glands, the brain, nerves, muscles, and even bones and teeth are all formed from metamorphosed cells. dr bennett says--"if this be true, and there can be little doubt, it obliges us to modify our notions of organization and life. it compels us to confess that vegetables and animals are not simple beings, but composed of a greater or less number of individuals, of which thousands may exist in a mass not larger than a grain of sand, each having a vital centre and separate life, independent of those around it. each of these individuals, or organized cells, should be regarded as a living being, which has its particular vital centre of absorption, assimilation, and growth, and which continues to vegetate, to increase, and undergo transformations as if it were an isolated individual. at all events, a knowledge of the existence of the cell-life of plants will explain several phenomena respecting the vegetation, growth, and ripening of corn, and may hereafter lead to some valuable practical results." _the climate, elevation, and exposure_ are not to be neglected. upon the higher portions of the wolds crops suffer, much from elevation and exposure, while in the western portion of yorkshire, upon the moor edges, the harvest is usually a month later than in the central parts of the island. _a moderate depth_ of soil in general is a favourable sign, although some of shallow soils on the new red sandstone and on the wolds are very good; to these signs are to be added locality, as respects markets, facilities of obtaining a supply of lime, or other tillage, the rates and outpayments peculiar to the district, &c. &c., all of which are to be taken into account when considering the value of any particular farm. i shall now briefly apply these indications of fertility over the different geological formations of yorkshire, and it will be found that each lends aid to the other, and that a person will be able to ascertain the value of land in proportion as he is able to appreciate the collective evidence afforded by them. (_to be continued._) [1] mr brakenridge, of bretton lodge, who has extensive practice in land valuing, informs me that a mechanical analysis of the soil affords him much assistance; and he has found that in soils, whenever free from stagnant water, that in a mechanical analysis the larger the proportion which remains suspended in the water, the greater its powers of production will be found, and the less manure it will require. that the best soils are those which, when diffused and well stirred in water and allowed to stand for three minutes, from 20 to 30, say 25, per cent. is carried off with the water of decantation. when 30 per cent. and upwards is decanted off, the soil becomes retentive of water and consequently wet. when less than 20 per cent., say only 16 per cent. and under, is carried off, it becomes too porous; water passes through it too rapidly; its soluble matter is washed off into the substratum, and it has a strong tendency to become thin and sterile. [2] the celebrated black earth of russia contains 2,45 per cent. of nitrogen. court and aristocracy. the queen and prince albert, on their return on thursday week from the chateau d'eu, were accompanied by the prince de joinville, who remained to dine with the royal party, and then returned in the evening on board his yacht, for the coast of france. after a few days' repose, her majesty and the prince started on another marine excursion. they sailed from brighton on tuesday morning, passed dover, and arrived off deal about three o'clock, where the royal yacht anchored, in order to receive the duke of wellington, who came from walmer castle, and dined with her majesty on board, a large number of vessels, gaily decked with flags, as well as crowds on shore, giving animation to the scene. the duke remained with her majesty and prince albert upwards of two hours, and during the time he was on board, the wind, which throughout the day had been blowing rather fresh from the northward and eastward, had considerably increased, and her majesty, upon the duke's taking his leave, evinced very great anxiety respecting the safe landing of his grace. everybody who knows this coast is aware that when the wind is blowing at all from the eastward that there is a very heavy surf on the beach, and consequently great difficulty in landing. his grace, however, on thanking her majesty for the concern she evinced on his account, made light of the matter, and returned on board the _ariel_, which brought him as near the shore as possible; here he got into the barge and rowed towards the beach. the swell was too great to admit of his landing at the pier, from which he had started, and the boat was pulled towards the naval yard, where the surf was not so great as at any other part of the shore. here the duke landed, but not without a thorough drenching, for no sooner had the bows of the boat touched the shore than a heavy sea broke right over her stern, and completely saturated his grace's apparel. the duke, upon landing, all wet as he was, immediately mounted his horse, and rode off to walmer castle. a numerous assemblage of persons had congregated on the beach when the duke came on shore, and loudly and enthusiastically cheered him. at an early hour on wednesday morning the squadron got their steam up, and made preparations for taking their departure. the weather had moderated, and the day was fine. about seven o'clock the royal yacht got under way, and stood out to sea, and was followed by the other steamers, and also by the _penelope_, which had been ordered to form one of the royal squadron. about two o'clock on wednesday the royal yacht entered the port of ostend, taking the authorities somewhat by surprise, who did not expect it quite so soon. the king and queen of belgium, and the official personages of ostend, were, however, on the pier to await the landing; and the populace displayed the most lively enthusiasm. in the evening there was a grand banquet at the hotel de ville, and ostend was brilliantly illuminated, in a style far surpassing ordinary occasions. the king of hanover.--a correspondent writes that his majesty, while in conversation with a noble friend, expressed the determination, should divine providence spare him health, to visit this country again next summer, and he purposed then to come earlier in the season. visit of the regent of spain to greenwich hospital.--on wednesday, about twelve o'clock, general espartero paid a visit to the royal hospital at greenwich. sir robert peel arrived in town by the london and birmingham railway on saturday afternoon, from his seat, drayton manor, staffordshire, and immediately proceeded from the euston-square terminus to the residence of the earl of aberdeen, in argyll street, to pay a visit to his lordship. soon, after the arrival of the right hon. baronet, sir james graham arrived in argyll street from the home office, and had an interview with sir robert peel. sir r. peel left his colleagues at a quarter-past four o'clock for the terminus at london bridge, and travelled by the london and brighton railway to brighton, to dine with her majesty and prince albert, remaining at the pavilion, on a visit to her majesty. music and musicales. manchester musical festival.--this great festival--one of the greatest and finest musical events that ever occurred in manchester--was held in the magnificent hall of the anti-corn-law league, the length of which is 135 feet, the breadth 102 feet, inclosing an area of about 14,000 square feet. the services of all our principal vocal artists were secured. the _soprani_ were miss clara novello and miss rainforth; the _alto_ or _mezzo soprano_, mrs alfred shaw; the _tenori_, mr braham and mr james bennett; and the _basso_, mr henry phillips. the choir was the most complete and efficient one ever collected in manchester, and consisted of nearly the whole of the vocal members of the manchester choral society and the hargreaves choral society, with some valuable additions from the choirs of bury and other neighbouring towns, and from gentlemen amateurs, conversant with handel. the _messiah_ was the performance of monday night; and, on the whole, was executed in a style worthy of that great work of art, the conductor being sir henry bishop, who wore his robes as a musical bachelor of the university of oxford. on tuesday there was a grand miscellaneous concert, the hall being even more numerously attended than on the preceding evening, there not being fewer than 3,500 persons present. this went off with very great satisfaction to the very numerous auditory; and the _manchester guardian_ says, "as to the general impression produced by this festival, we believe we do not err in saying that there is but one opinion,--that it has been throughout an eminently successful experiment. sir henry bishop, we understand, said that he never heard choruses sung with better effect in his life; and that he considered the festival, as a musical performance, most creditable to every one connected with it. as to the capabilities of the hall for singing, we are informed that miss clara novello has declared that she never sang with more ease in any place in her life; and we think the ease with which she did sing was obvious to all who could see her countenance. we have asked many persons who sat in different parts of the hall, especially in distant corners, and all concur in saying that they heard most distinctly miss novello's softest and faintest notes." musical intelligence.--rubini is about to establish an opera at st petersburg, and has engaged his old colleague, tamburini, to assist him in the enterprize. he has also engaged signor pisani, a young tenor of great promise. lablache will not appear at the opening of the italian opera in paris. he has gone to naples, where he will remain for two months, and where he is to be joined by his son-in-law, thalberg. a grand musical festival, which was to have taken place in paris on thursday next, has been postponed till the beginning of october. it is said that this festival will rival those of germany in splendour. the hereford musical festival, which was held on tuesday, wednesday, and thursday, in all saints church, in consequence of the repairs going on at the cathedral, was on a much smaller scale than of late years has been usual with the three choirs, and the attendances at the various performances were by no means so numerous as had been generally expected; still, as the expenses had been studiously kept down, it is to be hoped the receipts may cover them, or nearly so. the collections after the three services amounted to 865_l._, being 200_l._ less than in 1840, but 50_l._ more than in 1837.--_cheltenham looker-on._ rossini has just left paris without its having been possible to procure a note from him. every effort has been fruitless. unwilling to hear one word said of music, rossini has not even been to the opera. he is returning to bologna, cured of a painful disease by doctor civiale, who, with reason, seemed to him a far more important personage than duprez. it is said that rossini replied to the great tenor, who asked him for a part, "i have come too early, and you too late."--_french print._ the metropolis. the aldermanic gown of bread-street ward.--it is supposed that there will be a hard contest for the aldermanic gown of bread street, vacant by the resignation of alderman lainson, who on thursday last addressed a letter to the lord mayor, announcing his determination to retire, in consequence of ill health. metropolitan improvements.--the works are now about to commence in good earnest for forming victoria park. great progress is being made by the commissioners of the metropolis improvements in the formation of the new street at the west-end. the new street leading from oxford street to holborn has been marked out by the erection of poles along the line. last week several houses were disposed of by auction, for the purpose of being taken down. some delay has arisen in respect to the purchase of the houses which have formed the locality known as little ireland. among the buildings to be removed is the chapel situated at the top of plumtree street. in this street the whole of the houses on the west side will be shortly removed, for the new street which will lead from waterloo bridge. in belton street, in the line for this intended street, the inmates of several houses received notice to quit yesterday. the occupiers of the several houses forming the clump at the end of monmouth street, in holborn, have also received similar notices. similar progress has been made with the new street communicating between coventry street and long acre. the line has been cleared from castle street to long acre on the east. on the west side the inmates of the houses, it is expected, will in a few days have notice to quit. improvements will also be made between long acre and st giles's; and in upper st martin's lane the whole of the houses on the west side will be removed, the greater part of which are already taken down. report on the model prison.--the commissioners appointed to superintend the management of the pentonville prison have just presented their report for the approval of the secretary of state. the report states, that it is the intention of the secretary of state to appropriate the prison to the reception of convicts between eighteen and thirty-five years, under sentence of transportation not exceeding fifteen years; and that the convicts so selected shall undergo a term of probationary discipline for eighteen months in the prison, when they will be removed to van diemen's land under their original sentences. returns of the royal mint.--the master of the mint has issued his annual return of the work done in the refinery of the mint, and of the assays made during the past year on other accounts than those of government, and of public and private bodies, in conformity with an order of the house on a motion made by mr hume. the return estimates the amount of bullion refined in the year 1842, under this head, at 940 lbs 0 oz. 19 dwts. of gold, and 24,376 lbs. 11 oz. of silver, the amount received by the refiner being about 600_l._ the number of assays made in the same period is put down at 2,158, at a rate of charge of 2s. for each assay. post-office law.--it may be interesting at this season, when so many persons who are out of town have their letters forwarded to them in the country, to see the answer to an inquiry whether a letter forwarded after delivery at one address to another in the country is liable to second postage:--"general post office, sept. 7, 1843.--sir,--i am commanded by the postmaster-general to inform you, in reply to your communication of the 29th ultimo, that a letter re-directed from one place to another is legally liable to additional postage for the further service. i am, sir, &c. &c." singular employment of the police.--under an order recently issued by the commissioners of the metropolitan police, a number of the officers of each division have been actively engaged in collecting information and making out a return of all new houses completed since the year 1830, in which year the police force was established; all new houses commenced but not finished; all new churches, new chapels, new schools, and other public buildings; all new streets and squares formed since that period, with their names and the name of the neighbourhood. the provinces. sanitary state of liverpool.--a mr henry laxton has published a very thin pamphlet, in the shape of a letter to dr lyon playfair, who has been appointed, under the commission of inquiry, to examine and report upon the unhealthy state of liverpool. but though mr laxton's pamphlet is very small, it exposes evils too complicated and large to be remedied without vigorous, continuous, steadily-applied exertion. groups of houses packed together, with scarcely room for the inhabitants to stir; open cesspools continually sending up their poisonous exhalations, and in hot or wet weather so infesting the air as to render it almost insupportable; smoke from the factories and steam-vessels, which, when the wind is westerly, covers the town, blackening the buildings, soiling goods, and, mixing with the other gases already generated, forming one general conglomeration of deleterious vapours; the state of the inhabited cellars; the neighbourhood of which exhibits scenes of barbarism disgraceful for any civilised state to allow; an inefficient supply of that great necessity of life--water; inefficient drainage, which is only adapted to carry off the surface water;--these are but a sample of the general state of liverpool, and at the same time very distinct and efficient causes of its excessive mortality. sheffield.--it is now understood that there will be no immediate vacancy for sheffield, and that both mr ward and mr parker will retain their seats. henry damar, esq.--the _dorset chronicle_ publishes a long account of the festivities which took place at milton abbey, in dorsetshire, on the 5th instant, on the occasion of the coming of age of the proprietor, henry damar, esq. proposed public meeting in birmingham.--on monday a deputation waited on the mayor of birmingham, with the requisition requesting him to call a public meeting to petition the queen to dismiss her present ministers. the requisition was signed by nearly one thousand merchants, manufacturers, and shopkeepers of the town. there was not the name of a working man attached to it. the mayor, however, declined calling the meeting, observing, that although he might not act in accordance with the wishes of many most respectable individuals in the town, he had made up his mind not to call the meeting. attendance of the lancashire members of the house of commons in the session of 1843.--the total number of divisions in the house of commons, during the session of 1843, was 220, in which there voted- times. 1. joseph brotherton salford 191 2. dr bowring bolton 153 3. lord stanley n. lancashire 129 4. william sharman crawford rochdale 120 5. thomas greene lancaster 102 6. charles hindley ashton 92 7. sir howard douglas liverpool 88 8. john wilson patten n. lancashire 82 9. john ireland blackburne warrington 75 10. viscount sandon liverpool 69 11. john fielden oldham 61 12. john hornby blackburn 61 13. peter greenal wigan 60 14. thomas milner gibson manchester 56 15. sir george strickland preston 53 16. hon. richard bootle wilbraham s. lancashire 50 17. edward cardwell clitheroe 47 18. william fielden blackburn 47 19. peter ainsworth bolton 34 20. general johnson oldham 32 21. george marton lancaster 31 22. mark philips manchester 26 23. sir peter hesketh fleetwood preston 19 24. richard walker bury 16 25. lord francis egerton s. lancashire 9 26. charles standish wigan 9 destructive fire at halifax.--we regret to learn that a fire broke out early on saturday morning, in the warehouse of messrs james acroyd and son, worsted manufacturers, bowling dyke, near halifax, when the building, together with a large quantity of goods, was entirely destroyed. we understand that messrs acroyd were insured to the extent of six or seven thousand pounds, but that the loss considerably exceeds that amount. chester cheese fair.--at this fair on wednesday last, the first of the season for this year's make, about 200 tons of new cheese were piled for sale. early in the morning several dairies went off briskly, but as the day advanced sales became heavy. prices ranged from 40s. to 50s. per cwt., according to quality. we hear that the make this season has been above an average one. new college, near oxford.--a correspondent states that it is intended to establish at littlemore, near oxford, a college, in which young men holding tractarian views may be trained for missionary labour in connexion with the established church. the right rev. dr coleridge, formerly bishop of barbadoes, will be the principal of the institution. chatham.--a general court-martial was held on wednesday, the 6th inst., in the general court-martial-room, chatham barracks, for the purpose of trying lieutenant j. piper, of the 26th cameronian regiment. the trial lasted four days, terminating on saturday, the 9th inst. the charges alleged ungentlemanly and improper conduct. the prisoner's defence being closed, the court broke up. the sentence of the court will not be known until the evidence has been laid before the commander-in-chief at the horse guards. the prisoner is about 26 years of age. the trial excited the greatest interest throughout the garrison. it is said that there are at present upwards of 2,000 visitors congregated at harrogate; and all the other watering places in the north of england, scarborough, seaton, carew, redcar, tynemouth, shotley bridge, gilsland, as well as the lakes, are teeming with gay and respectable company. ireland. repeal association.--on monday the usual weekly meeting of the repeal association was held at the corn exchange, dublin. the week's "rent" amounted to 735_l._, of which 1_l._ was from mr baldwin, a paper manufacturer of birmingham, who is of opinion that ireland would be of greater benefit to england with a domestic legislature than she was at present. repeal meetings.--a repeal meeting was held on sunday last at loughrea, a town in the county of galway, about ninety miles from dublin. it was attended by mr o'connell, who as it was raining in torrents, addressed the people from under the shelter of an umbrella. amongst other things in his speech, he said,--"believe me, my friends, that if you follow my advice, the day is not far distant when you shall have your parliament restored in ireland. i am working the plan out. i have it in detail. i will have this protective society of 300 sitting before christmas, and i hope to be able to give you, as a new year's gift, a parliament in college green. (cheers.) people of ireland, you deserve it. brave, noble-minded people of ireland, you deserve it. faithful, religious, moral, temperate people of ireland, you deserve to be a nation, and you shall be a nation. (much cheering.) the saxon stranger shall not rule you. ireland shall belong to the irish, and the irish shall have ireland." (hurrah.) there was a dinner in the evening, at which about 400 persons were present. branding of arms in ireland.--government has entered into a contract with mr grubb, the scientific and very able mechanist of the bank of ireland, for the construction of the machine intended to be used in marking the arms under the new law--they are not to be subjected to the operation of punching, still less, as some strangely supposed, to the notion of fire. the letters, or figures, will be marked by cutting; and, so simple and ingenious is the method employed, that the most unskilful workman, even an ordinary person unpractised in any trade, can effect the process with the most perfect ease. four figures and two letters are expected to suffice for designating the county or riding of a county, and the number of the piece; the time occupied in the engraving will be one minute. the expense will be extremely moderate; the cost of each machine being, we understand, only twenty-five guineas, one-half of which, by law, will be defrayed out of the consolidated fund, the other half by the county.--_evening mail._ scene at the phoenix park.--an extraordinary scene took place on saturday, at the viceregal lodge, between the military on duty and a person named thomas campbell, who is, it would appear, insane. thomas campbell, it appears, is a very powerful young man, about thirty years of age, and a native of the north road, drogheda. at the lodge, in the phoenix park, he asked to see the lord lieutenant; but, being armed with a pitchfork and a hammer, he was not considered an eligible visitor, and after a desperate struggle with the guard, whom he kept at bay, he was knocked down and secured by a police constable. the meeting of tuesday of the repeal association, adjourned over from monday, was enlivened by the presence of mr o'connell, without whom all its proceedings would be "stale, flat, and unprofitable." it again adjourned till wednesday; and, on that day, mr o'connell read an address to the people of great britain, setting forth the grievances of the people of ireland. after the reading of this document, which is long, and certainly ably drawn up, the association adjourned till monday. military defences.--before the winter sets in every barrack in ireland will be in a state of defence, fit to hold out against an insurgent assault. in fact, everything will be prepared, excepting the insurrectionary force; and certainly there does not at present appear to be much chance that the strength of the fortifications will be tested. * * * * * repeal demonstration in liverpool.--some days ago public announcements were made that two days' "demonstration" would be made in this town, in favour of the repeal of the union, and that mr daniel o'connell, jun., youngest son of the liberator, and one or two others of inferior note would attend. the meeting took place on tuesday night last, in the amphitheatre, which was crowded, by not less than between 3,000 and 4,000 persons. shortly after the doors were opened it appeared evident that a considerable body of orangemen were dispersed in different parts, from partial sounds of the "kentish fire," and other circumstances. mr o'connell, and the gentlemen accompanying him, arrived about half-past seven, and the chair was taken by mr james lennon, who was described as an "inspector of repeal wardens in liverpool." he delivered a short speech in favour of repeal, during which he was repeatedly interrupted by the orangemen, and some confusion followed.--mr fitzgerald moved the first resolution, which was supported by mr daniel o'connell, jun. his retirement was the signal for the commencement of an uproar which almost defies description. there appeared an evident determination that the proceedings should be stopped; for fights commenced in different parts, many of the benches were torn up, and a sort of attack was made upon the stage by a few orangemen who were in the pit. the police were very active in endeavouring to secure the assailants, several of whom were seriously hurt; and a few of them having been removed from the building, order was eventually restored, and, with a few trifling exceptions, it was preserved to the end of the proceedings. scotland. the working of the measure of the past session, denominated the church of scotland benefices act, will soon be tested, and is now undergoing the ordeal of proof, in consequence of objections lodged by the parishioners of banff, with the presbytery of fordyce, against the presentation, induction, and translation of the rev. george henderson, now incumbent of the church and parish of cullen, to the cure and pastoral charge of the church and parish of banff. the rev. mr grant, formerly parochial minister of banff, ceased to hold his _status_ in the established church of scotland, having signed the famous deed of secession, and voluntarily resigned his living with his brethren of the non-intrusion clergy. a large portion of his congregation left the establishment along with him, and a free church is now in course of being built for their accommodation. the patronage of the vacant benefice is in the gift of the earl of seafield. the rev. mr henderson, of cullen, has accepted the presentation to the parish church of banff. on the day appointed for "moderating on the call," very few names were given in, in favour of the presentee, and the presbytery having fixed a day for receiving objections, a series of reasons and objections was lodged in the hands of that reverend body, and published at length in the _aberdeen herald_, against proceeding with the collation of mr henderson. the objections are set forth under no less than fourteen different heads. "the approaches and manners" of the reverend gentleman are not considered such "as to attach and endear his congregation to him." he is reported to be subject "to an occasional exuberance of animal spirits, and at times to display a liveliness of manner and conversation which would be repugnant to the feelings of a large portion of the congregation of banff." others of the objections assert, that his illustrations in the pulpit do not bear upon his text--that his subjects are incoherent and ill deduced; and the reverend gentleman is also charged with being subject to a natural defect of utterance--a defect which it is said increases as he "extends his voice," which is of a "very harsh and grating description," and renders it difficult to hear or follow what he says in the church of banff, which we are informed "is very large, and peculiarly constructed, with an unusually high pulpit, to suit the high galleries;" and moreover, "the said rev. george henderson is considered to be destitute of a musical ear, which prevents the correct modulation of his voice!" argyllshire election.--the election of a member of parliament for the county of argyll, in the room of alexander campbell, esq., of monzie, who has accepted the chiltern hundreds, took place at inverary on friday week. the lord advocate (mr duncan m'neill), the only candidate in the field, was accompanied to the hustings by a great number of the county gentlemen; and no other candidate having been brought forward, a show of hands was consequently taken, which being perfectly unanimous, he was, of course, declared duly elected.--_glasgow saturday post._ the speaker of the house of commons, mr shaw lefevre, has been on a visit at glenquoich, the shooting quarters of edward ellice, esq., m.p., in this county. the right hon. edward ellice, m.p. for coventry, the baron james de rothschild, and other members of the rothschild family, were also at glenquoich.--_inverness courrier._ wales. the disturbances in wales still continue, though the apprehension of some of the rioters who destroyed the pontardulais gate has had some effect. the following distressing scene is reported in the _times_:-"outrage in south wales.--on the road from llanelly to pontardulais, and within five hundred yards of the latter place, is a turnpike-gate called hendy gate. this gate was kept by an old woman upwards of seventy years of age, who has received frequent notices that if she did not leave the gate, her house should be burnt down. about three o'clock on sunday morning, a party of ruffians set fire to the thatch of the toll-house. the old woman, on being awakened, ran into the road and to a neighbouring cottage within twenty yards of the toll-house, shouting to the people who lived in it, 'for god's sake to come out and help her to put out the fire; there was not much.' the occupier of this cottage, a stout able man, was afraid to go out, and begged the old woman to come into his cottage, which she refused, and went back to try and save some of her furniture. it appears her exclamation had been overheard, for the villains returned and set fire to the thatch again. the old woman then ran across the road, and shouted out, 'she knew them;' when the brutes fired at her, and shot her dead." an inquest was held on the body of the unfortunate woman, and the jury returned the following astounding verdict:--"that the deceased died from the effusion of blood into the chest, which occasioned suffocation, but from what cause is to this jury unknown." meetings of the magistrates, in relation to the turnpike trusts, have been held, and measures taken to mitigate the heaviest tolls. foreign. france. louis philippe has had a remarkable history; but it has been distinguished to an extraordinary degree by its vicissitudes, amongst which we must not forget his involuntary exile, and his residence in this country, where he lived for many years as duke of orleans. a worse man than his father it would be difficult to imagine. he was a vain, ambitious, and cowardly voluptuary, who gratified his personal passions at the expense of his sovereign and his country; but his son was reared in a different school, and to that accident, conjoined with a better nature, he probably owes the high position which he now occupies as a european monarch. misfortune is a stern teacher, and its effects on louis philippe may be exemplified by a little story that was told of him and lord brougham some years ago:--"i am the most independent crowned head in europe," said he, "and the best fitted for my office of all my brethren." the praise might be deserved, but it seemed strange to the _ex_-chancellor that it should come from his own mouth--he, therefore, bowed assent, and muttered some complimentary phrases about his majesty's judgment, firmness, and the like. "pooh, pooh, my lord," he observed, laughing heartily, "i do not mean that--i do not mean that, but that i can--brush my own boots!" this was practical philosophy, and indicated a clear perception of the constitution of modern society, particularly on the part of one who is known to be by no means indifferent to the fortunes of his race. we believe, also, that louis philippe has been happy beyond most men of regal rank in the possession of an admirable woman for a wife, the present queen of the french being, in all respects, a lady of superior intelligence and virtue; properties which are luckily confined to no condition of life, and to no country or creed. she has shared in all her husband's troubles during the last eventful forty years, and now adorns that throne which the exigencies of the times demanded that he should fill if the french monarchy was to be preserved. her attention to her children has been unremitting, and the result is, that high though their position be, a more united household nowhere exists. spain. the ministry has been on the point of dissolution. general serrano, angered at the contempt shown to his denunciations and lists of conspirators, by the home minister, caballero, gave in his resignation. general serrano demanded the dismissal from madrid of more suspected persons. senors olozaga and cortina intervened, however, and made up the quarrel, ordering the _gazette_ to declare that the most perfect harmony reigned in the cabinet. this the _gazette_ did. mr aston has demanded his audience of leave, and quits madrid on the 15th. grenada has blotted the name of martinez de la rosa from its lists of candidates, though he had formerly been elected for that place. m. toreno is expected at madrid. senor olozaga sets out for paris, to try and persuade christina to be patient, for that her presence previous to the elections would rather militate against her party. at madrid the anniversary of the revolution of 1840, which drove queen christina from the regency, was celebrated by a _te deum_, chanted in the church of san isidro, on the 1st, and at which assisted the ayuntamiento and provincial deputation. barcelona has been in open insurrection, and a sanguinary conflict commenced on the evening of the 3rd, which continued with intermissions till the 6th. later intelligence stated that the town still held out. on the 8th the state of things at barcelona was nearly the same. one of the great accusations of mm. prim, olozaga, and the french party, against the regent was, that instead of carrying barcelona and other towns by storm, he fired upon them with muskets and with cannon. generals arbuthnot and prim have pursued precisely the same course, and we see montjuich again throwing bullets upon barcelona, and with all this making no progress in its reduction. accounts from barcelona of the 8th, mention that several mansions were damaged. three cannon shots had traversed the apartments of the british consul. prim's own volunteers of reus had taken part against him, and many of the towns had declared for the central junta. a rural junta of prim's had been surprised at sarria, and several of its members slain. a central junta had been formed at girona. madrid letters of the 5th state that government were about to dismiss a great many superior officers and functionaries opposed to them. the partisans of don francisco have decidedly joined the esparterists. austria and italy. the _siã¨cle_ says that austria was much alarmed at the state of italy. "the necessity which austria finds to defend her italian possessions by arms is highly favourable to the projects of russia against the danubian provinces of the ottoman empire." the _national german gazette_ of the 8th instant states, that the fortifications of verona are being considerably strengthened. the heights surrounding the town are to be crowned with towers _ã  la montalembert_, so that the city will become one of the strongest fortresses in italy. the hungarian infantry, of which the greater part are cantoned in upper italy, are actively employed in the construction of the fortifications. turkey. constantinople, august 23.--petroniewitch and wulchitch have at length consented to leave servia, and are probably at this time in widin, on their way, it is said, to constantinople. the province has been confided to the care of baron lieven and m. vashenko, who are the actual governors. but the most important feature in the question is a note which the ex-prince michael has addressed to the porte. he declares that the election of alexander kara georgewitch was brought about by violence and intimidation, and that he and his ministers are the only faithful servants of the porte, and, consequently, the only persons fit to govern servia. it is generally believed that the russians have been privy to this step, and that it is their intention to put forward michael a second time in opposition to alexander. a daughter was born to the sultan on the 17th. she has been named _jamileh_, or the beautiful. the event has been celebrated by the usual illuminations and rejoicings. the sultan has been the father of nine children, seven of whom, two sons and five daughters, are now living. egypt. it is said that a misunderstanding exists between mehemet pacha and his son ibrahim, relative to the succession to the throne of egypt; mehemet proposing that abbas pacha, his grandson, should succeed after the death of ibrahim, whilst the latter would wish his own son to succeed him. united states. arrival of the "hibernia" at liverpool, on wednesday.--great interest has been excited here for some days past respecting the voyage of the _great western_ and the _hibernia_, the former leaving new york on the 31st ult., and the latter, boston on the 1st. the betting has been in favour of the _hibernia_, and she has again beaten her great rival. on tuesday, at midnight, her lights were seen off the port, and at one o'clock she entered the river, after another rapid passage of nine days from halifax, and eleven from boston. the news by this arrival is from new york to the 31st, boston to the 1st, and halifax to the 3rd; sixteen days later than previously received by the new york packet ship, _liverpool_. the _new york american_, in its summary for the packet, says:--our commercial and money markets continue without sensible change, both abounding in supply without any corresponding demand. the trade of the interior is prosecuted cautiously, and for money in hand. political affairs are exceedingly dull and uninteresting; even the irish repeal speakers are quiet. the progress of the pacification between mexico and texas, and mexico and yucatan, is slow and somewhat uncertain. the president of texas, general houston, has dismissed commodore moore and captain sothorp from the naval service for disobedience of orders. indeed, the texan navy may be said to have been disbanded. the people of galveston thereupon gave moore a public dinner, and burnt their president in effigy! the mexican government has formally complained to the united states minister at mexico, of the inroads of certain citizens of illinois, missouri, and arkansas, into the mexican territory. advices from buenos ayres to the end of june, describe monte video as still holding out; and it was reported in buenos ayres that the british commodore would at length allow commodore brown, the buenos ayrean commander, to prosecute the siege of monte video by sea, in conjunction with oribe by land. a new constitution has been agreed upon by the republic of ecuador, establishing the roman catholic religion as the state religion, "to the _exclusion_ of all other worship," and the bishop of quito, in an address to which the people responded favourably, proposed that "ecclesiastics should be henceforth made sole judges in all questions of faith; and be invested with all the powers of the extinct tribunal of the inquisition!" the bishop then published a "pastoral lecter," to "make known the glad tidings." and yet the people of ecuador, without religious freedom, call their country a free republic! philadelphia.--the president has returned from his country seat to washington, and although some alterations in the cabinet are spoken of, still the results of the august elections, showing that a majority in the united states senate will be whig, have produced a pause in the contemplated changes. indeed, people are beginning to complain, and not without reason, of such frequent changes in important offices. for example, within three years there have been three secretaries of state, three of war, three of the treasury, three of the navy, three attorneys-general, and three postmasters-general. some of them have really not had time to learn their duties, and they have been succeeded by others who knew still less of the duties and responsibilities of office. canada. sir c. metcalfe has returned to the seat of his government at montreal. the emigrants from great britain arrived this season at quebec, up to the 19th ult., were 18,131; same time last year, 38,159. a few days ago, a party of irish labourers, who had received, as they supposed, some offence from a few canadians, at beauharnois, attacked and nearly killed two respectable old inhabitants, who had nothing to do with the affair. another great fire at toronto has burnt about twenty houses; and the methodist meeting at waterloo has been burnt down by some incendiary. the crops in both the canadas are abundant. american coarse cottons are sold there in great quantities, at a lower price than european goods of the same class. * * * * * arrival of the emperor of russia at berlin.--the emperor of russia arrived on the 6th instant at berlin. the disturbances at bologna.--a letter from bologna, september 2, in the _debats_, says:--"notwithstanding the nomination of a military commission, and the display of numerous forces, some armed bands have again appeared, as is reported, in our province. one was commanded by a priest at castel-bolognese (district of ravenna). this state of things does injury to trade and business of every description. the greatest number of depositors have withdrawn their funds from the savings' banks. a circular has been sent round to all the mayors of the province, giving a description of eight persons, for the arrest of each of whom a sum of 300 crowns (1,700f.) is offered." colonies and emigration. emigration during the last seventeen years.--from a return furnished by the emigration board, it appears that the number of emigrants from england and wales, in the seven years from 1825 to 1831, were 103,218, or an average of 14,745 yearly; in the ten years from 1832 to 1841, 429,775, or 42,977 per annum. total number in the last seventeen years, 532,993; or an average for that period of 31,352. but the rate of emigration has greatly increased of late years, as is shown by the fact, that while the emigration of the seven years ending 1831 averaged only 14,745 per annum, that of the last ten years (ending 1841) averaged nearly 43,000 per annum. new south wales.--the monetary and commercial disasters which have afflicted this important colony are most serious, and they are thus alluded to by the colonial press:--"our next mail to england will carry home the tidings of fresh disasters to this once flourishing colony. the fast growing embarrassments of 1841, and the 600 insolvencies of 1842, have been crowned in the first third of the year 1843, by the explosion of the bank of australia, then by the minor explosion of the sydney bank, and, last of all, by the run on the savings bank. these three latter calamities have come in such rapid succession, that before men's minds recovered from the stunning effect of one shock, they were astounded by the sudden burst of another; and we are convinced that at the present moment there is a deeper despondency and a more harrowing anticipation of ruin to the colony than ever existed before since the landing of governor philip, in 1788."--the run upon the savings bank at sydney originated, it is said, from malice against mr george miller, the accountant, whose exertions had been very useful in exposing the mismanagement of the bank of australasia. reports were circulated that the governor had gone suddenly down to the savings bank and demanded a sight of all the bills under discount and mortgages, and that his excellency declared that he would not give three straws for all the securities put together; but this statement regarding his excellency is flatly contradicted. many of the largest holders of land and stock in the colony are said to be so irretrievably embarrassed, by reason chiefly of the high prices at which their investments were made, that their property must go to the hammer without reserve. the present time is, therefore, held out as a favourable opportunity for emigrants, with moderate capital, to make their purchases. it is broadly declared that 500_l._ would go as far now in new south wales, in the purchase of land and live stock, as would 5,000_l._ four or five years ago. australia has been, in some respects, unlucky in its colonization. new south wales has hitherto flourished from its abundant supply of convict labour, at the expense of those higher interests which constitute the true strength and security of a state. western australia was planted with a sound of trumpets and drums, as if another _el dorado_ were expected. but the sudden disaster and discredit into which it fell, linked the name of swan river with associations as obnoxious as those which were once inspired by the south sea or missisippi. south australia, again, planned on principles which are universally recognised as containing the elements of sound and successful colonization, has also proved a failure. one of the newest and most enterprising of our australian settlements, that of port philip has been sharing with sydney in the recent commercial distress and calamity; and though it is already getting over its troubles, it must undergo a painful process before it can lay an unquestioned claim to its title--australia felix. land jobbing; banking facilities at one time freely afforded, and at another suddenly withdrawn; ventures beyond the means of those engaged in them; imprudent speculations, in which useful capital was either rashly risked or hopelessly sunk--these unquestionably have been amongst the causes which have brought on the commercial disasters of new south wales. it is seldom advantageous for an emigrant, newly arrived, to become a proprietor of land in any part of australia, unless his capital be considerable; but the eager desire to become possessed of the soil overcame all prudential considerations; land at port philip was eagerly bought, at prices varying from 12_s._ to 500_l._ in 1840 the influx of moneyed immigrants from england and van diemen's land, to a newly-discovered and extensive territory, produced a land fund exceeding the sum of 300,000_l._, and engagements were entered into by the colonial government, on the faith that the land fund would produce annually a large amount, but in 1841 it fell down to 81,000_l._; and though in 1842 as much as 343_l._ 10_s._ per acre was given for building ground in the town of brisbane, district of moreton bay, it was impossible for this to continue; and even for valuable lands in the neighbourhood of sydney, in the very same year, wholly inadequate prices were obtained. the colonial government became embarrassed by the expenditure exceeding the revenue; and in 1842, sir george gipps, in an official despatch, says, "pecuniary distress, i regret to state, still exists to a very great, and even perhaps an increased, degree in the colony, though it at present shows itself more among the settlers (agriculturists or graziers) than the merchants of sydney. when, however, i consider the vast extent to which persons of the former class are paying interest, at the rate of from 10 to 15 per cent., on borrowed money, i can neither wonder at their embarrassments, nor hope to see an end to them, except by the transfer of a large portion of the property in the colony from the present nominal holders of it to other hands, that is to say, into the hands of their mortgagees or creditors, who, in great part, are resident in england." this official prophecy is now in the act of fulfilment; and when the storm has spent itself, the colony may be prosperous again. cape of good hope.--the want of government protection which is felt by the british resident at the cape of good hope is well illustrated by the following extract from a letter addressed by the writer to his family at home:--"i am sure i shall be able to get on well in this country if the caffres are only prevented from doing mischief, but if they go on in the present way, i shall not be able to keep a horse or an ox, both of which are indispensable to a farmer. now i can never assure myself that when i let my horses go i shall see them again. it is a disgrace to our government that we are not protected. as it is, all our profits may be swept away in one night by the marauders." new zealand.--we understand a box of specie was placed on board the _thomas sparkes_, in charge of the captain, for mr chetham. on the owner opening the box, he discovered to his great surprise that, by some unaccountable process on the voyage, the money--gold, had been turned into one of the baser metals--iron. it is stated that the steward left at plymouth, and the first and second mates whilst the vessel was detained at the cape, but whether they had any agency in the transmogrification of gold into iron remains to be proved.--_new zealand gazette_, feb. 4, 1843. political. the abortive commercial negotiations with spain.--senor sanchez silva, known for his speeches in the cortes, as deputy for cadiz, has published, in an address to his constituents, an account of the negotiations between the spanish and british governments relative to a treaty of commerce. the effect of this publication will be to undeceive the minds of spaniards from the idea that the regent's government was about to sacrifice the interests of spain, or even of catalonia, to england. the terms proposed by the spanish commissioner were, indeed, those rather of hard bargainers than of men eager and anxious for a commercial arrangement. senor silva says that england, in its first proposals, demanded that its cottons should be admitted into spain on paying a duty of 20 per cent., england offering in return to diminish its duties on spanish wines, brandies, and dried fruits. but england, which offered in 1838 to reduce by one-third its duty on french wines, did not make such advantageous offers to spain; and the spanish negotiators demanded that 20 per cent. _ad valorem_ should be the limit of the import duty of spanish wines and brandies into england, as it was to be the limit of the duty on english cottons into spain. this demand nearly broke off the negotiation, when spain made new proposals; these were to admit english cottons at from 20 to 25 per cent. _ad valorem_ duty, if england would admit spanish brandies at 50 per cent. _ad valorem_ duty, sherry wines at 40 per cent., and other wines at 30 per cent., exclusive of the excise. moreover, that tobacco should be prohibited from coming to gibraltar, except what was necessary for the wants of the garrison. the english government, in a note dated last month, declared the spanish proposals inadmissible. if the spanish government did not admit the other articles of english produce, the duty on spanish wines could not be reduced. english cottons were an object of necessity for the spanish people, and came in by contraband; whereas spanish wines were but an article of luxury for the english. senor sanchez silva concludes, that it is quite useless to renew the negotiations, the english note being couched in the terms of an _ultimatum_. correspondence and answers to inquiries. london, september 13, 1843. sir,--i have read your preliminary number and prospectus, and the first number of your new periodical, the economist, and it gives me pleasure to see the appearance of so able an advocate of free trade, the carrying out the principles of which is so necessary for the future welfare and prosperity of the country, and the relief of the distress which is more or less felt in all the different departments of industry. i belong to the class who have their sole dependence in the land, and have no direct interest in trade or manufactures; and feel as strong a wish for the prosperity of agriculture as the duke of buckingham, or any other of the farmer's friends; but i consider the interests of all classes of the community so intimately connected, and so mutually dependent on one another, that no one can rise or prosper upon the ruins of the others. like your northumberland correspondent i am fully convinced of the impolicy and inefficiency of "restrictive corn laws," and of the benefit of "the free-trade system" for the relief of the agricultural, as well as of the manufacturing, the shipping, or any other interest in the country; and i should also be glad if i could in any way assist "in dispelling the errors respecting the corn trade that have done so much harm for the last twenty (eight) years." the intention of the corn law of 1815 was to prevent the price of wheat from falling below 80s. per quarter; and it was the opinion of farmers who were examined on the subject, that less than 80s. or 90s. would not remunerate the grower, and that if the price fell under these rates, the wheat soils would be thrown out of cultivation. prices, however, fell, and though they have fallen to one half, land has not been thrown out of cultivation. various modifications have since been made in the scale of duties, but always with a view to arrest the falling prices in their downward course; but all these legislative attempts have been in vain; and so far as the farmer trusted to them, they have only misled him by holding out expectations that have not been realized. but though the corn laws failed in keeping up the price of corn as high as their framers and supporters wished, they succeeded so far as to enhance the price of this first necessary of life, and make it perhaps 20 or 30 per cent. dearer than it otherwise would have been to all the consumers, even the poorest tradesman or labourer in the country. if the difference which the agriculturists were enabled, by this monopoly, to obtain at the expense of the other classes, had all been pure gain, without any drawback, they must have been in a comparatively flourishing condition; but we find this is not the case, and what is the reason? let us hear sir robert peel's answer to the question. in his speech in parliament on mr villiers's motion, when replying to the accusations that had been made by mr blackstone and other members on his own side of the house, that he had deceived the agriculturists, as the government measures, instead of affording them the protection that was promised, had brought down prices and rendered their situation worse than before, sir robert says, it was not the government measures that had brought down prices and occasioned the agricultural distress, but that this arose from the _condition of the manufacturing districts, and the general distress from bad trade and want of employment, which rendered the people unable to consume_. if this, then, is the true cause of the agricultural distress,--if the corn, sugar, and other monopolies are so injurious to the manufacturing and commercial classes, who are the agriculturists' best, and, indeed, their only customers, as to render them unable to consume, it is not to class legislation that we can look for relief. in order to relieve the agricultural distress there is no other way than to relieve the distress of those on whom they depend for a market for their productions. were the farmer (or rather the landed proprietor) to gain all that the consumer loses by the corn monopoly,--if it were only taking from one, and giving to another--without any national loss; though this of itself would be bad enough,--it is perhaps the smallest part of the loss which the manufacturer sustains; for the same law which hinders him from going to the best and cheapest market to purchase his food, at the same time necessarily excludes him from a market for the produce of his industry; and by diminishing the demand for his labour, lowers his wages or throws him out of employment. but one abuse leads to another. those who are interested in the corn monopoly, or think themselves so, cannot well oppose the sugar monopoly while they require the aid of the west india planters to enable them to obtain this advantage at their country's expense; and so it is with all the other monopolists, they naturally unite together, and it requires their mutual aid and all their combined power and influence to preserve a system which they know stands upon rather an insecure foundation, and if once broken in upon would soon fall to pieces; and thus it is that we are subjected to the sugar monopoly, and though it is manifestly our interest to buy this important necessary of life (as well as every other) in any quarter of the globe where we can find it best and cheapest, we are restricted to a small portion of the earth's surface, and have to pay a third part more than we might obtain the article for without any loss to the revenue. by this narrow-minded system of buying, we deprive ourselves of valuable markets for our manufactures, as you have shown is likely to be the case with the brazils on the expiry of the commercial treaty with that country if the matter is left in the hands of ministers, "and no effort made to avert so great an evil." the agriculturists have to pay directly for this monopoly in common with all the other classes in the addition to the price of the sugar they consume; but the manufacturers suffer the still greater disadvantage of having the market for the produce of their labour narrowed, and thus the agriculturist will also suffer indirectly by their customers being thereby still farther disabled to consume. but these and all other monopolies and restrictions in trade not only lessen the demand for our manufactures abroad, but they diminish the consumption at home, to an extent greater perhaps than we are aware of; for there can be no doubt that the more the consumer has to pay for his bread, sugar, and other articles of food, the less he will have to spare for cottons, woollens, and other manufactured commodities. the demand for his labour is thus lessened both at home and abroad. the weaver of cloth may be unable to obtain a coat even of his own manufacture, however necessary it may be for his health and comfort; he must have food, in the first place, being more indispensibly necessary to his existence,--no doubt he may have to content himself with a less quantity than he could have wished, and have to substitute oatmeal and potatoes, or some other inferior food for wheaten bread and butchers meat; still, it is less in his power to curtail the consumption of agricultural produce than of manufactures, so that the manufacturing classes suffer from the general distress which renders the people unable to consume in a greater degree than the agriculturist. r.t.f. * * * * * to the editor of the economist. darlaston, september 8, 1843. sir,--twelve months ago the editor of the _morning chronicle_ allowed a letter of mine, referring to the distress then prevailing in this town, to appear in that journal; in it i stated that for our annual wake only twenty-four cows had been killed, when but a few years previously ninety-four had been slaughtered on a similar occasion. perhaps you will permit me to state in your columns that this year the festival, in this particular, has afforded as melancholy and unquestionable proof of distress as the last, while it bore other evidence, which though trivial in itself, is not unworthy of notice. last year two theatrical shows visited us, displaying their "red barn" tragedies, and illuminated ghosts, at threepence per head, at which they did well; as also did a tremendous giantess, a monstrously fat boy, and several other "wonderful works of nature:" this year only one show of any description attended, and that, with kings and queens, and clowns, as well dressed and efficient, and ghosts, as white and awe-inspiring as ever paraded before an audience, has reaped but an indifferent harvest at the "low charge of one penny each;" while the swing boats and wood horses, patronized with such glee by the miniature men and women attending and enjoying wakes and fairs, only worked half time. the physical-force majority in the house, and their aiders and abettors, were they to see this, would perhaps laugh at the petty details, but their doing so would not in the least detract from their truth, or render questionable for a moment the deductions i make from them,--that poverty is so wide spread and bitter that the poor are compelled to make a stern sacrifice of innocent amusements; that the parent cannot exercise the holiest affections of his nature, by adding to the pleasures of his lisping little ones; that the landowners' corn law, by its paralyzing influence, is rapidly withering the great mass of the industry of the country into idle, dispiriting pauperism. from inquiries i have made i learn that through the country generally the wakes, and fairs, and races, have presented similar features to those i have described above, so far as money goes. and in face of the distress, of which these things bear glaring witness, the prime minister says "that the distress has been produced by over-production." can sir robert be serious when he talks of "over-production?" if he be, and will condescend to honour me with a visit during his stay at drayton manor, which is only a short drive of sixteen miles from here, i will show him that the opinion is fallacious. he shall dispense with his carriage for a short time, and i will walk him through all the streets of darlaston, wednesbury, willenhall, bilstow, &c., and, forsaking the thoroughfares frequented by the gay and well-to-do, he shall visit the back streets--in which carriage passengers never deign to go--of birmingham, wolverhampton, and walsall, and what he will witness in the course of the short ramble will "change the spirit of his dream." in darlaston, as a sample of what he would see, there are hundreds of men and women whose clothes, made of the coarsest materials, are patched, and threadbare, and valueless; hundreds of houses without anything in them deserving the name of furniture; hundreds of beds without clothing, and hundreds of children whose excuses for clothes are barely sufficient, with every contrivance decent poverty can suggest, to cover the body as civilized society demands. in the towns i have enumerated, in fact, if the least reliance may be placed in newspaper reports, in every town and village in the country the same want prevails to a much greater extent than can be conceived by such as sir robert, "who fare sumptuously every day,"--aye, even to a much greater extent than is generally supposed by the above-want dwellers in large towns whom business may frequently bring in contact with those who toil. with the millions, then, who in this country must be next to naked, without furniture in their houses, without clothes to cover their straw beds, is it not the nonsense of nonsense to talk of "over-production." enable these men to satisfy the wants of themselves and families, enable them to make their homes comfortable, and that alone would find employment for a goodly number, while those so employed would also be enabled to purchase the articles others are engaged in manufacturing. to produce so desirable a result, nothing is wanted but free trade repeal the corn and provision laws, and the shadow of "over production" could not exist: in three months there is not a man in the kingdom who would not have full work. and when we had supplied the physical wants of our population (a greater task than it appears at the first view), we should have introduced from every corner of the world the luxuries which refine civilization; the artisan building himself a house would then make it more comfortable and healthy, with wood floors, carpets, better furniture, &c.; and the master manufacturer erecting a house would have marble stairs and floor in his entrance hall, doors, &c. of mahogany, furniture, of rarer woods, and ornaments of marble, paintings, plate glass, &c.; and when all these things were procured, "over-production" would be still as far behind us as during their acquisition, as we would then work but three days a week instead of six, as with so much labour we should be able to procure the necessaries and luxuries of life. and all nations would be compelled to minister to our real and created wants, for england is the only nation in the world incapable of internally supplying its inhabitants with food, and therefore, under free trade, has the command of the markets of the whole world. then the english merchant going to, say america, to dispose of manufactures need not fear the merchant of france, belgium, germany, &c., he may meet there with similar goods; for the american asking each what he requires for the articles offered, is told by the former, "i will take your surplus corn in exchange, we want every year from six to ten millions of quarters;" and this latter answers, "we have more corn at home of our own growth than we can consume, i must have cash;" the american, preferring barter, will turn on his heel and trade with the englishman; the unsuccessful applicant takes back his goods, or visits the market no more, and confines his future operations to the home supply of his own country, which in a short time, from competition and want of a foreign outlet, fail to realise a remunerating profit; trade is gradually relinquished; the people turn again to the more extensive cultivation of the land, and england obtains another customer. this is no "castle building," if there be the least affinity between the results of great things and small ones. if a grocer want a coat he will have it from the tailor who will take sugar and tea in payment, in preference to patronising one who requires pounds shillings and pence, and the owners of land in all countries will take right good care that they derive some sort of revenue from their possessions. i say, i think my premises are no "castle buildings;" neither do i think i am indulging in aerial erections when i predict that, under free trade, england, with her capital, and energy, and enterprise, would shortly become the world's granary, profitably supplying from her accumulated stores the deficiencies resulting from bad harvests, or other casualties of her continental neighbours. your obedient servant, g.w.g. * * * * * _we are much obliged to j. livesay, of preston, for his suggestion, which, however, if he compare the_ economist _with other weekly papers he will perceive to be unnecessary. we presume we are indebted to mr livesay for copies forwarded of his excellent little paper the_ struggle. * * * * * r.b., bristol.--_from the great press of room last week we were obliged to omit everything that did not appear of very pressing haste. in the preliminary number we have used no statistics but such as we have derived from official sources, and we shall always be glad to give the authority on which any statistical statement is made. the statement of the quantity of sugar exported from java and madeira, page 10 of the preliminary number, will be found in part viii, 1838, page 408, of the_ tables of population, revenue, commerce, &c., _presented by the board of trade to both houses of parliament, from 1826 to 1837;--and the quantities, from 1837 to 1841, are derived from the dutch official accounts._ h.h., s---court, london.--_the returns showing the quantity of flax imported up to the 5th of august, viz., 774,659 cwts., are official, but do not distinguish the ports from which it was shipped. the latest year for which such distinction has been made to this time is for the year 1841; for which, or any preceding year back to 1832, we shall be glad to furnish the particulars: for example, in 1840 the imports of flax and tow were--from_ cwts. russia 870,401 denmark 1,094 prussia 135,590 germany 8,105 holland 113,108 belgium 80,748 france 43,295 gibraltar 19 italy and the italian islands 746 the morea 3 turkey 107 egypt 12 united states 1 guernsey, &c. 11 -------- total 1,253,240 c.d.f.----, near rochdale.--_the question connected with the new customs amendment bill has engaged our best attention, but its investigation has raised two or three very nice points of international law, on which we are now taking the best opinion which can be obtained, and before our next number we shall be able to give a reply as satisfactory as can possibly be obtained from any quarter on this important but very nice question. we have now before us the whole of the particulars of the treaties in question, but we wish to make our reply valuable by giving the best legal construction on some disputable points. this, however, is only another of those daily evidences which we have of the absurdity and inconvenience of a great commercial country like this attempting to regulate its laws and transactions by treaties, which, however convenient they may be when made, may, by the ordinary course of events, be rapidly changed._ postscript. london, _saturday morning, september 16, 1843_. stock exchange, half-past eleven o'clock. there is little or no variation in english stock: mexican, which left off yesterday at 35-5/8 to 7/8, is now 33-3/4 to 34. brazilian, which left at 73 to 75, is now 74 to 76. in other foreign stocks there is no alteration worth notice. liverpool, friday evening, september 15, 1843. an active demand has been constantly kept up all the week, and a large business has been done daily. so far, however, it has been freely met by the holders; and the speculators and spinners have had an abundant choice of all qualities. in american descriptions there is but little change in prices; the tendency, has been and still is in favour of holders; and it has been thought necessary to raise the quotations of "fair" uplands and mobile to 4-7/8d.; but there is so little actual change, that for the most part, the quotations remain as before. brazils, egyptian, and long stapled generally, have been more in demand, and may be considered 1/8d. higher. sea islands also within the fortnight are 1/2d. higher, making an advance in the ordinary to fair qualities from the very lowest point of 1-1/2d. to 2d. per lb. a considerable part of the speculative business of this week has been prompted by the accounts from the united states, brought by the _hibernia_ and _great western_, the tenor of which is to confirm the previous impression as to short crops. 19,800 american, 100 egyptian, and 300 surat have been taken on speculation; and 1,000 american, 300 pernam, and 200 surat for export. the following is the statistical review of our cotton market:- taken for consumption: for export: from 1st jan. to 15th sept. 1842. 1843. 1842. 1843. 794,500 bales. 946,500 bls. 66,500 bls. 65,900 bls. whole import: 1842. 1843. 1,024,141 bls. 1,401,278 bls. computed stock. average weekly consumption. 15th sept. 1st jan. to 15th sept. 1842. 1843. 1842. 1843. 593,000 bls. 834,000 bls. 21,556 bls. 25,689 bls. for sugar there is rather more inquiry, at steady prices.--coffee; the sales of plantation trivial without change of price.--indigo, price firm at the advance of 3d. to 4d., established at public sale yesterday.--tea; the market remains rather firm, and a moderate business has been done at previous rates. in other articles of produce a fair amount of business has been done, without any particular features to remark. grain.--there has been rather more demand for old wheat, and prices for this and all other articles in the trade are supported. duty has been paid on nearly the whole of the bonded stock, and the rate is now on the advance. * * * * * the papers of this morning do not contain any intelligence of the slightest novelty or interest. her majesty and prince albert are enjoying themselves at ostend in the society of their august relatives, the king and queen of the belgians. to-day (saturday) the royal party go to bruges; on monday to brussels; on tuesday to antwerp; and on wednesday return to england. barcelona is still in a state of insurrection; and though madrid is tranquil, the state of spain, as the _times_ remarks, is one of "simple confusion." the malta correspondent of the _morning chronicle_ says that a report had been current at bombay that it was the intention to order the next steamer for the overland mail to keep her direct course, in spite of the monsoon. the monsoon had, no doubt, driven her back. wales continues in a distracted state, and acts of incendiarism are common. the extraordinary verdict given by the inquest jury on the body of the unfortunate old woman who was shot, is the subject of general remark, as strikingly evincing the terrorism which prevails. there is even talk of the necessity of putting the country under martial law! the very remarkable meeting held by messrs cobden and bright, at oxford, on wednesday last, is the theme of general conversation in society. it is, indeed, a very striking evidence of the progress of free-trade principles amongst the agriculturists. the _leeds mercury_ of this morning, and other provincial organs of public opinion, in the great seats of our commerce and manufactures, all speak in cheerful terms of the decidly-improving prospects of trade. the latest from the american press on free trade--aug. 24th. the corn-law controversy.--a friend has placed in our hands numbers of the tracts which the corn-law reformers of england circulate among the people. they are about the size and length of the religious tracts of this country, and are put up in an envelope, which is stamped with neat and appropriate devices. these little publications comprise essays on all the topics involved in the corn-law controversy, sometimes in the form of dialogues, sometimes of tales, and sometimes of extracts from famous books and speeches. the arguments are arranged so as to be easily comprehended by the meanest capacities. the friend to whom we are indebted for these is well informed on the subject, and says that a more advanced state of opinion prevails among the people of england, in relation to the operation of tariffs, than in this nation generally so much more enlightened. it is a singular spectacle which is thus presented to the eyes of the civilized world. while the tendency of opinion, under an aristocratic monarchy, is towards the loosening of the restraints under which the labour of the people has long suffered, a large and powerful party in a nation, whose theory of government is nearly a century in advance of the world, is clamouring for their continuance and confirmation. monarchical england is struggling to break the chains that an unwise legislation has forged for the limbs of its trade; but democratic america is urged to put on the fetters which older but less liberal nations are throwing off. the nations of europe are seeking to extend their commercial relations, to expand the sphere of their mutual intercourse, to rivet the market for the various products of their soil and skill, while the "model republic" of the new world is urged to stick to the silly and odious policy of a semi-barbarous age. we look upon the attempt which is making in great britain to procure a revision of the tariff laws, as one of the most important political movements of the age. it is a reform that contemplates benefits, whose effects would not be confined to any single nation, or any period of time. should it be successful, it would be the beginning of a grand and universal scheme of commercial emancipation. let england--that nation so extensive in her relations, and so powerful in her influences--let england adopt a more liberal policy, and it would remove the only obstacles now in the way of a complete freedom of industry throughout the globe. it is the apparent unwillingness of nations to reciprocate the advantages of mutual trade, that has kept back this desirable reform so long. the standing argument of the friends of exclusiveness--their defence under all assaults, their shelter in every emergency--has been that one nation cannot pursue a free system until all others do, or, in other words, that restriction is to be met by restriction. it is a flimsy pretence, but such as it is, has answered the purposes of those who have used it, for many centuries. the practice of confining trade by the invisible, but potent chains of law, has been a curse wherever it has prevailed. in england, more dependent than other nations on the extent of its commercial intercourse, it may be said to have operated as a scourge. the most terrible inflictions of natural evil, storms, famine, and pestilence, have not produced an equal amount of suffering. indeed, it has combined the characteristics of the worst of those evils. it has devastated, like the storm, the busy hives of industry; it has exhausted, like famine, the life and vital principle of trade; and, like the pestilence, it has "walked in the darkness and wasted at noon-day." when we read of thousands of miserable wretches, in all the cities and towns of a great nation, huddled together like so many swine in a pen; in rags, squalor, and want; without work, bread, or hope; dragging out from day to day, by begging, or the petty artifices of theft, an existence which is worthless and a burden; and when, at the same time, we see a system of laws, that has carefully drawn a band of iron around every mode of human exertion; which with lynx-eyed and omniscient vigilance, has dragged every product of industry from its retreat to become the subject of a tax, can we fail in ascribing the effect to its cause, or suppress the utterance of our indignation at a policy so heartless and destructive? yet, this is the very policy that a certain class of politicians in this country would have us imitate. misled by the selfish and paltry arguments of british statesmen, but unawed by the terrible experience of the british people, they would fasten upon us a system whose only recommendation, in its best form, is that it enriches a few, at the cost of the lives and happiness of many. they would assist a constrictor in wrapping his folds around us, until our industry shall be completely crushed. * * * * * st olave's church.--the rebuilding of this church in the early part of the last century cost the parishioners a less sum than the organ. the old church having fallen down, the new one (that recently destroyed by fire) was erected by raising an annuity of 700_l_., and the granter died after receiving the first half year's payment of 350_l_. the organ was the most ancient instrument in the metropolis. free-trade movements. messrs cobden and bright at oxford.--important meeting of freeholders and farmers of that county. as we stated last week, announcing the intention, mr cobden and mr bright visited oxford on wednesday, for the purpose of addressing the freeholders and farmers of the county on the subject of the corn laws. very considerable excitement had prevailed in the city and the surrounding districts in consequence of the proposed visit of mr cobden, but it does not appear that the landowners on the present occasion, through the medium of the farmers' clubs and agricultural associations, thought fit to get up an organised opposition, similar to that at colchester, or interfere to prevent their tenants from attending, as at reading. the consequence was a very large number of farmers were present at the meeting, although it is well known that the harvest is not in such a state of forwardness as to allow them to absent themselves from their ordinary occupations without considerable inconvenience. it is a circumstance worthy of notice, and strongly indicative of the present state of public feeling upon the subject, that in a purely agricultural district, at a county meeting regularly convened by the high sheriff, the whole of the county members being present, two of whom spoke in favour of protection, supported by many influential men of their own party, no person ventured to propose a resolution in favour of the present corn law, and that even the resolution for a low fixed duty made by two of the most popular men and largest landed proprietors in oxfordshire, lord camoys and mr langston, was supported by only three or four individuals out of a meeting of nearly 3,000 persons. early in the morning, a protectionist champion presented himself, not in the guise either of a freeholder or farmer of the county, but in the person of a good-humoured, though somewhat eccentric printer, named sparkhall, who had come from the celebrated _locale_ of john gilpin--cheapside, and who having armed himself with a large blue bag fitted with elaborate treatises upon the corn laws, and among other pamphlets a recent number of _punch_, forthwith travelled to oxford, and by the kind permission of the meeting was permitted to essay a speech, about what nobody could divine, and in a manner truly original. it is, however, due to the monopolists of oxfordshire to state that they did not accredit their volunteer champion, and even went so far as to request that he would "bottle up" his eloquence for some future opportunity. at two o'clock, the hour appointed for the proceedings to commence, the county hall, which is capable of containing 1,800 persons, was nearly filled. mr cobden and mr bright, who had been dining at the farmers' ordinary, held at the roebuck hotel, arrived shortly after two, and were accompanied to the place of meeting by a large number of influential farmers and leading agriculturists, who had met the honourable members at the market table. they at once proceeded to the gallery, where, among others at this time, were lord camoys, of stonor hall, oxon; the three members for the county, lord norreys, mr harcourt, and mr henley; mr langston, m.p. for the city of oxford; mr thomas robinson, banker; mr charles cottrell dormer, mr j.s. browning, mr w. dry, mr w. parker, captain matcham, rev. dr godwin, rev. w. slatter, mr richard goddard, mr h. venables, messrs grubb, sadler, towle, weaving, harvey, &c. on the motion of lord cambys, seconded by mr langston, m.p., mr samuel cooper, of henley-on-thames, under-sheriff for the county, was, in the absence of the high sheriff, called to the chair. the chairman said he regretted very much that the high sheriff was prevented from attending the meeting, which had been convened in consequence of a requisition presented to the sheriff by several freeholders of the county. having read the requisition, he introduced mr cobden, who proceeded for some time to address the meeting on the fallacy of the present corn law as a protection to the farmer, amid frequent cries for adjournment, in consequence of the crowded state of the hall, and mr sadler having intimated that several hundred persons were waiting at the castle green, at which place it had been generally expected the meeting would ultimately be held, moved its adjournment to that spot, which was immediately agreed to. several waggons had been brought to the green, for the purpose of forming a temporary platform, and the meeting being again formed, mr cobden resumed, and, in his usual powerful manner, explained the influence of the corn law upon the tenant, farmer, and farm-labourer, urging the necessity of free trade as the only remedy for agricultural as well as manufacturing distress. the honourable member was loudly cheered during the delivery of his address, which evidently made a deep impression on the large proportion of his auditory. mr sparkhall then came forward. mr cobden having kindly interceded to obtain him a hearing, and having duly arranged his books and papers, he at once commanded the serious attention of the meeting, by stating broadly as the proposition he was about to prove--that the repeal of the corn laws would plunge the nation into such a state of depression as must ultimately terminate in a national bankruptcy. after quoting from the honourable and reverend baptist noel, mr gregg, and other passages, the relevancy of which to his proposition no one could discover, he bewildered himself in a calculation, and gladly availed himself of a slight interruption to make his bow and retire. lord camoys next addressed the meeting. he said mr cobden came among them either as a friend or an enemy. if he came as a friend, it was the duty of all to receive him as such; but if as an enemy, then it behoved the farmers of oxfordshire to meet him boldly, and expose the fallacy of his arguments. for himself he (lord camoys) believed mr cobden came as a friend. he was not one of those who were afraid of the anti-corn-law league; but he was afraid of that class who designated themselves the farmers' friends. he thought if they were to give the anti-corn-law league 50,000_l_. a year for fifty years, it would never do half the mischief to agriculture that the farmers' friends themselves had done. (hear, hear.) it was this impression that had induced him to sign the requisition that had been laid before him, for he was anxious that the farmers of oxfordshire should have the benefit of any information that could be given to them on the subject. there were three courses open for discussion. the first was the sliding scale (cries of "no, no"); the second a low fixed duty; and the third, a total and immediate repeal of the corn law. (hear, hear.) he believed the sliding scale was already on its last legs; indeed, it was only defended by a few country gentlemen and fortunate speculators, who had by a lucky chance contrived to realise large fortunes. he was himself for a low fixed duty, and mr cobden advocated free trade. there was not so much difference, after all, between them; but he considered that to apply the principles of free trade to england, would be to apply the principles of common sense to a deranged country, suffering under the pressure of an enormous debt. he thought the english farmer should be placed on a level with the continental corn-grower; but he did not think the mere expense of transit would have the effect of securing this as argued by mr. cobden. with this view he should propose to the meeting the following resolution:--"that the agricultural interest being the paramount interest in this country, to depress that interest would be injurious to the entire community; that suddenly to adopt free trade in corn must produce that effect, and that, therefore, it is the opinion of this meeting that a moderate fixed duty upon the importation of foreign grain is the one best adapted to the present position of the agricultural interest and the welfare of the country." this resolution was seconded by mr langston, m.p., but this gentleman gave way for mr bright, who, upon presenting himself, was received with load cheering. in an eloquent address he clearly demonstrated that the only way in which the corn laws could benefit the farmer was by making food dearer, which could only be done by making it more scarce. that the advantage of such high prices invariably went to the landlord in the shape of rent, in consequence of the immense competition for farms, arising from the increase in the agricultural population, and the difficulty of providing for them in commerce and manufactures, owing to the depressed condition to which they had been reduced by the operation of the corn laws. high prices could only be obtained by the farmer from the prosperity of his customers. in reply to the resolution of lord camoys, the honourable gentleman stated, that with regard to agriculture being the paramount interest of the country, there could be no doubt in every country there must be land for the people to live on, and so far it was the paramount interest; but he denied that anything like half the population of england were engaged in agricultural pursuits. the agricultural interest would not be depressed, nor would the community be injured by free trade. he would put it to the meeting whether they would have a low duty or no duty at all. (loud cries of "no duty.") a fixed duty of 6s. would raise the price that amount, and the whole would go into the pockets of the landlord. the honourable gentleman concluded his address amid loud cheers. lord norreys next spoke in favour of the existing corn laws, attributing the distress under which all classes at present laboured to the over-production of the manufacturers. mr langston, m.p., having replied to his lordship, mr henley, m.p., addressed the meeting at some length, in favour of the present restrictive duties on the importation corn. the honourable member concluded by observing that he had attended the meeting because it had been convened by the high sheriff; and he thanked them for the patience with which they had listened to his observations, though neither he nor his colleagues considered it to be properly designated as a farmers' meeting, the majority present being composed of other classes. mr cobden briefly replied; and mr towle (a tenant farmer) moved the following amendment, "that in the opinion of this meeting the principles of free trade are in accordance with the laws of nature and conducive to the welfare of mankind, and that all laws which interfere with the free intercourse of nations, under the pretence of protection to the agricultural, colonial, or manufacturing interests, ought to be forthwith abolished." the motion having been seconded, was put, and declared to be carried, with only three dissentients. mr henley then proposed, and mr cobden seconded, a vote of thanks to the chairman, who briefly acknowledged the compliment, and three cheers having been given for free trade the meeting separated, having lasted nearly five hours. * * * * * public dinner to r. walker, esq., m.p., bury.--on wednesday week a public dinner was given, in the free-trade pavilion, paradise street, bury, by the electors of bury, to the above-named gentleman, for his constant advocacy of liberal principles in the house of commons. the meeting, though called to do honour to the worthy representative of bury, was emphatically a gathering of the friends of free trade, mr bright, dr bowring, mr brotherton, &c., being present. dr bowring's visit to his constituents.--dr bowring arrived in bolton, on his annual visit, on thursday week. in the course of the afternoon he called upon several of the leading reformers and free-traders of the borough; and in the evening, according to public announcement, he attended at the temperance hall, little bolton, to address the inhabitants generally. the doors of the hall were opened at seven o'clock, and hundreds immediately flocked in. at half-past seven, the hall was crowded to excess in every part. on dr bowring's entrance, he was greeted with loud cheers. the chief portion of the proceedings consisted in the speech of the learned and honourable member, who, as might be expected, dwelt with great power on the question of questions--free trade. we have only room for the following eloquent passage: "the more i see of england, the prouder i am to recognise her superiority--not alone in arms--about that i care little, but in manufacturing arts, the peaceful arts, which really reflect glory on her people. (cheers.) give us fair play and no favour, and we need not fear the strength of the whole world. (hear.) let us start in an honest rivalry--let us get rid of the drawbacks and impediments which are in the way of our progress, and sure i am that the virtues, the energies, the industry, the adventurous spirit of the manufacturers and merchants of england, which have planted their language in every climate and in every region, would make them known as benefactors through the wide world. they are recognised by the black man as giving him many sources of enjoyment which he had not before; by the red man as having reached his fields and forests, and brought to him in his daily life enjoyments of which his ancestors had no notion; by all tribes and tongues throughout the wide expanse of the earth, as the allies of improvement, and the promoters of happiness. sure i am that england--emancipated england--the labourers--the artisans of england, may do more for the honour and reputation of our country than was ever done by all the nelsons and wellingtons of the day. (loud cheers.) i was struck very much, the other day, by the remark of one of the wisest and best men of our times, from the other side of the atlantic, who said, 'i am not dazzled by the great names which i see recorded in high places; i am not attracted by the statues which are raised to the men whom you call illustrious, but what _does_ strike me, what _does_ delight me, what _does_ fascinate me, is to trace the working man of england to his home; to see him there labouring at his loom unnoticed and unknown, toiling before the sun rises, nor ceasing to toil when the sun has descended beneath the mountain. it is _that_ man, the missionary of peace, who forms the true link of alliance between nation and nation, making all men of one kindred and of one blood,--that man upon whose brow the sweat is falling,--that man whose hands are hardened by labour,--that is the man of whom england has a right to be proud--(hear)--that is the man whom the world ought to recognise as its benefactor.' (cheers.) and, gentlemen, in such sentiments i cordially agree, and the time will come when the names of men who are called illustrious, at whose feet we have been rolling out torrents of wealth, whom we have been crowning with dazzling honours--those men will pass away into the realms of forgetfulness, while the poor and industrious labourer, who has been through the world a herald and apostle of good, will be respected and honoured, and upon him future times will look as the real patriot, the real philanthropist, the real honour of his country and of his countrymen." the proceedings were closed by the unanimous thanks of the meeting being given to dr bowring. free trade.--we are glad to learn, from a correspondence in the _liverpool albion_, that w. brown, esq., the head of the eminent house of brown, shipley, and co., of liverpool, has declared his adherence to the cause of perfect freedom of trade, contributing, at the same time, 50_l._ to the funds of the liverpool anti-monopoly association. corn trade of france.--the _moniteur_ publishes the return of the corn trade in france during the month of july, from which it appears that the imports were--wheat, 45,896 metrical quintels; other grain, 23,389; and flour, 613. the exports--wheat, 14,318; other grain, 11,506; and flour, 2,435. the quantities lying in the government bonding stores on the first of august were--wheat, 28,405 metrical quintals; other grain, 9,378; and flour, 11,051. anti-corn-law meeting at hampstead.--the opponents of the corn laws resident at hampstead assembled on tuesday night, in crowded meeting, at the temperance hall of that locality, to hear mr sidney smith deliver an address on the evils of the corn laws. the meeting was the first of the kind since the formation of the new association, and there were several of the respectable inhabitants of the neighbourhood present. mr smith entered at length into the whole question of the monopolies from which the people of this country suffer. he showed, conclusively, and by a reference to facts and comparisons with other countries, that "protective" duties were injurious to the best interests of the community, as they were productive of abridgment of the people's comfort, and of taxation on everything that they could see or touch. he illustrated the advantages that would arise from free trade, by a reference to the great increase of consumption of the article of coffee since the reduction of the duty of half a crown on the pound weight to ninepence; the consumption at that period (1824) having been but eight millions of pounds weight, while at present, it was twenty-eight millions. the learned gentleman, who spoke for upwards of two hours, concluded amid loud cheers. three cheers which were proposed for the charter proved a decided failure; while, on the other hand, three were proposed for a repeal of the corn laws, which were responded to by nearly the whole of the crowded meeting. mr ewart and his constituents.--william ewart, esq., the indefatigable member for the dumfries district of burghs, is at present paying his respects to his constituents, after the recess of what has been to him a laborious session of parliament, however little may have been effected during its course by the government and the legislature. on thursday evening he addressed a large meeting in this town. on friday he visited lochmaben, and on saturday sanquhar, and addressed the inhabitants of both these burghs.--_dumfries courier_. miscellanies of trade. state of trade.--owing to the continued absence of the overland mail, the demand for manufactured goods, and especially for shirtings, has been limited; but, as stocks are low, prices remain tolerably steady. for yarn the demand continues good, and prices very firm, but the spinners are so generally engaged, that no great amount of business has been done.--_manchester guardian_ of wednesday. commercial intercourse between england and the united states.--the circumstances of america are such as to require, for the furtherance of its own interests, a large and extended commercial relationship with england. there is nothing wanting but a movement on our part for the speedy establishment of an unbounded trade. both countries are so situated that they need never become rivals, provided they consent to co-operate with each other. it is because they have not been permitted hitherto so to do that we now hear of an embryo manufacturing system in america. we have already built lowell in new england, and pittsburg in western pennsylvania; and will yet, unless we change our system, drive the enterprising republican to efforts which may be more generally and more permanently successful.--_morning chronicle_. travelling between england and france.--the number of persons who passed from england to france, by boulogne, in the week from 1st to 7th september inclusive, was 2,409, and by calais, 838. it appears that the opening of the southern and eastern railway as far as folkestone has increased the number of travellers between england and france by nearly one-half. the number in august, 1842, was 7,436, while during the past month it has been no less than 10,579, showing an increase of 3,143. steam v. water.--owing to the birmingham and gloucester railway company having reduced their charge for all kinds of goods to 6s. per ton between gloucester and cheltenham; most of the carriers in this city will be compelled to avail themselves of this mode of conveyance, it being impossible for them to compete with the railway company. the consequence will be that some thirty or forty boats will speedily be "laid up in ordinary," to the sorrow of three or four times the number of boatmen, who will of course be thrown out of employ.--_worcester chronicle_. the new tariff.--"the imports of foreign beasts since monday last (one week) have been confined to twenty-five into london by the _batavier_ steamer from rotterdam." (london markets report, september 11.) can any clever master of fractions calculate the effect of this importation on the smithfield market, and the benefit thence accruing to the citizens of london as a set-off to the payment of their income-tax? improvement of trade--rochdale.--the piece market has been uncommonly brisk to-day, and all the goods on hand have been cleared off. at present all the workmen are in full employment, though at very low wages; but a few markets of this kind will have a tendency to get up wages. the ready sale of goods has given a buoyancy to the wool market, and the dealers in the raw material have not been so eager to sell at former prices. state of trade--paisley.--so far as ample employment to all engaged in the staple manufactures of the town is concerned, trade still continues favourable for the workman, but the manufacturers generally complain that, for the season, sales are late of commencing, and many of them are already rather slackening their operations to keep their stocks down. the unexpected procrastination in the commencement of the fall trade is reasonably accounted for by the fineness of the weather. "a merchant of twenty-five years' standing, and an old subscriber," calls attention to the unusual state of things now so long existing in the money market, by the fall in the rate of interest to 1-3/4 and 2 per cent. upon the first class commercial bills. he states that a friend of his has lately lent 100,000_l._ at 1-1/2 to 2 per cent., being the highest rate he could obtain. this condition of the money market he attributes to the large amount of paper money in circulation, compared with the demands of commerce. our correspondent favours us with some figures, illustrative of his views, from november, 1841, to the present month, taken from the _gazette_ returns, and observing that there has been a serious fall in the value of merchandise equal to one-fifth or one-sixth, with some exceptions during the last year and a half, he accounts by the juxtaposition of his figures, denoting the amount of paper in circulation, and this assumed fall in the price of merchandise for the present anomalous condition of the money market, and for the apparent worthlessness of capital. we cannot agree, however, with our correspondent to the full extent, because the very low prices of commodities, with a _minimum_ rate of interest for money, proves that there is no fictitious or inflated excess of paper money. the anomalous state of the money market proceeds, we believe, from a redundancy, not of mere paper, but of capital which cannot find investment, superinduced by stagnation of trade, and the want of commercial enterprise, occasioned by the restrictive nature of our duties on imports.--_morning chronicle._ the accounts from the united states mention that the greatest activity prevails among the manufacturers in their purchases of the raw material for the year's consumption. police. extraordinary charge.--_captain, william tune_, the commander of a steam packet called the _city of boulogne_, the property of the new commercial steam-packet company, on monday appeared at the mansion house to answer the complaint of the directors of that company, by whom he was charged with being privy to the abstraction of four packages, each containing gold, checks on bankers, bank-notes, and bills of exchange, which had been previously booked at the company's office in boulogne, and paid for according to the rates agreed upon by the company, and which, with others, had been entrusted to his care. after evidence had been adduced, mr wire requested that captain tune should be remanded for a week, and stated that the directors being anxious that he should receive as much accommodation as might be consistent with the respectability of his character and the nature of the difficulty in which he was at present involved, were desirous that bail should be taken for his appearance on the next day of investigation.--alderman gibbs: i shall require two respectable securities for 500_l._ each, and captain tune to be bound himself in the sum of 1,000_l._--the captain was then remanded for a week. a curious fact came out on the inquiry as to the value of each package. they were all, it appeared, entered and paid for as containing a sum of money much inferior to what each package really contained. matrimonial advertisements.--an unlucky man, who, in order to get a family by a deceased wife taken care of, had been induced to marry a worthless drunken woman, through the medium of a matrimonial advertisement, applied at union hall for advice, but, of course, nothing could be done for him. awkward predicament.--a man advanced in years, named _david simms_, who was claimed by two wives, and nearly torn in pieces by them, was committed from union hall, on a charge of bigamy. * * * * * singular detection of an extensive swindler.--a man named _william cairnes_, alias _thomas sissons_, with a host of other _aliases_, was placed before the magistrates at the borough court, manchester, charged with one of the most singular attempts at fraud we ever remember to have heard. the prisoner, who was a respectable-looking old man, gave his name _william carnes_. under the pretence of giving employment to a labouring man, on getting specimens of his handwriting, he got him to write his name across two blank bills, in the form of acceptance. he has been remanded for further inquiry. embezzlement.--_theodore grumbrecht_, a confidential clerk in the extensive india house of messrs huth and co., was arrested on board the _bucephalus_, bound for new zealand, whither he was going. the charge against him is extensive embezzlement. accidents, occurrences, and offences. singular accident.--an accident occurred at outwell on the 29th ult. a child, three years old, went to play in a donkey cart, in which a rope coiled and knotted had been placed to dry. the rope was doubled the greater part of the way; and, being knotted, was full of steps or meshes; in one of these the child got his head and unfortunately falling at the same time from the cart, which was propped up as if the donkey were between the shafts, the rope caught on the hook in front of the cart, and held the child suspended a short distance from the ground. he was found quite dead. an inquest was held on the body of the child, and the jury returned a verdict of accidental death.--_bury post._ affray with soldiers.--on tuesday the greatest excitement prevailed throughout westminster in consequence of repeated outbreaks between the military and the lower, or perhaps we might with propriety say the lowest order of inhabitants of this populous district. the tumult having continued during the whole of the day it was anticipated, and justly, that when night came on, it would increase rather than diminish, although during the whole of the afternoon various parties of the military were seen searching for and escorting to the barracks, the delinquent and disorderly soldiers engaged in the affray. fires in the metropolis.--on saturday night the greater portion of the extensive premises of messrs cleaseley, floor-cloth manufacturers, grove street, walworth common, were destroyed by fire.--on monday morning the shop of mr crawcour, a tobacconist, surrey place, old kent road, was burnt to the ground.--on tuesday morning, about a quarter to four o'clock, a city police constable discovered fire in the lower part of the extensive premises, nearly rebuilt, of the religious tract society, paternoster row, through some unslacked lime having been left by the workmen among some timber the previous night. to the vigilance of the officer may justly be attributed the saving of much valuable property from destruction. fire at bristol.--the old castle tavern, bristol, was burned on thursday, the 7th inst., and the landlord, who was an invalid, perished in the flames. the fire was caused by the carelessness of a niece, in attendance on the invalid, who set fire to the bed furniture accidentally with a candle. the little girl lydia groves, who so courageously attempted to extinguish the bed curtains, has sunk under the shock she then experienced. sporting intelligence. doncaster meeting.--this much-talked-of meeting commenced on monday, sept. 11, at two o'clock precisely. the regulations, in every minor detail, answered the purposes for which they were respectively intended; particularly the one affecting those persons who have proved themselves "defaulters," as such were refused admission to the stands, the ring, the betting-rooms, and every other place under the jurisdiction of of the stewards. many improvements and alterations have been made, and no expense spared towards securing the comfort of all. the different stands have undergone a complete renovation, and present a very striking and handsome appearance, very unlike their neglected condition in former years. on sunday evening a tremendous storm came on, accompanied with hail and extraordinarily vivid lightning; in fact, it was truly awful to witness--the rain literally pouring down in torrents, and the flashes of lightning following each other in rapid succession. happily the storm was not of very long continuance, commencing about half-past six, and terminating about seven o'clock; but, during that short period, it was sufficient nearly to drown the "unfortunates," who were travelling outside per coach from sheffield, york, leeds, &c., and who, on alighting, presented a most wretched appearance. the morning of monday was dark and lowering, but towards eleven or twelve o'clock the weather cleared up and remained very fine. the course, notwithstanding the rain, was in the very best possible order, the attendance large, beyond any former example on the first day, punctuality as to the time of starting was very strictly observed, and the sport was first rate. the great event of these races is the st leger stakes, which on this occasion were run for in three minutes and twenty seconds. mr bowes's "cotherstone," the winner of the derby, was the favourite, and was confidently expected to gain the st leger. but it only came in second, being beaten by mr wrather's nutwith, and only gained by a neck on lord chesterfield's prizefighter, which was third. woolwich garrison races.--the officers of the garrison at woolwich having resolved on testing the value and quality of their horses by races, the first day's sport came off on wednesday; and owing to the great number of spectators, of whom there were upwards of 10,000, on the ground, and the fineness of the weather, the scene was more animated than on any former occasion. a spacious booth was erected on the ground and was well filled throughout the day. upwards of 100 carriages, containing families, were drawn up along both sides of the course, and hundreds of gentlemen on horseback occupied various parts of the common where the races took place; presenting altogether an enlivening and interesting spectacle. the band of the royal artillery attended in front of the booth, and played, with very little intermission, some of the finest airs from one o'clock to seven o'clock, p.m. on thursday, the second day, a slight shower of rain, about one o'clock, p.m. prevented the races from being so well attended by spectators as they were yesterdy, yet the attendance was numerous in the afternoon, and great interest existed amongst the officers of the garrison, and many sporting gentlemen, to witness the result. agricultural varieties. the best home market.--the _norwich mercury_ of last saturday contains no less than seventy advertisements relating to the sale of farming stock; and a majority of these are cases in which the tenant of the farm on which a sale is announced is described as one "quitting the occupation," or "retiring from business." we should like to know how many of those parties have managed to amass a fortune, or even to acquire a moderate competency, under that protective system which, as they have always been taught to believe, was devised for their especial benefit. from the ominous newspaper paragraphs, announcing the liberality of landlords to their tenants, which have lately become so numerous, we rather suspect that most of those farmers who are retiring from business do so to avoid greater evils. it is worthy of remark, however, that, amidst all this agricultural depression, which has now lasted some twelve months at least, the "home trade"--which the advocates of the corn law always describe as entirely dependent on the farmers obtaining high prices for their grain--is in a healthier state than it has been for several years past. the _standard_ lately stated, on the authority of a mr spackman, that the united kingdom contained 20,500,000 individuals dependent on agriculture, and only 6,500,000 individuals dependent on manufactures; and, as we have frequently seen the same absurd statement brought forward at farmers' clubs as "agricultural statistics," it is possible enough that many persons may have been led to believe it. those who do so, however, would find it rather difficult to explain, under such a division of the population, the fact, that during four or five years of high prices, which the duke of buckingham designated "agricultural prosperity," the 20,500,000 souls should have been unable to create a brisk demand for manufactures; while a single year of cheap provisions has done so much to improve trade, and relieve the pressure from the shoulders of the labouring classes. who that looks at these two facts can have the slightest doubt in his mind as to what it is that makes the best home market?--_manchester guardian._ curious agricultural experiment.--the following novel and interesting experiment has lately been successfully made by mr a. palmer, of cheam, surrey:--in july, 1842, he put one grain of wheat in a common garden-pot. in august the same was divided into four plants, which in three weeks were again divided into twelve plants. in september these twelve plants were divided into thirty-two, which in november were divided into fifty plants, and then placed in open ground. in july, 1843, twelve of the plants failed, but the remaining thirty-eight were healthy. on the 19th august they were cut down, and counted 1,972 stems, with an average of fifty grains to a stem, giving an increase of 98,600. now, if this be a practicable measure of planting wheat, it follows that most of the grain now used for seed may be saved, and will infinitely more than cover the extra expense of sowing, as the wheat plants can be raised by the labourer in his garden, his wife and children being employed in dividing and transplanting them. one of the stems was rather more than six feet long, and stout in proportion. cultivation of waste lands.--employment of labourers.--a paper was recently laid before the council of the royal agricultural society of england, by lord portman, which we think deserves a much greater degree of attention than we believe it has yet received, in that it shows to what a considerable extent waste lands may, without any very heavy expenditure of money, be brought into profitable cultivation, and at the same time, under a well-regulated system of spade husbandry, yield abundant employment to agricultural labourers and their families. the following is the substance of the document referred to:--his lordship, who has large estates in dorsetshire, found that a tract of land, called shepherd's corner, about 200 acres in extent, was wholly unproductive, yielding a nominal rent of 2s. 6d. per acre. about fifteen years ago his lordship resolved to make an experiment with this land. he accordingly gave directions to his steward that it should be laid out in six divisions, representing so many small farms, in the cultivation of which such of the labourers as could not obtain full work from the neighbouring farmers were occasionally employed. for the three first years there were no returns, the ground having been merely broken up with the spade, and the surface soil exposed. in subsequent years this land was sown chiefly with turnips, fed off by sheep, until it was found in sufficient heart for the reception of grass and corn seeds, the crops from which were at first scanty and indifferent, but sufficient, however, to pay for cultivation. at the expiration of fifteen years the expenditure upon the whole, inclusive of allowance for rent, at the original rate of 2s. 6d. per acre, together with all charges on account of tithes and taxes, amounted to a little more than 10,000_l._; the returns by crops sold and sheep fed exceeding that sum by 88_l._, independent of the crops now in the ground, which will come to the landlord in september. this may appear to be an inadequate return for the fifteen years' experiment; but, as lord portman justly observes, "as a farmer he has lost nothing, whilst as landlord he is a considerable gainer, the land being now fully equal to any of the neighbouring farms." two objects, both of great importance, have thus been obtained. these 200 acres have been fertilized, which would otherwise have been of no present or prospective value; and in the process of cultivation employment has, during that long period, been provided for several hundreds of labourers who, but for that resource, must, at some seasons at least, have become a burden to the parish. our library table. free trade, reciprocity, and colonization. _the budget; a series of letters, published at intervals, addressed to lord john russell, sir robert peel, lord stanley, and lord eliot, on import duties, commercial reform, colonization, and the condition of england._ by r. torrens, esq., f.r.s. _the edinburgh review._ no. clvii. article, free trade and retaliation. _the westminster review._ no. lxxviii. article, colonel torrens on free trade. our readers are not, in general, unacquainted with the public character and literary reputation of colonel torrens. he is, we believe, a self-taught political economist; and, like colonel thompson, early achieved distinction in a branch of moral science not considered particularly akin to military pursuits. but in his recent labours, he has very seriously damaged his reputation, by attempting to bolster up a policy whose influence on the welfare of the nation has been of the most deadly and pernicious kind; and we therefore advert to the letters called the _budget_, more with the view of showing that they have been analysed, and their mischievous principles thoroughly refuted, than with any intention of entering at large into the discussion. it was, we believe, in the autumn of 1841, immediately following the accession of the present government to office, that colonel torrens commenced the publication of his letters called the _budget_. the two first were addressed to lord john russell, and professed to show that the commercial propositions of the late whig government would, if adopted, have altered the value of money, increased the pressure of taxation, and aggravated the distress of the people. the third letter was on commercial reform, addressed to sir robert peel. the remainder of the series were on colonization and taxation, on the expediency of adopting differential duties, &c.; concluding with one on the condition of england, and on the means of removing the causes of distress; which was afterwards followed by a _postscript_, in which the author, addressing sir robert peel, said- "i would beg to submit to your consideration what appears to me to amount to a mathematical demonstration, that a reduction of the duties upon foreign production, unaccompanied by a corresponding mitigation of the duties imposed by foreign countries upon british goods, would cause a further decline of prices, of profits, and of wages, and would render it doubtful whether the taxes could be collected, and faith with the public credit or maintained." opinions like these, coming from a man considered to be of some little authority in economical science, were certainly important. the time was serious--the crisis really alarming. a new government had come into power, and it was thought and expected were about to effect great changes. even the _quarterly review_, alarmed by the aspect of affairs, came round, in the winter of 1841, to advocate commercial reform. at this critical period colonel torrens stepped forward. what his motives were we do not know; though we know that men neither harsh nor uncharitable, and with some opportunities of judging, considered that colonel torrens, soured by political disappointments and personal feeling, had permitted himself to be biassed by hopes of patronage from the new government. the pamphlets composing the _budget_ only appeared at intervals: but so far as they were then published, did attract considerable attention; the mere supporters of pure monopoly did not, of course, understand them: but that body who may be appropriately enough termed _middle men_, were not unaware of the value of such support as that afforded by colonel torrens, in staring off changes which seemed inevitable. sir robert peel, too, was then in the very midst of his lesson-taking; and as he deeply studied mr hume's import duties report, before he brought out his new tariff, we need not consider it to be very discreditable to him, that he read the pamphlets of colonel torrens before he tried his diplomatic commercial policy. at all events, one of the chief arguments with which sir robert peel and mr gladstone justified the great omissions of the new tariff, was the fact that the government was engaged in negotiations with other countries in order to obtain treaties of reciprocity. the utter failure of these efforts sir robert peel has repeatedly confessed, accompanied with a sigh over the inutility of the attempt; and the last time that he adverted, in the house of commons, to the authority of colonel torrens (he was citing the _postscript_ to the _letter_ addressed to himself) it was with the kind of manner which indicated want of confidence in the guide who had misled him. whether or no, however, he had relied on that authority in his negotiations with other countries during his futile attempts to obtain commercial treaties, this much is certain enough, that colonel torrens did what he could to strengthen the old notion, that it was of no use for us to enlarge our markets unless other countries did so also at the same time and in the same way; and in condemning all reduction of import duties that was not based on "reciprocity," he certainly added all the weight of his authority to prop up a system whose injurious influence has affected the very vitality of our social state, and whose overthrow will yet require no small amount of moral force to effect. we are far indeed, from undervaluing treaties of reciprocity; but to make them a _sine qua non_ in the policy of a country whose condition is that of an overflowing population, a deficient supply of the first necessaries of life, and a contracted market for its artificial productions, is an error of the first magnitude. therefore, though not attaching primary importance to the _budget_ of colonel torrens, or believing that it could ultimately have any great effect in retarding the effectual settlement of the great question, it was not without some feeling of satisfaction that we perused the able article in the last _edinburgh review_, in which his delusions are completely set at rest. we quite agree with the writer (mr senior, it is said) that "if the _budget_ were to remain unanswered, it would be proclaimed in all the strongholds of monopoly to which british literature penetrates--in parliament, in congress, in the _algemeine zeitung_, and in the councils of the zollverein--that adam smith and the modern economists had been refuted by colonel torrens; that free trade is good only where reciprocity is perfect; that a nation can augment its wealth by restraining a trade that was previously free; can protect itself against such conduct on the part of its neighbours only by retaliation: and if it neglect this retaliatory policy, that it will be punished for its liberality by a progressive decrease of prices, of wages, and of profits, and an increase of taxation." the identity of colonel torrens's propositions with the exploded "mercantile theory" is very satisfactorily established by the edinburgh reviewer; and it is certainly humbling to see a man of his ability coming forward to revive doctrines which had well nigh gone down to oblivion. on the subject where colonel torrens conceives himself strongest, the distribution of the precious metals, the reviewer has given a very able reply, though some points are left for future amplification and discussion; and, as a whole, if there be any young political economist whose head the _budget_ has puzzled, the article in the _edinburgh review_ will be found a very sufficient antidote. with this, and another able article on the same subject in the last _westminster review_ (in fact, two articles of the _westminster_ relate to the subject--one is on colonel torrens, the other on free trade and colonization), we may very safely leave the _budget_ to the oblivion into which it has sunk; and, meantime, the novice will not go far astray who adheres to the "golden rule" of political economy, propounded by the london merchants in 1820, and re-echoed by sir robert peel in 1842: "the maxim of buying in the cheapest market, and selling in the dearest, which regulates every merchant in his individual dealings, is strictly applicable as the best rule for every nation. as a matter of mere diplomacy, it may sometimes answer to hold out the removal of particular prohibitions or high duties as depending on corresponding concessions; but it does not follow that we should maintain our restrictions where the desired concessions cannot be obtained; for our restrictions would not be the less prejudicial to our capital and industry, because other governments persisted in preserving impolitic regulations." miscellanea. captain james clarke ross and the antarctic expedition. all the newspapers have quoted an account from the _literary gazette_ of the antarctic expedition, under the command of captain james ross. it was composed of two vessels, the _erebus_, captain ross, and the _terror_, captain crozier, and left england on the 29th of september, 1839. during the outward voyage to australia, scientific observation was daily and sedulously attended to; experiments were made on the temperature and specific gravity of the sea; geological and geographical investigations were made at all available points, especially at kerguelen's land; and both here, as well as during the expedition, magnetic observation and experiment formed a specific subject of attention. this was a main object during 1840, the expedition remaining at the auckland islands for this purpose; and it was not till the 1st of january, 1841, that it entered the antarctic circle. their subsequent adventures, deeply interesting as they are from the perils which they encountered, and the spirit and perseverance with which they were met, come hardly within our sphere to report. after an absence of four years, the expedition, as mentioned in last week's economist, has returned to england, and the acquisitions to natural history, geology, geography, but above all towards the elucidation of the grand mystery of terrestrial magnetism, raise this voyage to a pre-eminent rank among the greatest achievements of british courage, intelligence, and enterprise. religious worship.--church property.--the following parliamentary return has just been printed, entitled, "a return of the amount applied by parliament during each year since 1800, in aid of the religious worship of the church of england, of the church of scotland, of the church of rome, and of the protestant dissenters in england, scotland, and ireland, respectively, whether by way of augmentation of the income of the ministers of each religious persuasion, or for the erection and endowment of churches and chapels, or for any other purposes connected with the religious instruction of each such section of the population of the united kingdom, with a summary of the whole amount applied during the above period in aid of the religions worship of each of the above classes." the abstract of sums paid to the established church shows that the total was 5,207,546_l._ which is divided in the following manner:--church of england, 2,935,646_l._; church of scotland, 522,082_l._; church of ireland, 1,749,818_l._ church of rome.--the total sum paid to the church of rome is set forth at 365,607_l._ 1s. 2d. comprised in the following two items;--augmentation of incomes (including maynooth college), 362,893_l._ 8s. 1d.; erection and repairs of chapels, 2,113_l._ 13s. 1d. protestant dissenters.--the total sum is 1,019,647_l._ 13s. 11d. in england and ireland. the recapitulation shows the following three sums:--established church, 5,207,546_l._; church of rome, 365,607_l._; and protestant dissenters, 1,019,647_l._ the sums were advanced from 1800 to 1842. imperishable bread.--on wednesday, in the mayor's private room, at the town hall, liverpool, a box of bread was opened which was packed at rio janeiro nearly two years ago, and proved as sound, sweet, and in all respects as good, as on the day when it was enclosed. this bread is manufactured of a mixture in certain proportions of rice, meal, and wheat flour. st george's chapel, windsor.--the extensive alterations and embellishments which have been in progress since the early part of may last (from which period the chapel has been closed), at an outlay of several thousands of pounds, throughout the interior of this sacred edifice, having been brought to a close, it was reopened for divine service on thursday. father mathew.--father mathew, after finishing his labours in the metropolis, went to norwich, where he met the bishop, who, in an earnest and eloquent speech, in st andrew's hall, on thursday week, introduced the reverend gentleman to that locality, and very warmly eulogized his conduct. mr gurney, the well-known norwich banker, occupied the chair on this occasion, and seconded the bishop in his patronage and approbation of the great temperance movement. after remaining at norwich two or three days, father mathew started for ireland, taking birmingham and liverpool in his way. importation of fruit from antwerp.--on thursday, the steam-packet _antwerpen_, captain jackson, arrived at the st katherine's steam packet wharf, after an expeditious passage, from antwerp. the continental orchards continue to supply our fruit markets with large supplies, the _antwerpen_ having brought 4,000 packages, or nearly 2,800 bushels of pears, apples, plums, and filberts. advices were received by the _antwerpen_ that another extensive importation of fruit from antwerp may be expected at the st katherine's steam packet wharf this day (saturday), by the steam-packet _princess victoria_, capt. pierce. lieut. holman, the blind traveller.--this celebrated tourist and writer took his departure from malta, on the 3rd of september, for naples. he will afterwards proceed to the roman states, and then to trieste. during the few days of his residence in this island the greatest hospitality has been shown him. the veteran traveller had the honour of dining with his excellency the governor, and with admiral sir e. owen. amidst all the vicissitudes of his perilous life and increasing age, he still maintains the same unabated thirst for travel, and his mental and bodily faculties appear to grow in activity and strength in the inverse ratio of his declining life and honoured grey hairs. railway from worcester to cardiff.--it is proposed, by means of this new line, to connect the population of the north of england and the midland counties with the districts of south wales and the south of ireland. it will commence at the taff vale railway, pass through wales, cross the severn, and unite with the birmingham and gloucester railway at worcester. the cost will be 1,500,000_l._ french opinions on spanish events.--the french journals are loud in condemning the poor barcelonese for the very same acts which drew down the applause of these same journals a week ago. the following remarks from the _national_ render any of our own useless:--"it must be admitted that the french journals appreciate in a strange way the deplorable events in spain. some soldiers revolt at madrid, without going any length of insurrection, or at all endangering the government. general narvaez comes, and without consulting government or any one else, shoots eight non-commissioned officers. straight our ministerial journals exclaim, what an act of vigour! vigour if you will; but where is the humanity, the wisdom, the justice? then behold barcelona, of which the people some weeks ago rose against the established and constitutional government. what heroes! exclaimed the french ministerial papers. now they do the same thing, rising against a provisional and extra-constitutional government. what brigands! exclaim the ministerial writers. a few weeks back a spanish government defended itself with violence against those who attacked it. regiments fired rounds of musketry, and the cannons of forts bombarded the rebellious towns. the french ministerialists forthwith pronounced the spanish regent as a malefactor, and devoted him to the execration of the civilized world. now, another government, without the same right, follows precisely the same course as the one overthrown. it defends itself, fires, bombards, and pours forth grape from behind walls upon insurgent bands in the street. this same conduct is glorified as firm, as legitimate, as what not. the system of political morality changes, it seems, with men and with seasons. what was infamy in espartero and zurbano, is heroism and glory in narvaez and prim. what is more infamous than all this is the press, that thus displays itself in the light of a moral weathercock, shifting round to every wind." statistics of the metropolitan police.--by a return just issued in compliance with an order of the house of commons relative to the city and metropolitan police force, it appears that there are 20 superintendents in the metropolitan division, receiving from 200_l._ to 600_l._ per annum; 110 inspectors, whose salaries vary from 80_l._ to 200_l._ per annum; 465 sergeants, with incomes ranging from 60_l._ to 80_l._ per annum; and 3,790 constables, receiving from 44_l._ to 81_l._ per annum, including clothing and 40 pounds of coal weekly throughout the year. the amount paid on this account during the past year, including 3,620_l._ for superannuation and retiring allowances to officers and constables late of bow-street horse patrol, and thames police, amounted to 295,754_l._ in this is likewise included a sum of 9,721_l._ received from theatres, fairs, and races. the number of district surgeons is 60, and the amount paid for books, &c., is 757_l._ the total rate received during the past year from the various wards in the city of london and its liberties, for the maintenance of the city police force, is put down at 41,714_l._, and the expenditure at 41,315_l._, the gross pay, irrespective of other charges to the force, amounting to 29,800_l._ loss of the united states steam frigate "missouri," at gibraltar, by fire.--the superb american steam frigate _missouri_, which was conveying the hon. caleb cushing, american minister at china, to alexandra, whilst at anchor in gibraltar bay, on the 26th ult., was entirely consumed by fire. the fire broke out in the night, and raged with such determined fury as to baffle all the efforts of the crew, as well as that of the assistance sent from her majesty's ship _malabar_, and from the garrison. the magazines were flooded soon after the commencement of the fire; and, although a great many shells burst, yet, very fortunately, no accident happened to any of the crew. this splendid steamer was 2,600 tons and 600 horse power, and is said to have cost 600,000 dollars. the alleged arrest of the murderer of mr dadd.--the following are the remarks of _galignani's messenger_ on the report in the english papers that dadd was arrested at fontainbleau:--"the above statement has been partially rumoured in town for the last two days, but not in a shape to warrant our publishing it in the _messenger_. the police have been everywhere active in their researches for the fugitive; and we perceive, by the _courrier de lyons_, that, on thursday night, all the hotels in that city were visited by their agents, in pursuit of two englishmen, one of them supposed to be the unfortunate lunatic. these individuals had, however, quitted the town on their way to geneva, previously to the visit of the police." the cartoons.--we understand that several of the prize cartoons, and a selection of some of the most interesting of the works of the unsuccessful competitors, have been removed from westminster hall to the gallery of the pantechnicon, belgrave square, for further exhibition. mackerel.--the halifax papers state that the coast of nova scotia is now visited by mackerel and herrings in larger quantities than ever were known at this season. in the straits of canso the people are taking them with seines, a circumstance without a parralel for the last 30 years. the _journal des chemins de fer_ says:--"an inventor announces that he has found a composition which will reduce to a mere trifle the price of rails for railroads. he replaces the iron by a combination of kaolin clay (that used for making pottery and china) with a certain metallic substance, which gives a body so hard as to wear out iron, without being injured by it in turn." commerce and commercial markets. domestic. friday night.--we are still without the arrival of the indian mail, nor has any explanation of its detention transpired, except that which we mentioned last week. no serious apprehension exists for its safety, as similar detentions, of even much greater duration, have been experienced in the arrival of the september mail in former years, as a consequence of the monsoon. in manchester, during the week, the market has been somewhat flatter in goods suited for the eastern markets, in consequence of merchants being anxious to receive their advices by the indian mail before extending their transactions materially at present prices. in the yorkshire woollen markets a fair trade continues to be done; and in bradford a very active demand has arisen for the goods peculiar to that neighbourhood. in the scotch seats of manufactures, both woollen and cotton, the trade has considerably improved, especially in the demand for tartans of all kinds, in which there is a very active and brisk trade. in the iron districts, the trade continues without change since our last: most of the works are full of orders, at low prices. in the coal districts, in northumberland and durham, trade is without any improvement whatever, and this trade, as well as their shipping, is in the most depressed condition. _indigo._--the transactions in this article have not been on a more extensive scale in our market than last week, but a good demand continues for the home trade, and occasionally a small advance upon the last july rates is paid on such sorts suitable for that branch, but there is almost no demand for export, the consumption of the article in foreign countries being this year unusually slack. the shipments to russia, since the opening of the season, amount to only 2,209 chests, against 3,439 chests during the same time last year. a public sale was held yesterday, in liverpool, of about 400 chests of east india, and 120 serons of caracas. of the former about 100 chests were withdrawn by the poprietors, but the remainder, together with the serons, sold briskly for the home trade, at prices about 3d. to 4d. per lb. higher than the previous nominal value, and rather above that of the london market. there are now 6,070 chests declared for the quarterly sale on the 10th of october; a great portion of it consists of good shipping sorts. it is supposed that several thousand chests more will be declared upon arrival of the indian mail, now due. _cochineal._--only two small public sales were held this week, together of 97 serons. the first consisted of 30 serons mexican, mostly silver, which sold at prices from 2d. to 3d. per lb. higher than those of last week. the lowest price for ordinary foxy silver was 4s. 4d. per lb. the second sale was held at higher prices still, in consequence of which the whole quantity was bought in. _cotton._--the purchases at liverpool, for this week, will again reach the large quantity of about 40,000 bales, of which a considerable proportion is on speculation. prices have been extremely firm, without any decided advance, however, there not being much importance attached, or faith given, to the statements that the american crop has suffered, which have been received by the halifax and new york steamers, up to 1st inst. from the latter place. in this market, business by private contract is again trifling. at public sales there have been offered 714 bales american, and 3,796 bales surat; the former were held considerably above the value, and only 30 bales good fair were sold at 4-3/4d. in bond. of the surat about 2,300 bales found buyers, from 2-7/8d. to 3-1/8d. for middling, to 3-3/8d. to 3-1/2d. for fair; a few lots superior went at 3-5/8d. for good fair, and 4d. per lb. for good. the prices paid show an advance of 1/8d. to 1/4d. a lb. upon the last public sales of 24th august, and sustain the previous market rates, though the highest advance was conceded reluctantly, and not in many instances; there are buyers for low-priced cotton of every description, but there is little of it offering. _sugar._--the purchases for home consumption have been upon a limited scale, and prices barely maintained. the same remark applies to foreign sugar. only one cargo of porto rico sugar has been sold afloat, for a near port, at 18s., with conditions favourable to the buyer. at public sale 630 chests bahia, and 120 chests, and 240 barrels pernambuco, were almost entirely bought in at extreme rates: since when only about 170 chests of the brown bahia have been placed at an average of 17s. 6d., and with 50 chests of the lowest white at 21s. to 21s. 6d.; by private contract 300 chests old yellow havannah, of good quality, sold at 20s. _coffee._--the home demand remains good; good and fine jamaica fetched previous rates; a parcel of ceylon, of somewhat better quality than the common run, sold at 51s. to 52s., which is rather dearer: very good singapore java sold at 36s. to 40s. in foreign coffee a cargo of st domingo has been sold afloat for flanders at 26s. 6d. two others being held above that price without finding a buyer, they have been sent on unsold. on the spot the transactions in coffee for export by private contract are quite insignificant, and of 650 bags old st domingo _via_ cape, only a small proportion sold at 28s. to 30s. for pale bold good ordinary. _rice._--about 4,000 bags of bengal offered at public sale sold from 10s. to 11s. per cwt., establishing a decline of 3d. per cwt. _saltpetre._--the market is sparingly supplied, and importers do not sell except upon extreme rates, which have been paid for about 3,000 bags, viz. from 23s. 6d. for very ordinary, to 25s. 6d. for good middling. _cassia lignea._--for small parcels offering in public sale full prices have been paid; fine by private contract as high as 70s. _pimento._--fair quality has been sold 2-1/2d. to 2-5/8d., which is rather dearer. _tallow._--the demand on the spot is not improved and the price unaltered, 41s. 9d. to 42s.; for forward delivery there is rather more disposition to purchase. _rum._--the demand is very limited, except for the finest qualities of jamaica, and common are rather cheaper. foreign. the accounts received from the united states up to the first of this month by the _hibernia_ and _great western_ are favourable as regards commerce. the manufactories in the union are reported to be in a state of considerable prosperity, notwithstanding which the demand for imports was increasing. the reports about the cotton crops were various; it was admitted that the weather had latterly been favourable. large arrivals of wheat and flour were expected in the ports from the west. the commercial reports received this week from the continent of europe do not show any great activity in foreign markets, though the prices of colonial produce are well maintained. sugar was somewhat more in demand both at antwerp and hamburg. in coffee there was rather less doing at both places. * * * * * prices current, sept. 16, 1843. ------------------------------------------+---------- english funds. | prices | this day. ------------------------------------------+---------- india stock | 266 3 per cent. red | shut 3 per cent. consols money | 94-3/4 3-1/2 per cent. annuity, 1818 | - 3-1/2 per cent. red. | shut new 3-1/2 per cent. annuity | 102 long annuities | shut annuities, terminable july, 1859 | - india bonds 3 per cent. | 69s pm exchequer bills 1-3/4d. | 69s pm 3 per cent. consols for account | 91-1/8 bank stock for account | shut ------------------------------------------+---------- ------------------------------------------+---------- foreign funds. | prices | this day. ------------------------------------------+---------- belgium bonds | 105 brazilian bonds | 74-1/2 chilian bonds, 6 per cent. | - columbian bonds, 6 per cent. 1824 | 25-3/8 dutch, 5 per cent. | - ditto, 2-1/2 per cent. exchange 12 guil. | 52-1/8 mexican bonds, 1837, 5 per cent. | 34 peruvian bonds, 6 per cent. | - portuguese 5 per cent. converted | 44-1/4 ditto 3 per cent. ditto | - russian bonds, 1822, 5 per cent. | 114-1/2 spanish bonds, 5 per cent. 1821 | 18-1/8 1822 | - ditto, deferred | 11 ditto, passive | 4-1/8 ------------------------------------------+----------corn markets. _(from messrs gillies and horne's circular.)_ corn exchange, monday, sept. 11.--the weather continued most beautiful here until yesterday, when we had some heavy thunder showers, and to-day is gloomy, damp and close. the wind, what little there is of it, is north. the arrivals during last week were moderate except of foreign wheat and barley, of which of course there is yet some quantity to arrive. the new english wheat coming soft in hand, is slow sale at 1s. to 2s. reduction--free foreign finds buyers for mixing at last week's currency. barley is dull sale at last week's rates. oats are 6d. to 1s. lower. some new irish have appeared of fine quality. there is no change in beans and peas. flour is the same as last week. ----------------------------------------------+------------ british. | per qr. | wheat, essex, kent, suffolk, white | 59s to 61s ---lothian, fife, angus, do. | 52s to 57s ---inverness, murray, &c. | 52s to 57s ---essex, kent, suffolk, red | 54s to 57s ---cambridge, lincoln, red | 54s to 57s barley, english malting, and chevalier | - - ---distiller's, english & scotch | - - ---coarse, for grinding, &c. | 28s to 30s oats, northumberland & berwick | 21s to 23s ---lothian, fife, angus | 21s to 23s ---murray, ross | 21s to 23s ---aberdeen and banff | 21s to 23s ---caithness | 21s to 23s ---cambridge, lincoln, &c. | 20s to 23s ---irish | 17s to 19s ---english, black | 18s to 21s ---irish " | 17s to 21s ---potato, scotch | 23s to 26s --- " irish | 19s to 22s ---poland, lincoln, &c. | 21s to 24s beans, ticks | 30s to 31s ---harrow | 31s to 34s ---small | 32s to 34s peas, white | 36s to 38s ---boilers | - - flour, town made households | 50s to 53s ---norfolk and suffolk | 40s to 42s ----------------------------------------------+------------ ----------------------------------------------+------------ foreign and colonial. | per qr. | wheat, white, spanish, tuscan | 52s to 59s ---high mixed danzig | 58s to 61s ---mixed do. | 52s to 58s ---rostock, new | 57s to 60s ---red hamburg | 52s to 55s ---polish odessa | 48s to 52s ---hard | - - ---egyptian | 32s to 37s barley, malting, &c. | - - ---distiller's, &c. | 28s - ---grinding, &c. | 28s to 29s oats, brew, &c. | 21s to - ---polands, &c. | 22s to - ---feed, &c. | 18s to - ---do, dried, riga, &c. | - 21s rye, dried | - - ---undried | - - beans, horse | 30s to 34s ---mediterranean | 26s to 29s peas, white | 34s to - ---yellow | - 35s flour, french, per 280 lbs. nett weight | - - ---american, per bar. 196 lbs. nett weight | - - ---danzig, &c. do. do. | - - ---canada, do. do. | 29s to 29s ---sour, do. do. | - - ----------------------------------------------+------------corn exchange, friday, sept. 15.--the weather threatened to be stormy yesterday, the barometer fell, and we had some heavy drops of rain, but it has since cleared up, and to-day is 10 degrees warmer and beautifully clear, with the wind south east. in ireland and scotland there was a good deal of rain on sunday and monday, which (we understand) stopped the harvest work for the time, but we hope by this time they have it fine again. the new english wheat comes to hand softer and lighter than at first; as usual after being stacked, the yield is much complained of, besides that many of the stacks got so soaked by the heavy rains of the 21st and 23rd of august, that the condition of the wheat is sadly spoiled. the arrivals are moderate this week, except of irish oats, several small parcels of which are of the new crop; there is also a small parcel of new scotch barley in fine condition, and new scotch oats, also good. almost all the wheat has been entered at the 14s. duty; we believe it is over 300,000 qrs. new english wheat is dull sale: foreign, on the other hand, is more inquired for, and not to be purchased in any quantity except at 1s. advance. barley is saleable in retail at monday's prices. oats are again 6d. cheaper than on monday, except for very fine samples. the averages lead us to suppose that on the 21st instant the duty on foreign wheat will rise to 16s. per qr.; on barley it will remain 6s.; on oats 6s.; on rye it will rise to 9s. 6d.; on beans it will remain 10s. 6d.; and on peas, 9s. 6d. london averages. for the week ending september 12. -------------------------------------------------------------------- wheat. barley. oats. rye. beans. peas. -----------+----------+-------------+----------+----------+--------- 4.113 qrs. | 345 qrs. | 25,600 qrs. | 50 qrs. | 147 qrs. | 132 qrs. 51s. 6d. | 32s. 2d. | 18s. 9d. | 30s. 2d. | 30s. 2d. | 42s. 1d. -----------+----------+-------------+----------+----------+---------imperial averages. --------------------+--------+---------+--------+--------+--------+------- | wheat. | barley. | oats. | rye. | beans. | peas. --------------------+--------+---------+--------+--------+--------+-------weeks ending | s. d. | s. d. | s. d. | s. d. | s. d. | s. d. aug. 10th | 60 9 | 32 4 | 21 5 | 37 1 | 31 9 | 31 4 -17th | 61 2 | 32 11 | 21 9 | 38 7 | 32 1 | 33 7 -24th | 59 9 | 33 11 | 21 5 | 37 1 | 32 6 | 34 9 -31st | 56 8 | 32 11 | 20 7 | 31 8 | 31 10 | 33 9 sept. 7th | 54 2 | 31 11 | 20 5 | 31 1 | 32 4 | 32 1 -14th | 53 0 | 31 11 | 19 7 | 31 3 | 31 9 | 33 8 +--------+---------+--------+--------+--------+-------aggregate of six | | | | | | weeks | 57 7 | 32 8 | 20 10 | 34 6 | 32 0 | 33 8 --------------------+--------+---------+--------+--------+--------+-------duties till sept. | | | | | | 20th inclu. | 15 0 | 6 0 | 6 0 | 8 6 | 10 6 | 9 6 on grain from b. | | | | | | possession out | | | | | | of europe | 2 0 | 0 6 | 2 0 | 0 6 | 1 6 | 1 0 --------------------+--------+---------+--------+--------+--------+-------flour--foreign, 9s. 0d. per 196lbs.--british possession, 1s. 2d. ditto. price of sugar. the average price of brown or muscovado sugar for the week ending september 12, 1843, is 34s. 1-3/4d. per cwt., exclusive of the duties of customs paid or payable thereon on the importation thereof into great britain. smithfield market. monday.--there was a considerable and beneficial improvement in trade to-day for everything, but not, however, permanent; at least, the causes which produced the change this morning would not authorise a different conclusion, and the salesmen of the market, although looking forward to a very fair state of things next monday, do not anticipate that the improvement will last the next succeeding monday. it appears that london is clear of meat, the which, with small supplies of everything to-day, is the sole immediate cause of the improvement, for, notwithstanding that the market was well attended by both town and country butchers and stock-takers, they, nevertheless, at the opening of the market, appeared disposed to purchase briskly, on the supposition, according to the returns of over-night, that the supplies were large, but when this statement was discovered to be erroneous they then bought freely, and higher prices were more readily given. friday.--in consequence of the supply of beasts on sale being large for the time of year, we have to report a very heavy demand for beef, and in some instances the quotations declined 2d. per 8 lbs. from scotland nearly 200 lots were received fresh up. prime old downs maintained their previous value; but that of all other kinds of sheep had a downward tendency. in lambs very little was doing, at barely monday's quotations. calves moved off heavily, at a reduction of 2d. per 8 lbs. the pork trade was unusually dull, at previous currencies. milch cows sold slowly at from 16_l._ to 20_l._ each. -----------------------------------------+-------------------------------- prices per stone. | at market. -----------------------------------------+-------------------------------- monday. friday. | monday. friday. beef 3s 0d to 4s 2d 2s 8d to 4s 0d | beasts 2,840 800 mutton 3s 2d to 4s 4d 2s 10d to 4s 4d | calves 149 373 veal 3s 6d to 4s 8d 3s 6d to 4s 6d | sheep and lambs 32,840 9,210 pork 3s 6d to 4s 8d 3s 0d to 3s 10d | pigs 410 326 lamb 4s 0d to 5s 0d 3s 4d to 4s 8d | -----------------------------------------+-------------------------------- prices of hay and straw, per load of 36 trusses. hay, 3_l._ 5s. 0d. to 4_l._ 8s. 0d. clover, 4_l._ 4s. 0d. to 5_l._ 8s. 0d. straw, 1_l._ 18s. 0d. to 2_l._ 4s. 0d. borough hop-market. monday.--there was no business whatever transacted during last week, and even the duty remains without fluctuation. in this state of inactivity the effects of the metropolitan total abstinence movement was a topic of interest to the trade. as it appears that nearly 70,000 persons took the pledge, the consumption of malt liquor must seriously diminished, and the demand for hops will consequently be very considerably decreased. it is fortunate, therefore, for the planters that this year's growth is not large, otherwise the prices would have been seriously low, and although that crop is not only about an average, yet from this diminished consumption, which is likely to progress, the value of the new will not be more than last year, and possibly even less. there have been a few small lots of 1843's at market, which go off very slowly. friday.--about ten pockets of new hops have been disposed of this week at from 7_l._ to 8_l._ per cwt. we are now almost daily expecting large supplied from kent and sussex, as picking is now going on rapidly. in old hops scarcely any business is doing, while the duty is called 150,000_l._ liverpool cotton market. sept. 14.--a large amount of business has been transacted in cotton at this day's market. the sales, inclusive of 5,000 american bought on speculation, have consisted of 10,000 bales. sept. 15.--we have a fair inquiry for cotton this morning, and there is no change whatever in the general temper of the market. coal market. buddle's west hartley, 15s.; davison's west hartley, 15s. 6d.; fenham, 13s. 6d.; hastings hartley, 15s.; holywell main, 15s. 6d.; new tanfield, 14s.; ord's redheugh, 12s. 6d.; pontop windsor, 12s. 6d.; tanfield moor, 16s. 6d.; west pelton, 12s. 9d,; west hartley, 15s. 6d.; west wylam, 14s. 6d.; wylam, 14s. 6d. wall's end:--clennell, 14s. 6d.; clarke and co, 14s.; hilda, 15s. 6d.; riddell's, 16s. 9d.; braddyll's hetton, l8s. 9d.; haswell, 19s.; hetton, 18s. 6d.; lambton, 18s. 3d.; morrison, 16s.; russell's hetton, 18s,; stewart's, 18s. 6d.; whitwell, 17s.; cassop, 18s.; hartlepool, 16s. 6d.; heselden, 16s, 6d.; quarrington, 17s.; trimdon, 17s. 6d.; adelaide, 18s.; barrett, 16s. 9d.; bowburn, 15s. 6d.; south durham, 17s.; tees, 17s. 9d.; cowpen hartley, 15s. 6d.; lewis's merthyr, 19s. 6d.; killingworth, 16s. fifty-nine ships arrived since last day. the gazette. _tuesday, september 12._ declarations of insolvency. j. halls, wilkes street, spitalfields, braid manufacturer.--j. brooke, liverpool, cupper.--j. thorburn, hillhouse, yorkshire, warehouseman.--j. allwright, basingstoke, hampshire, boot maker.--j. bland, leeds, eatinghouse keeper.--w.s. lawrence, essex place, grange-road, dalston, out of business.--t. leete, finedon, northamptonshire, butcher.--w, simpson, elland upper edge, yorkshire, woollen spinner.--d. m'george, huddersfield, tea dealer.--w. hall, cockhill, wiltshire, out of business.--t. mercer, wansdon house, fulham, out of business.--w. elliott, berners street, oxford street, waiter at an hotel.--c.t. jones, charles street, berkeley square, out of business.--t. price, cardiff road, monmouthshire, coal dealer.--w. williams, newport, monmouthshire, out of business.--w.g. still, high street, poplar, hair dresser.--t. cook, giltspur street, city, tailor.--j. mayson, marlborough road, old kent road, commission agent.--d. taylor, meltham, yorkshire, licensed tea dealer.--w.w. greaves, newark-upon-trent, nottinghamshire, corn dealer.--c.h. balls, beccles, suffolk, chemist.--j. chapman (commonly known as j. fitzjames), bridges street, covent garden, comedian. bankruptcy annulled. jones, t., liverpool, coal dealer. bankrupts. sharp, r., jun., faversham, kent, draper. [reed and shaw, friday street, cheapside. pearsall, c., anderton, cheshire, boiler maker. [sharp and co., bedford row. johnson, t., late of great bridge, staffordshire, draper. [messrs nicolls and pardoe, bewdley. holt, w.j.; grantham, lincolnshire, tea dealer. [messrs hill and matthews, st mary axe. declarations of dividends. j.o. palmer, liverpool, music seller--first dividend of 6s. in the pound, any wednesday after december 1, payable at 31 basinghall street, city.--d. ellis, haverhill, suffolk, draper--first dividend of 5s. 10d. in the pound, any wednesday after december 1, payable at 31 basinghall street.--p.j. papillon, leeds, wine merchant--first dividend of 2s. in the pound, on any monday or wednesday after october 4, payable at 15 benson's buildings, basinghall street, leeds.--e. cragg, kendal, westmoreland, innkeeper--first dividend of 2s. in the pound, on october 7, or on any succeeding saturday, payable at 57 grey street, newcastle-upon-tyne. dividends. october 5, t. and j. parker, j. rawlinson, w. abbott, j. hanson, j. bell, t. chadwick, a. emsley, r. kershaw, j. musgrave, j. wooller, t. pullan, j. shaw, g. eastburn, and d. dixon, leeds, dyers.--october 10, t. bell, newcastle-upon-tyne, tea dealer.--october 10, j.g. pallister and j.m.b. newrick, sunderland, durham, grocers.--october 4, j. fletcher, maryport, cumberland, boiler manufacturer.--october 11, j. todd. hylton ferry, durham, ship builder.--october 3, j. parke, liverpool, druggist.--october 4, s. boult and t. addison, liverpool, stock brokers.--october 7, t. bourne, liverpool, cotton broker.--october 14, h. merridew, coventry, ribbon manufacturer. certificates. october 5, f. robert, new bond street, and gower street north, coal merchant.--october 5, j. bowie, shoe lane, city, grocer.--october 14, j. barnes, 14 commercial place. commercial road, engineer.--october 4, j. davies, westminster road, lambeth, linendraper.--october 11, m. jackson, east thickley steam mill, durham, miller.--october 10, j. todd, hylton ferry, durham, ship builder.--october 3, j. gallop, jun., bedminster, bristol, painter.--october 12, g.b. worboys, bristol, perfumer.--october 4, r. crosbie, sutton, cheshire, tea dealer.--october 7, c. holebrook, uttoxeter, staffordshire, plumber.--october 17, j. hedderly, nottingham, druggist.--october 5, j. oates, glossop, derbyshire, innkeeper. certificates, october 3. w. pugh, gloucester, auctioneer.--j. lockwood, wakefield, yorkshire, and st. john's, new brunswick, linendraper.--h. francis, feoek, cornwall, agent.--g. chapman, aylesbury, buckinghamshire, grocer.--e. wheeler, birmingham, corn dealer.--j. a. boden, sheffield, razor manufacturer.--w. woodward, birmingham, tailor.--s. j. manning, 28 camomile street, city, and halleford, near shepperton, manufacturer of bitters. partnerships dissolved. elizabeth o'connor and mary rossiter, brighton, sussex, milliners.--c. weatherley and h. o'neil, wilkes street, spitalfields, and ferdinand street, camden town, fancy trimming manufacturers.--h.i. isaacs and d. israel, duke street, aldgate, city, poulterers.--j. davis and a. mottram, warrington, lancashire, timber merchants,--m. fortier and emile and anna levilly, bruton street, berkeley square, milliners.--t. and g. stevenson, dudley, worcestershire, tailors.--d. israel and j. lyons, st mary-axe, city, trunk makers.--w. fairbairn, j. hetherington, and j. lee, manchester, machine makers.--e. archer, h. ewbank, jun., and a.p.w. philip, gravel lane, southwark, surrey.--j.m. pott and j. midworth, newark-upon-trent, auctioneers.--t.p. holden, t. parker, and w. burrow, liverpool, upholsterers (as regards w. burrow).--w.l. springett, t. beale, and e. kine, southwark, surrey, hop merchants (as regards w.l. springett). scotch sequestrations. a. dunn, keithock mills, near coupar-angus, farmer.--d. m'intyre, jun., fort william, merchant. * * * * * _friday, september 15._ bankrupts. greenslade, w., gray's inn lane, builder. [oldershaw, king's arms yard. bone, g.b., camberwell, builder. [meymott and sons, blackfriars road. lewis, r.w., shenfield, essex, farmer. [watson and co., falcon square. phillips, s., brook street, hanover square, carpet warehousman. [reed and shaw, friday street, cheapside. pino, t.p., liverpool, ship chandler. [chester and toulmin, staple inn. hoole, w., sheffield, leather dresser. [branson, sheffield. cambridge, r.j., cheltenham, wine merchant. [packwood, cheltenham. metcalf, e., middlesbrough, yorkshire, currier. [blackburn, leeds. duffield, c., bath, grocer [jay, serjeants' inn. poppleton, c., york, linen manufacturer. [blackburn, leeds. lister, j.c., wolverhampton, wine merchant. [phillips and bolton, wolverhampton. declarations of insolvency. j. brooke, liverpool, cupper.--j. thorburn, hillhouse, yorkshire, warehouseman.--j. bland, leeds, eating house keeper.--w.s. lawrence, essex place, hackney, bank clerk.--t. leete, finedon, northamptonshire, butcher.--w. simpson, elland upper edge, yorkshire, woollen-spinner.--w. hall, cockhill, wiltshire.--d. m'george, huddersfield, tea dealer.--t. mercer, wansdown house, fulham--w. elliott, berner's street, oxford street, waiter.--c.t. jones, charles street, berkeley square.--t. price, cardiffmouth, coal dealer.--w. williams, george street, newport.--w. g. still, high street, poplar, tobacconist.--t. cook, giltspur street, city, tailor,--j. mayson, marlborough road, old kent road, commission agent.--d. taylor, aldmondbury, yorkshire, tea dealer.--w.w. greaves, newark-upon-trent, corn dealer.--c. h. balls, ringsfield, suffolk, chemist.--j. chapman, bridges street, covent garden, comedian.--j. robinson, edmonton, butcher.--g. dickinson, chenies mews, bedford square, coach painter.--j. murphy, gloucestershire, coachman.--j. burnham, harrold, bedfordshire, chemist.--w.l. phillips, kennington green, omnibus proprietor.--j.d. lockhart, poplar, tobacconist.--j. wilkinson, cheltenham, licensed victualler.--j.d. hubbarde, wakefield, printer.--j. ames, holywell, flintshire, licensed victualler.--s. bone, greenwich, cabinet maker.--j. davis, great bolton, lancashire, sawyer.--j. pollard, batley, yorkshire, blanket manufacturer.--s. m'millan, llangollen, denbighshire, tea dealer.--s. brook, birstal, yorkshire, grocer.--f. wormald, birstal, yorkshire, blacksmith.--w. barnes, knightsbridge, shopkeeper.--h. manley, belvidere buildings, st george the martyr, surrey, coach builder.--w. jeffery, queen street, brompton, horse dealer.--r.w. webb, saville row, walworth road, attorney. * * * * * births. on the 10th inst., in milman street, bedford row, the wife of s.s. teulon, esq. of a son. on the 13th inst., at nottingham place, the wife of thomas a.h. dickson, esq., of a son. marriages. at st george's church, hanover square, miss louisa georgina augusta anne murray, only daughter of general the right honourable sir george murray, g.c.b., master-general of the ordnance, to henry george boyce, esq., of the 2nd life guards, eldest son of mr and the late lady amelia boyce. on the 13th inst., at kintbury, berks, lieutenant-colonel j.a. butler, to martha, daughter of the late william bruce smith, esq., of starborough castle, surrey. on the 13th inst., at rickmansworth church, john, second son of thomas weall, esq., of woodcote lodge, beddington, to susanna, eldest daughter of w. white, esq., of chorleywood. deaths. on the 7th inst., aged 69 years, the rev. william porter, who was for 44 years minister of the presbyterian congregation of newtownlimavady; for fourteen years clerk to the general synod of ulster; the first moderator of the remonstrant synod, and clerk to the same reverend body since its formation. at bath, general w. brooke. the deceased general, who had served with distinction throughout the peninsular war, had been upwards of fifty years in the army. on sunday, the 10th instant, after a lengthened illness, at the family residence in great george street, mr john crocker bulteel. he married, may 13, 1826, lady elizabeth grey, second daughter of earl grey, by whom he leaves a youthful family. lady elizabeth bulteel, who is inconsolable at her bereavement, has gone to viscount howick's residence, near datchet. advertisements. york and london life assurance company, king william-street, london. empowered by act of parliament. george frederick young, esq., chairman. mathew forster, esq. m.p. deputy chairman. the superiority of the system of assurance adopted by this company, will be found in the fact that the premium required by a bonus office to assure 1,000_l._ on the life of a person in the 20th year of his age would in this office insure 1,291_l._ 7s. 6d. assurances at other ages are effected on equally favourable terms, and thus the assured has an immediate bonus instead of a chance dependent upon longevity and the profits of an office. in cases of assurance for a limited number of years, the advantage offered by this company is still greater, no part of the profits of a bonus office being ever allotted to such assurances. prospectuses, containing tables framed to meet the circumstances of all who desire to provide for themselves or those who may survive them by assurance, either of fixed sums or annuities, may be had at the office as above, or of the agents. john reddish, sec. * * * * * h. walker's needles (by authority the "queen's own"), in the illustrated chinese boxes, are now in course of delivery to the trade. the needles have large eyes, easily threaded (even by blind persons), and improved points, temper, and finish. each paper is labelled with a likeness of her majesty or his royal highness prince albert, in relief on coloured grounds. every quality of needles, fish hooks, hooks and eyes, steel pens, &c. for shipping. these needles or pens for the home trade are sent, free by post, by any respectable dealer, on receipt of 13 penny stamps for every shilling value.--h. walker, manufacturer to the queen, 20 maiden lane, wood street, london. * * * * * one hundred foreign marble chimney-pieces on view. the westminster marble company have now completed their machinery, which will enable them in future to supply every variety of marble work at a considerable reduction in price. a neat box belgium marble chimney-piece, with moulded caps, 3 feet high, can be supplied from 1_l._ to 2_l._ a best vein marble chimney-piece, from 2_l._ to 3_l._ a liberal commission for all orders will be allowed to the trade; and those persons wishing to act as agents, can have a book of designs forwarded by enclosing twenty postage stamps. direct, "the westminster marble company, earl street, horseferry road." * * * * * carriages.--the attention of gentlemen about purchasing, or having carriages to dispose of, is invited to marks and co.'s london carriage repository, langham place. an immense stock, new and second hand, by eminent builders, is always on sale, and a candid opinion of each carriage will be given as to its quality and condition. invalid carriages for any journey. carriages to be let on yearly job. * * * * * wonderful cure!--read the following interesting facts, communicated by mr brown, bookseller, gainsborough:-"to messrs t. roberts and co. crane court, fleet street, london, proprietors of parr's life pills. "gentlemen, "west stockwith, aug. 11, 1843. "i, james jackson easton, do hereby testify, that, by taking your excellent parr's life pills, i have derived greater benefit than in using all the other medicines i have tried since 1841; about which time i was attacked with severe illness, accompanied with excruciating pain and trembling, with large rupture. for the last six months i have had no return of this illness, nor the least appearance of the last-mentioned symptom. through the mercy of god, i do at present feel perfectly recovered from it. i still continue the occasional use of your excellent pills.--i am gentlemen, respectfully yours, j.j. easton." sold by all respectable medicine venders, in boxes at 1s. 1-1/2d. 2s. 9d. and 11s.--see the words "parr's life pills," in white letters on a red ground, engraved on the government stamp. european life insurance company, no. 10 chatham place, blackfriars, london. established, january, 1819. president. sir james rivett carnac, bart. vice-president. george forbes, esq. no. 9 fitzroy square. with twelve directors. facilities are offered by this long-established society to suit the views and the means of every class of insurers. premiums are received yearly, half-yearly, or quarterly, or upon an increasing or decreasing scale. an insurance of 100_l._ may be effected on the ascending scale by an annual premium for the first five years of 1_l._ 9s. at the age of 25; 1_l._ 12s. 6d. at 30; 1_l._ 17s. at 35; 2_l._ 2s 5d. at 40; and 2_l._ 9s. 6d. at 45; or, one-half only of the usual rate, with interest on the remainder, will be received for five or seven years, the other half to be paid at the convenience of the assured. the insured for life participate septennially; in the profits realised. a liberal commission is allowed to solicitors and agents. david foggo, secretary. n.b. agents are wanted in towns where none have yet been appointed. * * * * * britannia life assurance company, 1 princes street, bank, london. empowered by special act of parliament, iv vict. cap. ix. directors. william bardgett, esq. samuel bevington, esq. wm. fechney black, esq. john brightman, esq. george cohen, esq. millis coventry, esq. john drewett, esq. robert eglinton, esq. erasmus rt. foster, esq. alex. robert irvine, esq. peter morison, esq. henry lewis smale, esq. thomas teed, esq. auditors. j.b. bevington, esq.; f.p. cockerill, esq.; j.d. dow, esq. medical officer. john clendinning, m.d. f.r.s. 16 wimpolestreet, cavendish square. standing counsel. the hon. john ashley, new square, lincoln's inn. mr serjeant murphy, m.p. temple. solicitor. william bevan, esq. old jewry. bankers. messrs drewett and fowler, princes street, bank. this institution is empowered by a special act of parliament, and is so constituted as to afford the benefits of life assurance in their fullest extent to policy-holders, and to present greater facilities and accommodation than are usually offered by other companies. assurances may either be effected by parties on their own lives, or by parties interested therein on the lives of others. the effect of an assurance on a person's own life is to create at once a property in reversion, which can by no other means be realized. take, for instance, the case of a person at the age of thirty, who, by the payment of 5_l._ 3s. 4d. to the britannia life assurance company, can become at once possessed of a bequeathable property, amounting to 1,000_l._, subject only to the condition of his continuing the same payment quarterly during the remainder of his life--a condition which may be fulfilled by the mere saving of eight shillings weekly in his expenditure. thus, by the exertion of a very slight degree of economy--such indeed, as can scarcely be felt as an inconvenience, he may at once realise a capital of 1,000_l._, which he can bequeath or dispose of in any way he may think proper. a table of decreasing rates of premium on a novel and remarkable plan; the policy-holder having the option of discontinuing the payment of all further premiums after twenty, fifteen, ten, and even five years; and the policy still remaining in force--in the first case, for the full amount originally assured; and in either of the three other cases, for a portion of the same according to a fixed and equitable scale endorsed upon the policy. increasing rates of premium on a new and remarkable plan for securing loans or debts; a less immediate payment being required on a policy for the whole term of life than in any other office. age of the assured in every case admitted in the policy. all claims payable within one month after proof of death. medical attendants remunerated in all cases for their reports. extract from increasing rates of premium, for an assurance of 100_l._ for whole term of life. -----+-----------------------------------------------------------+ | annual premiums payable during | +-----------+-----------+-----------+-----------+-----------+ | 1st five | 2nd five | 3rd five | 4th five | remainder | age | years. | years. | years. | years. | of life. | -----+-----------+-----------+-----------+-----------+-----------+ | â£. s. d.| â£. s. d.| â£. s. d.| â£. s. d.| â£. s. d.| 20 | 1 1 4 | 1 5 10 | 1 10 11 | 1 16 9 | 2 3 8 | 30 | 1 6 4 | 1 12 2 | 1 19 1 | 2 7 4 | 2 17 6 | 40 | 1 16 1 | 2 4 4 | 2 14 6 | 3 7 3 | 4 3 4 | 50 | 2 16 7 | 3 9 4 | 4 5 5 | 5 6 3 | 6 13 7 | -----+-----------+-----------+-----------+-----------+-----------+ detailed prospectuses, and every requisite information as to the mode of effecting assurances, may be obtained at the office. peter morrison, resident director. *** a board of directors attend daily at two o'clock, for the despatch of business. * * * * * panclibanon iron works, bazaar, no. 58 baker street, portman square. london.--gentlemen about to furnish, or going abroad, will find it worth their attention to look into the above establishment, where they will find the largest assortment of general furnishing ironmongery ever offered to the public, consisting of tin, copper, and iron cooking utensils, table cutlery, best shffield plate, german silver wares, papier machee tea trays, tea and coffee urns, stove grates, kitchen ranges, fenders and fire-irons, baths of all kinds, shower, hot, cold, vapour, plunging, &c. ornamental iron and wire works for conservatories, lawns, &c. and garden engines. all articles are selected of the very best description, and offered at exceedingly low prices, for cash only; the price of each article being made in plain figures. * * * * * limbird's magnum bonum pens.--one dozen highly-finished steel pens, with holder, in a box, for 6d.; name-plate engraved for 2s. 6d.; 100 cards printed for 2s. 6d,; crest and name engraved on visiting card for 6s.; arms and crests for book plates on the most reasonable terms; travelling writing-desks at 9s. 6d. 10s. 6d. 12s. 6d. and 14s 6d. each; dressing-cases from 6s. 6d. each; blotting-books in great variety, from 9d.; with locks, 2s. each; royal writing-papers--diamond, five quires for 1s. 2d.; the queen's and prince albert's size, five quires for 1s. 6d.; envelopes, 6d. 9d. and 1s. the 100; and every article in stationery, of the best quality and lowest prices, at limbird's, 143 strand, facing catherine street. * * * * * pianofortes.--messrs moore and co. makers of the improved pianofortes, are now selling their delightful instruments as follows:--a mahogany piccolo, the best that can be made, in a plain but fashionable case, only 28_l._; a 6-1/2 octave ditto, only 32_l._; a cottage ditto, only 32_l._; a 6-1/2 octave cottage ditto, only 38_l._ cabinets of all descriptions. all warranted of the very best quality, packed free of expense, and forwarded to any part of the world. some returned from hire at reduced prices. moore and co. 138 bishopsgate street without, near sun steet. just published, two thick volumes, 8vo. illustrated with six large important maps, 4_l._ cloth, a dictionary, geographical, statistical, and historical, of the various countries, places and principal natural objects in the world. by j.r. m'culloch, esq. "the extent of information this dictionary affords on the subjects referred to in its title is truly surprising. it cannot fail to prove a vade-mecum to the student, whose inquiries will be guided by its light, and satisfied by its clear and frequently elaborated communications. every public room in which commerce, politics, or literature, forms the subject of discussion, ought to be furnished with these volumes."--globe. london: longman, brown, green, and longmans. * * * * * just published in 8vo. price 2s. 6d. railway reform--its expediency, practicability, and importance considered, with a copious appendix, containing an account of all the railways in great britain and ireland, parliamentary returns, &c. "an excellent pamphlet."--morning herald. "the subject is very fully, earnestly, and ably investigated."--morning advertiser. "remarkable for originality of design, boldness of execution, and minuteness in statistical detail."--sun. "we would recommend all who have an interest in railways to purchase this work."--sentinel. pelham richardson, cornhill. * * * * * la'mert on nervous debility, general and local weakness, &c. just published, seventh edition, price 2s. 6d. or free by post for 3s. 6d. self-preservation; a popular essay on the concealed causes of nervous debility, local and general weakness, indigestion, lowness of spirits, mental irritability, and insanity; with practical observations on their treatment and cure. by samuel la'mert, consulting surgeon, 9 bedford street, bedford square, london; matriculated member of the university of edinburgh; honorary member of the london hospital medical society; licentiate of apothecaries' hall, london, &c. published by the author; and sold in london by s. gilbert, 51 and 52 paternoster row; field, 65 quadrant; gordon, 146 leadenhall street; noble, 109 chancery lane; and by all booksellers. "the design of this work will be tolerably obvious from its title, and we cordially recommend the author and his book to all who are suffering from nervous debility and general weakness. mr la'mert has treated the subject in a very scientific and intelligible manner."--wakefield journal. at home every day till three, and from five till eight. * * * * * the fourteenth thousand. just published, in a sealed envelope, price 3s.; and sent free, on receiving a post office order for 3s. 6d. manhood; the causes of its premature decline, with plain directions for its perfect restoration; followed by observations on marriage, and the treatment of mental and nervous debility, incapacity, warm climate, and cure of the class of diseases resulting therefrom. illustrated with cases, &c. by j.l. curtis and co. consulting surgeons, london. fourteenth edition. published by the authors; and sold by burgess, medical bookseller, 28 coventry street, haymarket; mann, 39 cornhill; strange, 21 paternoster row, london; guest, 51 bull street, birmingham; hickling, coventry; robinson, leamington; journal office, leicester; cook, chronicle office, oxford; sowler, 4 st anne's square, manchester; philip, south castle street, liverpool; and sold, in a sealed envelope, by all booksellers. opinions of the press. "this work, a tenth edition of which is now presented to the public--ten thousand copies have been exhausted since its first appearance--has been very much improved and enlarged by the addition of a more extended and clear detail of general principles, as also by the insertion of several new and highly interesting cases. the numberless instances daily occurring, wherein affections of the lungs, putting on all the outer appearances of consumption, which, however, when traced to their source, are found to result from certain baneful habits, fully proves that the principle of the division of labour is nowhere more applicable than in medical practice. we feel no hesitation in saying, that there is no member of society by whom the book will not be found useful, whether such person holds the relation of a parent, a preceptor, or a clergyman."--sun, evening paper. "messrs curtis's work, called 'manhood,' is one of the few books now coming before the public on such a subject which can lay claim to the character of being strictly professional, at the same time that it is fully intelligible to all who read it. the moral and medical precepts given in it render it invaluable."--magnet. messrs curtis and co. are to be consulted daily at their residence, 7 frith street, soho square, london. country patients are requested to be as minute as possible in the details of their cases. the communication must be accompanied by the usual consultation fee of 1_l._; and in all cases the most inviolable secrecy may be relied on. * * * * * foreign newspaper and commission office, 18 cornhill, london. p.l. simmonds, advertising agent, receives regularly files of all the newspapers published in the british colonies and possessions beyond the seas, which are preserved for the facility of reference and inspection, and sent when requested to parties for perusal. also various german, french, italian, american, and other foreign journals. orders and advertisements received for every foreign and european publication. * * * * * photography.--great improvements having been recently effected in this interesting and extraordinary science by mr beard, the patentee, in the process of taking and colouring likenesses, the public are particularly invited to an inspection of varieties, at the establishment, 85 king william street, city; royal polytechnic institution; and 34 parliament street, where exchanges for new in lieu of old portraits may be had, on payment of 5s. colouring small busts, 5s. * * * * * guarantee society. established by act of parliament. capital, â£100,000. trustees. charge hugge price, esq. james francis maubert, esq. thomas fowler, esq. major-general parlby, c.b. to officers of her majesty's service (both civil and military), secretaries, clerks, and all others holding, or about to hold, confidential and responsible situations, this society presents immediate facilities for obtaining surety, or integrity, upon payment of a small annual premium, and by which relatives and friends are relieved from the various pecuniary responsibilities attendant on private suretiships. the surety of this society is accepted by the war office (for payment of regiments and of pensioners), the ordnance, east india company, the customs, the bank of england, and numerous banking, mercantile, and commercial firms, both in london and in the country. forms of application and every information may be obtained at the offices, 28 poultry, london. thomas dodgson, sec. natural mineral waters.--e. h. duhamel and co. 7 duke street, grosvenor square, have constantly on sale the undernamed natural mineral waters, which they can supply fresh and genuine at a very reasonable price. barã¨ges cheltenham malvern schwalbach bath ems marienbad sedlitz bonnes fachingen pullna selters bristol harrogate pyrmont spa cauterets kissengen saidschutz vichy, &c. genuine eau de cologne, digestive pastilles de vichy, and various foreign articles of pharmacy. e.h.d. and co. are the only agents for the copahine-mã¨ge, and for j. jourdain, mã¨ge and co.'s dragã©es minã©rales and dragã©es carboniques for effervescing lemonade, and also for their pilules carboniques, preventive of sea sickness and vomitings of every description. the dragã©es minã©rales, with which a tumbler of mineral water can be instantaneously produced, are considered as the best substitute to the genuine waters, when these cannot be procured and have the advantage of being much cheaper. * * * * * notice. wood paving.--the letters patent granted to me, david stead, for paving with wooden blocks being the first patent obtained on the subject, and rendering all subsequent patents for the same object void, have, after a long investigation at liverpool, been declared valid, notwithstanding the most resolute opposition against me by the real defendants in the case--the metropolitan wood paving company. i therefore warn all public authorities and persons using, or assisting in using wooden blocks for paving, that such infringement upon my patent will be suppressed; but i am prepared (as is my licencee, mr blackie), to execute any extent of wood paving of any description upon contract, and also to grant licenses for the adoption and promotion of the great advantage and benefits of wood paving in london, and all parts of england, scotland, and ireland. for terms, parties may apply to me, or to my solicitor, mr john duncan, 72 lombard street, london, or to mr a.b. blackie, no. 250 strand. (signed) david stead 250 strand, london, sept. 4, 1843. * * * * * wood pavement.--stead v. williams and others. (abridged from the liverpool albion.) this was an action for an infringement of a patent for the paving of roads, streets, &c. with timber or wooden blocks. mr martin and mr webster were for the plaintiff; mr warren and mr hoggins for the defendants; mr john duncan, of 72 lombard street, was the solicitor for the plaintiff. the plaintiff is mr david stead, formerly a merchant of the city of london; the defendants are, nominally, mr lewis williams, and several others, who are the surveyors of streets and paving at manchester; but the action was really against the metropolitan wood paving company. about the year 1836 or 1837 mr nystrom, a russian merchant, with whom mr stead had had transactions in business came to england, having whilst in russia devoted his attention to the mode of pavement in that country, which was done in a great measure by wood. he communicated with mr stead, who paid a great deal of attention to the matter, and materially improved the scheme; and it was the intention of mr nystrom and mr stead, in 1835 or 1837, to take out a patent, but mr nystrom found it necessary to return to russia, and thus frustrated that intention. on the 19th of may, 1838, the plaintiff, however, took out a patent, and this was the one to which attention was directed. four months were allowed for inrolment, but as six months was the usual period, the plaintiff imagined that that would be the period allowed to him, and inadvertently allowed the four months to elapse before he discovered his mistake. on the 21st of june, 1841, however, an act of parliament was passed, confirming the patent to mr stead, as though it had been regularly filed within the prescribed period. a second patent was afterwards obtained, but that related more particularly to the form of blocks. the first patent, which had been infringed, was for an invention consisting of a mode of paving with blocks of similar sizes and dimensions, of either a sexagonal, triangular, or square form, so as to make a level road or surface. the defendants pleaded, amongst other things, that the patent was not an original invention; that it was not useful; and that it was in use prior to the granting of the patent. the jury retired to consult at a quarter past four, and returned at twenty minutes to six o'clock with a verdict for the plaintiff. * * * * * parsons's aleppo office writing ink.--this very superior ink, being made with pure aleppo galls, is equally adapted for quills and steel pens, and combines the requisite qualities of incorrodibility and permanency of colour with an easy flow from the pen. it is therefore strongly recommended to merchants, bankers, solicitors, accountants, and others. *** warranted not to be affected either by time or climate. sold in quart, pint, half-pint, and sixpenny bottles, by john parsons, manufacturer of printing and writing inks, 35 orange street, gravel lane, southwark; and 9 ave maria lane, london. * * * * * under the special patronage of her most gracious majesty, h.r.h. prince albert, the royal family and the several courts of europe. rowland's macassar oil, for the growth, and for _preserving_ and beautifying the human hair. *** to ensure the real article, see that the words _rowland's macassar oil_ are engraven on the back of the label nearly 1,500 times, containing 29,028 letters. without this _none are genuine_. rowland's kalydor, for _improving and beautifying_ the skin and complexion. rowland's odonto, or pearl dentifrice, renders the teeth beautifully white, and preserves the gums. * * * * * caution. numerous _pernicious compounds_ are universally offered for sale as the real "macassar oil" and "kalydor," (some under the _implied_ sanction of royalty), the labels and bills of the original articles are copied, and either a fictitious name or the word "genuine" is used in the place of "rowland's." it is therefore necessary on purchasing either article to see that the word "rowland's" is on the envelope. for the protection of the public from fraud and imposition, the _honourable commissioners of her majesty's stamps_ have authorized the proprietors to have their names engraven on the government stamp, which is affixed to the _kalydor_ and _odonto_, thus- a. rowland & son, no. 20, hatton garden. *** all others are spurious imitations. * * * * * printed by charles reynell, 16 little pulteney street, in the parish of st james, westminster; and published by him at the office of the journal, no. 6 wellington street, strand,--september 16, 1843. proofreaders series xxvi nos. 7-8 johns hopkins university studies in historical and political science under the direction of the departments of history, political economy, and political science the elizabethan parish in its ecclesiastical and financial aspects by sedley lynch ware, a.b., ll.b. fellow in history. published monthly july-august, 1908 preface these chapters are but part of a larger work on the elizabethan parish designed to cover all the aspects of parish government. there is need of a comprehensive study of the parish institutions of this period, owing to the fact that no modern work exists that in any thorough way pretends to discuss the subject. the work of toulmin smith was written to defend a theory, while the recent history of mr. and mrs. webb deals in the main with the parish subsequent to the year 1688. the material already in print for such a study is very voluminous, the accumulation of texts having progressed more rapidly than the use of them by scholars. my subject was suggested to me by professor vincent, to whom as well as to professor andrews i am indebted for advice and assistance throughout this work. in england i have to thank messrs. sidney webb, hubert hall and george unwin, of the london school of economics, for reading manuscript and suggesting improvements. for similar help and for reference to new material my acknowledgments are due to mr. c.h. firth, regius professor of modern history, oxford, and to mr. c.r.l. fletcher, of magdalen college. at the british museum i found the officials most courteous, while the librarians of the peabody institute, baltimore, have given me every aid in their power. contents. chapter i. the ecclesiastical government of the parish. its importance in local government archdeacons' courts illustrations from act books of judicial administration churchwardens' duties ministers' duties obligations exacted from all alike control of church over education and opinion how courts christian enforced their decrees effectiveness of excommunication evils and abuses of the system jurisdiction of queen's judges in ecclesiastical matters chapter ii. parish finance. endowed parishes expedients for raising money church-ales, plays, games, etc offerings and gatherings communion dues sale of seats, pew rents parish tariffs for burials, marriages, etc. income from fines and miscellaneous receipts rates and assessments independence of parish as a financial unit significance of this in county government the elizabethan parish in its ecclesiastical and financial aspects. chapter i. the ecclesiastical government of the parish. the ecclesiastical administration of the english parish from the period of the reformation down to the outbreak of the great civil war is a subject which has been much neglected by historians of local institutions. yet during the reign of elizabeth, at least, the church courts took as large a share in parish government as did the justices of the peace. not only were there many obligations enforced by the ordinaries which today would be purely civil in character, but to contemporaries the maintenance of the church fabric and furniture appeared every whit as important as the repairing of roads and bridges; while the obligation to attend church and receive communion was on a par with that to attend musters, but with this difference, that the former requirement affected all alike, while the latter applied to comparatively few of the parishioners. in the theory of the times, indeed, every member of the commonwealth was also a member of the church of england, and conversely. allegiance to both was, according to the simile of the elizabethan divine, in its nature as indistinguishable as are the sides of a triangle, of which any line indifferently may form a side or a base according to the angle of approach of the observer[1]. the queen was head of the commonwealth ecclesiastical as well as of the commonwealth civil, and as well apprized of her spiritual as of her temporal judges[2]. for both sets of judges equally parliament legislated, or sanctioned legislation. sometimes, in fact, it became a mere matter of expediency whether a court christian or a common law tribunal should be charged with the enforcement of legislation on parochial matters. thus the provisions of the rubric of the book of common prayer were enforced by the justices as well as by the ordinaries. again, secular and ecclesiastical judges had concurrent jurisdiction over church attendance, and--at any rate between 1572 and 1597[3]--over the care of the parish poor. finally, it must not be supposed that the men who actually sat as judges in the archdeacon's or the bishop's court were necessarily in orders. in point of fact a large proportion, perhaps a large majority of them, were laymen, since the act of henry viii in 1545 permitted married civilians to exercise ecclesiastical jurisdiction.[4] in the treatment of our subject the plan we shall follow is, first, to make some preliminary observations as to the times, places and modes of holding the church courts; second, with the aid of illustrations drawn from the act-books of these courts, to show how their judicial administration was exercised over the parish, either through the medium of the parish officers or directly upon the parishioners themselves; third, to analyze the means at the command of the ecclesiastical judges to enforce their decrees; and, finally, to point out that from its very nature the exercise of spiritual jurisdiction was liable to abuses, and must at all times have proved unpopular. speaking generally (for the jurisdictions called "peculiars" formed exceptions), england was divided for the purposes of local ecclesiastical administration and discipline into archdeaconries, each comprising a varying number of parishes. twice a year as a rule the archdeacon, or his official in his place, held a visitation or kept a general court (the two terms being synonymous) in the church of some market town--not always the same--of the archdeaconry. the usual times for these visitations were easter and michaelmas. the bishops also commonly held visitations in person, or by vicars-general or chancellors, once every third year throughout their dioceses. yet at the semiannual visitations of the archdeacon as well as at the triennial visitations of the bishop, the mode of procedure, the class of offences, the parish officers summoned, the discipline exercised--all were the same, the bishop's court being simply substituted for the time being for that of the archdeacon. there were other visitations: those of the queen's high commissioners, and those of the metropolitan. there were a very great number of other courts, but for the purposes of the every-day ecclesiastical governance of the parish the two classes of courts or visitations above mentioned are all that need concern us. it is, however, important to state, that while churchwardens and sidemen were _compelled_ to attend the two general courts of the archdeacon (and of course the bishop's court) and to write out on each occasion formal lists of offenders and offences ("presentments" or "detections") these parish officers might also at any time make _voluntary_ presentments to the archdeacons. those functionaries, in fact, seem to have held sittings for the transaction of current business, or of matters which could not be terminated at the visitation, every month, or even every three weeks. others may have sat (as we should say of a common-law judge) in chambers.[5] before each general visitation an apparitor or summoner of the court went about and gave warning to the churchwardens of some half-dozen parishes, more or less, to be in attendance with other parish officers on a day fixed in some church centrally located in respect of the parishes selected for that day's visitation. the church of each parish was, indeed, not only its place for worship, but also the seat and centre for the transaction of all business concerning the parish. in it, according to law, the minister had to read aloud from time to time articles of inquiry founded on the queen's or the diocesan's injunctions, and to admonish wardens and sidemen to present offences under these articles at the next visitation.[6] in it also he gave monition for the annual choice of collectors for the poor;[7] warning for the yearly perambulation of the parish bounds;[8] and public announcement of the six certain days on which each year every parishioner had to attend in person or send wain and men for the repair of highways.[9] in the parish church also proclamation had to be made of estrays before the beasts could be legally seized and impounded.[10] here, too, school-masters often taught their pupils[11]--unless, indeed, the parish possessed a separate school-house. here, in the vestry, the parish armor was frequently kept, and sometimes the parish powder barrels were deposited;[12] here too, occasionally, country parsons stored their wool or grain.[13] finally, in the parish church assembled vestries for the holding of accounts, the making of rates and the election of officers. overseers of the poor held their monthly meetings here. occasionally the neighboring justices of the peace met here to take the overseers' accounts or to transact other business;[14] and in the church also might be held coroners' inquests over dead bodies.[15] last, but not least in importance, in the churches of the market towns the archdeacon made his visitations and held his court; and on these occasions the sacred edifice rang with the unseemly squabbles of the proctors, the accusations of the wardens and sidemen or of the apparitor, and the recriminations of the accused--in short, the church was turned for the time being into a moral police court, where all the parish scandal was carefully gone over and ventilated.[16] the ecclesiastical courts carried on their judicial administration of the parish largely, of course, through the medium of the officers of the parish. these were the churchwardens, the sidemen and the incumbent, whether rector, vicar or curate.[17] first in importance were the churchwardens. though legislation throughout the time of elizabeth was ever adding to their functions duties purely civil in their nature, and though they themselves were more and more subjected to the control of the justices of the peace, nevertheless it is true to say that to the end of the reign the office of churchwarden is one mainly appertaining to the jurisdiction and supervision of the courts christian. the doctrine of the courts that churchwardens were merely civil officers belongs to a later period.[18] after a churchwarden had been chosen or elected, he took the oath of office before the archdeacon. in this he swore to observe the queen's and the bishop's injunctions, and to cause others to observe them; to present violators of the same to the sworn men (or sidemen), or to the ordinary's chancellor or official, or to the queen's high commissioners; finally, he swore to yield up a faithful accounting to the parish of all sums that had passed through his hands during his term of office.[19] before each visitation day, as has been said, the archdeacon's or the bishop's summoner went to each parish and gave warning that a court would be held in such and such a church on such and such a day. pending that day wardens and sidemen drew up their bills of presentment. these bills were definite answers to a series of articles of inquiry founded on the diocesan's injunctions, themselves based on the queen's injunctions of 1559 and on the canons.[20] failure to present offences was promptly punished by the judge.[21] failure to attend court when duly warned was no less promptly followed by excommunication, and then it was an expensive matter for the wardens to get out of the official's book again.[22] but of fees and fines more hereafter. among the churchwardens' principal obligations, as laid down in the injunctions and articles they were sworn to observe, was the keeping in repair of the church fabric and its appurtenances, as well as the procuring and the maintaining in good condition of the church "furniture," a term which in the language of the time included all the necessaries for worship and the celebration of the sacraments: church linen, surplices, the communion cup, the elements themselves, bibles, prayer books, the writings of authorized commentators on the scriptures, or the works of apologists for the anglican church; tables of consanguinity and other official documents enjoined to be kept in every parish by the diocesan.[23] the visitation act-books of the period abundantly show the processes employed by the ecclesiastical authorities in enforcing these and other duties (which will be detailed in their turn), and prove that the courts christian were emphatically administrative as well as judicial bodies. to show these courts at work it will be necessary to give a number of illustrative examples taken from the visitation entries. thus the wardens of childwall, having been presented at the visitation of the bishop of chester, 9th october, 1592, because their church "wanteth reparac[i]on," are excommunicated for not appearing. on a subsequent day john whittle, who represents the wardens, informs the court that the repairs have been executed. thereupon the wardens are absolved and the registrar erases the word "excommunicated" from the act-book.[24] at the same visitation the wardens of aughton are presented because "there bible is not sufficient, they want the first tome of the homilies, mr. juells replie and apologie[25] [etc.]...." the two wardens are enjoined by the judge to buy a sufficient bible and to certify to him that they have done so. but--so careful is the supervision over parish affairs--mere certification by vicar or wardens that a certain article has been procured in obedience to a court order will not always suffice. if the thing can be produced in court the judge often orders it to be brought before him for personal inspection. accordingly, when at the visitation of the chancellor of the bishop of durham, the 13th march, 1578/1579, the wardens of coniscliffe are found to "lacke 2 salter bookes [and] one booke of the homelies," they are admonished to certify "that they have the books detected 4th april and to bringe their boks hither."[26] thus, too, the wardens of st. michael's, bishop stortford, record in 1585 that they have paid 8d. "when we brought in to the court the byble and comunion booke to shewe before the comysary."[27] there is a curious entry in the same accounts some years earlier, viz.: "pd for showing [shoeing] of an horse when mr jardfield went to london to se wether it was our byble that was lost or no and for his charges...."[28] at the visitation held at romford chapel, essex archdeaconry, 5th september, 1578, the wardens of dengie "broughte in theire surplice, which surplice is torne & verie indecent & uncomly, as appereth; whereupon the judge, for that theie neglected their othes, [ordered them to confess their fault and prepare] a newe surplice of holland cloth of v s. thele [the ell], conteyninge viii elles, _citra festum animarum prox_." remembering that money was then worth ten to twelve times what it is today, this was probably considered too great a burden by the parishioners of dengie. a petition must have been presented to be allowed to procure a cheaper surplice, for on the 6th october following the wardens were permitted to prepare a surplice containing six ells only at the reduced price of 2s. 8d. per ell.[29] it seems to have been the practice in the dean of york's peculiar for the judge to threaten the churchwardens occasionally with a fine for failure to repair their church or supply missing requisites for service by a fixed day. thus at dean matthew hutton's visitation, july, 1568, the churchyards of hayton and of belby were found to be insufficiently fenced. the order of the court was: "_habent ad reparanda premissa citra festum sancti michaelis proximum sub pena xx s_."[30] so, too, the thornton wardens at the same visitation are warned to repair the body of their church "betwixt this and michlmes next upon paine of x s."[31] but as spiritual tribunals had no legal power to fine[32] or to imprison, apparently the usual penalty prescribed by the judges in case of disobedience to, or neglect of, their orders to repair or replace by a certain day, was, in the words of bishop barnes addressed to the churchwardens in durham diocese, the "paynes of interdiction and suspencion [_i.e._, temporary excommunication] to be pronounced against themselves."[33] yet here, too, the wardens did not escape indirect amercement, for absolution from interdiction or excommunication often meant a payment of various court fees, which in many cases were by no means light. these fines the wardens put to their credit in the expense items of their accounts if they could possibly do so, and it is probable that the parish always paid them except in cases of very gross individual delinquency in office. thus the wardens of st. martin's, leicester, record: "payd to mr. comyssarye whe[n] we was suspendyd for lackynge a byble & to hys offycers xxiij d."[34] the wardens of melton mowbray register: "ffor our chargs & marsements at lecest[e]r ... for yt ye rood loft whas not takyn down & deafasyed iiij s. iiij d."[35] in the same accounts we find some years later: "payde to ... at the vicitacion houlden at melton for dismissinge us oute of there bookes for not reparinge the churche iij s. ij d."[36] so, also, we read in the st. ethelburga-within-bishopsgate accounts: "paid in d[octor] stanhope's courte beinge p[re]sented by p[ar]son bull aboute the glasse windowes xvj d." and nine years later: "paid for mr gannett and myselfe ['humfery jeames'] for absolution iiij s. viij d." also: "paid for our discharge at the courte for [from] our excomm[uni]cacon xvj d."[37] the act-books abundantly show that ecclesiastical courts were very far from being limited to mere moral suasion or to spiritual censures. they could never have accomplished their work so thoroughly if they had been. this point will be brought out much more clearly, it is hoped, when we come to consider excommunication as a weapon of coercion.[38] the courts fined parishioners individually[39] and they fined them collectively. what matters it that these fines were called court fees, absolution fees, commutation of penance, or by any other name? what signifies it that the proceeds could be applied only _in pios usus_? the mulcting was none the less real. on the score of bringing stubborn or careless wardens to terms through their purses, the following extract from a letter written in 1572 to the official of the archdeacon of the bishop of london is in point. the letter informs the judge that jasper anderkyn, a churchwarden, "hathe done nothing of that which he was apoinnted by your worshipp at mydsomer to do, for the churche yarde lyeth to commons and all other thynkes in the churche is ondonne.... i praye you dele w[i]t[h] hym so yt he maye be a presydent for them that shall have the offyce; for they wyll but jess att itt, and saye it is butt a mony matter: therefore lett them paye well for the penaltie whiche was sett on theire heads." continuing, the writer states that his reason for writing is "that you be not abewseid in youre office by there muche intreatyng for themselffes, for jesper anderkyn stands excommunicated."[40] sometimes for failure to perform the ordinary's[41] injunctions a whole parish was excommunicated or a church interdicted.[42] thus in the abbey parish church[43] accounts we read under the year 1592 how troublesome and how costly it was "when the church was interdicted" to ride to lichfield and there tarry several days seeking absolution. for this 20 shillings was paid, a very large sum for the time, not to mention a fee to the summoner, travelling expenses and the writing of letters on the parish's behalf.[44] the wardens of stratton, cornwall, had a similar experience "when the churche wardyns & the hole p[ar]ysch was exco[mu]nycatt" in 1565. among the expense items relating to that occasion is a significant one: "ffor wyne & goodchere ffor the buschuppe ys s[er]vantt[s] ij s. viij d."[45] so close is the supervision of the ordinary over the churchwardens, so effective the discipline of the church courts, that we seem to hear occasionally a sort of dialogue going on between judges and wardens, the former directing certain things to be executed, the latter replying and reporting from time to time that progress is being made on the work to be performed, or that the missing objects will be soon supplied. accordingly, at the archdeacon of canterbury's visitation in 1595, we find the wardens of st. john in thanet (margate) reporting: "the chancel[46] is out of repairs, for the repairing whereof some things are provided."[47] two years later they state to the court: "for repairing of the churchyard we desire a day."[48] at the same visitation the wardens of st. lawrence in thanet (ramsgate) present: "our church is repaired, saving that some glass by reason of the last wind be broken, the which are [sic] shortly to be amended."[49] as a final illustration on this score may be adduced the report of the conscientious wardens of kilham, yorkshire, who certify to the judge of that peculiar, august, 1602, "that there churche walles ar in suche repaire as heretofore they have beyne. but not in suche sufficient repaire as is required by the article[50] for that effect ministred vnto us."[51] but the upkeep of the church and its requisites[52] was only one of the churchwardens' many tasks. they had to look to it that the people attended church regularly; that the victuallers and ale-houses received no one while service was being held or a sermon was preached; that each person was seated in his or her proper place, that each conducted himself with decorum and remained throughout the service. accordingly the act-books tell their interesting story of ministers on beginning service sending wardens and sidemen abroad to command men to come to church. the churchwardens and their allies have all sorts of experiences: they break in upon "exercises" or conventicles;[53] they peep in at victuallers' houses or at inns where irate hosts slam doors in their faces and give them bad words on being caught offending;[54] they come across merrymakers dancing the morris-dance on the village green during sunday afternoon service,[55] or they surprise men at a quiet game of cards at a neighbor's house during evening prayer.[56] when admonished by the wardens to enter church, some merely gave contemptuous replies, such as "what prates thou?";[57] others, when the wardens approached, took to their heels and ran away.[58] once inside the church the wardens' task was by no means ended. they had the care of placing each one in his or her seat according to degree;[59] according to sex;[60] and, in case of women, according as they were old or young, married or unmarried.[61] finally, as has been said, the wardens were expected to keep watch lest some one slip out before the service was over or the sermon ended.[62] but while they have one eye on the congregation lest they offend, wardens and sidemen must keep another on the minister while service proceeds or the sacraments are administered, in order that the rites be duly observed and the rubric followed. the curate of theydon gernon (essex) is presented by wardens and sidemen "_quia non fecit suam diligentiam in dicendo preces_, viz. the communion and litany";[63] while the rector of east hanningfield in the same archdeaconry is not only complained of to the ordinary for not maintaining the book of articles, and not using the cross in baptism, but he is also indicted on the same occasion for not praying for the queen "accordinge to hir injunctions, viz. he leaveth out of hir stile the kingdome of fraunce."[64] the court's order was that the rector should acknowledge his error on the following sunday "_coram gardianis_." the wardens of wilton, yorkshire, report to the commissary of the dean of york that their curate recites divine service "very orderlie," but not at a fit time, for he holds service at eight in the morning and two in the afternoon.[65] finally, the rector of pitsea is complained against to the archdeacon of essex for "that he is unsufficient to serve the cure ine that theie are not edified by him...."[66] if the parson neglected his duties it was incumbent upon the wardens to exhort him to perform them.[67] when at the visitation of the bishop of chester in 1592 it was found that there was no surplice at bolton church, manchester deanery, not only did the judge admonish one of the bolton wardens to buy the surplice, but he was instructed "to offer hit to thee vicar at the time of ministering the sacraments, and to certify of his wearing or refusing of hit before the feast of the nativity of our lord next."[68] by virtue of searching articles of inquiry administered to them,[69] such as, is your vicar a double-beneficed man, and, if so, is he lawfully dispensated? does he keep hospitality? if non-resident does he give the fortieth part to the poor? does your minister wear a surplice at the appointed times, yea or no? does he use the cross in baptism and the ring in marriage?[70] does your schoolmaster teach without licence of his ordinary under seal, or no? do you know any person excommunicate in your parish who repairs to church? do you know anyone ordered by law to do penance, or excommunicate for not doing the same, who still continues unreformed?--by virtue of this strict questioning by the ordinary put to them in written articles before each visitation, church wardens, and their coadjutors, the sworn men or sidemen, were compelled to exercise a continual supervision over their minister's conduct as well as over that of the parishioners generally. this fact, coupled with the circumstance that they were themselves liable to be reported to the court and punished if they failed to indict, accounts for the cautious presentments made by these elizabethan wardens. those of great witchingham, norfolk, for instance, inform the chancellor that their parson "holdeth two benefices, but whether lawfully dispensated they know not," and they add that a schoolmaster in their parish "teacheth publicly, but whether licenced or not they know not."[71] the wardens of ellerburn, yorkshire, present jane gryme for fornication, and add "but whether the curate did churche hir or no they cannot say."[72] and the following year they bring to the court's knowledge "that their vicar ... is not resident upon his vicaredg, but what he bestoweth upon the poore they know not."[73] lastly, the very prudent wardens of pickering in the same peculiar bring in their presentment in this fashion: "_qui dicunt et presentant_ there vicar for that he for the moste parte, but not alwaies dothe weare a surplesse in tyme of dyvyne service. they present there vicar for that they ar vncerteyne whether his wif[e] was commended vnto him by justices of peace, nor whether he was licenced to marrye hir according to hir maiestie's iniuncions."[74] the almost unseemly interest here displayed by the wardens in their vicar's matrimonial relations is explained by the provisions of article xxix of the queen's injunctions of 1559, which ordain that no priest or deacon shall wed any woman without the bishop's licence and the advice and allowance of two neighboring justices of the peace first obtained. other parish obligations enforced by the courts christian through the churchwardens were the keeping of annual perambulations (or, as we should say today, beating the bounds of the parish) by parson, wardens and certain of the substantial men of the parish, in the second week before whit-sunday ("rogation week");[75] the exhibiting to the official of the parish register, or the putting in of copies of it once a year at easter;[76] the choosing in conjunction with the parson of collectors for the poor up to 1597, in most parishes at any rate;[77] the levying of the 12d. fine on all those who absented themselves from service;[78] the putting down of all "superstitious" rites in the parish, such as the carrying of banners in perambulation week or the wearing of surplices on such occasions;[79] the ringing of the church bells on hallowe'en, or on the eve of all souls; excessive tolling of bells at funerals,[80] etc. from the point of view of their fellow-parishioners, no doubt, the most important function of the wardens was that of administering the parish finances. this subject will be considered at length in the chapter which follows, but the fact that the spiritual courts enforced the levying of rates for church repair, etc., through the wardens, as well as an accounting to the parish of all monies received or disbursed, concerns us here. when the ealing wardens were "detected" to the chancellor of the bishop of london because they had no pulpit-cloth, no poor-box, nor the paraphrases of erasmus, they appeared and declared in court that they had not provided these things "nor can do it, for that there is no churche stock wherewith to do it." hereupon they were admonished that the judge's pleasure was that they should procure mr. fleetwood and mr. knight (evidently two prominent parishioners) to make an assessment on the parish in order to purchase these articles, and further that they (the wardens) should certify to the court at a later day fixed that the rate had been laid and the missing requisites bought, unless, indeed, some refused to pay, in which case their names should be handed into court.[81] so, again, when rector and wardens of sutton were presented in the same court for letting their church go to ruin, they protested that the reason was that â£40 "will skant repayre it, and that so mutch cannot be levied of all the land in the p[ar]ishe." but this excuse was not for a moment admitted, and they were warned to appear in the next consistory court to take out a warrant for the assessment of the lands.[82] though the wardens did not themselves in practice always make the rate directed by the archdeacon, yet they were held responsible for its making. so true was this that if, after a duly called parish meeting for the purpose of laying the rate in obedience to the archdeacon's orders, no parishioners appear, then, in the words of the archdeacon's official to the wardens of ramsden bellhouse (essex): "if the inhabitants of the said p[ar]ish will not join with the said church wardens &c., that then the said churchwardens shall themselves make a rate for the leveinge of the said charges [etc.] ..."[83] finally, the archdeacons or their officials always stood ready to enforce an accounting by the outgoing wardens to the parishioners or their representatives. if the accounting was delayed too long, or if the surplus was not promptly handed over to the incoming (or newly elected) wardens, then the delinquent officers were cited before the court. numerous instances are found in the court records of the enforcing of this duty. [84] a permanent parish officer and one over whose appointment the parishioners had usually no control [85] was the parish minister, whether officiating rector, vicar or curate. [86] elizabethan statutes and canons sought to increase the dignity of the incumbents of cures, [87] but royal greed did yet more to lower it. [88] the minister was usually addressed by his parishioners as "sir" john, or "sir" george, etc., quite irrespective of his actual rank,[89] and this in an age of punctilious distinctions in forms of address. in the small country parishes the incumbent was often the only, or almost the only, educated man in the community. his advice had naturally considerable weight in parish affairs, and his pen was often required in the drawing up of official or legal documents, certifications or testimonials, the casting up of parish accounts and the like.[90] we find in the act-books officiating rectors or vicars presented for non-residence upon their cures;[91] while rectors and other recipients of great tithes are "detected" at visitations for not repairing the chancels in their churches; or not maintaining their vicarage buildings with barns and dove-cotes;[92] or for not providing quarter sermons where the clergyman serving the cure was not himself licenced to preach;[93] beneficed men not resident are arraigned for not giving the fortieth part of their revenue to the parish poor;[94] resident ministers indicted for not keeping hospitality,[95] or for not visiting the sick.[96] just as the wardens were to look after the conduct of their minister, so the minister was required to fill the office of a censor upon the behavior of the wardens and to report to the ordinary their delinquencies--as, indeed, the trespasses of any among his congregation, though the latter task was more particularly assigned to the wardens and sidemen.[97] furthermore the minister was the vehicle through which the commands of the authorities, lay or ecclesiastical, were conveyed to the parishioners. he was compelled to read these commands or injunctions at stated times and exhort his hearers to obey them. for failure to comply with this duty, he might be cited before the official,[98] and punished by that officer.[99] the curate of east hanningfield, essex, is presented in 1587 for "that he hathe not geven warninge to the church-wardens to looke to there dutie in service tyme, for such as are absent from service."[100] the curate of monkton, kent, is brought before the court in 1569 for that he "doth not call upon fathers and mothers and masters of youths to bring them up in the fear of god."[101] when the archdeacon sent down an excommunication against any one of the parish, it was delivered to the minister to be solemnly proclaimed by him from the pulpit,[102] and thereafter he had to see that the excommunicate person remained away from service until absolution was granted[103] by the ordinary, which absolution was then publicly pronounced from the pulpit.[104] when penance had to be done in church by an offender, it was the duty of the parson to superintend the performance; to say, if necessary, before the congregation the formula of confession prescribed for the offence, in order that the guilty person might repeat it after him;[105] to exhort the persons present to refrain from similar transgressions; to read, on occasion, some homily bearing upon the subject;[106] and finally to make out a certificate (together with the wardens, if necessary) that the penance had been carried out as enjoined by the judge. besides the celebration of the rites pertaining to his priestly office, which need not detain us here, there were many other duties which the ecclesiastical courts enjoined on the parish incumbent. some of these have already been referred to.[107] others will appear as we view the discipline of the courts christian when exercised over the parishioners at large, to which subject we shall now address ourselves. foremost among the requirements exacted by the ordinaries from all alike was the duty of attending church. every one had to frequent service on sundays and on feast-days, and to be present at evening as well as at morning prayer.[108] nor might a man repair to a church in another parish because it was nearer than his own.[109] should his own minister be unlicenced to preach--and only about one incumbent out of four or five was licenced[110]--he was not permitted, except under special authorization,[111] to hear a sermon in another church while service was going on in his own.[112] if, however, a man were able to pay the statutory[113] fine of 12d. for each absence on holy days he could, it would seem, in practice resort to his parish church only on occasions, say once a month, and yet not get himself written down as a recusant.[114] heads of families were made responsible for the attendance of their children and servants; innkeepers or victuallers for their guests.[115] if it was not permissible to frequent service in another place of worship, neither was it optional with a parishioner to get married elsewhere than in his own church.[116] there, too, his marriage banns had to be published--and it was a presentable offence to marry without banns;[117] there he had to have his children christened[118] and his wife churched;[119] there he was compelled to send sons, daughters or apprentices to be catechized,[120] and there himself learn the principles of religion (if he were ignorant of them), for without a knowledge of the catechism and the ten commandments he could not receive communion.[121] all persons over fourteen had to receive communion at easter, and at least on two other occasions during the year.[122] in fact readiness to receive according to the anglican rites became the test of a loyal subject.[123] the strict requirement to report all non-communicants to the official resulted in the keeping of books in which were written the names of the parish communicants.[124] next in importance to church attendance and the observance of the sacraments came the duty of all parishioners to contribute to the parish expenses. we have viewed church courts at work, compelling wardens to levy church rates; we have now to see how the judges forced recalcitrant ratepayers to pay the sums assessed upon them to the wardens or other collectors. among the earliest vestry minutes of the parish of st. christopher-le-stocks, london, is one which, after ordering that an assessment be made for the clerk's wages and for pews, decreed that any rebellious persons should be summoned before themselves, the vestry, to be reformed. but if the rebel would not appear, or, on appearance, remain stubborn to reason, then the churchwardens should sue him before the ordinary at the parish costs "vntill suche tyme as he be reduced vnto a good order, and hath paid bothe the costys of the sute and the chargs that he owith vnto the church...."[125] fifty years later we find this vestry ordaining the same procedure to be followed against parish debtors, and referring to its former order.[126] it seems, in fact, to have been the well-understood thing that just as parish rates to defray the costs of those matters of parish administration, falling within the province of the ecclesiastical courts, were to be assessed by the authority, and under the direction, of those courts, so, too, the recovery of these rates was to be had before the same tribunals. it is not denied that recourse may occasionally have been made in these matters to the courts of common law, but it is believed that the proper remedy was at ecclesiastical law.[127] furthermore, we believe that the means at the disposal of the ecclesiastical courts for putting their judgments into effect were quite sufficient and in practice effective. what these means were will be taken up and discussed a little further on. returning to the matter of suing parish debtors in courts christian, it is interesting to find that in the language of the period a suit "at law" did not always mean at common law. an order of the vestry of stepney, london, in february, 1605-6, after determining the manner in which â£50 should be raised to pay off parish debts due to the bell founder, adds that persons refusing to pay their shares, or neglecting to do so, should not find themselves aggrieved "if the same be recouered against them by lawe." and the meaning of this term is fully explained by these subsequent words in the same order, that the churchwardens shall "at the chardg of the p[ar]ish appointe and entertayne one doctor and a proctor to sue and recouer the same by lawe of any p[er]son [etc.]."[128] now doctors and proctors practiced before ecclesiastical tribunals only.[129] that presentment to the ordinary was the common and usual way, not only of recovering church rates, but any thing of value that belonged to the parish and was unjustly detained, the act-books and other documents of the time plentifully show. thus in archbishop parker's visitation articles for the diocese of canterbury in the year 1569, he requires all churchwardens to report to their ordinaries "whether there be any money or stoke, appertaininge to any paryshe churche, in anye manne's handes, that refuse or differeth to paye the same [etc.]."[130] the wardens of melton mowbray record under the year 1602 an item for charges at the court at leicester against a parishioner "for not payinge his levi for the churche."[131] those of ashburton, devon, itemize in 1568-1569 two shillings "for a zytation to those that wold nott pay to the power."[132] as the wardens of east tilbury were going about among the parishioners demanding money of each one according to the rating inscribed on an assessment roll which they carried with them, one garrett, a constable, discontented that he himself should be rated as high as four shillings, seized the roll and refused to produce it. this, of course, put an end to further collections. for this he was presented by the vicar before the consistory court at stratford bow chapel. here he alleged that the rating "was very unequally made." but the judge warned garrett to appear in court the following tuesday to answer for his contempt. further he was to pay his four shillings to the wardens and bring to the judge the wardens' certificate that he had done so. on the day appointed garrett was present in court with the vicar and wardens. the decree of the court is headed: "_negotiu[m] reparac[i]o[n]is eccl[esi]e de_ east tilburie," and is so characteristic of the thoroughgoing and searching manner in which ordinaries supervised the administration of parish affairs that we cannot forbear to quote a large part of it in full. "touchinge the same wm garrett," the registrar inscribes in the act-book, "the churchwardens do here testifie that he hathe payd his iiij s. w[hi]ch he was rated at...& they saye they have receyved it. towching the churchwardens & the repayre [of] the church," the scribe continues, "the judge doth order that the minister, mr howdsworth, [and seven others named, including wardens, sidemen and constables]...p[ro]cure workmen of all trad[es], & then sett downe under their hand in writing what chardg it will be to repayer the church sufficiently in all thing[s] wharein it is decayd, as namely, tyling, paving, masonns worke, carpenters worke & glasing...and when they have under the workmens hand founde what will repayer the churche in every p[ar]ticuler, then shall they all nyne assemple themselves in the church [on a day named]...and make a rate to that proportion w[hi]ch shall remayne above the rate already allowed of...and they shall certify in stratford bowe chappell bothe of the vew making by the workmen, of the gathering of the rate already made, of their making a new rate...and of the gathering thereof; and likewise how farr they have p[ro]ceeded in the repayer of the church the ixth of aprill next: and for the punish[men]t of him, the said wm garrett, for his contemptuous taking away of the rate, as is complayned of, it is respited untill this p[resent] order be p[er]formed; & he is now monished to appeare in the consistorie the first court day [etc]...."[133] so, too, when richard fynsett of clayton, sussex, was "detected" to the official for not paying his rate for church repairs, november, 1595, he appeared and claimed that not only was his rating excessive, but that the assessment had not been according to custom, to wit, made by the majority of the parishioners. he was summoned by the judge to prove his allegation at the next court day, and to pay his court and other fees. he was probably unable to prove his point, for under the 9th december following the record simply states "_comparuit et solvit feoda debita_."[134] the wardens of swalecliffe, kent, complain to the archdeacon of canterbury in 1565 that their church is near utter decay, but the parish is so poor that they cannot repair it unless an assessment be made on the lands within the parish, for the making of which assessment they ask for an authorization.[135] two years later they appear and say in court that their church still lacks windows, "and the parish is not able to mend the same, without it may please you that the rest of the cess that was made may be levied, which we cannot get unless we have your aid."[136] in the same way the wardens of st. alban's "implored the aid of the judge," because they wished divers persons who refused to pay their rates "co[m]pelled therunto by aucthoritye of this court," otherwise the unpaid workmen on their ruinous church would leave, and the half-finished structure sustain damage by winter weather.[137] the act-books teem with such presentments as the following: one holaway refuses to give to the poor-box, "and is found able by the parish."[138] thomas arter will give but a half-penny to the poor. arter appears and "saithe that he is not of the wealthe that men takithe him to be." the judge commands him to pay a half-penny every week, and dismisses him.[139] "john wilson haithe not paide his clerke wages by the report of the clerke."[140] "here follow the names of such, as being able, refuse notwithstanding to pay to the poor man's box [eight names follow]";[141] or "the presentment made by the churchwardens and sidemen...of all such as are behind for a cess made for the church and refuse to pay [five names]."[142] john baldwin presented for that "the fame and report goeth" that he keeps back â£10, a legacy given seven years previously for church repairs and the poor-box, "and the church and the poor have wanted the same, having no benefit thereof, as we know."[143] one consant received a cow belonging to the parish "and hath not made an account to the parish for her."[144] jeremy robson is cited "for detaining our clerk's wages from the land which he occupieth in our parish after 6 s. 8 d. for a plough land of 140 acres."[145] two lessees of the parish are presented "for withholding the farm of two acres and a half of church land one year and a half unpaid."[146] john smithe presented for felling and selling a great oak which stood upon church land, "whereas now we stand in lack of the same to repair our church."[147] a parishioner is cited before the ordinary because he withholds church goods and refuses both to enter into bond for them and to make an accounting.[148] so men are presented for not paying the parish fees due for the burial of members of their family, or for the ringing of knells;[149] for suffering a church tenement or a part of the church fence, which they are bound to repair, to fall into decay,[150] and so forth. in short, any one at all, whether in the capacity of parish officer; rate payer; trustee; administrator or executor; lessee of the parish cattle or its lands or tenements--any one, in fact, standing in the relation of debtor to the parish in a matter falling within the jurisdiction of the spiritual courts, could be, and was, compelled by these to pay or to account to the parishioners. not only did the church regulate many acts of a parishioner's life, and preside over his moral conduct, making him pay in great measure the costs of this disciplinary administration, but it also was entrusted with his education, through which it sought to control his ideas and convictions, and to direct and form public opinion. the education and training of a nation depend, of course, in greatest measure on its primary schools and its press. as for its universities, these are but the apex on the educational pyramid, for a very select few only. now the primary schools were represented in the times whereof we write by the parish schoolmaster, the familiar "_ludimagister_" of the canons and act-books, and by the incumbent himself. for the people at large the press was represented almost entirely by the licenced preacher, and, in the larger towns, the licenced lecturer. the canons of 1571 ordain that no one shall teach the humanities nor instruct boys, whether in school or in private families,[151] unless the diocesan licence him under his seal. nor are schoolmasters to use other grammars or catechisms than those officially prescribed. every year schoolmasters are to commend to the bishop of the diocese the best read among their pupils, and those that by their achievements give promise that they may usefully serve the state or the church, so that their parents may be induced to educate them further to that end.[152] bishop barnes in his injunctions of 1577 commands that all incumbents of cures in durham diocese not licenced to preach shall "duly, paynefully and frely" teach the children of their several parishes to read and write. furthermore, teachers shall exhort the parents of those boys who have proved themselves apt at learning and of "pregnant capacitie" to cause their sons to continue their studies and to acquire the good and liberal sciences. on the other hand they shall induce fathers of sons of little wit or capacity to put them to husbandry, or some other suitable craft, that they may grow to be useful members of the commonwealth.[153] in this diocese we find schoolmasters by profession ("_ludimagistri_") summoned at the visitations very regularly, and there seem to have been a considerable number of them in the towns, though not in the country parishes, where the curates doubtless officiated as instructors of the youth according to the bishop's monitions.[154] everywhere in the proceedings of the ecclesiastical courts schoolmasters are "detected" to the judges from time to time for having no licence to teach.[155] as for the pulpit, that great instrument of political guidance at a period when politics consisted chiefly of religious contentions,[156] it is well known that elizabeth and her advisors grasped at once its paramount importance, and that she had been on the throne but little over a month when she issued her proclamation inhibiting all preaching and teaching for the time being. this command was followed by her injunctions of the next year, forbidding any to preach unless licenced by herself, her two archbishops, the diocesan, or her visitors.[157] as is well known also, no command was more universally enforced. it is constantly mentioned in the metropolitan or diocesan injunctions or articles of the period,[158] and the proceedings before the ordinaries bear witness to its enforcement.[159] parish opinion was further sought to be moulded by the reading in church of various tracts, homilies, monitions, forms of special prayers, etc., etc., which the wardens were ordered to procure from time to time, and which are very often met with in their accounts. these official mediums of information or edification conveyed to the good people of the parishes some knowledge of the events and politics of the realm and of the world beyond it. thus they heard of the overthrow of the rebels in the north of england (1569), the ravages of the great earthquake of 1579; the progress of the plague; or, again, of the struggle of the french protestants led by henry of navarre, the defeat of the turks at lepanto, and so forth.[160] as food for the more advanced minds of the congregations, ordinaries saw to it that volumes dealing with the interpretation of the scriptures, the polity of church and state, and the defence of that polity were provided for every parish church. such works were erasmus' paraphrases, bullinger's decades, bishop jewel's works, and other writings of an apologetic nature. to a certain extent news was also spread, and grievances were aired, in unofficial broadsides or ballads. these treated of such subjects as the untimely end of traitors great or small; the adventures of her majesty's soldiers and sailors; the rapacity of landlords and the evils of the enclosure movement.[161] but these publications and all other printed matter were subject to the strict censorship of church and state. extremely few presses were permitted in england, and these few under the jealous supervision of the high ecclesiastical authorities, as is evidenced by the numerous orders or decrees issued by them to the master and wardens of the london stationers company, which, with a very few special patentees, enjoyed the monopoly of printing.[162] having now reviewed the chief administrative functions of the spiritual courts and their mode of exercise, the question presents itself, what were the means at the disposal of the ordinaries for enforcing their decrees? the principal one of these has already been mentioned incidentally, viz., excommunication. excommunication was the most usual, as it was by far the most effective, weapon for compelling obedience to the mandate of the judge in any matter whatever. indeed without this instrument of coercion the ecclesiastical judges would have been impotent. excommunication was of two kinds, the lesser and the greater. the former was in constant use (to employ the words of a contemporary document) "for manifest and wilful contumacy or disobedience in not appearing when ... summoned for a cause ecclesiastical, or when any sentence or decree of the bishop or his officer, being deliberately made, was wilfully disobeyed...."[163] even under the lesser excommunication a man could not attend service, and he was deprived of the use of the sacraments.[164] if an excommunicate sought to enter church with the congregation, either he had to be forcibly expelled or the service could not proceed.[165] if he continued in his contempt of court he made himself liable to the greater excommunication,[166] and then he was virtually an outcast from the society of his fellow parishioners.[167] that excommunication was feared by the great majority of parish folk there is no reason to doubt. certainly the greater excommunication might seriously injure a man in his business as well as his social interests, not to mention the trouble and expense of getting an absolution.[168] that excommunication reduced most offenders to order the church court proceedings demonstrate. if, however, a man were obdurate and hardened he was turned over to the queen's high commissioners, and these, while making the fullest use of ecclesiastical procedure and the oath _ex officio_,[169] also freely employed the penalties of the temporal courts, viz., fines and imprisonments. as no ecclesiastical offence was too small for the commissioners to deal with, and as their jurisdiction was not limited (like that of the ordinaries) to a district or a diocese, courts of high commission may be called universal ordinaries.[170] finally, if a person stood excommunicate over forty days, an ecclesiastical judge, on application to the diocesan, might procure against him out of chancery the writ _de excommunicato capiendo_. this writ was probably not very often resorted to in practice, partly because of the great expense involved, and partly perhaps, too, because of the slack execution of the writ by certain undersheriffs or bailiffs, encouraged as they were by the rather hostile attitude sometimes assumed against the courts christian by the queen's temporal judges.[171] the writ was, however, certainly no dead letter, and served also _in terrorem_ to reduce stubborn offenders.[172] indeed archbishop bancroft in 1605 called it "the chiefest temporal strength of ecclesiastical jurisdiction."[173] in view of the fact that "standing excommunicate" was in itself a presentable offence before the ordinary, and an offence often presented,[174] and in view of the further fact that the excommunicate might, according to a contemporary who writes with authority, "be punished for absence from diuine praier, neither shall his excommunication excuse him, for it is in his owne default,"[175] it is queried whether such an involuntary absentee from church did not make himself just as liable to presentment at quarter sessions for recusancy[176] as any voluntary recusant. perhaps it is for this reason that grand juries are sometimes complained of for discriminating among the names sent in to them on the bishops' certificates for indictment at quarter sessions, and for certifying some and throwing out others "at their pleasure."[177] but be this as it may--and it is conjecture unsupported by positive proof--enough has been said, it is hoped, to show that ordinaries were quite capable of making their decrees obeyed, and that excommunication (contrary to the commonly received opinion) was a most effective means of coercion. many, indeed, were its uses. it might (or its equivalent interdiction or suspension[178]), as has been seen,[179] be used to compel a parish officer to perform the duties of his office. it might also be employed, when persuasion failed, to induce a parishioner to accept office when chosen by his fellows.[180] but, it would seem, one single definition would comprise all cases: excommunication was employed against all those who disobeyed some order of the spiritual judge, express or implied--it was a summary process for contempt of court, in fact, and was daily used as such. to recapitulate: a very large part of the parishioner's life and activity fell under the surveillance and regulation of the ecclesiastical courts. they compelled him to attend on specified days his parish church, and no other; to be married there; to have his children baptized and his wife churched there; to receive a certain number of times communion there; to contribute to the maintenance of church and churchyard, as well as to the finding of the requisites for service or the church ornaments or utensils. in his parish church he and his children were catechized and instructed, and, if the latter were taught in a neighboring school-house, it was under the strict supervision of the ordinary and by his or the bishop's licence and allowance. so true was this that the schoolmaster was, like the parson, a church officer. for the parishioner his church was the place of business where all local affairs, civil or ecclesiastical, were transacted, as well as the centre of social life in the village. here the mandates of the authorities in church and state were read to him; here he was admonished of his duty to contribute to, or to perform, the burdens of parish administration and warned of the penalties for neglect; here he met with his fellows to settle parish affairs and audit parish accounts, or to choose parish officers under the auspices of the ordinary, being himself compelled, if necessary, by that official to serve when his own turn for office came round. as churchwarden it was his duty to collect the rents from parish lands and tenements, and to see that parish offerings were gathered and the parish rates assessed and paid, or recovered by means of the ecclesiastical courts. if the church was ruinous; if bread and wine were lacking for the communion; if any of the books, furniture, utensils or ornaments enjoined by the diocesan's articles or by the canons were missing; if the curate did not follow the rubric, or retained "superstitious" rites; if the yearly perambulation was omitted; if faults of the minister or of the parishioners were not presented: he and his fellow-warden were held responsible by the official. the machinery which the canon and the civil law placed at the disposal of the ordinary for his judicial administration of the parish was extraordinarily flexible. courts christian were unencumbered by the formalities of the common law or by the coã¶peration of juries. they could proceed _ex officio, i.e_., without formal presentment and upon hearsay only, and they were armed with the formidable power of administering the oath _ex officio_ by which a parishioner was forced to disclose all he knew against himself. they could in all cases command the _doing_, as well as the _giving_[181] of a thing--powers far more extensive than those possessed by any court of equity of today. lastly, it was their custom to require that a return be made in court, or in other words, a certification, that their commands had been duly performed--thus stamping them as true administrative bodies. it was inevitable from the nature of their jurisdiction and procedure that abuses should be committed both by ecclesiastical judges and by their officers, such as registrars, proctors and apparitors. these judges wielded an admirable instrument of administration and discipline, one that could be bent to meet any emergency, but this efficiency had been attained at the sacrifice of some indispensable safeguards for the carrying out of impartial justice. first, no parishioner's acts, whether done in an official or a private capacity, were ever quite safe from misrepresentation, or downright falsification by his enemies, for secret denunciation to wardens or sidemen (or to the ordinary himself) by any one[182] might start a proceeding against the person denounced and force him upon oath to disclose the most private, the most confidential, matters. again, proctors, apparitors, registrars, and other scribes whose fees depended on citations and the drawing up of court proceedings, documents, or certificates, had every interest in haling persons before the official, because court fees had to be paid whether a man were found innocent or guilty.[183] hence the system tended to create spies, of whom the chief were the apparitors, or summoners, and their underlings. there is a very interesting contemporary ballad entitled _"a new ballad of the parrator and the divell_," attributed by its modern editor to not later than 1616, which throws much light on the proceedings of certain unscrupulous apparitors, and reflects also the strong dislike entertained for the whole tribe of apparitors by people of the time.[184] the devil going a hunting one sunday and beating the bushes, up starts a proud apparitor. during several stanzas the apparitor narrates to the devil, as one consummately wicked man to another, all the tricks of his trade to drum up cases for himself and his court. he spies on lovers as they pass unsuspecting; he haunts the ale-houses and overhears men's tales over their cups; if business be dull he even devises scandal among neighbors, and sets them at enmity. thus he concocts his accusations of immorality, or drunkenness, or profanity, or uncharity towards neighbors, and writes them busily down in his _quorum nomina_, or formulas of citations to appear before the official's court. "my _corum nomine_ beares such swaye," he boasts, "they'le sell their clothes my fees to pay." but, remarks the devil after listening to all this, surely the innocent pay no court fees, "but answere and discharged bee." "my _corum nomine_ sayth not so," rejoins the apparitor, "for all pay fees before they goe.--the lawier's fees must needs be payd,--and every clarke in his degree--or els the lawe cannot be stayd--but excommunicate must they bee." the devil, amazed and disgusted at laws which "excell the paines of hell," turns to go, whereupon the apparitor seeks to arrest and fine him for traveling on the sabbath. exclaiming "thou art no constable!" the devil pounces upon the unworthy officer and carries him off to hell.[185] thirdly, even when at their best and conducted by upright judges and officers, the modes of proof in force in the courts christian were sometimes utterly inadequate as means for getting at the truth. the inquest, or trial by jury, had never been introduced into these courts, where the archaic system of compurgation[186] still lingered. if a man for want of friends, or for want of good reputation, were unable to procure compurgators to attend him at visitations or courts, held sometimes twenty miles and more away,[187] he might be condemned as guilty of specific acts which he had never committed.[188] he might even fail in his proof because he was poor. when the judge arraigned lewis billings of barking, essex archdeaconry, for "that he hath failed in his purgacion," billings pleaded "that he is a very poore man and not able to procure his neighbours to come to the cort, and beare their charges."[189] but, as is well known, contemporaries attacked not only the inferior officers, but the judges themselves. complaints of great abuses were loud and long,[190] and when the ecclesiastical courts were abolished by the long parliament in 1641,[191] the satirical literature of the day celebrated their downfall with a verve, a gusto, and an exultation amazing to one not familiar with the procedure of these courts.[192] as was mentioned at the beginning of this chapter, the secular judges were given statutory authority to take cognizance of breaches of the order prescribed by the book of common prayer, of the offence of not attending church, and other delinquencies against the legal settlement of religion. hence in these matters they exercised what might be called a sort of ecclesiastical jurisdiction in aid of the ordinary and concurrently with him, though their mode of procedure, of course, was that of the common law, possessing nothing in common with the practice adopted in courts christian. men who were "hinderers" and "contemners" of religion; who refrained from going to church without lawful cause; who had mass-books or super-altars[193] in their possession;[194] who spoke in contempt of the book of common prayer and its rites;[195] who caused their children to be baptized with forms other than those prescribed;[196] ministers who omitted the cross in baptism;[197] who left off the surplice;[198] who refused to church women;[199] who called purification "a jewish ceremony," or who in their sermons preached seditious doctrine[200]--all these and other like offenders were indicted at quarter sessions or at the assizes. chapter ii. parish finance. speaking generally of the average parish, elizabethan churchwardens accounts and vestry minutes show that for the purposes of raising money amongst themselves to meet every-day parish expenditures,[201] the parishioners of the period did not commonly resort to rates, if by "rate" be understood a general assessment of all lands or all goods alike at a fixed percentage of their revenue or value above a minimum exempted. it must not be supposed, however, that in the case of offerings or gatherings, or of levies to raise a certain sum where each man assessed himself, it was entirely optional for each to give or to refuse. what a man customarily gave, or what he had promised to give, or, again, what the parish thought he ought to give, that the ordinary might compel him to give.[202] from an offering or a voluntary assessment to a rate is often but a short step, and the two former shade off into the latter almost imperceptibly. the justices of the peace and the ecclesiastical authorities usually cast lump sums upon the parishes, leaving ways and means to the parishioners themselves. but it was, of course, optional with the justices to rate each individual separately when it seemed good to them, and for this they had the queen's subsidy books to guide them. here, however, we are chiefly concerned with the raising of money amongst the parishioners themselves. how manifold, how ingenious were the parochial devices for creating resources, it is the purpose of this chapter to set forth. but before proceeding to the parish expedients, properly so called, for raising money, it will be well to say something of parish endowments, whether in lands, houses or funds. according as the revenue from these was available for general, or at least for various purposes, or, on the other hand, was impressed with a trust for some specific object, these endowments may be divided into general and special. parishes well endowed might be able to dispense with some of the devices for money-getting which we shall have occasion to enumerate, but then, after all, endowments might come and they might go;[203] moreover, the financial policy of any one parish would, of course, differ according to the disposition or the ability of those who shaped it. of loddon, norfolk, we are told that "no complaint appears about church rates, for there were none, as the revenue of the town farm ... rendered a tax of that description unnecessary."[204] of st. petrock's, exeter, we are informed that "the parish became so well endowed by donations of land and houses as to enable the wardens to dispense almost entirely with the quarterly collections entered in the earlier accounts."[205] the editor of the thatcham, berks, accounts, writes: "in the early years of these churchwardens accounts the available funds were derived chiefly from the two oldest charities, one called 'lowndye's almshouses,' the first account of which is for the year ... 1561 ... to 1562; the other known as 'the church estate,' the first account of which begins in 1566."[206] summoned by the bodmin, cornwall, justices in january, 159-4/5, to make a report as to the parish stock, the representatives of stratton certify at sessions that their stock "am[oun]ts to the now some of sixteene poundes, some yeares it is more & some yeares lesse...." and, they continue, "the vsinge of our sayde stocke is by the two wardens & the rest of the eight men w[hi]ch for the same stande sworne, and it is bestowed aboute her ma[jes]ties service, for buyenge of armor, settinge forth of souldiers w[i]th powder & shott.... and likewise for the relievinge & mainetayning of the poore...." they thereupon give the names of the impotent and decrepit persons and orphan children "wholly relieved" by the parish, ten in number, and add that there are upwards of a hundred poor "w[h]ich are not able to liue of themselues, but haue reliefe dayly one thinge or another of the seide p[ar]ish."[207] the little parish of st. michael's in bedwardine, worcestershire,[208] possessed lands and tenements in various parishes, and in 1599 invested â£10 in buying two more tenements in worcester city.[209] its wardens accounts, we are told by their editor, disclose that there was never any lack of money for parish purposes "in spite of a rather lavish expenditure at times in the luxury of law[suits]."[210] lapworth, warwickshire, had many acres of parish land.[211] the churchwardens of st. john's, glastonbury, somerset, return in their accounts the rent of the parish lands in 1588 at â£9 13s. 10d.,[212] and, as these accounts show, they occasionally received important sums for fines on changes of tenants. the various properties managed by the wardens of st. michael's, bath, numbered thirty-seven in 1527, yielding a revenue of â£11 8s.;[213] and even in 1572 the rent amounted to â£11 8s.[214] indeed, though parish lands and houses were generally vested as to title in trustees (often a numerous and cumbersome body),[215] the churchwardens themselves and sometimes other accountants,[216] who like the wardens were appointed from year to year, usually exercised the actual management. the feoffees existed chiefly for the purpose of making it difficult to alienate the parish properties, "and the larger the trust body the more difficult such alienation was supposed to be."[217] contenting ourselves with the above examples, which could easily be multiplied, we pass on under this same head of general endowments to an interesting form of personal property, viz., cattle, for not only did the wardens derive receipts from parish holdings of real estate, but also from _endowments of cows or sheep_. the pittington, durham, twelve men, a sort of parish executive and administrative body, enact in 1584 "that everie iiij pounde rent[218] within this parrishe, as well of hamlets as townshippes, shall gras[219] winter and somer one shepe for the behoufe of this church;"[220] and we are told that these "church shepe," as they were called, were here one of the chief means of raising funds for parochial purposes.[221] it was the custom of pious donors, especially among the lowly, to leave one or more sheep or cows to their parish. in the year 1559 twelve sheep were thus given or bequeathed to wootton church, hants, by ten donors.[222] these sheep, as well as the parish cows, were often hired out to parishioners, who gave security for their return. sometimes they were given to poor men at a reduced rent, and thus they served to support the poor.[223] that the keeping of cattle was a well-recognized source of parish income is seen by the queen's injunctions of 1559 in which she alludes to "the profit of cattle" among other sources of parish revenue to be devoted to the poor, "and if they be provided for, then to the reparation of highways next adjoining," or to the repair of the church.[224] leaving the topic of general endowments to take up those sources of revenue destined to defray particular forms of expenditure, we find that _permanent parish endowments_ in lands, goods or money devoted to the defraying of _specific parish administrative burdens_ or _utilities_ were very numerous in the local documents of the 16th century. sometimes a land or fund was set apart by the donor, or by the parish itself, for the support of a parish servant or officer;[225] sometimes its revenue maintained this or that cripple or blind man,[226] or a number of them; sometimes it was used for feeding the poor,[227] or for buying wearing apparel for them;[228] for setting them at work in houses of correction,[229] or for parish education.[230] in particular, lands or funds were frequently set apart as special and permanent endowments for the repair of bridges.[231] in fact, the proceeds of parish lands or other endowments might be appropriated to alleviate any tax burden whatsoever. in 1549 it was stated by the wardens of north elmham, norfolk, that the net proceeds of the five and thirty or forty acres which they rented out were devoted exclusively towards the paying of the fifteenths due from time to time to the king and his successors.[232] to illustrate the variety of purposes for which parish trusts were created, i cannot do better than quote part of the preamble of the 43 eliz. c. 4, known as the statute of charitable uses: "whereas landes, tenements, rentes ... money and stockes of money," it is there rehearsed, "have bene heretofore given, limitted ... and assigned ... some for releife of aged, impotent and poore people, some for maintenaunce of sicke and maymed souldiers and marriners, schooles of learninge ... some for repaire of bridges, fortes, havens, causwaies, churches, sea-bankes and highewaies, some for educac[i]on and p[re]fermente of orphans, some for or towardes reliefe, stocke or maintenaunce for howses of correcc[i]on, some for mariages of poore maides, some for supportac[i]on, ayde and helpe of younge tradesmen, handiecraftesmen and p[er]sons decayed, and others ... for aide or ease of any poore inhabitants conc[er]ninge paymente of fifteenes, settinge out of souldiers and other taxes [etc.]...."[233] as for money and goods left by testators or given _inter vivos_ for _temporary expenses_ or _special occasions_ (as opposed to the creation of permanent trusts and endowments), we find a constant stream of such benefactions throughout the elizabethan period. by the queen's injunctions of 1559 parsons are diligently to exhort their parishioners, "and especially when men make their testaments," to give to the poor-box, the surplus of which, after provision for the needy, might be devoted to church and highway repair.[234] bequests made to the highways or bridges were considered as donated _in pios usus_. "i thinke," wrote a prebendary of durham cathedral in 1599, "it also a deade of charitie and a comendable worke before god to repaire the high-wayes, that the people may travaille saifely without daunger. i therefore will to the mending of the highwayes [etc.]...."[235] noblemen and wealthy men were expected to help maintain the local poor in particular. elizabethan ballads celebrate the liberality to the destitute of an earl of huntingdon,[236] of an earl of southampton,[237] or of an earl of bedford.[238] at the funeral of george, earl of shrewsbury, in 1591, eight thousand got the dole served to them, and it was thought that at least twice that number were in waiting, but could not approach because of the tumult.[239] the churchwardens and overseers of the poor accounts, especially in london and the larger cities, abound with receipt items of gifts from great personages or wealthy merchants.[240] owing to the difficulty of investing money because present-day intermediaries were absent between capital seeking employment and would-be borrowers; and because the medieval stigma attaching to money loaned at interest had by no means wholly disappeared,[241] there grew up in elizabethan parishes a system of laying out money, raised by the parish or donated by benefactors, in various trades, such as wool-spinning, linen-weaving, the buying of wood or coal to sell again at a profit,[242] etc. sometimes well-to-do parishioners with good credit would themselves borrow parish money, returning ten per cent. for its use.[243] usually, however, parish money was loaned gratis, the parish taking sureties for its repayment and sometimes articles of value, being, apparently, not always above doing a little pawnbroking business.[244] on the other hand, when the parish itself had occasion to borrow money it would occasionally give its own valuables as security. thus the mere, wiltshire, wardens record in 1556 that they have redeemed on the repayment of 40s. to one cowherd, "borowed of hym to thuse of the churche," "certeyn sylver spones of the churche stocke."[245] finally, parishes would now and then make some cautious speculation in real estate, such as the buying of a local market or fair with a view to profit.[246] leaving the subject of endowments we shall now take up in order the measures which may be called _parish expedients for raising money_. of all means ever devised for obtaining large sums of money for parish uses, the most popular, as certainly the most efficacious, was the _church-ale_. widespread during the first years of elizabeth's reign, church-ales, for reasons hereafter to be mentioned, ceased to be held in many parishes towards the end of the reign. they constitute, nevertheless, at all times during the 16th century an important chapter in the history of parochial finance. in some wardens' accounts the proceeds of these ales form a yearly recurring and an ordinary receipt item; in others ales were resorted to when some unusually large sum had to be raised, or some heavy expense was to be met, such as the rebuilding of the church tower, the recasting of the bells, the raising of a stock to set the poor to work, or the buying of a silver communion cup.[247] frequently, also, funds were raised by means of ales called clerk-ales, sexton-ales, etc., to pay the wages of clerks, sextons and other servants of the parish. "for in poore countrey parishes," writes an early 17th century bishop, "where the wages of the clerke is very small, the people ... were wont to send him in provision, and then feast with him, and give him more liberality then their quarterly payments [or offerings] would amount unto in many years." indeed, he continues, since these ales have been abolished "some ministers have complained unto me, that they are afrayd they shall have no parish clerks for want of maintenance for them."[248] church-ales were usually held at or near whitsuntide, hence they were also called whitsun-ales or may-ales in the accounts. if the occasion were an extraordinary one, and it was sought to realize a large sum, notices were sent to the surrounding parishes, say to ten, fifteen, or more, to be read aloud from the pulpits of their respective churches after service, which notices contained invitations to any and all to come and spend their money in feasting and drinking for the benefit of the parish giving the ale. as the day approached for the opening of the ale, which, if it were a great one, would be kept for four or five days or more, all was bustle in the parish to prepare for a feasting which often assumed truly gargantuan proportions. cuckoo kings and princes were chosen, or lords and ladies of the games; ale-drawers were appointed. for the brewing of the ale the wardens bought many quarters of malt out of the church stock, but much, too, was donated by the parishioners for the occasion. breasts of veal, quarters of fat lambs, fowls, eggs, butter, cheese, as well as fruit and spices, were also purchased. minstrels, drum players and morris-dancers were engaged or volunteered their services. in the church-house, or church tavern, a general-utility building found in many parishes, the great brewing crocks were furbished, and the roasting spits cleaned. church trenchers and platters, pewter or earthen cups and mugs were brought out for use; but it was the exception that a parish owned a stock of these sufficient for a great ale. many vessels were borrowed or hired from the neighbors or from the wardens of near-by parishes, for, as will presently be seen, provident churchwardens derived some income from the hiring of the parish pewter as well as money from the loan of parish costumes and stage properties. when the opening day arrived people streamed in from far and wide. if any important personage or delegation from another village were expected, the parish went forth in a body with bag-pipes to greet them, and (with permission from the ecclesiastical authorities) the church bells were merrily rung out. at the long tables, when the ale was set abroach, "well is he," writes a contemporary, "that can get the soonest to it, and spend the most at it, for he that sitteth the closest to it, and spendes the most at it, hee is counted the godliest man of all the rest ... because it is spent uppon his church forsooth."[249] the receipts from these ales were sometimes very large. so important were they at chagford, devon, that the churchwardens were sometimes called alewardens.[250] at mere, wilts, out of a total wardens' receipts of â£21 5s. 7-1/2d. for the two years 1559-61, the two church-ales netted â£17 3s. 1-1/2d.,[251] thus leaving only â£5 2s. 6d. as receipts from other sources for these two years. at a later period, on the other hand, this relation of receipts was entirely reversed. for instance, in 1582-3 the wardens secured only â£4 10s. 4d. from their ale, while proceeds from other sources amounted to â£17 9s. 7d.[252] in the thirty-one years from 1556-7 to 1587-8 in this parish the recorded wardens' expenditures had more than doubled. in the first-named year they had been but â£8 i2s. 5d.;[253] in the latter year they had swelled to â£18 14s 3-1/2d.[254] this characteristic is true of all elizabethan church budgets, and the writer has seen a number of them.[255] the wootton churchwardens enter under the year 1600 the following: "rec. by our kingale, all things discharged, xij li. xiiij[s]. jd. ob.," an important sum for the day.[256] besides the churchwardens other wardens or gilds sometimes busied themselves with the selling of ale for the benefit of the church. one of these gilds at south tawton, devon, records in its accounts for 1564: "we made of our alle and gathering xl l. viijs. viijd."[257] so important a source of parish income had to be carefully looked after. a church-ale with its attendant festivities for drawing visitors was an important business matter. accordingly we find the parishioners of st. john's, glastonbury, making an order in 1589 "that the churchwardens shall yearly keape ale to the comodeti of the parishe upon payne of xxs. a yere."[258] in ashburton, devon, in 1567 christopher wydecomb had to pay 20s. to the wardens "because he refused the office of the drawer of the church ale."[259] at wing, bucks, those refusing "to be lorde at whitsuntyde for the behofe of the church" were fined 35. 4d. apiece.[260] in some places these masters of the revels were called cuckoo kings, and the office seems to have gone in rotation like other parish offices.[261] when invitations had been sent out to surrounding parishes, interparochial courtesy seems to have required the attendance either of the churchwardens or of some other more or less official representatives of the neighboring communities. these representatives carried with them some small contribution made at the expense of their respective parishes ('ale-scot').[262] because of the alleged drunkenness and disorderly conduct attendant upon some of these ales, the justices of assize and the justices of the peace attempted in some shires to put them down on various occasions.[263] more effective, perhaps, in doing away with them was the gradual growth of puritanism. in conclusion it should be remarked that church-ales seem to have obtained only in central and southern england. the huge and thinly populated parishes of the north did not favor the development of an institution so essentially social in its character. _church plays, games_ and _dances_ were allied in a measure with church-ales, partly because they were sometimes held concurrently with them, partly because they served as a substitute for the ales when these fell into disrepute. miracle plays and other pageants were given by certain parishes from time to time, too frequently in the churches themselves, in which case the wrath of the ordinary was called down upon the parish if he heard of them.[264] some parishes kept various costumes and stage properties, which were hired out to other parishes when not in use.[265] may games, robin hood plays or bowers, hocktide sports and forfeits, morris-dances and children's dances were all turned to the profit of the church, collections being taken up at them.[266] morris coats, caps, bells and feathers were frequently loaned out for a consideration by wardens to other parishes.[267] _church-house_. here were the brewing kettles and the spits, and here was stored church grain or malt for beer making.[268] here, too, presumably, the pewter ale pots, trenchers, spoons, etc., which figure in the accounts, were kept. these were hired out to other parishes for their ales.[269] while ale was brewed and drunk in the church-house for the benefit of the parish, and that apparently on other occasions than church-ales, it does not seem probable that the place was often allowed to degenerate into a common ale-house, even though in some parishes it may have borne the name of "church tavern."[270] when not required for parish purposes the church-house was rented out, and rooms in an upper story were used for lodging.[271] as church-ales fell into disfavor _offerings_ or _gatherings_ in church or at the church door became more frequent[272] and more systematized. as time went on these collections were regularly taken up in many parishes every quarter, usually at easter, midsummer, michaelmas and christmas.[273] hence the name quarterage.[274] when the proceeds went to general church furnishing and repairing, the gatherings wrere sometimes called in the accounts "church works."[275] as the sum given by each was often noted down in "quarter books" or "easter books,"[276] and was, on denial, occasionally sued for before the official (together with dues for other purposes--clerk's wages, pew rents, etc., presently to be noticed), an "offering" might become virtually an assessment or rate.[277] we come now to _communion dues_, or _collections_ taken up at the time of communion. "_paschall money_" is defined in a vestry order of stepney parish, london, in 1581 as a duty of 1d. paid by each communicant at easter "toward the charge of breade and wine over and besides theyre offering mony due unto the vicar." these paschal dues, the order further informs us, had long been farmed by the vicar for 40s. yearly. but now the yield of a penny from each communicant was "thought a thing so profitable and beneficiall," that only as a special mark of favor was the vicar to continue to farm it, but at â£4 thenceforth instead of at 40s.[278] "_easter money_," an expression found not infrequently in the accounts, may have referred to the same payment, or it may have designated the offering which generally followed the celebration of communion,[279] taken up, doubtless, from all those present, whether communicating or not, the proceeds of which might go to the minister or to the parish according to agreement or custom. though the second edwardine prayer book (1552) provided that the elements were to be found by the curate and the wardens at the expense of the parish, which was then to be discharged of fees, or levies on each household, nevertheless, we meet with _communion fees_ or with house-to-house levies to defray the cost of bread and wine in many parishes during elizabeth's reign.[280] in order to ensure payment of the communion fee, tokens (or as we would say today, tickets) were provided in some parishes which were first to be handed in before the ministrant admitted the applicant to reception.[281] in a number of parishes a fine wine such as muscatel or malmsey was provided for the better sort, or the masters and mistresses, while the servants, or poorer folk, were served with claret.[282] indeed where all were compelled to communicate thrice yearly the cost of wine was a very serious item. _collections for the holy loaf_, that is, blessed but not consecrated bread, which went to defray the costs of administering the eucharist, occur in some of the earlier elizabethan accounts.[283] surplus communion fee money, or communion offerings were devoted to the care of the poor and other expenses.[284] the heading _clerk's wages_, which is so often met with in the wardens' receipt items, frequently serves (as do several other special headings) as a mere peg on which to hang a collection for various or even for general parish expenses.[285] _pews_ and _seats in church_ were often made a source of revenue. thus at st. mary's, reading, it was agreed in 1581 by the chief men of the parish, in order to augment the parish stock and to maintain the church, because "the rentes ar very smale," that those sitting in front seats in the church should pay 8d., those behind them 6d., the third row 4d., and so on.[286] at st. dunstan's, stepney parish, london, a book was made by the wardens "whearein was expressed the pewes in the whole church," distinguished by numbers. "also there was noted against everie pewe the price that was thought reasonable it shoulde yeeld by the yeare.... the w[hi]ch rates by this vestrie is allowed and confirmed to be imploied to the use of the parish church." when a few months later it was determined to build a gallery because the congregation needed more seats, it was also settled that the cost should be met by a year's pew rent in one payment down, over and besides the usual quarterly payments for seats.[287] sometimes the seats were sold outright and for life only.[288] _mortuary fees_ were a source of revenue in almost all parishes, and sometimes an important one.[289] consequently tariffs of fees were drawn up in various places. so much is charged for interment within, so much for burial without the church; so much for a knell according to duration and according to size of the bell; so much for the herse--a sort of catafalque--so much for the pall, the fee varying from that charged for "the best" to that charged for "the worst cloth"; so much if the body is coffined or uncoffined, most of the dead being buried in winding sheets only, though the parish provided a coffin for the body to lie in during service in church and for removal to the graveside.[290] so, too, one fee was charged for interring a " great corse," another for a "chrisom child."[291] all, in fact, is tabulated with minute precision, the minister getting certain fees for himself alone, and sharing others with the parish; and so of the clerk and of the sexton, if any. among other reasons alleged by the vestry of stepney parish for dismissing their sexton in 1601 was because he made "composic[i]on with diu[er]s & sundry p[ar]ishoners for the duties of the church to the hinderannce & great damage of the bennefitt of the church & p[ar]ishoners."[292] _fees_ for _weddings, christenings_ and _churchings_, and for the ringing of the bells (at marriages), together with the _offerings_ taken up on these occasions, might form a source of revenue to the parish, either going directly into the parish coffers, or being paid in whole or in part to minister, clerk or sexton, who, after all, had to be supported by the parish (or otherwise), being essential officers or servants.[293] the parish poor and the parish church derived an uncertain, but by no means negligible, income from the product of _fines for various delinquencies_. in the previous chapter fines for non-attendance at church have been alluded to.[294] a contemporary, writing in 1597, refers to these as an important fund for the support of the poor if duly levied. he writes: "whereunto [he is speaking of various means to alleviate poverty] if we adde the forfaiture of 12 pence for euerie householders absence from church (man and woman) forenoone and after, sunday and holiday (according to the statute without sufficient cause alledged) to be duely collected by churchwardens and other appointed to that end, with the like regard for wednesday suppers: there would be sufficient releefe for the poore in all places ...."[295] ecclesiastical courts sometimes condemned offenders to pay a fine for the use of the poor.[296] sometimes they commuted a penance for money to go to church-repair or to the parish poor.[297] the churchwardens or overseers of the poor accounts also mention fines received for profanation of the sabbath and for offences during service time.[298] the star chamber often condemned offenders, especially enclosers of cottage land and engrossers of corn, to fines for the benefit of the poor.[299] finally, most parishes derived some income from fining men various sums for refusing parish offices; for neglect of duty when in office; and for not attending duly called vestry meetings. sometimes a parishioner would pay down a large lump sum for exemption forever from all offices served by the parishioners.[300] yet another irregular but appreciable means of revenue might be classed under the heading of _miscellaneous receipts_. as the parishioners were always eager to turn an honest penny for their own benefit, no possible source of receipts was neglected. if, for instance, any part of the church or the church premises might, temporarily or permanently, be rented out without drawing upon the community the censure of the ordinary, the parishioners were happy to do so. owners of structures of any kind encroaching upon the churchyard, or other church land, were promptly made to pay for the privilege.[301] occasionally parishes derived more or less large sums from the sale of parish valuables. the sale of costly vestments, embroideries, hangings, images, chalices, pyxes and other church furnishings and ornaments condemned as superstitious by the anglican church, brought some income to the wardens of most parishes during the first years of elizabeth. examples will be found in all the accounts. now and then, too, a parish would make a large sum from the sale of the wood or other products of parish lands.[302] a fairly common item in city parishes especially were fees paid for licences to eat flesh during lent and on other legal fast days.[303] when an elizabethan parish undertook some work on a great scale, such as the rebuilding of its church, or of the church steeple; or, again, when it had suffered great losses by fire or flood, it solicited through _begging proctors_ the _contributions of outsiders_, sometimes from all parts of england.[304] to terminate our enumeration of means of raising money, or of contributions of all sorts on which the wardens could count (as apart from rates, properly so-called), we might mention _fixed contributions_, of money or of labor, issuing out of certain tenements; and _annual payments to mother churches_. certain lands or houses, generally abutting on the church grounds, had fixed upon them the obligation to repair a certain portion of the churchyard enclosure, tenement x, so many feet of fence, tenement y, such a portion of brick or stone wall, and so forth.[305] sometimes also certain houses or lands are spoken of as yielding so much a year for the repair of the church and the support of the poor.[306] incidentally we might mention--though hardly connected with parish finance--certain payments for church repair, etc., claimed of old by some cathedral churches from the parishes of the diocese. originally a tax varying from a farthing to a penny for each household (hence the names "smoke farthings," "hearth penny," "smoke silver"), the payments were commuted for a small lump sum exacted yearly. thus we find in the elizabethan accounts mention of "st. swithin farthings;"[307] of "ely farthings;"[308] of "lincoln farthings,"[309] etc., according to the _name_ of the cathedral to which they were paid; or, again, of "whitsun farthings;" of "pentecost farthings," etc., according to the _time_ of the year at which the payments were made.[310] these payments must not be confused with "peter's pence," which had before the reformation been paid by english parishes to rome.[311] lastly the mother parish church, in large parishes requiring chapels of ease, would exact (when it could) contributions from those congregations who frequented for ordinary divine worship these chapels of ease within the parish. and these exactions would be made irrespective of the fact that these congregations were bound to repair their own chapels and possessed their own churchwardens.[312] when the means or expedients we have hitherto set forth were found insufficient, or impracticable, or too tardy for an emergency, the parish was compelled to resort to _rates_ or _assessments_. assessments were levied in all sorts of ways and for all sorts of purposes. in an emergency, or if the sum to be raised was not large, a levy might be made by the principal men of the parish upon themselves only.[313] a "rate" might, however, be made to collect a very small sum, as well as a very large one.[314] all kinds of units or rules of assessment were resorted to from parish to parish, and (apparently) sometimes no fixed unit at all was taken, men's ability to pay being roughly gauged, or a man being permitted to rate himself,[315] or give his "benevolence." in the wardens' accounts are frequently seen long lists of names, each being taxed at a sum varying from 1/2d. to three or four shillings. such lists may represent an attempt to tax each man at 1/2d. or 1d. in the pound, or, likely as not, it may merely mean a crude sizing up of the ability of each to contribute. furthermore, a "rate" might consist in a fixed sum, the same for all, and levied by polls or by households,[316] say 1d. or 2d. each. or, again, it might be levied by pews at varying sums.[317] assessments to pay the parish clerk or sexton might sometimes be made in kind, and issue from households, from cottages, or from ploughlands: so much corn at easter, so much bread, so many eggs.[318] when it came to the more accurate basing of rates upon lands, or goods at a valuation, the inhabitants of the various communities observed no uniform ratio of taxation from parish to parish, nor even in the same parish, and disputes were always recurring.[319] it must be borne in mind that parish financiering was largely of the hand-to-mouth variety. indeed, it was difficult it should be otherwise, for the exigencies of the civil or the ecclesiastical authorities were constantly shifting, now a petty lump sum being required (and to be spent as soon as raised), now a great one to be disbursed in the same manner. in conclusion, a few observations on the parish as a financial unit in connection with county government may be made. there seems to have been no general treasury at the disposal of the hundred or of the county, but merely certain treasurers charged with the disbursement of this or that special collection for this or that special purpose. a collection is made by order of the justices, for instance, in certain hundreds, or throughout the shire, for the support of the prisoners in the county gaol, and a treasurer for the fund is appointed. or it may be that this treasurer is a more or less permanent official. and so with collections for hospitals, for houses of correction, for great bridges, etc. if the constables levied more than was sufficient for a parish, or if the contemplated disbursement turned out to be less than originally estimated, the surplus, if the justices had no immediate use for it, might be returned to that parish to go back into the pockets of the rate payers.[320] furthermore, it seems scarcely accurate in elizabethan times to speak of any _county rate_,[321] for there was no recognized basis of assessment common to all parishes, unless it were at any given time the then prevailing subsidy rate, and a rating according to the subsidy books by the justices would fail to reach many whom a parish rating might attain. as a matter of fact the justices, when they had a large sum to levy on the county at large, almost always apportioned it in lump sums among the hundreds, or among the parishes of their respective divisions, according to "the bygnes or smallnes of their parishes."[322] it comes, then, to all practical intents and purposes to this: that each parish is left to produce according to its own local methods, or rating, the wherewithal for carrying on county government. while in local government itself the parishioners have practically no voice, the large measure of freedom they enjoy for the devising of ways and means to meet the demands made upon them (though they have no option whatever in granting or withholding supplies) gives to the parish a vigorous entity and a certain autonomous life of its own, which otherwise it never could have possessed over against the all-regulating and inquisitorial tudor machinery of church and state. as the reign advanced the parish developed a selfish, jealous and exclusive gild life of its own, especially under the operation of the poor laws. non-parishioners, or "foreigners," were viewed with the strongest suspicion. generally they were discriminated against if they happened to have dealings with the parish. wedding or funeral fees were doubled in their cases.[323] if the parishioners could have had their will no alien poor could have gained a settlement amongst them--no, not even after twenty years' residence. in 1598 the west riding, yorkshire, justices were compelled to interfere in favor of divers poor persons in various parishes, where officers were seeking to expel them as vagrants born elsewhere, though they had been domiciled in their adopted communities for twenty years and upwards.[324] already that "organized hypocrisy," so characteristic of parish life in later reigns, shows itself in the many presentments of, and petitions against, persons supposedly immoral--especially single women. not zeal for morality prompts these indictments, but fear that the community may have to support illegitimate children.[325] quite typical of the times is the language held by the inhabitants of castle combe in appealing to the wiltshire justices against a townwoman in 1606. they are apprehensive, they say, lest "by this licentious life of hers not only god's wrath may be powered downe uppon us ... but also hir evill example may so greatly corrupt others than great and extraordinary charge ... may be imposed uppon us."[326] few laws on the statute book were so frequently enforced as the 31 eliz. c. 7, which required four acres to be laid to every cottage to be constructed, for there was a powerful local backing behind the law. when john fletcher, "a meere stranger lately come into this parish with his wife and children," took certain parcels of land in severn stoke in 1593, and was suspected of the intention to build a cottage without laying to it the requisite number of acres, the parishioners immediately complained to the worcester justices, for they wanted to provide against the contingent liability of having to support the inmates.[327] four acres was then the quantity considered necessary to maintain a man and his family. it was an indictable offence to sublet, for then there would be two families where only one was before. nor could lodgers be taken, for such increase of the inmates of the house would surcharge the land.[328] in short, that feeling of distrust and discrimination against the outside world, which, in the 18th century, led a lancashire vestry to dub all outsiders "foreigners,"[329] is already fully developed by the end of the 16th century. but we must also recognize that this feeling engendered in the parish itself solidarity of interests, close fellowship and local spirit. footnotes: [1] richard hooker, _ecclesiastical polity_, bk. viii, 448-9 (ed. 1666). [2] coke, 4 _inst_., 320 (ed. 1797). [3] see 14 eliz. c. 5, sec. 16, and 39 eliz. c. 3. [4] 37 hen. viii, c. 17, re-enacted i eliz. c. i. "the real effect of the statute was this--that lay lawyers were substituted for the clerical canonists of pre-reformation times." lewis t. dibden, _an historical inquiry into the status of the ecclesiastical courts_ (1882), 59. by canon cxxvii of the canons of 1604 in order to be a chancellor, a commissary, or an official in the courts christian, a man must be "_ad minimum magister artium, aut in jure bacalareus, ac in praxi et causis forensibus laudabiliter exercitatus_." e. cardwell, _synodalia_ (etc.), i, 236. cf. blomefield, _hist. of norfolk_, iii, 655-6 (parker's report, 1563. officials of the archdeacons not required to be in orders). e. cardwell, _documentary annals of the reformed church of england_, i, 426 (complaint in a document of circa 1584 [or later] that excommunication is executed by laymen. in the answer by the bishops it is stated [_ibid_., 428] _inter alia_, "that in later times, divines have wholly employed themselves to divinity and not to the proceedings and study of the law"). to the same effect, but for a later period, see white kennett, _parochial antiquities_ (oxon. ed. 1695), 642. [5] harrison, writing in 1577, says that archdeacons keep, beside two visitations or synods yearly, "their ordinarie courts which are holden within so manie or more of their several deaneries by themselues or their officials once in a moneth at the least." harrison, _description of england_, bk. ii, _new shakespeare soc_. for 1877 (ed. dr. furnivall), p. 17. between 27th nov., 1639, and 28th nov., 1640, there were thirty sittings in the court of the archdeacon of london. hale, _crim. prec_., introd. p. liii. any casual inspection of the visitation act-books reveals the fact that the judge sits either in court or in chambers between visitations, for offenders are constantly ordered to appear again in a few days or in a few weeks. compulsory presentments were, however, limited by law and custom to two courts a year. see canons 116 and 117 of the canons of 1604. also gibson, _codex_, ii, 1001. [6] see p. 18 and p. 20 _infra_. for the duty to read the injunctions or the articles based on them see p. 32 _infra_. [7] see 5 eliz. c. 3. _stats. of the realm_, iv, pt. i, 411. also visitation of warrington deanery in 1592 by the bishop of chester in _lancashire and cheshire historic soc. trans_., n. s., x (1895), 186 _et passim_. hereinafter cited as _warrington deanery visit_. cf. also grindal's injunc. for the province of york (1571), art. 17, _remains of grindal, parker soc_., 132 ff. [8] see visitations of the archdeacon of canterbury, _archaeologia cantiana_, xxvi (1904), 24 (1602). mr. arthur hussey has published copious extracts from the act-books of these visitations extending over a considerable period in vols. xxv-xxvii of the _arch. cant_. hereinafter cited as _canterbury visit_., xxv (etc.). for perambulations see p. 27 _infra_. [9] cordy jeaffreson, _middlesex county records_, i, 100-1 (indictment reciting that john johnson had had due notice in his parish church, yet had not sent his wain, etc., 1576). cf. provisions of the statutes 5 eliz. c. 13, and 18 eliz. c. 10, _stats. of realm_, iv, pt. i, 441-3, and 620-1 respectively. [10] brownlow v. lambert, c.b., 41 eliz., i _croke eliz. rep., leache's ed_. (1790), pt. ii, 716. [11] _canterbury visit_., xxvi, 23 (1599); _ibid_., 20 (1591). w.h. hale, _a series of precedents in criminal causes from the act books of the ecclesiastical courts of london_, 1475-1640 (pub. in 1847), 190 (schoolmaster of stock presented in court for defacing the church "in makinge a fire for his schollers," 1587). this work hereinafter cited as hale, _crim. prec_. [12] constables acc'ts of melton in _leicester architec. and archaeol. soc. trans_., iii (1874), 72-3. chelmsford churchwardens acc'ts in _essex archaeol. soc. trans_., ii (1863), 225 ff. [13] stratton (cornwall) churchwardens acc'ts, _archaeologia_, xlvi, 200 ff. _s. a_. 1565 and editor's note. [14] "sir w.. a.. and i with divers other justices, being met together at sondon church" (1582). strype, _annals of the reformation_, iii, pt. ii, 214. this meeting here may have been in the churchyard. [15] see in the _antiquary_, xxxii (1896), 147-8, the inquest held at st. botolph extra aldgate (1590), and the coroner's judgment delivered in the church that a suicide should be buried at cross-roads with a stake through her breast. [16] for the noisy proceedings in bow church and in st. paul's, london, see _the spiritual courts epitomised_ [etc.], a satire printed in 1641 at london. for this and similar satires see mr. stephen's _catalogue of political and personal satires_ in brit. mus. (1870). cf. strype, _life of grindal_ (oxon. ed. 1821), 83 ff. (proclamation of 1561 for reverent use of churches). also augustus jessop, _one generation of a norfolk house_, 15. sir j.f. stephen, _hist. of criminal law_, ii. 404. [17] in the canons of 1571 the churchwardens are called "_aeditui_," in those of 1604 "_oeconomi_." in the older churchwardens accounts their latin designations are "_gardiani_" and "_custodes_," sometimes "_prepositi_" (or 'reeves'). english equivalents are churchmen, highwardens, stockwardens (alewardens even), kirkmasters, church masters, proctors, etc. sidemen are called also questmen, assistants and (apparently) sworn men or jurates. they do not always appear in small country parishes, neither are they generally found before the latter half of elizabeth's reign. their latin appelation was "_fide digni_" and they were chosen from among the parishioners to the number of two, four, six or more to present offences along with the churchwardens, or offences which the wardens would not present (gibson, _codex_, ii, 1000). the sidemen went about the parish during service time with the wardens and warned persons to come to church (see p. 23 _infra_). for rector, etc., see p. 30 _infra_. [18] toulmin smith, _the parish_ (2d ed., 1857), 69 ff., strongly insists that churchwardens "never were ecclesiastical officers." but the authorities he cites are post-elizabethan. the courts in elizabeth's time held that the execution of the office "doth belong to the spirituall jurisdiction" (see brown v. lother, 40 eliz., in _j. gouldsborough's rep_., ed. 1653, p. 113). lambard (_the duties of constables_, etc., ed. 1619, p. 70) says that wardens are taken in favor of the church to be a corporation at common law for some purposes, viz., to be trustees for the church goods and chattels. [19] see "the othe which the parsons ... shall minister to the churche wardens," of which the text is given in bishop barnes' injunctions and other ecclesiastical proceedings, _surtees soc_., xxii (1850), 26 (hereinafter cited as _barnes' eccles. proc_.). the wording of this oath is evidently very similar to, if not identical with, that of the oath administered to the wardens by the archdeacon. [20] for a number of examples clearly illustrating this point see visitations of the dean of york's peculiar, _yorkshire archaeological journal_. xviii (1905), 202, 221, 222, 224, _et passim_. hereinafter cited as _dean of york's visit_. we have a number of these articles of inquiry formulated by archbishops or bishops. _e.g._, see in t. nash, _hist. and antiq. of worcestershire_, i, 472 (wardens of grimley make answer to the 5th and 6th articles inquired of by the bishop in 1585). cf. cardwell, _doc. ann._, ii, 13-16 (whitgift's articles of 1588). [21] _e.g., canterbury visit_., xxv, 12 (birchington wardens arraigned in court "for that they have not presented divers faults committed within the parish." 1591). act-books in _barnes' eccles. proc_., 118 (a warden of long newton detected to the official because "he refused to present faltes with his fellowe churchwardone, _et fatebatur delationem_, viz., that he wolde not present his owne wief." 1579). _ibid_., 129 (1580). see also _warrington deanery visit_., 188 ("departing and not exhibitinge there presentments"). w.h. hale, _precedents in causes of office against churchwardens and others_ (1841), 81 (wardens of sarratt [herts] excommunicated for not exhibiting their "_billas detectionum_." 1577). the last named work hereinafter cited as hale, _churchwardens' prec_. [22] for numerous examples of excommunication for non-appearance, see _barnes' eccles. proc_., 29 ff. under the heading of each parish we see "_aegrotat_" or "_excusatur_," or "_nullo modo_" (_sc. comparuit_) placed after the name of each person cited to attend from that parish. incumbents, wardens and sidemen were almost always in attendance. schoolmasters usually so when there were such. delinquent parishioners were of course cited in person, or remanded to appear at the next court day holden elsewhere. upon non-appearance the formula usually entered by the registrar or scribe in the act-book was "_et omnes et singulos hujusmodi non comparentes [judex] pronuntiavit contumaces et eos excommunicavit in scriptis_." at alnwick in 1578 fifteen persons were excommunicated for non-attendance. _barnes' eccles. proc_., 41. cf. hale, _crim. prec., passim_. [23] lists of "furniture," implements and books will be found in the metropolitan or diocesan injunctions of the time. a typical one is given in _barnes' eccles. proc_., 25, entitled "the furnitures, implements and bookes requisite to be had in every churche, and so commaunded by publique aucthoritie" (1577). cf. cardwell, _doc. ann_., i, 287 ff. ("advertisements partly for due order in the publique administration of common prayers [etc.] ..." jan., 1564). [24] _warrington deanery visit_., 184. [25] that is, bishop john jewel's _apologia ecclesiae anglicanae_, published in 1560, and his _defence of the apology_, published in 1567, sometimes called in the act-books and wardens accounts (where both works are frequently mentioned) _the reply to mr. harding_. [26] _barnes' eccles. proc_., 116. [27] j.l. glasscoek, _the records of st. michael's, bishop stortford_ (1882), 63. see also minchinhampton (gloucester) acc'ts, _archaeologia_, xxxv, 422 ff. ("allowynge the regester booke." 1575). _shrop. arch, and nat. hist. soc. tr_., 2d ser., i, ludlow acc'ts, _s. a_. 1585-6 (record of the new bible and other books). [28] glasscock, _op. cit_., 59 (1578). [29] hale, _crim. free_., 170-1. [30] visitations of the dean of york's peculiar, _yorkshire archaeological journal_, xviii (1905), 209. [31] _ibid_., 210. [32] with the exception of the high commission by the terms of its commission. see the writ of 1559 in gee, _the elizabethan clergy and the settlement of religion_, 150. also cardwell, _doc. ann_., i, 220, for the commission for york in 1559. as a matter of fact, as will appear from the illustrations cited, fines were virtually inflicted by way of court or absolution fees. again, while the canons or injunctions forbade the commutation of penance for money, an exception was made for money taken _in pios usus_, such as church repair or the relief of the poor. examples of the practice will be found in hale, _crim. prec_., 232 (repair of st. paul's, london); _warrington deanery visit_., 189 (poor); chelmsfofd acc'ts, _essex arch. soc., ii_, 212 (paving of church). for fines inflicted for the benefit of the poor see _barnes' eccles. proc_., 122 ("for that he gave evill words" an offender was enjoined by the judge to pay 2s. to the poor and to certify); hale, _op. cit_., 198 (an offender to pay a rate of 4d., and 12d. more _"pro negligentia_." 1589/1590) _cf_. canons of 1585 in cardwell, _synodalia_, i, 142. [33] _barnes' eccles. proc_., 24 (1577). in the case of individuals interdiction or suspension _(i.e_., from service and sacraments) does not differ in effect from excommunication, except that the former are temporary penalties and to terminate upon compliance with the judge's order. see burn, _eccles. law_ (ed. 1763), i, 616 (interdiction) and ii, 362-3 (suspension). [34] thomas north, _a chronicle of the church of st. martin's in leicester_ (1866), 116 (1568-9). [35] _leicester archit. and archaeol. soc. tr_., iii (1874), 192 (1567). [36] _ibid_., 197 (1594-5). [37] w.f. cobb, _churchwardens accounts of st. ethelburga-within-bishopsgate_ (1905), p. 10 (1595) and p. 12 (1604), respectively. stanhope was chancellor to the bishop of london. [38] see p. 46 ff. _infra_. [39] see _infra_ p. 40, p. 48 (note 169), p. 131, etc. also ch. ii, _infra_. _cf_. note 32 _supra_ (p. 19). [40] hale, _crim. prec_., 155. [41] ordinary is that ecclesiastical magistrate who has regular jurisdiction over a district, in opposition to judges extraordinarily appointed. at common law a bishop was taken to be the ordinary in his diocese, and so he was designated in some acts of parliament. but as a matter of fact 'ordinary' signifies any judge authorized to take cognizance of causes by virtue of his office or by custom. such were pre-eminently the archdeacons. these officers, at first merely attendant on the bishops at public services, were gradually entrusted by the latter with their own jurisdictional powers, owing to the vast extent of dioceses, so that "the holding of general synods or visitations when the bishop did not visit, came by degrees to be known and established branches of the archidiaconal office, as such, which by this means attained to the dignity of ordinary instead of delegated jurisdiction." edmund gibson, _codex juris ecclesiastici anglicani_, or the _statutes, constitutions_ (etc.) _of the church of england_, ii (1713), 998. cf. richard burn, _eccles. law_, ii, 101-2. as the ordinary in practice entrusted his office of judge to an official, i have used the two terms interchangeably. in some places exempted from the archdeacon's jurisdiction commissaries acted as judges, burn, i, 391. [42] that is, services and sacraments (except baptism) were suspended in it. the words of burn (_eccles. law_, i, 616, quoting gibson, 1047) are misleading. he says: "but this censure hath been long disused; and nothing of it appeareth in the laws of church or state since the reformation." of course interdiction _temp_. elizabeth was no longer the terrible punishment it used to be. [43] at shrewsbury. [44] _shrop. arch, and nat. hist. soc. tr_., i (1878), 62. [45] r.w. goulding, _records of the charity known as blanchminster's charity_ (1898), stockwardens acc'ts, 68. for other examples of interdiction of churches or excommunication see hale, _churchwardens' prec_., 111-12 (shoreham vetera interdicted. 1599/1600), _et passim_. [46] except in the city of london and some few other places, the chancel was at the charge of the rector or other recipient of the great tithes. sidney and beatrice webb, _english local government_ (1906), 20, _note_. also w.g. clark-maxwell in _wilts arch_. etc. _mag_., xxxiii (1904), 358. h.b. wilson, _history of st. laurence pountney_ (london, 1831), 73. [47] _canterbury visit_., xxvi, 21. [48] _ibid_. [49] _ibid_., 32. in 1599 the wardens of this parish inform the archdeacon that both church and churchyard need repairs "which we mean shortly to do." the next year, too, they make a report in almost identical words. _ibid_., 33. [50] see p. 15 _supra_. [51] _dean of york's visit_., 341. [52] numerous other presentments at visitations for failure to supply the requisites for worship besides those adduced in the text will be found in hale, _crim. prec_., 173 (a warden failing to supply the elements for communion, 1579-1580) _ibid_., 154 ("the rode lofte beame, the staieres of the rode loft standinge, the churche lacketh whittinge to deface the monuments." 1572), etc. _barnes' eccles. proc_._, 115 ("the degrees of mariage" and "the postils" lacking. 1578-1579). _warrington deanery visit_., 189 ("cloth for the communion table." 1592). visitation of manchester deanery in 1592 by the bishop of chester in _lancashire and cheshire antiquarian soc. tr_., xiii, 58. (communion cup lacking). _ibid_., 62 ("noe fonte," and christenings in "a bason or dish"). this source hereinafter cited as _manchester deanery visit_. [53] hale, _crim. prec_., _s. a_. 1587 (21st june). [54] _manchester deanery visit_., 66 (1592). cf. _canterbury visit_., xxv, 23 (1600). [55] hall, _crim. prec_., 13 (1598). [56] _warrington deanery visit_., 189. [57] _manchester deanery visit_., 69. [58] _ibid_. then as now the ale-house was the strongest rival of the house of god. a very common class of offenders were those who would not leave their ale cups to go to service (see authorities cited, _passim_). men were also great gossipers ("common talkers") in the churchyard, as a number of presentments show. [59] order of the archdeacon, essex archdeaconry, to the wardens of st. peter's and of all saints. maldon, in 1577, hale, _crim. prec_., 158. for refusing to keep her seat in church according to this order elizabeth harris was presented the next year, hale, _loc. cit_., 171. [60] the vestry of st. alphage's (g.b. hall, _records of st. alphage, london wall_, 31) grew highly indignant in aug., 1620, when the business of seating the parishioners came up for discussion, that a mr. loveday and his wife should presume to sit "togeather in one pewe and that in the ile where men vsually doe & ere did sitt; we hould it most ynconvenyent and most vnseemely, and doe thinke it fitt that mr chancellor of london be made acquainted w[i]th it [etc]..." [61] hale, _crim. prec_., 241-2: "_contra hayward, puellam. presentatur_, for that she beinge but a yonge mayde, sat in the pewe with her mother, to the greate offence of many reverend women." the child (as the vicar who made the presentment continues should have sat at her mother's "pewe dore." 1617). cf. _barnes' eccles. proc_., 122-3 (janet foggard cited for that "she beinge a yonge woman, unmarried, will not sit in the stall wher she is appointed ..."). cf. hale, _op. cit_., 210 (one clay and his wife "will not be ordered in church by us the church wardens [etc.]..". 1595). [62] examples will be found in the act-books cited _supra_. [63] hale, _crim. prec_., 149 (1566). cf. _ibid_., 163 (the divine service not "reverently, plainelye and distinctlye saide..." 1576). [64] hale, _op. cit_., 182 (1584). cf. whitgift's _articles for sarum diocese_ in 1588, art. viii: "whether your ministers used to pray for the quenes majestie ... by the title and style due to her majestie." cardwell, _doc. ann_., ii, 14. [65] _dean of york's visit_., 320 (1596). [66] hale, _op. cit_., 159 (1575). [67] 3 _rep. hist. mss. com_., 275 (a vicar presented by churchwardens in the commissary's court at poddington-apud-ampthill for not catechising the youth, etc., though required to do so by one of the wardens. 1616). for not presenting their minister when he neglected to catechise on the sabbath, the wardens of st. mary woolchurch haw, london, had to pay divers fees to the chancellor. brooke and hallen, _registers of st. mary woolchurch haw_ (1886), wardens acc'ts, _s.a._ 1593. [68] accordingly, by a later entry in the book we see that the warden brought in court a certificate that the surplice had been bought and worn by the vicar. _manchester deanery visit_., 59. for a precisely similar injunction see _ibid_., 62 (wardens of eccles). [69] see p. 15 _supra_. [70] for presentments of vicar's (etc.) offences see pp. 31 ff. _infra_. [71] l.g. bolingbroke; _the reformation in a norfolk parish, norf. and norw. arch. soc_., xiii, 207-8 (1593). [72] _dean of york's visit_, 231 (1594). [73] _ibid_., 315. see also _ibid_., 225 and 229. [74] _ibid_., 339 (1602). [75] see _queen's inj. of_ 1559, art. xviii. also art. xviii of archbp. (of york) grindal's inj. of 1571, _parker soc., remains of grindal_, 132. also cardwell, _doc. ann_., i, 337, etc. for the enforcing of the obligation by the ordinary, see numerous examples in _canterbury visit_., xxv, 22 (1585); 32 (controversy in 1584 between two parishes as to bounds); 37 (1594). also _ibid_., xxvi, 24, 25, _et passim_. other examples in hale, _crim. prec_., 162, where a parishioner of burstead parva (essex) is cited at a visitation for ploughing up a dole (a balk or unploughed ridge), which marked the boundary line between burstead and dunton parishes. cf. _canterbury visit_., xxv, 15, where three parishioners are presented for covering up a parish procession linch (1617). [76] see, _e.g_., a.g. legge, _north elmham_ (norfolk) _acc'ts_ (1891), 76 (1562), 82 (1566 and 1567). melton acc'ts in _leicest. archit. and arch. soc_., iii, 192 (1566). ludlow acc'ts in _shrop. arch. soc_., 2nd ser., i, _s.a._ 1601-2, etc. [77] in this year the 39 eliz. c. 3 was enacted which instituted overseers of the poor nominated by the licence of the justices, and placed wholly under their supervision. in spite of the provisions of an earlier act (14 eliz. c. 5) giving the justices power to appoint, or see collectors appointed, the ecclesiastical courts rather than the justices, as the act-books show, seem to have looked after the matter. see, _e.g., manchester deanery visit_., 57, 59, 60, 62, 63, 64, 68, etc. also _warrington deanery visit_., 184, 186, 187, 191, etc. cf. the item in the ludlow acc'ts, _shrop. arch. soc_., i, _s.a._ 1586-7, where is recorded an expense item for a payment to "mr. chauncelor" for entering a presentment for collections for the poor. [78] see act-books above cited. also hale, _crim. prec_., 165, _et passim_. _barnes' eccles. proc_., 118, _et passim_. _norf. and norw. arch. soc_., xiii, 207-8 (great witchingham wardens). [79] stanford (berks) accounts, _antiquary_, xvii (1888), 169 (expenses to oxford "to speke with [the] ... archedyacon for caryeng a strem[e]r in rogacion weke." 1564). hale, _crim. prec_., 150 (wearing of surplice on same occasion. 1567); 152 (_do_. 1572). cf. grindal's inj. at york, 1571, in cardwell, _doc. ann_., i, 337. [80] melton acc'ts, _ubi supra_, 192 ("beyng somonyd ffor ryngng off all hallodaye att nyght." 1566). halesowen acc'ts in t.r. nash, _history and antiq. of worcestershire_, ii, app., p. xxx (1578). stanford acc'ts, _ubi supra_, 169 (1566). _manchester deanery visit_., 64 (wardens of manchester "ringe more than is necessarie at burialls..."). cf. canons of 1571, cardwell, _syn_., i, 124 (ordained that wardens must not suffer "_campanas superstitiose pulsari, vel in vigilia animarum, vel postridie omnium sanctorum_..."). [81] accordingly some seven weeks later the wardens (or rather their successors) appeared again and reported that the rate had been laid, but not gathered. the court granted them a further space to buy the implements. hale, _churchwardens' prec_., 2-3 (1583/1584). similar examples abound in archdeacon hale's work, just cited, which covers the period 1557 to 1736. [82] _ibid_., 4 (1584). for other cases see _passim_. [83] hale, _churchwardens' prec_., 98 (1601). burn, _eccles. law_, i, 268 (citing gibson, _codex_, 196, and 1 bacon, _abridg_., 373), says that if no parishioners appear at a meeting duly called for the purpose of assessment," the churchwardens alone may make the rate, because they and not the parishioners are to be cited and punished in defect of repairs." to these words should be added the qualification that the parishioners _were_ sometimes collectively punished, viz., by interdiction of their church. thus in st. alban's archdeaconry the parishioners of redbourn were directed through the wardens to make a rate to levy â£60 "_sub pena interdictionis eccl[es]ie sue a divinoru[m] celebratione et sacramentaru[m] et sacramentaliu[m]_...[etc]." hale, _op. cit_., 89 (1599). in jan., 1599/1600; we find shoreham vetera in lewes archdeaconry interdicted, and one of its wardens appearing, "_humil[ite]r petijt interdicc[i]o[n]em ... emissam pro defect[u] eccle[s]ie ruinos[e] ... revocari ..._" in order that time might be given him to call together the tenants and owners of land in the parish and outlying districts as well as "strangers" who held lands in the parish. _ibid_., 111-12. in 1603 the wardens of northawe are to see a levy made "_sub pena interdicti_." _ibid_., 90. cf. pp. 36-7. [84] examples are: hale, _crim. prec_., 189 (mucking, essex, wardens. 157-6/7). _ibid_.,199 (east horndon, essex, wardens confess they have not accounted "by reason the parishioners will not come to recken with them." they are warned to make their account and if the parishioners will not audit it, to exhibit it at the next court. 1590). _ibid_., 222 (several parishioners presented for "not receiving" a warden's account. they plead that he was not chosen to be warden by their parson. 1600). see also _canterbury visit_., xxvi, 20, 21, also _ibid_., xxvii, 220, _et passim. dean of york's visit_., 335. [85] "the cases in which the advowson of the parish belonged to the inhabitants, though more numerous than is often supposed, were distinctly exceptional." beatrice and sidney webb, _local government, the county and the parish_ (1906), 34 _note_. [86] on the distinction between rector, vicar, curate, etc., see felix makower, _the constitutional history and constitution of the church of england_ (engl. trans. 1895), 334-7. also rev. w.g. clark-maxwell in _wilts arch_., (etc.) _mag_., xxxiii (1904), 358-9. [87] _e.g._, the canons of 1571, sec. _de episcopis_, required that the bishops ordain no one except such as had a good education and were versed in latin and the holy scriptures. nor was a candidate to be admitted to orders "_si in agricultura vel in vili aliquo et sedentario artificio fuerit educatus_." [88] of some 8,800 parish churches in england in 1601 only 600, it was computed, afforded a competent living for a minister. dr. james in debate in parliament november 16th, 1601. heywood townshend, _historical collections or proceedings in the last four parliaments of elisabeth_ (ed. 1680), 218-19. sir s. d'ewes, _the journals of all the parliaments during the reign of elizabeth_ (ed. 1682), 640. how this came about see white kennett, _parochial antiquities_ (ed. 1695), 433-45. [89] examples will be found in the churchwardens' accounts of the period, the _morebath_, (devon) _acc'ts_ for instance, which have been transcribed _in extenso_ up to 1573 by rev. j. erskine binney (exeter, 1904). the garrulous old vicar here, christopher trychay, who wrote the parish accounts himself for more than a generation, and always punctiliously styled himself "sir," is a fascinating figure. thanks to his chatty explanations on all subjects, bits of the daily life of this little devonshire parish from henry viii's, from edward vi's, from mary's, and from elizabeth's reigns are brought down to us with great vividness. cf. james stockdale, _annals of cartmel_ (1872), 58-9 (custom of addressing minister as "sir" lingering down to nineteenth century in lancashire). [90] lambard, _duties of constables, borsholders_, etc. (ed. 1619 frequently made an appendix to his _eirenarcha_), 67, says: "the ... lawes, hauing imployment of many to make, hath borrowed some use in a few easie matters of spirituall ministers, chiefly for the helpe and readinesse of their pen, which in many parishes few, or n�one (besides they) can serue withall." [91] _canterbury visit_., xxv, 22 (1590); 23 (1593). _dean of york's visit_., 231 (1594); 315 (1595). [92] _warrington deanery visit_., 184 (farmer of advowson not repairing chancel); 186 ("wm. brereton of hareford, esquire," _ditto_); 188 (executors of will of the late rector, _ditto_); 191 (rector of warrington); 192 (rector of wigan). _canterbury visit_., xxv, 32 (dean and chapter of christ church. 1583); 26 ("mr. john smyth, esquire"). for not keeping in repair vicarages, barns, dove-houses, etc., see _ibid_., xxvi, 20, 32. also _ibid_., xxvii, 222, etc. [93] hale, _crim. prec_., 160 ("_dominus injunxit dicto_ simpson [rector of pitsea, essex] that he shall procure iiijor sermons in the yeare ..." 1575-6). _canterbury visit_., xxvi, 44 (wardens present "they have no quarter sermons"). _ibid_., 213 (1569); 214 (1574); 222 (1600). _dean of york's visit_., 222 (wardens present "mr. deane for want of the quarter sermons." 1592). _canterbury visit_., xxv, 43 ("sir wm. baldock our vicar, himself unlicenced to preach, doth not provide a preacher for the sermons appointed by her majesty's injunctions." 1593). the _queen's injunctions of_ 1559, art. iv, provided that parsons should preach in their own persons at least one sermon in every quarter of the year. [94] _canterbury visit_., xxv, 22, 23 (two examples). _ibid_., vol. xxvi, 31, 44, 222, 319, etc. see _queen's injunc_. of 1559, art. xi. [95] see authorities above cited. whether the incumbent kept hospitality was a standing article of inquiry in the visitations of the period; _e.g_., grindal's metrop. visit. art of 1576, _remains of grindal, parker soc_., 157 ff. [96] _manchester deanery visit_., 63 ("they [ministers of manchester] be nott dutifull in visitinge the sicke"). [97] "and if the churchwardens and swornmen be negligent, or shall refuse to do their duty ... ye shall present to the ordinary both them and all such others of your parish as shall offend...." archbp. grindal's inj. at york, 1571, _remains of grindal, parker soc_., 129. [98] or judge acting by delegation from the ordinary. [99] "against the reader [of denton chapel] ... doth not reade the injunctions...." _manchester deanery visit_., 60. "_qui_ [wardens of belby] _dicunt_, the articles being diligentlie redd unto them [etc.]..." _dean of york's visit_., 221 (1591). _ibid_., 341. cf. _queen's inj. of_ 1559, art. xiv. [100] hale; _crim. prec_., 193. cf. grindal's inj. at york, 1571: "ye [the ministers] shall openly every sunday ... monish ... the churchwardens and sworn men of your parish to look to their oaths [etc.] ..." _remains of grindal_, 129. also whitgift's _articles_ of 1583, cardwell, _doc. ann_., i, 406 (ministers to warn parishioners once a month to repair to church). [101] _canterbury visit_., xxv, 36. [102] cf. canons of 1597: "_de recusantibus et aliis excommunicatis publice denunciandis_." cardwell, _syn_., i, 156. also _croke's eliz. rep_., leache's ed. (1790), i, pt. ii, 838, where a plaintiff sues for damages because defendant, a curate, maliciously erased the original name in an instrument of excommunication and inserted plaintiff's name, "and read it in the church, whereupon he was inforced to be absent from divine service, and to be at the expence to procure a discharge for himself" (1599). _canterbury visit_., xxvii, 219 (rector of swalecliffe presented for keeping back and not announcing excommunications "sent out of this court." 1596). [103] _canterbury visit_., xxvii, 219 (rector suffering excommunicates to come to his church during service). see also _infra_, p. 47. [104] canons of 1585 and 1597, cardwell, _syn_., i, 144 and 155-6 respectively. [105] see in hale, _crim. prec_., 206-7, the elaborate formula of confession prescribed for wm. peacock of leighton, essex, in 1592. he was to "publiquely after the minister ... confesse [etc.] ..." [106] hale, _op. cit_., 160 (margaret orton's penance for adultery. "and ther was redd the firste parte of the homilie againste whoredome & adulterie, the people ther present exorted to refraine from soche wickedness..."). [107] see pp. 12-13, and p. _27, supra_. [108] _barnes' eccles. proc_., 114 (parishioner in a durham parish presented for absenting himself "twice at morning prayer, and verrey often at eveninge prayer." 1579). houghton-le-spring acc'ts, _s.a._, 1596, _surtees soc_., lxxxiv (1888), 271 (giving in a bill of presentment for those absent from morning and from evening prayer). [109] _canterbury visit_., xxvii, 221 (four persons cited "for that they dwell so far from their own church come now to the parish church of westbere." 1569). _ibid_., xxv, 21 (two men presented for not attending their parish church "being two miles off, but go to the next parish church." 1569). _ibid_., 23 (1600). _op. cit_., xxvi, 46 (presentment of one who had often to be absent from his parish on business. 1593). _dean of york's visit_., 227 (attending another church for fear of arrest for debt in his own. 1594). [110] see in daniel neal, _history of the puritans_ (j. toulmin's ed., bath, 1793-7), i. 413-17, contemporary (1585-6) statistics for the licenced preachers of nine counties. see also j.c. cox, _three centuries of derbyshire annals_, i, 245 (only 82 clergymen licenced to preach out of a total in the diocese of lichfield of 433, according to a document _circa_ 1602). [111] for such a permit to hear preaching elsewhere, see hale, _crim. prec_., 189 (six parishioners of shopland (essex) authorized by the archdeacon to repair to a neighboring church for a sermon when there is no preaching in their own, but only two permitted to leave their own services at any one time. 1586-7). [112] hale, _ibid_., 187-8. [113] 1 eliz., c. 2, sec. iii, _ad finem_. [114] see 23 eliz. c. i, sec. iv (forfeiture of â£20 for every month's forbearance from church attendance). cardwell, _doc. ann_., i, 406 (whitgift's _articles of 1583_; minister and wardens to diligently observe those absenting themselves for the space of a month, according to 23 eliz. [_supra_] in order that they may be presented as recusants to the justices at quarter sessions). see also in _roxburghe ballads_ (1871), i, 118, a ballad written _circa 1620_ which tells us: "there be diuers papists, that to saue their fine, come to church once a moneth, to heare seruice diuine. the pope giues them power, as they say, to doe so; they saue money by't too, but i know what i know." cf. _canterbury visit_., xxv, 27 (presentment "that he is a negligent comer to our parish church, being not able to pay the forfeiture." 1597). _ibid_., xxvii, 223 ("john wilkins be slothful in coming to the church, and because he is a poor man we cannot take the fine of twelve pence." 1578). also _ibid_., xxvi, 46 (humphrey watts coming sometimes but once a month to church). [115] _canterbury visit_., xxvi, 18 (one deal presented for keeping a schoolmaster, "and also being a victualler, suffereth him to remain in his house and not frequent divine service on the sabbath day." 1580). [116] _warrington deanery visit_., 191 (one motley "married not known where"). see other visitations, _passim_. [117] _warrington deanery visit_., 192 (four persons presented from wigan for marrying without banns); 189, _et passim_. [118] _ibid_. 184 (a child not baptized at the parish church); 189 ("a child christened, and not known where"); 190 (same). hale, _crim. prec_., 216 ("keeping her child unbaptized a whole moneth." 1597). _ibid_., 183 (curate of blackmore, essex, suspended from the celebration of the rites because "there was tow children... which died unchristened by his necligence." 1584). [119] _warrington deanery visit_., 189; 190 ("his wife churched not known where"). hale, _ubi sup_., 167. [120] _warrington deanery visit_., 185 (office of judge against james woswall: "his children come not to bee catechised"). see canons of 1571 (parents and masters to be presented for not regularly sending children or apprentices to learn the catechism), cardwell, _syn_. i, 120. [121] see _queen's visit. art. of_ 1559 in cardwell, _doc. ann_., i, 211. hale, _crim. prec_., 226 (one robinson presented for not going to his minister to be examined in the principles of religion of which he was ignorant). _barnes' eccles. proc_., 122-3 (an offender "lackeinge the catechism dyde thrust in amongest others and receyvid ..." another was "repulsed from the communion because he coulde not saye the 10 commaundements, in whome we can perceyve no towardnes to learne them"). also hale, _ubi supra_, 146, 159, etc. [122] presentments for not receiving are numerous in the act-books. a few references are, _dean of york's visit_., 219 ff. _e.g._, at goathland 20 persons are presented by name. see also hale, _crim. prec_., 163, 171, 176, etc., and the other act-books heretofore cited. also canons, injunctions and visitation articles of the time, _e.g_., canons of 1571 (vicars, etc., to present all over fourteen who have not received) in cardwell, _syn_., i, 120. grindal's inj. for york, 1571 (all above fourteen to receive in their own churches at least three times a year), cardwell, _doc. ann_., i, 336. [123] see heywood townshend, _proc. in the last four parl. of eliz_., debates, _passim_. [124] j.e. foster: _ch'wd'ns acc'ts of st. mary the great_, cambridge (1905), 225 (item for paper book to write in all names of the parish at easter. 1590-1). _ibid_., 202 (item to a scribe for writing names of communicants). thos. north, _chronicle of st. martin, leicester, ch'ivd'us acc'ts_, 171 (item same as above. 1568-9). [125] e. freshfield, _vestry minutes of st. christopher-le-stocks_, append., 71. [126] _ibid_., 7. for similar vestry orders see _vestry minutes of st. margaret, lothbury_, london (also edited by dr. freshfield), pp. 1 (1571) and 15 (1583). also g.w. hill and w.f. frere, _memorials of stepney parish_, 43 (1602), and 51 (1605/6). [127] burn, _eccles. law_, i (ed. 1763), 274, _sub voce_ church, says: "and if any of the parishioners refuse to pay their rates, being demanded by the churchwardens, they are to be sued for, and to be recovered in, the ecclesiastical courts, and not elsewhere." [128] _memorials of stepney_, 51. cf. _acts of the privy council_ (ed. dasent), xxii, 482-3 (a tenant refusing a customary payment for church repair, presented by "the generall consent" of the parishioners of lewesham to the commissary's court. he removes the cause to star chamber "to the extreame chardgis, trouble and hinderance" of one of the wardens, to the encouragement of like offenders, and to the "utter ruin and decaie" of the church. 1592). the source last quoted hereinafter cited as a.p.c., xxii (etc.). [129] besides the order just mentioned, the stepney vestry had three years before ordained concerning their wardens that these were "to shew how they haue p[re]sented them [old dues in their books], otherwise the said churchwardens shalbe charged to pay those arrearages as shall remayne so vnpaid and not p[re]sented by them." _op. cit_., 43. [130] art. xxi, cardwell, _doc. ann_., i, 326. [131] _leicest. archit_. (etc.) _soc_., iii, 204. [132] j.h. butcher, _the parish of ashburton in the 15th and 16th centuries_ (1870), 42. see also _ibid_., 40 and 49. also h.j.f. swayne, _acc'ts of st. edmund and st. thomas, sarum_ (wilts rec. soc. 1896), introd., p. xxv, and p. 317. [133] hale, _churchwardens' prec_., 4-10, 5th to 8th march, 1607-8. cf. _ibid_., 16. [134] hale, _op. cit_., 109-110. [135] _canterbury visit_., xxvii, 218. authorization to tax the land is not asked for in express terms, but seems to be implied. in other cases it is clear that a warrant was given for the assessment of lands, _e.g_., hale, _churchwardens' prec_., 4 (a warden of chelmsford, essex, to appear in court "for a warrant for seassment of the landes." 1584). sometimes the rates made were offered in court to be confirmed, hale, _ibid_., 8 (a rate "offered" to the judge at stratford at bow. 1607). _canterbury visit_., xxv, 14 (a rate, subscribed by the boards of the parishioners, "and certified under mr. doctor newman's own hand." 1613). [136] _canterbury visit., ubi supra_. [137] hale, _churchwardens' prec_., 90-1 (1603). [138] _canterbury visit_., xxvii, 223 (1569). cf. _ibid_., 214. also _ibid_., xxvi, 18 (three persons presented who will not "pay to the poor mens' box." 1574). [139] hale, _crim. prec_., 149 (1566). cf. _ibid_., 176 ("detected for beinge an uncharitable person & for not gevenge to the poore & impotent..." 1583). _ibid_., 208 (one crisp detected for not paying his accustomed "offering" for himself and wife to the minister at easter. 1593). [140] _dean of york's visit_., 229 (1595). _ibid_., 214 (similar presentment, 1570). _ibid_., 335 (_same_. 1600). _ibid_., 223 (bellman's wages). [141] _canterbury visit_., xxvi, 22 (1598). [142] _ibid_., 20 (1592). [143] _ibid_., 21 (1596), 44. _op. cit_., xxv. 32 ("we do suppose that [name] ... doth keep back from us a certain sum ... given by will to the use of the church ... and we know not how we may come by the same, unless your worship's aid be ministered unto us in that behalf." 1581). _ibid_., 22, 23, 26 etc. [144] _op. cit_., xxvii, 219 (1569). _op. cit_., xxv, 14 (keeping church ewes and not paying rent for them. 1613). [145] _op. cit_., xxvi, 33 (1605). [146] _ibid_., 39 (1600). _ibid_., 31. [147] _op. cit_., xxvii, 224 (1584). [148] _op. cit_., xxv, 13 (1600). [149] _e.g._, hale, _crim. prec_., 221 (1599). [150] _dean of york's visit_., 333 (church house. 1601). _ibid_., 214 (churchyard fence. 1570). [151] the higher nobility excepted. [152] cardwell, _syn_., i, 128. [153] _barnes' eccles. proc_., 19. [154] see, _e.g., op. cit_., 42-45 (5 schoolmasters mentioned by name at allhallows, newcastle; 4 at st. nicholas). in durham city "_sub-pedagogi_" are also spoken of in the various wards. [155] _op. cit., passim_. other examples will be found in _dean of york's visit_., 225, 229 etc. hale, _crim. prec_., 154, 184-8 (john leache's case. 1584-6), 190, 198 (one dawe's wife teaches without a licence. warned not to teach any "man child above the age of x yeres, untyll she shall be lawfully licenced." 15-89/90). _canterbury_ visit., xxvi, 20, 21, 25, 31, etc. [156] see j. cordy jeaffreson, _a book about the clergy_, ii, 58. [157] cardwell, _doc. ann_., i, 176 and 182. [158] see also archbishop parker's and other commissioners' precept to churchwardens and others in june, 1571 ("and that in no wise ye suffer any person publicly, or privately to teach, read or preach ... unless such be licenced [etc.] ... as you and every one of you will answer to the contrary"). _corresp. of archbp. parker, parker soc_., 382-3. cf. also archbp. whitgift's 'commission' to the ministers and churchwardens of london, aug., 1587, forbidding "that they ... do suffer any to preach in their churches or to read any lectures [etc.] ..." neal, _history of the puritans_, (toulmin's ed. 1793), i, 428. [159] _e.g._, hale, _crim. prec_., 188 ff. (leach, a schoolmaster, was cited for catechizing and preaching, being unlicenced. he was strictly warned by the judge not to "use any private lecture or expositions of scripture or catechisinge of his schollers in the presence of anye ... not ... of his owne howse-hold [etc.]." 1586-7). ibid., 202 (a curate detected for preaching without a licence. he confessed "that he hathe expounded" a little on the text, "but wold that mr archdeacon would appoint some time that he might preache before his wor[ship], and yf he should accepte of him, he would request his wor[ship] to be meanes unto my lord of london that he may be licenced to preache." 1591). w.h. overall and a.j. waterlow, _st. michael's, cornhill_, (london) _acc'ts_ (1869), 176 ("paide to mr. sadlor for avoidinge one excommunication for suffering a preacher to preache in o[u]r churche, being unlycenced, iij s. viij d." 1587-8). [160] in 1585 the wardens of pittington (durham) are "commanded to bye for everie person in our parish a booke ..." _surlees soc_., lxxxiv, 19. examples taken promiscuously from the wardens accounts of the day are: "paid for three prayer books for the good successe of the french kinge;" "paid for a prayer of thankes gevinge for ye over throwe of the rebelles in the north." in many accounts occur items for books of prayers "for the earthquake," or "against the turke," or "omelies against the rebells," or "in plague tyme," etc. [161] a number of ballads dating from the reigns of elizabeth and james have been very recently (oxon. 1907) published by mr. andrew clark under the title of _shirburn ballads_. [162] one of the earliest orders of the high commissioners preserved dates from 1560 and directs the wardens of the stationers to stay certain persons from the printing of primers and psalters in english and latin, for which printing one seres had obtained a monopoly. c.r. rivington, _the records of the worshipful company of stationers_ in _london and middlesex archã¦ol. soc. tr_., vi, 302. [163] "_a writing of the bishops in answer to the book of articles offered the last session of parliament anno reginã¦_ xxvii [etc.]." so called by strype, but assigned by dr. cardwell to a date later than 1584. cardwell, _doc. ann_., i, 426. "excommunication" in the act-books and elsewhere almost invariably refers to the lesser excommunication. [164] thus he could not receive communion, be married, stand as godfather, etc. burn, _eccles. law_, i, 252-3. compare _antiquary_, xxxii (1896), 143 (penance and heavy costs for a man who "being excominecated ... ded preseume to marye before ... he was absolved." 1583). also hale, _crim. prec_., 223 (presentment of an excommunicate for marrying. 1600). [165] see hale., _op. cit_., 198 (archdeacon's instructions to a curate in 1589). _ibid_., 200 (minister stopping service as an excommunicate would not leave. 1590). _hist. mss. com. rep. var. coll_. (1901), 78 (complaint by a vicar to wilts quarter sessions that an excommunicate tried to remain at service. 1606). _associated architectural soc. rep_., (etc.), xxxiii, pt. ii (1897), 373-4 (device of procuring an excommunicate to enter church and interrupt service so certain youths could continue their morris-dancing, 1617). chelmsford acc'ts, _essex arch. soc_., ii, 213 (item for "carrying roger price out of the church, he being exc[mmunicated]..." 1632). [166] see canons of 1597, cardwell, _syn_., i, 156. burn, _op. cit_., 457-8. for such a sentence see e.h. chadwyck healey, _hist. of west somerset_ (1901), 184 (archdeacon of taunton requiring a minister to denounce solemnly three obstinate excommunicates, and to warn all good christians not to eat or drink, buy or sell, or otherwise communicate with them under the pains of being themselves excommunicated. 1628). [167] thus those who talked with him, ate at the same table with him, saluted him, or gave anything to him were themselves _ipso facto_ excommunicate. see reeve, _hist. of english law_ (finlayson's ed.), iii, 68. if such an excommunicate brought an action at law, the defendant could plead in bar the excommunication. the testimony of such a man was not admissible in court. finally, he could not be buried in the parish churchyard nor could services be performed over his body. burn, _loc. cit., supra_. [168] see the case of kenton v. wallinger, 41 eliz., _croke's eliz. rep., leache's ed_., pt. ii, 838. this has already been mentioned on p. 33, note 102. in the leverton, lincoln, overseers for the poor acc'ts, there occurs, _s. a_. 1574 an item of 7s. given to john towtynge "for the discharge of ... his excomynacion," and the next year a sum of 2s. 6d. given to a woman for a like discharge. _archã¦ologia_, xli, 369-70. [169] whereby any but a perjured man would be forced to incriminate himself. [170] cf. maitland, _canon law in the church of england_, chapter, "the pope the universal ordinary." for proceedings by high commissioners see stubbs in _eccles. courts com. rep_. to parliament (1883), i, hist. append., 50. [171] as to the expense in suing out the writ, and also the slackness of bailiffs, etc., in executing it, see [r. cosen], _an apologie of and for sundrie proceedings by jurisdiction ecclesiasticall_ (1st ed., london, 1591), 64-5. speaking of the great charges incurred in suing out the writ cosen writes: "so that i dare auowe in sundrie diocesses in the realme, the whole yeerly reuenue of the seuerall bishops there woulde not reach to the iustifying of all contemnours ... by the course of this writte." that temporal judges sometimes set prisoners under the writ free at their own discretion without notice to the spiritual judges, see bancroft's _petition to the privy council_ in 1605, cardwell, _doc. ann_. ii, 100. for hostility of temporal judges for ecclesiastical jurisdiction, see bancroft, _op. cit_., 85. he counts up 488 prohibitions during elizabeth's reign, many of them awarded without good cause and "upon frivolous suggestions" of defendants (_op. cit_., 89). [172] hale, _crim. prec_., 145 ("_dominus decrevit scribendum fore regie majestate pro corporis capcione_ [etc.]." the threat subdued the excommunicate, for 15 days later "_solutis_ xxxiiis.... _pro expensis contumacie_," absolution was given, and penance enjoined. 1562). _ibid_., 172 (similar threat, we do not hear of the outcome). cf. r.w. merriam, _extracts from wilts quarter sess_. in _wilts arch. and nat. hist. mag_., xxii (1885), 20 (affray because of an arrest under the writ. 1604). see also whitgift's note to his bishops in 1583, cardwell, _doc. ann_., i, 404-6 ("if the ordinarie shall perceave that, either by slackness of the justices or waywardness of juries," recusants cannot be indicated at quarter sessions, then the ordinary shall, after first trying persuasion, excommunicate the culprits, and after forty days procure the writ against them). bancroft writes, march, 1605, that he will use his "uttermost endeavour" to aid his suffragans in procuring the writ, and in having it faithfully and speedily served. cardwell, _doc. ann_., ii, 80. cf. also the satirical single-sheet, published june, 1641, entitled _the pimpes prerogative ... a dialogue between pimp-major pig and ancient whiskin_, in brit. mus. _coll. of polit. and personal satires_. pig: "tush, their excommunications fright not us; but our land-ladies (poore soules) lie in most danger; for them they serve after with _excommunicato capiendo_, and then our forts are beleaguer'd with under-sheriffs, bum-bayliffs, shoulder-clappers, etc., whom we sometimes beat back by violence." [173] cardwell, _loc. cit_., 100. ecclesiastical jurisdiction derived also much temporal strength from the fact that practically every bishop was also a justice of the peace. for proof of this see strype, _annals of the reformation_ (oxon. ed.), iii, pt. ii, 451 (bishop of peterboro' complaining that he alone was left out of the commission. 1587). cardwell, _doc. ann_., ii, 80 (bancroft's letter, 1605: "we that are bishops, being all of us (as is supposed) justices of the peace"). when commissioning justices burghley referred to the bishops for lists of orthodox men. see such lists in strype, _op. cit_., 453-60. also in strype, _life of whitgift_, i, 187-8. _victoria county history of cumberland_, ii, 73-4. _sussex arch. soc. coll_., ii (1849), 58-62. mary bateson, _letters from the bishops to the privy council_, 1564, _with returns of the justices of the peace_, etc., in _camden miscellany_, ix (1895). by 1 eliz. c. 2, bishops could at pleasure associate themselves to justices of _oyer and terminer_ or of assize. cf. strype, _whitgift_, 329. [174] presentments on this score are frequent. take only a single jurisdiction, that of the dean of york's peculiar, between the years 1592-1601, and a number will be found. see _dean of york's visit_., 222 (5 persons); 226, 229, 315, 326, 329 (remaining excommunicate for a month); 334 (over 40 days. also a person presented for harboring an excommunicate); 335 (over a year); 341 (14 days). [175] cosen, _an apologie_, etc., 64. as has been above stated, an excommunicate could not attend service. p. 47 _supra_. [176] according to 23 eliz. c. i, sec. 4 and sec. 6. [177] see _a.p.c_., xiii, 271-2 (1581). cardwell, _doc. ann_., i, 406 (whitgift alludes to the "waywardnes" of juries). [178] not suspension from office (as might be supposed) but from service and sacraments. [179] p. 19, note 33, _supra_. [180] hale, _crim. prec_., 150 ("_contra_ ... because he will not be churchwarden accordinge to the archdeacon's judgment." excommunicated. 1566). ibid., 162 ("_contra ... detectum_ that he obstinately refuseth to be churchwarden, notwithstanding he was chosen by the consent of the parson and parishioners." excommunicated. 1576). cf. ibid., 183 (presentment for refusing to be sideman), and ibid., 207 (refusing churchwardenship). [181] in equity specific performance is nothing more than the giving of an instrument transferring title after all has previously been done on both sides, but this, to complete the transaction. [182] denunciation "in many poyntes resembleth a presentment," cosen, _an apologie_ (etc.), 70. see his book for the modes of proceeding. cf. also hale, _crim. prec_., introd., p. lviii. in commenting on archdeacon hale's book, which we have so often here cited (_a series of precedents in criminal causes from the act books of ecclesiastical courts of london_, 1475-1640 [pub. in 1847]), sir j.f. stephen in his _history of crim. law in england_, ii, 413, makes these observations: "it is difficult even to imagine a state of society in which, on the bare suggestion of some miserable domestic spy, any man or woman whatever might be convened before an archdeacon or his surrogate and put upon his or her oath as to all the most private affairs of life; as to relations between husband and wife; as to relations between either and any woman or man with whom the name of either might be associated by scandal; as to contracts to marry, as to idle words, as to personal habits, and, in fact, as to anything whatever which happened to strike the ecclesiastical lawyer as immoral or irreligious." [183] the case of john johnson in the official's court in durham city forms an excellent commentary on the whole system. he was presented as suspected of incontinency. after repeated citations and a threat of excommunication, he appeared, denying the charge and alleging that a churchwarden with others had falsely concocted it. at the petition of an apparitor, who acted as public prosecutor, seven of johnson's fellow-parishioners were cited to swear not to the _fact_ of his guilt, but to the general _belief_ in it. articles were then drawn up upon which depositions were taken and published. the case was adjourned repeatedly so that the many formalities of procedure might drag out their weary length. the oath _ex officio_ was forced on johnson, but he denied all guilt. finally, he was enjoined to procure three compurgators. these swore that they believed _"in animis suis"_ that johnson had sworn to the truth. though pronounced innocent, johnson was condemned to pay the costs of all the formalities that the apparitor had set in motion against him, and a last time was dragged into court in order to be admonished under pain of excommunication to pay these fees, amounting to â£1. 3s. 4d., within a month! the case had extended from 11th june, 1600, to 22nd may, 1601. _surtees soc_., lxxxiv (1888), 359-362. cf. also the following: "payed for annswerynge dyuerse faulse vntrothes suggested by [five names] to the sayd commyssyoneres vj s. viij d." minchinhampton, gloucester, acc'ts, _s.a._ 1576 (archbishop's visitation), _archaeologia_, xxxv. "pd. for our charges to lycoln when we were p[re]sented by the apparytor unjustly for that our church should by [be] mysvsed vs. vjd." leverton, lincoln, acc'ts, _s.a._ 1579, _archaeologia_, xli, 365. under 1595 the leverton wardens have the entries: "pd. to the apparitor for fallts in the churche ijs. viijd.," and: "for playing in the churche iijs. viijd." the last is explained by a third entry: "to the apparator for suffering a plaie in the church." (_op. cit_., 367.) this looks like bribery, or blackmail, or both. for examples of bribery see wing acc'ts, _s.a._ 1561, _archaeologia_, xxxvi ("to ye s[um]m[o]ner to kepe us ffrom lincoln for slacknes of o[u]r auters"). abbey parish acc'ts, _s.a._ 1600, _shrop. arch. soc_., i. 65 ("paid to cleaton, the chauncelor's man for keeping us from lichfield"). great witchingham acc'ts, _norfolk and norwich arch. soc_., xiii, 207 ("simp the sumner for his fees for excusing us from norwich"). _st. mary woolchurch haw_, london, _acc'ts, s.a_. 1594 ("more unto the paratour and doctor stanhopes man for their favours"). hale, _crim. prec_., 202 ("_fassus est_ that he gave xs. to ... the apparitor to thend that he might not be called into this corte." 1590). for examples of fees paid for absolution from an unjust excommunication see _minchinhampton acc'ts, s.a_. 1606 ("layd out [at] gloucester when we wer excommunicated for our not appearinge when wee were not warned to appeere, vj s. viij d"). st. clement's, ipswich, acc'ts, _east anglian_, in (1890), 304 ("payed for owr absolution to the commissary, being reprimanded for that we did not give in our verdict, where as we nether had warning nor notice given us of his corte houlden, ij[s.] x[d.]:" and: "payed more ffor the discharg of his boocke, viijd." 1610). churchwardens accounts are pretty reliable evidence, for they were subject to the scrutiny of those who had to foot the bills. [184] see mr. andrew clark's _shirburn ballads_ (oxon. 1907), 306 ff. mr. clark's notes and illustrations drawn from other contemporary sources are most valuable. [185] a number of broadsides and pamphlets were published in 1641 upon the abolition of the spiritual courts. consult mr. stephen's _catalogue_ (1870) for those in the british museum. one of them is entitled _the proctor and parator their mourning ... beinge a true dialogue, relating the fearfull abuses and exorbitances of those spirituall courts, under the names of sponge the proctor and hunter the parator_. in the spirited dialogue between the two _hunter_ tells of his ways of extorting money from recusants, seminary priests and neophytes, "whose starting holes i knew as well as themselves"; also, he adds, "i got no small trading by the brownists, anabaptists and familists who love a barne better than a church." "poor curates, lecturers and schoolmasters ... that have been willing to officiate their places without licences" are also his special prey. as for minor offenders "against our terrible canons and jurisdiction ... had i but given them a severe looke, i could ... have made them draw their purses ..." "i tell you," he concludes, "the name of doctors commons was as terrible to these as argier [algiers] is to gally-slaves." _sponge_ admits that he has made many a fat fee by _hunter's_ procurement. for more serious documents in corroboration see whitgift's circular to his suffragans in may, 1601, and also his address to his bishops a few months later in strype, _whitgift_, ii, 447 ff. among many other and grave abuses he refers to "the infinite number" of apparitors and "petty sumners" hanging upon every court, "two or three of them at once most commonly seizing upon the subject for every trifling offence to make work to their courts." cf. canons of 1597, can. xi (multitude of apparitors and their excesses) in cardwell, _syn_., i, 159. also canons of 1603/4, _ibid_. most of the elizabethan and stuart metropolitan and diocesan injunctions call for the presentment of the abuse of apparitors and other court officials. see cardwell, _doc. ann_., ii, _passim_. also _appendix to 2nd rep. of the com. on ritual_ to parliament (1870), where a large number of injunctions from parker to juxon (1640) are gathered together. [186] by this system, if the accused could get together a certain number of his neighbors (3, 4, 6 or more) to act as oath-helpers, _i.e._, who would swear that they believed him on oath, he was acquitted. it seems to have been no concern of the judge to weigh the evidence on the facts themselves. [187] the churchwardens accounts are full of items for horse hire and other expenses for long journeys, for ecclesiastical courts were held at all kinds of places at the pleasure of the judges. see mr. bruce's remarks on the minchinhampton acc'ts, _archã¦ologia_, xxxv, 419 ff. cf. the ludlow acc'ts, _shrop. arch. soc. 2nd. ser_., i, 235 ff.--in fact any of the accounts of the period that have been printed in detail. [188] archdeacon hale in _crim. prec_., introd., p. lx. [189] hale, _crim. prec_., 205 (1591). in warrington deanery, at the bishop's visitation in 1592, one grimsford is cited for not living with his wife. on a later occasion he appeared and affirmed that his wife had run away with another man, "whereupon the judge, having regard to the poverty of the man," absolved him. _warrington deanery visit_., 190. an ecclesiastical judge in durham city made this decree in 1580: "_dominus ... decrevit scribendum fore aldermanno_ ... to whip and cart the said rowle and tuggell in all open places within the city of durham, for that they faled in their purgacion, and therefore convicted of the crime detected." _barnes' eccles. proc_., 126. [190] a most important piece of evidence--because coming from such a source--is whitgift's circular and (later) his address to his bishops, already alluded to (note 185) given in strype's life of him. whitgift mentions the frequent keeping of officials' or commissaries' courts and the multitude of apparitors serving under them, so that "the subject was almost vexed weekly with attendance on their several courts." he adds that "what with churchwardens' continual attendance in these courts, which in many places came to more than was by a whole parish for any one cessment made to her majesty, the poor men who were chosen church wardens ... were in their estates hindered greatly in leaving their day labor for attendance there." these and like complaints, the metropolitan continued, were daily brought to him "with a general exclamation against commissaries' and officials' courts." in prophetic language he warned his suffragans that if they were not more zealous for reform all their courts might be swept away. we have further the unceasing complaints and the numberless petitions that were presented in every elizabethan parliament from 1572 onwards. some of these are given in strype, _annals_, etc., some in his _whitgift_. mr. prothero has conveniently gathered some, with references to others, in his _statutes and constitutional documents_ (1st ed.), pp. 209, 210, 215 and 221. see also heywood townshend, 110, _et passim_; d'ewes, 302, _et passim_, and the canons and injunctions of the time. peculiars were doubtless most subject to abuses, as being often exempt from the oversight and corrective discipline of the diocesan. offenders sometimes fled to these for protection. see strype, _ann_., iii, pt. ii, 211-12 (bishop of coventry and lichfield complaining in 1582 of peculiars, some of which belonged to laymen, as holders of abbey lands, in the matter of recusants). cf. blomefield, _hist. of norfolk_, iii, 557. _camden miscellany_, ix (1895), 41 (letters from bishops to privy council in 1564. recusants flying to exempt places). on the scandalous neglect of duty of some holders of peculiars see _dean of york's visit_., 199, 201 ff., 324, _et passim_. see also mr. w.e.b. whittaker's article "_on peculiars with special reference to the peculiar of hawarden_," in _archit. arch. and hist. soc. for chester and n. wales_, n.s. xi (1905), 66 ff. and records there given. see also _eccles. courts com. rep_., 1830-2, printed as appendix to vol. i of _eccles. courts com. rep_. of 1883, p. 198. lists of peculiars will be found in the above authorities. [191] though they were reestablished in 1660 they were forever shorn of their ancient glory. [192] the names of some of these broadsides, pamphlets, etc., have already been given. to these may be added, _the spiritual courts epitomised in a dialogue betwixt two proctors, busie body and scrape-all, and their discourse of the want of their former imployment_. others will be found in mr. stephen's _catalogue_. [193] that is, a portable stone altar which had been consecrated and could be set up anywhere for mass. [194] see order of the wilts justices issued against such offenders, oct., 1577. _hist. mss. com. rep. on mss. in var. coll_., i (1901), 68. [195] see indictment of an essex jury at quarter sessions in 1585 against one glasscock who spoke lightly of the ceremony of baptism, and rent out of a prayer book certain leaves where the ministration of baptism was set forth. _hist mss. com. rep_., x, pt. iv, 480. [196] presentment to the wilts justices, _loc. cit. supra_, 69 (1588), for excessive zeal of the justices of assize in suffolk see _state papers dom. eliz_., 1591-4, p. 275 (address of suffolk gentry to privy council in 1592. they complain of indictments against ministers on very trivial pretexts). for the answer of the council to this petition see strype, _ann_., ii, pt. i, 268-9 (lords write to judges to consult the spirit not the letter of law, and add their own suspicions that informers are mainly to be blamed if justice has miscarried). [197] _state pap., loc. cit_. [198] indictment of essex jury, _hist. mss. rep., loc. cit. supra_. [199] _ibid_. [200] information of the wilts justices against one dearling, parson of upton lowell, _loc. cit. supra_, 68 (1585). cf. chelmsford acc'ts, _essex arch. soc_., ii, 212 (an item paid the clerk of assizes for framing the indictment of chelmsford hundred "against puritisme." 1592). [201] these would be--to cite the principal--the ordinary upkeep of the church with its services and all its appurtenances whatsoever (see previous chapter); the finding of clerk and sexton; the care of the poor; maintaining of the local roads and bridges; purchasing and repair of parish armor, and mustering of parish contingents; contributions for prisoners and maimed soldiers; the keeping of the parish butts and the stocks; the destruction of frugivorous birds and animals (the statutory "vermin"), etc. [202] the act-books are full of "detections" for being an "uncharitable person," for "not giving to the poor," etc. see pp. 41 ff., _supra_. [203] reference is here made to the occasional seizure of parish lands or funds by the queen's commissioners for concealed lands. see strype's strong language in his _ann. of the ref_. (oxon. ed.), ii, pt. i, 310. he speaks of the unjust oppressions of courtiers and other griping men, 'harpies' and 'hell-hounds,' who, under the pretense of commissions, "did intermeddle and challenge land of long times possessed by churchwardens, and such like, upon the charitable gifts of predecessors ... yea and certain stocks of money, plate, cattle and the like. they made pretence to bells, lead [etc.] ..." strype's words are none too strong, being amply confirmed by much evidence _aliunde_. see, _e.g_., the determined attacks in 1567 and subsequently on the melton mowbray school lands in _leicest. archit_. (etc.) _soc_., iii (1874), 406 ff. thanks to powerful neighbors the meltonians won their case. less fortunate were the parishioners of st. mary's, shrewsbury, the revenue from whose lands supported church fabric, the poor, etc. for proceedings against them, and the vain appeal by the parish to the lord chief justice in 1572 ff., see owen and blakeway's _hist. of shrewsbury_, ii, 350-2. for confiscation of parish gild property and parish lands on a large scale, see examples given in _cambridge and hunts arch. soc_., i (1904), 330 ff. we are here told that during elizabeth's reign at least twelve commissions for concealed lands were sent down into cambridgeshire (p. 332). see also _ibid_., 370 ff. for a sale of forfeited lands to jones and grey in 1569. the list of lands is very long and only a sample of many such. for attacks (1587) on all saints, derby, lands, whose revenues went to church repairs, etc., see j.c. cox and w.h. st. j. hope, _chronicles of all saints, derby_ (1881). for informers involving lapworth, warwick, in a suit about its parish lands see robt. hudson, _memorials of a warwickshire parish_ (1904), 104. the churchwardens acc'ts occasionally allude to the queen's commissioners, _e.g_., the great witchingham acc'ts, where they are dubbed by the right name: "for my expenses when i was before the quenes inquisitors for lands and goods" (1559). _norf. and norw. arch. soc_., xiii, 207. [204] jas. copeman in _norf. and norw. arch. soc_., ii (1849), 64. the loddon acc'ts cover the period 1554-1847, some of the donations, or endowments, being made in the 16th and some in the 17th centuries. [205] robt. dymond in _devon assoc. for advanc. of science_ (etc.) _tr_., xiv (1882), 407. these acc'ts run from 1425-1590. for a list of parish properties in 1565, see pp. 460-1. their yearly rent then amounted to â£9 14s. 2d. [206] sam'l barfield, _thatcham, berks, and its manors_ (1901), i. 121. [207] r.w. goulding, _records of the charity known as blanchminster's charity, stratton_ (1898), 64-5. [208] in 1562 it is said to have contained only 48 families. john amphlett, _churchwardens acc'ts of st. michael's in bedwardine_ (ed. for _worcester hist. soc_., 1898), introd., p. iii. [209] _op. cit_., 142-3. see _ibid_., and for the year named, the receipts from these properties. thus â£4 is paid for one and a half years' rental of parish land lying in severn stoke parish; 44s. for two years' rent of parish houses in st. peter's parish, worcester city, etc. [210] _op. cit_., pp. xxx-i. [211] hudson, _memorials_, etc., 85 ff. consult mr. hudson's map of the parish lands. [212] _notes and queries for somer. and dorset_, v (1897), 94. [213] _somerset arch. and nat. hist. soc. tr_., xxiii, mr. pearson's introd., p. iii, and _op. cit_., vol. xxvi, 106-9. cf. a.g. legge, _north elmham_, norfolk, _acc'ts_ (1891), 5-6 (long list of lands managed by wardens in 1549). also j.h. butcher, _the parish of ashburton_ (devon), 49 (1580). owen and blakeway, _hist. of shrewsbury_, ii, 342 (st. mary's parish lands with 32 tenants and rental of â£6. 7s. 8d. in 1544. the churchwardens were here called "lady wardens" as managing the "rentall of our lady"). [214] _st. michael's acc'ts, op. cit_., vol. xxvi, 129. the wardens of this parish record among their expenditures many items for the repair of the parish tenements and other property. in early times they received 12d. as a salary for management. later this was changed into an honorarium of varying amount "_pro bono servicio suo." op. cit_., vol. xxiii, intro., p. ii. [215] thus at lapworth, warwickshire, a trust of parish lands was re-created in 1563 with twenty-two feoffees; and one collet in 1567 enfeoffed seventeen men of a field of only three acres, fourteen perches, to parish uses. hudson, _memorials_ (etc.), 85-6. [216] _e.g._, the grasswardens of st. giles, durham, who managed the common lands of the parish, and accounted yearly for them. they made disbursements for many parish expenses which elsewhere churchwardens usually paid out (_e.g_., for bridges, houses of correction, poor prisoners, armor and musters), yet were themselves distinct from the churchwardens. see _surtees soc_., xcv, i ff. cf. the bridge wardens of loughborough, leicester (w.g.d. fletcher, _hist. of l_., 1883, pp. 40 ff). also the townwardens of melton mowbray, _leicester archit_. (etc.) _soc_., iii, 61-2, _note_. [217] hudson, _memorials_, etc., 88. [218] that is (apparently) holdings returning â£4 of rent annually. [219] pasture. [220] _surtees soc_., lxxxiv, 15. [221] editor's (mr. barmby's) introd., _ibid_., 4. [222] (dean) g.w. kitchen, the manor of manydown, _hants rec. soc_., 1895, 171. for other examples both of parish cows and sheep: see hale, _crim. prec_., 221 (40 parish sheep of billericay, essex, for the relief of the poor. 1599). littleton, worcestersh. acc'ts, _midland antiquary_, i (1883), 107 (purchase of cow for parish in 1556). _ibid_., 108 (wintering of a church heifer). morton, derbysh., acc'ts, _the reliquary_, xxv, 17 (same as above. 1593). owen & blakeway, _hist. of shrewsbury_, ii, 342 (st. mary's had in 1544 ten cows and three sheep renting for â£1 1s. 8d. yearly). rotherfield acc'ts, _sussex arch. coll_., xli, 26, 46. st. michael's, bath, acc'ts, _somerset arch_. (etc.) _soc_., xxiii, introd., _et passim_. great witchingham, _norf. and norw. arch. soc_., xiii, 207 (cows in 1604). hartland, devon, acc'ts, _hist. mss. com. rep_., v, pt. i (1876), 573a (custom _circa_ 1601 for poor to leave sheep to church by will). hudson, _memorials_, etc., 106-10 (parish meeting about renting out of cows. surety bonds given by hirers in 1580 ff.). many other examples will be found in the wardens acc'ts and elsewhere. [223] see hudson, _op. cit., supra_, 106. in 1595 two cows were bequeathed to lapworth to be rented out at 20 d. yearly. the proceeds of one to mend a certain parish road, of the other to support the poor (_ibid_., 109). [224] art. xxv, cardwell, _doc. ann_., i, 189 ff. so in the visitation articles of the same year (_ibid_., 213) we read: "item, whether the money coming and rising of any cattle or other movable stocks of the church [etc.] ... have not been employed to the poor men's chest." [225] in north elmham the term "office land" seems to have been used for lands set apart for the remuneration of parish servants. see a.g. legge, _north elmham acc'ts_, 81, _s.a._ 1566: "it[e]m for office land of the ten[emen]te fost[er] ... vij d." cf. mr. legge's _note_ (p. 129). he cites other examples in norfolk parishes, viz., "constable acre" in stuston, "constable pasture" in fralingham, "dog whipper's land" in barton turf. cf. j.l. glasscock, _records of bishop stortford_, 55 ("sexten's meade," 1563). in an early year _temp_. henry viii one jesop left two tenements to mendlesham, suffolk, "to ye fyndyng of a clarke to pley att ye organys for a p[er]petuite." _hist. mss. com. rep_., v, pt. i (1876), 596a. see also _shrop. arch. and nat. hist. soc_., iii, 3rd ser. (1903), 315 (26s. and 8d. and 12 bushels of rye issuing annually out of idsal rectory for the poor and the maintenance of a clerk). e. freshfield, _st. christopher-le-stocks' acc'ts_, 38 (bequest of a perpetuity of 20s. annually for clerk and sexton. 1602). [226] swyre, dorset, parish acc't book in _notes and quer. for somer. and dorset_, iii (1893), 293 (lands allotted by parish for support of a blind man). [227] _e.g., st. christopher-le-stocks' acc'ts_, 38 (yearly perpetuity of â£3 4s. in bread and money to poor. 1602). _st. michael's in bedwardine acc'ts_, 99 (house left to parish, 12s. of whose rental to go to poor, and 1s. to the churchwardens. 1590). [228] butcher, _parish of ashburton_, 46 (land given to buy shirts and smocks for the poor. 1575). [229] t.p. wadley, _notes on bristol wills_ (1886), 230 (â£20 for a stock of money to remain for ever "in the howse of correction" for the maintenance and "settinge on work of such people as shalbe therevnto co[m]mitted for their mysdemeanors." _thos. kelke's will_. 1583). [230] _wills and inventories_, pt. ii, _surtees soc_., xxxviii, 83 (keyper school of houghton and its endowment of â£240. 1582). [231] examples among many are the edenbridge, kent, lands. these bridgewardens held lands in three parishes. _arch. cant_., xxi (1895), 110 ff. also burton's charity lands at loughborough. the "bridgmasteres" here in 1570 collected â£33 18s. 6d., and disbursed â£16 12s. 11d. fletcher, _hist. of loughborough_, 41-2. also hayward bridge lands, _notes and quer. for somer. and dorset_, iv (1895), 205-7. [232] legge, _north elmham acc'ts_, 87-90. so too at eltham, kent, where the "fifetene peny lands" have special wardens who account for their revenue. _archaeologia_, xxxiv, 51 ff. [233] _statutes of the realm_, iv, pt. ii, 968-9. [234] cardwell, _doc. ann_., i, 189 ff. [235] dr. pilkington's will, _surtees soc_., xxii, append., p. cxxxviii. for a few other examples of bequests for parish utilities see _ibid_., p. ciii (george reyd's will, 1559). _ibid_., p. cx ff. (william birche's will of 1575 in which are many bequests to poor artificers, to prisoners--a very frequent bequest--to "needfull briggs or highe waies," etc.). see also _benefactions to dorset parishes, churches_, etc., in _notes and quer. for somer. and dorset_, x, 164 ff. also t.p. wadley, _notes on bristol wills, passim (e.g_., thos. kelke's will of 1583, on p. 230. he leaves â£13 to newgate prisoners, a frieze gown to 12 women and 12 men--a frequent bequest--6s. 8d. each to 52 poor maidens for their marriage, etc.). also _wills and inventories, surtees soc_., xxxviii, pt. ii, _passim_. surrey wills in _surrey arch. coll_., x (1891), _passim_. [236] _the crie of the poore for the death of the right honourable earle of huntington_ (printed 1596), joseph lilly, _a collection of seventy-nine black-letter ballads and broadsides_, 1559-1597 (1870), 230. [237] _ibid_., 263. [238] _the poore people's complaynt, bewayling the death of their famous benefactor, the worthy earle of bedford_ (died 1585). bedford was described as "a person of such great hospitality that queen elizabeth was wont to say of him that he made all the beggars." clark, _shirburn ballads_, 256. [239] j.c. cox, _three centuries of derbyshire annals_, i, 136. [240] e. freshfield, _st. bartholomew, exchange, acc'ts, s.a_. 1598, _et passim_. freshfield, _st. margaret, lothbury, vestry book_, 32 (1595). _st. margaret's, westminster, overseers' acc'ts_ in _the westminster tobacco box_, pt. ii (1887), _e.g., s.a_. 1572-3, where we find donations from lord burghley, the lord chief justice, the dean of westminster, the earl of derby, the earl of hertford, etc. [241] though by 37 hen. viii c. 9, sec. 3 (_stats. of realm_, iii, 996) interest up to 10 per cent. per annum was permitted, all interest was prohibited by the 5 & 6 ed. vi, c. 20, sec. 2 (_stats. of realm_, iv, pt. i, 155). interest is here dubbed usury, "a vice most odyous and detestable." interest up to 10 per cent. was, however, again made lawful by the 13 eliz. c. 8, sec. 4 (_stats. of realm_, iv, pt. i, 542) which, however, stigmatizes usury as sinful. [242] examples are, _vestry minutes of st. margaret, lothbury_, 32 (gift of â£20 in 1595 to be employed in wood and coal for the use of the poor. a committee of four was appointed to invest and make sales. see their account for 1596, p. 34). _the westminster tobacco box_, pt. ii, 22 (one of the overseers of st. margaret's to keep a gift of â£42 "untill the same may be bestowed upon somme good bargaine as a lease or somme other such like commoditie w[hi]ch may yeelde a yerely rente to the pore." 1578). cf. _st. bartholomew, exchange, acc'ts books_, 3 ff., where in 1598, and regularly in subsequent years, appears the item: "alowed to this account for the geft of the lady wilfordes xx li for the pore xx[s]." also another item, likewise of 20s. yearly, on mr. nutmaker's â£20--in other words, 10 per cent. in each case every year. cf. jas. stockdale, _annals of cartmel_ (lancashire, pub. 1872), 37-8 (â£65 6s., money belonging to cartmel grammar school "placed" in the hands of various persons, some of whom give pledges, others mortgages, for repayment. the revenue from this is â£6 10s. 7d., _i.e._, 10 per cent. in 1598). in 1613, in allowing the overseer's accounts of swyre, dorset, the local justices indorse: "upon this condition that from henceforth the overseers and churchwardens do yearlie charge themselves with the some of xxs. for thuse of a stocke of xli [_i.e._, 10 per cent.] giuen to the poore by the testam[en]t of james rawlinge." the practice above illustrated is simply that enjoined by 18 eliz. c. 3, amended and completed by 39 eliz. c. 3 and 43 eliz. c. 2, with an object of making the poor administration self-supporting as far as might be. the fact that elizabethan poor laws were based on the best-approved parish customs made them perdurable. for a model administration of parish stock according to the poor laws see the cowden overseers acc'ts, _sussex arch. coll_., xx, 95 ff. (1599 ff.). [243] _e.g._, in st. michael's in bedwardine (_acc'ts_ ed. john amphlett) one stanton left 50s. to the poor in 1588 (_acc'ts_, p. 97-8). robt. chadbourne paid 5s. for the use of this money for several years (_acc'ts_, p. 108, etc.). it then was loaned to john brayne, an entry being made from time to time that the principal was owing as well as the interest (_acc'ts_ p. 108). brayne paid the 50s. to the wardens in sept., 1595. cf. preceding note (cartmel school money). [244] _st. michael's in bedwardine acc'ts, supra, 96_ (one fletcher loaned 30s. in 1586, he depositing with the wardens "a gilt salt with a cover"). for numerous gratuitous loans of parish money, see the mere acc'ts, _wilts arch. and nat. hist. mag_., xxxv (1907), _passim_. cf. also the document of 1586 relating to the parish of heavitree, in _devon notes and quer_., i (1901), 61, where it is stipulated (_inter alia_) that if any parishioner of good character upon reasonable cause shall desire to borrow from any surplus funds of the church for a season, "such a one shall not be denyed." [245] see _wilts arch. mag_., xxxv. cf. j.e. foster, _st. mary the great_ (cambridge) _acc'ts_ (1905), 208. [246] in 1564 the parishioners of chagford, devon, bought from the lord of the manor for â£10 the local markets and fairs, subject to a yearly rent of 16s., which they had always paid as tenants. they then repaired and enlarged the market house. presumably their venture was a profitable one, for in 1595 the revenue from these markets and fairs was â£3 10s. g.w. ormerod in _devon assoc. for adv. of science_, etc., viii (1876), 72. same, _local information reprinted from the chagford parish mag_. (1867) in _topographical tracts_ in brit. mus. as it was sometimes hard for the authorities to prevent the churchwardens from utilizing the church for plays, so it was hard for them to keep the wardens from giving up the churchyard or outlying portions of the church structure for fairs and stall-holders. in herts co. rec. quarter sess. rolls (ed. w.j. hardy, 1905), p. 13, we read, _s. a_. 1591-2, that a presentment was made that some part of the "fayer of starford has usually been kept within the compase of the churchyard." see also _st. edmund and st. thomas, sarum, acc'ts_ (ed. h.j.f. swayne, _wilts rec. soc_. 1896), introd., p. xxiii (st. edmund's fair held within and without the churchyard. wardens receipts from cheesesellers, butchers, etc., for stalls and standings). [247] as late as 1633 the bishop of bath and wells could write to archbishop laud: "i finde that by church-ales hertofore many poore parishes have cast their bells, repaired their towers, beautified their churches, and raised stocks for the poore." wm. prynne, _canterburies' doome_, etc. (1646), 151. cf. philip stubbes, _anatomie of abuses_ (4th ed., 1595), 110-11. _spudeus:_ "but, i pray you, how do they bestow that money which is got thereby?" [_i.e._, by church-ales]. _philopomus:_ "oh well, i warrant you, if all be true which they say; for they repaire their churches and chappels with it; they buy bookes for service, cuppes for the celebration of the sacrament, surplesses for sir john [_i.e._, the parson], and such other necessaries. and they maintaine other extraordinarie charges in their parishes besides." [248] bath and wells to canterbury, prynne, _supra, loc. cit_. in 1536 at morebath, devon, the parish agreed that the clerk should gather his "hire meat" (_i.e._, so much corn of each one) at easter, "& then ye p[a]rysse schall helpe to drenke him a coste of ale yn ye churche howse." j.e. binney, _morebath acc'ts_ (1904), 86. when in 1651 at st. thomas', salisbury, clerk-ales were abolished, "both the clerk and sexton claimed compensation for the loss of income sustained." the same was true of st. edmunds' (in the same city) in 1697. swayne, _st. edmund and st. thomas acc'ts_, introd., p. xvii. [249] stubbes, _anatomie_, etc., 110. the above account of church-ales has been derived partly from stubbes and from a curious little pamphlet, edited by rev. fredk. brown in 1883, entitled _on some star chamber proceedings_, 34 _eliz_. 1592; partly, also, from many churchwardens acc'ts, in particular the seal acc'ts in _surrey arch. coll_., ii (1864), 34-6 (see items in detail for the ale of 1592, and especially the ale of 1611. expenses for all manner of provisions and delicacies, for minstrels and evidently, too, for a play occur. in 1611 the festivities lasted at least 5 days). cf., too, the _expenses of the maye feast_ at dunmow in 1538 (cooks, minstrels and players mentioned), _essex arch. soc_., ii, 230. also kitchen, _manor of manydown_, 172-3 (lists of delicacies provided at the wootton ale in 1600. expense items for lords' and ladies' liveries, players, etc.) [250] the parish of chagford in _devon ass. for adv. of science_, viii, 74. [251] _wilts arch. mag_., xxxv (1907), mere acc'ts, 30. these have been transcribed verbatim by mr. t.h. baker. [252] _op. cit_. because of greatly increased expenses the wardens here thenceforth resorted to collections according to a book of rates. they also devised other means of income, such as parish burial fees, collections for the holy loaf (_i.e._, blessed but not consecrated bread), etc. this casting about for new sources of revenue was characteristic of all parishes as the reign advanced. [253] _op. cit_., 26. [254] _op. cit_., 92. [255] in 1605 and 1606, doubtless to meet some extraordinary expenses, the mere wardens roused themselves to great efforts at their church-ale, and netted â£15 6s., and â£20 respectively. sir rich. colt hoare, _hist. of modern wiltshire_ (1822), i, 21. [256] kitchen, _manor of manydown_, 174. at this ale there were six tables and the receipts from each were tabulated separately. for other large receipts see the wing, bucks, acc'ts, _archaeologia_, xxxvi, 219 ff. in 1598 the ale here yielded â£9 16s. 4d. at morebath, a small and poor parish, an ale had produced â£10 13s. 5d. in 1529. but the receipts from this source fell off here in elizabeth's time. at stratton, cornwall, up to 1547, at any rate, if not later, ales were the chief source of income. _archaeologia_, xlvi, 195-6. [257] _devon notes and quer_., iii (1905), 224. cf. the young men wardens' ales at morebath (binney, _morebath acc'ts_, 213 [1573], _et passim_). also st. anthony's gild ales at chagford. _devon ass. for adv. of science_, viii, 74 (1599). various persons at milton abbot sold ale and bread. _op. cit_., vol. xi (1879), 218. [258] _notes and quer. for somer. and dorset_, v (1897), 48. the same year in these acc'ts we find three conduit wardens mentioned. these are to have "the assistance of william ellis plomer [plumber]." of them it is also determined that they "do kepe an alle for the comodetie of the [transcriber's note: word illegible] dytts in the sayd towne to be kept abowts the tyme of shrofftyde," [transcriber's note: word(s) illegible] just before lent. [259] butcher, _the parish of ashburton_, 41. it would seem that there were special wardens here for ale drawing. (see p. 44 [1570-1].) [260] _archaeologia_, xxxvi, 235. [261] "and because john watts hath ben long sick, hit is agreed that if hee be not able to s[e]rve at the tyme of the church ale, that then john coward ... shall s[e]rve and be king in his place for this yeare." mere acc'ts (_wilts arch. mag., l.c_., 34) _s.a._ 1561. cf. j.h. matthews, _history of st. ives_ (1892), 144, _et passim_. [262] bishop hobhouse, _churchwdn's acc'ts of croscombe, pilton_, etc., _somerset rec. soc_., iv (1890), 80, where he says: "the [yatton] wardens attended these festivals at ken, kingston, wrington, congresbury, etc., with more or less regularity, making their contributions, commonly xijd. in the name of the parish and at the cost of the parish ..." cf. _morebath acc'ts_ (ed. binney), 224: "it there was payd a trinite sonday at the churche ale at bawnton [bampton] for john skynner ... xjd." (1565). mere acc'ts (_wilts arch. mag_.), 60: "item paied for bread and drink to make the sum[m]er lord of gillingham drink ... ijs. vjd." (1578-9). t. nash, _hist. and antiq. of worcestershire_, ii, appen., p. xxix (halesowen acc'ts: "paid when we went to frankley to the church ale 20d."). [263] see the precedents given for the western circuit in prynne, _canterburies' doome_, 152. cf. also, _ibid_., 128 ff. that these ales died hard in devon and somerset is seen by the repeated judicial orders. see also j.w. willis bund, _social life in worcestershire illustrated by the quarter sess. rec_. in _assoc. archit. soc_., xxiii, pt. ii (1897), 373-4 (1617). a.h. hamilton, _quarter sessions from elisabeth to anne_ (1878), 28-9. harrison, _descrip. of engl_., bk. ii, new shak. soc., 32. saml. barfield, _thatcham, berks, and its manors_, ii, 105 (wardens acc'ts 1598-9: "item wee were bounde over by mr. dolman, justice, to appeare at reading assizes, where it cost t.. l.. and r.. c.. conserning our business wee kept at whitsuntide xvs. apece, somme xxxs.") [264] hale, _crim. prec_., 149 (hornchurch wardens bringing players into church. 1566). _ibid_., 156 ("tromperie" and "paynted stuff for playes in the chefe parte of the [rayleigh] church." 1574). _ibid_., 158 (two plays in romford chapel by "comon players." wardens plead in extenuation that proceeds went to "a poore man in decay." 1577). leverton, lincolnshire, acc'ts, _archã¦ologia_, xli, 333 ff. (several examples of plays in the church. 1579-95). [265] in the chelmsford acc'ts, _essex arch. soc_., ii, 225-6 (1562), is a most interesting inventory showing an elaborate stage outfit. that it was used for miracle plays is seen on p. 227 (" cotte of lether for christe," and "lyne for the clowdes," etc.). from various towns the chelmsford men received in 1563, and subsequently, large sums for the hire of these properties, e.g., â£3 6s. 8d. from "starford" (bishop stortford?); 43s. 4d. from colchester. [266] examples are thos. north, _st. martin's, leicester, acc'ts_ (1884), 80 (children's morris-dance. 1558-9). ibid., 85 (robin hood play). st. helen, abingdon, acc'ts, _archã¦ologia_, i (2d ed.), 15 (1560). j.h. baker, _notes on st. martin's_ (salisbury) _church and parish_ (1906), wardens acc'ts, 153 (whitsun dance in 1588 yielding 13s. 4d.). _st. edmund and st. thomas, sarum, acc'ts_, introd., p. xvii. also both acc'ts, _passim_ ("feast of hokkes," "childrens daunse." at st. edmund's â£3 12s. collected in 1581 [p. 131]; at st. thomas' same year â£3 6s. 8d. [p. 291]). t.n. & a.s. garry, _st. mary, reading, acc'ts_ (1893), 28-9, et passim (whitsuntide and hocktide money here drop out as early as 1575. there was also here a christmas gathering). [267] examples: wandsworth acc'ts in _surrey arch. coll_., xvii (1902), 158 (1567-8). john nichols, _illustrations of the manners etc. of antient times_ (1707) (great marlow, bucks, acc'ts, 135. 1612), etc. [268] _wilts arch_. (etc.) _mag., loc. cit_. (mere acc'ts: brass crocks in inventory of 1584). chagford acc'ts in _devon ass_. (etc.), 74. binney, _morebath acc'ts_, 132. a.e.w. marsh, _history of caine_, 368 (church furnace, 1529. wardens expenditures for sowing church lands, mowing them, and carrying the corn and storing it in the church-house). _the antiquary_, xvii, 169 (stanford, berks, acc'ts, _s.a._ 1569: laying corn in church-house, and making malt there). _morebath acc'ts_, 132 (spits put up in the church-house). [269] morebath acc'ts, 142 (church stock-taking), mere acc'ts _(wilts arch_. (etc.) _mag. loc. cit_.), 32, 37, 54, etc. chelmsford acc'ts, 217 ("xv dozen pewter & ix peces," and rent of it owing to church. 1560). [270] st. john's, glastonbury, acc'ts, _n. and q. for som. and dor_., v, 94, _s.a._ 1588 (selling ale in church-house). tintinhull acc'ts, _somer. rec. soc_., iv, p. xxii ("the chief source of income [church-house] at t[intinhull] and elsewhere to the end of the 16th century,") stratton acc'ts, _arch_., xlvi, 198. _bristol and glouc. arch. soc. tr_., vii (1882-3), 108 (tenement donated 1532 to northleach known as "the churche taverne." it was rented out, but on the condition that the lessee should "permit the towne to have the use of the same one month at whitsontyde"). of the stratton church-house we are told that men were fined (in 1541) for drinking ale there, because the drinking was not for the profit of the parish. _arch., loc. cit., supra_. [271] _stanford acc'ts, loc. cit., s. a_. 1595. _stratton acc'ts, loc. cit_., 198. [272] thus at calne (wilts) in 1574-5 no church-ale was had, but a gathering in lieu of it was made from the parishioners. ales and collections thenceforward alternated here, until church rates were established. marsh, _history of calne_, 372. [273] see, _e.g_., thos. north, _st. martin's leicester, acc'ts_, 98, where the times of collection are named. [274] see, among others, ludlow acc'ts, _shrop. archit_. (etc.) _soc_., iii, 127 (1567), where the name occurs. also st. edmund's, sarum, acc'ts, _wilts rec. soc_. for 1896, p. 141 (1592). [275] _e.g._, at st. edmund's, sarum, or at st. martin's, leicester. [276] see, _e.g_., j.e. foster, _st. mary the great_ (cambridge) _acc'ts_, 148 ff. offerings of the masters of arts and of the bachelors form a distinct feature here. [277] see pp. 41 ff. and 59 _supra_. in the _morebath acc'ts_ (ed. j.e. binney, p. 178) we read, _s.a._ 1553-4, as a heading to the receipt items: "now to pay y'e forsayd dettis & demawndis y'e schall hyre of all our resettis y't we have resseuyed, & how gentylly for y'e moste p[ar]te men have payd of there owne devoc[i]on w[i]t[h] out ony taxyn or ratyng as y'e schall hyre here after." then follows a list of 30 names. there is evidently some sort of rough assessment here, _e.g_., nicholas at hayne pays 4s. 9d., "consyderyng hys bothe bargayns" _(i.e_., small farms). cf. _st. edmund and st. thomas, sarum, acc'ts_, p. xviii and p. 317. [278] five years later, the vicar dead, the clerk was ordered to assist the wardens in receiving the 'paskall pence' whether paid at easter or at any other time of communion. hill and frere, _memorials of stepney parish_, 4-5 and 13-14. [279] ordered by st. edmund's, sarum, vestry in 1628: "that the bread and wyne for the communion shalbe paid for by the auncyennt paymentt of the halfepence, and yf it shall com[e] to more ... jt shalbe supplied out of the rest of the mony given after the co[m]munion." _st. edmund and st. thomas acc'ts (wilts rec. soc.)_, 187. [280] these levies were 2-1/2d. on each householder at st. margaret, lothbury, london; 3d. a house at st. lawrence pountney, london (_history of st. laurence pountney_, by h.b. wilson [1831], 125 ff.). etc. at salehurst, sussex, the fee was 1d. a poll yearly, heads of households being empowered in 1585 to abate that sum from their servants' wages: _sussex arch. coll_., xxv, 154. at pittington, durham, landlords were to answer for their cottagers for a yearly fee of 2d.: _surtees soc_., lxxxiv, 29 (1590). cf. _ibid_., houghton-le-spring acc'ts, 269. leverton, lincoln, acc'ts, _archã¦ologia_, xli, 368 (a penny a poll for the elements. 1612). in the abbey parish church estate acc'ts, shrewsbury, every "gentleman" is to pay 6d. yearly to the wardens for bread and wine; "the second sorte" of the parishioners 4d. each; "the third or weaker sorte," each 2d.: _shrop. arch. soc_., i, 65 (1603). [281] see great yarmouth acc'ts, _east anglian_, iv (1892), 67 ff. (an item for purchase of 1000 tokens. 1613-14). also _st. margaret, lothbury, vestry minute books_, 14 (1584). also _archã¦ologia eeliana_, xix (1898), 44 (ryton, durham, book of easter offerings. 1595). [282] _st. edmund and st. thomas, sarum, acc'ts_, 288 (muscatel and claret). _abbey parish church estate acc'ts_, 62 (same). _st. martin's, leicester, acc'ts_ (ed. thos. north), 100 (malmsey and claret). [283] rubric ⧠144 of the first edwardine prayer book directs that as ministers are to find the elements, the congregations are to contribute every sunday at the time of the offertory the just value of the holy loaf. see e. freshfield, _st. christopher-le-stocks vestry minute book_, p. vii, _et passim_. stanford, berks, acc'ts, _antiquary_, xvii, _s.a._ 1582 (2d. collected every sunday for holy loaf). mere acc'ts (_wilts arch_. (etc.) _mag_., xxxv, 38), _s.a._ 1568, _et passim_. [284] j.v. kitto, _st. martin's-in-the-fields_ (london) _acc'ts_, append. d., vestry order of 1590. parish order of salehurst (1582), _sussex arch. coll_., xxv, 153. st. margaret's, westminster, overseers acc'ts in _westminster tobacco box_, pt. ii, 18 (1566). [285] _e.g._, at st. laurence pountney, london, the "clerk's wages" amounted in 1598 to nearly â£30 in the wardens receipt items, but in the expense items to â£8 plus various dues for lighting, bell-ringing and church-linen washing, in all â£12 12s. wilson, _history of st. laurence_, 125. in the _st. christopher-le-stocks acc'ts_ (ed. e. freshfield), p. 4, the receipts in 1576 for "clarkes wagis" are â£9 6s. 5d., but we read: "pd. to j.m. clarke his whole yeares wagis [etc.] ... iij li." in _st. margaret, lothbury, vestry minutes_ (p. 13) it was decided in 1581 to raise the "clarkes rolle" to â£8 a year, but expressly stated that the clerk is to be paid as before, "but that [the] overplus shall remayn for astocke to the churche to beare owtt such charges as shalbe nessesarye for the same." in _st. bartholomew, exchange, vestry minutes_ (ed. e. freshfield) in 1583 it is agreed (p. 27) that the clerk is to pay out of his wages the statutory assessment of 2d. weekly on the parish for maimed soldiers and mariners. same stipulation at st. alphage's, london wall: g.b. hall, _records of st. alphage_ (1882), 25 (1594). [286] _st. mary, reading, acc'ts_ (ed. f.n. & a.g. garry), p. 56. [287] hill and frere, _memorials of stepney_, 1-3 (1580). later, 1606 (p. 50), the same method was employed to pay debts for casting the bells. those not paying their assessments were to be deprived of their seats (p. 4). other examples of raising money by pew rents are butcher, _parish of ashburton_, 49 (â£6 4s. collected "for the seat rent". 1579-80). _st. christopher-le-stocks vestry minutes_, 71 (clerk's wages to be "sessed by the pyews"). [288] baker, _mere acc'ts (wilts arch_, [etc.] _mag_.), 33 (12d. for seats for a man and his wife, "which before were his ffather's." 1561). in a sale to a parishioner in 1556-7 it is expressly stated that she is to hold the seat during "here lyfe accordynge to the old usage of the parishe": _ibid_., 24. at st. edmund's, sarum, the sale was sometimes for life, sometimes for a lesser period. a fine was paid for changing a pew, _introd_., p. xxi. cf. order made at chelmsford in 1592, _essex arch. soc_., ii, 219-20. see in st. john's, glastonbury, acc'ts, _notes and quer. for somer. and dor_., iv, 384, _s.a._ 1574, and _op. cit_., v, _s.a._ 1588, many receipts from the sale of seats. cf. pittington vestry order, 1584, _surtees soc_., lxxxiv, 13. _st. michael's in bedwardine acc'ts_, introd., p. xvi. fletcher, _history of loughborough_, acc'ts, 24 ff. [289] see, _e.g_., in _st. martin-in-the-fields acc'ts_, 214, the long list of receipts "for burialls, knylles and suche lyke," _s.aa_. 1563-5. at st. edmund, sarum, burials with christenings and banns netted â£8 5s. 2d. in 1592-3 (_acc'ts_, 141). at kingston-upon-thames in 1579 burials totalled 39s. 8d.: _surrey arch. coll_., viii, 75. in _st. michael's, cornhill_, london, _acc'ts_ (ed. w.h. overall & a.j. waterlow), 178-9, the receipts from knells and peals alone were 44s. 8d. in 1589-90. [290] j.v. kitto, _st. martin-in-the-fields acc'ts_ (1901), 106, _note_. [291] one of the most systematic tariffs i know of is that of st. alphage, london wall (g.b. hall, _records of st. a_., 28-30) drawn up in 1613. first there are _the parson's dutyes for parishioners_, for bann-askings, weddings, churchings, etc., as well as a percentage on offerings. then the burial fees due him, without or with a coffin, in churchyard or in church, etc. then comes the heading, _the dutyes belonging to the parrish for parrishioners_, a catalogue of fees for burial under various conditions. then follow _the parrishe's dutyes for the bells_ (knells, peals, with small or large bells). finally, _the clarke his dutyes for parishioners_ (bann-askings, weddings, churchings, grave digging, tolling the bells for funerals in various ways, and on specified occasions, etc.). all the above fees are doubled in case of non-parishioners. see also the salehurst tariff of 1597, most comprehensive and minute also: _sussex arch. coll_., xxv, 154-5. also parish order in _st. martin's, leicester, acc'ts_ (ed. thos. north), 19 and 128, _s. aa_. 1570-1 and 1584-5, as to duties for bells. these are regulated according to the rank of the person. _st. margaret, lothbury, vestry min., 2_ (order regulating fees for "weddinges, cristeings, churchinges and berrialls" of 1571). see also the tariff of st. edmund, sarum (_acc'ts_, 194), of 1608. for receipt items for palls in the acc'ts, see _st. martin's-in-the-fields acc'ts_, 317 (1580), where "best cloth" nets 20d. on each occasion, the "worst" but 2d. see also stepney vestry regulation of 1602 concerning fees to be paid for palls: _memorials of stepney_, 41-2. for expenses for making parish coffins see _st. martin's-in-the-fields acc'ts, s. a_. 1546. cf. _st. edmund and st. thomas, sarum, acc'ts_, introd., p. xx. _st. helen, bishopsgate, acc'ts_ (ed. j.e. cox), 103 (ordinance of 1564 that those buried within the church are to be confined). also the other acc'ts _supra_. at st. edmund, sarum, the wardens sold tombstones for the benefit of the parish (_acc'ts_, 135. 1587-8). [292] _memorials of stepney_, 39-40. [293] see w.g.d. fletcher, _hist. of loughborough (acc'ts)_, 24: an order regulating fees for marriage peals in 1588. in _st. edmund, sarum, acc'ts_, 127, are receipt items, being money turned over to the wardens by the sexton, for banns, christenings, etc. cf. _introd_. to _st. edmund and st. thomas, sarum, acc'ts_, p. xix. cf. also _st. laurence pountney acc'ts_ (wilson, _hist. of st. l_.), 124 (a marriage offering going to the parish. 1582). usually marriage and churching dues went to minister and clerk (see tariffs, p. 221 _supra_). chrisoms, _i.e._, white robes put on children when baptized, and given as an offering at churching, occasionally figure in the wardens' receipt items. see, _e.g_., j.e. foster, _st. mary the great_ (cambridge) _acc'ts_, 156 (1565-7), _et passim. st. thomas, sarum, acc'ts_, 282 (chrisoms farmed out by the parish in 1562-3. in 1567-8 the value of the chrisom offerings is 40s.). see _introd_. to _st. edmund and st. thomas, sarum, acc'ts_, p. xix. [294] see p. 27 _supra_. also p. 35 _supra_. [295] _provision for the poore now in penurie out of the store-house of gods plentie, explained by_ h. a[rth], london, 1597 (no pagination). "wednesday suppers" refers to fasting nights appointed by proclamation or by statute. a not uncommon entry in the act-books is "no levy of the fyne of 12d." see, _e.g., manchester deanery visit_., 57, _et passim. barnes' eccles. proc_., 119, _et passim_. hale, _crim. prec., passim_. cf. in _bishop stortford acc'ts_ (j.l. glasscock, _rec. of st. michael, b. s_.), 64, the rubric: "rec. of defaultes for absence" (9 names follow, each for 12d., except one for 3s.). _dean of york's visit_., 215 (hayton wardens report to commissary that they have a small sum from absentees yet undistributed to the poor: "but it shalbe shortlie". 1570). [296] see examples in note 32, pp. 19 _supra_. [297] _warrington deanery visit_., 189 (penance of three days standing in white sheet for fornication commuted--the offender "_humiliter petens_"--to 13s. 4d. to be paid to vicar and wardens of ormschurch to be distributed to poor, etc.). hale, _crim. prec_., 232-3 (commutation of a penance for having a bastard into â£5 to be paid for the repair of st. paul's, london, and also into 34s. 4d. to be paid to wardens of horndon-on-the-hill for the poor. 1606). see also _chelmsford acc'ts_, 212 (20s. received in 1560 "toward the pavynge of oure churche for part of his penance"). _abbey parish church estate acc'ts, s. a_. 1578 (20s. received for a "purgation" to go to parish poor and to church). [298] for some interesting receipt items see _the westminster tobacco box_, pt. ii, _overseers acc'ts_, 18 ff. (fines in 1569 from a player beating a drum in service time; for selling coals on candlemas day; for selling wood on sunday; for driving a cart on that day, etc. in 1570 fines are received for retailing during service time, from proceeds of forfeitures of pots and dishes, etc., etc.). wandsworth acc'ts, _surrey arch. coll_., xviii, 146 (receipts for 1599 from fines for bricklaying on sunday; for being in ale-house at service time--a number). [299] see john hawarde, _les reportes del cases in camera stellata_. 1593-1609 ed. w.p. baildon (1894), _passim. e.g_., p. 91 (offender fined â£10 to use of poor for not laying sufficient ground to his cottages). _ibid_. (ed. framingham, of norfolk, fined â£40 to use of poor for same offence. oct. 14th, 1597). _ibid_., 71 (council commend a justice of the peace for condemning a wilts engrosser to sell his corn to the poor 8d. under the price he paid for it). [300] some examples taken from many are north, _st. martin, leicester, acc'ts_, 119 (agreement in 1571 by mayor and brethren to fine one refusing to be warden for the first year 10s. to the use of the church). _ibid_., 142 (this fine raised in 1600 to 20s.). _st. edmund and st. thomas, sarum, acc'ts, introd_., p. xi, and _st. edmund's acc'ts_, 121, 129. _mere acc'ts, 26_ (parish order of 1556-7). _st. margaret, lothbury, minutes_, 33 (an offer from a parishioner in 1595 of â£10 for church repair, "condicynellie that the parish wowld dispence with him for the church warden, officers and cunstable..."). _ibid_., 36 and 45 (two parishioners each pay â£10, being exempted thereafter "from all services as constableshipp, churchwarden, syde men and any other offices whatsoever that the parish myght ... hereafter impose uppon them...". 1607). _memorials of stepney_, 44 (fine for not attending vestry. 1602). _clifton antiq. club_, i (1888), 198 (40d. fine for absence from st. stephen's, bristol, vestry, 1524. for other fines, see _ibid_.). _clifton antiq. club_, i, 195 (same fine for absence from st. thomas', bristol, vestry. 1579). _st. margaret, lothbury, minutes, passim_ (fines for not accounting on a certain day, and for not auditing accounts). [301] examples are found in w.f. cobb, _st. ethelburga-within-bishopsgate_, london, _acc'ts_, 5 (10s. received of a schoolmaster allowed to keep school in the belfry. 1589). _ibid_., same p. ("receaved of the owte cryar for a quarters rente for settynge of goodes at the churche doore ... iiis. iiijd..." 1585). the canons of 1571 forbid this practice: "_non patientur [sc_. the wardens] _ut quisquam ex ... istis ... sordidis mercatoribus ... quos ... pedularios_ [peddlars] _appellant, proponant merces suas vel in coemeteriis vel in porticibus ecclesiarum_ [etc.]...", cardwell, _syn_., i, 124. st. michael's, lewes, acc'ts, _sussex arch. coll_., xlv (1902), 40, 60 ("recd for sarttayn standyngs agaynst the cherche at whytson fayar xvd." 1588). similar items to the last are found in many accounts. see also _st. mary the great_, cambridge, _acc'ts_, 215 (receipt items "for the chirch style before his house"; for the rent of the "p[ar]ishe ground wherevpon his chymney standythe". 1588). _ibid_., 203 ("yt ys also agreyd that goodman tomson shall from hence forthe paye vnto the p[ar]yshe for hys byldynge into the churche yarde 12d. by the yeare." 1584). [302] thus in 1561 kingston-upon-thames church sold brushwood growing upon its land for â£14 7s. 8d.: _surrey arch. coll_., viii, 77. in 1573 the wardens of st. michael's in bedwardine _(acc'ts_ ed. john amphlett, p. 74) brought a suit for the value of eight trees sold to one lode, alleging that the defendant had promised to pay the price "for the reparacions of the ... church and reliff of the pore..." [303] for the form and wording of such a licence see parish registers and documents of kingston-upon-thames, etc.: _surrey arch. coll_., ii (1864), 92 (1591). the fee according to royal proclamation was 6s. 8d.: _st. margaret, lothbury, vestry minutes_, 9. for receipts from this source see _st. ethelburga-within-bishopsgate acc'ts_, 5, _et passim_, as well as the other london acc'ts already cited. cf. cardwell, _doc. ann_., i, 370-2, for council's letter to the archbishop of canterbury on the observance of ember days and lent. [304] _e.g._, see in _st. mary the great_, cambridge, _acc'ts_, 227-9 and 240-2, long lists of persons from all parts of england who contributed in the years 1592-4 towards the rebuilding of st. mary's steeple. a host of proctors licenced under the broad seal, or by the justices of the peace, or otherwise, went from parish to parish soliciting contributions for churches, alms-houses, hospitals, etc. they seem to have entered parish churches at service time and disturbed or annoyed the congregations. this probably led to the parish order of mere, wilts _(mere acc'ts_, p. 80, in _wilts arch_. [etc.] _mag_.), which in 1585 forbade such persons going about the parish or entering the church, but enjoined them all to repair to the mere churchwardens for contributions to be given at the expense of the parish. [305] at winsham, somerset, a document was drawn up in 1581, apportioning among certain parishioners (by virtue of their holdings), the vicar, and finally the whole parish, how many feet of wattled fence each should keep in repair, or what stiles each was to maintain: _notes and quer. for somer. and dor_., v, 538. see a similar agreement in _morebath_ (devon) _acc'ts_, 38. also in marsh, _hist. of calne_, 372, the list at calne. here are 25 groups of houses and certain individuals charged with making and keeping the churchyard bounds. see also _canterbury visit_., xxv, 34 (suit brought before the archdeacon against the tenant of a holding whose former owners had for 40 years repaired a portion of the church fence, 1611). for presentments to the courts christian for non-repair of church fence by individuals, see _dean of york's visit_., 214, 228, 325 (1570-1599). [306] _canterbury visit_., xxv, 26 (a parishioner of herne presented for withholding 9s., "which hath always been accustomed to be paid out of a certain house and lands." 1592). [307] early history of kingston-upon-thames, _surrey arch. coll_., viii, 74. [308] _st. mary the great acc'ts_, 148. [309] _hist. and antiq. of leicestershire_, by john nichols (1815), i, pt. ii, 569 ff. [310] see in t. nash, _hist. and antiq. of worcestershire_, i, pp. lii-lvi, a long list of pentecost, etc., farthings paid by each parish of the diocese in lump sums varying from 3d. to 3s. [311] _morebath acc'ts_ (ed. binney), 34, _s. a_. 1531, seem to offer a genuine example of such a payment of peter's pence. but the minchinhampton wardens (acc'ts in _archaeologia_, xxxv, 422 ff.), confuse their payments to the mother church, made in 1575 ff., with peter's pence. see, _e.g., s. a_. 1575, the entry: "to the sumner [or apparitor] for peterpence or smoke farthynges sometyme due to the anthecriste of roome ... xd." [312] see, _e.g_., sam'l. barfield, _thatcham, berks, and its manors_, ii, 122 (midgham and greenham called upon against their will for contributions to mother church). _surtees soc_., lxxxiv, 123 (dispute ending in a suit between st. oswald and st. margaret. 1595 ff.). _memorials of stepney, 1-2_ (parishioners of stratford bow forced to contribute to st. dunstan's, the mother church). [313] _e.g._, the vestry of st. christopher-le-stocks, london _(minutes_, ed e. freshfield), agree to cess "the parishioners" for money to prosecute a suit for certain parish lands in 1585-6. when the lands were recovered each was to have his money back _(minutes_, p. 12). but those assessed numbered only 38 (p. 13), whereas we see by a list (p. 12) that 43 persons were here assessed for the queen's subsidy; and subsidy men were the wealthier men of the parishes. cf. assessment at lapworth for barford bridge levied on 26 tenements, cottagers not being assessed. hudson, _memorials of a warwickshire parish_, 115. [314] hale, _crim. prec_., 198 (one spencer presented for not paying his proportion for the ringing on the queen's anniversary, "being rated at iiijd.") hudson, _op. cit. supra_ (barford bridge assessment of 4s. 4d. spread out over 26 tenements). [315] _canterbury visit_, xxvii, 214 (john basset "cessed" at 2d. a quarter, but thought well able to pay 3d. for the clerk's wages. robert sawyer, _ditto_. 1577). _st. margaret, lothbury, minutes_, 16 (ed. e. freshfield), where in 1584 thirty-four parishioners make a "free offer" of sums from 2d. to 6s. 8d. to pay a lecturer. _ibid_., 10 (18 parishioners give from 1d. to â£2 towards the erecting of a clock. 1577). [316] rates for bread and wine were commonly so levied. see _supra_, p. 78 and _note_ 80. [317] see p. 80 _supra_ and _note_ 87. [318] houghton-le-spring acc'ts, _surtees soc_., lxxxiv, 271 (1596). binney, _morebath acc'ts_, 34 (1531). _ibid_., 85 (1536). [319] _e.g._, see hale, _churchwardens' prec., passim, e.g_., where the parishioners of elstree ("idlestrye"), herts, cannot agree in 1585/6, some contending for assessment "by their welthe and goods only, and some others do require that the taxation might be made by the acres of grounde only." _canterbury visit_., xxvii, 218 (2d. an acre). _ibid_., xxv, 42 (4d. an acre). _ibid_., xxvi, 33 (ploughland of 140 acres paying 6s. 8d. for clerk's wages). _ibid_., xxv, 33 (two "cesses" at minster church, one at 20d. the score [of pounds?], the other at 12d.). _the reliquary_, xxv, 18 (levy made in morton, derbysh., of 8d. the oxgang of 15 acres). [320] order of wiltshire justices, michaelmas, 1600, that three of their number shall call certain constables and others before them, "and examine them what overplus of money is remaining in their hands w[hi]ch they have collected of their hundredes for anie service whatsoever, and if there be anie founde remayning the said justice to distribute the same amongst the inhabitants of the same hundredes according to their discretion." _rec. of wilts quarter sess_. in _wilts arch_, (etc.) _mag_., xxi, 85. [321] according to the 22 hen. viii c. 5, where it cannot be known who ought of right to repair a bridge, the justices of the district shall call before them the constables of the parishes of the surrounding hundreds, or of the whole shire, and "with the assent of the ... constables or [chief] inhabitants," tax every inhabitant of the towns and parishes of the shire (if necessary). this looks like a county bridge tax, but in practice the justices either threw a lump sum on a hundred, or on a parish, and left each parish to raise this sum according to local rating. such, at least, would seem to be the usual practice according to the churchwardens accounts, which contain many lump payments made to constables for bridges. [322] see wilts justices order, 20 eliz., _wilts arch_. (etc.) _mag_., xxi, 80-1. cf. _ibid_., 16, the appeal of hilprington and whaddon that they have been compelled by the inhabitants of melkesham to pay a third part with the last named parish of these lump assessments, though the acreage of melkesham is much greater than either of theirs, "and far better ground." [323] see p. 81, _note_ 91 _supra_. [324] john lister, _west riding session rolls_, 85. as early as 14 eliz. c. 5, sec. 17, city or parish officers might remove alien poor to their places of birth, if such aliens had resided in their adopted parishes not longer than three years. [325] j.w. willis bund, _cal. worcester quar. sess. rec_.,i, p. clxxxii. the appearance of a bastard was a portentous event. see the many ridings to and fro across country to ecclesiastical and civil magistrates in the _ashburton acc'ts_ (butcher, _the parish of ashburton_), p. 47 (1576-7). the devonshire justices order, easter 1598, that every woman who shall have a bastard child shall be whipped: hamilton, _quarter session from eliz. to anne, 32_. cf. the item: "paide for carriage of an irish woman into fynsburie feildes who was delivered of a childe under the stockes." brooke and hallen, _st. mary woolnoth and st. mary woolchurch haw_ (london) _acc'ts, s. a_. 1587. [326] wilts quart. sess. in _wilts arch_, (etc.) _mag_., xxii, 17. [327] willis bund, _loc. cit. supra_, p. 8. from 1599 to 1642 there were twenty-four indictments for not laying four acres to a cottage at the worcester sessions. _ibid_., table of indictments for all offences, p. lvii ff. cf. wilts quarter sess. rec. in _hist. mss. com. rep. on var. coll_., i (1901), 66. w.j. hardy, _herts co. rec. sess. rolls_ (1905), i, 5, _et passim. norfolk archaeology_, x (1888), 159. _les reportes del cases in camera stellata_ (ed. w.p. baildon), _passim_. [328] bund, _loc. cit_., p. clxxxiii. [329] geo. a. wade, _an english town that is still ruled by an oligarchy_ (dalton-in-furness), _engl. illust. mag_., xxv (1901). transcriber's note: text enclosed by underscores is in italics (_italics_). small capital text has been replaced with all capitals. the carat character (^) indicates that the following letter is superscripted (example: esq^r). letters from a farmer in pennsylvania. [illustration: the patriotic american farmer. j-n d-k-ns--n esq^r. barrister at law: who with attic eloquence and roman spirit hath asserted, the liberties of the british colonies in america. 'tis nobly done, to stem taxations rage; and raise, the thoughts of a degen'rate age, for happiness, and joy, from freedom spring; but life in bondage, is a worthless thing. printed for & sold by r. bell. bookseller] letters from a farmer in _pennsylvania_, to the inhabitants of the british colonies by john dickinson with an historical introduction by r. t. h. halsey [illustration: mark] new york the outlook company 1903 copyright, 1903 by r. t. h. halsey to the memory of one who loved her country and all that pertained to its history contents. page introduction xvii notes xlix letter i 5 letter ii 13 letter iii 27 letter iv 37 letter v 47 letter vi 59 letter vii 67 letter viii 79 letter ix 87 letter x 101 letter xi 117 letter xii 133 letter of thanks from the town of boston 147 illustrations. the patriotic american farmer j-n d-k-ns-n, esq^r, barrister-at-law frontispiece photogravure on copper. initial letter from the pennsylvania chronicle of 1768 title line etching on copper. chelsea derby porcelain statuette of catherine macaulay xliii bierstadt process color print. introduction. in the issue of the pennsylvania chronicle and universal advertiser of november 30th-december 3d, 1767, appeared the first of twelve successive weekly "_letters from a_ farmer _in_ pennsylvania _to the inhabitants of the_ british _colonies_," in which the attitude assumed by the british parliament towards the american colonies was exhaustively discussed. so extensive was their popularity that they were immediately reprinted in almost all our colonial newspapers. the outbursts of joy throughout america occasioned by the repeal of the stamp act had scarcely subsided when, the protracted illness of lord chatham having left the ministry without a head, the indomitable charles townsend, to the amazement of his colleagues and unfeigned delight of his king, introduced measure after measure under the pretence that they were demanded by the necessities of the exchequer; but in reality for the purpose of demonstrating the supremacy of the power of the parliament of great britain over her colonies in america. among these acts were those which provided for the billeting of troops in the various colonies; others called for duties upon glass, lead, paint, oil, tea, etc. of dire portent was the provision therein, that the revenues thus obtained be used for the maintenance of a civil list in america, and for the payment of the salaries of the royal governors and justices, salaries which had hitherto been voted by the various assemblies. the assembly of new york, having failed to comply strictly with the letter of the law in regard to the billeting of the king's troops, was punished by having its legislative powers suspended. this action boded ill for the future of any law-making body in america which should fail to carry out strictly any measure upon which the british parliament might agree. the colonies needed a common ground on which to meet in their opposition to these arbitrary acts of parliament. the deeds of violence and the tumultuous and passionate harangues in the northern colonies met with little sympathy among a large class in the middle and southern colonies, who, while chafing under the attacks upon their liberties, hesitated to favor resistance to the home government because of their unswerving loyalty to their king and their love for the country to whom and to which they owed allegiance. to these "the farmer" appealed when he wrote, "the cause of liberty is a cause of too much dignity to be slighted by turbulence and tumult. it ought to be maintained in a manner suitable to her nature, those who engage in it should breathe a sedate yet fervent spirit animating them to actions of prudence, justice, modesty, bravery, humanity and magnanimity." the convincing logic of these letters clearly proved that the constitutional rights belonging to englishmen were being trampled upon in the colonies, and furnished a platform upon which all those who feared their liberties were endangered could unite. under the date of the fifth of november, 1767, the seventy-ninth anniversary of the day on which the landing of william the third at torbay gave constitutional liberty to all englishmen, john dickinson, of pennsylvania (for before long it became known that he was the illustrious author), in a letter addressed to his "beloved countrymen," called attention to the lack of interest shown by the colonies in the act suspending the legislative powers of new york, and logically pointed out that the precedent thereby established was a blow at the liberty of all the other colonies, laying particular emphasis upon the danger of mutual inattention by the colonies to the interests of one another. the education and training of the author well qualified him to handle his subject. born in 1732 on his ancestral plantation on the eastern shore of maryland, from early youth john dickinson had had the advantages of a classical education.[1] his nineteenth year found him reading law in a lawyer's office in philadelphia. three years later, he sailed for england, where he devoted four important years to study at the middle temple, and then and there obtained that knowledge of english common law and constitutional history, and imbibed the traditions of liberty belonging to englishmen on which he later founded his plea for the resistance of the colonies to the ministerial attacks upon their liberty. on his return home he took up the practice of his profession at philadelphia, and immediately won for himself a high place at the bar. elected in 1760 a member of the assembly of delaware, his reputation for ability and political discernment gained him its speakership. in 1762 he became a member of the assembly of pennsylvania, where he acquired great prominence and unpopularity, which later cost him his seat in that body, on account of his opposition to the assembly's sending a petition to the king praying that the latter "would _resume_ the government of the province, making such compensation to the proprietaries as would be equitable, and permitting the inhabitants to enjoy under the new government the privileges that have been granted to them by and under your royal ministries." [1] "the life and times of john dickinson," by charles j. stillé. possibly dickinson's knowledge of the personality of the ministry and the dominant spirits in english political circles gained while abroad, led him bitterly to attack this measure, fathered and supported by franklin, for subsequent events soon showed the far-sightedness which led him to distrust the wisdom of a demand for the revoking of the proprietary charter, even though it were a bad one. his part in the controversy forced even his bitterest opponents to admire his ability. the enormous debt incurred by great britain during the then recent war with france led the ministry to look for some way of lightening taxation at home. it was decided that america must pay a share toward lifting the burden resting heavily on those in england, caused by the financing of the expenses of a war which drove france from north america. the fact that the colonies had furnished, equipped and maintained in the field twenty-five thousand troops and had incurred debts far heavier in proportion than those at home was forgotten. in 1764 was passed the "sugar act," which extended and enlarged the navigation acts and made england the channel through which not only all european, but also all asiatic trade to and from the colonies must flow. at the same time an announcement was made that "stamp duties" would be added later on. the next year from dickinson's pen appeared a pamphlet entitled "the late regulations respecting the british colonies on the continent of america considered, in a letter from a gentleman in philadelphia to his friend in london," in which these late regulations and proposed measures were discussed entirely from an economic standpoint. in it was clearly shown how dependent were the manufacturers and traders in england for their prosperity upon the trade of the colonies and that any restraint of american trade would naturally curtail the ability of those in the colonies to purchase from the home market. the stamp act was opposed on the ground that the already impoverished colonies would be drained of all their gold and silver which necessarily would have to go abroad in the payment for the stamps. this letter was conciliatory and persuasive, yet in the closing pages dickinson asked: "what then can we do? which way shall we turn ourselves? how may we mitigate the miseries of our country? _great britain_ gives us an example to guide us? she teaches us to make a distinction between her interests and our own. "teaches! she requires--commands--insists upon it--threatens--compels--and even distresses us into it. "we have our choice of these two things--to continue our present limited and disadvantageous commerce--or to promote manufactures among ourselves, with a habit of economy, and thereby remove the necessity we are now under of being supplied by _great britain_. "it is not difficult to determine which of these things is most eligible. could the last of them be only so far executed as to bring our demand for british manufactures below the profits of our foreign trade, and the amount of our commodities immediately remitted home, these colonies might revive and flourish. states and families are enriched by the same means; that is, by being so industrious and frugal as to spend less than what they raise can pay for." the various non-importation agreements signed during the next ten years, bear testimony to the popularity of the proposed plan. this pamphlet circulated freely and increased dickinson's reputation as that of a man capable of thoroughly discussing public measures; it also brought his name to the attention of the british public for whom the "letter" was especially written. at the call of massachusetts, representatives of nine of the colonies met in new york in october, 1764, and after a long discussion (in which dickinson's knowledge of constitutional law and english colonial policy enabled him to assume the leadership) issued a "declaration of rights," in which it was asserted that the inhabitants of the colonies, standing on their rights as englishmen, could not be taxed by the house of commons while unrepresented in that body. memorials were sent abroad protesting against the proposed acts, expressing, however, their willingness to meet loyally as in the past any properly accredited requisitions for funds sent to the various assemblies. notwithstanding this opposition, and the protests of all friends of america in england, the stamp act was passed. a year later it was repealed. _just published._ _printed on a large type, and fine paper_, and to be sold at the _london book store_ north side of king-street _letters_ from a farmer in _pennsylvania_ to the inhabitants of the british colonies. (_price two pistareens_) among all the writers in favor of the colonies, the farmer shines unrivalled, for _strength_ of _argument_, _elegance_ of _diction_, _knowledge_ in the _laws_ of _great britain_, and _the true interest_ of the colonies: a _pathetic_ and _persuasive eloquence_ runs thro the whole of these letters: they have been printed in every _colony_ from _florida_ to _nova scotia_; and the _universal applause_ so justly bestowed on the _author_, hath fully testified the gratitude of the people of america, for such an _able adviser_ and _affectionate friend_. written in a plain, pure style, with illustrations and arguments drawn from ecclesiastical, classical and english history, each point proven with telling accuracy and convincing logic, conciliatory to the english people, and filled with expressions of loyalty to the king, these essays, popularly known as the "farmer's letters," furnished the basis on which all those who resented the attacks on their liberty were able to unite. town meetings[2] and assemblies vied with each other in their resolutions of thanks. the "letters" were published immediately in book form in philadelphia (three different editions), new york, boston (two different editions), williamsburgh, london (with a preface written by franklin), and dublin. franklin was influential, also, in having them translated into french, and published on the continent. owing to the beauty of its typography and the excellence of its book-making, the boston edition, published by messrs. mein & fleeming, has been selected for republication, and has been reprinted line for line and page for page, in a type varying but slightly from that used by mein & fleeming. a few typographical errors have been corrected, but the irregularities in spelling, wherever they exist throughout the various editions, have been retained. the binding also is a reproduction of that of the original. its publication[3] was announced in the "boston chronicle," march 14-21, 1768, by the advertisement reprinted on the preceding page. [2] the "address from the town of providence," printed from the original manuscript, is to be found in the notes, page li. [3] two weeks later a letter of thanks voted by the town of boston was added to this edition. valuable as these "letters" were at home in uniting all factions in their measures of resistance, yet their influence abroad was of even more far-reaching effect. reprinted in london in june, 1768, this two-shilling pamphlet quickly circulated through coffee-house and drawing-room. in ministerial circles the "farmer" caused great indignation. in a letter from franklin, addressed to his son, dated london, 13th of march, 1768, appears the following: "my lord hillsborough mentioned the 'farmer's letters' to me, said that he had read them, that they were well written, and he believed he could guess who was the author, looking in my face at the same time, as if he thought it was me. he censured the doctrines as extremely wild. i have read them as far as number 8. i know not if any more have been published. i should, however, think they had been written by mr. delancey, not having heard any mention of the others you point out as joint authors." groaning under their own heavy taxation, the troubles of america had hitherto appealed but slightly to the average englishman and the sympathies of the english people had become involved in the long-drawn-out struggles of wilkes to obtain his constitutional rights. the press published little american news. america was little discussed; conditions there were practically unknown to all but the trading class, whose members had prospered through the monopoly of the constantly increasing commerce with the growing colonies. this class, naturally fearing the loss of the magnificent trade which had been built up, had long bemoaned the constantly increasing friction between the two factions on each side of the water. englishmen in general had hitherto paid little attention to the debates over the various acts raising revenue from the colonies. from the time the "farmer's letters" were published in england the differences between parliament and colonies were better understood there. untouched and yet alarmed by the political corruption so prevalent at the time, thinking men saw in these "letters" a warning that if their sovereign was successful in his attempt to take away constitutional liberty from their fellow englishmen across the sea, their own prized liberty at home was in danger. "american" news became more frequent in the newspapers, "letters to the printer," the form of editorials of the day, discussed and criticised the measures of parliament with great freedom. to the masses, john dickinson's name soon became very familiar through the agency of the press, which under date of june 26-28, 1768, freely noted isaac barré's characterization in the house of commons of dickinson as "a man who was not only an ornament to his country but an honor to human nature." almost immediately after the publication of the london edition, the monthly review of july, 1768, forcibly called the attention of the literary world to the "farmer's letters" in an exhaustive review which is reprinted in the notes, page liii, for the purpose of showing the view held by the english whigs regarding the doctrines laid down and arguments used by dickinson in defence of his position. the "london chronicle," under date of september 1st, 1768, printed the popular liberty song, written by mr. dickinson, and which, set to the inspiring air of "hearts of oak," was being sung throughout the colonies. in order to give the accompanying letter of request for the republication of the song, a request which, from its wording demonstrates the enthusiasm which the song aroused, the latter is here reprinted from the issue of the boston "evening post" of august 22, 1768. messirs fleets the following song being now much in vogue and of late is heard resounding in almost all companies in town, and by way of eminence called "the liberty song," _you are desired to republish in your_ 'circulating' paper for the benefit of the whole continent of america. [to the tune of hearts of oak.] come, join hand in hand, brave americans all, and rouse your bold hearts at fair _liberty's_ call, no _tyrannous acts_ shall suppress your _just claim_, or stain with _dishonor_ america's name. in freedom we're _born_, & in freedom we'll _live_, our purses are ready, steady, friends, steady, not as _slaves_ but as _freemen_ our money we'll give. our worthy forefathers--let's give them a cheer- to _climates unknown_ did courageously steer; thro' _oceans_ to _deserts_ for _freedom_ they came, and dying bequeath'd us their _freedom_ & _fame_. in freedom we're _born_, &c. their generous bosoms all dangers despis'd, so _highly_, so _wisely_, their _birthrights_ they priz'd; we'll keep what they gave--we will piously keep, nor frustrate their toils on the land or the deep. in freedom we're _born_, &c. the tree their own hands had to _liberty_ rear'd, they liv'd to behold growing strong and rever'd; with transport then cry'd, 'now our wishes we gain, for our children shall gather the fruits of our pain.' in freedom we're _born_, &c. swarms of _placemen_ and _pensioners_ soon will appear, like locusts deforming the charms of the year; suns vainly will rise, showers vainly descend, if _we_ are to _drudge for_ what _others_ shall _spend_. in freedom we're _born_, &c. then join hand in hand brave americans all, by _uniting_ we stand, by _dividing_ we fall; _in so righteous a cause_ let us hope to succeed, for heaven approves of each generous deed. in freedom we're _born_, &c. all ages shall speak with _amaze_ and _applause_, of the _courage_ we'll shew _in support of our laws_; to die we can _bear_--but to serve we _disdain_- for _shame_ is to _freemen_ more dreadful than _pain_. in freedom we're _born_, &c. this bumper i crown for our _sovereign's_ health, and this for _britannia's_ glory and wealth; that wealth and that glory immortal may be, if _she_ is but _just_--and if _we_ are but _free_. in freedom we're _born_, & in freedom we'll _live_, our purses are ready, steady, friends, steady, not as _slaves_, but as _freemen_ our money we'll give. the following extract from the london "chronicle" of october 4, 1768, demonstrates how completely the arguments and logic of the "farmer's letters" gained popular approval; how constantly dickinson's name was kept before the public, both at home and abroad; how his fame was toasted; how he was recognized as the leader of political thought in the colonies. it shows also the constantly increasing interest in american matters taken by the press of england since the advent of the "farmer's letters," for the "american news," published in this and other london papers, was extensively reprinted in the local journals throughout the kingdom. _taken from the boston, in new england, evening post of august 22, 1768_ on monday the fifteenth instant, the anniversary of the ever memorable _fourteenth of august_, was celebrated by the sons of liberty in this town, with extraordinary festivity. at this dawn, the british flag was displayed on the _tree of liberty_, and a discharge of _fourteen_ cannon, ranged under the venerable elm, saluted the joyous day. at eleven o'clock, a very large company of the principal gentlemen and respectable inhabitants of the town, met at the hall under the tree, while the streets were crowded with a concourse of people of all ranks, public notice having been given of the intended celebration. the musick began at high noon, performed on various instruments, joined with voices; and concluding with the universally admired _american_ song of liberty,[4] the grandeur of its sentiment, and the easy flow of its numbers, together with an exquisite harmony of sound, afforded sublime entertainment to a numerous audience, fraught with a noble ardour in the cause of freedom: the song was clos'd with the discharge of cannon and a shout of joy; at the same time the windows of the neighbouring houses, were adorned with a brilliant appearance of the fair daughters of liberty, who testified their approbation by smiles of satisfaction. the following toasts succeeded, viz. [4] the song has been given already in our chronicle. the following toasts may need brief explanation.--r. t. h. h.: _1._ _our rightful sovereign george the third._ _2._ _the queen, prince of wales, and the rest of the royal family._ _3._ _the sons of liberty throughout the world._ _4._ _the glorious administration of 1766._ 4. the rockingham ministry which repealed the stamp act. _5._ _a perpetual union of great britain and her colonies, upon the immutable principles of justice and equity._ _6._ _may the sinister designs of oppressors, both in great britain and america, be for ever defeated._ _7._ _may the common rights of mankind be established on the ruin of all their enemies._ _8._ _paschal paoli and his brave corsicans. may they never want the support of the friends of liberty._ 8. the struggles of paoli and the corsicans excited great interest both in great britain and america. constant references are made to these in the "letters." _9._ _the memorable 14th of august, 1765._ 9. the day of the demonstration in boston against the stamp officers. daybreak disclosed hanging on a tree an effigy of the stamp officer oliver. after hanging all day, at nightfall it was taken down by the sons of liberty, who placed it on a bier and escorted it through the principal streets in boston to the home of oliver, where, in the presence of a large number of people, it was burned. _10._ _magna charta, and the bill of rights._ _11._ _a speedy repeal of unconstitutional acts of parliament, and a final removal of illegal and oppressive officers._ _12._ _the farmer._ 12. john dickinson. _13._ _john wilkes, _esq.; and all independent members of the british parliament_. _14._ _the glorious ninety-two who defended the rights of america, uninfluenced by the mandates of a minister, and undaunted by the threats of a governor._ 14. on the 11th day of february, 1768, the assembly of massachusetts adopted and sent to the various colonial assemblies a circular letter drawn up by samuel adams, informing them of the contents of a petition which the massachusetts assembly had sent to the king. this letter also urged united action against the oppressive measures of the ministry, and gave great offense to the king and ministry. the secretary for the colonies, lord hillsborough, instructed governor bernard of massachusetts to order the assembly to rescind this letter, and in case of refusal to dissolve this body. after a thorough discussion this request was refused by a vote of "ninety-two" to "seventeen." which being finished, the french horns sounded; and after another discharge of the cannon, compleating the number ninety-two, the gentlemen in their carriages repaired to the greyhound tavern in roxbury, where a _frugal_ and _elegant_ entertainment was provided. the music played during the repast: after which the following toasts were given out, and the repeated discharge of cannon spoke the general assent. _1._ _the king._ _2._ _queen and royal family._ _3._ _lord_ cambden. 3. a strenuous upholder of the constitutional rights of the colonies and a strong defender in the house of lords of the doctrine, "no taxation without representation." contemporary writers frequently spelt camden's name as above. _4._ _lord_ chatham. _5._ _duke of_ richmond. 5. another friend of america in the same body. _6._ _marquis of_ rockingham. 6. under whose ministry the stamp act was repealed. _7._ _general_ conway. 7. the leader in the house of commons during the rockingham ministry. _8._ _lord_ dartmouth. 8. president of the board of trade in the rockingham ministry, much loved in the colonies. dartmouth college bears his name. _9._ _earl of_ chesterfield. 9. a warm adherent of america. _10._ _colonel_ barre. 10. the companion of wolfe at quebec; in replying to townsend during one of the debates over the passage of the stamp acts he characterized the americans as "sons of liberty," a term which immediately was applied throughout the colonies to those who were resenting the interference of parliament with their home government. _11._ _general_ howard. 11. a member of parliament from stamford who was active in obtaining the repeal of the stamp act. _12._ _sir_ george saville. 12. represented yorkshire in the house of commons; a strong supporter of the rockingham ministry. _13._ _sir_ william meredith. 13. member of parliament from liverpool. lord of the admiralty during the rockingham administration. _14._ _sir_ william baker. 14. also energetic in securing the repeal of the stamp act. _15._ _john_ wilkes, _esq., and a speedy reversal of his outlawry_. 15. the struggles of wilkes excited keen interest in america. _16._ _the farmer of_ pennsylvania. 16. it is noted that this was the second time dickinson's health was drunk that day. no other american residing in this country was toasted. _17._ _the massachusetts_ ninety-two. _18._ _prosperity and perpetuity to the_ british empire, _on constitutional principles_. _19_. north america: _and her fair daughters of liberty_. _20._ _the illustrious patriots of the kingdom of ireland._ 20. in letter x dickinson warns against the fate of ireland. _21._ _the truly heroic_ paschal paoli, _and all the brave corsicans_. _22._ _the downfall of_ arbitrary _and_ despotic power _in all parts of the earth; and liberty without_ licentiousness _to all mankind_. _23._ _a perpetual union and harmony between_ great britain _and the colonies, on the principles of the original compact_. _24._ _to the immortal memory of that_ hero _of_ heroes _william the third_. _25._ _the speedy establishment of a_ wise _and_ permanent administration. _26._ _the_ right _noble lords, and_ very worthy _commoners, who voted for the repeal of the_ stamp act _from_ principle. _27._ dennis de berdt, _esq; and all the true friends of_ america _in great britain, and those of great britain in america_. 27. the agent of massachusetts in london. _28._ _the_ respectable _towns of_ salem, ipswich _and_ marblehead, _with all the absentees from the late assembly, and their_ constituents, _who have publickly approved of the vote against_ rescinding. 28. representatives of these towns voted in favor of rescinding. town meetings, however, were held, and the citizens of these places recorded themselves as endorsing the action of the majority in refusing the "ministerial mandates" and condemned the position assumed by their own representatives. in letters which appeared in the press a number of absentees from the assembly boldly endorsed the action of the majority. _29._ _may all_ patriots _be as wise as serpents, and as harmless as doves_. _30._ _the_ manufactories _of_ north america, _and the_ banishment _of luxury_, dissipation and _other vices, foreign and domestic_. 30. referring to the proposal of dickinson quoted on page xxiii of the introduction. _31._ _the removal of all task-masters, and an effectual redress of all other grievances._ _32._ _the_ militia _of_ great britain _and of the_ colonies. _33._ _as_ iron _sharpeneth_ iron, _so may the countenance of every good and virtuous son and daughter of liberty, that of his or her friend_. _34._ _the assemblies on this vast and rapidly populating continent, who have treated a late haughty and "merely ministerial" mandate "with all that contempt it so justly deserves."_ 34. referring to the replies of the various assemblies to the circular letter and endorsements of the action of the massachusetts assembly. _35._ strong halters _and_ sharp axes _to all such as respectively deserve them_. _36._ scalping savages _let loose in_ tribes, _rather than_ legions of placemen, pensioners, _and_ walkerizing dragoons. _37._ _the amputation of any_ limb, _if it be necessary to preserve the body_ politic _from_ perdition. _38._ _the oppressed and distressed foreign protestants._ _39._ _the free and independent cantons of switzerland._ _40._ _their_ high mightinesses _the states general of_ seven _united provinces_. _41._ _the king of_ prussia. _42._ _the_ republic _of_ letters. _43._ _the_ liberty _of the press_. _44._ spartan, roman, british virtue, _and_ christian graces joined. _45._ _every man under his own vine! under his own fig-tree! none to make us afraid! and let all the people say, amen!_ 45. see page 51. upon this happy occasion, the whole company with the approbation of their brethren in roxbury, consecrated a tree in the vicinity; under the shade of which, on some future anniversary, they say they shall commemorate the day, which shall liberate america from her present oppression! then making an agreeable excursion round jamaica pond, in which excursion they received the kind salutation of a friend to the cause by the discharge of cannon at six o'clock they returned to town; and passing in slow and orderly procession through the principal streets, and the state-house, they retired to their respective dwellings. it is allowed that this cavalcade surpassed all that has ever been seen in america. the joy of the day was manly, and an uninterrupted regularity presided through the whole. the two illustrations in this volume were selected for the purpose of recording prevalent contemporary opinions of dickinson. the frontispiece is a reproduction (slightly reduced in size)[5] of the very scarce print in which john dickinson is crudely portrayed as the author of the "farmer's letters." it was first advertised for sale in the pennsylvania "chronicle" under date of october 12-17, 1768, as follows: lately published and sold by r. bell at james emerson's, in market-street, near the river, and at john hart's vendue store, in southward (price one shilling) an elegant engraved copper plate print of the patriotic american farmer; the same glazed and framed, price five shillings. [5] reproduced through the courtesy of the library company of philadelphia. i wish also to express my obligation to my friends messrs. wilberforce eames of the lenox library and robert h. kelby of the new york historical society for repeated access to the volumes of colonial newspapers, etc., in the collections under their charge. this specimen of early american engraving, the work of some unknown artist and engraver, was undoubtedly inspired by the following article which appeared in the pennsylvania "chronicle" for may, 9-16, 1768, as well as the many other newspapers in the colonies, so eager was the press to publish any information concerning the author of the "farmer's letters." the inscription is thus explained as well as the elimination of the vowels from dickinson's name. philadelphia on tuesday last, by order of the governor and society of fort st. david's, fourteen gentlemen, members of that company, waited upon j-n d-ck-nson esq; and presented the following address, in a box of heart of oak. respected sir, when a man of abilities, prompted by love of his country, exerts them in her cause, and renders her the most eminent services, _not to be sensible_, of the benefits received, is stupidity; _not to be grateful for them_, is baseness. influenced by this sentiment, we, the governor and company of fort st. david's, who among other inhabitants of _british america_, are indebted to you for your most excellent and generous vindication of liberties dearer to us than our lives, beg leave to return you our heartiest thanks, and offer to you the greatest mark of esteem, that, as a body, it is in our power to bestow, by admitting you, as we hereby do, a member of our society. when that destructive project of _taxation_, which your integrity and knowledge so signally contributed to baffle about two years ago, was lately renewed under a _disguise_ so _artfully contrived_ as to delude millions, you, sir, _watchful_ for the interests of your country, _perfectly_ acquainted with them, and _undaunted_ in asserting them, alone detected the monster concealed from others by an altered appearance, exposed it, stripped of its insidious covering, in its own horrid shape, and, we firmly trust by the blessing of god on your wisdom and virtue, will again extricate the _british_ colonies on this continent from the cruel snares of oppression; for we already perceive these colonies roused _by your strong and seasonable_ call, pursuing the salutary measures advised by you for obtaining redress. nor is this all that you have performed for your native land. _animated by a sacred_ zeal, _guided by truth and supported by justice_, you _have penetrated to the foundations of the constitution_, have _poured_ the clearest light on the important _points_, hitherto involved in a darkness bewildering even the learned, and have _established_ with an amazing force and plainness of argument, the true distinctions and grand principles, that will _fully instruct ages_ yet unborn, what rights belong to them, and the best methods of defending them. to merit far less distinguished, ancient _greece_ or _rome_ would have decreed statues and honours without number: but it is _your fortune_ and _your glory_, sir, that you live in _such_ times, and possess _such exalted worth_, that the _envy_ of those, whose _duty_ it is to applaud you, can conceive no other consolation, than by withholding those praises in public, which all honest men acknowledge in private that you have deserved. we present to you, sir, a small gift of a society not dignified by any legal authority; but when you consider this gift as expressive of the _sincere affection_ of many of your fellow citizens for your person, and of their _unlimited approbation_ of the noble principles maintained in your unequalled labours, we hope this testimony of our sentiments will be acceptable to you. may that all-gracious being, which in kindness to these colonies gave your valuable life existence _at the critical period_ when it will be most wanted, grant it a long continuance, filled with every felicity; and when your country sustains its dreadful loss, may you enjoy the happiness of heaven, and on earth may your memory be cherished, as we doubt not it will be, to the latest posterity. _signed by the order of the society_, john bayard, secretary. the box was finely decorated, and the inscription neatly done in letters of gold. on the top was represented the cap of liberty on a spear, resting on a cypher of the letters i. d. underneath the cypher in a semicircular label----pro patria----around the whole the following words: the gift of the governor and society of fort st. david's to the author of the farmer's letters, in grateful testimony of the very eminent services thereby rendered to this country, 1768. on the inside of the top- the liberties of the british colonies in america asserted with attic eloquence, and roman spirit, by j-n d-k-ns-n[6] esqr.; barrister at law. [6] the name at length. on the inside of the bottom- ita cuique eveniat ut de republica meruit. on the outside of the bottom--a sketch of _fort st. david's_. _to which the following answer was returned._ gentlemen, i very gratefully receive the favour you have been pleased to bestow upon me, in admitting me a member of your company; and i return you my heartiest thanks for your kindness. the "esteem" of worthy fellow citizens is a treasure of greatest price; and as no man can more highly value it than i do, your society in "expressing the affection" of so many respectable persons for me, affords me the sincerest pleasure. nor will this pleasure be lessened by reflecting, that you may have regarded with a generous _partiality_ my attempts to promote the welfare of our country; for the warmth of your praises in commending a conduct you _suppose_ to deserve them, gives worth to these praises, by proving _your_ merit, while you attribute merit to _another_. your characters, gentlemen, did not need this evidence to convince me, how much i ought to prize your "esteem" or how much you deserved _mine_. i think myself extremely fortunate, in having obtained your favorable opinion, which i shall constantly and carefully endeavor to preserve. i most heartily wish you every kind of happiness, and particularly that you may enjoy the comfortable prospect of transmitting to your posterity those "liberties" dearer to you than your lives, "which god gave to you, and which no _inferior power_ has a right to take away." [illustration: chelsea derby porcelain statuette of catherine macaulay] the potter's art, which from time immemorial has been the means of transmitting history, furnishes the other illustration and also perpetuates the estimate of dickinson's character held by william duesbury, england's greatest manufacturer of porcelain. it pictures a porcelain statuette of mrs. catherine macaulay, a well-known historian, whose "history of england from the accession of james the first to that of the brunswick line" and other historical writings met with great approval among the whig party in england and whose decided approval of the stand taken by the colonies, gave her great popularity in america. this statuette, measuring 13½ inches in height, is modeled to a certain extent after the statue of this lady which was erected in 1777 in the church of st. stephen, walbrook, london. mrs. macaulay appears leaning upon her "histories of england," which rest on the top of a pedestal, on the front of which is the inscription, "government a power delegated for the happiness of mankind conducted by wisdom, justice and mercy." beneath are the words, "_american congress_." on the side of the pedestal the name of _dickinson_ appears, preceded by the names of those noble writers, england's great advocates and expounders of constitutional liberty, sydney, hampden, milton, locke, harrington, ludlow and marvel. this beautiful porcelain statuette was moulded at the chelsea factory in 1777, the same year in which boswell chronicles dr. johnson's visit there, noting, "the china was beautiful, but dr. johnson justly observed it was too dear, for he could have vessels of silver as cheap as were here made of porcelain." the space at my disposal prevents my quoting many a "letter to the printer" appealing for justice for the colonials as well as numerous contributed articles which appeared during the next few years in the english press, the contents of which clearly show how strongly dickinson's arguments had influenced their respective authors. while it is true that these sentiments were attacked both at home and abroad, the attacks soon lost their vehemence. strange as it may seem, more protests against the course of the ministry than denunciations of the doings of the colonial assemblies are found in the columns of the english press of the period. the demand for the arguments contained in the "farmer's letters" was not lessened by subsequent events as their popularity demanded the publishing of another london edition in 1774. certainly to john dickinson for his masterly defence of the rights of the colonies america owes an everlasting debt of gratitude. the logic of his claims and his warnings as to what must be the ultimate result of the ministerial encroachments upon the liberties of englishmen did much to win over to the american cause in england that strong ally, the support of a large body of thoughtful englishmen. these men actively condemned the ministerial actions and during the war which followed caused the course of the government to be bitterly opposed by an influential and constantly growing minority in parliament. through their efforts was fostered a public sentiment which caused the war to be prosecuted in a half-hearted manner and obliged a power-loving king to fill the depleted ranks of his army with german mercenaries, so impossible was it to force a sufficient number of his own liberty-loving subjects to fight against their kindred living in the land so happily alluded to by a contributor to the london "chronicle" (june 3-6, 1769), in the following poem: _the genius of_ america _to her sons_ who'd know the sweets of liberty? 'tis to climbe the mountain's brow, thence to discern rough industry, at the harrow or the plough; 'tis where my sons their crops have sown, calling the harvest all their own; 'tis where the heart to truth allied, never felt unmanly fear; 'tis where the eye with milder pride, nobly sheds sweet pity's tear; such as america yet shall see, these are the sweets of liberty. notes. i. an address from the moderator and freemen of the town of providence in the colony of rhode-island, and providence plantation convened in open meeting the 20th day of june, 1768, to the author of a series of letters signed a farmer. _sir_, in your retirement, "near the banks of the river delaware," where you are compleating, in a rational way, the number of days allotted to you by divine goodness, the consciousness of having employed those talents which god hath bestowed upon you, for the support of our rights, must afford you a satisfaction vastly exceeding that, which is derived to you from the universal approbation of your letters,--however amidst the general acclamation of your praise, we the moderator and freemen of the ancient town of providence cannot be silent; although we would not offend your delicacy, or incur the imputation of flattery in expressing our gratitude to you. your benevolence to mankind, fully discoverable from your writings, doubtless caused you to address your countrymen, whom you tenderly call _dear_ and _beloved_, in a series of letters, wherein you have with a great judgment, and in the most spirited and forcible manner explained their rights and privileges; and vindicated them against such as would reduce these extensive dominions of his majesty to poverty, misery, and slavery. this your patriotic exertion in our cause and indeed in the cause of all the human race in some degree, hath rendered you very dear to us, although we know not your person. we deplore the frailty of human nature, in that it is necessary that we should be frequently awakened into attention to our duty in matters very plain and incontrovertible, if we would suffer ourselves to consider them. from this inattention to things evidently the duty and interest of the world, we suppose despotic rule to have originated, and all the train of miseries consequent thereupon. the virtuous and good man, who rouses an injured country from their lethargy, and animates them into active and successful endeavours for casting off the burdens imposed on them, and effecting a full enjoyment of the rights of men, which no human creature ought to violate, will merit the warmest expressions of gratitude from his countrymen, for his instrumentality in saving them and their posterity. as the very design of instituting civil government in the world was to secure to individuals a quiet enjoyment of their native rights, wherever there is a departure from this great and only end, impious force succeeds. the blessings of a just government, and the horror of brutal violence are both inexpressible. as the latter is generally brought upon people by degrees, it will be their duty to watch against even the smallest attempt to "innovate a single iota" in their privilege. with hearts truly loyal to the king, we feel the greatest concern at divers acts of the british parliament, relative to these colonies. we are clear and unanimous in sentiment that they are subversive of our liberties, and derogatory to the power and dignity of the several legislatures established in america. permit us, sir, to assure you that we feel an ineffable gratitude to you, for sending forth your letters at a time when the exercise of great abilities was necessary. we sincerely wish that you may see the fruit of your labours. we on our parts shall be ready at all times to evince to the world that we will not surrender our privileges to any of our fellow subjects, but will earnestly contend for them, hoping that the "almighty will look upon our righteous contest with gracious approbation." we hope that the conduct of the colonies on this occasion will be "peaceable, prudent, firm, and joint; and such as will show their loyalty to the best of sovereigns, and that they know what they owe to themselves as well as to great-britain." signed by order james angell, town clerk. ii. from the monthly review. london, july, 1768. "_letters from a farmer in pennsylvania, to the inhabitants of the british colonies. 8vo. 2s. almon. 1768._ "we have, in the letters now before us, a calm yet full inquiry into the right of the british parliament, lately assumed, to tax the american colonies; the unconstitutional nature of which attempt is maintained in a well-connected chain of close and manly reasoning; and though from this character, it is evident that detached passages must appear to a disadvantage, yet it is but just to give our readers some specimens of the manner in which the author asserts the rights of his american brethren; subjects of the british government, as he pleads, carrying their birthrights with them wherever they settle as such. 'colonies, says he, were formerly planted by warlike nations, to keep their enemies in awe; to relieve their country overburthened with inhabitants; or to discharge a number of discontented and troublesome citizens. but in more modern ages, the spirit of violence being, in some measure, if the expression may be allowed, sheathed in commerce, colonies have been settled by the nations of europe for the purposes of trade. these purposes were to be attained, by the colonies raising for their mother country those things which she did not produce herself; and by supplying themselves from her with things they wanted. these were the _national_ objects in the commencement of our colonies, and have been uniformly so in their promotion. 'to answer these grand purposes, perfect liberty was known to be necessary; all history proving, that trade and freedom are nearly related to each other. by a due regard to this wise and just plan, the infant colonies, exposed in the unknown climates and unexplored wildernesses of this new world, lived, grew, and flourished. 'the parent country, with undeviating prudence and virtue, attentive to the first principles of colonization, drew to herself the benefits she might reasonably expect, and preserved to her children the blessings, upon which those benefits were founded. she made laws, obliging her colonies to carry to her all those products which she wanted for her own use; and all those raw materials which she chose herself to work up. besides this restriction, she forbade them to procure _manufactures_ from any other part of the globe, or even the _products_ of _european_ countries, which alone could rival her, without being first brought to her. in short, by a variety of laws, she regulated their trade in such a manner as she thought most conducive to their mutual advantage and her own welfare. a power was reserved to the crown of _repealing_ any laws that should be enacted: the executive authority of government was also lodged in the crown, and its representatives; and an _appeal_ was secured to the crown from all judgments in the administration of justice. 'for all these powers, established by the mother country over the colonies; for all these immense emoluments derived by her from them; for all their difficulties and distresses in fixing themselves, what was the recompense made them? a communication of her rights in general, and particularly of that great one, the foundation of all the rest--that their property, acquired with so much pain and hazard, should be disposed of by none but themselves--or, to use beautiful and emphatic language of the sacred scriptures, "that they should sit _every man_ under his vine, and under his fig-tree, and _none should make them afraid_." 'can any man of candour and knowledge deny that these institutions form an affinity between great britain and her colonies, that sufficiently secures their dependence upon her? or that for her to levy taxes upon them is to reverse the nature of things? or that she can pursue such a measure without reducing them to a state of vassalage? 'if any person cannot conceive the supremacy of great britain to exist, without the power of laying taxes to levy money upon us, the history of the colonies, and of great britain, since their settlement, will prove the contrary. he will there find the amazing advantages arising to her from them--the constant exercise of her supremacy--and their filial submission to it, without a single rebellion, or even the thought of one, from their first emigration to this moment--and all these things have happened, without one instance of great britain's laying taxes to levy money upon them. 'how many british authors have demonstrated, that the present wealth, power and glory of their country, are founded upon these colonies? as constantly as streams tend to the ocean have they been pouring the fruits of all their labours into their mother's lap. good heaven! and shall a total oblivion of former tendernesses and blessings, be spread over the minds of a good and wise nation by the sordid arts of intriguing men, who, covering their selfish projects under pretences of public good, first enrage their countrymen into a frenzy of passion, and then advance their own influence and interest, by gratifying the passion, which they themselves have basely excited. 'hitherto great britain has been contented with her prosperity, moderation has been the rule of her conduct. but now, a generous, humane people, that so often have protected the liberty of _strangers_, is inflamed into an attempt to tear a privilege from her own children, which if executed, must, in their opinion, sink them into slaves: _and for what_? for a pernicious power, not necessary to her as her own experience may convince her; but horribly dreadful and detestable to her. 'it seems extremely probable, that when cool, dispassionate prosperity, shall consider the affectionate intercourse, the reciprocal benefits, and the unsuspecting confidence, that have subsisted between these colonies and their parent country, for such a length of time, they will execrate, with the bitterest curses, the infamous memory of those men, whose pestilential ambition unnecessarily, wantonly, first opened the sources of civil discord between them; first turned their love into jealousy; and first taught these provinces, filled with grief and anxiety, to enquire.' "as every community possessed of valuable privileges, and desirous to preserve the enjoyment of them, ought to be very cautious of admitting innovations from their established forms of political administration, our author does not confine his views to the immediate effects of the laws lately passed regarding america; but considers the necessary tendency of the precedents; thus he says, 'i have looked over every _statute_ relating to these colonies, from their first settlement to this time; and i find everyone of them founded on this principle, till the _stamp-act_ administration. _all before_, are calculated to regulate trade, and preserve or promote a mutually beneficial intercourse between the several constituent parts of the empire; and though many of them imposed duties on trade, yet those duties were always imposed _with design_ to restrain the commerce of one part, that was injurious to another, and thus to promote the general welfare. the raising a revenue thereby was never intended. thus, the king by his judges in his courts of justice, impose fines, which altogether amount to a very considerable sum, and contribute to the support of government; but this is merely a consequence arising from restrictions, that only meant to keep peace, and prevent confusion; and surely a man would argue very loosely, who should conclude from hence, that the king has a right to levy money in general upon his subjects. never did the british parliament, till the period above mentioned, think of imposing duties in america, _for the purpose of raising a revenue_. mr. grenville first introduced this language, in the preamble to the fourth of george iii. chap. 15, which has these words--"and whereas it is just and necessary that _a revenue be raised in your majesty's said dominions in america, for defraying the expenses of defending, protecting and securing the same_: we your majesty's most dutiful and loyal subjects, _the commons of great britain_, in parliament assembled, being desirous to make some provisions in this present session of parliament, _towards raising the said revenue in america_, have resolved to _give_ and _grant_ unto your majesty the several rates and duties hereinafter mentioned," etc. 'a few months after came the _stamp-act_, which reciting this, proceeds in the same strange mode of expression, thus--"and whereas it is just and necessary, that provision be made _for raising a further revenue within your majesty's dominions in america, towards defraying the said expenses_, we your majesty's most dutiful and loyal subjects, the _commons_ of _great britain, etc., give and grant_," etc., as before. 'the last act, granting duties upon paper, etc., carefully pursues these modern precedents. the preamble is, "whereas it is expedient, _that a revenue should be raised in your majesty's dominions in america for making a more certain and adequate provision for defraying the charge of the administration of justice, and the support of civil government in such provinces, where it shall be found necessary; and towards the further defraying of the expences of defending, protecting, and securing the said dominions_, we your majesty's most dutiful and loyal subjects, the _commons of great britain_, etc. give _and grant_," etc. as before. 'here we may observe an authority expresly claimed and exerted to impose duties on these colonies; not for the regulation of trade; not for the preservation or promotion of a mutually beneficial intercourse between the several constituent parts of the empire, heretofore the _sole objects_ of parliamentary institutions; _but for the single purpose of levying money upon us_.' "again in another place, 'what but the indisputable, the acknowledged exclusive right of the colonies to tax themselves, could be the reason, that in this long period of more than one hundred and fifty years, no statute was ever passed for the sole purpose of raising a revenue from the colonies? and how clear, how cogent must that reason be, to which every parliament, and every ministry for so long a time submitted, without a single attempt to innovate? 'england, in part of that course of years, and great britain, in other parts, was engaged in several fierce and expensive wars; troubled with some tumultuous and bold parliaments; governed by many daring and wicked ministers; yet none of them ever ventured to touch the palladium of american liberty. ambition, avarice, faction, tyranny, all revered it. whenever it was necessary to raise money on the colonies, the requisitions of the crown were made, and dutifully complied with. the parliament, from time to time, regulated their trade, and that of the rest of the empire, to preserve their dependence and the connections of the whole in good order.' "the amount of present duties exacted in an unusual way is no part of the object in question; for our pennsylvanian farmer observes: 'some persons may think this act of no consequence, because the duties are so _small_. a fatal error. _that_ is the very circumstance most alarming to me. for i am convinced, that the authors of this law would never have obtained an act to raise so trifling a sum as it must do, had they not intended by it to establish a _precedent_ for future use. to console ourselves with the _smallness_ of the duties, is to walk deliberately into the snare that is set for us, praising the _neatness_ of the workmanship. suppose the duties imposed by the late act could be paid by these distressed colonies with the utmost ease, and that the purposes to which they are to be applied, were the most reasonable and equitable that can be conceived, the contrary of which i hope to demonstrate before these letters are concluded; yet even in such a supposed case, these colonies ought to regard the act with abhorrence. for who are a free people? not those, over whom government is reasonably and equitably exercised, but those, who live under a government so _constitutionally checked_ and controuled, that proper provision is made against its being otherwise exercised. 'the late act is founded on the destruction of this constitutional security. if the parliament have a right to lay a duty of four shillings and eight pence on a hundred weight of glass, or a ream of paper, they have a right to lay a duty of any other sum on either. they may raise the duty, as the author before quoted says has been done in some countries, till it "exceeds seventeen or eighteen times the value of the commodity." in short, if they have a right to levy a tax of _one penny_ upon us, they have a right to levy a _million_ upon us; for where does their right stop? at any given number of pence, shillings or pounds? to attempt to limit their right, after granting it to exist at all, is as contrary to reason--as granting it to exist at all, is contrary to justice. if they have any right to tax us--then, whether our own money shall continue in our pockets or not, depends no longer on _us_, but on _them_, "there is nothing which "we" can call our own; or, to use the words of mr. locke--_what property have "we" in that which another may, by right, take, when he pleases, to himself_?" 'these duties which will inevitably be levied upon us--which are now levying upon us--are _expresly laid for the sole purpose of taking money_. this is the true definition of "taxes." they are therefore _taxes_. this money is to be taken from _us_. we are therefore _taxed_. _those_ who are _taxed_ without their own consent, expressed by themselves or their representatives are _slaves_. _we are taxed_ without our own consent, expressed by ourselves or representatives. _we_ are therefore slaves.' "further, 'indeed nations in general are more apt to _feel_ than to _think_; and therefore nations in general have lost their liberty: for as the violation of the rights of the governed are commonly not only _specious_, but _small_ at the beginning, they spread over the multitude in such a manner, as to touch individuals but slightly; thus they are disregarded. the power or profit that arises from these violations, _centering in a few persons_, is to them considerable. for this reason, the _governors_ having in view their particular purposes, successively preserve an uniformity of conduct for attaining them: they regularly increase and multiply the first injuries, till at length the inattentive people are compelled to perceive the heaviness of their burthen. they begin to complain and inquire--but too late. they find their oppressions so strengthened by success, and themselves so entangled in examples of express authority on the part of their rulers, and of tacit recognition on their own part, that they are quite confounded: for millions entertain no other idea of the _legality_ of power, than that it is founded on the exercise of power. they then voluntarily fasten their chains by adopting a pusillanimous opinion "that there will be too much danger in attempting a remedy"--or another opinion no less fatal, "that the government has a _right_ to treat them as it does." they then seek a wretched relief for their minds, by persuading themselves, that to yield their _obedience_, is to discharge their _duty_. the _deplorable_ poverty of spirit, that prostrates all the dignity bestowed by divine providence on our nature--of course succeeds.' "with regard to the proper conduct of the colonies on this occasion he premises the following questions: 'has not the parliament _expressly avowed_ their _intention_ of raising money from us for _certain_ purposes? is not this scheme _popular_ in great britain? will the taxes imposed by the late act, _answer_ those purposes? if it will, must it not take an immense sum from us? if it will not, is it to be _expected_, that the parliament will not _fully execute_ their _intention_, when it is pleasing at home, _and not opposed_ here? must not this be done by imposing _new taxes_? will not every addition thus made to our taxes, be an addition to the power of the british legislature, _by increasing the number of officers_ employed in the collection? will not every additional tax therefore render it _more difficult_ to abrogate any of them? when a branch of revenue is once established, does it not appear to many people _invidious_ and undutiful, to attempt to abolish it? if taxes sufficient to _accomplish_ the intention of the parliament, are imposed by the parliament, what taxes will remain to be imposed by our assemblies? if _no material_ taxes remain to be imposed by them, what must become of _them_, and the people they represent?' "our author all along, however, asserts that the real interest of english america consists in its proper dependence on the mother country, at the same time that he strenuously exhorts his countrymen to oppose, by all the suitable means in their power, every incroachment on those constitutions under the sanction of which they settled on those remote and uncultivated shores, whereon they have so industriously established themselves. he remarks with a spirit which no one, it is apprehended, can condemn: 'i am no further concerned in anything affecting america, than any one of you; and when liberty leaves it, i can quit it much more conveniently than most of you: but while divine providence, that gave me existence in a land of freedom, permits my head to think, my lips to speak, and my hands to move, i shall so highly and gratefully value the blessing received, as to take care, that my silence and inactivity shall not give my implied assent to any act, degrading my brethren and myself from the birthright, wherewith heaven itself "hath made us free.' "the consequence of great britain exerting this disagreeable power, he shews, in a long train of arguments, to have a tendency very fatal to the liberty of america, which he illustrates by examining into the application of the pensions on the irish establishment; and sums up his reasoning with the following positions: 'let these _truths_ be indelibly impressed on our mind--_that we cannot be_ happy, _without being_ free--that we cannot be free, _without being secure_--in our property--that we cannot be secure in our property, if, _without our consent, others may, as by right, take it away--that taxes imposed on us by parliament_, do thus take it away--that _duties laid for the sole purposes of raising money_, are taxes--that attempts to lay such duties _should be instantly and firmly opposed_--that this opposition can never be effectual, unless it is the united effort of those provinces--that therefore _benevolence of temper towards each other_, and _unanimity of counsels_, are essential to the welfare of the whole--and lastly, that for this reason, every man amongst us, who in any manner would encourage either dissention, diffidence, or indifference, between these colonies, is an enemy to _himself_, and to _his country_. 'the belief of these truths, i verily think, my countrymen, is indispensably necessary to your happiness. i beseech you, therefore, "teach them diligently unto your children, and talk of them when you sit in your houses, and when you walk by the way, and when you lie down and when you rise up." '_what_ have these colonies to _ask_, while they continue free? or what have they to _dread_, but insidious attempts to subvert their freedom? _their prosperity_ does not depend on _ministerial favours doled_ out to particular provinces. _they_ form one political body, of which _each_ colony is a _member_. _their happiness_ is founded on their constitution; and is to be promoted by preserving that constitution in unabated vigour, _throughout every part_. a spot, a speck of decay, however small the limb on which it appears, and however remote it may seem from the vitals, should be alarming. we have _all the rights_ requisite for our prosperity. the _legal authority_ of great britain may indeed lay hard restrictions upon us; but, like the spear of telephus, it will cure as well as wound. her unkindness will instruct and compel us, after some time to discover, in our _industry_ and _frugality_, surprising remedies--_if our rights continue_ unviolated: for as long as the _products_ of our _labour_, and the _rewards_ of our _care_, can properly be called _our own_, so long will it be worth our while to be _industrious_ and _frugal_. but if we plow--sow--reap--gather and thresh--we find, that we plow--sow--reap--gather and thresh _for others_, whose pleasure is to be the sole limitation _how much_ they shall _take_ and _how much_ they _shall leave_, why should we repeat the unprofitable toil? horses and oxen are content with _that portion of the fruits of their work_, which their _owners_ assign to them, in order to keep them strong enough to raise successive crops; but even _these beasts_ will not submit to draw for their masters, until they are _subdued_ with _whips_ and _goads_. let us take care of our rights, and we _therein_ take care of our _property_. "slavery is ever preceded by sleep." _individuals_ may be _dependent_ on ministers if they please. _states should scorn it_; and if _you_ are not wanting to yourselves, you will have a _proper regard_ paid _you_ by _those_, to whom if you are not _respectable_, you will infallibly be contemptible. but--_if we have already forgot_ the _reasons_ that urged us, with unexampled unanimity, to exert ourselves two years ago--if _our zeal_ for the _public good_ is _worn out_ before the _homespun cloaths_ which it caused us to have made--if _our_ resolutions are so faint, as by our present conduct to _condemn_ our own late _successful_ example--if _we are not affected_ by any reverence for the memory of our ancestors, who transmitted to us that freedom in which they had been blest--if _we are not animated_ by any regard for posterity, to whom, by the most sacred obligations, we are bound to deliver down the invaluable inheritance--then, indeed, any _minister_, or any _tool_ of a minister, or any _creature_ of a tool of a minister--or any _lower instrument_ of _administration_, if lower there be, is a _personage_ whom it may be dangerous to offend.' "in justification of the letter-writer's loyalty, and the integrity of his intentions, he declares in a note: 'if any person shall imagine that he discovers in these letters the least disaffection towards our most excellent sovereign, and the parliament of great britain, or the least dislike of the dependence of these colonies on that kingdom, i beg that such person will not form any judgment on _particular expressions_, but will consider the _tenour_ of all the letters taken together. in that case, i flatter myself that every unprejudiced reader will be _convinced_, that the true interests of great britain are as dear to me as they ought to be to every good subject. 'if i am an enthusiast in anything, it is in my zeal for the _perpetual dependance_ of these colonies on the mother country.--a dependance founded on mutual benefits, the continuance of which can be secured only by _mutual affections_. therefore it is, that with extreme apprehension i view the smallest seeds of discontent, which are unwarily scattered abroad. fifty or sixty years will make astonishing alterations in these colonies; and this consideration should render it the business of great britain more and more to cultivate our good dispositions toward her: but the misfortune is, that those _great men_, who are wrestling for power at home, think themselves very slightly interested in the prosperity of their country _fifty_ or _sixty_ years hence; but are deeply concerned in blowing up a popular clamour for supposed _immediate advantages_. 'for my part, i regard great britain as a _bulwark_ happily fixed between these colonies and the powerful nations of europe. that kingdom is our advanced post or fortification, _which remaining safe_, we under its protection enjoying peace, may diffuse the blessings of religion, science, and liberty, through remote wildernesses. it is, therefore, incontestably our _duty_ and our _interest_ to support the strength of great britain. when, confiding in that strength, she begins to forget from whence it arose, it will be an easy thing to shew the source. she may readily be reminded of the loud alarm spread among her merchants and tradesmen, by the universal association of these colonies, at the time of the _stamp-act_, not to import any of her manufactures. in the year 1718, the russians and swedes entered into an agreement, not to suffer great britain to export any naval stores from their dominions, but in russian or swedish ships, and at their own prices. great britain was distressed. _pitch_ and _tar_ rose to _three pounds_ a barrel. at length she thought of getting these articles from the colonies; and the attempt succeeding, they fell down to fifteen shillings. in the year 1756, great britain was threatened with an invasion: an easterly wind blowing for six weeks, she could not man her fleet; and the whole nation was thrown into the utmost consternation. the wind changed. the american ships arrived. the fleet sailed in ten or fifteen days. there are some other reflections on this subject worthy of the most deliberate attention of the british parliament; but they are of such a nature that i do not chuse to mention them publicly. i thought i discharged my duty to my country, by taking the liberty, in the year 1765, while the _stamp-act_ was in suspence, of writing my sentiments to a man of the greatest influence at home, who afterwards distinguished himself by espousing our cause in the debates concerning the repeal of that act.' "when we review a performance well written, and founded upon laudable principles, if we do not restrain ourselves to a general approbation, which may be given in few words, the article will unavoidably contain more from the author of it, than from ourselves; this, if any excuse is needful for enabling our readers, in some measure, to judge for themselves, is pleaded as an apology for our copious extracts from these excellent letters. to conclude; if _reason_ is to decide between us and our colonies, in the affairs here controverted, our author, whose name the advertisements inform us is dickenson,[7] will not perhaps easily meet with a satisfactory refutation." [7] of pennsylvania. see his dispute with mr. galloway, review, vol. xxxii. p. 67. letters from a farmer. letters from a farmer in _pennsylvania_, to the inhabitants of the british colonies. boston: printed by mein and fleeming, and to be sold by john mein, at the london book-store, north-side of king-street. m dcc lxviii. letters from a farmer. letter i. _my dear countrymen_, i am a farmer, settled after a variety of fortunes, near the banks, of the river _delaware_, in the province of _pennsylvania_. i received a liberal education, and have been engaged in the busy scenes of life: but am now convinced, that a man may be as happy without bustle, as with it. my farm is small, my servants are few, and good; i have a little money at interest; i wish for no more: my employment in my own affairs is easy; and with a contented grateful mind, i am compleating the number of days allotted to me by divine goodness. being master of my time, i spend a good deal of it in a library, which i think the most valuable part of my small estate; and being acquainted with two or three gentlemen of abilities and learning, who honour me with their friendship, i believe i have acquired a greater share of knowledge in history, and the laws and constitution of my country, than is generally attained by men of my class, many of them not being so fortunate as i have been in the opportunities of getting information. from infancy i was taught to love humanity and liberty. inquiry and experience have since confirmed my reverence for the lessons then given me, by convincing me more fully of their truth and excellence. benevolence towards mankind excites wishes for their welfare, and such wishes endear the means of fulfilling them. those can be found in liberty alone, and therefore her sacred cause ought to be espoused by every man, on every occasion, to the utmost of his power: as a charitable but poor person does not withhold his _mite_, because he cannot relieve _all_ the distresses of the miserable, so let not any honest man suppress his sentiments concerning freedom, however small their influence is likely to be. perhaps he may "[8]touch some wheel" that will have an effect greater than he expects. [8] pope. these being my sentiments, i am encouraged to offer to you, my countrymen, my thoughts on some late transactions, that in my opinion are of the utmost importance to you. conscious of my defects, i have waited some time, in expectation of seeing the subject treated by persons much better qualified for the task; but being therein disappointed, and apprehensive that longer delays will be injurious, i venture at length to request the attention of the public, praying only for one thing,--that is that these lines may be _read_ with the same zeal for the happiness of british america, with which they were _wrote_. with a good deal of surprise i have observed, that little notice has been taken of an act of parliament, as injurious in its principle to the liberties of these colonies, as the stamp-act was: i mean the act for suspending the legislation of new-york. the assembly of that government complied with a former act of parliament, requiring certain provisions to be made for the troops in america, in every particular, i think, except the articles of salt, pepper, and vinegar. in my opinion they acted imprudently, considering all circumstances, in not complying so far, as would have given satisfaction, as several colonies did: but my dislike of their conduct in that instance, has not blinded me so much, that i cannot plainly perceive, that they have been punished in a manner pernicious to american freedom, and justly alarming to all the colonies. if the british parliament has a legal authority to order, that we shall furnish a single article for the troops here, and to compel obedience to that order; they have the same right to order us to supply those troops with arms, cloaths, and every necessary, and to compel obedience to that order also; in short, to lay _any burdens_ they please upon us. what is this but _taxing_ us at a _certain sum_, and leaving to us only the _manner_ of raising it? how is this mode more tolerable than the stamp act? would that act have appeared more pleasing to americans, if being ordered thereby to raise the sum total of the taxes, the mighty privilege had been left to them, of saying how much should be paid for an instrument of writing on paper, and how much for another on parchment? an act of parliament commanding us to do a certain thing, if it has any validity, is a tax upon us for the expence that accrues in complying with it, and for this reason, i believe, every colony on the continent, that chose to give a mark of their respect for great-britain, in complying with the act relating to the troops, cautiously avoided the mention of that act, lest their conduct should be attributed to its supposed obligation. the matter being thus stated, the assembly of _new-york_ either had, or had not a right to refuse submission to that act. if they had, and i imagine no american will say, they had not, then the parliament had no _right_ to compel them to execute it.--if they had not _that right_, they had _no right_ to punish them for not executing it; and therefore had _no right_ to suspend their legislation, which is a punishment. in fact, if the people of _new-york_ cannot be legally taxed but by their own representatives, they cannot be legally deprived of the privileges of making laws, only for insisting on that exclusive privilege of taxation. if they may be legally deprived in such a case of the privilege of making laws, why may they not, with equal reason, be deprived of every other privilege? or why may not every colony be treated in the same manner, when any of them shall dare to deny their assent to any impositions that shall be directed? or what signifies the repeal of the stamp-act, if these colonies are to lose their _other_ privileges, by not tamely surrendering that of _taxation_? there is one consideration arising from this suspicion, which is not generally attended to, but shews its importance very clearly. it was not _necessary_ that this suspension should be caused by an act of parliament. the crown might have restrained the governor of _new-york_, even from calling the assembly together, by its prerogative in the royal governments. this step, i suppose, would have been taken, if the conduct of the assembly of _new-york_, had been regarded as an act of disobedience _to the crown alone_: but it is regarded as an act of "disobedience to the authority of the british legislature." this gives the suspension a consequence vastly more affecting. it is a parliamentary assertion of the _supreme authority_ of the _british legislature_ over these colonies in _the part of taxation_; and is intended to compel _new-york_ unto a submission to that authority. it seems therefore to me as much a violation of the liberty of the people of that province, and consequently of all these colonies, as if the parliament had sent a number of regiments to be quartered upon them till they should comply. for it is evident, that the suspension is meant as a compulsion; and the _method_ of compelling is totally indifferent. it is indeed probable, that the sight of red coats, and the beating of drums would have been most alarming, because people are generally more influenced by their eyes and ears than by their reason: but whoever seriously considers the matter, must perceive, that a dreadful stroke is aimed at the liberty of these colonies: for the cause of _one_ is the cause of _all_. if the parliament may lawfully deprive _new-york_ of any of its rights, it may deprive any, or all the other colonies of their rights; and nothing can possibly so much encourage such attempts, as a mutual inattention to the interest of each other. _to divide, and thus to destroy_, is the first political maxim in attacking those who are powerful by their union. he certainly is not a wise man, who folds his arms and reposeth himself at home, seeing with unconcern the flames that have invaded his neighbour's house, without any endeavours to extinguish them. when mr. _hampden's_ ship-money cause, for three shillings and four-pence, was tried, all the people of _england_, with anxious expectation, interested themselves in the important decision; and when the slightest point touching the freedom of a single colony is agitated, i earnestly wish, that all the rest may with equal ardour support their sister. very much may be said on this subject, but i hope, more at present is unnecessary. with concern i have observed that two assemblies of this province have sat and adjourned, without taking any notice of this act. it may perhaps be asked, what would have been proper for them to do? i am by no means fond of inflammatory measures. i detest them.----i should be sorry that any thing should be done which might justly displease our sovereign or our mother-country. but a firm, modest exertion of a free spirit, should never be wanting on public occasions. it appears to me, that it would have been sufficient for the assembly, to have ordered our agents to represent to the king's ministers, their sense of the suspending act, and to pray for its repeal. thus we should have borne our testimony against it; and might therefore reasonably expect that on a like occasion, we might receive the same assistance from the other colonies. "_concordia res parvæ crescunt._" small things grow great by concord.- a farmer. letter ii. _beloved countrymen_, there is another late act of parliament, which seems to me to be as destructive to the liberty of these colonies, as that inserted in my last letter; that is, the act for granting the duties on paper, glass, &c. it appears to me to be unconstitutional. the parliament unquestionably possesses a legal authority to _regulate_ the trade of _great-britain_, and all its colonies. such an authority is essential to the relation between a mother country and its colonies; and necessary for the common good of all. he, who considers these provinces as states distinct from the _british empire_, has very slender notions of _justice_ or of _their interests_. we are but parts of _a whole_; and therefore there must exist a power somewhere, to preside, and preserve the connection in due order. this power is lodged in the parliament; and we are as much dependant on _great-britain_, as a perfectly free people can be on another. i have looked over every _statute_ relating to these colonies, from their first settlement to this time; and i find every one of them founded on this principle, till the stamp-act administration[9]. _all before_ are calculated to preserve or promote a mutually beneficial intercourse between the several constituent parts of the empire; and though many of them imposed duties on trade, yet those duties were always imposed _with design_ to restrain the commerce of one part, that was injurious to another, and thus to promote the general welfare. the raising a revenue thereby was never intended. thus, the king by his judges in his courts of justice, imposes fines, which all together amount to a considerable sum, and contribute to the support of government: but this is merely a consequence arising from restrictions, which only meant to keep peace, and prevent confusion; and surely a man would argue very loosely, who should conclude from hence, that the king has a right to levy money in general upon his subjects; never did the _british parliament_, till the period abovementioned, think of imposing duties in america for the purpose of raising a revenue. mr. _greenville's_ sagacity first introduced this language, in the preamble to the 4th of geo. iii. ch. 15, which has these words--"and whereas it is just and necessary that a revenue be raised in your majesty's said dominions in america, _for defraying the expences of defending, protecting and securing the same_: we your majesty's most dutiful and loyal subjects, the commons of great britain, in parliament assembled, being desirous to make some provision in the present session of parliament, towards raising the said revenue in america, have resolved to give and grant unto your majesty the several rates and duties herein after mentioned," &c. [9] for the satisfaction of the reader, recitals from former acts of parliament relating to these colonies are added. by comparing these with the modern acts, he will perceive their great difference in expression and intention. the 12th cha. ii chap. 18, which forms the foundation of the laws relating to our trade, by enacting that certain productions of the colonies shall be carried to england only, and that no goods shall be imported from the plantations but in ships belonging to england, ireland, wales, berwick, or the plantations, &c. begins thus: "for the increase of shipping, and encouragement of the navigation of this nation, wherein, under the good providence and protection of god, the wealth, safety, and strength of this kingdom is so much concerned," &c. the 15th cha. ii. chap. 7. enforcing the same regulation, assigns these reasons for it. "in regard to his majesty's plantations, beyond the seas, are inhabited and peopled by his subjects of this his kingdom of england; for the maintaining a greater correspondence and kindness between them, and keeping them in a firmer dependence upon it, and rendering them yet more beneficial and advantageous unto it, in the further employment and increase of english shipping and seamen, vent of english woolen, and other manufactures and commodities, rendering the navigation to and from the same more safe and cheap, and making this kingdom a staple, not only of the commodities of those plantations, but also of the commodities of other countries and places for the supplying of them; and it being the usage of other nations to keep their plantations trade to themselves," &c. the 25th cha. ii. chap. 7, made expressly "for the better securing the plantation trade," which imposes duties on certain commodities exported from one colony to another, mentions this last for imposing them: "whereas by one act passed in the 12th year of your majesty's reign, intitled, an act for encouragement of shipping and navigation, and by several other laws, passed since that time, it is permitted to ship, &c. sugars, tobacco, &c. of the growth, &c. of any of your majesty's plantations in america &c. from the places of their growth, &c. to any other of your majesty's plantations in those parts, &c. and that without paying of custom for the same, either at the lading or unlading the said commodities, by means whereof the trade and navigation in those commodities from one plantation to another is greatly encreased, and the inhabitants of divers of those colonies, not contenting themselves with being supplied with those commodities for their own use, free from all customs (while the subjects of this your kingdom of england have paid great customs and impositions for what of them hath been spent here) but, contrary to the express letter of the aforesaid laws, have brought into diverse parts of europe great quantities thereof, and do also vend great quantities thereof to the shipping of other nations, who bring them into divers parts of europe, to the great hurt and diminution of your majesty's customs, and of the trade and navigation of this your kingdom; for the prevention thereof, &c." the 7th and 8th will. iii. chap. 21, intitled, "an act for preventing frauds, and regulating abuses in the plantation trade," recites that, "notwithstanding diverse acts, &c. great abuses are daily committed, to the prejudice of the english navigation, and the loss of a great part of the plantation trade to this kingdom, by the artifice and cunning of ill disposed persons: for remedy whereof, &c. and whereas in some of his majesty's american plantations, a doubt or misconstruction has arisen upon the before mentioned acts, made in the 25th year of the reign of charles ii. whereby certain duties are laid upon the commodities therein enumerated (which by law may be transported from one plantation to another, for the supplying of each others wants) as if the same were, by the payment of those duties in one plantation, discharged from giving the securities intended by the aforesaid acts, made in the 12th, 22d and 23d years of the reign of king charles ii. and consequently be at liberty to go to any foreign market in europe," &c. the 6th anne, chap. 37, reciting the advancement of trade, &c. and encouragement of ships of war, &c. grants to the captors the property of all prizes carried into america, subject to such customs and duties, &c. as if the same had been first imported into any part of great-britain, and from thence exported, &c. this was a gift to persons acting under commissions from the crown, and therefore it was reasonable that the terms prescribed should be complied with----more especially as the payment of such duties was intended to give a preference to the productions of the british colonies, over those of other colonies. however, being found inconvenient to the colonies, about four years afterwards, this act was, for that reason, so far repealed, by another act "all prize goods, imported into any part of great-britain, from any of the plantations, were liable to such duties only in great-britain, as in case they had been of the growth and produce of the plantations," &c. the 6th geo. ii. chap. 13, which imposes duties on foreign rum, sugar and molasses, imported into the colonies, shews the reason thus.--"whereas the welfare and prosperity of your majesty's sugar colonies in america, are of the greatest consequence and importance to the trade, navigation and strength of this kingdom; and whereas the planters of the said sugar colonies, have of late years fallen under such great discouragements that they are unable to improve or carry on the sugar trade, upon an equal footing with the foreign sugar colonies, without some advantage and relief be given to them from great-britain: for remedy whereof, and for the good and welfare of your majesty's subjects," &c. the 29th geo. ii. chap. 26. and the 1st geo. iii. chap. 9, which contains 6th geo. ii. chap. 13, declare, that the said act hath, by experience, been found useful and beneficial, &c. there are all the most considerable statutes relating to the commerce of the colonies; and it is thought to be utterly unnecessary to add any observations to these extracts, to prove that they were all intended solely as regulations of trade. a few months after came the _stamp-act_, which reciting this, proceeds in the same strange mode of expression, thus--"and whereas it is just and necessary, that provision be made for raising a further revenue within your majesty's dominions in america, towards defraying the said expences, we your majesty's most dutiful and loyal subjects, the commons of great-britain, &c. give and grant," &c. as before. the last act, granting duties upon paper, &c. carefully pursues these modern precedents. the preamble is, "whereas it is expedient that a revenue should be raised in your majesty's dominions in america, for making a more certain and adequate provision for the defraying the charge of the administration of justice, and the support of civil government in such provinces, where it shall be found necessary; and towards the further defraying the expences of defending, protecting and securing the said dominions, we your majesty's most dutiful and loyal subjects, the commons of great-britain, &c. give and grant," &c. as before. here we may observe an authority _expressly_ claimed to impose duties on these colonies; not for the regulation of trade; not for the preservation or promotion of a mutually beneficial intercourse between the several constituent parts of the empire, heretofore the _sole objects_ of parliamentary institutions; _but for the single purpose of levying money upon us_. this i call an[10] innovation; and a most dangerous innovation. it may perhaps be objected, that _great-britain_ has a right to lay what duties she pleases upon her[11] exports, and it makes no difference to us, whether they are paid here or there. [10] it is worthy observation how quickly subsidies, granted in forms usual and accustomable (tho' heavy) are borne; such a power hath use and custom. on the other side, what discontentment and disturbances subsidies formed on new moulds do raise (such an inbred hatred novelty doth hatch) is evident by examples of former times. lord coke's 2d institute, p. 33. [11] some people, whose minds seem incapable of uniting two ideas, think that great-britain has the same right to impose duties on the exports to these colonies, as on those to spain and portugal, &c. such persons attend so much to the idea of exportation, that they entirely drop that of the connection between the mother country and her colonies. if great-britain had always claimed, and exercised an authority to compel spain and portugal to import manufactures from her only, the cases would be parallel: but as she never pretended to such a right, they are at liberty to get them where they please; and if they chuse to take them from her, rather than from other nations, they voluntary consent to pay the duties imposed on them. to this i answer. these colonies require many things for their use, which the laws of _great-britain_ prohibit them from getting any where but from her. such are paper and glass. that we may be legally bound to pay any _general_ duties on these commodities, relative to the regulation of trade, is granted; but we being _obliged by her laws_ to take them from great britain, any _special_ duties imposed on their exportation _to us only, with intention to raise a revenue from us only_, are as much _taxes_ upon us, as those imposed by the _stamp-act_. what is the difference in _substance_ and _right_, whether the same sum is raised upon us by the rates mentioned in the stamp-act, on the _use_ of the paper, or by these duties, on the _importation_ of it. it is nothing but the edition of a former book, with a new title page. suppose the duties were made payable in _great-britain_? it signifies nothing to us, whether they are to be paid here or there. had the _stamp-act_ directed, that all the paper should be landed in _florida_, and the duties paid there, before it was brought to the _british colonies_, would the act have raised less money upon us, or have been less destructive of our rights? by no means: for as we were under a necessity of using the paper, we should have been under the necessity of paying the duties. thus, in the present case, a like _necessity_ will subject us, if this act continues in force, to the payment of the duties now imposed. why was the _stamp-act_ then so pernicious to freedom? it did not enact, that every man in the colonies _should_ buy a certain quantity of paper--no: it only directed, that no instrument of writing should be valid in law, if not made on stamp paper, &c. the makers of that act knew full well, that the confusions that would arise upon the disuse of writings would compel the colonies to use the stamp paper, and therefore to pay the taxes imposed. for this reason the _stamp-act_ was said to be a law that would execute itself. for the very same reason, the last act of parliament, if it is granted to have any force here, will execute itself, and will be attended with the very same consequences to _american liberty_. some persons perhaps may say, that this act lays us under no necessity to pay the duties imposed, because we may ourselves manufacture the articles on which they are laid: whereas by the stamp-act no instrument of writing could be good, unless made on british paper, and that too stampt. such an objection amounts to no more than this, that the injury resulting to these colonies, from the total disuse of british paper and glass, will not be _so afflicting_ as that which would have resulted from the total disuse of writing among them; for by that means even the stamp-act might have been eluded. why then was it universally detested by them as slavery itself? because it presented to these devoted provinces nothing but a choice of calamities, imbittered by indignities, each of which it was unworthy of freemen to bear. but is no injury a violation of right but the _greatest_ injury? if the eluding the payment of the duties imposed by the stamp-act, would have subjected us to a more dreadful inconvenience, than the eluding the payment of those imposed by the late act; does it therefore follow, that the last is no violation of our rights, though it is calculated for the same purpose that the other was, that is, _to raise money upon us_, without our consent? this would be making _right_ to consist, not in an exemption from _injury_, but from a certain _degree of injury_. but the objectors may further say, that we shall sustain no injury at all by the disuse of british paper and glass. we might not, if we could make as much as we want. but can any man, acquainted with america, believe this possible? i am told there are but two or three _glass-houses_ on this continent, and but very few _paper-mills_; and suppose more should be erected, a long course of years must elapse, before they can be brought to perfection. this continent is a country of planters, farmers, and fishermen; not of manufacturers. the difficulty of establishing particular manufactures in such a country, is almost insuperable, for one manufacture is connected with others in such a manner, that it may be said to be impossible to establish one or two, without establishing several others. the experience of many nations may convince us of this truth. inexpressible therefore must be our distresses in evading the late acts, by the disuse of british paper and glass. nor will this be the extent of our misfortunes, if we admit the legality of that act. _great-britain_ has prohibited the manufacturing iron and steel in these colonies, without any objection being made to her right of doing it. the like right she must have to prohibit any other manufacture among us. thus she is possessed of an undisputed _precedent_ on that point. this authority, she will say, is founded on the _original intention_ of settling these colonies; that is, that she should manufacture for them, and that they should supply her with materials. the _equity_ of this policy, she will also say, has been universally acknowledged by the colonies, who never have made the least objection to statutes for that purpose; and will further appear by the _mutual benefits_ flowing from this usage, ever since the settlement of these colonies. our great advocate, mr. pitt, in his speeches on the debate concerning the repeal of the _stamp-act_, acknowledged, that great-britain could restrain our manufactures. his words are these--"this kingdom, as the supreme governing and legislative power, has _always_ bound the colonies by her regulations and _restrictions_ in trade, in navigation, in _manufactures_----in every thing, _except that of taking their money out of their pockets_, without their consent." again he says, "we may bind their trade, confine their manufactures, and exercise every power whatever, except that of taking money out of their pockets, without their consent." here then, let my countrymen, rouse yourselves, and behold the ruin hanging over their heads. if they once admit, that great-britain may lay duties upon her exportations to us, _for the purpose of levying money on us only_, she then will have nothing to do, but to lay those duties on the articles which she prohibits us to manufacture--and the tragedy of american liberty is finished. we have been prohibited from procuring manufactures, in all cases, any where but from great-britain, (excepting linens, which we are permitted to import directly from ireland). we have been prohibited, in some cases, from manufacturing for ourselves; we are therefore exactly in the situation of a city besieged, which is surrounded by the works of the besiegers in every part _but one_. if _that_ is closed up, no step can be taken, _but to surrender at discretion_. if great-britain can order us to come to her for necessaries we want, and can order us to pay what taxes she pleases before we take them away, or when we have them here, we are as abject slaves, as france and poland can shew in wooden shoes, and with uncombed hair.[12] [12] the peasants of france wear wooden shoes; and the vassals of poland are remarkable for matted hair, which never can be combed. perhaps the nature of the necessities of the dependant states, caused by the policy of a governing one, for her own benefit, may be elucidated by a fact mentioned in history. when the carthaginians were possessed of the island of sardinia, they made a decree, that the sardinians should not get corn, any other way than from the carthaginians. then, by imposing any duties they would, they drained from the miserable sardinians any sums they pleased; and whenever that oppressed people made the least movement to assert their liberty, their tyrants starved them to death or submission. this may be called the most perfect kind of political necessity. from what has been said, i think this uncontrovertible conclusion may be deduced, that when a ruling state obliges a dependant state to take certain commodities from her alone, it is implied in the nature of that obligation; and is essentially requisite to give it the least degree of justice; and is inseparably united with it, in order to preserve any share of freedom to the dependant state; that those commodities should never be loaded with duties for the sole purpose of levying money on the dependant state. the place of paying the duties imposed by the late act, appears to me therefore to be totally immaterial. the single question is, whether the parliament can legally impose duties to be paid _by the people of these colonies only_ for the sole purpose of raising a revenue, _on commodities which she obliges us to take from her alone_; or, in other words, whether the parliament can legally take money out of our pockets, without our consent. if they can, our boasted liberty is but _vox et præterea nihil._ a sound, and nothing else. a farmer. letter iii. _beloved countrymen_, i rejoice to find, that my two former letters to you, have been generally received with so much favour by such of you whose sentiments i have had an opportunity of knowing. could you look into my heart, you would instantly perceive an ardent affection for your persons, a zealous attachment to your interests, a lively resentment of every insult and injury offered to your honour or happiness, and an inflexible resolution to assert your rights, to the utmost of my weak power, to be the only motives that have engaged me to address you. i am no further concerned in any thing affecting america, than any one of you, and when liberty leaves it i can quit it much more conveniently than most of you: but while divine providence, that gave me existence in a land of freedom, permits my head to think, my lips to speak, and my hand to move, i shall so highly and gratefully value the blessing received, as to take care that my silence and inactivity shall not give my implied assent to any act degrading my brethren and myself from the birthright wherewith heaven itself "_hath made us free_.[13]" [13] gal. v. 1. sorry i am to learn, that there are some few persons, shake their heads with solemn motion, and pretend to wonder what can be the meaning of these letters. "great-britain, they say, is too powerful to contend with; she is determined to oppress us; it is in vain to speak of right on one side, when there is power on the other; when we are strong enough to resist, we shall attempt it; but now we are not strong enough, and therefore we had better be quiet; it signifies nothing to convince us that our rights are invaded, when we cannot defend them, and if we should get into riots and tumults about the late act, it will only draw down heavier displeasure upon us." what can such men design? what do their grave observations amount to, but this--"that these colonies, totally regardless of their liberties, should commit them, with humble resignation, to _chance_, _time_, and the tender mercies of _ministers_." are these men ignorant, that usurpations, which might have been successfully opposed at first, acquire strength by continuance, and thus become irresistible? do they condemn the conduct of these colonies, concerning the _stamp-act_? or have they forgot its successful issue? ought the colonies at that time, instead of acting as they did, to have trusted for relief, to the fortuitous events of futurity? if it is needless "to speak of rights" now, it was as needless then. if the behaviour of the colonies was prudent and glorious then, and successful too; it will be equally prudent and glorious to act in the same manner now, if our rights are equally invaded, and may be as successful. therefore it becomes necessary to enquire, whether "our rights _are_ invaded." to talk of "defending" them, as if they could be no otherwise "defended" than by arms, is as much out of the way, as if a man having a choice of several roads to reach his journey's end, should prefer the worst, for no other reason, than because it is the worst. as to "riots and tumults," the gentlemen who are so apprehensive of them, are much mistaken, if they think, that grievances cannot be redressed without such assistance. i will now tell the gentlemen, what is "the meaning of these letters." the meaning of them is, to convince the people of these colonies, that they are at this moment exposed to the most imminent dangers; and to persuade them immediately, vigourously, and unanimously, to exert themselves, in the most firm, but most peaceable manner for obtaining relief. the cause of liberty is a cause of too much dignity, to be sullied by turbulence and tumult. it ought to be maintained in a manner suitable to her nature. those who engage in it, should breathe a sedate, yet fervent spirit, animating them to actions of prudence, justice, modesty, bravery, humanity, and magnanimity. to such a wonderful degree were the antient _spartans_, as brave and as free a people as ever existed, inspired by this happy temperature of soul, that rejecting even in their battles the use of trumpets, and other instruments for exciting heat and rage, they marched up to scenes of havock and horror, with the sound of flutes, to the tunes of which their steps kept pace--"exhibiting, as _plutarch_ says, at once a terrible and delightful sight, and proceeding with a deliberate valour, full of hope and good assurance, as if some divinity had insensibly assisted them." i hope, my dear countrymen, that you will in every colony be upon your guard against those who may at any time endeavour to stir you up, under pretences of patriotism, to any measures disrespectful to our sovereign and our mother country. hot, rash, disorderly proceedings, injure the reputation of a people as to wisdom, valour and virtue, without procuring them the least benefit. i pray god, that he may be pleased to inspire you and your posterity to the latest ages with that spirit, of which i have an idea, but find a difficulty to express: to express in the best manner i can, i mean a spirit that shall so guide you, that it will be impossible to determine, whether an _american_'s character is most distinguishable for his loyalty to his sovereign, his duty to his mother country, his love of freedom, or his affection for his native soil. every government, at some time or other, falls into wrong measures; these may proceed from mistake or passion.----but every such measure does not dissolve the obligation between the governors and the governed; the mistake may be corrected; the passion may pass over. it is the duty of the governed, to endeavour to rectify the mistake, and appease the passion. they have not at first any other right, than to represent their grievances, and to pray for redress, unless an emergency is so pressing, as not to allow time for receiving an answer to their applications which rarely happens. if their applications are disregarded, then that kind of opposition becomes justifiable, which can be made without breaking the laws, or disturbing the public peace. this consists in the prevention of the oppressors reaping advantage from their oppressions, and not in their punishment. for experience may teach them what reason did not; and harsh methods, cannot be proper, till milder ones have failed. if at length it becomes undoubted, that an inveterate resolution is formed to annihilate the liberties of the governed, the english history affords frequent examples of resistance by force. what particular circumstances will in any future case justify such resistance, can never be ascertained till they happen. perhaps it may be allowable to say, generally, that it never can be justifiable, until the people are fully convinced, that any further submission will be destructive to their happiness. when the appeal is made to the sword, highly probable it is, that the punishment will exceed the offence; and the calamities attending on war out weigh those preceding it. these considerations of justice and prudence, will always have great influence with good and wise men. to these reflections on this subject, it remains to be added, and ought for ever to be remembred; that resistance in the case of colonies against their mother country, is extremely different from the resistance of a people against their prince. a nation may change their king or race of kings, and retain their antient form of government, be gainers by changing. thus great-britain, under the illustrious house of brunswick, a house that seems to flourish for the happiness of mankind, has found a felicity, unknown in the reigns of the stuarts. but if once we are separated from our mother country, what new form of government shall we accept, or when shall we find another britain to supply our loss? torn from the body to which we are united by religion, liberty, laws, affections, relations, language, and commerce, we must bleed at every vein. in truth, the prosperity of these provinces is founded in their dependance on great-britain; and when she returns to "her old good humour, and old good nature," as lord clerendon expresses it, i hope they will always esteem it their duty and interest, as it most certainly will be, to promote her welfare by all the means in their power. we cannot act with too much caution in our disputes. anger produces anger; and differences that might be accommodated by kind and respectful behaviour, may by imprudence be changed to an incurable rage. in quarrels between countries, as well as in those between individuals, when they have risen to a certain heighth, the first cause of dissention is no longer remembred, the minds of the parties being wholly engaged in recollecting and resenting the mutual expressions of their dislike. when feuds have reached that fatal point, all considerations of reason and equity vanish; and a blind fury governs, or rather confounds all things. a people no longer regards their interest, but the gratification of their wrath. the sway of the cleon's,[14] and clodius's, the designing and detestable flatters of the prevailing passion, becomes confirmed. [14] cleon was a popular firebrand of athens and clodius of rome; each of them plunged his country into the deepest calamities. wise and good men in vain oppose the storm, and may think themselves fortunate, if, endeavouring to preserve their ungrateful fellow citizens, they do not ruin themselves. their prudence will be called baseness; their moderation, guilt; and if their virtue does not lead them to destruction, as that of many other great and excellent persons has done, they may survive, to receive from their expiring country, the mournful glory of her acknowledgment, that their councils, if regarded, would have saved her. the constitutional modes of obtaining relief, are those which i would wish to see pursued on the present occasion, that is, by petitioning of our assemblies, or, where they are not permitted to meet, of the people to the powers that can afford us relief. we have an excellent prince, in whose good dispositions towards us we may confide. we have a generous, sensible, and humane nation, to whom we may apply. they may be deceived: they may, by artful men, be provoked to anger against us; but i cannot yet believe they will be cruel or unjust; or that their anger will be implacable. let us behave like dutiful children, who have received unmerited blows from a beloved parent. let us complain to our parents; but let our complaints speak at the same time, the language of affliction and veneration. if, however, it shall happen by an unfortunate course of affairs, that our applications to his majesty and the parliament for the redress, prove ineffectual, let us then take another step, by withholding from great-britain, all the advantages she has been used to receive from us. then let us try, if our ingenuity, industry, and frugality, will not give weight to our remonstrances. let us all be united with one spirit in one cause. let us invent; let us work; let us save; let us at the same time, keep up our claims, and unceasingly repeat our complaints; but above all, let us implore the protection of that infinite good and gracious being, "by whom kings reign and princes decree justice." "_nil desperandum._" nothing is to be despaired of. a farmer. letter iv. _beloved countrymen_, an objection, i hear, has been made against what i offer in my second letter, which i would willingly clear up before i proceed. "there is," say these objectors "a material difference between the stamp-act and the late act for laying a duty on paper, &c. that justifies the conduct of those who opposed the former, and yet are willing to submit to the latter. the duties imposed by the stamp-act, were internal taxes, but the present are external, which therefore the parliament may have a right to impose."----to this i answer, with a total denial of the power of parliament to lay upon these colonies any tax whatever. this point being so important to this and to all succeeding generations, i wish to be clearly understood. to the word "tax," i annex that meaning which the constitution and history of england require to be annexed to it; that it is, an imposition on the subject for the sole purpose of levying money. in the early ages of our monarchy, the services rendered to the crown, for the general good, were personal;[15] but in progress of time, such institutions being found inconvenient, certain gifts and grants of their own property were made by the people, under the several names of aids, tallages, talks, taxes, subsidies, &c. these were made as may be collected even from the names for public service, "upon need and necessity,"[16] all these sums were levied upon the people by virtue of their voluntary gift.[17] the design of them was to support the national honour and interest. some of those grants comprehended duties arising from trade, being imports on merchandizes. these chief justice coke classes "under subsides"[18] and "parliamentary aids." they are also called "customs." but whatever the name was, they were always considered as gifts of the people to the crown, to be employed for public uses. [15] it is very worthy of remark, how watchful our wise ancestors were, least these services should be extended beyond the limits of the law. no man was bound to go out of the realm to serve, and therefore even in the conquering reign of henry v. when the martial spirit of the nation was inflamed by success to a great degree, they still carefully guarded against the establishment of illegal services. lord chief justice coke's words are these, "when this point concerning maintainance of wars out of england came in question, the commons did make their continual claim of their antient freedom and birth-right, as in the first of henry v. and 7th of henry v. &c. the commons made protest that they were not bound to the maintainance of war in scotland, ireland, calais, france, normandy, or other foreign parts, and caused their protests to be entered into the parliament roll, where they yet remain; which, in effect, agreeth with that, which upon the like occasion was made in the parliament of 25. e. 1." 2d inst. p. 528. [16] 4. inst. p. 28. [17] _rege angliæ nihiltale, nisi convocatis primis ordinibus et assentiente populo, suscipiunt. phil. comines._ these gifts entirely depending on the pleasure of the donors, were proportioned to the abilities of the several ranks of people, who gave, and were regulated by their opinion of the public necessities. thus edward i. had in his 11th year a thirteenth from the laity, a twentieth from the clergy; in his 22d year, a tenth from the laity, a sixth from london, and other corporate towns, half of their benefices from the clergy; in his 23d year, an eleventh from the barons and others, a tenth from the clergy, and a seventh from the burgesses, &c. hume's history of england. the same difference in the grants of the several ranks, is observable in other reigns. in the famous statute _de tallagio non concedendo_, the king enumerates the several classes, without whose consent he and his heirs should never set or levy any tax. "_nullum tallagium vel auxilium, per nos, vel hæredes nostros, in regno nostro ponatur seu levetur, sine voluntare et assensu archiepiscoporum, episcoporum, comitum, baronum, militum, burgensium, et aliorum liberorum de regno nostro._" 34 e. i. lord chief justice coke in his comment on these words, says, "for the quieting of the commons, and for a perpetual and constant law for ever after, both in this and other like cases, this act was made." "these words are plain without scruple; absolute without any saving." 2 coke's inst. p. 522, 523. little did the venerable judge imagine, that "other like cases" would happen, in which the spirit of this law would be despised by englishmen, the posterity of those who made it. [18] 4. inst. p. 28. commerce was at a low ebb, and most surprising instances may be produced, how little it was attended to, for a succession of ages. the terms that have been mentioned, and among the rest that of "tax," had obtained a national, parliamentary meaning, drawn from the principles of the constitution, long before any englishmen thought of regulations of trade "by imposing duties." whenever we speak of taxes among englishmen, let us therefore speak of them with reference to the intentions with which, and the principles on which they have been established. this will give certainty to our expression, and safety to our conduct: but if when we have in view the liberty of these colonies, and the influence of "taxes" laid without our consent, we proceed in any other course, we pursue a juno[19] indeed, but shall only catch a cloud. [19] the goddess of empire, in the heathen mythology. according to an ancient fable, ixion pursued her, but she escaped by a cloud which she threw in his way. in the national parliamentary sense insisted on, the word "tax"[20] was certainly understood by the congress at new-york, whose resolves may be said to form the american "bill of rights." i am satisfied that the congress was of opinion, that no impositions could be legally laid on the people of these colonies for the purpose of levying money, but by themselves or their representatives. [20] in this sense montesquieu uses the word "tax", in his 13th book of spirit of laws. the third, fourth, fifth, and sixth resolves are thus expressed. iii. "that it is inseparably essential to the freedom of a people and the undoubted right of englishmen, that no tax be imposed on them, but with their own consent, given personally or by their representatives." iv. "that the people of the colonies are not, and from their local circumstances cannot be represented in the house of commons, in great-britain." v. "that the only representatives of the people of the colonies, are the persons chosen therein by themselves; and that no taxes ever have been, or can be constitutionally imposed on them, but by their respective legislatures." vi. "that all supplies to the crown being free gifts of the people, it is unreasonable and inconsistent with the principles and spirit of the british constitution, for the people of great-britain to grant to his majesty the property of the colonies." here is no distinction made, between internal and external taxes. it is evident from the short reasoning thrown into these resolves that every imposition "to grant to his majesty the property of the colonies," was thought a "tax;" and that every such imposition if laid any other way "but with their consent, given personally, or by their representatives;" was not only "unreasonable, and inconsistent with the principles and spirit of the british constitution," but destructive "to the freedom of a people." this language is clear and important. a "tax" means an imposition to raise money. such persons therefore as speak of internal and external "taxes," i pray may pardon me, if i object to that expression as applied to the privileges and interests of these colonies. there may be external and internal impositions, founded on different principles, and having different tendencies; every "tax" being an imposition, tho' every imposition is not a "tax." but all "taxes" are founded on the same principle, and have the same tendency. "external impositions for the regulation of our trade, do not grant to his majesty the property of the colonies." they only prevent the colonies acquiring property in things not necessary, and in a manner judged to be injurious to the welfare of the whole empire. but the last statute respecting us, "grants to his majesty the property of these colonies," by laying duties on manufactures of great-britain, which they must take, and which he settled them, in order that they should take. what[21] "tax" can be more "internal" than this? here is money drawn without their consent from a society, who have constantly enjoyed a constitutional mode of raising all money among themselves. the payment of this tax they have no possible method of avoiding, as they cannot do without the commodities on which it is laid, and they cannot manufacture these commodities themselves; besides, if this unhappy country should be so lucky as to elude this act, by getting parchment enough to use in the place of paper, or reviving the antient method of writing on wax and bark, and by inventing something to serve instead of glass, her ingenuity would stand her in little stead; for then the parliament would have nothing to do, but to prohibit manufactures, or to lay a tax on hats and woollen cloths, which they have already prohibited the colonies from supplying each other with; or on instruments and tools of steel and iron, which they have prohibited the provincials from manufacturing at all[22] and then what little gold and silver they have, must be torn from their hands, or they will not be able in a short time, to get an ax[23] for cutting their firewood, nor a plough for raising their food.--in what respect therefore, i beg leave to ask, is the late act preferable to the stamp-act, or more consistent with the liberties of the colonies? "i regard them both with equal apprehension, and think they ought to be in the same manner opposed." "_habemus quidem senatus consultum--tanquam gladium in vagina repositum_" we have a statute like a sword in the scabbard. a farmer. [21] it seems to be evident, that mr. pitt, in his defence of america, during the debate concerning the repeal of the stamp-act, by "_internal taxes_" meant any duties "_for the purpose of raising a revenue_;" and by "_external taxes_," meant "_duties imposed for the regulation of trade_." his expressions are these.--"if the gentleman does not understand the difference between internal and external taxes, i cannot help it; but there is a plain distinction between taxes levied for the purposes of raising a revenue, and duties imposed for the regulation of trade, for the accommodation of the subject; altho' in the consequences, some revenue might incidentally arise from the latter." these words were in mr. pitt's reply to mr. grenville, who said he could not understand the difference between external and internal taxes. but mr. pitt in his first speech, had made no such distinction; and his meaning, when he mentions the distinction, appears to be--that by "_external taxes_," he intended impositions, for the purpose of regulating the intercourse of the colonies with others; and by "_internal taxes_," he intended impositions, for the purpose of taking money from them. in every other part of his speeches on that occasion, his words confirm this construction of his expressions. the following extracts will shew how positive and general were his assertions of our right. "it is my opinion that this kingdom has no right to lay a tax upon the colonies." "the americans are the sons not the bastards of england. taxation is no part of the governing or legislative power." "the taxes are a voluntary gift and grant of the commons alone. in legislation the three estates of the realm are alike concerned, but the concurrence of the peers and the crown to a tax, is only necessary to close with the form of a law. the gift and grant is of the commons alone." "the distinction between legislation and taxation is essentially necessary to liberty." "_the commons of america represented in their several assemblies have ever been in possession of the exercise of this, their constitutional right, of giving and granting their own money. they would have been slaves, if they had not enjoyed it._" "the idea of a virtual representation of america in this house, is the most contemptible idea that ever entered into the head of man. it does not deserve a serious refutation." he afterwards shews the unreasonableness of great-britain taxing america, thus--"when i had the honour of serving his majesty, i availed myself of the means of information, which i derived from my office: i speak therefore from knowledge. my materials were good, i was at pains to collect, to digest, to consider them: _and i will be bold to affirm that the profit to great-britain from the trade of the colonies, thro' all its branches, is two millions a year. this is the fund that carried you triumphantly thro' the last war._ the estates that were rented at two thousand pounds a year, threescore years ago, are at three thousand pounds at present. those estates sold then from fifteen to eighteen years purchase; the same may now be sold for thirty. you owe this to america. this is the price that america pays you for her protection,"--"i dare not say how much higher these profits may be augmented."--"upon the whole, i will beg leave to tell the house what is really my opinion: it is, that the stamp-act be repealed absolutely, totally, and immediately. that the reason for the repeal be assigned, because it was founded on an erroneous principle." [22] "and that pig and bar iron made in his majesty's colonies in america may be further manufactured in this kingdom, be it further enacted by the authority aforesaid, that from and after the twenty-fourth day of june, 1750, no mill or other engine for slitting or rolling of iron, or any plaiting forge to work with a tilt hammer, or any furnace for making steel, shall be erected, or after such erection continued, in any of his majesty's colonies in america." 3 geo. ii. chap. 29. sect. 9. [23] though these particulars are mentioned as being so absolutely necessary, yet perhaps they are not more so than glass, in our severe winters, to keep out the cold, from our houses; or than paper, without which such inexpressible confusion must ensue. letter v. _beloved countrymen_, perhaps the objection to the late act, imposing duties upon paper, &c. might have been safely rested on the arguments drawn from the universal conduct of parliaments and ministers, from the first existence of these colonies, to the administration of mr. grenville. what but the indisputable, the acknowledged exclusive right of the colonies to tax themselves, could be the reason, that in this long period of more than one hundred and fifty years, no statute was ever passed for the sole purpose of raising a revenue on the colonies? and how clear, how cogent must that reason be, to which every parliament and every minister, for so long a time submitted, without a single attempt to innovate? england in part of that course of years, and great britain, in other parts, was engaged in fierce and expensive wars; troubled with some tumultuous and bold parliaments; governed by many daring and wicked ministers; yet none of them ever ventured to touch the palladium of american liberty. ambition, avarice, faction, tyranny, all revered it. whenever it was necessary to raise money on the colonies, the requisitions of the crown were made, and dutifully complied with. the parliament from time to time regulated their trade, and that of the rest of the empire, to preserve their dependencies, and the connection of the whole in good order. the people of great-britain in support of their privileges, boast much of their antiquity. yet it may well be questioned, if there is a single privilege of a british subject, supported by longer, more solemn, or more uninterrupted testimony, than the exclusive right of taxation in these colonies. the people of great-britain consider that kingdom as the sovereign of these colonies, and would now annex to that sovereignty a prerogative never heard of before. how would they bear this, was the case their own? what would they think of a new prerogative claimed by the crown? we may guess what their conduct would be from the transports of passion into which they fell about the late embargo, laid to remove the most emergent necessities of state, admitting of no delay; and for which there were numerous precedents. let our liberties be treated with the same tenderness, and it is all we desire. explicit as the conduct of parliaments, for so many ages, is, to prove that no money can be levied on these colonies, by parliament for the purpose of raising a revenue; yet it is not the only evidence in our favour. every one of the most material arguments against the legality of the stamp-act operates with equal force against the act now objected to; but as they are well known, it seems unnecessary to repeat them here. this general one only shall be considered at present. that tho' these colonies are dependant on great-britain; and tho' she has a legal power to make laws for preserving that dependance; yet it is not necessary for this purpose, nor essential to the relation between a mother-country and her colonies, as was eagerly contended by the advocates for the stamp-act, that she should raise money upon them without their consent. colonies were formerly planted by warlike nations, to keep their enemies in awe; to relieve their country overburthened with inhabitants; or to discharge a number of discontented and troublesome citizens. but in more modern ages, the spirit of violence being in some measure, if the expression may be allowed, sheathed in commerce, colonies have been settled by the nations of europe for the purposes of trade. these purposes were to be attained by the colonies raising for their mother country those things which she did not produce herself; and by supplying themselves from her with things they wanted. these were the national objects in the commencement of our colonies, and have been uniformly so in their promotion. to answer these grand purposes, perfect liberty was known to be necessary; all history proving, that trade and freedom are nearly related to each other. by a due regard to this wise and just plan, the infant colonies exposed in the unknown climates, and unexplored wildernesses of this new world, lived, grew, and flourished. the parent country with undeviating prudence and virtue, attentive to the first principles of colonization, drew to herself the benefits she might reasonably expect, and preserved to her children the blessings, on which those benefits were founded. she made laws obliging her colonies to carry to her all those products which she wanted for her own use; and all those raw materials which she chose herself to work up. besides this restriction, she forbade them to procure manufactures from any other part of the globe; or even the products of european countries, which alone could rival her, without being first brought to her. in short, by a variety of laws, she regulated their trade in such a manner, as she thought most conducive to their mutual advantage, and her own welfare. a power was reserved to the crown of repealing any laws that should be enacted. the executive authority of government was all lodged in the crown and its representatives; and an appeal was secured to the crown from all judgments in the administration of justice. for all these powers established by the mother country over the colonies; for all these immense emoluments derived by her from them; for all their difficulties and distresses in fixing themselves, what was the recompense made them? a communication of her rights in general, and particularly of that great one, the foundation of all the rest--that their property, acquired with so much pain and hazard, should not be disposed of by[24] any one but themselves--or to use the beautiful and emphatic language of the sacred scriptures, "that they should sit every man under his vine, and under his fig tree, and none should make them afraid."[25] [24] the power of taxing themselves, was the privileges of which the english were, with reason, particularly jealous. hume's hist. of england. [25] mic. iv. 4. can any man of candour and knowledge deny, that these institutions, form an affinity between great-britain and her colonies, that sufficiently secures their dependance upon her? or that for her to levy taxes upon them, is to reverse the nature of things? or that she can pursue such a measure, without reducing them to a state of vassalage? if any person cannot conceive the supremacy of great britain to exist, without the power of laying taxes to levy money upon us, the history of the colonies and of great-britain since their settlement will prove the contrary. he will there find the amazing advantages arising to her from them--the constant exercise of her supremacy--and their filial submission to it, without a single rebellion, or even the thought of one, from the first emigration to this moment--and all these things have happened, without an instance of great-britain laying taxes to levy money upon them. how many british authors[26] have remonstrated that the present wealth, power and glory of their country are founded on these colonies? as constantly as streams tend to the ocean, have they been pouring the fruits of all their labours into their mother's lap. good heaven! and shall a total oblivion of former tendernesses and blessings be spread over the minds of a wise people, by the sordid acts of intriguing men, who covering their selfish projects under pretences of public good, first enrage their countrymen into a frenzy of passion, and then advance their own influence and interest, by gratifying that passion, which they themselves have barely excited? [26] it has been said in the house of commons, when complaints have been made of the decay of trade to any part of europe, "that such things were not worth regard, as great-britain was possest of colonies that could consume more of her manufactures than she was able to supply them with." "as the case now stands, we shall shew that the plantations are a spring of wealth to this nation, that they work for us, that their treasure centers all here, and that the laws have tied them fast enough to us; so that it must be through our own fault and mismanagement, if they become independent of england." davenant on the plantat. trade. "it is better that the islands should be supplied from the northern colonies than from england, for this reason; the provisions we might send to barbados, jamaica, &c. would be unimproved product of the earth, as grain of all kinds, or such product where there is little got by the improvement, as malt, salt, beef and pork; indeed the exportation of salt fish thither would be more advantageous, but the goods which we send to the northern colonies are such, whose improvement may be justly said, one with another to be near four fifths of the value of the whole commodity, as apparel, household furniture, and many other things." idem. "new-england is the most prejudicial plantation to the kingdom of england; and yet, to do right to that most industrious english colony, i must confess, that though we lose by their unlimited trade with other foreign plantations, yet we are very great gainers by their direct trade to and from old england. our yearly exportations of english manufactures, malt and other goods, from hence thither, amounting, in my opinion, to ten times the value of what is imported from thence; which calculation i do not make at random, but upon mature consideration, and peradventure, upon as much experience in this very trade, as any other person will pretend to; and therefore, whenever reformation of our correspondency in trade with that people shall be thought on, it will, in my poor judgment, require great tenderness, and very serious circumspection." sir josiah child's discourse on trade. "our plantations spend mostly our english manufactures, and those of all sorts almost imaginable, in egregious quantities, and employ near two thirds of all our english shipping; so that we have more people in england, by reason of our plantations in america." idem. sir josiah child says, in another part of his work, "that not more than fifty families are maintained in england by the refining of sugar." from whence, and from what davenant says, it is plain, that the advantages here said to be derived from the plantations by england, must be meant chiefly of the continental colonies. "i shall sum up my whole remarks on our american colonies, with this observation, that as they are a certain annual revenue of several millions sterling to their mother country, they ought carefully to be protected, duly encouraged, and every opportunity that presents, improved for their increasment and advantage, as every one they can possibly reap, must at least return to us with interest." beawes's lex merc. red. "we may safely advance, that our trade and navigation are greatly increased by our colonies, and that they really are a source of treasure and naval power to this kingdom, since they work for us, and their treasure centers here. before their settlement, our manufactures were few, and those but indifferent; the number of english merchants very small, and the whole shipping of the nation much inferior to what now belongs to the northern colonies only. these are certain facts. but since their establishment, our condition has altered for the better, almost to a degree beyond credibility. our manufactures are prodigiously encreased, chiefly by the demand for them in the plantations, where they at least take off one half, and supply us with many valuable commodities for exportation, which is as great an emolument to the mother kingdom, as to the plantations themselves." postlethwait's universal dict. of trade and commerce. "most of the nations of europe have interfered with us more or less, in divers of our staple manufactures, within half a century, not only in our woollen, but in our lead and tin manufactures, as well as our fisheries." idem. "the inhabitants of our colonies, by carrying on a trade with their foreign neighbours, do not only occasion a greater quantity of the goods and merchandizes of europe being sent from hence to them, and a greater quantity of the product of america to be sent from them thither, which would otherways be carried from, and brought to europe by foreigners, but an increase of the seamen and navigation in those parts, which is of great strength and security, as well as of great advantage to our plantations in general. and though some of our colonies are not only for preventing the importations of all goods of the same species they produce, but suffer particular planters to keep great runs of land in their possession uncultivated with design to prevent new settlements, whereby they imagine the prices of their commodities may be affected; yet if it be considered, that the markets of great-britain depend on the markets of all europe in general, and that the european markets in general depend on the proportion between the annual consumption and the whole quantity of each species annually produced by all nations; it must follow, that whether we or foreigners, are the producers, carriers, importers and exporters of american produce, yet their respective prices in each colony (the difference of freight, customs and importations considered) will always bear proportion to the general consumption of the whole quantity of each sort, produced in all colonies, and in all parts, allowing only for the usual contingencies, that trade and commerce, agriculture and manufactures are liable to in all countries." idem. "it is certain, that from the very time sir walter raleigh, the father of our english colonies, and his associates, first projected these establishments, there have been persons who have found an interest, in misrepresenting, or lessening the value of them.--the attempts were called chimerical and dangerous. afterwards many malignant suggestions were made, about sacrificing so many englishmen to the obstinate desire of settling colonies in countries which then produced very little advantage. but as these difficulties were gradually surmounted, those complaints vanished. no sooner were these lamentations over, but others arose in their stead; when it could be no longer said, that the colonies were useless, it was alledged that they were not useful enough to their mother country; that while we were loaded with taxes, they were absolutely free; that the planters lived like princes, when the inhabitants of england laboured hard for a tolerable subsistence." idem. "before the settlement of these colonies," says postlethwayt, "our manufactures were few, and those but indifferent. in those days we had not only our naval stores, but our ships from our neighbours. germany furnished us with all things made of metal, even to nails. wine, paper, linens, and a thousand other things came from france. portugal supplied us with sugar; all the products of america were poured into us from spain; and the venetians and genoese retailed to us the commodities of the east-indies, at their own price." "if it be asked, whether foreigners for what goods they take of us, do not pay on that consumption a great portion of our taxes? it is admitted they do." postlethwayt's great-britain's true system. "if we are afraid that one day or other the colonies will revolt, and set up for themselves, as some seem to apprehend, let us not drive them to a necessity to feel themselves independant of us; as they will do, the moment they perceive that they can be supplied with all things from within themselves, and do not need our assistance. if we would keep them still dependant upon their mother country, and in some respects subservient to their views and welfare, let us make it their interest always to be so." tucker on trade. "our colonies, while they have english blood in their veins, and have relations in england, and while they can get by trading with us, the stronger and greater they grow, the more this crown and kingdom will get by them; and nothing but such an arbitrary power as shall make them desperate can bring them to rebel." davenant on the plantation trade. "the northern colonies are not upon the same footing as those of the south; and having a worse soil to improve, they must find the recompence some other way, which only can be in property and dominion. upon which score, any innovations in the form of government there, should be cautiously examined, for fear of entering upon measures, by which the industry of the inhabitants may be quite discouraged. 'tis always unfortunate for a people, either by consent or upon compulsion, to depart from their primitive institutions, and those fundamental, by which they were first united together." idem. all wise states will well consider how to preserve the advantages arising from colonies, and avoid the evils. and i conceive that there can be but two ways in nature to hinder them from throwing off their dependence; one to keep it out of their power, and the other, out of their will. the first must be by force; and the latter by using them well, and keeping them employed in such productions, and making such manufactures, as will support themselves and families comfortably, and procure them wealth too, and at least not prejudice their mother country. force can never be used effectually to answer the end, without destroying the colonies themselves. liberty and encouragement are necessary to carry people thither, and to keep them together when they are there; and violence will hinder both. any body of troops considerable enough to awe them, and keep them in subjection, under the direction too of a needy governor, often sent thither to make his fortune, and at such a distance from any application for redress, will soon put an end to all planting, and leave the country to the soldiers alone, and if it did not, would eat up all the profit of the colony. for this reason, arbitrary countries have not been equally successful in planting colonies with free ones; and what they have done in that kind, has either been by force at a vast expence, or by departing from the nature of their government, and giving such privileges to planters as were denied to their other subjects. and i dare say, that a few prudent laws, and a little prudent conduct, would soon give us far the greatest share of the riches of all america, perhaps drive many of other nations out of it, or into our colonies for shelter. there are so many exigencies in all states, so many foreign wars and domestic disturbances, that these colonies can never want opportunities, if they watch for them, to do what they shall find their interest to do; and therefore we ought to take all the precautions in our power, that it shall never be their interest to act against that of their native country; an evil which can no otherways be averted, than by keeping them fully employed in such trades as will increase their own, as well as our wealth; for it is much to be feared, if we do not find employment for them, they may find it for us. the interest of the mother country is always to keep them dependent, and so employed; and it requires all her address to do it; and it is certainly more easily and effectually done by gentle and insensible methods, than by power alone. cato's letters. hitherto great-britain has been contented with her prosperity. moderation has been the rule of her conduct. but now a generous and humane people that so often has protected the liberty of strangers, is inflamed into an attempt to tear a privilege from her own children, which, if executed, must in their opinion, sink them into slaves: and for what? for a pernicious power, not necessary to her, as her own experience may convince her; but horribly dreadful and detestable to them. it seems extremely probable, that when cool, dispassionate posterity shall consider the affectionate intercourse, the reciprocal benefits, and the unsuspecting confidence, that have subsisted between these colonies and their parent country, for such a length of time, they will execrate with the bitterest curses the infamous memory of those men, whose pestilential ambition, unnecessarily, wantonly, first opened the sources of civil discord, between them; first turned their love into jealousy; and first taught these provinces, filled with grief and anxiety, to enquire, "_mens ubi materna est?_" where is maternal affection. a farmer. letter vi. _beloved countrymen,_ it may perhaps be objected against the arguments that have been offered to the public concerning the legal power of the parliament, that it has always exercised the power of imposing duties for the purposes of raising a revenue on the productions of these colonies carried to great-britain, which may be called a tax on them. to this i answer; that is no more a violation of the rights of the colonies, than their being ordered to carry certain of their productions to great-britain, which is no violation at all; it being implied in the relation between them, that the colonies should not carry such commodities to other nations, as should enable them to interfere with the mother country. the duties imposed on these commodities when brought to her, are only a consequence of her paternal right; and if the point is thoroughly examined, will be found to be laid on the people of the mother country, and not at all dangerous to the liberties of the colonies. whatever these duties are, they must proportionably raise the price of the goods, and consequently the duties must be paid by the consumers. in this light they were considered by the parliament in the 25 char. ii. chap. 7, sec. 2, which says, that the productions of the plantations were carried from one to another free from all customs "while the subjects of this your kingdom of england have paid great customs and impositions for what of them have been spent here, &c." such duties therefore can never be injurious to the liberties of the colonies. besides, if great-britain exports these commodities again, the duties will injure her own trade, so that she cannot hurt us without plainly and immediately hurting herself; and this is our check against her acting arbitrarily in this respect. it[27] may, perhaps, be further objected, "that it being granted that statutes made for regulating trade are binding upon us, it will be difficult for any persons but the makers of the laws to determine, which of them are made for the regulating of trade, and which for raising a revenue; and that from hence may arise confusion." [27] 'if any one should observe, that no opposition has been made to the legality of the 4th geo. iii. ch. 15, which is the first act of parliament that ever imposed duties on the importations in america, for the express purpose of raising a revenue there, i answer, first, that tho' that act expressly mentions the raising a revenue in america, yet it seems that it had as much in view, "the improving and securing the trade between the same and great-britain," which words are part of its title, and the preamble says, "whereas it is expedient that new provisions and regulations should be established for improving the revenue of this kingdom, and for extending and securing the navigation and commerce between great-britain and your majesty's dominions in america, which, by the peace, have been so happily extended and enlarged, &c." 'secondly, all the duties mentioned in that act, are imposed solely on the productions and manufactures of foreign countries, and not a single duty laid on any production or manufacture of our mother country. thirdly, the authority of the provincial assemblies is not therein so plainly attacked, as by the last act, which makes provision for defraying the charges of the administration of justice, and the support of civil government, 4thly, that it being doubtful whether the intention of the 4th geo. iii. ch. 15, was not as much to regulate trade as to raise a revenue, the minds of the people here were wholly engrossed by the terror of the stamp-act, then impending over them, about the intention of which they could be in no doubt.' 'these reasons so far distinguish 4th geo. iii. ch. 15, from the last act, that it is not to be wondered at, that the first should have been submitted to, though the last should excite the most universal and spirited opposition. for this will be found on the strictest examination to be, in the principle on which it is founded, and in the consequences that must attend it, if possible, more destructive than the stamp-act. it is, to speak plainly, a prodigy in our laws, not having one british feature.' to this i answer, that the objection is of no force in the present case, or such as resemble it, because the act now in question is formed expressly for the sole purpose of raising a revenue. however, supposing the design of the parliament had not been expressed, the objection seems to me of no weight, with regard to the influence, which those who may make it, might expect it ought to have on the conduct of the colonies. it is true, that impositions for raising a revenue, may be hereafter called regulations of trade, but names will not change the nature of things. indeed we ought firmly to believe, what is an undoubted truth, confirmed by the unhappy experience of many states heretofore free, that unless the most watchful attention be exerted, a new servitude may be slipped upon us under the sanction of usual and respectable terms. thus the cæsars ruined roman liberty, under the titles of tribunical and dictatorial authorities,----old and venerable dignities, known in the most flourishing times of freedom. in imitation of the same policy, james ii. when he meant to establish popery, talked of liberty of conscience, the most sacred of all liberties; and had thereby almost deceived the dissenters into destruction. all artful rulers, who strive to extend their own power beyond its just limits, endeavour to give to their attempts, as much semblance of legality as possible. those who succeed them may venture to go a little farther; for each new encroachment will be strengthened by a former, [28]"that which is now supported by examples, growing old, will become an example itself," and thus support fresh usurpations. [28] tacitus. a free people, therefore, can never be too quick in observing, nor too firm in opposing the beginnings of alterations, either in form or reality, respecting institutions formed for their security. the first leads to the last; on the other hand nothing is more certain, than that forms of liberty may be retained, when the substance is gone. in government as well as in religion, "the letter killeth, but the spirit giveth life."[29] [29] 2 cor. iii. 6. i will beg leave to enforce this remark by a few instances. the crown, by the constitution, has the prerogative of creating peers; the existence of that order in due number and dignity, is essential to the constitution; and if the crown did not exercise that prerogative, the peerage must have long since decreased so much, as to have lost its proper influence. suppose a prince for some unjust purposes, should from time to time advance many needy profligate wretches, to that rank, that all the independance of the house of lords should be destroyed, there would then be a manifest violation of the constitution, under the appearance of using legal prerogative. the house of commons claim the privilege of forming all money-bills, and will not suffer either of the other branches of the legislature to add to or alter them; contending that their power, simply extends to an acceptance or rejection of them. this privilege appears to be just; but under pretence of this just privilege, the house of commons has claimed a licence of tacking to money bills, clauses relating to many things of a totally different kind, and have thus forced them, in a manner, on the crown and lords. this seems to be an abuse of that privilege, and it may be vastly more abused. suppose a future house; influenced by some displaced discontented demagogues, in a time of danger, should tack to a money bill something so injurious to the king and peers, that they would not assent to it and yet the commons should obstinately insist on it; the whole kingdom would be exposed to ruin, _under the appearance of maintaining a valuable privilege_. in these cases it might be difficult for a while to determine, whether the king intended to exercise his prerogative in a constitutional manner or not; or whether the commons insisted on the demand factitiously, or for the public good: but surely the conduct of the crown, or of the house, would in time sufficiently explain itself. ought not the people therefore to watch to observe facts? to search into causes? to investigate designs? and have they not a right of judging from the evidence before them, on no slighter points than their liberty and happiness? it would be less than trifling, wherever a british government is established, to make use of any other arguments to prove such a right. it is sufficient to remind the reader of the day on which king william landed at torbay.[30] [30] november 5, 1688. i will now apply what has been said to the present question. the nature of any impositions laid by parliament on the colonies, must determine the design in laying them. it may not be easy in every instance to discover that design. whenever it is doubtful, i think submission cannot be dangerous; nay, it must be right: for, in my opinion, there is no privilege the colonies claim, which they ought, in duty and prudence, more earnestly to maintain and defend, than the authority of the british parliament to regulate the trade of all her dominions. without this authority, the benefits she enjoys from our commerce, must be lost to her: the blessings we enjoy from our dependance upon her, must be lost to us; her strength must decay; her glory vanish; and she cannot suffer, without our partaking in her misfortune.----"let us therefore cherish her interest as our own, and give her every thing that it becomes freemen to give or to receive." the _nature_ of any impositions she may lay upon us, may in general be known, considering how far they relate to the preserving, in due order, the connexion between the several parts of the _british_ empire. one thing we may be assured of, which is this; whenever a statute imposes duties on commodities, to be paid only upon their exportation from great-britain to these colonies, it is not a regulation of trade, but a design to raise a revenue upon us. other instances may happen, which it may not be necessary to dwell on. i hope these colonies will never, to their latest existence, want understanding sufficient to discover the intentions of those who rule over them, nor the resolution necessary for asserting their interests. they will always have the same right that all free states have, of judging when their privileges are invaded, and of using all prudent measures for preserving them. "_quocirca vivite fortes_" "_fortiaque adversis opponite pectora rebus_," wherefore keep up your spirits, and gallantly oppose this adverse course of affairs. a farmer. letter vii. _beloved countrymen_, this letter is intended more particularly for such of you, whose employment in life may have prevented your attending to the consideration of some points that are of great and public importance. for many such persons there must be even in these colonies, where the inhabitants in general are more intelligent than any other people, as has been remarked by strangers, and it seems with reason. some of you perhaps, filled as i know your breasts are with loyalty to our most excellent prince, and with love to our dear mother country, may feel yourselves inclined by the affections of your hearts, to approve every action of those whom you so much venerate and esteem. a prejudice thus flowing from goodness of disposition is amiable indeed. i wish it could be indulged without danger. did i think this possible, the error should have been adopted, not opposed by me. but in truth, all men are subject to the passions and frailties of nature; and therefore whatever regard we entertain for the persons of those who govern us, we should always remember that their conduct as rulers may be influenced by human infirmities. when any laws injurious to these colonies are passed, we cannot, with the least propriety, suppose that any injury was intended us by his majesty or the lords. for the assent of the crown and peers to law seems, as far as i am able to judge, to have been vested in them, more for their own security than for any other purpose. on the other hand, it is the particular business of the people to enquire and discover what regulations are useful for themselves, and to digest and present them in the form of bills to the other orders, to have them enacted into laws--where these laws are to bind themselves, it may be expected that the house of commons will very carefully consider them: but when they are making laws, that are not designed to bind themselves, we cannot imagine that their deliberations will be as cautious and scrupulous as in their own case.[31] [31] many remarkable instances might be produced of the extraordinary inattention with which bills of great importance, concerning these colonies, have passed in parliament; which is owing, as it is supposed, to the bills being brought in by the persons who have points to carry, so artfully framed, that it is not easy for the members in general, in the haste of business, to discover their tendency. the following instances shew the truth of this remark. when mr. grenville, in the violence of reformation and innovation, formed the 4th geo. iii. chap. 15th, for regulating the american trade, the word "ireland" was dropt in the clause relating to our iron and lumber, so that we could send these articles to no other part of europe, but to great-britain. this was so unreasonable a restriction, and so contrary to the sentiments of the legislature, for many years before, that it is surprising it should not have been taken notice of in the house. however the bill passed into a law. but when the matter was explained, this restriction was taken off in a subsequent act. i cannot postively say, how long after the taking off this restriction, as i have not the acts; but i think in less than eighteen months, another act of parliament passed, in which the word "ireland," was left out as it had been before. the matter being a second time explained, was a second time regulated. now if it be considered, that the omission mentioned struck off, with one word, so very great a part of our trade, it must appear remarkable: and equally so is the method by which rice became an enumerated commodity, and therefore could be carried to great-britain only. "the enumeration was obtained, (says mr. gee*) by one cole, a captain of a ship, employed by a company then trading to carolina; for several ships going from england thither and purchasing rice for portugal, prevented the aforesaid captain of a loading. upon his coming home, he possessed one mr. lowndes, a member of parliament (who was very frequently employed to prepare bills) with an opinion, that carrying rice directly to portugal was a prejudice to the trade of england, and privately got a clause into an act to make it an enumerated commodity; by which means he secured a freight to himself. but the consequence proved a vast loss to the nation." [* gee on trade, p. 32.] i find that this clause "privately got into an act," for the benefit of capt. cole, "to the vast loss of the nation," is foisted into the 3d anne, chap. 5, intituled, "an act for granting to her majesty a further subsidy on wines and merchandizes imported," with which it has no more connexion, than with 34th edw. i. 34th and 35th of henry viii. or the 25th of car. ii. which provide that no person shall be taxed but by himself or his representative. i am told that there is a wonderful address frequently used in carrying points in the house of commons, by persons experienced in these affairs--that opportunities are watched--and sometimes votes are past, that if all the members had been present, would have been rejected by a great majority. certain it is, that when a powerful and artful man has determined on any measure against these colonies, he has always succeeded in his attempt. perhaps therefore it will be proper for us, whenever any oppressive act affecting us is past, to attribute it to the inattention of the members of the house of commons, and to the malevolence or ambition of some factious great man, rather than to any other cause. now i do verily believe, that the late act of parliament imposing duties on paper, &c. was formed by mr. grenville and his party, because it is evidently a part of that plan, by which he endeavoured to render himself popular at home; and i do also believe that not one half of the members of the house of commons, even of those who heard it read, did perceive how destructive it was to american freedom. for this reason, as it is usual in great-britain, to consider the king's speech, as the speech of the ministry, it may be right here to consider this act as the act of a party.--perhaps i should speak more properly if i was to use another term.-there are two ways of laying taxes.--one is by imposing a certain sum on particular kinds of property, to be paid by the user or consumer, or by taxing the person at a certain sum; the other is, by imposing a certain sum on particular kinds of property to be paid by the seller. when a man pays the first sort of tax, he knows with certainty that he pays so much money for a tax. the consideration for which he pays it is remote, and it may be does not occur to him. he is sensible too that he is commanded and obliged to pay it as a tax; and therefore people are apt to be displeased with this sort of tax. the other sort of tax is submitted to in a very different manner. the purchaser of any article very seldom reflects that the seller raises his price so as to indemnify him for the tax he has paid. he knows the prices of things are continually fluctuating, and if he thinks about the tax, he thinks at the same time in all probability, that he might have paid as much, if the article he buys had not been taxed. he gets something visible and agreeable for his money, and tax and price are so confounded together, that he cannot separate, or does not chuse to take the trouble of separating them. this mode of taxation therefore is the mode suited to arbitrary and oppressive governments. the love of liberty is so natural to the human heart, that unfeeling tyrants think themselves obliged to accommodate their schemes as much as they can to the appearance of justice and reason, and to deceive those whom they resolve to destroy or oppress, by presenting to them a miserable picture of freedom, when the inestimable original is lost. this policy did not escape the cruel and rapacious nero. that monster, apprehensive that his crimes might endanger his authority and life, thought proper to do some popular acts to secure the obedience of his subjects. among other things, says [32]tacitus, "he remitted the twenty-fifth part of the price on the sale of slaves, but rather in shew than reality; for the seller being ordered to pay it, it became a part of the price to the buyer." [32] tacitus's an. b. 13. f. 31. this is the reflection of the judicious historian: but the deluded people gave their infamous emperor full credit for his false generosity. other nations have been treated in the same manner the romans were. the honest industrious germans who are settled in different parts of this continent can inform us, that it was this sort of tax that drove them from their native land to our woods, at that time the seats of perfect and undisturbed freedom. their princes inflamed by the lust of power and the lust of avarice, two furies, that the more hungry they grow, transgressed the bounds, they ought in regard to themselves, to have observed. to keep up the deception in the minds of subjects "there must be," says a very learned author[33] "some proportion between the impost and the value of the commodity; wherefore there ought not to be an excessive duty upon merchandizes of little value. there are countries in which the duty exceeds seventeen or eighteen times the value of the commodity. in this case the prince removes the illusion. his subjects plainly see they are dealt with in an unreasonable manner, which renders them most exquisitely sensible of their slavish situation." [33] montesquieu's spirit of laws, b. 13. chap. 8. from hence it appears that subjects may be ground down into misery by this sort of taxation as well as the other. they may be as much impoverished if their money is taken from them in this way, as in the other; and that it will be taken, may be more evident, by attending to a few more considerations. the merchant, or importer who pays the duty at first, will not consent to be so much money out of pocket. he, therefore, proportionably raises the price of his goods. it may then be said to be a contest between him and the person offering to buy, who shall lose the duty. this must be decided by the nature of the commodities and the purchasers demand for them. if they are mere luxuries, he is at liberty to do as he pleases, and if he buys, he does it voluntarily: but if they are absolute necessaries, or conveniences which use and custom have made requisite for the comfort of life, and which he is not permitted, by the power imposing the duty, to get elsewhere, there the seller has a plain advantage, and the buyer must pay the duty. in fact, the seller is nothing less than the collector of the tax for the power that imposed it. if these duties then are extended to necessaries and conveniences of life in general, and enormously increased, the people must at length become indeed "most exquisitely sensible of their slavish situation." their happiness, therefore, entirely depends on the moderation of those who have authority to impose the duties. i shall now apply these observations to the late act of parliament. certain duties are thereby imposed on paper and glass, &c. imported into these colonies. by the laws of _great-britain_ we are prohibited to get these articles from any other part of the world. we cannot at present, nor for many years to come, though we should apply ourselves to these manufactures with the utmost industry, make enough ourselves for our own use. that paper and glass are not only convenient, but absolutely necessary for us, i imagine very few will contend. some, perhaps, who think mankind grew wicked and luxurious as soon as they found out another way of communicating their sentiments than by speech, and another way of dwelling than in caves, may advance so whimsical an opinion. but i presume nobody will take the unnecessary trouble of refuting them. from these remarks i think it evident, that we must use paper and glass, that what we use must be _british_, and that we must pay the duties imposed unless those who sell these articles are so generous as to make us presents of the duties they pay, which is not to be expected. some persons may think this act of no consequence, because the duties are so _small_. a fatal error. that is the very circumstance most alarming to me. for i am convinced that the authors of this law, would never have obtained an act to raise so trifling a sum, as it must do, had they not intended by it to establish a _precedent_ for future use. to console ourselves with the _smallness_ of the duties, is to walk deliberately into the snare that is set for us, praising the _neatness_ of the workmanship. suppose the duties, imposed by the late act, could be paid by these distressed colonies, with the utmost ease, and that the purposes, to which they are to be applied, were the most reasonable and equitable that could be conceived, the contrary of which i hope to demonstrate before these letters are concluded, yet even in such a supposed case, these colonies ought to regard the act with abhorrence. for who are a free people? not those over whom government is reasonably and equitably exercised but those who live under a government, so _constitutionally checked_ and _controuled_, that proper provision is made against its being otherwise exercised. the late act is founded on the destruction of this constitutional security. if the parliament have a right to lay a duty of four shillings and eight pence on a hundred weight of glass, or a ream of paper, they have a right to lay a duty of any other sum on either. they may raise the duty as the author before quoted says, has been done in some countries, till it "exceeds seventeen or eighteen times the value of the commodity." in short, if they have a right to levy a tax of _one penny_ upon us, they have a right to levy a _million_ upon us. for where does their right stop? at any given number of pence, shillings, or pounds? to attempt to limit their right, after granting it to exist at all, is as contrary to reason, as granting it to exist at all is contrary to justice. if they have any right to tax us, then, whether our own money shall continue in our own pockets, or not, depends no longer on _us_, but on _them_. "there is nothing which we can call our own", or to use the words of mr. _locke_, "what property have" we "in that, which another may, by right, take, when he pleases, to himself."[34] [34] speech lord cambden lately published. these duties, which will inevitably be levied upon us, and which are now levying upon us, are expressly laid for the sole purpose of taking money. this is the true definition of taxes. they are therefore taxes. this money is to be taken from us. we are therefore taxed. those who are taxed without their own consent, given by themselves, or their representatives, are slaves.[35] we are taxed without our own consent given by ourselves, or our representatives. we are therefore----i speak it with grief----i speak it with indignation----we are slaves. "_miserabile vulgus._" a miserable tribe. a farmer. [35] this is the opinion of mr. pitt, in his speech on the stamp-act. "it is my opinion, that this kingdom has no right to lay a tax upon the colonies. the americans are the sons, not the bastards of england. the distinction between legislation and taxation is essentially necessary to liberty. the commons of america represented in their several assemblies, have ever been in possession of this their constitutional right of giving and granting their own money. they would have been slaves if they had not enjoyed it. the idea of a virtual representation of america, in this house, is the most contemptible idea that ever entered into the head of man. it does not deserve a serious refutation." that great and excellent man lord cambden, maintains the same opinion in his speech, in the house of peers, on the declaratory bill of the sovereignty of great-britain over the colonies. the following extracts so perfectly agree with, and confirm the sentiments avowed in these letters, that it is hoped the inserting them in this note will be excused. "as the affair is of the utmost importance, and in its consequences may involve the fate of kingdoms, i took the strictest review of my arguments; i re-examined all my authorities; fully determined, if i found myself mistaken, publicly to own my mistake, and give up my opinion, but my searches have more and more convinced me, that the british parliament have no right to tax the americans. nor is the doctrine new; it is as old as the constitution; it grew up with it, indeed it is its support. taxation and representation are inseparably united. god hath joined them; no british parliament can separate them; to endeavour to do it is to stab our vitals. "my position is this--i repeat it--i will maintain it to my last hour--taxation and representation are inseparable. this position is founded on the laws of nature; it is more, it is itself an eternal law of nature; for whatever is a man's own, is absolutely his own; and no man hath a right to take it from him without his consent, either expressed by himself or representative; whoever attempts to do it, attempts an injury; whoever does it, commits a robbery; he throws down the distinction between liberty and slavery." "there is not a blade of grass, in the most obscure corner of the kingdom, which is not, which was not, represented since the constitution began: there is not a blade of grass, which when taxed, was not taxed by the consent of the proprietor." "the forefathers of the americans did not leave their native country, and subject themselves to every danger and distress, to be reduced to the state of slavery. they did not give up their rights; they looked for protection, and not for chains, from their mother-country. by her they expected to be defended in the possession of their property; and not to be deprived of it: for should the present power continue, there is nothing which they can call their own, or, to use the words of mr. locke, what property have they in that, which another may, by right, take, when he pleases, to him self." it is impossible to read this speech and mr. pitt's, and not be charmed with the generous zeal for the rights of mankind, that glows in every sentence. these great and good men, animated by the subject they speak upon, seem to rise above all the former glorious exertions of their abilities. a foreigner might be tempted to think they are americans, asserting with all the ardour of patriotism, and all the anxiety of apprehension, the cause of their native land, and not britons striving to stop their mistaken countrymen from oppressing others. there reasoning is not only just; it is "vehement," as mr. hume says of the eloquence of demosthenes, "'tis disdain, anger, boldness, freedom, involved in a continual stream of argument." hume's essay on eloquence. letter viii. _beloved countrymen_, in my opinion, a dangerous example is set in the last act relating to these colonies. the power of parliament to levy money upon us for raising a revenue, is therein avowed and exerted. regarding the act on this single principle, i must again repeat, and i think it my duty to repeat, that to me it appears to be unconstitutional. no man, who considers the conduct of parliament since the repeal of the stamp-act, and the disposition of many people at home, can doubt, that the chief object of attention there, is, to use mr. grenville's expression, "providing that the dependance and obedience of the colonies be asserted and maintained." under the influence of this notion, instantly on repealing the stamp-act, an act passed, declaring the power of parliament to bind these colonies in all cases whatever. this, however, was only planting a barren tree, that cast a shade indeed over the colonies, but yielded no fruit. it being determined to enforce the authority on which the stamp-act was founded, the parliament having never renounced the right, as mr. pitt advised them to do; and it being thought proper to disguise that authority in such a manner, as not again to alarm the colonies; some little time was required to find a method, by which both these points should be united. at last the ingenuity of mr. greenville and his party accomplished the matter, as it was thought, in "an act for granting certain duties in the british colonies and plantations in america, for allowing drawbacks, &c. which is the title of the act laying duties on paper, &c." the parliament having several times before imposed duties to be paid in america, it was expected no doubt, that the repetition of such a measure would be passed over as an usual thing. but to have done this, without expressly asserting and maintaining "the power of parliament to take our money without our consent," and to apply it as they please, would not have been sufficiently declarative of its supremacy, nor sufficiently depressive of american freedom. therefore it is, that in this memorable act we find it expressly "provided" that money shall be levied upon us without our consent, for purposes, that render it, if possible, more dreadful than the stamp-act. that act, alarming as it was, declared, the money thereby to be raised, should be applied "towards defraying the expences of defending, protecting and securing the british colonies and plantations in america:" and it is evident from the whole act, that by the word "british" were intended colonies and plantations settled by british people, and not generally, those subject to the british crown. that act therefore seemed to have something gentle and kind in its intention, and to aim only at our own welfare: but the act now objected to, imposes duties upon the british colonies, "to defray the expences of defending, protecting and securing his majesty's dominions in america." what a change of words! what an incomputable addition to the expences intended by the stamp-act! "his majesty's dominions" comprehended not only the british colonies; but also the conquered provinces of canada and florida, and the british garrisons of nova-scotia; for these do not deserve the name of colonies. what justice is there in making us pay for "defending, protecting and securing" these places? what benefit can we, or have we ever derived from them? none of them was conquered for us; nor will "be defended, protected and secured" for us. in fact, however advantageous the subduing or keeping any of these countries may be to great-britain, the acquisition is greatly injurious to these colonies. our chief property consists in lands. these would have been of a much greater value, if such prodigious additions had not been made to the british territories on this continent. the natural increase of our own people, if confined within the colonies, would have raised the value still higher and higher, every fifteen or twenty years. besides, we should have lived more compactly together, and have been therefore more able to resist any enemy. but now the inhabitants will be thinly scattered over an immense region, as those who want settlements, will chuse to make new ones, rather than pay great prices for old ones. these are the consequences to the colonies of the hearty assistance they gave to great-britain in the late war.----a war, undertaken solely for her own benefit. the objects of it were, the securing to herself the rich tracts of land on the back of these colonies, with the indian trade, and nova-scotia with the fishery. these, and much more has that kingdom gained; but the inferior animals that hunted with the lion, have been amply rewarded for all the sweat and blood their loyalty cost them, by the honour of having sweated and bled in such company. i will not go so far as to say, that canada and nova-scotia are curbs on new-england; the chain of forts through the back woods, on the middle provinces; and florida, on the rest: but i will venture to say, that if the products of canada, nova-scotia and florida, deserve any consideration, the two first of them are only rivals of our northern colonies and the other of our southern. it has been said, that without the conquest of these countries, the colonies could not have been "protected, defended, and secured;" if that is true, it may with as much propriety be said, that great-britain could not have been "defended, protected, and secured" without that conquest: for the colonies are parts of her empire, which it is as much concerns her as them to keep out of the hands of any other power. but these colonies when they were much weaker, defended themselves, before this conquest was made; and could again do it, against any that might properly be called their enemies. if france and spain indeed should attack them, as members of the british empire perhaps they might be distressed; but it would be in a british quarrel. the largest account i have seen of the number of people in canada, does not make them exceed 90,000. florida can hardly be said to have any inhabitants----it is computed that there are in our colonies, 3,000,000.--our force therefore must encrease with a disproportion to the growth of their strength, that would render us very safe. this being the state of the case, i cannot think it just, that these colonies, labouring under so many misfortunes, should be loaded with taxes, to maintain countries not only not useful, but hurtful to them. the support of canada and florida cost yearly, it is said, half a million sterling. from hence we may make some guess of the load that is to be laid upon us; for we are not only to "defend, protect, and secure" them, but also to make "an adequate provision for defraying the charge of the administration of justice and the support of civil government, in such provinces where it shall be found necessary." not one of the provinces of canada, nova-scotia, or florida, has ever defrayed these expences within itself: and if the duties imposed by the last statute are collected, all of them together, according to the best information i can get, will not pay one-quarter as much as pennsylvania alone. so that the british colonies are to be drained of the rewards of their labour, to cherish the scorching sands of florida, and the icy rocks of canada and nova-scotia, which never will return to us one farthing that we send to them. great-britain----i mean the ministry in great-britain, has cantoned canada and florida out into five or six governments, and may form as many more. she now has fourteen or fifteen regiments on this continent; and may send over as many more. to make "an adequate provision" for all these expences, is, no doubt, to be the inheritance of the colonies. can any man believe that the duties upon paper, &c. are the last that will be laid for these purposes? it is in vain to hope, that because it is imprudent to lay duties on the exportation of manufactures from a mother country to colonies, as it may promote manufactures among them, that this consideration will prevent them. ambitious, artful men have made the measure popular, and whatever injustice or destruction will attend it in the opinion of the colonists, at home it will be thought just and salutary.[36] [36] "so credulous, as well as obstinate, are the people in believing every thing, which flatters their prevailing passion." hume's hist. of england. the people of great-britain will be told, and they have been told, that they are sinking under an immense debt--that great part of this debt has been contracted in defending the colonies--that these are so ungrateful and undutiful, that they will not contribute one mite to its payment--nor even to the support of the army now kept up for their "protection and security"--that they are rolling in wealth, and are of so bold and republican a spirit, that they are aiming at independence--that the only way to retain them in "obedience" is to keep a strict watch over them, and to draw off part of their riches in taxes--and that every burden laid upon them is taking off so much from great-britain--these assertions will be generally believed, and the people will be persuaded that they cannot be too angry with their colonies, as that anger will be profitable to themselves. in truth, great-britain alone receives any benefit from canada, nova-scotia, and florida; and therefore she alone ought to maintain them.--the old maxim of the law is drawn from reason and justice, and never could be more properly applied, than in this case. "_qui sentit, commodum, sentire debet et onus._" they who feel the benefit, ought to feel the burden. a farmer. letter ix. _beloved countrymen_, i have made some observations on the purposes for which money is to be levied upon us by the late act of parliament. i shall now offer to your consideration some further reflections on that subject; and, unless i am greatly mistaken, if these purposes are accomplished, according to the exprest intention of the act, they will be found effectually to supersede that authority in our respective assemblies, which is most essential to liberty. the question is not whether some branches shall be lopt off--the ax is laid to the root of the tree; and the whole body must infallibly perish, if we remain idle spectators of the work. no free people ever existed, or ever can exist, without, keeping, to use a common but strong expression, "the purse strings" in their own hands. where this is the case, they have a constitutional check upon the administration, which may thereby be brought into order without violence: but where such a power is not lodged in the people, oppression proceeds uncontrouled in its career, till the governed, transported into rage, seeks redress in the midst of blood and confusion. the elegant and ingenious mr. hume, speaking of the anglo-norman government, says "princes and ministers were too ignorant to be themselves sensible of the advantages attending an equitable administration; and there was no established council or assembly which could protect the people, and, by withdrawing supplies, regularly and peaceably admonish the king of his duty, and ensure the execution of the laws." thus this great man, whose political reflections are so much admired, makes this power one of the foundations of liberty. the english history abounds with instances, proving that this is the proper and successful way to obtain redress of grievances. how often have kings and ministers endeavoured to throw off this legal curb upon them, by attempting to raise money by a variety of inventions, under pretence of law, without having recourse to parliament? and how often have they been brought to reason, and peaceably obliged to do justice, by the exertion of this constitutional authority of the people, vested in their representatives? the inhabitants of these colonies have on numberless occasions, reaped the benefits of this authority lodged in their assemblies. it has been for a long time, and now is, a constant instruction to all governors, to obtain a permanent support for the officers of government. but as the author of the administration of the colonies says, "this order of the crown is generally, if not universally, rejected by the legislatures of the colonies." they perfectly know how much their grievances would be regarded, if they had no other method of engaging attention, than by complaining. those who rule, are extremely apt to think well of the constructions made by themselves, in support of their own power. these are frequently erroneous and pernicious to those they govern--dry remonstrances, to shew that such constructions are wrong and oppressive, carry very little weight with them, in the opinion of persons, who gratify their own inclinations in making these constructions. they cannot understand the reasoning that opposes their power and desire: but let it be made their interest to understand such reasoning--and a wonderful light is instantly thrown on the matter; and then rejected remonstrances become as clear as "proof of holy writ."[37] [37] shakespeare. the three most important articles, that our assemblies, or any legislatures can provide for, are, first the defence of the society: secondly--the administration of justice: and, thirdly, the support of civil government. nothing can properly regulate the expence of making provision for these occasions, but the necessities of the society; its abilities; the conveniency of the modes of levying money among them; the manner in which the laws have been executed; and the conduct of the officers of government; all which are circumstances that cannot possibly be properly known, but by the society itself; or, if they should be known, will not, probably, be properly considered, but by that society. if money may be raised upon us, by others, without our consent, for our "defence," those who are the judges in levying it, must also be the judges in applying it. of consequence, the money said to be taken from us for our defence, may be employed to our injury. we may be chained in by a line of fortifications: obliged to pay for building and maintaining them; and be told that they are for our defence. with what face can we dispute the fact, after having granted, that those who apply the money, had a right to levy it; for, surely, it is much easier for their wisdom to understand how to apply it in the best manner, than how to levy it in the best manner. besides, the right of levying is of infinitely more consequence, than that of applying it. the people of england, that would burst out into fury, if the crown should attempt to levy money by its own authority, have assigned to the crown the application of money. as to "the administration of justice"--the judges ought, in a well regulated state, to be equally independant of the legislative powers. thus, in england, judges hold their commissions from the crown "during good behaviour;" and have salaries, suitable to their dignity, settled on them by parliament. the purity of the courts of law, since this establishment, is a proof of the wisdom with which it was made. but, in these colonies, how fruitless has been every attempt to have the judges appointed during good behaviour; yet whoever considers the matter will soon perceive, that such commissions are beyond all comparison more necessary in these colonies, than they are in england. the chief danger to the subject there, arose from the arbitrary designs of the crown; but here, the time may come, when we may have to contend with the designs of the crown, and of a mighty kingdom. what then will be our chance, when the laws of life and death, are to be spoken by judges, totally dependant on that crown and kingdom--sent over, perhaps, from thence--filled with british prejudice--and backed by a standing army, supported out of our own pockets, to "assert and maintain" our own "dependance and obedience." but supposing, that through the extreme lenity that will prevail in the government, through all future ages, these colonies never will behold any thing like the campaign of chief justice jeffereys, yet what innumerable acts of injustice may be committed, and how fatally may the principles of liberty be sapped by a succession of judges utterly independant of the people? before such judges, the supple wretches, who cheerfully join in avowing sentiments inconsistent with freedom, will always meet with smiles: while the honest and brave men, who disdain to sacrifice their native land to their own advantage, but on every occasion, boldly vindicate her cause, will constantly be regarded with frowns. there are two other considerations, relating to this head, that deserve the most serious attention. by the late act the officers of the customs are impowered "to enter into any house, warehouse, shop, cellar, or other place, in the british colonies or plantations in america, to search for, or seize prohibited or unaccustomed goods," &c. on "writs granted by the inferior or supreme court of justice, having jurisdiction within such colony or plantation respectively." if we only reflect that the judges of these courts are to be _during pleasure_--that they are to have "_adequate provision_" made for them, which is to continue during their _complisant behaviour_--that they may be stranger to these colonies--what an engine of oppression may this authority be in such hands? i am well aware that writs of this kind may be granted at home, under the seal of the court of exchequer: but i know also that the greatest asserters of the rights of englishmen, have always strenuously contended, that such a power was dangerous to freedom, and expressly contrary to the common law, which ever regarded a man's house, as his castle, or a place of perfect security. if such a power is in the least degree dangerous there, it must be utterly destructive to liberty here.--for the people there have two securities against the undue exercise of this power by the crown, which are wanting with us, if the late act takes place. in the first place, if any injustice is done there, the person injured may bring his action against the offender, and have it tried by independant judges, who are[38] no parties in committing the injury. here he must have it tried before dependant judges, being the men who granted the writ. [38] the writs for searching houses in england are to be granted under the seal of the court of exchequer, according to the statute--and that seal is kept by the chancellor of the exchequer. 4 inst. to say that the cause is to be tried by a jury can never reconcile men, who have any idea of freedom to such a power.--for we know, that sheriffs in almost every colony on this continent, are totally dependant on the crown; and packing of juries has been frequently practiced even in the capital of the british empire. even if juries are well inclined, we have too many instances of the influence of overbearing unjust judges upon them. the brave and wise men who accomplished the revolution, thought the independency of judges essential to freedom. the other security which the people have at home, but which we shall want here, is this.--if this power is abused there, the parliament, the grand resource of the opprest people, is ready to afford relief. redress of grievances must precede grants of money. but what regard can we expect to have paid to our assemblies, when they will not hold even the puny privilege of french parliaments----that of registering the edicts, that take away our money, before they are put in execution. the second consideration above hinted at, is this--there is a confusion in our laws that is quite unknown in great-britain. as this cannot be described in a more clear or exact manner, than has been done by the ingenious author of the history of new-york, i beg leave to use his words. "the state of our laws opens a door to much controversy. the uncertainty which respect them, renders property precarious, and greatly exposes us to the arbitrary decision of unjust judges. the common law of england is generally received, together with such statutes, as were enacted before we had a legislature of our own; but our courts exercise a sovereign authority, in determining what parts of the common and statute law ought to be extended: for it must be admitted, that the difference of circumstances necessarily requires us, in some cases, to reject the determination of both. in many instances they have also extended even acts of parliament, passed since we had a distinct legislature, which is greatly adding to our confusion. the practice of our courts is no less uncertain than the law. some of the english rules are adopted, others rejected. two things therefore seem to be absolutely necessary for the public security. first the passing an act for settling the extent of the english laws. secondly, that the courts ordain a general set of rules for the regulation of the practice." how easy will it be under this "state of our laws" for an artful judge to act in the most arbitrary manner, and yet cover his conduct under specious pretences, and how difficult will it be for the injured people to obtain redress, may be readily perceived. we may take a voyage of three thousand miles to complain; and after the trouble and hazard we have undergone, we may be told, that the collection of the revenue and maintenance of the prerogative, must not be discouraged.----and if the misbehaviour is so gross as to admit of no justification, it may be said that it was an error in judgment only, arising from the confusion of our laws, and the zeal of the king's servants to do their duty. if the commissions of judges are during the pleasure of the crown, yet if their salaries are during the pleasure of the people, there will be some check upon their conduct. few men will consent to draw on themselves the hatred and contempt of those among whom we live, for the empty honour of being judges. it is the sordid love of gain that tempts men to turn their backs on virtue, and pay their homage where they ought not. as to the third particular, the "support of civil government," few words will be sufficient. every man of the least understanding must know, that the executive power may be exercised in a manner so disagreeable and harassing to the people, that it is absolutely requisite, they should be enabled by the gentlest method which human policy has yet been ingenious enough to invent, that is by the shutting their hands, to "admonish" (as mr. hume says) certain persons "of their duty." what shall we now think, when, upon looking into the late act, we find the assemblies of these provinces thereby stript of their authority on these several heads? the declared intention of that act is, "that a revenue should be raised in his majesty's dominions in america, for making a more certain and adequate provision for defraying the charge of the administration of justice, and the support of civil government, in such provinces where it shall be found necessary; and towards further defraying the expences of defending, protecting, and securing the said dominions," &c. let the reader pause here one moment, and reflect--whether the colony in which he lives, has not made such "certain and adequate provisions" for these purposes, as is by the colony judged suitable to its abilities, and all other circumstances. then let him reflect--whether, if this act takes place, money is not to be raised on that colony without its consent to make provision for these purposes, which it does not judge to be suitable to its abilities, and all other circumstances. lastly, let him reflect--whether the people of that country are not in a state of the most abject slavery, whose property may be taken from them under the notion of right, when they have refused to give it. for my part, i think i have good reason for vindicating the honour of the assemblies on this continent, by publicly asserting, that they have made as "certain and adequate provision" for the purposes above-mentioned, as they ought to have made; and that it should not be presumed, that they will not do it hereafter. why then should these most important truths be wrested out of their hands? why should they not now be permitted to enjoy that authority, which they have exercised from the first settlement of these colonies? why should they be scandalized by this innovation, when their respective provinces are now, and will be for several years, labouring under loads of debts imposed on them for the very purposes now spoken of? why should the inhabitants of all these colonies be with the utmost indignity treated, as a herd of despicable wretches, so utterly void of common sense, that they will not even make "adequate provision" for the "administration of justice" and "the support of civil government" among them, for their "own defence"--though without such "provision" every people must inevitably be overwhelmed with anarchy and destruction? is it possible to form an idea of slavery more complete, more miserable, more disgraceful, than that of a people, where justice is administered, government exercised, and a standing army maintained, at the expence of the people, and yet without the least dependance upon them? if we can find no relief from this infamous situation, let mr. grenville set his fertile fancy again to work, and as by one exertion of it, he has stripped us of our property and liberty, let him by another deprive us of our understanding too, that unconscious of what we have been or are, and ungoaded by tormenting reflections, we may tamely bow down our necks with all the stupid serenity of servitude, to any drudgery, which our lords and masters may please to command.-when the "charges of the administration of justice,"--"the support of civil government;"--and "the expences of defending protecting and securing" us, are provided for, i should be glad to know upon what occasion the crown will ever call our assemblies together. some few of them may meet of their own accord, by virtue of their charters: but what will they have to do when they are met? to what shadows will they be reduced? the men, whose deliberations heretofore had an influence on every matter relating to the liberty and happiness of themselves and their constituents, and whose authority in domestic affairs, at least, might well be compared to that of roman senators, will now find their deliberations of no more consequence than those of constables.--they may perhaps be allowed to make laws for yoking of hogs, or pounding of stray cattle. their influence will hardly be permitted to extend so high as the keeping roads in repair, as that business may more properly be executed by those who receive the public cash. one most memorable example in history is so applicable to the point now insisted on, that it will form a just conclusion of the observations that have been made. spain was once free. their _cortes_ resembled our parliament. no money could be raised on the subject, without their consent. one of their kings having received a grant from them to maintain a war against the moors, desired, that if the sum which they had given, should not be sufficient, he might be allowed for that emergency only, to have more money, without assembling the _cortes_. the request was violently opposed by the best and wisest men in the assembly. it was however, complied with by the votes of a majority; and this single concession was a precedent for other concessions of the like kinds, until, at last, the crown obtained a general power for raising money in cases of necessity. from that period the _cortes_ ceased to be useful, and the people ceased to be free. _venienti occurrite morbo._ oppose a disease at its beginning.- a farmer. letter x. _beloved countrymen_, the consequences, mentioned in the last letter, will not be the utmost limits of our misery and infamy. we feel too sensibly that any[39] ministerial measures, relating to these colonies, are soon carried successfully thro' the parliament. certain prejudices operate there so strongly against us, that it might justly be questioned, whether all the provinces united, will ever be able effectually to call to an account, before the parliament, any minister who shall abuse the power by the late act given to the crown in america. he may divide the spoils torn from us, in what manner he pleases; and we shall have no way of making him responsible. if he should order, that every governor, should have a yearly salary of 5000_l._ sterling, every chief justice of 3000_l._ every inferior officer in proportion; and should then reward the most profligate, ignorant, or needy dependants on himself, or his friends with places of the greatest trust because they were of the greatest profit, this would be called an arrangement in consequence of the "adequate provision for defraying the charge of the administration of justice, and the support of the civil government." and if the taxes should prove at any time insufficient to answer all the expences of the numberless offices, which ministers may please to create, surely the house of commons would be too "modest" to contradict a minister who should tell them, it was become necessary to lay a new tax upon the colonies, for the laudable purpose of "defraying the charges of the administration of justice, and the support of civil government" among them. thus in fact we shall be taxed by ministers.[40] [39] the gentleman must not wonder he was not contradicted, when, as the minister, he asserted the right of parliament to tax america. i know not how it is, but there is a modesty in this house, which does not chuse to contradict a minister. i wish gentlemen would get the better of that modesty. if they do not, perhaps the collective body may begin to abate of its respect for the representative. mr. pitt's speech. [40] "within this act, (_statute de tallagio non concedendo_) are all new offices erected with new fees, or old offices with new fees, for that is a tallage put upon the subject, which cannot be done without common assent by act of parliament." 2 inst. 533. we may perceive, from the example of ireland, how eager ministers are to seize upon any settled revenue, and apply it in supporting their own power.----happy are the men, and happy are the people, who grow wise by the misfortune of others. earnestly, my dear countrymen, do i beseech the author of all good gifts, that you may grow wise in this manner: and, if i may be allowed to take the liberty, i beg leave to recommend to you in general, as the best method of obtaining wisdom, diligently to study the histories of other countries. you will there find all the arts, that can possibly be practiced by cunning rulers, or false patriots among yourselves, so fully delineated, that changing names, the account would serve for your own times. it is pretty well known on this continent, that ireland has, with a regular consistence of injustice, been cruelly treated by ministers in the article of pensions; but there are some alarming circumstances relating to that subject, which i wish to have better known among us. [41]the revenue of the crown there, arises principally from the excise granted "for pay of the army, and defraying other public charges in defence and preservation of the kingdom"--from the tonnage and additional poundage granted "for protecting the trade of the kingdom at sea, and augmenting the public revenue" from the hearth-money granted, as a "public revenue for public charges and expences." there are some other branches of the revenue, concerning which there is not any express appropriation of them for public service, but which were plainly so intended. [41] an enquiry into the legality of the pensions on the irish establishment, by alexander m'auley, esq; one of the king's council, &c. of these branches of the revenue, the crown is only a trustee for the public. they are unalienable; they are inapplicable to any other purposes, but those for which they were established; and therefore are not legally chargeable with pensions. there is another kind of revenue, which is a private revenue. this is not limited to any public uses; but the crown has the same property in it, that any person has in his estate. this does not amount at the most to fifteen thousand pounds a year, probably not to seven; and it is the only revenue that can legally be charged with pensions. if ministers were accustomed to regard the rights or happiness of the people, the pensions in ireland would not exceed the sum just mentioned: but long since have they exceeded that limit, and in december, 1765, a motion was made in the house of commons in that kingdom, to address his majesty, on the great increase of pensions on the irish establishment, amounting to the sum of £.158,685 in the last two years. attempts have been made to gloss over these gross incroachments, by this specious argument,--"that expending a competent part of the public revenue in pensions, from a principle of charity or generosity, adds to the dignity of the crown, and is, therefore, useful to the public." to give this argument any weight, it must appear that the pensions proceed from "charity or generosity" only--and that it "adds to the dignity of the crown" to act directly contrary to law. from this conduct towards ireland, in open violation of law, we may easily foresee what we may expect, when a minister will have the whole revenue of america, in his own hands, to be disposed of at his own pleasure. for all the monies raised by the late act are to be "applied, by virtue of warrants under the sign manual, countersigned by the high treasurer, or any three of the commissioners of the treasury." the "residue" indeed, is to be paid "into the receipt of the exchequer, and to be disposed of by parliament." so that a minister will have nothing to do but to take care that there shall be no "residue," and he is superior to all controul. besides the burden of pensions in ireland, which have enormously encreased within these few years, almost all the offices, in that poor kingdom, have, since the commencement of the present century, and now are bestowed upon strangers. for though the merit of those born there justly raises them to places of high trust, when they go abroad, as all europe can witness, yet he is an uncommonly lucky irishman, who can get a good post in his native country. when i consider the [42]manner in which that island has been uniformly depressed for so many years past, with this pernicious particularity of their parliament continuing[43] as long as the crown pleases, i am astonished to observe such a love of liberty still animating that loyal and generous nation; and nothing can raise higher my idea of the integrity and public spirit of the people[44] who have preserved the sacred fire of freedom from being extinguished though the altar, on which it burned, has been thrown down. [42] in charles ii's time, the house of commons, influenced by some factious demagogues, were resolved to prohibit the importation of irish cattle into england. among other arguments in favour of ireland, it was insisted "that by cutting off almost entirely the trade between the kingdoms, all the natural bands of union were dissolved, and nothing remained to keep the irish in their duty, but force and violence. "the king (says mr. hume in his history of england) was so convinced of the justice of these reasons, that he used all his interest to oppose the bill, and he openly declared, that he could not give his assent to it with a safe conscience. but the commons were resolute in their purpose. and the spirit of tyranny, of which nations are as susceptible as individuals, had animated the english extremely to exert their superiority over their dependant state. no affair could be conducted with greater violence that this, by the commons. they even went so far in the preamble of the bill, as to declare the importation of irish cattle to be a nuisance. by this expression they gave scope to their passion, and at the same time, barred the king's prerogative, by which he might think himself intitled to dispense with a law so full of injustice and bad policy. the lords expunged the word, but as the king was sensible that no supply would be given by the commons, unless they were gratified in all their prejudices, he was obliged both to employ his interest with the peers to make the bill pass, and to give the royal assent to it. he could not however forbear expressing his displeasure, at the jealousy entertained against him, and at the intention which the commons discovered of retrenching his prerogative." this law brought great distress for sometime upon ireland, but it occasioned their applying with great industry to manufactures, and has proved, in the issue, beneficial to that kingdom. perhaps the same reason occasioned the "barring the king's prerogative" in the late act suspending the legislation of new-york. this we may be assured of, that we are as dear to his majesty, as the people of great-britain are. we are his subjects as well as they, and as faithful subjects; and his majesty has given too many, too constant proofs of his piety and virtue, for any man, to think it possible, that such a prince can make any unjust distinction between such subjects. it makes no difference to his majesty, whether supplies are raised in great-britain, or america: but it makes some difference, to the commons of that kingdom. to speak plainly as becomes an honest man on such important occasions, all our misfortunes are owing to a lust of power in men of abilities and influence. this prompts them to seek popularity, by expedients profitable to themselves, though ever so destructive to their country. such is the accursed nature of lawless ambition, and yet--what heart but melts at the thought?--such false detestable patriots in every nation have led their blind confiding country, shouting their applauses, into the jaws of shame and ruin. may the wisdom and goodness of the people of great-britain, save them from the usual fate of nations. [43] the last irish parliament continued thirty-three years, that is during all the late reign. the present parliament there, has continued from the beginning of this reign; and probably will continue to the end. [44] i am informed, that within these few years, a petition was presented to the house of commons in great-britain, setting forth, "that herrings were imported into ireland, from some foreign parts of the north so cheap, as to discourage the british herring fishery, and therefore praying, that some remedy might be applied in that behalf by parliament"--"that, upon this petition, the house resolved to impose a duty of two shillings sterling on every barrel of foreign herrings imported into ireland, but afterwards dropt the affair, for fear of engaging in a dispute with ireland about the right of taxing her." so much higher was the opinion, which the house entertained of the spirit of ireland, than of that of these colonies. i find in the last english papers, that the resolution and firmness with which the people of that kingdom have lately asserted their freedom, have been so alarming in great-britain, that the lord lieutenant in his speech on the 20th of last october, "recommended" to the parliament, "that such provision may be made for securing the judges in the enjoyment of their offices and appointments during their good behaviour, as shall be thought most expedient." what an important concession is thus obtained by making demands becoming freemen, with a courage and perseverance becoming freemen. in the same manner shall we unquestionably be treated, as soon as the late taxes, laid upon us, shall make posts in the "government," and the "administration of justice," here, worth the attention of persons of influence in great britain. we know enough already to satisfy us of this truth. but this will not be the worst part of our case. the principals in all great offices will reside in england, make some paltry allowance to deputies for doing the business here. let any man consider what an exhausting drain this must be upon us, when ministers are possessed of the power of affixing what salaries they please to posts, and he must be convinced how destructive the late act must be. the injured kingdom, lately mentioned, can tell us the mischiefs of absentees; and we may perceive already the same disposition taking place with us. the government of new york has been exercised by a deputy. that of virginia is now held so; and we know of a number of secretaryships, collectorships, and other offices held in the same manner. true it is, that if the people of great-britain were not too much blinded by the passions, that have been artfully excited in their breasts, against their dutiful children, the colonists, these considerations would be nearly as alarming to them as to us. the influence of the crown was thought, by wise men many years ago, too great, by reason of the multitude of pensions and places bestowed by it; these have vastly increased since[45] and perhaps it would be no difficult matter to prove that the people have decreased. [45] one of the reasons urged by that great and honest statesman, sir william temple, to charles ii. in his famous remonstrance to dissuade him from aiming at arbitrary power, was, the "king had few offices to bestow." hume's hist. of england. "though the wings of prerogative have been clipt, the influence of the crown is greater than ever it was in any period of our history. for when we consider in how many burroughs the government has the voters at command, when we consider the vast body of persons employed in the collection of the revenue in every part of the kingdom, the inconceivable number of placemen, and candidates for places in the customs, in the excise, in the post-office, in the dock-yards, in the ordnance, in the salt-office, in the stamps, in the navy and victualling offices, and in a variety of other departments; when we consider again the extensive influence of the money corporations, subscription jobbers, and contractors: the endless dependance created by the obligations conferred on the bulk of the gentlemen's families throughout the kingdom, who have relations preferred in our navy and numerous standing army; when, i say, we consider how wide, how binding, a dependance on the crown is created by the above enumerated particulars; and the great, the enormous weight and influence which the crown derives from this extensive dependance upon its favour and power; any lord in waiting, any lord of the bedchamber, any man may be appointed minister." "a doctrine to this effect is said to have been the advice of l--- h----." late news papers. surely, therefore, those who wish the welfare of their country, ought seriously to reflect what may be the consequence of such a new creation of offices, in the disposal of the crown. the army, the administration of justice, and the civil government here, with such salaries as the crown shall please to annex, will extend ministerial influence, as much beyond its former bounds, as the late war did the british dominions. but whatever the people of great-britain may think on this occasion, i hope the people of these colonies will unanimously join in this sentiment, that the late act of parliament is injurious to their liberty; and that this sentiment will unite them in a firm opposition to it, in the same manner as the dread of the stamp-act did. some persons may imagine the sums to be raised by it, are but small, and therefore may be inclined to acquiesce under it. a conduct more dangerous to freedom, as before has been observed, can never be adopted. nothing is wanted at home but a precedent, the force of which shall be established, by the tacit submission of the colonies. with what zeal was the statute erecting the post-office, and another relating to the recovery of debts in america, urged and tortured, as precedents in the support of the stamp-act, though wholly inapplicable. if the parliament succeeds in this attempt, other statutes will impose other duties. instead of taxing ourselves as we have been accustomed to do from the first settlement of these provinces; all our useful taxes will be converted into parliamentary taxes on our importations; and thus the parliament will levy upon us such sums of money as they chuse to take, without any other limitation than their pleasure. we know how much labour and care have been bestowed by these colonies, in laying taxes in such a manner, that they should be most easy to the people, by being laid on the proper articles; most equal, by being proportioned to every man's circumstances; and cheapest by the method directed for collecting them. but parliamentary taxes will be laid on us without any consideration, whether there is any eassier mode. the only point regarded will be, the certainty of levying the taxes, and not the convenience of the people, on whom they are to be levied, and therefore all statutes on this head will be such as will be most likely, according to the favourite phrase, "to execute themselves." taxes in every free state have been, and ought to be as exactly proportioned, as is possible, to the abilities of those who are to pay them. they cannot otherwise be just. even a hottentot could comprehend the unreasonableness, of making a poor man pay as much for defending the property of a rich man, as the rich man pays himself. let any person look into the late act of parliament, and he will immediately perceive, that the immense estates of lord fairfax, lord baltimore,[46] and our proprietors, which are amongst "his majesty's other dominions" to be "defended, protected and secured" by that act will not pay a single farthing of the duties thereby imposed, except lord fairfax wants some of his windows glazed. lord baltimore, and our proprietors are quite secure, as they live in england. [46] the people of maryland and pennsylvania have been engaged in the warmest disputes, in order to obtain an equal and just taxation of their proprietors estates; but the late act does more for these proprietors than they themselves would venture to demand. it totally exempts them from taxation. i mention these particular cases as striking instances, how far the late act is a deviation from that principle of justice, which has so constantly distinguished our own laws on this continent. the third consideration with our continental assemblies in laying taxes has been the method of collecting them. this has been done by a few officers under the inspection of the respective assemblies, with moderate allowances. no more was raised from the subject, than was used for the intended purposes. but by the late act, a minister may appoint as many officers as he pleases for collecting the taxes; may assign them what salaries he thinks "adequate" and they are to be subject to no inspection but his own. in short, if the late act of parliament takes effect, these colonies must dwindle down into "common corporations," as their enemies in the debates concerning the repeal of the stamp-act, strenuously insisted they were: and it is not improbable, that some future historians will thus record our fall. "the eighth year of this reign was distinguished by a very memorable event, the american colonies then submitting for the first time, to be taxed by the british parliament. an attempt of this kind had been made two years before, but was defeated by the vigorous exertions of the several provinces in defence of their liberties. their behaviour on that occasion rendered their name very celebrated for a short time all over europe; all states being extremely attentive to a dispute between great-britain and so considerable a part of her dominions. for as she was thought to be grown too powerful by the successful conclusion of the late war she had been engaged in, it was hoped by many, that as it had happened before to other kingdoms, civil discords would afford opportunities of revenging all the injuries supposed to be received from her. however the cause of dissention was removed by a repeal of the statute, that had given offense. this affair rendered the submissive conduct of the colonies so soon after, the more extraordinary; there being no difference between the modes of taxation which they opposed, and that to which they submitted, but this, that by the first, they were to be continually reminded that they were taxed, by certain marks stampt on every piece of paper or parchment, they used. the authors of that statute triumphed greatly on this conduct of the colonies, and insisted that if the people of great-britain, had persisted in enforcing it, the americans would have been in a few months so fatigued with the efforts of patriotism, that they would quickly have yielded obedience. "certain it is, that though they had before their eyes so many illustrious examples in their mother country, of the constant success attending firmness and perseverance in opposition to dangerous encroachments on liberty, yet they quietly gave up a point of the last importance. from thence the decline of their freedom began, and its decay was extremely rapid; for as money was always raised upon them by the parliament, their assemblies grew immediately useless and in a short time contemptible; and in less than one hundred years, the people sunk down into that tameness and supineness of spirit by which they still continue to be distinguished." _et majores vestros et posteros cogitate._ remember your ancestors and your posterity. a farmer. letter xi. _beloved countrymen,_ i have several times, in the course of these letters, mentioned the late act of parliament, as being the foundation of future measures injurious to these colonies; and the belief of this truth i wish to prevail, because i think it necessary to our safety. a perpetual jealousy respecting liberty, is absolutely requisite in all free states. the very texture of their constitution, in mixt governments, demands it. for the cautions with which power is distributed among the several orders, imply, that each has that share which is proper for the general welfare, and therefore, that any further imposition mull be pernicious. [47]machiavel employs a whole chapter in his discourses, to prove that a state, to be long lived, must be frequently corrected, and reduced to its first principles. but of all states that have existed, there never was any, in which this jealousy could be more proper than in these colonies. for the government here is not only mixt, but dependant, which circumstance occasions a peculiarity in its form, of a very delicate nature. [47] machiavel's discourses. book 3, chap. 1. two reasons induce me to desire, that this spirit of apprehension may be always kept up among us, in its utmost vigilance. the first is this, that as the happiness of these provinces indubitably consists in their connection with great-britain, any separation between them is less likely to be occasioned by civil discords, if every disgusting measure is opposed singly, and while it is new: for in this manner of proceeding, every such measure is most likely to be rectified. on the other hand, oppressions and dissatisfactions being permitted to accumulate--if ever the governed throw off the load, they will do more. a people does not reform with moderation. the rights of the subject therefore cannot be too often considered, explained, or asserted: and whoever attempts to do this, shews himself, whatever may be the rash and peevish reflections of pretended wisdom, and pretended duty, a friend to those who injudiciously exercise their power, as well as to them, over whom it is so exercised. had all the points of prerogative claimed by charles i. been separately contested and settled in preceding reigns, his fate would in all probability have been very different, and the people would have been content with that liberty which is compatible with regal authority. but[48] he thought, it would be as dangerous for him to give up the powers which at any time had been by usurpation exercised by the crown, as those that were legally vested in it. this produced an equal excess on the part of the people. for when their passions were excited by multiplied grievances, they thought it would be as dangerous for them, to allow the powers that were legally vested in the crown, as those which at any time had been by usurpation exercised by it. acts, that might by themselves have been upon many considerations excused or extenuated, derived a contagious malignancy and odium from other acts, with which they were connected. they were not regarded according to the simple force of each, but as parts of a system of oppression. every one therefore, however small in itself, being alarming, as an additional evidence of tyrannical designs. it was in vain for prudent and moderate men to insist, that there was no necessity to abolish royalty. nothing less than the utter destruction of monarchy, could satisfy those who had suffered, and thought they had reason to believe, they always should suffer under it. [48] the author is sensible that this is putting the gentlest construction on charles' conduct; and that is one reason why he chuses it. allowance ought to be made for the errors of those men, who are acknowledged to have been possessed of many virtues. the education of that unhappy prince, and his confidence in men not so good and wise as himself, had probably filled him with mistaken notions of his own authority, and of the consequences that would attend concessions of any kind to a people, who were represented to him as aiming at too much power. the consequences of these mutual distrusts are well known: but there is no other people mentioned in history, that i recollect, who have been so constantly watchful of their liberty, and so successful in their struggles for it, as the english. this consideration leads me to the second reason, why i "desire that the spirit of apprehension may be always kept up among us in its utmost vigilance." the first principles of government are to be looked for in human nature. some of the best writers have asserted, and it seems with good reason, that "government is founded on [49]opinion." [49] "opinion is of two kinds, viz. opinion of interest, and opinion of right. by opinion of interest, i chiefly understand, the sense of public advantage which is reaped from government; together with the persuasion, that the particular government which is established, is equally advantageous with any other, that could be easily settled." "right is of two kinds, right to power, and right to property. what prevalence opinion of the first kind has over mankind may easily be understood, by observing the attachment which all nations have to their ancient government, and even to those names which have had the sanction of antiquity. antiquity always begets the opinion of right." "it is sufficiently understood, that the opinion of right to property, is of the greatest moment in all matters of government." hume's essays. custom undoubtedly has a mighty force in producing opinion, and reigns in nothing more arbitrarily than in public affairs. it gradually reconciles us to objects even of dread and detestation; and i cannot but think these lines of mr. pope, as applicable to vice in politics, as to vice in ethics. 'vice is a monster of so horrid mien, as to be hated, needs but to be seen; yet seen too oft, familiar with her face, we first endure, then pity, then embrace.' when an act injurious to freedom has been once done, and the people bear it, the repetition of it is most likely to meet with submission. for as the mischief of the one was found to be tolerable, they will hope that of the second will prove so too; and they will not regard the infamy of the last, because they are stained with that of the first. indeed, nations in general, are not apt to think until they feel; and therefore nations in general have lost their liberty: for as violations of the rights of the governed, are commonly not only specious,[50] but small at the beginning, they spread over the multitude in such a manner, as to touch individuals but slightly. thus they are disregarded.[51] the power or profit that arises from these violations, centering in few persons, is to them considerable. for this reason the governors having in view their particular purposes, successively preserve an uniformity of conduct for attaining them. they regularly increase and multiply the first injuries, till at length the inattentive people are compelled to perceive the heaviness of their burdens.--they begin to complain and enquire--but too late.--they find their oppressors so strengthened by success, and themselves so entangled in examples of express authority on the part of their rulers, and of tacit recognition on their own part, that they are quite confounded: for millions entertain no other idea of the legality of power, than that it is founded on the exercise of power. they voluntarily fatten their chains, by adopting a pusillanimous opinion, "that there will be too much danger in attempting a remedy," or another opinion no less fatal, "that the government has a right to treat them as it does." they then seek a wretched relief for their minds, by persuading themselves, that to yield their obedience is to discharge their duty. the deplorable poverty of spirit, that prostrates all the dignity bestowed by divine providence on our nature--of course succeeds. [50] _omnia mala exampla ex bonis initiis orta sunt._ sallust. bell. cat. s. 50. [51] "the republic is always attacked with greater vigour than it is defended, for the audacious and profligate, prompted by their natural enmity to it, are easily impelled to act upon the least nod of their leaders; whereas the honest, i know not why, are generally slow and unwilling to stir; and neglecting always the beginnings of things, are never roused to exert themselves, but by the last necessity; so that through irresolution and delay, when they would be glad to compound at last for their quiet, at the expence even of their honour, they commonly lose them both." cicero's orat. for sextius. such were the sentiments of this great and excellent man whose vast abilities, and the calamities of the time in which he lived, enabled him, by mournful experience, to form a just judgement on the conduct of the friends and enemies of liberty. from these reflections i conclude, that every free state should incessantly watch, and instantly take alarm on any condition being made to the power exercised over them, innumerable instances might be produced to shew, from what slight beginnings the most extensive consequences have flowed: but i shall select two only from the history of england. henry the seventh was the first monarch of that kingdom, who established a standing body of armed men. this was a band of 50 archers, called yeomen of the guard: and this institution, notwithstanding the smallness of the number, was, to prevent discontent, [52]"disguised under the pretence of majesty and grandeur." in 1684, the standing forces were so much augmented, that rapin says--"the king, in order to make his people fully sensible of their new slavery, affected to muster his troops, which amounted to 4000 well armed and disciplined men." i think our army, at this time, consists of more than seventy regiments. [52] rapin's history of england. the method of taxing by excise was first introduced amidst the convulsions of civil wars. extreme necessity was pretended, and its short continuance promised. after the restoration, an excise upon beer, ale and other liquors, was granted to the[53] king, one half in fee, the other for life, as an equivalent for the court of wards. upon james the second's accession, the parliament[54] gave him the first excise, with an additional duty on wine, tobacco, and some other things. since the revolution it has been extended to salt, candles, leather, hides, hops, soap, paper, paste-board, mill-boards, scaleboards, vellum, parchment, starch, silks, calicoes, linens, stuffs, printed, stained, &c. wire, wrought plate, coffee, tea, chocolate, &c. [53] 12 car. ii. chap. 23, and 24. [54] james ii. chap. 1, and 4. thus a standing army and excise have, from the first slender origins, tho' always hated, always feared, always opposed, at length swelled up to their vast present bulk. these facts are sufficient to support what i have said. 'tis true that all the mischiefs apprehended by our ancestors from a standing army and excise, have not yet happened: but it does not follow from thence, that they will not happen. the inside of a house may catch fire, and the most valuable apartments be ruined, before the flames burst out. the question in these cases is not, what evil has actually attended particular measures--but what evil, in the nature of things, is likely to attend them. certain circumstances may for some time delay effects, that were reasonably expected, and that must ensue. there was a long period, after the romans had prorogued the command to [55]q. publilius philo, before that example destroyed their liberty. all our kings, from the revolution to the present reign have been foreigners. their ministers generally continued but a short time in authority;[56] and they themselves were mild and virtuous princes. [55] in the year of the city 428, "_duo singularia hæc ei viro primum contigere; prorogatio imperii non ame in ullo fucto et acta honore triumphus_." liv. b. 8. chap. 23. 26. "had the rest of the roman citizens imitated the example of l. quintus, who refused to have his consulship continued to him, they had never admitted that custom of proroguing magistrates, and then the prolongation of their commands, the army had never been introduced, which very thing was at length the ruin of that commonwealth." machiavel's discourses, b. 3. chap. 24. [56] i don't know but it may be said with a good deal of reason, that a quick rotation of ministers is very desirable in great-britain. a minister there has a vast store of materials to work with. long administrations are rather favourable to the reputation of a people abroad, than to their liberty. a bold, ambitious prince, possessed of great abilities, firmly fixed in the throne by descent, served by ministers like himself, and rendered either venerable or terrible by the glory of his successes, may execute what his predecessors did not dare to attempt. henry iv. tottered in his seat during his whole reign. henry v. drew the strength of the kingdom into france, to carry on his wars there, and left the commons at home, protesting, "that the people were not bound to serve out of the realm." it is true, that a strong spirit of liberty subsists at present in great-britain, but what reliance is to be placed in the temper of a people, when the prince is possessed of an unconstitutional power, our own history can sufficiently inform us. when charles ii. had strengthened himself by the return of the garrison of tangier, "england (says rapin) saw on a sudden an amazing revolution; saw herself stripped of all her rights and privileges, excepting such as the king should vouchsafe to grant her; and what is more astonishing, the english themselves delivered up these very rights and privileges to charles ii. which they had so passionately, and, if i may say it, furiously defended against the designs of charles i." this happened only thirty-six years after this last prince had been beheaded. some persons are of opinion, that liberty is not violated, but by such open acts of force; but they seem to be greatly mistaken. i could mention a period within these forty years, when almost as great a change of disposition was produced by the secret measures of a long administration, as by charles's violence. liberty, perhaps is never exposed to so much danger, as when the people believe there is the least; for it may be subverted, and yet they not think so. public-disgusting acts are seldom practised by the ambitious, at the beginning of their designs. such conduct silences and discourages the weak, and the wicked, who would otherways have been their advocates or accomplices. it is of great consequence, to allow those, who, upon any account, are inclined to favour them, something specious to say in their defence. the power may be fully established, though it would not be safe for them to do whatever they please. for there are things, which, at some times, even slaves will not bear. julius cæsar and oliver cromwell did not dare to assume the title of king. the grand seignior dares not lay a new tax. the king of france dares not be a protestant. certain popular points may be left untouched, and yet freedom be extinguished. the commonality of venice imagine themselves free, because they are permitted to do, what they ought not. but i quit a subject, that would lead me too far from my purpose. by the late act of parliament, taxes are to be levied upon us, for "defraying the charge of the administration of justice, the support of civil government--and the expences of defending his majesty's dominions in america." if any man doubts what ought to be the conduct of these colonies on this occasion, i would ask them these questions. has not the parliament expressly avowed their intention of raising money from us for certain purposes? is not this scheme popular in great-britain? will the taxes, imposed by the late act, answer those purposes? if it will, must it not take an immense sum from us? if it will not, is it to be expected, that the parliament will not fully execute their intention, when it is pleasing at home, and not opposed here? must not this be done by imposing new taxes? will not every addition, thus made to our taxes, be an addition to the power of the british legislature, by increasing the number of officers employed in the collection? will not every additional tax therefore render it more difficult to abrogate any of them? when a branch of revenue is once established, does it not appear to many people invidious and undutiful, to attempt to abolish it? if taxes, sufficient to accomplish the intention of the parliament, are imposed by the parliament, what taxes will remain to be imposed by our assemblies? if no material taxes remain to be imposed by them, what must become of them, and the people they represent? [57] "if any person considers, these things, and yet not thinks our liberties are in danger, i wonder at that person's security." [57] demosthenes's 2d philippic. one other argument is to be added, which, by itself, i hope, will be sufficient to convince the most incredulous man on this continent, that the late act of parliament is only designed to be a precedent, whereon the future vassalage of these colonies may be established. every duty thereby laid on articles of british manufacture, is laid on some commodity upon the exportation of which from great-britain, a drawback is payable. those drawbacks in most of the articles, are exactly double to the duties given by the late act. the parliament therefore might in half a dozen lines have raised much more money only by stopping the drawbacks in the hands of the officers at home, on exportation to these colonies, than by this solemn imposition of taxes upon us, to be collected here. probably, the artful contrivers of this act formed it in this manner, in order to reserve to themselves, in case of any objections being made to it, this specious pretence--"that the drawbacks are gifts to the colonies; and that the act only lessens those gifts." but the truth is, that the drawbacks are intended for the encouragement and promotion of british manufactures and commerce, and are allowed on exportation to any foreign parts, as well as on exportation to these provinces. besides, care has been taken to slide into the act[58] some articles on which there are no drawbacks. however, the whole duties laid by the late act on all the articles therein specified, are so small, that they will not amount to as much as the drawbacks which are allowed on part of them only. if, therefore, the sum to be obtained by the late act had been the sole object in forming it, there would not have been any occasion for the "commons of great-britain to give and grant to his majesty, rates and duties for raising a revenue in his majesty's dominions in america, for making a more certain and adequate provision for defraying the charge of the administration of justice, the support of civil government, and the expences of defending the said dominions"----nor would there have been any occasion for an [59]expensive board of commissioners, and all the other new charges to which we are made liable. [58] though duties by the late act are laid on some articles, on which no drawbacks are allowed, yet the duties imposed by the act, are so small, in comparison with the drawbacks that are allowed, that all the duties together will not amount to so much as the drawbacks. [59] the expence of this board, i am informed, is between four and five thousand pounds sterling a year. the establishment of officers, for collecting the revenue of america, amounted before to seven thousand six hundred pounds per annum: and yet, says the author of "the regulation of the colonies," the whole remittance from all the taxes in the colonies, at an average of thirty years, has not amounted to one thousand nine hundred pounds a year, and in that time, seven or eight hundred pounds per annum only, have been remitted from north-america. the smallness of the revenue arising from the duties in america, demonstrated that they were intended only as regulations of trade; and can any person be so blind to truth, so dull of apprehension in a matter of unspeakable importance to his country, as to imagine, that the board of commissioners lately established at such a charge, is instituted to assist in collecting one thousand nine hundred pounds a year, or the trifling duties imposed by the late act? surely every man on this continent must perceive, that they are established for the care of a new system of revenue, which is but now begun. upon the whole, for my part, i regard the late act as an experiment made of our disposition. it is a bird sent over the waters, to discover, whether the waves, that lately agitated this part of the world with such violence, are yet subsided. if this adventurer gets footing here, we shall quickly be convinced, that it is not a phenix; for we shall soon see it followed by others of the same kind. we shall find it rather to be of the [60]breed described by the poet- "_infelix vates._" a direful foreteller of future calamities. a farmer. [60] "dira cælæno," virgil, æneid 2. letter xii. _beloved countrymen_, some states have lost their liberty by particular accidents; but this calamity is generally owing to the decay of virtue. a people is travelling fast to destruction, when individuals consider their interests as distinct from those of the public. such notions are fatal to their country, and to themselves. yet how many are there so weak and sordid as to think they perform all the offices of life, if they earnestly endeavour to increase their own wealth, power, and credit, without the least regard for the society, under the protection of which they live; who, if they can make an immediate profit to themselves, by lending their assistance to those, whose projects plainly tend to the injury of their country, rejoice in their dexterity, and believe themselves intitled to the character of able politicians. miserable men! of whom it is hard to say, whether they ought to be most the objects of pity or contempt, but whose opinions are certainly as detestable as their practices are destructive. though i always reflect with a high pleasure on the integrity and understanding of my countrymen, which, joined with a pure and humble devotion to the great and gracious author of every blessing they enjoy, will, i hope, ensure to them, and their posterity, all temporal and eternal happiness; yet when i consider, that in every age and country there have been bad men, my heart, at this threatening period, is so full of apprehension, as not to permit me to believe, but that there may be some on this continent, against whom you ought to be upon your guard. men, who either [61]hold or expect to hold certain advantages by setting examples of servility to their countrymen--men who trained to the employment, or self-taught by a natural versatility of genius, serve as decoys for drawing the innocent and unwary into snares. it is not to be doubted but that such men will diligently bestir themselves, on this and every like occasion, to spread the infection of their meanness as far as they can. on the plans they have adopted, this is their course. this is the method to recommend themselves to their patrons. [61] it is not intended by these words to throw any reflection upon gentlemen, because they are possessed of offices; for many of them are certainly men of virtue, and lovers of their country. but supposed obligations of gratitude and honour may induce them to be silent. whether these obligations ought to be regarded or not, is not so much to be considered by others, in the judgment they form of these gentlemen, as whether they think they ought to be regarded. perhaps, therefore we shall act in the properest manner towards them, if we neither reproach nor imitate them. the persons meant in this letter, are the base-spirited wretches, who may endeavor to distinguish themselves, by their sordid zeal, in defending and promoting measures, which they know, beyond all question, to be destructive to the just rights and true interests of their country. it is scarcely possible, to speak of these men with any degree of patience. it is scarcely possible to speak of them with any degree of propriety. for no words can truly describe their guilt, and meanness. but every honest man, on their being mentioned, will feel what cannot be expressed. if their wickedness did not blind them, they might perceive, along the coast of these colonies, many skeletons of wretched ambition; who after distinguishing themselves, in support of the stamp-act, by a couragious contempt of their country, and of justice, have been left to linger out their miserable existence, without a government, collectorship, secretaryship, or any other commission to console them, as well as it could for loss of virtue and reputation--while numberless offices have been bestowed in these colonies, on people from great-britain, and new ones are continually invented to be thus bestowed. as a few great prizes are put into a lottery to tempt multitudes to lose, so here and there an american has been raised to a good post- "_apparent rari nantes in gurgite vasto._" mr. grenville, indeed, in order to recommend the stamp-act, had the unequalled generosity, to pour down a golden shower of offices upon americans; and yet these ungrateful colonies did not thank mr. grenville for shewing his kindness to their countrymen, nor them for accepting it. how must that great statesman have been surprised to find, that the unpolished colonists could not be reconciled to infamy, by treachery? such a bountiful disposition towards us never appeared in any minister before him, and probably never will appear again. for it is evident that such a system of policy is to be established on this continent, as, in a short time, is to render it utterly unnecessary to use the least art in order to conciliate our approbation of any measures. some of our countrymen may be employed to fix chains upon us; but they will never be permitted to hold them afterwards. so that the utmost that any of them can expect, is only a temporary provision, that may expire in their own time; but which, they may be assured, will preclude their children from having any consideration paid to them. the natives of america, will sink into total neglect and contempt, the moment that their country loses the constitutional powers she now possesses. most sincerely do i wish and pray, that every one of us may be convinced of this great truth, that industry and integrity are the "paths of pleasantness, which lead to happiness." they act consistently, in a bad cause. they run well in a mean race. from them we shall learn, how pleasant and profitable a thing it is, to be, for our submissive behaviour, well spoken of in st. james's, or st. stephen's; at guildhall, or the royal exchange. specious fallacies will be drest up with all the arts of delusion, to persuade one colony to distinguish herself from another, by unbecoming condescensions, which will serve the ambitious purpose of great men at home, and therefore will be thought by them, to entitle their assistants in obtaining them, to considerable rewards. our fears will be excited; our hopes will be awakened. it will be insinuated to us with a plausible affectation of wisdom and concern, how prudent it is to please the powerful--how dangerous to provoke them--and then comes in the perpetual incantation, that freezes up every generous purpose of the soul, in cold--inactive--expectation "that if there is any request to be made, compliance will obtain a favourable attention." our vigilance and our union are success and safety. our negligence and our division are distress and death. they are worse--they are shame and slavery. let us equally shun the benumbing stillness of overweening sloth, and the feverish activity of that ill-informed zeal, which buries itself in maintaining little, mean, and narrow opinions. let us, with a truly wise generosity and charity, banish and discourage all illiberal distinctions, which may arise from differences in situation, forms of government, or modes of religion. let us consider ourselves as men--freemen--christian men--separated from the rest of the world, and firmly bound together by the same rights, interests, and dangers. let these keep our attention inflexibly fixed on the great objects, which we must continually regard, in order to preserve those rights, to promote those interests, and to avert those dangers. let these truths be indelibly impressed on our minds--that we cannot be happy without being free--that we cannot be free without being secure in our property--that we cannot be secure in our property, if, without our consent, others may, as by right, take it away--that taxes imposed on us by parliament, do thus take it away--that duties laid for the sole purposes of raising money, are taxes--that attempts to lay such duties should be instantly and firmly opposed--that this opposition can never be effectual, unless it is the united effort of these provinces--that, therefore, benevolence of temper toward each other, and unanimity of counsels are essential to the welfare of the whole--and lastly, that, for this reason, every man amongst us, who, in any manner, would encourage either dissention, diffidence, or indifference between these colonies, is an enemy to himself and to his country. the belief of these truths, i verily think, my countrymen, is indispensably necessary to your happiness. i beseech you, therefore, [62]"teach them diligently unto your children, and talk of them when you sit in your houses, and when you walk by the way, and when you lie down, and when you rise up." [62] deut. vi. 7. what have these colonies to ask, while they continue free? or what have they to dread, but insidious attempts to subvert their freedom? their prosperity does not depend on ministerial favours doled out to particular provinces. they form one political body, of which each colony is a member. their happiness is founded on their constitution; and is to be promoted by preserving that constitution in unabated vigour throughout every part. a spot, a speck of decay, however small the limb on which it appears, and however remote it may seem from the vitals, should be alarming. we have all the rights requisite for our prosperity. the legal authority of great-britain may indeed lay hard restrictions upon us; but, like the spear of telephus, it will cure as well as wound. her unkindness will instruct and compel us, after some time, to discover, in our industry and frugality, surprising remedies--if our rights continue inviolated. for as long as the products of our labours and the rewards of our care, can properly be called our own, so long will it be worth our while to be industrious and frugal. but if when we plow--sow--reap--gather--and thresh, we find, that we plow--sow--reap--gather--and thresh for others, whose pleasure is to be the sole limitation, how much they shall take, and how much they shall leave, why should we repeat the unprofitable toil? horses and oxen are content with that portion of the fruits of their work, which their owners assign to them, in order to keep them strong enough to raise successive crops; but even these beasts will not submit to draw for their masters, until they are subdued with whips and goads. let us take care of our rights, and we therein take care of our property. "slavery is ever preceded by sleep."[63] individuals may be dependant on ministers, if they please. states should scorn it----and, if you are not wanting to yourselves, you will have a proper regard paid you by those, to whom if you are not respectable, you will infallibly be contemptible. but if we have already forgot the reasons that urged us, with unexampled unanimity, to exert ourselves two years ago; if our zeal for the public good is worn out before the homespun cloaths which it caused us to have made--if our resolutions are so faint, as by our present conduct to condemn our own late successful example----if we are not affected by any reverence for the memory of our ancestors, who transmitted to us that freedom in which they had been blest----if we are not animated by any regard for posterity, to whom, by the most sacred obligations, we are bound to deliver down the invaluable inheritance--then, indeed, any minister--or any tool of a minister--or any creature of a tool of a minister--or any lower [64]instrument of administration, if lower there may be, is a personage, whom it may be dangerous to offend. [63] montesquieu's spirit of laws, b. 14. c. 13. [64] "_instrumenta regni._" tacitus an. b. 12. s. 66. if any person shall imagine that he discovers in these letters the least disaffection towards our most excellent sovereign, and the parliament of great-britain; or the least dislike to the dependance of these colonies on that kingdom, i beg that such person will not form any judgment on particular expressions, but will consider the tenour of all the letters taken together. in that case, i flatter myself that every unprejudiced reader will be convinced, that the true interests of great-britain are as dear to me as they ought to be to every good subject. if i am an enthusiast in anything, it is in my zeal for the perpetual dependance of these colonies on their mother-country.--a dependance founded on mutual benefits, the continuance of which can be secured only by mutual affections. therefore it is, that with extreme apprehension i view the smallest seeds of discontent, which are unwarily scattered abroad. fifty or sixty years will make astonishing alterations in these colonies; and this consideration should render it the business of great britain more and more to cultivate our good dispositions towards her: but the misfortune is, that those great men, who are wrestling for power at home, think themselves very slightly interested in the prosperity of their country fifty or sixty years hence; but are deeply concerned in blowing up a popular clamour for supposed immediate advantages. for my part, i regard great-britain as a bulwark happily fixed between these colonies and the powerful nations of europe. that kingdom is our advanced post or fortification, which remaining safe, we under its protection enjoying peace, may diffuse the blessings of religion, science, and liberty, thro' remote wildernesses. it is, therefore, incontestibly our duty and our interest, to support the strength of great britain. when, confiding in that strength, she begins to forget from whence it arose, it will be an easy thing to shew the source. she may readily be reminded of the loud alarm spread among her merchants and tradesmen, by the universal association of these colonies, at the time of the stamp-act, not to import any of her manufactures.----in the year 1718, the russians and swedes, entered into an agreement, not to suffer great-britain to export any naval stores from their dominions, but in russian or swedish ships, and at their own prices. great-britain was distressed. pitch and tar rose to three pounds a barrel. at length she thought of getting these articles from the colonies; and the attempt succeeding, they fell down to fifteen shillings. in the year 1756, great britain was threatened with an invasion. an easterly wind blowing for six weeks, she could not man her fleet, and the whole nation was thrown into the utmost consternation. the wind changed. the american ships arrived. the fleet sailed in ten or fifteen days. there are some other reflections on this subject worthy of the most deliberate attention of the british parliament; but they are of such a nature, i do not chuse to mention them publicly. i thought i discharged my duty to my country, taking the liberty, in the year 1765, while the stamp-act was in suspense, of writing my sentiments to a man of the greatest influence at home, who afterwards distinguished himself by espousing our cause, in the debates concerning the repeal of that act. i shall be extremely sorry if any man mistakes my meaning in any thing i have said. officers employed by the crown, are, while according to the laws they conduct themselves, entitled to legal obedience and sincere respect. these it is a duty to render them, and these no good or prudent person will withhold. but when these officers, thro' rashness or design, endeavour to enlarge their authority beyond its due limits, and expect improper concessions to be made to them, from regard for the employments they bear, their attempts should be considered as equal injuries to the crown and people, and should be courageously and constantly opposed. to suffer our ideas to be confounded by names, on such occasions, would certainly be an inexcusable weakness, and probably, an irremediable error. we have reason to believe, that several of his majesty's present ministers are good men, and friends to our country; and it seems not unlikely, that by a particular concurrence of events, we have been treated a little more severely than they wished we should be. they might not think it prudent to stem a torrent. but what is the difference to us, whether arbitrary acts take their rise from ministers, or are permitted by them? ought any point to be allowed to a good[65] minister, that should be denied to a bad one? the mortality of ministers is a very frail mortality. a * * * may succeed a shelburne--a * * * may succeed a conway. [65] "ubi imperium ad ignaros aut minus bonos pervenit; novum illud exemplum, ad dignis et idoneis, ad indignos et non idoneos transfertur." sall. bed. cat. s. 50. we find a new kind of minister lately spoken of at home----"the minister of the house of commons." the term seems to have particular propriety when referred to these colonies, with a different meaning annexed to it, from that in which it is taken there. by the word "minister" we may understand not only a servant of the crown, but a man of influence among the commons, who regard themselves as having a share of the sovereignty over us. the minister of the house may, in a point respecting the colonies, be so strong, that the minister of the crown in the house, if he is a distinct person, may not chuse, even where his sentiments are favourable to us, to come to a pitched battle upon our account. for tho' i have the highest opinion of the deference of the house for the king's minister; yet he may be so good natured as not to put it to the test, except it be for the mere and immediate profit of his master or himself. but whatever kind of minister he is, that attempts to innovate a single iota in the privileges of these colonies, him i hope you will undauntedly oppose, and that you will never suffer yourselves to be either cheated or frightened into any unworthy obsequiousness. on such emergencies you may surely without presumption believe that almighty god himself will look down upon your righteous contest with gracious approbation. you will be a "band of brother's" cemented by the dearest ties--and strengthened with inconceivable supplies of force and constancy, by that sympathetic ardour which animates good men, confederated in a good cause. your honour and welfare will be, as they now are, most intimately concerned; and besides----you are assigned by divine providence, in the appointed order of things, the protectors of unborn ages, whose fate depends upon your virtue. whether they shall arise the noble and indisputable heirs of the richest patrimonies, or the dastardly and hereditary drudges of imperious task-masters, you must determine. to discharge this double duty to yourselves and to your posterity; you have nothing to do, but to call forth into use the good sense and spirit, of which you are possessed. you have nothing to do, but to conduct your affairspeaceably---prudently----firmly----jointly. by these means you will support the character of freemen, without losing that of faithful subjects--a good character in any government--one of the best under a british government. you will prove that americans have that true magnanimity of soul, that can resent injuries without falling into rage; and that tho' your devotion to great-britain is the most affectionate, yet you can make proper distinctions, and know what you owe to yourselves as well as to her----you will, at the same time that you advance your interests, advance your reputation--you will convince the world of the justice of your demands, and the purity of your intentions--while all mankind must with unceasing applauses confess, that you indeed deserve liberty, who so well understand it, so passionately love it, so temperately enjoy it, and so wisely, bravely, and virtuously, assert, maintain, and defend it. "_certe ego libertatem quæ mihi a parente meo tradita est, experiar, verum id frustra, an ob rem faciam, in vestra manu situm est, quirites._" "for my part, i am resolved strenuously to contend for the liberty delivered down to me from my ancestors; but whether i shall do this effectually or not, depends on you, my countrymen." how little soever one is able to write, yet, when the liberties of one's country are threatened, it is still more difficult to be silent. a farmer. _is there not the greatest reason to hope, if the universal sense of the colonies is immediately exprest by resolves of the assemblies, in support of their rights; by instructions to their agents on the subject; and by petitions to the crown and parliament for redress; that those measures will have the same success now that they had in the time of the stamp-act._ to the ingenious author of certain patriotic letters, subscribed a farmer. much respected sir, when the rights and liberties of the numerous and loyal inhabitants of this extensive continent are in imminent danger,--when the inveterate enemies of these colonies are not more assiduous to forge fetters for them, than diligent to delude the people, and zealous to persuade them to an indolent acquiescence: at this alarming period, when to reluct is deemed a revolt, and to oppose such measures as are injudicious and destructive, is construed as a formal attempt to subvert order and government; when to reason is to rebel; and a ready submission to the rod of power, is sollicited by the tenders of place and patronage, or urged by the menace of danger and disgrace: 'tis to you, worthy sir, that america is obliged, for a most seasonable, sensible, loyal, and vigorous vindication of her invaded rights and liberties: 'tis to you, the distinguished honour is due; that when many of the friends of liberty were ready to fear its utter subversion: armed with truth, supported by the immutable laws of nature, the common inheritance of man, and leaning on the pillars of the british constitution; you seasonably brought your aid, opposed impending ruin, awakened the most indolent and inactive, to a sense of danger, re-animated the hopes of those, who had before exerted themselves in the cause of freedom, and instructed america in the best means to obtain redress. nor is this western world alone indebted to your wisdom, fortitude, and patriotism: great-britain also may be confirmed by you, that to be truly great and successful, she must be just: that to oppress america, is to violate her own honours, defeat her brightest prospects, and contract her spreading empire. to such eminent worth and virtue, the inhabitants of the town of boston, the capital of the province of the massachusetts-bay, in full town meeting assembled, express their earliest gratitude. actuated themselves by the same generous principles, which appear with so much lustre in your useful labours, they will not fail warmly to recommend, and industriously to promote that union among the several colonies, which is so indispensably necessary for the security of the whole. tho' such superior merit must assuredly, in the closest recess, enjoy the divine satisfaction of having served, and possibly saved this people; tho' veiled from our view, you modestly shun the deserved applause of millions; permit us to intrude upon your retirement, and salute the farmer, as the friend of americans, and the common benefactor of mankind. _boston, march 22, 1768._ the above letter was read, and unanimously accepted by the town, and ordered to be published in the several news-papers. _attest._ william cooper, town-clerk. [illustration: logo] * * * * * transcriber's note: minor typographical and punctuation errors have been corrected without note. irregularities and inconsistencies in the text have been retained as printed. mismatched quotes are not fixed if it's not sufficiently clear where the missing quote should be placed. in the book there are notes at the bottom of pages xxxii to xxxvii referring to certain toasts. for ease of reading, the transcriber has moved the notes to follow the toast to which it refers. principles of mining +--------------------------------------------------------------+ | published by the | | mcgraw-hill book company | | new york | | | | successors to the book departments of the | | mcgraw publishing company hill publishing company | | | | publishers of books for | | electrical world the engineering and mining journal | | engineering record power and the engineer | | electric railway journal american machinist | | metallurgical and chemical engineering | +--------------------------------------------------------------+ principles of mining valuation, organization and administration copper, gold, lead, silver, tin and zinc by herbert c. hoover _member american institute of mining engineers, mining and metallurgical society of america, société des ingénieurs civils de france, fellow royal geographical society, etc._ first edition _fourth thousand_ mcgraw-hill book company 239 west 39th street, new york bouverie street, london, e.c. 1909 preface. this volume is a condensation of a series of lectures delivered in part at stanford and in part at columbia universities. it is intended neither for those wholly ignorant of mining, nor for those long experienced in the profession. the bulk of the material presented is the common heritage of the profession, and if any one may think there is insufficient reference to previous writers, let him endeavor to find to whom the origin of our methods should be credited. the science has grown by small contributions of experience since, or before, those unnamed egyptian engineers, whose works prove their knowledge of many fundamentals of mine engineering six thousand eight hundred years ago. if i have contributed one sentence to the accumulated knowledge of a thousand generations of engineers, or have thrown one new ray of light on the work, i shall have done my share. i therefore must acknowledge my obligations to all those who have gone before, to all that has been written that i have read, to those engineers with whom i have been associated for many years, and in particular to many friends for kindly reply to inquiry upon points herein discussed. contents. chapter 1. valuation of copper, gold, lead, silver, tin, and zinc lode mines determination of average metal content; sampling, assay plans, calculations of averages, percentage of errors in estimate from sampling. chapter ii. mine valuation (_continued_) calculation of quantities of ore, and classification of ore in sight. chapter iii. mine valuation (_continued_) prospective value. extension in depth; origin and structural character of the deposit; secondary enrichment; development in neighboring mines; depth of exhaustion. chapter iv. mine valuation (_continued_) recoverable percentage of the gross assay value; price of metals; cost of production. chapter v. mine valuation (_continued_) redemption or amortization of capital and interest. chapter vi. mine valuation (_concluded_) valuation of mines with little or no ore in sight; valuations on second-hand data; general conduct of examinations; reports. chapter vii. development of mines entry to the mine; tunnels; vertical, inclined, and combined shafts; location and number of shafts. chapter viii. development of mines (_continued_) shape and size of shafts; speed of sinking; tunnels. chapter ix. development of mines (_concluded_) subsidiary development: stations; crosscuts; levels; interval between levels; protection of levels; winzes and rises. development in the prospecting stage; drilling. chapter x. stoping methods of ore-breaking; underhand stopes; overhand stopes; combined stope. valuing ore in course of breaking. chapter xi. methods of supporting excavation timbering; filling with waste; filling with broken ore; pillars of ore; artificial pillars; caving system. chapter xii. mechanical equipment conditions bearing on mine equipment; winding appliances; haulage equipment in shafts; lateral underground transport; transport in stopes. chapter xiii. mechanical equipment (_continued_) drainage: controlling factors; volume and head of water; flexibility; reliability; power conditions; mechanical efficiency; capital outlay. systems of drainage,--steam pumps, compressed-air pumps, electrical pumps, rod-driven pumps, bailing; comparative value of various systems. chapter xiv. mechanical equipment (_concluded_) machine drilling: power transmission; compressed air _vs._ electricity; air drills; machine _vs._ hand drilling. workshops. improvement in equipment. chapter xv. ratio of output to the mine determination of possible maximum; limiting factors; cost of equipment; life of the mine; mechanical inefficiency of patchwork plant; overproduction of base metal; security of investment. chapter xvi. administration labor efficiency; skill; intelligence; application coördination; contract work; labor unions; real basis of wages. chapter xvii. administration (_continued_) accounts and technical data and reports; working costs; division of expenditure; inherent limitations in accuracy of working costs; working cost sheets. general technical data; labor, supplies, power, surveys, sampling, and assaying. chapter xviii. administration (_concluded_) administrative reports. chapter xix. the amount of risk in mining investments risk in valuation of mines; in mines as compared with other commercial enterprises. chapter xx. the character, training, and obligations of the mining engineering profession index principles of mining. chapter i. valuation of copper, gold, lead, silver, tin, and zinc lode mines. determination of average metal content; sampling, assay plans, calculations of averages, percentage of errors in estimate from sampling. the following discussion is limited to _in situ_ deposits of copper, gold, lead, silver, tin, and zinc. the valuation of alluvial deposits, iron, coal, and other mines is each a special science to itself and cannot be adequately discussed in common with the type of deposits mentioned above. the value of a metal mine of the order under discussion depends upon:-_a_. the profit that may be won from ore exposed; _b_. the prospective profit to be derived from extension of the ore beyond exposures; _c_. the effect of a higher or lower price of metal (except in gold mines); _d_. the efficiency of the management during realization. the first may be termed the positive value, and can be approximately determined by sampling or test-treatment runs. the second and the third may be termed the speculative values, and are largely a matter of judgment based on geological evidence and the industrial outlook. the fourth is a question of development, equipment, and engineering method adapted to the prospects of the enterprise, together with capable executive control of these works. it should be stated at the outset that it is utterly impossible to accurately value any mine, owing to the many speculative factors involved. the best that can be done is to state that the value lies between certain limits, and that various stages above the minimum given represent various degrees of risk. further, it would be but stating truisms to those engaged in valuing mines to repeat that, because of the limited life of every mine, valuation of such investments cannot be based upon the principle of simple interest; nor that any investment is justified without a consideration of the management to ensue. yet the ignorance of these essentials is so prevalent among the public that they warrant repetition on every available occasion. to such an extent is the realization of profits indicated from the other factors dependent upon the subsequent management of the enterprise that the author considers a review of underground engineering and administration from an economic point of view an essential to any essay upon the subject. while the metallurgical treatment of ores is an essential factor in mine economics, it is considered that a detailed discussion of the myriad of processes under hypothetic conditions would lead too far afield. therefore the discussion is largely limited to underground and administrative matters. the valuation of mines arises not only from their change of ownership, but from the necessity in sound administration for a knowledge of some of the fundamentals of valuation, such as ore reserves and average values, that managerial and financial policy may be guided aright. also with the growth of corporate ownership there is a demand from owners and stockholders for periodic information as to the intrinsic condition of their properties. the growth of a body of speculators and investors in mining stocks and securities who desire professional guidance which cannot be based upon first-hand data is creating further demand on the engineer. opinions in these cases must be formed on casual visits or second-hand information, and a knowledge of men and things generally. despite the feeling of some engineers that the latter employment is not properly based professionally, it is an expanding phase of engineers' work, and must be taken seriously. although it lacks satisfactory foundation for accurate judgment, yet the engineer can, and should, give his experience to it when the call comes, out of interest to the industry as a whole. not only can he in a measure protect the lamb, by insistence on no investment without the provision of properly organized data and sound administration for his client, but he can do much to direct the industry from gambling into industrial lines. an examination of the factors which arise on the valuation of mines involves a wide range of subjects. for purposes of this discussion they may be divided into the following heads:-1. _determination of average metal contents of the ore._ 2. _determination of quantities of ore._ 3. _prospective value._ 4. _recoverable percentage of gross value._ 5. _price of metals._ 6. _cost of production._ 7. _redemption or amortization of capital and interest._ 8. _valuation of mines without ore in sight._ 9. _general conduct of examination and reports._ determination of average metal contents of the ore. three means of determination of the average metal content of standing ore are in use--previous yield, test-treatment runs, and sampling. previous yield.--there are certain types of ore where the previous yield from known space becomes the essential basis of determination of quantity and metal contents of ore standing and of the future probabilities. where metals occur like plums in a pudding, sampling becomes difficult and unreliable, and where experience has proved a sort of regularity of recurrence of these plums, dependence must necessarily be placed on past records, for if their reliability is to be questioned, resort must be had to extensive test-treatment runs. the lake superior copper mines and the missouri lead and zinc mines are of this type of deposit. on the other sorts of deposits the previous yield is often put forward as of important bearing on the value of the ore standing, but such yield, unless it can be _authentically_ connected with blocks of ore remaining, is not necessarily a criterion of their contents. except in the cases mentioned, and as a check on other methods of determination, it has little place in final conclusions. test parcels.--treatment on a considerable scale of sufficiently regulated parcels, although theoretically the ideal method, is, however, not often within the realm of things practical. in examination on behalf of intending purchasers, the time, expense, or opportunity to fraud are usually prohibitive, even where the plant and facilities for such work exist. even in cases where the engineer in management of producing mines is desirous of determining the value of standing ore, with the exception of deposits of the type mentioned above, it is ordinarily done by actual sampling, because separate mining and treatment of test lots is generally inconvenient and expensive. as a result, the determination of the value of standing ore is, in the great majority of cases, done by sampling and assaying. sampling.--the whole theory of sampling is based on the distribution of metals through the ore-body with more or less regularity, so that if small portions, that is samples, be taken from a sufficient number of points, their average will represent fairly closely the unit value of the ore. if the ore is of the extreme type of irregular metal distribution mentioned under "previous yield," then sampling has no place. how frequently samples must be taken, the manner of taking them, and the quantity that constitutes a fair sample, are matters that vary with each mine. so much depends upon the proper performance of this task that it is in fact the most critical feature of mine examination. ten samples properly taken are more valuable than five hundred slovenly ones, like grab samples, for such a number of bad ones would of a surety lead to wholly wrong conclusions. given a good sampling and a proper assay plan, the valuation of a mine is two-thirds accomplished. it should be an inflexible principle in examinations for purchase that every sample must be taken under the personal supervision of the examining engineer or his trusted assistants. aside from throwing open the doors to fraud, the average workman will not carry out the work in a proper manner, unless under constant supervision, because of his lack of appreciation of the issues involved. sampling is hard, uncongenial, manual labor. it requires a deal of conscientiousness to take enough samples and to take them thoroughly. the engineer does not exist who, upon completion of this task, considers that he has got too many, and most wish that they had taken more. the accuracy of sampling as a method of determining the value of standing ore is a factor of the number of samples taken. the average, for example, of separate samples from each square inch would be more accurate than those from each alternate square inch. however, the accumulated knowledge and experience as to the distribution of metals through ore has determined approximately the manner of taking such samples, and the least number which will still by the law of averages secure a degree of accuracy commensurate with the other factors of estimation. as metals are distributed through ore-bodies of fissure origin with most regularity on lines parallel to the strike and dip, an equal portion of ore from every point along cross-sections at right angles to the strike will represent fairly well the average values for a certain distance along the strike either side of these cross-sections. in massive deposits, sample sections are taken in all directions. the intervals at which sample sections must be cut is obviously dependent upon the general character of the deposit. if the values are well distributed, a longer interval may be employed than in one subject to marked fluctuations. as a general rule, five feet is the distance most accepted. this, in cases of regular distribution of values, may be stretched to ten feet, or in reverse may be diminished to two or three feet. the width of ore which may be included for one sample is dependent not only upon the width of the deposit, but also upon its character. where the ore is wider than the necessary stoping width, the sample should be regulated so as to show the possible locus of values. the metal contents may be, and often are, particularly in deposits of the impregnation or replacement type, greater along some streak in the ore-body, and this difference may be such as to make it desirable to stope only a portion of the total thickness. for deposits narrower than the necessary stoping width the full breadth of ore should be included in one sample, because usually the whole of the deposit will require to be broken. in order that a payable section may not possibly be diluted with material unnecessary to mine, if the deposit is over four feet and under eight feet, the distance across the vein or lode is usually divided into two samples. if still wider, each is confined to a span of about four feet, not only for the reason given above, but because the more numerous the samples, the greater the accuracy. thus, in a deposit twenty feet wide it may be taken as a good guide that a test section across the ore-body should be divided into five parts. as to the physical details of sample taking, every engineer has his own methods and safeguards against fraud and error. in a large organization of which the writer had for some years the direction, and where sampling of mines was constantly in progress on an extensive scale, not only in contemplation of purchase, but where it was also systematically conducted in operating mines for working data, he adopted the above general lines and required the following details. a fresh face of ore is first broken and then a trench cut about five inches wide and two inches deep. this trench is cut with a hammer and moil, or, where compressed air is available and the rock hard, a small air-drill of the hammer type is used. the spoil from the trench forms the sample, and it is broken down upon a large canvas cloth. afterwards it is crushed so that all pieces will pass a half-inch screen, mixed and quartered, thus reducing the weight to half. whether it is again crushed and quartered depends upon what the conditions are as to assaying. if convenient to assay office, as on a going mine, the whole of the crushing and quartering work can be done at that office, where there are usually suitable mechanical appliances. if the samples must be taken a long distance, the bulk for transport can be reduced by finer breaking and repeated quartering, until there remain only a few ounces. precautions against fraud.--much has been written about the precautions to be taken against fraud in cases of valuations for purchase. the best safeguards are an alert eye and a strong right arm. however, certain small details help. a large leather bag, arranged to lock after the order of a mail sack, into which samples can be put underground and which is never unfastened except by responsible men, not only aids security but relieves the mind. a few samples of country rock form a good check, and notes as to the probable value of the ore, from inspection when sampling, are useful. a great help in examination is to have the assays or analyses done coincidentally with the sampling. a doubt can then always be settled by resampling at once, and much knowledge can be gained which may relieve so exhaustive a program as might be necessary were results not known until after leaving the mine. assay of samples.--two assays, or as the case may be, analyses, are usually made of every sample and their average taken. in the case of erratic differences a third determination is necessary. assay plans.--an assay plan is a plan of the workings, with the location, assay value, and width of the sample entered upon it. in a mine with a narrow vein or ore-body, a longitudinal section is sufficient base for such entries, but with a greater width than one sample span it is desirable to make preliminary plans of separate levels, winzes, etc., and to average the value of the whole payable widths on such plans before entry upon a longitudinal section. such a longitudinal section will, through the indicated distribution of values, show the shape of the ore-body--a step necessary in estimating quantities and of the most fundamental importance in estimating the probabilities of ore extension beyond the range of the openings. the final assay plan should show the average value of the several blocks of ore, and it is from these averages that estimates of quantities must be made up. calculations of averages.--the first step in arriving at average values is to reduce erratic high assays to the general tenor of other adjacent samples. this point has been disputed at some length, more often by promoters than by engineers, but the custom is very generally and rightly adopted. erratically high samples may indicate presence of undue metal in the assay attributable to unconscious salting, for if the value be confined to a few large particles they may find their way through all the quartering into the assay. or the sample may actually indicate rich spots of ore; but in any event experience teaches that no dependence can be put upon regular recurrence of such abnormally rich spots. as will be discussed under percentage of error in sampling, samples usually indicate higher than the true value, even where erratic assays have been eliminated. there are cases of profitable mines where the values were all in spots, and an assay plan would show 80% of the assays _nil_, yet these pockets were so rich as to give value to the whole. pocket mines, as stated before, are beyond valuation by sampling, and aside from the previous yield recourse must be had to actual treatment runs on every block of ore separately. after reduction of erratic assays, a preliminary study of the runs of value or shapes of the ore-bodies is necessary before any calculation of averages. a preliminary delineation of the boundaries of the payable areas on the assay plan will indicate the sections of the mine which are unpayable, and from which therefore samples can be rightly excluded in arriving at an average of the payable ore (fig. 1). in a general way, only the ore which must be mined need be included in averaging. the calculation of the average assay value of standing ore from samples is one which seems to require some statement of elementals. although it may seem primitive, it can do no harm to recall that if a dump of two tons of ore assaying twenty ounces per ton be added to a dump of five tons averaging one ounce per ton, the result has not an average assay of twenty-one ounces divided by the number of dumps. likewise one sample over a width of two feet, assaying twenty ounces per ton, if averaged with another sample over a width of five feet, assaying one ounce, is no more twenty-one ounces divided by two samples than in the case of the two dumps. if common sense were not sufficient demonstration of this, it can be shown algebraically. were samples equidistant from each other, and were they of equal width, the average value would be the simple arithmetical mean of the assays. but this is seldom the case. the number of instances, not only in practice but also in technical literature, where the fundamental distinction between an arithmetical and a geometrical mean is lost sight of is amazing. to arrive at the average value of samples, it is necessary, in effect, to reduce them to the actual quantity of the metal and volume of ore represented by each. the method of calculation therefore is one which gives every sample an importance depending upon the metal content of the volume of ore it represents. the volume of ore appertaining to any given sample can be considered as a prismoid, the dimensions of which may be stated as follows:- _w_ = width in feet of ore sampled. _l_ = length in feet of ore represented by the sample. _d_ = depth into the block to which values are assumed to penetrate. we may also let:- _c_ = the number of cubic feet per ton of ore. _v_ = assay value of the sample. then _wld_/c_ = tonnage of the prismoid.* _v wld_/c_ = total metal contents. [footnote *: strictly, the prismoidal formula should be used, but it complicates the study unduly, and for practical purposes the above may be taken as the volume.] the average value of a number of samples is the total metal contents of their respective prismoids, divided by the total tonnage of these prismoids. if we let _w_, _w_1, _v_, _v_1 etc., represent different samples, we have:-_v(_wld_/_c_) + _v_1 (_w_1 _l_1 _d_1/_c_) + _v_2 (_w_2 _l_2 _d_2/_c_) -------------------------------------------------------------------- _wld_/_c_ + _w_1 _l_1 _d_1/_c_ + _w_2 _l_2 _d_2/_c_ = average value. this may be reduced to:-(_vwld_) + (_v_1 _w_1 _l_1 _d_1) + (_v_2 _w_2 _l_2 _d_2,), etc. -------------------------------------------------------------- (_wld_) + (_w_1 _l_1 _d_1) + (_w_2 _l_2 _d_2), etc. as a matter of fact, samples actually represent the value of the outer shell of the block of ore only, and the continuity of the same values through the block is a geological assumption. from the outer shell, all the values can be taken to penetrate equal distances into the block, and therefore _d_, _d_1, _d_2 may be considered as equal and the equation becomes:-(_vwl_) + (_v_1 _w_1 _l_1) + (_v_2 _w_2 _l_2), etc. -------------------------------------------------- (_wl_) + (_w_1 _l_1) + (_w_2 _l_2), etc. the length of the prismoid base _l_ for any given sample will be a distance equal to one-half the sum of the distances to the two adjacent samples. as a matter of practice, samples are usually taken at regular intervals, and the lengths _l_, _l_1, _l_2 becoming thus equal can in such case be eliminated, and the equation becomes:-(_vw_) + (_v_1 _w_1) + (_v_2 _w_2), etc. --------------------------------------- _w_ + _w_1 + _w_2 , etc. the name "assay foot" or "foot value" has been given to the relation _vw_, that is, the assay value multiplied by the width sampled.[*] it is by this method that all samples must be averaged. the same relation obviously can be evolved by using an inch instead of a foot, and in narrow veins the assay inch is generally used. [footnote *: an error will be found in this method unless the two end samples be halved, but in a long run of samples this may be disregarded.] where the payable cross-section is divided into more than one sample, the different samples in the section must be averaged by the above formula, before being combined with the adjacent section. where the width sampled is narrower than the necessary stoping width, and where the waste cannot be broken separately, the sample value must be diluted to a stoping width. to dilute narrow samples to a stoping width, a blank value over the extra width which it is necessary to include must be averaged with the sample from the ore on the above formula. cases arise where, although a certain width of waste must be broken with the ore, it subsequently can be partially sorted out. practically nothing but experience on the deposit itself will determine how far this will restore the value of the ore to the average of the payable seam. in any event, no sorting can eliminate all such waste; and it is necessary to calculate the value on the breaking width, and then deduct from the gross tonnage to be broken a percentage from sorting. there is always an allowance to be made in sorting for a loss of good ore with the discards. percentage of error in estimates from sampling.--it must be remembered that the whole theory of estimation by sampling is founded upon certain assumptions as to evenness of continuity and transition in value and volume. it is but a basis for an estimate, and an estimate is not a statement of fact. it cannot therefore be too forcibly repeated that an estimate is inherently but an approximation, take what care one may in its founding. while it is possible to refine mathematical calculation of averages to almost any nicety, beyond certain essentials it adds nothing to accuracy and is often misleading. it is desirable to consider where errors are most likely to creep in, assuming that all fundamental data are both accurately taken and considered. sampling of ore _in situ_ in general has a tendency to give higher average value than the actual reduction of the ore will show. on three west australian gold mines, in records covering a period of over two years, where sampling was most exhaustive as a daily régime of the mines, the values indicated by sampling were 12% higher than the mill yield plus the contents of the residues. on the witwatersrand gold mines, the actual extractable value is generally considered to be about 78 to 80% of the average shown by sampling, while the mill extractions are on average about 90 to 92% of the head value coming to the mill. in other words, there is a constant discrepancy of about 10 to 12% between the estimated value as indicated by mine samples, and the actual value as shown by yield plus the residues. at broken hill, on three lead mines, the yield is about 12% less than sampling would indicate. this constancy of error in one direction has not been so generally acknowledged as would be desirable, and it must be allowed for in calculating final results. the causes of the exaggeration seem to be:-_first_, inability to stope a mine to such fine limitations of width, or exclusion of unpayable patches, as would appear practicable when sampling, that is by the inclusion when mining of a certain amount of barren rock. even in deposits of about normal stoping width, it is impossible to prevent the breaking of a certain amount of waste, even if the ore occurrence is regularly confined by walls. if the mine be of the impregnation type, such as those at goldfield, or kalgoorlie, with values like plums in a pudding, and the stopes themselves directed more by assays than by any physical differences in the ore, the discrepancy becomes very much increased. in mines where the range of values is narrower than the normal stoping width, some wall rock must be broken. although it is customary to allow for this in calculating the average value from samples, the allowance seldom seems enough. in mines where the ore is broken on to the top of stopes filled with waste, there is some loss underground through mixture with the filling. _second_, the metal content of ores, especially when in the form of sulphides, is usually more friable than the matrix, and in actual breaking of samples an undue proportion of friable material usually creeps in. this is true more in lead, copper, and zinc, than in gold ores. on several gold mines, however, tests on accumulated samples for their sulphide percentage showed a distinctly greater ratio than the tenor of the ore itself in the mill. as the gold is usually associated with the sulphides, the samples showed higher values than the mill. in general, some considerable factor of safety must be allowed after arriving at calculated average of samples,--how much it is difficult to say, but, in any event, not less than 10%. chapter ii. mine valuation (_continued_). calculation of quantities of ore, and classification of ore in sight. as mines are opened by levels, rises, etc., through the ore, an extension of these workings has the effect of dividing it into "blocks." the obvious procedure in determining tonnages is to calculate the volume and value of each block separately. under the law of averages, the multiplicity of these blocks tends in proportion to their number to compensate the percentage of error which might arise in the sampling or estimating of any particular one. the shapes of these blocks, on longitudinal section, are often not regular geometrical figures. as a matter of practice, however, they can be subdivided into such figures that the total will approximate the whole with sufficient closeness for calculations of their areas. the average width of the ore in any particular block is the arithmetical mean of the width of the sample sections in it,[*] if the samples be an equal distance apart. if they are not equidistant, the average width is the sum of the areas between samples, divided by the total length sampled. the cubic foot contents of a particular block is obviously the width multiplied by the area of its longitudinal section. [footnote *: this is not strictly true unless the sum of the widths of the two end-sections be divided by two and the result incorporated in calculating the means. in a long series that error is of little importance.] the ratio of cubic feet to tons depends on the specific gravity of the ore, its porosity, and moisture. the variability of ores throughout the mine in all these particulars renders any method of calculation simply an approximation in the end. the factors which must remain unknown necessarily lead the engineer to the provision of a margin of safety, which makes mathematical refinement and algebraic formulæ ridiculous. there are in general three methods of determination of the specific volume of ores:-_first_, by finding the true specific gravity of a sufficient number of representative specimens; this, however, would not account for the larger voids in the ore-body and in any event, to be anything like accurate, would be as expensive as sampling and is therefore of little more than academic interest. _second_, by determining the weight of quantities broken from measured spaces. this also would require several tests from different portions of the mine, and, in examinations, is usually inconvenient and difficult. yet it is necessary in cases of unusual materials, such as leached gossans, and it is desirable to have it done sooner or later in going mines, as a check. _third_, by an approximation based upon a calculation from the specific gravities of the predominant minerals in the ore. ores are a mixture of many minerals; the proportions vary through the same ore-body. despite this, a few partial analyses, which are usually available from assays of samples and metallurgical tests, and a general inspection as to the compactness of the ore, give a fairly reliable basis for approximation, especially if a reasonable discount be allowed for safety. in such discount must be reflected regard for the porosity of the ore, and the margin of safety necessary may vary from 10 to 25%. if the ore is of unusual character, as in leached deposits, as said before, resort must be had to the second method. the following table of the weights per cubic foot and the number of cubic feet per ton of some of the principal ore-forming minerals and gangue rocks will be useful for approximating the weight of a cubic foot of ore by the third method. weights are in pounds avoirdupois, and two thousand pounds are reckoned to the ton. ============================================ | | number of | weight per | cubic feet | cubic foot | per ton of | | 2000 lb. ------------------|------------|-----------antimony | 417.50 | 4.79 sulphide | 285.00 | 7.01 arsenical pyrites | 371.87 | 5.37 barium sulphate | 278.12 | 7.19 calcium: | | fluorite | 198.75 | 10.06 gypsum | 145.62 | 13.73 calcite | 169.37 | 11.80 copper | 552.50 | 3.62 calcopyrite | 262.50 | 7.61 bornite | 321.87 | 6.21 malachite | 247.50 | 8.04 azurite | 237.50 | 8.42 chrysocolla | 132.50 | 15.09 iron (cast) | 450.00 | 4.44 magnetite | 315.62 | 6.33 hematite | 306.25 | 6.53 limonite | 237.50 | 8.42 pyrite | 312.50 | 6.40 carbonate | 240.62 | 8.31 lead | 710.62 | 2.81 galena | 468.75 | 4.27 carbonate | 406.87 | 4.81 manganese oxide | 268.75 | 6.18 rhodonite | 221.25 | 9.04 magnesite | 187.50 | 10.66 dolomite | 178.12 | 11.23 quartz | 165.62 | 12.07 quicksilver | 849.75 | 2.35 cinnabar | 531.25 | 3.76 sulphur | 127.12 | 15.74 tin | 459.00 | 4.35 oxide | 418.75 | 4.77 zinc | 437.50 | 4.57 blende | 253.12 | 7.90 carbonate | 273.12 | 7.32 silicate | 215.62 | 9.28 andesite | 165.62 | 12.07 granite | 162.62 | 12.30 diabase | 181.25 | 11.03 diorite | 171.87 | 11.63 slates | 165.62 | 12.07 sandstones | 162.50 | 12.30 rhyolite | 156.25 | 12.80 ============================================ the specific gravity of any particular mineral has a considerable range, and a medium has been taken. the possible error is inconsequential for the purpose of these calculations. for example, a representative gold ore may contain in the main 96% quartz, and 4% iron pyrite, and the weight of the ore may be deduced as follows:- quartz, 96% x 12.07 = 11.58 iron pyrite, 4% x 6.40 = .25 ---- 11.83 cubic feet per ton. most engineers, to compensate porosity, would allow twelve to thirteen cubic feet per ton. classification of ore in sight. the risk in estimates of the average value of standing ore is dependent largely upon how far values disclosed by sampling are assumed to penetrate beyond the tested face, and this depends upon the geological character of the deposit. from theoretical grounds and experience, it is known that such values will have some extension, and the assumption of any given distance is a calculation of risk. the multiplication of development openings results in an increase of sampling points available and lessens the hazards. the frequency of such openings varies in different portions of every mine, and thus there are inequalities of risk. it is therefore customary in giving estimates of standing ore to classify the ore according to the degree of risk assumed, either by stating the number of sides exposed or by other phrases. much discussion and ink have been devoted to trying to define what risk may be taken in such matters, that is in reality how far values may be assumed to penetrate into the unbroken ore. still more has been consumed in attempts to coin terms and make classifications which will indicate what ratio of hazard has been taken in stating quantities and values. the old terms "ore in sight" and "profit in sight" have been of late years subject to much malediction on the part of engineers because these expressions have been so badly abused by the charlatans of mining in attempts to cover the flights of their imaginations. a large part of volume x of the "institution of mining and metallurgy" has been devoted to heaping infamy on these terms, yet not only have they preserved their places in professional nomenclature, but nothing has been found to supersede them. some general term is required in daily practice to cover the whole field of visible ore, and if the phrase "ore in sight" be defined, it will be easier to teach the laymen its proper use than to abolish it. in fact, the substitutes are becoming abused as much as the originals ever were. all convincing expressions will be misused by somebody. the legitimate direction of reform has been to divide the general term of "ore in sight" into classes, and give them names which will indicate the variable amount of risk of continuity in different parts of the mine. as the frequency of sample points, and consequently the risk of continuity, will depend upon the detail with which the mine is cut into blocks by the development openings, and upon the number of sides of such blocks which are accessible, most classifications of the degree of risk of continuity have been defined in terms of the number of sides exposed in the blocks. many phrases have been coined to express such classifications; those most currently used are the following:-positive ore \ ore exposed on four sides in blocks of a size ore developed / variously prescribed. ore blocked out ore exposed on three sides within reasonable distance of each other. probable ore \ ore developing / ore exposed on two sides. possible ore \ the whole or a part of the ore below the ore expectant / lowest level or beyond the range of vision. no two of these parallel expressions mean quite the same thing; each more or less overlies into another class, and in fact none of them is based upon a logical footing for such a classification. for example, values can be assumed to penetrate some distance from every sampled face, even if it be only ten feet, so that ore exposed on one side will show some "positive" or "developed" ore which, on the lines laid down above, might be "probable" or even "possible" ore. likewise, ore may be "fully developed" or "blocked out" so far as it is necessary for stoping purposes with modern wide intervals between levels, and still be in blocks too large to warrant an assumption of continuity of values to their centers (fig. 1). as to the third class of "possible" ore, it conveys an impression of tangibility to a nebulous hazard, and should never be used in connection with positive tonnages. this part of the mine's value comes under extension of the deposit a long distance beyond openings, which is a speculation and cannot be defined in absolute tons without exhaustive explanation of the risks attached, in which case any phrase intended to shorten description is likely to be misleading. [illustration: fig. 1.--longitudinal section of a mine, showing classification of the exposed ore. scale, 400 feet = 1 inch.] therefore empirical expressions in terms of development openings cannot be made to cover a geologic factor such as the distribution of metals through a rock mass. the only logical basis of ore classification for estimation purposes is one which is founded on the chances of the values penetrating from the surface of the exposures for each particular mine. ore that may be calculated upon to a certainty is that which, taking into consideration the character of the deposit, can be said to be so sufficiently surrounded by sampled faces that the distance into the mass to which values are assumed to extend is reduced to a minimum risk. ore so far removed from the sampled face as to leave some doubt, yet affording great reason for expectation of continuity, is "probable" ore. the third class of ore mentioned, which is that depending upon extension of the deposit and in which, as said above, there is great risk, should be treated separately as the speculative value of the mine. some expressions are desirable for these classifications, and the writer's own preference is for the following, with a definition based upon the controlling factor itself. they are:-proved ore ore where there is practically no risk of failure of continuity. probable ore ore where there is some risk, yet warrantable justification for assumption of continuity. prospective ore ore which cannot be included in the above classes, nor definitely known or stated in any terms of tonnage. what extent of openings, and therefore of sample faces, is required for the ore to be called "proved" varies naturally with the type of deposit,--in fact with each mine. in a general way, a fair rule in gold quartz veins below influence of secondary alteration is that no point in the block shall be over fifty feet from the points sampled. in limestone or andesite replacements, as by gold or lead or copper, the radius must be less. in defined lead and copper lodes, or in large lenticular bodies such as the tennessee copper mines, the radius may often be considerably greater,--say one hundred feet. in gold deposits of such extraordinary regularity of values as the witwatersrand bankets, it can well be two hundred or two hundred and fifty feet. "probable ore" should be ore which entails continuity of values through a greater distance than the above, and such distance must depend upon the collateral evidence from the character of the deposit, the position of openings, etc. ore beyond the range of the "probable" zone is dependent upon the extension of the deposit beyond the realm of development and will be discussed separately. although the expression "ore in sight" may be deprecated, owing to its abuse, some general term to cover both "positive" and "probable" ore is desirable; and where a general term is required, it is the intention herein to hold to the phrase "ore in sight" under the limitations specified. chapter iii. mine valuation (_continued_). prospective value.[*] extension in depth; origin and structural character of the deposit; secondary enrichment; development in neighboring mines; depth of exhaustion. [footnote *: the term "extension in depth" is preferred by many to the phrase "prospective value." the former is not entirely satisfactory, as it has a more specific than general application. it is, however, a current miner's phrase, and is more expressive. in this discussion "extension in depth" is used synonymously, and it may be taken to include not alone the downward prolongation of the ore below workings, but also the occasional cases of lateral extension beyond the range of development work. the commonest instance is continuance below the bottom level. in any event, to the majority of cases of different extension the same reasoning applies.] it is a knotty problem to value the extension of a deposit beyond a short distance from the last opening. a short distance beyond it is "proved ore," and for a further short distance is "probable ore." mines are very seldom priced at a sum so moderate as that represented by the profit to be won from the ore in sight, and what value should be assigned to this unknown portion of the deposit admits of no certainty. no engineer can approach the prospective value of a mine with optimism, yet the mining industry would be non-existent to-day were it approached with pessimism. any value assessed must be a matter of judgment, and this judgment based on geological evidence. geology is not a mathematical science, and to attach a money equivalence to forecasts based on such evidence is the most difficult task set for the mining engineer. it is here that his view of geology must differ from that of his financially more irresponsible brother in the science. the geologist, contributing to human knowledge in general, finds his most valuable field in the examination of mines largely exhausted. the engineer's most valuable work arises from his ability to anticipate in the youth of the mine the symptoms of its old age. the work of our geologic friends is, however, the very foundation on which we lay our forecasts. geologists have, as the result of long observation, propounded for us certain hypotheses which, while still hypotheses, have proved to account so widely for our underground experience that no engineer can afford to lose sight of them. although there is a lack of safety in fixed theories as to ore deposition, and although such conclusions cannot be translated into feet and metal value, they are nevertheless useful weights on the scale where probabilities are to be weighed. a method in vogue with many engineers is, where the bottom level is good, to assume the value of the extension in depth as a sum proportioned to the profit in sight, and thus evade the use of geological evidence. the addition of various percentages to the profit in sight has been used by engineers, and proposed in technical publications, as varying from 25 to 50%. that is, they roughly assess the extension in depth to be worth one-fifth to one-third of the whole value of an equipped mine. while experience may have sometimes demonstrated this to be a practical method, it certainly has little foundation in either science or logic, and the writer's experience is that such estimates are untrue in practice. the quantity of ore which may be in sight is largely the result of managerial policy. a small mill on a large mine, under rapid development, will result in extensive ore-reserves, while a large mill eating away rapidly on the same mine under the same scale of development would leave small reserves. on the above scheme of valuation the extension in depth would be worth very different sums, even when the deepest level might be at the same horizon in both cases. moreover, no mine starts at the surface with a large amount of ore in sight. yet as a general rule this is the period when its extension is most valuable, for when the deposit is exhausted to 2000 feet, it is not likely to have such extension in depth as when opened one hundred feet, no matter what the ore-reserves may be. further, such bases of valuation fail to take into account the widely varying geologic character of different mines, and they disregard any collateral evidence either of continuity from neighboring development, or from experience in the district. logically, the prospective value can be simply a factor of how _far_ the ore in the individual mine may be expected to extend, and not a factor of the remnant of ore that may still be unworked above the lowest level. an estimation of the chances of this extension should be based solely on the local factors which bear on such extension, and these are almost wholly dependent upon the character of the deposit. these various geological factors from a mining engineer's point of view are:-1. the origin and structural character of the ore-deposit. 2. the position of openings in relation to secondary alteration. 3. the size of the deposit. 4. the depth to which the mine has already been exhausted. 5. the general experience of the district for continuity and the development of adjoining mines. the origin and structural character of the deposit.--in a general way, the ore-deposits of the order under discussion originate primarily through the deposition of metals from gases or solutions circulating along avenues in the earth's crust.[*] the original source of metals is a matter of great disagreement, and does not much concern the miner. to him, however, the origin and character of the avenue of circulation, the enclosing rock, the influence of the rocks on the solution, and of the solutions on the rocks, have a great bearing on the probable continuity of the volume and value of the ore. [footnote *: the class of magmatic segregations is omitted, as not being of sufficiently frequent occurrence in payable mines to warrant troubling with it here.] all ore-deposits vary in value and, in the miner's view, only those portions above the pay limit are ore-bodies, or ore-shoots. the localization of values into such pay areas in an ore-deposit are apparently influenced by: 1. the distribution of the open spaces created by structural movement, fissuring, or folding as at bendigo. 2. the intersection of other fractures which, by mingling of solutions from different sources, provided precipitating conditions, as shown by enrichments at cross-veins. 3. the influence of the enclosing rocks by:- (a) their solubility, and therefore susceptibility to replacement. (b) their influence as a precipitating agent on solutions. (c) their influence as a source of metal itself. (d) their texture, in its influence on the character of the fracture. in homogeneous rocks the tendency is to open clean-cut fissures; in friable rocks, zones of brecciation; in slates or schistose rocks, linked lenticular open spaces;--these influences exhibiting themselves in miner's terms respectively in "well-defined fissure veins," "lodes," and "lenses." (e) the physical character of the rock mass and the dynamic forces brought to bear upon it. this is a difficult study into the physics of stress in cases of fracturing, but its local application has not been without results of an important order. 4. secondary alteration near the surface, more fully discussed later. it is evident enough that the whole structure of the deposit is a necessary study, and even a digest of the subject is not to be compressed into a few paragraphs. from the point of view of continuity of values, ore-deposits may be roughly divided into three classes. they are:-1. deposits of the infiltration type in porous beds, such as lake superior copper conglomerates and african gold bankets. 2. deposits of the fissure vein type, such as california quartz veins. 3. replacement or impregnation deposits on the lines of fissuring or otherwise. in a general way, the uniformity of conditions of deposition in the first class has resulted in the most satisfactory continuity of ore and of its metal contents. in the second, depending much upon the profundity of the earth movements involved, there is laterally and vertically a reasonable basis for expectation of continuity but through much less distance than in the first class. the third class of deposits exhibits widely different phenomena as to continuity and no generalization is of any value. in gold deposits of this type in west australia, colorado, and nevada, continuity far beyond a sampled face must be received with the greatest skepticism. much the same may be said of most copper replacements in limestone. on the other hand the most phenomenal regularity of values have been shown in certain utah and arizona copper mines, the result of secondary infiltration in porphyritic gangues. the mississippi valley lead and zinc deposits, while irregular in detail, show remarkable continuity by way of reoccurrence over wide areas. the estimation of the prospective value of mines where continuity of production is dependent on reoccurrence of ore-bodies somewhat proportional to the area, such as these mississippi deposits or to some extent as in cobalt silver veins, is an interesting study, but one that offers little field for generalization. the position of the openings in relation to secondary alteration.--the profound alteration of the upper section of ore-deposits by oxidation due to the action of descending surface waters, and their associated chemical agencies, has been generally recognized for a great many years. only recently, however, has it been appreciated that this secondary alteration extends into the sulphide zone as well. the bearing of the secondary alteration, both in the oxidized and upper sulphide zones, is of the most sweeping economic character. in considering extension of values in depth, it demands the most rigorous investigation. not only does the metallurgical character of the ores change with oxidation, but the complex reactions due to descending surface waters cause leaching and a migration of metals from one horizon to another lower down, and also in many cases a redistribution of their sequence in the upper zones of the deposit. the effect of these agencies has been so great in many cases as to entirely alter the character of the mine and extension in depth has necessitated a complete reëquipment. for instance, the mt. morgan gold mine, queensland, has now become a copper mine; the copper mines at butte were formerly silver mines; leadville has become largely a zinc producer instead of lead. from this alteration aspect ore-deposits may be considered to have four horizons:-1. the zone near the outcrop, where the dominating feature is oxidation and leaching of the soluble minerals. 2. a lower horizon, still in the zone of oxidation, where the predominant feature is the deposition of metals as native, oxides, and carbonates. 3. the upper horizon of the sulphide zone, where the special feature is the enrichment due to secondary deposition as sulphides. 4. the region below these zones of secondary alteration, where the deposit is in its primary state. these zones are seldom sharply defined, nor are they always all in evidence. how far they are in evidence will depend, among other things, upon the amount and rapidity of erosion, the structure and mineralogical character of the deposit, and upon the enclosing rock. if erosion is extremely rapid, as in cold, wet climates, and rough topography, or as in the case of glaciation of the lake copper deposits, denudation follows close on the heels of alteration, and the surface is so rapidly removed that we may have the primary ore practically at the surface. flat, arid regions present the other extreme, for denudation is much slower, and conditions are most perfect for deep penetration of oxidizing agencies, and the consequent alteration and concentration of the metals. the migration of metals from the top of the oxidized zone leaves but a barren cap for erosion. the consequent effect of denudation that lags behind alteration is to raise slowly the concentrated metals toward the surface, and thus subject them to renewed attack and repeated migration. in this manner we can account for the enormous concentration of values in the lower oxidized and upper sulphide zones overlying very lean sulphides in depth. some minerals are more freely soluble and more readily precipitated than others. from this cause there is in complex metal deposits a rearrangement of horizontal sequence, in addition to enrichment at certain horizons and impoverishment at others. the whole subject is one of too great complexity for adequate consideration in this discussion. no engineer is properly equipped to give judgment on extension in depth without a thorough grasp of the great principles laid down by van hise, emmons, lindgren, weed, and others. we may, however, briefly examine some of the theoretical effects of such alteration. zinc, iron, and lead sulphides are a common primary combination. these metals are rendered soluble from their usual primary forms by oxidizing agencies, in the order given. they reprecipitate as sulphides in the reverse sequence. the result is the leaching of zinc and iron readily in the oxidized zone, thus differentially enriching the lead which lags behind, and a further extension of the lead horizon is provided by the early precipitation of such lead as does migrate. therefore, the lead often predominates in the second and the upper portion of the third zone, with the zinc and iron below. although the action of all surface waters is toward oxidation and carbonation of these metals, the carbonate development of oxidized zones is more marked when the enclosing rocks are calcareous. in copper-iron deposits, the comparatively easy decomposition and solubility and precipitation of the copper and some iron salts generally result in more extensive impoverishment of these metals near the surface, and more predominant enrichment at a lower horizon than is the case with any other metals. the barren "iron hat" at the first zone, the carbonates and oxides at the second, the enrichment with secondary copper sulphides at the top of the third, and the occurrence of secondary copper-iron sulphides below, are often most clearly defined. in the easy recognition of the secondary copper sulphides, chalcocite, bornite, etc., the engineer finds a finger-post on the road to extension in depth; and the directions upon this post are not to be disregarded. the number of copper deposits enriched from unpayability in the first zone to a profitable character in the next two, and unpayability again in the fourth, is legion. silver occurs most abundantly in combination with either lead, copper, iron, or gold. as it resists oxidation and solution more strenuously than copper and iron, its tendency when in combination with them is to lag behind in migration. there is thus a differential enrichment of silver in the upper two zones, due to the reduction in specific gravity of the ore by the removal of associated metals. silver does migrate somewhat, however, and as it precipitates more readily than copper, lead, zinc, or iron, its tendency when in combination with them is towards enrichment above the horizons of enrichment of these metals. when it is in combination with lead and zinc, its very ready precipitation from solution by the galena leaves it in combination more predominantly with the lead. the secondary enrichment of silver deposits at the top of the sulphide zone is sometimes a most pronounced feature, and it seems to be the explanation of the origin of many "bonanzas." in gold deposits, the greater resistance to solubility of this metal than most of the others, renders the phenomena of migration to depth less marked. further than this, migration is often interfered with by the more impervious quartz matrix of many gold deposits. where gold is associated with large quantities of base metals, however, the leaching of the latter in the oxidized zone leaves the ore differentially richer, and as gold is also slightly soluble, in such cases the migration of the base metals does carry some of the gold. in the instance especially of impregnation or replacement deposits, where the matrix is easily permeable, the upper sulphide zone is distinctly richer than lower down, and this enrichment is accompanied by a considerable increase in sulphides and tellurides. the predominant characteristic of alteration in gold deposits is, however, enrichment in the oxidized zone with the maximum values near the surface. the reasons for this appear to be that gold in its resistance to oxidation and wholesale migration gives opportunities to a sort of combined mechanical and chemical enrichment. in dry climates, especially, the gentleness of erosion allows of more thorough decomposition of the outcroppings, and a mechanical separation of the gold from the detritus. it remains on or near the deposit, ready to be carried below, mechanically or otherwise. in wet climates this is less pronounced, for erosion bears away the croppings before such an extensive decomposition and freeing of the gold particles. the west australian gold fields present an especially prominent example of this type of superficial enrichment. during the last fifteen years nearly eight hundred companies have been formed for working mines in this region. although from four hundred of these high-grade ore has been produced, some thirty-three only have ever paid dividends. the great majority have been unpayable below oxidation,--a distance of one or two hundred feet. the writer's unvarying experience with gold is that it is richer in the oxidized zone than at any point below. while cases do occur of gold deposits richer in the upper sulphide zone than below, even the upper sulphides are usually poorer than the oxidized region. in quartz veins preëminently, evidence of enrichment in the third zone is likely to be practically absent. tin ores present an anomaly among the base metals under discussion, in that the primary form of this metal in most workable deposits is an oxide. tin in this form is most difficult of solution from ground agencies, as witness the great alluvial deposits, often of considerable geologic age. in consequence the phenomena of migration and enrichment are almost wholly absent, except such as are due to mechanical penetration of tin from surface decomposition of the matrix akin to that described in gold deposits. in general, three or four essential facts from secondary alteration must be kept in view when prognosticating extensions. oxidation usually alters treatment problems, and oxidized ore of the same grade as sulphides can often be treated more cheaply. this is not universal. low-grade ores of lead, copper, and zinc may be treatable by concentration when in the form of sulphides, and may be valueless when oxidized, even though of the same grade. copper ores generally show violent enrichment at the base of the oxidized, and at the top of the sulphide zone. lead-zinc ores show lead enrichment and zinc impoverishment in the oxidized zone but have usually less pronounced enrichment below water level than copper. the rearrangement of the metals by the deeper migration of the zinc, also renders them metallurgically of less value with depth. silver deposits are often differentially enriched in the oxidized zone, and at times tend to concentrate in the upper sulphide zone. gold deposits usually decrease in value from the surface through the whole of the three alteration zones. size of deposits.--the proverb of a relation between extension in depth and size of ore-bodies expresses one of the oldest of miners' beliefs. it has some basis in experience, especially in fissure veins, but has little foundation in theory and is applicable over but limited areas and under limited conditions. from a structural view, the depth of fissuring is likely to be more or less in proportion to its length and breadth and therefore the volume of vein filling with depth is likely to be proportional to length and width of the fissure. as to the distribution of values, if we eliminate the influence of changing wall rocks, or other precipitating agencies which often cause the values to arrange themselves in "floors," and of secondary alteration, there may be some reason to assume distribution of values of an extent equal vertically to that displayed horizontally. there is, as said, more reason in experience for this assumption than in theory. a study of the shape of a great many ore-shoots in mines of fissure type indicates that when the ore-shoots or ore-bodies are approaching vertical exhaustion they do not end abruptly, but gradually shorten and decrease in value, their bottom boundaries being more often wedge-shaped than even lenticular. if this could be taken as the usual occurrence, it would be possible (eliminating the evident exceptions mentioned above) to state roughly that the minimum extension of an ore-body or ore-shoot in depth below any given horizon would be a distance represented by a radius equal to one-half its length. by length is not meant necessarily the length of a horizontal section, but of one at right angles to the downward axis. on these grounds, which have been reënforced by much experience among miners, the probabilities of extension are somewhat in proportion to the length and width of each ore-body. for instance, in the a mine, with an ore-shoot 1000 feet long and 10 feet wide, on its bottom level, the minimum extension under this hypothesis would be a wedge-shaped ore-body with its deepest point 500 feet below the lowest level, or a minimum of say 200,000 tons. similarly, the b mine with five ore-bodies, each 300 hundred feet long and 10 feet wide, exposed on its lowest level, would have a minimum of five wedges 100 feet deep at their deepest points, or say 50,000 tons. this is not proposed as a formula giving the total amount of extension in depth, but as a sort of yardstick which has experience behind it. this experience applies in a much less degree to deposits originating from impregnation along lines of fissuring and not at all to replacements. development in neighboring mines.--mines of a district are usually found under the same geological conditions, and show somewhat the same habits as to extension in depth or laterally, and especially similar conduct of ore-bodies and ore-shoots. as a practical criterion, one of the most intimate guides is the actual development in adjoining mines. for instance, in kalgoorlie, the great boulder mine is (march, 1908) working the extension of ivanhoe lodes at points 500 feet below the lowest level in the ivanhoe; likewise, the block 10 lead mine at broken hill is working the central ore-body on the central boundary some 350 feet below the central workings. such facts as these must have a bearing on assessing the downward extension. depth of exhaustion.--all mines become completely exhausted at some point in depth. therefore the actual distance to which ore can be expected to extend below the lowest level grows less with every deeper working horizon. the really superficial character of ore-deposits, even outside of the region of secondary enrichment is becoming every year better recognized. the prospector's idea that "she gets richer deeper down," may have some basis near the surface in some metals, but it is not an idea which prevails in the minds of engineers who have to work in depth. the writer, with some others, prepared a list of several hundred dividend-paying metal mines of all sorts, extending over north and south america, australasia, england, and africa. notes were made as far as possible of the depths at which values gave out, and also at which dividends ceased. although by no means a complete census, the list indicated that not 6% of mines (outside banket) that have yielded profits, ever made them from ore won below 2000 feet. of mines that paid dividends, 80% did not show profitable value below 1500 feet, and a sad majority died above 500. failures at short depths may be blamed upon secondary enrichment, but the majority that reached below this influence also gave out. the geological reason for such general unseemly conduct is not so evident. conclusion.--as a practical problem, the assessment of prospective value is usually a case of "cut and try." the portion of the capital to be invested, which depends upon extension, will require so many tons of ore of the same value as that indicated by the standing ore, in order to justify the price. to produce this tonnage at the continued average size of the ore-bodies will require their extension in depth so many feet--or the discovery of new ore-bodies of a certain size. the five geological weights mentioned above may then be put into the scale and a basis of judgment reached. chapter iv. mine valuation (_continued_). recoverable percentage of the gross assay value; price of metals; cost of production. the method of treatment for the ore must be known before a mine can be valued, because a knowledge of the recoverable percentage is as important as that of the gross value of the ore itself. the recoverable percentage is usually a factor of working costs. practically every ore can be treated and all the metal contents recovered, but the real problem is to know the method and percentage of recovery which will yield the most remunerative result, if any. this limit to profitable recovery regulates the amount of metal which should be lost, and the amount of metal which consequently must be deducted from the gross value before the real net value of the ore can be calculated. here, as everywhere else in mining, a compromise has to be made with nature, and we take what we can get--profitably. for instance, a copper ore may be smelted and a 99% recovery obtained. under certain conditions this might be done at a loss, while the same ore might be concentrated before smelting and yield a profit with a 70% recovery. an additional 20% might be obtained by roasting and leaching the residues from concentration, but this would probably result in an expenditure far greater than the value of the 20% recovered. if the ore is not already under treatment on the mine, or exactly similar ore is not under treatment elsewhere, with known results, the method must be determined experimentally, either by the examining engineer or by a special metallurgist. where partially treated products, such as concentrates, are to be sold, not only will there be further losses, but deductions will be made by the smelter for deleterious metals and other charges. all of these factors must be found out,--and a few sample smelting returns from a similar ore are useful. to cover the whole field of metallurgy and discuss what might apply, and how it might apply, under a hundred supposititious conditions would be too great a digression from the subject in hand. it is enough to call attention here to the fact that the residues from every treatment carry some metal, and that this loss has to be deducted from the gross value of the ore in any calculations of net values. price of metals. unfortunately for the mining engineer, not only has he to weigh the amount of risk inherent in calculations involved in the mine itself, but also that due to fluctuations in the value of metals. if the ore is shipped to custom works, he has to contemplate also variations in freights and smelting charges. gold from the mine valuer's point of view has no fluctuations. it alone among the earth's products gives no concern as to the market price. the price to be taken for all other metals has to be decided before the mine can be valued. this introduces a further speculation and, as in all calculations of probabilities, amounts to an estimate of the amount of risk. in a free market the law of supply and demand governs the value of metals as it does that of all other commodities. so far, except for tariff walls and smelting rings, there is a free market in the metals under discussion. the demand for metals varies with the unequal fluctuations of the industrial tides. the sea of commercial activity is subject to heavy storms, and the mine valuer is compelled to serve as weather prophet on this ocean of trouble. high prices, which are the result of industrial booms, bring about overproduction, and the collapse of these begets a shrinkage of demand, wherein consequently the tide of price turns back. in mining for metals each pound is produced actually at a different cost. in case of an oversupply of base metals the price will fall until it has reached a point where a portion of the production is no longer profitable, and the equilibrium is established through decline in output. however, in the backward swing, due to lingering overproduction, prices usually fall lower than the cost of producing even a much-diminished supply. there is at this point what we may call the "basic" price, that at which production is insufficient and the price rises again. the basic price which is due to this undue backward swing is no more the real price of the metal to be contemplated over so long a term of years than is the highest price. at how much above the basic price of depressed times the product can be safely expected to find a market is the real question. few mines can be bought or valued at this basic price. an indication of what this is can be gained from a study of fluctuations over a long term of years. it is common to hear the average price over an extended period considered the "normal" price, but this basis for value is one which must be used with discretion, for it is not the whole question when mining. the "normal" price is the average price over a long term. the lives of mines, and especially ore in sight, may not necessarily enjoy the period of this "normal" price. the engineer must balance his judgments by the immediate outlook of the industrial weather. when lead was falling steadily in december, 1907, no engineer would accept the price of that date, although it was then below "normal"; his product might go to market even lower yet. it is desirable to ascertain what the basic and normal prices are, for between them lies safety. since 1884 there have been three cycles of commercial expansion and contraction. if the average prices are taken for these three cycles separately (1885-95), 1895-1902, 1902-08) it will be seen that there has been a steady advance in prices. for the succeeding cycles lead on the london exchange,[*] the freest of the world's markets was £12 12_s._ 4_d._, £13 3_s._ 7_d._, and £17 7_s._ 0_d._ respectively; zinc, £17 14_s._ 10_d._, £19 3_s._ 8_d._, and £23 3_s._ 0_d._; and standard copper, £48 16_s._ 0_d._, £59 10_s._ 0_d._, and £65 7_s._ 0_d._ it seems, therefore, that a higher standard of prices can be assumed as the basic and normal than would be indicated if the general average of, say, twenty years were taken. during this period, the world's gold output has nearly quadrupled, and, whether the quantitative theory of gold be accepted or not, it cannot be denied that there has been a steady increase in the price of commodities. in all base-metal mining it is well to remember that the production of these metals is liable to great stimulus at times from the discovery of new deposits or new processes of recovery from hitherto unprofitable ores. it is therefore for this reason hazardous in the extreme to prophesy what prices will be far in the future, even when the industrial weather is clear. but some basis must be arrived at, and from the available outlook it would seem that the following metal prices are justifiable for some time to come, provided the present tariff schedules are maintained in the united states: [footnote *: all london prices are based on the long ton of 2,240 lbs. much confusion exists in the copper trade as to the classification of the metal. new york prices are quoted in electrolytic and "lake"; london's in "standard." "standard" has now become practically an arbitrary term peculiar to london, for the great bulk of copper dealt in is "electrolytic" valued considerably over "standard."] ========================================================================== | lead | spelter | copper | tin | silver |------------|----------|----------|----------|-------------- |london| n.y.|lon.| n.y.|lon.| n.y.|lon.| n.y.| lon. | n.y. | ton |pound|ton |pound|ton |pound|ton |pound|per oz.|per oz. ------------|------|-----|----|-----|----|-----|----|-----|-------|------basic price | £11. |$.035|£17 |$.040|£52 |$.115|£100|$.220| 22_d._|$.44 normal price| 13.5| .043| 21 | .050| 65 | .140| 130| .290| 26 | .52 ========================================================================== in these figures the writer has not followed strict averages, but has taken the general outlook combined with the previous records. the likelihood of higher prices for lead is more encouraging than for any other metal, as no new deposits of importance have come forward for years, and the old mines are reaching considerable depths. nor does the frenzied prospecting of the world's surface during the past ten years appear to forecast any very disturbing developments. the zinc future is not so bright, for metallurgy has done wonders in providing methods of saving the zinc formerly discarded from lead ores, and enormous supplies will come forward when required. the tin outlook is encouraging, for the supply from a mining point of view seems unlikely to more than keep pace with the world's needs. in copper the demand is growing prodigiously, but the supplies of copper ores and the number of copper mines that are ready to produce whenever normal prices recur was never so great as to-day. one very hopeful fact can be deduced for the comfort of the base metal mining industry as a whole. if the growth of demand continues through the next thirty years in the ratio of the past three decades, the annual demand for copper will be over 3,000,000 tons, of lead over 1,800,000 tons, of spelter 2,800,000 tons, of tin 250,000 tons. where such stupendous amounts of these metals are to come from at the present range of prices, and even with reduced costs of production, is far beyond any apparent source of supply. the outlook for silver prices is in the long run not bright. as the major portion of the silver produced is a bye product from base metals, any increase in the latter will increase the silver production despite very much lower prices for the precious metal. in the meantime the gradual conversion of all nations to the gold standard seems a matter of certainty. further, silver may yet be abandoned as a subsidiary coinage inasmuch as it has now but a token value in gold standard countries if denuded of sentiment. cost of production. it is hardly necessary to argue the relative importance of the determination of the cost of production and the determination of the recoverable contents of the ore. obviously, the aim of mine valuation is to know the profits to be won, and the profit is the value of the metal won, less the cost of production. the cost of production embraces development, mining, treatment, management. further than this, it is often contended that, as the capital expended in purchase and equipment must be redeemed within the life of the mine, this item should also be included in production costs. it is true that mills, smelters, shafts, and all the paraphernalia of a mine are of virtually negligible value when it is exhausted; and that all mines are exhausted sometime and every ton taken out contributes to that exhaustion; and that every ton of ore must bear its contribution to the return of the investment, as well as profit upon it. therefore it may well be said that the redemption of the capital and its interest should be considered in costs per ton. the difficulty in dealing with the subject from the point of view of production cost arises from the fact that, except possibly in the case of banket gold and some conglomerate copper mines, the life of a metal mine is unknown beyond the time required to exhaust the ore reserves. the visible life at the time of purchase or equipment may be only three or four years, yet the average equipment has a longer life than this, and the anticipation for every mine is also for longer duration than the bare ore in sight. for clarity of conclusions in mine valuation the most advisable course is to determine the profit in sight irrespective of capital redemption in the first instance. the questions of capital redemption, purchase price, or equipment cost can then be weighed against the margin of profit. one phase of redemption will be further discussed under "amortization of capital" and "ratio of output to the mine." the cost of production depends upon many things, such as the cost of labor, supplies, the size of the ore-body, the treatment necessary, the volume of output, etc.; and to discuss them all would lead into a wilderness of supposititious cases. if the mine is a going concern, from which reliable data can be obtained, the problem is much simplified. if it is virgin, the experience of other mines in the same region is the next resource; where no such data can be had, the engineer must fall back upon the experience with mines still farther afield. use is sometimes made of the "comparison ton" in calculating costs upon mines where data of actual experience are not available. as costs will depend in the main upon items mentioned above, if the known costs of a going mine elsewhere be taken as a basis, and subtractions and additions made for more unfavorable or favorable effect of the differences in the above items, a fairly close result can be approximated. mine examinations are very often inspired by the belief that extended operations or new metallurgical applications to the mine will expand the profits. in such cases the paramount questions are the reduction of costs by better plant, larger outputs, new processes, or alteration of metallurgical basis and better methods. if every item of previous expenditure be gone over and considered, together with the equipment, and method by which it was obtained, the possible savings can be fairly well deduced, and justification for any particular line of action determined. one view of this subject will be further discussed under "ratio of output to the mine." the conditions which govern the working costs are on every mine so special to itself, that no amount of advice is very useful. volumes of advice have been published on the subject, but in the main their burden is not to underestimate. in considering the working costs of base-metal mines, much depends upon the opportunity for treatment in customs works, smelters, etc. such treatment means a saving of a large portion of equipment cost, and therefore of the capital to be invested and subsequently recovered. the economics of home treatment must be weighed against the sum which would need to be set aside for redemption of the plant, and unless there is a very distinct advantage to be had by the former, no risks should be taken. more engineers go wrong by the erection of treatment works where other treatment facilities are available, than do so by continued shipping. there are many mines where the cost of equipment could never be returned, and which would be valueless unless the ore could be shipped. another phase of foreign treatment arises from the necessity or advantage of a mixture of ores,--the opportunity of such mixtures often gives the public smelter an advantage in treatment with which treatment on the mine could never compete. fluctuation in the price of base metals is a factor so much to be taken into consideration, that it is desirable in estimating mine values to reduce the working costs to a basis of a "per unit" of finished metal. this method has the great advantage of indicating so simply the involved risks of changing prices that whoso runs may read. where one metal predominates over the other to such an extent as to form the "backbone" of the value of the mine, the value of the subsidiary metals is often deducted from the cost of the principal metal, in order to indicate more plainly the varying value of the mine with the fluctuating prices of the predominant metal. for example, it is usual to state that the cost of copper production from a given ore will be so many cents per pound, or so many pounds sterling per ton. knowing the total metal extractable from the ore in sight, the profits at given prices of metal can be readily deduced. the point at which such calculation departs from the "per-ton-of-ore" unto the per-unit-cost-of-metal basis, usually lies at the point in ore dressing where it is ready for the smelter. to take a simple case of a lead ore averaging 20%: this is to be first concentrated and the lead reduced to a concentrate averaging 70% and showing a recovery of 75% of the total metal content. the cost per ton of development, mining, concentration, management, is to this point say $4 per ton of original crude ore. the smelter buys the concentrate for 95% of the value of the metal, less the smelting charge of $15 per ton, or there is a working cost of a similar sum by home equipment. in this case 4.66 tons of ore are required to produce one ton of concentrates, and therefore each ton of concentrates costs $18.64. this amount, added to the smelting charge, gives a total of $33.64 for the creation of 70% of one ton of finished lead, or equal to 2.40 cents per pound which can be compared with the market price less 5%. if the ore were to contain 20 ounces of silver per ton, of which 15 ounces were recovered into the leady concentrates, and the smelter price for the silver were 50 cents per ounce, then the $7.50 thus recovered would be subtracted from $33.64, making the apparent cost of the lead 1.86 cents per pound. chapter v. mine valuation (_continued_). redemption or amortization of capital and interest. it is desirable to state in some detail the theory of amortization before consideration of its application in mine valuation. as every mine has a limited life, the capital invested in it must be redeemed during the life of the mine. it is not sufficient that there be a bare profit over working costs. in this particular, mines differ wholly from many other types of investment, such as railways. in the latter, if proper appropriation is made for maintenance, the total income to the investor can be considered as interest or profit; but in mines, a portion of the annual income must be considered as a return of capital. therefore, before the yield on a mine investment can be determined, a portion of the annual earnings must be set aside in such a manner that when the mine is exhausted the original investment will have been restored. if we consider the date due for the return of the capital as the time when the mine is exhausted, we may consider the annual instalments as payments before the due date, and they can be put out at compound interest until the time for restoration arrives. if they be invested in safe securities at the usual rate of about 4%, the addition of this amount of compound interest will assist in the repayment of the capital at the due date, so that the annual contributions to a sinking fund need not themselves aggregate the total capital to be restored, but may be smaller by the deficiency which will be made up by their interest earnings. such a system of redemption of capital is called "amortization." obviously it is not sufficient for the mine investor that his capital shall have been restored, but there is required an excess earning over and above the necessities of this annual funding of capital. what rate of excess return the mine must yield is a matter of the risks in the venture and the demands of the investor. mining business is one where 7% above provision for capital return is an absolute minimum demanded by the risks inherent in mines, even where the profit in sight gives warranty to the return of capital. where the profit in sight (which is the only real guarantee in mine investment) is below the price of the investment, the annual return should increase in proportion. there are thus two distinct directions in which interest must be computed,--first, the internal influence of interest in the amortization of the capital, and second, the percentage return upon the whole investment after providing for capital return. there are many limitations to the introduction of such refinements as interest calculations in mine valuation. it is a subject not easy to discuss with finality, for not only is the term of years unknown, but, of more importance, there are many factors of a highly speculative order to be considered in valuing. it may be said that a certain life is known in any case from the profit in sight, and that in calculating this profit a deduction should be made from the gross profit for loss of interest on it pending recovery. this is true, but as mines are seldom dealt with on the basis of profit in sight alone, and as the purchase price includes usually some proportion for extension in depth, an unknown factor is introduced which outweighs the known quantities. therefore the application of the culminative effect of interest accumulations is much dependent upon the sort of mine under consideration. in most cases of uncertain continuity in depth it introduces a mathematical refinement not warranted by the speculative elements. for instance, in a mine where the whole value is dependent upon extension of the deposit beyond openings, and where an expected return of at least 50% per annum is required to warrant the risk, such refinement would be absurd. on the other hand, in a witwatersrand gold mine, in gold and tin gravels, or in massive copper mines such as bingham and lake superior, where at least some sort of life can be approximated, it becomes a most vital element in valuation. in general it may be said that the lower the total annual return expected upon the capital invested, the greater does the amount demanded for amortization become in proportion to this total income, and therefore the greater need of its introduction in calculations. especially is this so where the cost of equipment is large proportionately to the annual return. further, it may be said that such calculations are of decreasing use with increasing proportion of speculative elements in the price of the mine. the risk of extension in depth, of the price of metal, etc., may so outweigh the comparatively minor factors here introduced as to render them useless of attention. in the practical conduct of mines or mining companies, sinking funds for amortization of capital are never established. in the vast majority of mines of the class under discussion, the ultimate duration of life is unknown, and therefore there is no basis upon which to formulate such a definite financial policy even were it desired. were it possible to arrive at the annual sum to be set aside, the stockholders of the mining type would prefer to do their own reinvestment. the purpose of these calculations does not lie in the application of amortization to administrative finance. it is nevertheless one of the touchstones in the valuation of certain mines or mining investments. that is, by a sort of inversion such calculations can be made to serve as a means to expose the amount of risk,--to furnish a yardstick for measuring the amount of risk in the very speculations of extension in depth and price of metals which attach to a mine. given the annual income being received, or expected, the problem can be formulated into the determination of how many years it must be continued in order to amortize the investment and pay a given rate of profit. a certain length of life is evident from the ore in sight, which may be called the life in sight. if the term of years required to redeem the capital and pay an interest upon it is greater than the life in sight, then this extended life must come from extension in depth, or ore from other direction, or increased price of metals. if we then take the volume and profit on the ore as disclosed we can calculate the number of feet the deposit must extend in depth, or additional tonnage that must be obtained of the same grade, or the different prices of metal that must be secured, in order to satisfy the demanded term of years. these demands in actual measure of ore or feet or higher price can then be weighed against the geological and industrial probabilities. the following tables and examples may be of assistance in these calculations. table 1. to apply this table, the amount of annual income or dividend and the term of years it will last must be known or estimated factors. it is then possible to determine the _present_ value of this annual income after providing for amortization and interest on the investment at various rates given, by multiplying the annual income by the factor set out. a simple illustration would be that of a mine earning a profit of $200,000 annually, and having a total of 1,000,000 tons in sight, yielding a profit of $2 a ton, or a total profit in sight of $2,000,000, thus recoverable in ten years. on a basis of a 7% return on the investment and amortization of capital (table i), the factor is 6.52 x $200,000 = $1,304,000 as the present value of the gross profits exposed. that is, this sum of $1,304,000, if paid for the mine, would be repaid out of the profit in sight, together with 7% interest if the annual payments into sinking fund earn 4%. table i. present value of an annual dividend over -years at --% and replacing capital by reinvestment of an annual sum at 4%. ======================================================= years | 5% | 6% | 7% | 8% | 9% | 10% -------|-------|-------|-------|-------|-------|------ 1 | .95 | .94 | .93 | .92 | .92 | .91 2 | 1.85 | 1.82 | 1.78 | 1.75 | 1.72 | 1.69 3 | 2.70 | 2.63 | 2.56 | 2.50 | 2.44 | 2.38 4 | 3.50 | 3.38 | 3.27 | 3.17 | 3.07 | 2.98 5 | 4.26 | 4.09 | 3.93 | 3.78 | 3.64 | 3.51 6 | 4.98 | 4.74 | 4.53 | 4.33 | 4.15 | 3.99 7 | 5.66 | 5.36 | 5.09 | 4.84 | 4.62 | 4.41 8 | 6.31 | 5.93 | 5.60 | 5.30 | 5.04 | 4.79 9 | 6.92 | 6.47 | 6.08 | 5.73 | 5.42 | 5.14 10 | 7.50 | 6.98 | 6.52 | 6.12 | 5.77 | 5.45 | | | | | | 11 | 8.05 | 7.45 | 6.94 | 6.49 | 6.09 | 5.74 12 | 8.58 | 7.90 | 7.32 | 6.82 | 6.39 | 6.00 13 | 9.08 | 8.32 | 7.68 | 7.13 | 6.66 | 6.24 14 | 9.55 | 8.72 | 8.02 | 7.42 | 6.91 | 6.46 15 | 10.00 | 9.09 | 8.34 | 7.79 | 7.14 | 6.67 16 | 10.43 | 9.45 | 8.63 | 7.95 | 7.36 | 6.86 17 | 10.85 | 9.78 | 8.91 | 8.18 | 7.56 | 7.03 18 | 11.24 | 10.10 | 9.17 | 8.40 | 7.75 | 7.19 19 | 11.61 | 10.40 | 9.42 | 8.61 | 7.93 | 7.34 20 | 11.96 | 10.68 | 9.65 | 8.80 | 8.09 | 7.49 | | | | | | 21 | 12.30 | 10.95 | 9.87 | 8.99 | 8.24 | 7.62 22 | 12.62 | 11.21 | 10.08 | 9.16 | 8.39 | 7.74 23 | 12.93 | 11.45 | 10.28 | 9.32 | 8.52 | 7.85 24 | 13.23 | 11.68 | 10.46 | 9.47 | 8.65 | 7.96 25 | 13.51 | 11.90 | 10.64 | 9.61 | 8.77 | 8.06 26 | 13.78 | 12.11 | 10.80 | 9.75 | 8.88 | 8.16 27 | 14.04 | 12.31 | 10.96 | 9.88 | 8.99 | 8.25 28 | 14.28 | 12.50 | 11.11 | 10.00 | 9.09 | 8.33 29 | 14.52 | 12.68 | 11.25 | 10.11 | 9.18 | 8.41 30 | 14.74 | 12.85 | 11.38 | 10.22 | 9.27 | 8.49 | | | | | | 31 | 14.96 | 13.01 | 11.51 | 10.32 | 9.36 | 8.56 32 | 15.16 | 13.17 | 11.63 | 10.42 | 9.44 | 8.62 33 | 15.36 | 13.31 | 11.75 | 10.51 | 9.51 | 8.69 34 | 15.55 | 13.46 | 11.86 | 10.60 | 9.59 | 8.75 35 | 15.73 | 13.59 | 11.96 | 10.67 | 9.65 | 8.80 36 | 15.90 | 13.72 | 12.06 | 10.76 | 9.72 | 8.86 37 | 16.07 | 13.84 | 12.16 | 10.84 | 9.78 | 8.91 38 | 16.22 | 13.96 | 12.25 | 10.91 | 9.84 | 8.96 39 | 16.38 | 14.07 | 12.34 | 10.98 | 9.89 | 9.00 40 | 16.52 | 14.18 | 12.42 | 11.05 | 9.95 | 9.05 ======================================================= condensed from inwood's tables. table ii is practically a compound discount table. that is, by it can be determined the present value of a fixed sum payable at the end of a given term of years, interest being discounted at various given rates. its use may be illustrated by continuing the example preceding. table ii. present value of $1, or £1, payable in -years, interest taken at --%. =================================== years | 4% | 5% | 6% | 7% ------|------|------|------|------ 1 | .961 | .952 | .943 | .934 2 | .924 | .907 | .890 | .873 3 | .889 | .864 | .840 | .816 4 | .854 | .823 | .792 | .763 5 | .821 | .783 | .747 | .713 6 | .790 | .746 | .705 | .666 7 | .760 | .711 | .665 | .623 8 | .731 | .677 | .627 | .582 9 | .702 | .645 | .592 | .544 10 | .675 | .614 | .558 | .508 | | | | 11 | .649 | .585 | .527 | .475 12 | .625 | .557 | .497 | .444 13 | .600 | .530 | .469 | .415 14 | .577 | .505 | .442 | .388 15 | .555 | .481 | .417 | .362 16 | .534 | .458 | .394 | .339 17 | .513 | .436 | .371 | .316 18 | .494 | .415 | .350 | .296 19 | .475 | .396 | .330 | .276 20 | .456 | .377 | .311 | .258 | | | | 21 | .439 | .359 | .294 | .241 22 | .422 | .342 | .277 | .266 23 | .406 | .325 | .262 | .211 24 | .390 | .310 | .247 | .197 25 | .375 | .295 | .233 | .184 26 | .361 | .281 | .220 | .172 27 | .347 | .268 | .207 | .161 28 | .333 | .255 | .196 | .150 29 | .321 | .243 | .184 | .140 30 | .308 | .231 | .174 | .131 | | | | 31 | .296 | .220 | .164 | .123 32 | .285 | .210 | .155 | .115 33 | .274 | .200 | .146 | .107 34 | .263 | .190 | .138 | .100 35 | .253 | .181 | .130 | .094 36 | .244 | .172 | .123 | .087 37 | .234 | .164 | .116 | .082 38 | .225 | .156 | .109 | .076 39 | .216 | .149 | .103 | .071 40 | .208 | .142 | .097 | .067 =================================== condensed from inwood's tables. if such a mine is not equipped, and it is assumed that $200,000 are required to equip the mine, and that two years are required for this equipment, the value of the ore in sight is still less, because of the further loss of interest in delay and the cost of equipment. in this case the present value of $1,304,000 in two years, interest at 7%, the factor is .87 x 1,304,000 = $1,134,480. from this comes off the cost of equipment, or $200,000, leaving $934,480 as the present value of the profit in sight. a further refinement could be added by calculating the interest chargeable against the $200,000 equipment cost up to the time of production. table iii. =========================================================================== annual | number of years of life required to yield--% interest, and in rate of | addition to furnish annual instalments which, if reinvested at dividend.| 4% will return the original investment at the end of the period. ---------|---------------------------------------------------------------- % | 5% | 6% | 7% | 8% | 9% | 10% | | | | | | 6 | 41.0 | | | | | 7 | 28.0 | 41.0 | | | | 8 | 21.6 | 28.0 | 41.0 | | | 9 | 17.7 | 21.6 | 28.0 | 41.0 | | 10 | 15.0 | 17.7 | 21.6 | 28.0 | 41.0 | | | | | | | 11 | 13.0 | 15.0 | 17.7 | 21.6 | 28.0 | 41.0 12 | 11.5 | 13.0 | 15.0 | 17.7 | 21.6 | 28.0 13 | 10.3 | 11.5 | 13.0 | 15.0 | 17.7 | 21.6 14 | 9.4 | 10.3 | 11.5 | 13.0 | 15.0 | 17.7 15 | 8.6 | 9.4 | 10.3 | 11.5 | 13.0 | 15.0 | | | | | | 16 | 7.9 | 8.6 | 9.4 | 10.3 | 11.5 | 13.0 17 | 7.3 | 7.9 | 8.6 | 9.4 | 10.3 | 11.5 18 | 6.8 | 7.3 | 7.9 | 8.6 | 9.4 | 10.3 19 | 6.4 | 6.8 | 7.3 | 7.9 | 8.6 | 9.4 20 | 6.0 | 6.4 | 6.8 | 7.3 | 7.9 | 8.6 | | | | | | 21 | 5.7 | 6.0 | 6.4 | 6.8 | 7.3 | 7.9 22 | 5.4 | 5.7 | 6.0 | 6.4 | 6.8 | 7.3 23 | 5.1 | 5.4 | 5.7 | 6.0 | 6.4 | 6.8 24 | 4.9 | 5.1 | 5.4 | 5.7 | 6.0 | 6.4 25 | 4.7 | 4.9 | 5.1 | 5.4 | 5.7 | 6.0 | | | | | | 26 | 4.5 | 4.7 | 4.9 | 5.1 | 5.4 | 5.7 27 | 4.3 | 4.5 | 4.7 | 4.9 | 5.1 | 5.4 28 | 4.1 | 4.3 | 4.5 | 4.7 | 4.9 | 5.1 29 | 3.9 | 4.1 | 4.3 | 4.5 | 4.7 | 4.9 30 | 3.8 | 3.9 | 4.1 | 4.3 | 4.5 | 4.7 =========================================================================== table iii. this table is calculated by inversion of the factors in table i, and is the most useful of all such tables, as it is a direct calculation of the number of years that a given rate of income on the investment must continue in order to amortize the capital (the annual sinking fund being placed at compound interest at 4%) and to repay various rates of interest on the investment. the application of this method in testing the value of dividend-paying shares is very helpful, especially in weighing the risks involved in the portion of the purchase or investment unsecured by the profit in sight. given the annual percentage income on the investment from the dividends of the mine (or on a non-producing mine assuming a given rate of production and profit from the factors exposed), by reference to the table the number of years can be seen in which this percentage must continue in order to amortize the investment and pay various rates of interest on it. as said before, the ore in sight at a given rate of exhaustion can be reduced to terms of life in sight. this certain period deducted from the total term of years required gives the life which must be provided by further discovery of ore, and this can be reduced to tons or feet of extension of given ore-bodies and a tangible position arrived at. the test can be applied in this manner to the various prices which must be realized from the base metal in sight to warrant the price. taking the last example and assuming that the mine is equipped, and that the price is $2,000,000, the yearly return on the price is 10%. if it is desired besides amortizing or redeeming the capital to secure a return of 7% on the investment, it will be seen by reference to the table that there will be required a life of 21.6 years. as the life visible in the ore in sight is ten years, then the extensions in depth must produce ore for 11.6 years longer--1,160,000 tons. if the ore-body is 1,000 feet long and 13 feet wide, it will furnish of gold ore 1,000 tons per foot of depth; hence the ore-body must extend 1,160 feet deeper to justify the price. mines are seldom so simple a proposition as this example. there are usually probabilities of other ore; and in the case of base metal, then variability of price and other elements must be counted. however, once the extension in depth which is necessary is determined for various assumptions of metal value, there is something tangible to consider and to weigh with the five geological weights set out in chapter iii. the example given can be expanded to indicate not only the importance of interest and redemption in the long extension in depth required, but a matter discussed from another point of view under "ratio of output." if the plant on this mine were doubled and the earnings increased to 20% ($400,000 per annum) (disregarding the reduction in working expenses that must follow expansion of equipment), it will be found that the life required to repay the purchase money,--$2,000,000,--and 7% interest upon it, is about 6.8 years. as at this increased rate of production there is in the ore in sight a life of five years, the extension in depth must be depended upon for 1.8 years, or only 360,000 tons,--that is, 360 feet of extension. similarly, the present value of the ore in sight is $268,000 greater if the mine be given double the equipment, for thus the idle money locked in the ore is brought into the interest market at an earlier date. against this increased profit must be weighed the increased cost of equipment. the value of low grade mines, especially, is very much a factor of the volume of output contemplated. chapter vi. mine valuation (_concluded_). valuation of mines with little or no ore in sight; valuations on second-hand data; general conduct of examinations; reports. a large number of examinations arise upon prospecting ventures or partially developed mines where the value is almost wholly prospective. the risks in such enterprises amount to the possible loss of the whole investment, and the possible returns must consequently be commensurate. such business is therefore necessarily highly speculative, but not unjustifiable, as the whole history of the industry attests; but this makes the matter no easier for the mine valuer. many devices of financial procedure assist in the limitation of the sum risked, and offer a middle course to the investor between purchase of a wholly prospective value and the loss of a possible opportunity to profit by it. the usual form is an option to buy the property after a period which permits a certain amount of development work by the purchaser before final decision as to purchase. aside from young mines such enterprises often arise from the possibility of lateral extension of the ore-deposit outside the boundaries of the property of original discovery (fig. 3), in which cases there is often no visible ore within the property under consideration upon which to found opinion. in regions where vertical side lines obtain, there is always the possibility of a "deep level" in inclined deposits. therefore the ground surrounding known deposits has a certain speculative value, upon which engineers are often called to pass judgment. except in such unusual occurrences as south african bankets, or lake superior coppers, prospecting for deep level of extension is also a highly speculative phase of mining. the whole basis of opinion in both classes of ventures must be the few geological weights,--the geology of the property and the district, the development of surrounding mines, etc. in any event, there is a very great percentage of risk, and the profit to be gained by success must be, proportionally to the expenditure involved, very large. it is no case for calculating amortization and other refinements. it is one where several hundreds or thousands of per cent hoped for on the investment is the only justification. opinions and valuations upon second-hand data. some one may come forward and deprecate the bare suggestion of an engineer's offering an opinion when he cannot have proper first-hand data. but in these days we have to deal with conditions as well as theories of professional ethics. the growing ownership of mines by companies, that is by corporations composed of many individuals, and with their stocks often dealt in on the public exchanges, has resulted in holders whose interest is not large enough to warrant their undertaking the cost of exhaustive examinations. the system has produced an increasing class of mining speculators and investors who are finding and supplying the enormous sums required to work our mines,--sums beyond the reach of the old-class single-handed mining men. every year the mining investors of the new order are coming more and more to the engineer for advice, and they should be encouraged, because such counsel can be given within limits, and these limits tend to place the industry upon a sounder footing of ownership. as was said before, the lamb can be in a measure protected. the engineer's interest is to protect him, so that the industry which concerns his own life-work may be in honorable repute, and that capital may be readily forthcoming for its expansion. moreover, by constant advice to the investor as to what constitutes a properly presented and managed project, the arrangement of such proper presentation and management will tend to become an _a priori_ function of the promoter. sometimes the engineer can make a short visit to the mine for data purposes,--more often he cannot. in the former case, he can resolve for himself an approximation upon all the factors bearing on value, except the quality of the ore. for this, aside from inspection of the ore itself, a look at the plans is usually enlightening. a longitudinal section of the mine showing a continuous shortening of the stopes with each succeeding level carries its own interpretation. in the main, the current record of past production and estimates of the management as to ore-reserves, etc., can be accepted in ratio to the confidence that can be placed in the men who present them. it then becomes a case of judgment of men and things, and here no rule applies. advice must often be given upon data alone, without inspection of the mine. most mining data present internal evidence as to credibility. the untrustworthy and inexperienced betray themselves in their every written production. assuming the reliability of data, the methods already discussed for weighing the ultimate value of the property can be applied. it would be possible to cite hundreds of examples of valuation based upon second-hand data. three will, however, sufficiently illustrate. first, the r mine at johannesburg. with the regularity of this deposit, the development done, and a study of the workings on the neighboring mines and in deeper ground, it is a not unfair assumption that the reefs will maintain size and value throughout the area. the management is sound, and all the data are given in the best manner. the life of the mine is estimated at six years, with some probabilities of further ore from low-grade sections. the annual earnings available for dividends are at the rate of about £450,000 per annum. the capital is £440,000 in £1 shares. by reference to the table on page 46 it will be seen that the present value of £450,000 spread over six years to return capital at the end of that period, and give 7% dividends in the meantime, is 4.53 x £450,000 = £2,036,500 ÷ 440,000 = £4 12_s_. 7_d_. per share. so that this mine, on the assumption of continuity of values, will pay about 7% and return the price. seven per cent is, however, not deemed an adequate return for the risks of labor troubles, faults, dykes, or poor patches. on a 9% basis, the mine is worth about £4 4_s_. per share. second, the g mine in nevada. it has a capital of $10,000,000 in $1 shares, standing in the market at 50 cents each. the reserves are 250,000 tons, yielding a profit for yearly division of $7 per ton. it has an annual capacity of about 100,000 tons, or $700,000 net profit, equal to 14% on the market value. in order to repay the capital value of $5,000,000 and 8% per annum, it will need a life of (table iii) 13 years, of which 2-1/2 are visible. the size of the ore-bodies indicates a yield of about 1,100 tons per foot of depth. at an exhaustion rate of 100,000 tons per annum, the mine would need to extend to a depth of over a thousand feet below the present bottom. there is always a possibility of finding parallel bodies or larger volumes in depth, but it would be a sanguine engineer indeed who would recommend the stock, even though it pays an apparent 14%. third, the b mine, with a capital of $10,000,000 in 2,000,000 shares of $5 each. the promoters state that the mine is in the slopes of the andes in peru; that there are 6,000,000 tons of "ore blocked out"; that two assays by the assayers of the bank of england average 9% copper; that the copper can be produced at five cents per pound; that there is thus a profit of $10,000,000 in sight. the evidences are wholly incompetent. it is a gamble on statements of persons who have not the remotest idea of sound mining. general conduct of examination. complete and exhaustive examination, entailing extensive sampling, assaying, and metallurgical tests, is very expensive and requires time. an unfavorable report usually means to the employer absolute loss of the engineer's fee and expenses. it becomes then the initial duty of the latter to determine at once, by the general conditions surrounding the property, how far the expenditure for exhaustive examination is warranted. there is usually named a money valuation for the property, and thus a peg is afforded upon which to hang conclusions. very often collateral factors with a preliminary sampling, or indeed no sampling at all, will determine the whole business. in fact, it is becoming very common to send younger engineers to report as to whether exhaustive examination by more expensive men is justified. in the course of such preliminary inspection, the ore-bodies may prove to be too small to insure adequate yield on the price, even assuming continuity in depth and represented value. they may be so difficult to mine as to make costs prohibitive, or they may show strong signs of "petering out." the ore may present visible metallurgical difficulties which make it unprofitable in any event. a gold ore may contain copper or arsenic, so as to debar cyanidation, where this process is the only hope of sufficiently moderate costs. a lead ore may be an amorphous compound with zinc, and successful concentration or smelting without great penalties may be precluded. a copper ore may carry a great excess of silica and be at the same time unconcentratable, and there may be no base mineral supply available for smelting mixture. the mine may be so small or so isolated that the cost of equipment will never be justified. some of these conditions may be determined as unsurmountable, assuming a given value for the ore, and may warrant the rejection of the mine at the price set. it is a disagreeable thing to have a disappointed promoter heap vituperation on an engineer's head because he did not make an exhaustive examination. although it is generally desirable to do some sampling to give assurance to both purchaser and vendor of conscientiousness, a little courage of conviction, when this is rightly and adequately grounded, usually brings its own reward. supposing, however, that conditions are right and that the mine is worth the price, subject to confirmation of values, the determination of these cannot be undertaken unless time and money are available for the work. as was said, a sampling campaign is expensive, and takes time, and no engineer has the moral right to undertake an examination unless both facilities are afforded. curtailment is unjust, both to himself and to his employer. how much time and outlay are required to properly sample a mine is obviously a question of its size, and the character of its ore. an engineer and one principal assistant can conduct two sampling parties. in hard rock it may be impossible to take more than five samples a day for each party. but, in average ore, ten samples for each is reasonable work. as the number of samples is dependent upon the footage of openings on the deposit, a rough approximation can be made in advance, and a general idea obtained as to the time required. this period must be insisted upon. reports. reports are to be read by the layman, and their first qualities should be simplicity of terms and definiteness of conclusions. reports are usually too long, rather than too short. the essential facts governing the value of a mine can be expressed on one sheet of paper. it is always desirable, however, that the groundwork data and the manner of their determination should be set out with such detail that any other engineer could come to the same conclusion if he accepted the facts as accurately determined. in regard to the detailed form of reports, the writer's own preference is for a single page summarizing the main factors, and an assay plan, reduced to a longitudinal section where possible. then there should be added, for purposes of record and for submission to other engineers, a set of appendices going into some details as to the history of the mine, its geology, development, equipment, metallurgy, and management. a list of samples should be given with their location, and the tonnages and values of each separate block. a presentation should be made of the probabilities of extension in depth, together with recommendations for working the mine. general summary. the bed-rock value which attaches to a mine is the profit to be won from proved ore and in which the price of metal is calculated at some figure between "basic" and "normal." this we may call the "_a_" value. beyond this there is the speculative value of the mine. if the value of the "probable" ore be represented by _x_, the value of extension of the ore by _y_, and a higher price for metal than the price above assumed represented by _z_, then if the mine be efficiently managed the value of the mine is _a_ + _x_ + _y_ + _z_. what actual amounts should be attached to _x, y, z_ is a matter of judgment. there is no prescription for good judgment. good judgment rests upon a proper balancing of evidence. the amount of risk in _x, y, z_ is purely a question of how much these factors are required to represent in money,--in effect, how much more ore must be found, or how many feet the ore must extend in depth; or in convertible terms, what life in years the mine must have, or how high the price of metal must be. in forming an opinion whether these requirements will be realized, _x, y, z_ must be balanced in a scale whose measuring standards are the five geological weights and the general industrial outlook. the wise engineer will put before his clients the scale, the weights, and the conclusion arrived at. the shrewd investor will require to know these of his adviser. chapter vii. development of mines. entry to the mine; tunnels; vertical, inclined, and combined shafts; location and number of shafts. development is conducted for two purposes: first, to search for ore; and second, to open avenues for its extraction. although both objects are always more or less in view, the first predominates in the early life of mines, the prospecting stage, and the second in its later life, the producing stage. it is proposed to discuss development designed to embrace extended production purposes first, because development during the prospecting stage is governed by the same principles, but is tempered by the greater degree of uncertainty as to the future of the mine, and is, therefore, of a more temporary character. entry to the mine. there are four methods of entry: by tunnel, vertical shaft, inclined shaft, or by a combination of the last two, that is, by a shaft initially vertical then turned to an incline. combined shafts are largely a development of the past few years to meet "deep level" conditions, and have been rendered possible only by skip-winding. the angle in such shafts (fig. 2) is now generally made on a parabolic curve, and the speed of winding is then less diminished by the bend. the engineering problems which present themselves under "entry" may be divided into those of:- 1. method. 2. location. 3. shape and size. the resolution of these questions depends upon the:- a. degree of dip of the deposit. b. output of ore to be provided for. c. depth at which the deposit is to be attacked. d. boundaries of the property. e. surface topography. f. cost. g. operating efficiency. h. prospects of the mine. [illustration: fig. 2.--showing arrangement of the bend in combined shafts.] from the point of view of entrance, the coöperation of a majority of these factors permits the division of mines into certain broad classes. the type of works demanded for moderate depths (say vertically 2,500 to 3,000 feet) is very different from that required for great depths. to reach great depths, the size of shafts must greatly expand, to provide for extended ventilation, pumping, and winding necessities. moreover inclined shafts of a degree of flatness possible for moderate depths become too long to be used economically from the surface. the vast majority of metal-mining shafts fall into the first class, those of moderate depths. yet, as time goes on and ore-deposits are exhausted to lower planes, problems of depth will become more common. one thing, however, cannot be too much emphasized, especially on mines to be worked from the outcrop, and that is, that no engineer is warranted, owing to the speculation incidental to extension in depth, in initiating early in the mine's career shafts of such size or equipment as would be available for great depths. moreover, the proper location of a shaft so as to work economically extension of the ore-bodies is a matter of no certainty, and therefore shafts of speculative mines are tentative in any event. another line of division from an engineering view is brought about by a combination of three of the factors mentioned. this is the classification into "outcrop" and "deep-level" mines. the former are those founded upon ore-deposits to be worked from or close to the surface. the latter are mines based upon the extension in depth of ore-bodies from outcrop mines. such projects are not so common in america, where the law in most districts gives the outcrop owner the right to follow ore beyond his side-lines, as in countries where the boundaries are vertical on all sides. they do, however, arise not alone in the few american sections where the side-lines are vertical boundaries, but in other parts owing to the pitch of ore-bodies through the end lines (fig. 3). more especially do such problems arise in america in effect, where the ingress questions have to be revised for mines worked out in the upper levels (fig. 7). [illustration: fig. 3.--longitudinal section showing "deep level" project arising from dip of ore-body through end-line.] if from a standpoint of entrance questions, mines are first classified into those whose works are contemplated for moderate depths, and those in which work is contemplated for great depth, further clarity in discussion can be gained by subdivision into the possible cases arising out of the factors of location, dip, topography, and boundaries. mines of moderate depths. case i. deposits where topographic conditions permit the alternatives of shaft or tunnel. case ii. vertical or horizontal deposits, the only practical means of attaining which is by a vertical shaft. case iii. inclined deposits to be worked from near the surface. there are in such instances the alternatives of either a vertical or an inclined shaft. case iv. inclined deposits which must be attacked in depth, that is, deep-level projects. there are the alternatives of a compound shaft or of a vertical shaft, and in some cases of an incline from the surface. mines to great depths. case v. vertical or horizontal deposits, the only way of reaching which is by a vertical shaft. case vi. inclined deposits. in such cases the alternatives are a vertical or a compound shaft. case i.--although for logical arrangement tunnel entry has been given first place, to save repetition it is proposed to consider it later. with few exceptions, tunnels are a temporary expedient in the mine, which must sooner or later be opened by a shaft. case ii. vertical or horizontal deposits.--these require no discussion as to manner of entry. there is no justifiable alternative to a vertical shaft (fig. 4). [illustration: fig. 4.--cross-sections showing entry to vertical or horizontal deposits. case ii.] [illustration: fig. 5.--cross-section showing alternative shafts to inclined deposit to be worked from surface. case iii.] case iii. inclined deposits which are intended to be worked from the outcrop, or from near it (fig. 5).--the choice of inclined or vertical shaft is dependent upon relative cost of construction, subsequent operation, and the useful life of the shaft, and these matters are largely governed by the degree of dip. assuming a shaft of the same size in either alternative, the comparative cost per foot of sinking is dependent largely on the breaking facilities of the rock under the different directions of attack. in this, the angles of the bedding or joint planes to the direction of the shaft outweigh other factors. the shaft which takes the greatest advantage of such lines of breaking weakness will be the cheapest per foot to sink. in south african experience, where inclined shafts are sunk parallel to the bedding planes of hard quartzites, the cost per foot appears to be in favor of the incline. on the other hand, sinking shafts across tight schists seems to be more advantageous than parallel to the bedding planes, and inclines following the dip cost more per foot than vertical shafts. an inclined shaft requires more footage to reach a given point of depth, and therefore it would entail a greater total expense than a vertical shaft, assuming they cost the same per foot. the excess amount will be represented by the extra length, and this will depend upon the flatness of the dip. with vertical shafts, however, crosscuts to the deposit are necessary. in a comparative view, therefore, the cost of the crosscuts must be included with that of the vertical shaft, as they would be almost wholly saved in an incline following near the ore. the factor of useful life for the shaft enters in deciding as to the advisability of vertical shafts on inclined deposits, from the fact that at some depth one of two alternatives has to be chosen. the vertical shaft, when it reaches a point below the deposit where the crosscuts are too long (_c_, fig. 5), either becomes useless, or must be turned on an incline at the intersection with the ore (_b_). the first alternative means ultimately a complete loss of the shaft for working purposes. the latter has the disadvantage that the bend interferes slightly with haulage. the following table will indicate an hypothetical extreme case,--not infrequently met. in it a vertical shaft 1,500 feet in depth is taken as cutting the deposit at the depth of 750 feet, the most favored position so far as aggregate length of crosscuts is concerned. the cost of crosscutting is taken at $20 per foot and that of sinking the vertical shaft at $75 per foot. the incline is assumed for two cases at $75 and $100 per foot respectively. the stoping height upon the ore between levels is counted at 125 feet. dip of | depth of | length of |no. of crosscuts| total length deposit from | vertical | incline | required from | of crosscuts, horizontal | shaft | required | v shaft | feet -------------|-------------|-------------|----------------|-------------- 80° | 1,500 | 1,522 | 11 | 859 70° | 1,500 | 1,595 | 12 | 1,911 60° | 1,500 | 1,732 | 13 | 3,247 50° | 1,500 | 1,058 | 15 | 5,389 40° | 1,500 | 2,334 | 18 | 8,038 30° | 1,500 | 3,000 | 23 | 16,237 ========================================================================== cost of |cost vertical| total cost | cost of incline|cost of incline crosscuts $20| shaft $75 | of vertical | $75 per foot | $100 per foot per foot | per foot |and crosscuts| | -------------|-------------|-------------|----------------|-------------- $17,180 | $112,500 | $129,680 | $114,150 | $152,200 38,220 | 112,500 | 150,720 | 118,625 | 159,500 64,940 | 112,500 | 177,440 | 129,900 | 172,230 107,780 | 112,500 | 220,280 | 114,850 | 195,800 178,760 | 112,500 | 291,260 | 175,050 | 233,400 324,740 | 112,500 | 437,240 | 225,000 | 300,000 from the above examples it will be seen that the cost of crosscuts put at ordinary level intervals rapidly outruns the extra expense of increased length of inclines. if, however, the conditions are such that crosscuts from a vertical shaft are not necessary at so frequent intervals, then in proportion to the decrease the advantages sway to the vertical shaft. most situations wherein the crosscuts can be avoided arise in mines worked out in the upper levels and fall under case iv, that of deep-level projects. there can be no doubt that vertical shafts are cheaper to operate than inclines: the length of haul from a given depth is less; much higher rope speed is possible, and thus the haulage hours are less for the same output; the wear and tear on ropes, tracks, or guides is not so great, and pumping is more economical where the cornish order of pump is used. on the other hand, with a vertical shaft must be included the cost of operating crosscuts. on mines where the volume of ore does not warrant mechanical haulage, the cost of tramming through the extra distance involved is an expense which outweighs any extra operating outlay in the inclined shaft itself. even with mechanical haulage in crosscuts, it is doubtful if there is anything in favor of the vertical shaft on this score. [illustration: fig. 6.--cross-section showing auxiliary vertical outlet.] in deposits of very flat dips, under 30°, the case arises where the length of incline is so great that the saving on haulage through direct lift warrants a vertical shaft as an auxiliary outlet in addition to the incline (fig. 6). in such a combination the crosscut question is eliminated. the mine is worked above and below the intersection by incline, and the vertical shaft becomes simply a more economical exit and an alternative to secure increased output. the north star mine at grass valley is an illustration in point. such a positive instance borders again on case iv, deep-level projects. in conclusion, it is the writer's belief that where mines are to be worked from near the surface, coincidentally with sinking, and where, therefore, crosscuts from a vertical shaft would need to be installed frequently, inclines are warranted in all dips under 75° and over 30°. beyond 75° the best alternative is often undeterminable. in the range under 30° and over 15°, although inclines are primarily necessary for actual delivery of ore from levels, they can often be justifiably supplemented by a vertical shaft as a relief to a long haul. in dips of less than 15°, as in those over 75°, the advantages again trend strongly in favor of the vertical shaft. there arise, however, in mountainous countries, topographic conditions such as the dip of deposits into the mountain, which preclude any alternative on an incline at any angled dip. case iv. inclined deposits which must be attacked in depth (fig. 7).--there are two principal conditions in which such properties exist: first, mines being operated, or having been previously worked, whose method of entry must be revised; second, those whose ore-bodies to be attacked do not outcrop within the property. the first situation may occur in mines of inadequate shaft capacity or wrong location; in mines abandoned and resurrected; in mines where a vertical shaft has reached its limit of useful extensions, having passed the place of economical crosscutting; or in mines in flat deposits with inclines whose haul has become too long to be economical. three alternatives present themselves in such cases: a new incline from the surface (_a b f_, fig. 7), or a vertical shaft combined with incline extension (_c d f_), or a simple vertical shaft (_h g_). a comparison can be first made between the simple incline and the combined shaft. the construction of an incline from the surface to the ore-body will be more costly than a combined shaft, for until the horizon of the ore is reached (at _d_) no crosscuts are required in the vertical section, while the incline must be of greater length to reach the same horizon. the case arises, however, where inclines can be sunk through old stopes, and thus more cheaply constructed than vertical shafts through solid rock; and also the case of mountainous topographic conditions mentioned above. [illustration: fig. 7.--cross-section of inclined deposit which must be attacked in depth.] from an operating point of view, the bend in combined shafts (at _d_) gives rise to a good deal of wear and tear on ropes and gear. the possible speed of winding through a combined shaft is, however, greater than a simple incline, for although haulage speed through the incline section (_d f_) and around the bend of the combined shaft is about the same as throughout a simple incline (_a f_), the speed can be accelerated in the vertical portion (_d c_) above that feasible did the incline extend to the surface. there is therefore an advantage in this regard in the combined shaft. the net advantages of the combined over the inclined shaft depend on the comparative length of the two alternative routes from the intersection (_d_) to the surface. certainly it is not advisable to sink a combined shaft to cut a deposit at 300 feet in depth if a simple incline can be had to the surface. on the other hand, a combined shaft cutting the deposit at 1,000 feet will be more advisable than a simple incline 2,000 feet long to reach the same point. the matter is one for direct calculation in each special case. in general, there are few instances of really deep-level projects where a complete incline from the surface is warranted. in most situations of this sort, and in all of the second type (where the outcrop is outside the property), actual choice usually lies between combined shafts (_c d f_) and entire vertical shafts (_h g_). the difference between a combined shaft and a direct vertical shaft can be reduced to a comparison of the combined shaft below the point of intersection (_d_) with that portion of a vertical shaft which would cover the same horizon. the question then becomes identical with that of inclined _versus_ verticals, as stated in case iii, with the offsetting disadvantage of the bend in the combined shaft. if it is desired to reach production at the earliest date, the lower section of a simple vertical shaft must have crosscuts to reach the ore lying above the horizon of its intersection (_e_). if production does not press, the ore above the intersection (_eb_) can be worked by rises from the horizon of intersection (_e_). in the use of rises, however, there follow the difficulties of ventilation and lowering the ore down to the shaft, which brings expenses to much the same thing as operating through crosscuts. the advantages of combined over simple vertical shafts are earlier production, saving of either rises or crosscuts, and the ultimate utility of the shaft to any depth. the disadvantages are the cost of the extra length of the inclined section, slower winding, and greater wear and tear within the inclined section and especially around the bend. all these factors are of variable import, depending upon the dip. on very steep dips,--over 70°,--the net result is in favor of the simple vertical shaft. on other dips it is in favor of the combined shaft. cases v and vi. mines to be worked to great depths,--over 3,000 feet.--in case v, with vertical or horizontal deposits, there is obviously no desirable alternative to vertical shafts. in case vi, with inclined deposits, there are the alternatives of a combined or of a simple vertical shaft. a vertical shaft in locations (_h_, fig. 7) such as would not necessitate extension in depth by an incline, would, as in case iv, compel either crosscuts to the ore or inclines up from the horizon of intersection (_e_). apart from delay in coming to production and the consequent loss of interest on capital, the ventilation problems with this arrangement would be appalling. moreover, the combined shaft, entering the deposit near its shallowest point, offers the possibility of a separate haulage system on the inclined and on the vertical sections, and such separate haulage is usually advisable at great depths. in such instances, the output to be handled is large, for no mine of small output is likely to be contemplated at such depth. several moderate-sized inclines from the horizon of intersection have been suggested (_ef_, _dg_, _ch_, fig. 8) to feed a large primary shaft (_ab_), which thus becomes the trunk road. this program would cheapen lateral haulage underground, as mechanical traction can be used in the main level, (_ec_), and horizontal haulage costs can be reduced on the lower levels. moreover, separate winding engines on the two sections increase the capacity, for the effect is that of two trains instead of one running on a single track. shaft location.--although the prime purpose in locating a shaft is obviously to gain access to the largest volume of ore within the shortest haulage distance, other conditions also enter, such as the character of the surface and the rock to be intersected, the time involved before reaching production, and capital cost. as shafts must bear two relations to a deposit,--one as to the dip and the other as to the strike,--they may be considered from these aspects. vertical shafts must be on the hanging-wall side of the outcrop if the deposit dips at all. in any event, the shaft should be far enough away to be out of the reach of creeps. an inclined shaft may be sunk either on the vein, in which case a pillar of ore must be left to support the shaft; or, instead, it may be sunk a short distance in the footwall, and where necessary the excavation above can be supported by filling. following the ore has the advantage of prospecting in sinking, and in many cases the softness of the ground in the region of the vein warrants this procedure. it has, however, the disadvantage that a pillar of ore is locked up until the shaft is ready for abandonment. moreover, as veins or lodes are seldom of even dip, an inclined shaft, to have value as a prospecting opening, or to take advantage of breaking possibilities in the lode, will usually be crooked, and an incline irregular in detail adds greatly to the cost of winding and maintenance. these twin disadvantages usually warrant a straight incline in the footwall. inclines are not necessarily of the same dip throughout, but for reasonably economical haulage change of angle must take place gradually. [illustration: fig. 8.--longitudinal section showing shaft arrangement proposed for very deep inclined deposits.] in the case of deep-level projects on inclined deposits, demanding combined or vertical shafts, the first desideratum is to locate the vertical section as far from the outcrop as possible, and thus secure the most ore above the horizon of intersection. this, however, as stated before, would involve the cost of crosscuts or rises and would cause delay in production, together with the accumulation of capital charges. how important the increment of interest on capital may become during the period of opening the mine may be demonstrated by a concrete case. for instance, the capital of a company or the cost of the property is, say, $1,000,000, and where opening the mine for production requires four years, the aggregate sum of accumulated compound interest at 5% (and most operators want more from a mining investment) would be $216,000. under such circumstances, if a year or two can be saved in getting to production by entering the property at a higher horizon, the difference in accumulated interest will more than repay the infinitesimal extra cost of winding through a combined shaft of somewhat increased length in the inclined section. the unknown character of the ore in depth is always a sound reason for reaching it as quickly and as cheaply as possible. in result, such shafts are usually best located when the vertical section enters the upper portion of the deposit. the objective in location with regard to the strike of the ore-bodies is obviously to have an equal length of lateral ore-haul in every direction from the shaft. it is easier to specify than to achieve this, for in all speculative deposits ore-shoots are found to pursue curious vagaries as they go down. ore-bodies do not reoccur with the same locus as in the upper levels, and generally the chances to go wrong are more numerous than those to go right. number of shafts.--the problem of whether the mine is to be opened by one or by two shafts of course influences location. in metal mines under cases ii and iii (outcrop properties) the ore output requirements are seldom beyond the capacity of one shaft. ventilation and escape-ways are usually easily managed through the old stopes. under such circumstances, the conditions warranting a second shaft are the length of underground haul and isolation of ore-bodies or veins. lateral haulage underground is necessarily disintegrated by the various levels, and usually has to be done by hand. by shortening this distance of tramming and by consolidation of the material from all levels at the surface, where mechanical haulage can be installed, a second shaft is often justified. there is therefore an economic limitation to the radius of a single shaft, regardless of the ability of the shaft to handle the total output. other questions also often arise which are of equal importance to haulage costs. separate ore-shoots or ore-bodies or parallel deposits necessitate, if worked from one shaft, constant levels through unpayable ground and extra haul as well, or ore-bodies may dip away from the original shaft along the strike of the deposit and a long haulage through dead levels must follow. for instance, levels and crosscuts cost roughly one-quarter as much per foot as shafts. therefore four levels in barren ground, to reach a parallel vein or isolated ore-body 1,000 feet away, would pay for a shaft 1,000 feet deep. at a depth of 1,000 feet, at least six levels might be necessary. the tramming of ore by hand through such a distance would cost about double the amount to hoist it through a shaft and transport it mechanically to the dressing plant at surface. the aggregate cost and operation of barren levels therefore soon pays for a second shaft. if two or more shafts are in question, they must obviously be set so as to best divide the work. under cases iv, v, and vi,--that is, deep-level projects,--ventilation and escape become most important considerations. even where the volume of ore is within the capacity of a single shaft, another usually becomes a necessity for these reasons. their location is affected not only by the locus of the ore, but, as said, by the time required to reach it. where two shafts are to be sunk to inclined deposits, it is usual to set one so as to intersect the deposit at a lower point than the other. production can be started from the shallower, before the second is entirely ready. the ore above the horizon of intersection of the deeper shaft is thus accessible from the shallower shaft, and the difficulty of long rises or crosscuts from that deepest shaft does not arise. chapter viii. development of mines (_continued_). shape and size of shafts; speed of sinking; tunnels. shape of shafts.--shafts may be round or rectangular.[*] round vertical shafts are largely applied to coal-mines, and some engineers have advocated their usefulness to the mining of the metals under discussion. their great advantages lie in their structural strength, in the large amount of free space for ventilation, and in the fact that if walled with stone, brick, concrete, or steel, they can be made water-tight so as to prevent inflow from water-bearing strata, even when under great pressure. the round walled shafts have a longer life than timbered shafts. all these advantages pertain much more to mining coal or iron than metals, for unsound, wet ground is often the accompaniment of coal-measures, and seldom troubles metal-mines. ventilation requirements are also much greater in coal-mines. from a metal-miner's standpoint, round shafts are comparatively much more expensive than the rectangular timbered type.[**] for a larger area must be excavated for the same useful space, and if support is needed, satisfactory walling, which of necessity must be brick, stone, concrete, or steel, cannot be cheaply accomplished under the conditions prevailing in most metal regions. although such shafts would have a longer life, the duration of timbered shafts is sufficient for most metal mines. it follows that, as timber is the cheapest and all things considered the most advantageous means of shaft support for the comparatively temporary character of metal mines, to get the strains applied to the timbers in the best manner, and to use the minimum amount of it consistent with security, and to lose the least working space, the shaft must be constructed on rectangular lines. [footnote *: octagonal shafts were sunk in mexico in former times. at each face of the octagon was a whim run by mules, and hauling leather buckets.] [footnote **: the economic situation is rapidly arising in a number of localities that steel beams can be usefully used instead of timber. the same arguments apply to this type of support that apply to timber.] the variations in timbered shaft design arise from the possible arrangement of compartments. many combinations can be imagined, of which figures 9, 10, 11, 12, 13, and 14 are examples. [illustration: fig. 9. fig. 10. fig. 11. fig. 12. fig. 13. fig. 14.] the arrangement of compartments shown in figures 9, 10, 11, and 13 gives the greatest strength. it permits timbering to the best advantage, and avoids the danger underground involved in crossing one compartment to reach another. it is therefore generally adopted. any other arrangement would obviously be impossible in inclined or combined shafts. size of shafts.--in considering the size of shafts to be installed, many factors are involved. they are in the main:- _a_. amount of ore to be handled. _b_. winding plant. _c_. vehicle of transport. _d_. depth. _e_. number of men to be worked underground. _f_. amount of water. _g_. ventilation. _h_. character of the ground. _i_. capital outlay. _j_. operating expense. it is not to be assumed that these factors have been stated in the order of relative importance. more or less emphasis will be attached to particular factors by different engineers, and under different circumstances. it is not possible to suggest any arbitrary standard for calculating their relative weight, and they are so interdependent as to preclude separate discussion. the usual result is a compromise between the demands of all. certain factors, however, dictate a minimum position, which may be considered as a datum from which to start consideration. _first_, a winding engine, in order to work with any economy, must be balanced, that is, a descending empty skip or cage must assist in pulling up a loaded one. therefore, except in mines of very small output, at least two compartments must be made for hoisting purposes. water has to be pumped from most mines, escape-ways are necessary, together with room for wires and air-pipes, so that at least one more compartment must be provided for these objects. we have thus three compartments as a sound minimum for any shaft where more than trivial output is required. _second_, there is a certain minimum size of shaft excavation below which there is very little economy in actual rock-breaking.[*] in too confined a space, holes cannot be placed to advantage for the blast, men cannot get round expeditiously, and spoil cannot be handled readily. the writer's own experience leads him to believe that, in so far as rock-breaking is concerned, to sink a shaft fourteen to sixteen feet long by six to seven feet wide outside the timbers, is as cheap as to drive any smaller size within the realm of consideration, and is more rapid. this size of excavation permits of three compartments, each about four to five feet inside the timbers. [footnote *: notes on the cost of shafts in various regions which have been personally collected show a remarkable decrease in the cost per cubic foot of material excavated with increased size of shaft. variations in skill, in economic conditions, and in method of accounting make data regarding different shafts of doubtful value, but the following are of interest:-in australia, eight shafts between 10 and 11 feet long by 4 to 5 feet wide cost an average of $1.20 per cubic foot of material excavated. six shafts 13 to 14 feet long by 4 to 5 feet wide cost an average of $0.95 per cubic foot; seven shafts 14 to 16 feet long and 5 to 7 feet wide cost an average of $0.82 per cubic foot. in south africa, eleven shafts 18 to 19 feet long by 7 to 8 feet wide cost an average of $0.82 per cubic foot; five shafts 21 to 25 feet long by 8 feet wide, cost $0.74; and seven shafts 28 feet by 8 feet cost $0.60 per cubic foot.] the cost of timber, it is true, is a factor of the size of shaft, but the labor of timbering does not increase in the same ratio. in any event, the cost of timber is only about 15% of the actual shaft cost, even in localities of extremely high prices. _third_, three reasons are rapidly making the self-dumping skip the almost universal shaft-vehicle, instead of the old cage for cars. first, there is a great economy in labor for loading into and discharging from a shaft; second, there is more rapid despatch and discharge and therefore a larger number of possible trips; third, shaft-haulage is then independent of delays in arrival of cars at stations, while tramming can be done at any time and shaft-haulage can be concentrated into certain hours. cages to carry mine cars and handle the same load as a skip must either be big enough to take two cars, which compels a much larger shaft than is necessary with skips, or they must be double-decked, which renders loading arrangements underground costly to install and expensive to work. for all these reasons, cages can be justified only on metal mines of such small tonnage that time is no consideration and where the saving of men is not to be effected. in compartments of the minimum size mentioned above (four to five feet either way) a skip with a capacity of from two to five tons can be installed, although from two to three tons is the present rule. lighter loads than this involve more trips, and thus less hourly capacity, and, on the other hand, heavier loads require more costly engines. this matter is further discussed under "haulage appliances." we have therefore as the economic minimum a shaft of three compartments (fig. 9), each four to five feet square. when the maximum tonnage is wanted from such a shaft at the least operating cost, it should be equipped with loading bins and skips. the output capacity of shafts of this size and equipment will depend in a major degree upon the engine employed, and in a less degree upon the hauling depth. the reason why depth is a subsidiary factor is that the rapidity with which a load can be drawn is not wholly a factor of depth. the time consumed in hoisting is partially expended in loading, in acceleration and retardation of the engine, and in discharge of the load. these factors are constant for any depth, and extra distance is therefore accomplished at full speed of the engine. vertical shafts will, other things being equal, have greater capacity than inclines, as winding will be much faster and length of haul less for same depth. since engines have, however, a great tractive ability on inclines, by an increase in the size of skip it is usually possible partially to equalize matters. therefore the size of inclines for the same output need not differ materially from vertical shafts. the maximum capacity of a shaft whose equipment is of the character and size given above, will, as stated, decrease somewhat with extension in depth of the haulage horizon. at 500 feet, such a shaft if vertical could produce 70 to 80 tons per hour comfortably with an engine whose winding speed was 700 feet per minute. as men and material other than ore have to be handled in and out of the mine, and shaft-sinking has to be attended to, the winding engine cannot be employed all the time on ore. twelve hours of actual daily ore-winding are all that can be expected without auxiliary help. this represents a capacity from such a depth of 800 to 1,000 tons per day. a similar shaft, under ordinary working conditions, with an engine speed of 2,000 feet per minute, should from, say, 3,000 feet have a capacity of about 400 to 600 tons daily. it is desirable to inquire at what stages the size of shaft should logically be enlarged in order to attain greater capacity. a considerable measure of increase can be obtained by relieving the main hoisting engine of all or part of its collateral duties. where the pumping machinery is not elaborate, it is often possible to get a small single winding compartment into the gangway without materially increasing the size of the shaft if the haulage compartments be made somewhat narrower (fig. 10). such a compartment would be operated by an auxiliary engine for sinking, handling tools and material, and assisting in handling men. if this arrangement can be effected, the productive time of the main engine can be expanded to about twenty hours with an addition of about two-thirds to the output. where the exigencies of pump and gangway require more than two and one-half feet of shaft length, the next stage of expansion becomes four full-sized compartments (fig. 11). by thus enlarging the auxiliary winding space, some assistance may be given to ore-haulage in case of necessity. the mine whose output demands such haulage provisions can usually stand another foot of width to the shaft, so that the dimensions come to about 21 feet to 22 feet by 7 feet to 8 feet outside the timbers. such a shaft, with threeto four-ton skips and an appropriate engine, will handle up to 250 tons per hour from a depth of 1,000 feet. the next logical step in advance is the shaft of five compartments with four full-sized haulage ways (fig. 13), each of greater size than in the above instance. in this case, the auxiliary engine becomes a balanced one, and can be employed part of the time upon ore-haulage. such a shaft will be about 26 feet to 28 feet long by 8 feet wide outside the timbers, when provision is made for one gangway. the capacity of such shafts can be up to 4,000 tons a day, depending on the depth and engine. when very large quantities of water are to be dealt with and rod-driven pumps to be used, two pumping compartments are sometimes necessary, but other forms of pumps do not require more than one compartment,--an additional reason for their use. for depths greater than 3,000 feet, other factors come into play. ventilation questions become of more import. the mechanical problems on engines and ropes become involved, and their sum-effect is to demand much increased size and a greater number of compartments. the shafts at johannesburg intended as outlets for workings 5,000 feet deep are as much as 46 feet by 9 feet outside timbers. it is not purposed to go into details as to sinking methods or timbering. while important matters, they would unduly prolong this discussion. besides, a multitude of treatises exist on these subjects and cover all the minutiæ of such work. speed of sinking.--mines may be divided into two cases,--those being developed only, and those being operated as well as developed. in the former, the entrance into production is usually dependent upon the speed at which the shaft is sunk. until the mine is earning profits, there is a loss of interest on the capital involved, which, in ninety-nine instances out of a hundred, warrants any reasonable extra expenditure to induce more rapid progress. in the case of mines in operation, the volume of ore available to treatment or valuation is generally dependent to a great degree upon the rapidity of the extension of workings in depth. it will be demonstrated later that, both from a financial and a technical standpoint, the maximum development is the right one and that unremitting extension in depth is not only justifiable but necessary. speed under special conditions or over short periods has a more romantic than practical interest, outside of its value as a stimulant to emulation. the thing that counts is the speed which can be maintained over the year. rapidity of sinking depends mainly on:-_a_. whether the shaft is or is not in use for operating the mine. _b_. the breaking character of the rock. _c_. the amount of water. the delays incident to general carrying of ore and men are such that the use of the main haulage engine for shaft-sinking is practically impossible, except on mines with small tonnage output. even with a separate winch or auxiliary winding-engine, delays are unavoidable in a working shaft, especially as it usually has more water to contend with than one not in use for operating the mine. the writer's own impression is that an average of 40 feet per month is the maximum possibility for year in and out sinking under such conditions. in fact, few going mines manage more than 400 feet a year. in cases of clean shaft-sinking, where every energy is bent to speed, 150 feet per month have been averaged for many months. special cases have occurred where as much as 213 feet have been achieved in a single month. with ordinary conditions, 1,200 feet in a year is very good work. rock awkward to break, and water especially, lowers the rate of progress very materially. further reference to speed will be found in the chapter on "drilling methods." tunnel entry.--the alternative of entry to a mine by tunnel is usually not a question of topography altogether, but, like everything else in mining science, has to be tempered to meet the capital available and the expenditure warranted by the value showing. in the initial prospecting of a mine, tunnels are occasionally overdone by prospectors. often more would be proved by a few inclines. as the pioneer has to rely upon his right arm for hoisting and drainage, the tunnel offers great temptations, even when it is long and gains but little depth. at a more advanced stage of development, the saving of capital outlay on hoisting and pumping equipment, at a time when capital is costly to secure, is often sufficient justification for a tunnel entry. but at the stage where the future working of ore below a tunnel-level must be contemplated, other factors enter. for ore below tunnel-level a shaft becomes necessary, and in cases where a tunnel enters a few hundred feet below the outcrop the shaft should very often extend to the surface, because internal shafts, winding from tunnel-level, require large excavations to make room for the transfer of ore and for winding gear. the latter must be operated by transmitted power, either that of steam, water, electricity, or air. where power has to be generated on the mine, the saving by the use of direct steam, generated at the winding gear, is very considerable. moreover, the cost of haulage through a shaft for the extra distance from tunnel-level to the surface is often less than the cost of transferring the ore and removing it through the tunnel. the load once on the winding-engine, the consumption of power is small for the extra distance, and the saving of labor is of consequence. on the other hand, where drainage problems arise, they usually outweigh all other considerations, for whatever the horizon entered by tunnel, the distance from that level to the surface means a saving of water-pumpage against so much head. the accumulation of such constant expense justifies a proportioned capital outlay. in other words, the saving of this extra pumping will annually redeem the cost of a certain amount of tunnel, even though it be used for drainage only. in order to emphasize the rapidity with which such a saving of constant expense will justify capital outlay, one may tabulate the result of calculations showing the length of tunnel warranted with various hypothetical factors of quantity of water and height of lift eliminated from pumping. in these computations, power is taken at the low rate of $60 per horsepower-year, the cost of tunneling at an average figure of $20 per foot, and the time on the basis of a ten-year life for the mine. feet of tunnel paid for in 10 years with under-mentioned conditions. ============================================================= feet of | 100,000 | 200,000 | 300,000 | 500,000 |1,000,000 water lift | gallons | gallons | gallons | gallons | gallons avoided |per diem |per diem |per diem |per diem |per diem -----------|---------|---------|---------|---------|-------- 100 | 600 | 1,200 | 1,800 | 3,000 | 6,000 200 | 1,200 | 2,400 | 3,600 | 6,000 | 12,000 300 | 1,800 | 3,600 | 5,400 | 9,000 | 18,000 500 | 3,000 | 6,000 | 9,000 | 15,000 | 30,000 1,000 | 6,000 | 12,000 | 18,000 | 30,000 | 60,000 ============================================================= the size of tunnels where ore-extraction is involved depends upon the daily tonnage output required, and the length of haul. the smallest size that can be economically driven and managed is about 6-1/2 feet by 6 feet inside the timbers. such a tunnel, with single track for a length of 1,000 feet, with one turn-out, permits handling up to 500 tons a day with men and animals. if the distance be longer or the tonnage greater, a double track is required, which necessitates a tunnel at least 8 feet wide by 6-1/2 feet to 7 feet high, inside the timbers. there are tunnel projects of a much more impressive order than those designed to operate upper levels of mines; that is, long crosscut tunnels designed to drain and operate mines at very considerable depths, such as the sutro tunnel at virginia city. the advantage of these tunnels is very great, especially for drainage, and they must be constructed of large size and equipped with appliances for mechanical haulage. chapter ix. development of mines (_concluded_). subsidiary development;--stations; crosscuts; levels; interval between levels; protection of levels; winzes and rises. development in the prospecting stage; drilling. subsidiary development. stations, crosscuts, levels, winzes, and rises follow after the initial entry. they are all expensive, and the least number that will answer is the main desideratum. stations.--as stations are the outlets of the levels to the shaft, their size and construction is a factor of the volume and character of the work at the levels which they are to serve. if no timber is to be handled, and little ore, and this on cages, the stations need be no larger than a good sized crosscut. where timber is to be let down, they must be ten to fifteen feet higher than the floor of the crosscut. where loading into skips is to be provided for, bins must be cut underneath and sufficient room be provided to shift the mine cars comfortably. such bins are built of from 50 to 500 tons' capacity in order to contain some reserve for hoisting purposes, and in many cases separate bins must be provided on opposite sides of the shaft for ore and waste. it is a strong argument in favor of skips, that with this means of haulage storage capacity at the stations is possible, and the hoisting may then go on independently of trucking and, as said before, there are no idle men at the stations. [illustration: fig. 15.--cross-section of station arrangement for skip-haulage in vertical shaft.] [illustration: fig. 16.--cross-section of station arrangement for skip-haulage in vertical shaft.] it is always desirable to concentrate the haulage to the least number of levels, for many reasons. among them is that, where haulage is confined to few levels, storage-bins are not required at every station. figures 15, 16, 17, and 18 illustrate various arrangements of loading bins. crosscuts.--crosscuts are for two purposes, for roadway connection of levels to the shaft or to other levels, and for prospecting purposes. the number of crosscuts for roadways can sometimes be decreased by making the connections with the shaft at every second or even every third level, thus not only saving in the construction cost of crosscuts and stations, but also in the expenses of scattered tramming. the matter becomes especially worth considering where the quantity of ore that can thus be accumulated warrants mule or mechanical haulage. this subject will be referred to later on. [illustration: fig. 17.--arrangement of loading chutes in vertical shaft.] on the second purpose of crosscuts,--that of prospecting,--one observation merits emphasis. this is, that the tendency of ore-fissures to be formed in parallels warrants more systematic crosscutting into the country rock than is done in many mines. [illustration: fig. 18.--cross-section of station arrangement for skip-haulage in inclined shaft.] levels. the word "level" is another example of miners' adaptations in nomenclature. its use in the sense of tunnels driven in the direction of the strike of the deposit has better, but less used, synonyms in the words "drifts" or "drives." the term "level" is used by miners in two senses, in that it is sometimes applied to all openings on one horizon, crosscuts included. levels are for three purposes,--for a stoping base; for prospecting the deposit; and for roadways. as a prospecting and a stoping base it is desirable that the level should be driven on the deposit; as a roadway, that it should constitute the shortest distance between two points and be in the soundest ground. on narrow, erratic deposits the levels usually must serve all three purposes at once; but in wider and more regular deposits levels are often driven separately for roadways from the level which forms the stoping base and prospecting datum. there was a time when mines were worked by driving the level on ore and enlarging it top and bottom as far as the ground would stand, then driving the next level 15 to 20 feet below, and repeating the operation. this interval gradually expanded, but for some reason 100 feet was for years assumed to be the proper distance between levels. scattered over every mining camp on earth are thousands of mines opened on this empirical figure, without consideration of the reasons for it or for any other distance. the governing factors in determining the vertical interval between levels are the following:- _a_. the regularity of the deposit. _b_. the effect of the method of excavation of winzes and rises. _c_. the dip and the method of stoping. regularity of the deposit.--from a prospecting point of view the more levels the better, and the interval therefore must be determined somewhat by the character of the deposit. in erratic deposits there is less risk of missing ore with frequent levels, but it does not follow that every level need be a through roadway to the shaft or even a stoping base. in such deposits, intermediate levels for prospecting alone are better than complete levels, each a roadway. nor is it essential, even where frequent levels are required for a stoping base, that each should be a main haulage outlet to the shaft. in some mines every third level is used as a main roadway, the ore being poured from the intermediate ones down to the haulage line. thus tramming and shaft work, as stated before, can be concentrated. effect of method of excavating winzes and rises.--with hand drilling and hoisting, winzes beyond a limited depth become very costly to pull spoil out of, and rises too high become difficult to ventilate, so that there is in such cases a limit to the interval desirable between levels, but these difficulties largely disappear where air-winches and air-drills are used. the dip and method of stoping.--the method of stoping is largely dependent upon the dip, and indirectly thus affects level intervals. in dips under that at which material will "flow" in the stopes--about 45° to 50°--the interval is greatly dependent on the method of stope-transport. where ore is to be shoveled from stopes to the roadway, the levels must be comparatively close together. where deposits are very flat, under 20°, and walls fairly sound, it is often possible to use a sort of long wall system of stoping and to lay tracks in the stopes with self-acting inclines to the levels. in such instances, the interval can be expanded to 250 or even 400 feet. in dips between 20° and 45°, tracks are not often possible, and either shoveling or "bumping troughs"[*] are the only help to transport. with shoveling, intervals of 100 feet[**] are most common, and with troughs the distance can be expanded up to 150 or 175 feet. [footnote *: page 136.] [footnote **: intervals given are measured on the dip.] in dips of over 40° to 50°, depending on the smoothness of the foot wall, the distance can again be increased, as stope-transport is greatly simplified, since the stope materials fall out by gravity. in timbered stopes, in dips over about 45°, intervals of 150 to 200 feet are possible. in filled stopes intervals of over 150 feet present difficulties in the maintenance of ore-passes, for the wear and tear of longer use often breaks the timbers. in shrinkage-stopes, where no passes are to be maintained and few winzes put through, the interval is sometimes raised to 250 feet. the subject is further discussed under "stoping." another factor bearing on level intervals is the needed insurance of sufficient points of stoping attack to keep up a certain output. this must particularly influence the manager whose mine has but little ore in reserve. [illustration: fig. 19.] protection of levels.--until recent years, timbering and occasional walling was the only method for the support of the roof, and for forming a platform for a stoping base. where the rock requires no support sublevels can be used as a stoping base, and timbering for such purpose avoided altogether (figs. 38, 39, 42). in such cases the main roadway can then be driven on straight lines, either in the walls or in the ore, and used entirely for haulage. the subheading for a stoping base is driven far enough above or below the roadway (depending on whether overhand or underhand stoping is to be used) to leave a supporting pillar which is penetrated by short passes for ore. in overhand stopes, the ore is broken directly on the floor of an upper sublevel; and in underhand stopes, broken directly from the bottom of the sublevel. the method entails leaving a pillar of ore which can be recovered only with difficulty in mines where stope-support is necessary. the question of its adoption is then largely one of the comparative cost of timbering, the extra cost of the sublevel, and the net value of the ore left. in bad swelling veins, or badly crushing walls, where constant repair to timbers would be necessary, the use of a sublevel is a most useful alternative. it is especially useful with stopes to be left open or worked by shrinkage-stoping methods. if the haulage level, however, is to be the stoping base, some protection to the roadway must be provided. there are three systems in use,--by wood stulls or sets (figs. 19, 30, 43), by dry-walling with timber caps (fig. 35), and in some localities by steel sets. stulls are put up in various ways, and, as their use entails the least difficulty in taking the ore out from beneath the level, they are much favored, but are applicable only in comparatively narrow deposits. winzes and rises. these two kinds of openings for connecting two horizons in a mine differ only in their manner of construction. a winze is sunk underhand, while a rise is put up overhand. when the connection between levels is completed, a miner standing at the bottom usually refers to the opening as a rise, and when he goes to the top he calls it a winze. this confusion in terms makes it advisable to refer to all such completed openings as winzes, regardless of how they are constructed. in actual work, even disregarding water, it costs on the average about 30% less to raise than to sink such openings, for obviously the spoil runs out or is assisted by gravity in one case, and in the other has to be shoveled and hauled up. moreover, it is easier to follow the ore in a rise than in a winze. it usually happens, however, that in order to gain time both things are done, and for prospecting purposes sinking is necessary. the number of winzes required depends upon the method of stoping adopted, and is mentioned under "stoping." after stoping, the number necessary to be maintained open depends upon the necessities of ventilation, of escape, and of passageways for material to be used below. where stopes are to be filled with waste, more winzes must be kept open than when other methods are used, and these winzes must be in sufficient alignment to permit the continuous flow of material down past the various levels. in order that the winzes should deliver timber and filling to the most advantageous points, they should, in dipping ore-bodies, be as far as possible on the hanging wall side. development in the early prospecting stage. the prime objects in the prospecting stage are to expose the ore and to learn regarding the ore-bodies something of their size, their value, metallurgical character, location, dip, strike, etc.,--so much at least as may be necessary to determine the works most suitable for their extraction or values warranting purchase. in outcrop mines there is one rule, and that is "follow the ore." small temporary inclines following the deposit, even though they are eventually useless; are nine times out of ten justified. in prospecting deep-level projects, it is usually necessary to layout work which can be subsequently used in operating the mine, because the depth involves works of such considerable scale, even for prospecting, that the initial outlay does not warrant any anticipation of revision. such works have to be located and designed after a study of the general geology as disclosed in adjoining mines. practically the only method of supplementing such information is by the use of churnand diamond-drills. drilling.--churn-drills are applicable only to comparatively shallow deposits of large volume. they have an advantage over the diamond drill in exposing a larger section and in their application to loose material; but inability to determine the exact horizon of the spoil does not lend them to narrow deposits, and in any event results are likely to be misleading from the finely ground state of the spoil. they are, however, of very great value for preliminary prospecting to shallow horizons. two facts in diamond-drilling have to be borne in mind: the indication of values is liable to be misleading, and the deflection of the drill is likely to carry it far away from its anticipated destination. a diamond-drill secures a small section which is sufficiently large to reveal the geology, but the values disclosed in metal mines must be accepted with reservations. the core amounts to but a little sample out of possibly large amounts of ore, which is always of variable character, and the core is most unlikely to represent the average of the deposit. two diamond-drill holes on the oroya brownhill mine both passed through the ore-body. one apparently disclosed unpayable values, the other seemingly showed ore forty feet in width assaying $80 per ton. neither was right. on the other hand, the predetermination of the location of the ore-body justified expenditure. a recent experiment at johannesburg of placing a copper wedge in the hole at a point above the ore-body and deflecting the drill on reintroducing it, was successful in giving a second section of the ore at small expense. the deflection of diamond-drill holes from the starting angle is almost universal. it often amounts to a considerable wandering from the intended course. the amount of such deflection varies with no seeming rule, but it is probable that it is especially affected by the angle at which stratification or lamination planes are inclined to the direction of the hole. a hole has been known to wander in a depth of 1,500 feet more than 500 feet from the point intended. various instruments have been devised for surveying deep holes, and they should be brought into use before works are laid out on the basis of diamond-drill results, although none of the inventions are entirely satisfactory. chapter x. stoping. methods of ore-breaking; underhand stopes; overhand stopes; combined stope. valuing ore in course of breaking. there is a great deal of confusion in the application of the word "stoping." it is used not only specifically to mean the actual ore-breaking, but also in a general sense to indicate all the operations of ore-breaking, support of excavations, and transportation between levels. it is used further as a noun to designate the hole left when the ore is taken out. worse still, it is impossible to adhere to miners' terms without employing it in every sense, trusting to luck and the context to make the meaning clear. the conditions which govern the method of stoping are in the main:- _a_. the dip. _b_. the width of the deposit. _c_. the character of the walls. _d_. the cost of materials. _e_. the character of the ore. every mine, and sometimes every stope in a mine, is a problem special to itself. any general consideration must therefore be simply an inquiry into the broad principles which govern the adaptability of special methods. a logical arrangement of discussion is difficult, if not wholly impossible, because the factors are partially interdependent and of varying importance. for discussion the subject may be divided into: 1. methods of ore-breaking. 2. methods of supporting excavation. 3. methods of transport in stopes. methods of ore-breaking. the manner of actual ore-breaking is to drill and blast off slices from the block of ground under attack. as rock obviously breaks easiest when two sides are free, that is, when corners can be broken off, the detail of management for blasts is therefore to set the holes so as to preserve a corner for the next cut; and as a consequence the face of the stope shapes into a series of benches (fig. 22),--inverted benches in the case of overhand stopes (figs. 20, 21). the size of these benches will in a large measure depend on the depth of the holes. in wide stopes with machine-drills they vary from 7 to 10 feet; in narrow stopes with hand-holes, from two to three feet. [illustration: fig. 20.] the position of the men in relation to the working face gives rise to the usual primary classification of the methods of stoping. they are:- 1. underhand stopes, 2. overhand stopes, 3. combined stopes. these terms originated from the direction of the drill-holes, but this is no longer a logical basis of distinction, for underhand holes in overhand stopes,--as in rill-stoping,--are used entirely in some mines (fig. 21). [illustration: fig. 21.] underhand stopes.--underhand stopes are those in which the ore is broken downward from the levels. inasmuch as this method has the advantage of allowing the miner to strike his blows downward and to stand upon the ore when at work, it was almost universal before the invention of powder; and was applied more generally before the invention of machine-drills than since. it is never rightly introduced unless the stope is worked back from winzes through which the ore broken can be let down to the level below, as shown in figures 22 and 23. [illustration: fig. 22.] this system can be advantageously applied only in the rare cases in which the walls require little or no support, and where very little or no waste requiring separation is broken with the ore in the stopes. to support the walls in bad ground in underhand stopes would be far more costly than with overhand stopes, for square-set timbering would be most difficult to introduce, and to support the walls with waste and stulls would be even more troublesome. any waste broken must needs be thrown up to the level above or be stored upon specially built stages--again a costly proceeding. a further drawback lies in the fact that the broken ore follows down the face of the stope, and must be shoveled off each bench. it thus all arrives at a single point,--the winze,--and must be drawn from a single ore-pass into the level. this usually results not only in more shoveling but in a congestion at the passes not present in overhand stoping, for with that method several chutes are available for discharging ore into the levels. where the walls require no support and no selection is desired in the stopes, the advantage of the men standing on the solid ore to work, and of having all down holes and therefore drilled wet, gives this method a distinct place. in using this system, in order to protect the men, a pillar is often left under the level by driving a sublevel, the pillar being easily recoverable later. the method of sublevels is of advantage largely in avoiding the timbering of levels. [illustration: fig. 23.--longitudinal section of an underhand stope.] overhand stopes.--by far the greatest bulk of ore is broken overhand, that is broken upward from one level to the next above. there are two general forms which such stopes are given,--"horizontal" and "rill." [illustration: fig. 24.--horizontal-cut overhand stope--longitudinal section.] the horizontal "flat-back" or "long-wall" stope, as it is variously called, shown in figure 24, is operated by breaking the ore in slices parallel with the levels. in rill-stoping the ore is cut back from the winzes in such a way that a pyramid-shaped room is created, with its apex in the winze and its base at the level (figs. 25 and 26). horizontal or flat-backed stopes can be applied to almost any dip, while "rill-stoping" finds its most advantageous application where the dip is such that the ore will "run," or where it can be made to "run" with a little help. the particular application of the two systems is dependent not only on the dip but on the method of supporting the excavation and the ore. with rill-stoping, it is possible to cut the breaking benches back horizontally from the winzes (fig. 25), or to stagger the cuts in such a manner as to take the slices in a descending angle (figs. 21 and 26). [illustration: fig. 25.--rill-cut overhand stope--longitudinal section.] in the "rill" method of incline cuts, all the drill-holes are "down" holes (fig. 21), and can be drilled wet, while in horizontal cuts or flat-backed stopes, at least part of the holes must be "uppers" (fig. 20). aside from the easier and cheaper drilling and setting up of machines with this kind of "cut," there is no drill dust,--a great desideratum in these days of miners' phthisis. a further advantage in the "rill" cut arises in cases where horizontal jointing planes run through the ore of a sort from which unduly large masses break away in "flat-back" stopes. by the descending cut of the "rill" method these calamities can be in a measure avoided. in cases of dips over 40º the greatest advantage in "rill" stoping arises from the possibility of pouring filling or timber into the stope from above with less handling, because the ore and material will run down the sides of the pyramid (figs. 32 and 34). thus not only is there less shoveling required, but fewer ore-passes and a less number of preliminary winzes are necessary, and a wider level interval is possible. this matter will be gone into more fully later. [illustration: fig. 26.--rill-cut overhand stope-longitudinal section.] combined stopes.--a combined stope is made by the coincident working of the underhand and "rill" method (fig. 27). this order of stope has the same limitations in general as the underhand kind. for flat veins with strong walls, it has a great superiority in that the stope is carried back more or less parallel with the winzes, and thus broken ore after blasting lies in a line on the gradient of the stope. it is, therefore, conveniently placed for mechanical stope haulage. a further advantage is gained in that winzes may be placed long distances apart, and that men are not required, either when at work or passing to and from it, to be ever far from the face, and they are thus in the safest ground, so that timber and filling protection which may be otherwise necessary is not required. this method is largely used in south africa. [illustration: fig. 27.--longitudinal section of a combined stope.] minimum width of stopes.--the minimum stoping width which can be consistently broken with hand-holes is about 30 inches, and this only where there is considerable dip to the ore. this space is so narrow that it is of doubtful advantage in any case, and 40 inches is more common in narrow mines, especially where worked with white men. where machine-drills are used about 4 feet is the minimum width feasible. resuing.--in very narrow veins where a certain amount of wall-rock must be broken to give working space, it pays under some circumstances to advance the stope into the wall-rock ahead of the ore, thus stripping the ore and enabling it to be broken separately. this permits of cleaner selection of the ore; but it is a problem to be worked out in each case, as to whether rough sorting of some waste in the stopes, or further sorting at surface with inevitable treatment of some waste rock, is more economical than separate stoping cuts and inevitably wider stopes. valuing ore in course of breaking.--there are many ores whose payability can be determined by inspection, but there are many of which it cannot. continuous assaying is in the latter cases absolutely necessary to avoid the treatment of valueless material. in such instances, sampling after each stoping-cut is essential, the unprofitable ore being broken down and used as waste. where values fade into the walls, as in impregnation deposits, the width of stopes depends upon the limit of payability. in these cases, drill-holes are put into the walls and the drillings assayed. if the ore is found profitable, the holes are blasted out. the gauge of what is profitable in such situations is not dependent simply upon the average total working costs of the mine, for ore in that position can be said to cost nothing for development work and administration; moreover, it is usually more cheaply broken than the average breaking cost, men and machines being already on the spot. chapter xi. methods of supporting excavation. timbering; filling with waste; filling with broken ore; pillars of ore; artificial pillars; caving system. most stopes require support to be given to the walls and often to the ore itself. where they do require support there are five principal methods of accomplishing it. the application of any particular method depends upon the dip, width of ore-body, character of the ore and walls, and cost of materials. the various systems are by:- 1. timbering. 2. filling with waste. 3. filling with broken ore subsequently withdrawn. 4. pillars of ore. 5. artificial pillars built of timbers and waste. 6. caving. timbering.--at one time timbering was the almost universal means of support in such excavations, but gradually various methods for the economical application of waste and ore itself have come forward, until timbering is fast becoming a secondary device. aside from economy in working without it, the dangers of creeps, or crushing, and of fires are sufficient incentives to do away with wood as far as possible. there are three principal systems of timber support to excavations,--by stulls, square-sets, and cribs. stulls are serviceable only where the deposit is so narrow that the opening can be bridged by single timbers between wall and wall (figs. 28 and 43). this system can be applied to any dip and is most useful in narrow deposits where the walls are not too heavy. stulls in inclined deposits are usually set at a slightly higher angle than that perpendicular to the walls, in order that the vertical pressure of the hanging wall will serve to tighten them in position. the "stull" system can, in inclined deposits, be further strengthened by building waste pillars against them, in which case the arrangement merges into the system of artificial pillars. [illustration: fig. 28.--longitudinal section of stull-supported stope.] [illustration: fig. 29.--longitudinal section showing square-set timbering.] [illustration: fig. 30.--square-set timbering on inclined ore-body. showing ultimate strain on timbers.] square-sets (figs. 29 and 30), that is, trusses built in the opening as the ore is removed, are applicable to almost any dip or width of ore, but generally are applied only in deposits too wide, or to rock too heavy, for stulls. such trusses are usually constructed on vertical and horizontal lines, and while during actual ore-breaking the strains are partially vertical, ultimately, however, when the weight of the walls begins to be felt, these strains, except in vertical deposits, come at an angle to lines of strength in the trusses, and therefore timber constructions of this type present little ultimate resistance (fig. 30). square-set timbers are sometimes set to present the maximum resistance to the direction of strain, but the difficulties of placing them in position and variations in the direction of strain on various parts of the stope do not often commend the method. as a general rule square-sets on horizontal lines answer well enough for the period of actual ore-breaking. the crushing or creeps is usually some time later; and if the crushing may damage the whole mine, their use is fraught with danger. reënforcement by building in waste is often resorted to. when done fully, it is difficult to see the utility of the enclosed timber, for entire waste-filling would in most cases be cheaper and equally efficient. [illustration: fig. 31.--"cribs."] there is always, with wood constructions, as said before, the very pertinent danger of subsequent crushing and of subsidence in after years, and the great risk of fires. both these disasters have cost comstock and broken hill mines, directly or indirectly, millions of dollars, and the outlay on timber and repairs one way or another would have paid for the filling system ten times over. there are cases where, by virtue of the cheapness of timber, "square-setting" is the most economical method. again, there are instances where the ore lies in such a manner--particularly in limestone replacements--as to preclude other means of support. these cases are being yearly more and more evaded by the ingenuity of engineers in charge. the author believes it soon will be recognized that the situation is rare indeed where complete square-setting is necessarily without an economical alternative. an objection is sometimes raised to filling in favor of timber, in that if it become desirable to restope the walls for low-grade ore left behind, such stopes could only be entered by drawing the filling, with consequent danger of total collapse. such a contingency can be provided for in large ore-bodies by installing an outer shell of sets of timber around the periphery of the stope and filling the inside with waste. if the crushing possibilities are too great for this method then, the subsequent recovery of ore is hopeless in any event. in narrow ore-bodies with crushing walls recovery of ore once left behind is not often possible. the third sort of timber constructions are cribs, a "log-house" sort of structure usually filled with waste, and more fully discussed under artificial pillars (fig. 31). the further comparative merits of timbering with other methods will be analyzed as the different systems are described. filling with waste.--the system of filling stope-excavations completely with waste in alternating progress with ore-breaking is of wide and increasingly general application (figs. 32, 33, 34, 35). although a certain amount of waste is ordinarily available in the stopes themselves, or from development work in the mine, such a supply must usually be supplemented from other directions. treatment residues afford the easiest and cheapest handled material. quarried rock ranks next, and in default of any other easy supply, materials from crosscuts driven into the stope-walls are sometimes resorted to. in working the system to the best advantage, the winzes through the block of ore under attack are kept in alignment with similar openings above, in order that filling may be poured through the mine from the surface or any intermediate point. winzes to be used for filling should be put on the hanging-wall side of the area to be filled, for the filling poured down will then reach the foot-wall side of the stopes with a minimum of handling. in some instances, one special winze is arranged for passing all filling from the surface to a level above the principal stoping operations; and it is then distributed along the levels into the winzes, and thus to the operating stopes, by belt-conveyors. [illustration: fig. 32.--longitudinal section. rill stope filled with waste.] [illustration: fig. 33.--longitudinal section. horizontal stope filled with waste.] [illustration: fig. 34.--longitudinal section. waste-filled stope with dry-walling of levels and passes.] in this system of stope support the ore is broken at intervals alternating with filling. if there is danger of much loss from mixing broken ore and filling, "sollars" of boards or poles are laid on the waste. if the ore is very rich, old canvas or cowhides are sometimes put under the boards. before the filling interval, the ore passes are built close to the face above previous filling and their tops covered temporarily to prevent their being filled with running waste. if the walls are bad, the filling is kept close to the face. if the unbroken ore requires support, short stulls set on the waste (as in fig. 39) are usually sufficient until the next cut is taken off, when the timber can be recovered. if stulls are insufficient, cribs or bulkheads (fig. 31) are also used and often buried in the filling. [illustration: fig. 35.--cross-section of fig. 34 on line _a-b_.] both flat-backed and rill-stope methods of breaking are employed in conjunction with filled stopes. the advantages of the rill-stopes are so patent as to make it difficult to understand why they are not universally adopted when the dip permits their use at all. in rill-stopes (figs. 32 and 34) the waste flows to its destination with a minimum of handling. winzes and ore-passes are not required with the same frequency as in horizontal breaking, and the broken ore always lies on the slope towards the passes and is therefore also easier to shovel. in flat-backed stopes (fig. 33) winzes must be put in every 50 feet or so, while in rill-stopes they can be double this distance apart. the system is applicable by modification to almost any width of ore. it finds its most economical field where the dip of the stope floor is over 45°, when waste and ore, with the help of the "rill," will flow to their destination. for dips from under about 45° to about 30° or 35°, where the waste and ore will not "flow" easily, shoveling can be helped by the use of the "rill" system and often evaded altogether, if flow be assisted by a sheet-iron trough described in the discussion of stope transport. further saving in shoveling can be gained in this method, by giving a steeper pitch to the filling winzes and to the ore-passes, by starting them from crosscuts in the wall, and by carrying them at greater angles than the pitch of the ore (fig. 36). these artifices combined have worked out most economically on several mines within the writer's experience, with the dip as flat as 30°. for very flat dips, where filling is to be employed, rill-stoping has no advantage over flat-backed cuts, and in such cases it is often advisable to assist stope transport by temporary tracks and cars which obviously could not be worked on the tortuous contour of a rill-stope, so that for dips under 30° advantage lies with "flat-backed" ore-breaking. [illustration: fig. 36.--cross-section showing method of steepening winzes and ore passes.] on very wide ore-bodies where the support of the standing ore itself becomes a great problem, the filling system can be applied by combining it with square-setting. in this case the stopes are carried in panels laid out transversally to the strike as wide as the standing strength of the ore permits. on both sides of each panel a fence of lagged square-sets is carried up and the area between is filled with waste. the panels are stoped out alternately. the application of this method at broken hill will be described later. (see pages 120 and figs. 41 and 42.) the same type of wide ore-body can be managed also on the filling system by the use of frequent "bulkheads" to support the ore (fig. 31). compared with timbering methods, filling has the great advantage of more effective support to the mine, less danger of creeps, and absolute freedom from the peril of fire. the relative expense of the two systems is determined by the cost of materials and labor. two extreme cases illustrate the result of these economic factors with sufficient clearness. it is stated that the cost of timbering stopes on the le roi mine by square-sets is about 21 cents per ton of ore excavated. in the ivanhoe mine of west australia the cost of filling stopes with tailings is about 22 cents per ton of ore excavated. at the former mine the average cost of timber is under $10 per m board-measure, while at the latter its price would be $50 per m board-measure; although labor is about of the same efficiency and wage, the cost in the ivanhoe by square-setting would be about 65 cents per ton of ore broken. in the le roi, on the other hand, no residues are available for filling. to quarry rock or drive crosscuts into the walls might make this system cost 65 cents per ton of ore broken if applied to that mine. the comparative value of the filling method with other systems will be discussed later. filling with broken ore subsequently withdrawn.--this order of support is called by various names, the favorite being "shrinkage-stoping." the method is to break the ore on to the roof of the level, and by thus filling the stope with broken ore, provide temporary support to the walls and furnish standing floor upon which to work in making the next cut (figs. 37, 38, and 39.) as broken material occupies 30 to 40% more space than rock _in situ_, in order to provide working space at the face, the broken ore must be drawn from along the level after each cut. when the area attacked is completely broken through from level to level, the stope will be full of loose broken ore, which is then entirely drawn off. a block to be attacked by this method requires preliminary winzes only at the extremities of the stope,--for entry and for ventilation. where it is desired to maintain the winzes after stoping, they must either be strongly timbered and lagged on the stope side, be driven in the walls, or be protected by a pillar of ore (fig. 37). the settling ore and the crushing after the stope is empty make it difficult to maintain timbered winzes. [illustration: fig. 37.--longitudinal section of stope filled with broken ore.] where it can be done without danger to the mine, the empty stopes are allowed to cave. if such crushing would be dangerous, either the walls must be held up by pillars of unbroken ore, as in the alaska treadwell, where large "rib" pillars are left, or the open spaces must be filled with waste. filling the empty stope is usually done by opening frequent passes along the base of the filled stope above, and allowing the material of the upper stope to flood the lower one. this program continued upwards through the mine allows the whole filling of the mine to descend gradually and thus requires replenishment only into the top. the old stopes in the less critical and usually exhausted territory nearer the surface are sometimes left without replenishing their filling. the weight of broken ore standing at such a high angle as to settle rapidly is very considerable upon the level; moreover, at the moment when the stope is entirely drawn off, the pressure of the walls as well is likely to be very great. the roadways in this system therefore require more than usual protection. three methods are used: (_a_) timbering; (_b_) driving a sublevel in the ore above the main roadway as a stoping-base, thus leaving a pillar of ore over the roadway (fig. 39); (_c_) by dry-walling the levels, as in the baltic mine, michigan (figs. 34 and 35). by the use of sublevels the main roadways are sometimes driven in the walls (fig. 38) and in many cases all timbering is saved. to recover pillars left below sublevels is a rather difficult task, especially if the old stope above is caved or filled. the use of pillars in substitution for timber, if the pillars are to be lost, is simply a matter of economics as to whether the lost ore would repay the cost of other devices. [illustration: fig. 38.--cross-section of "shrinkage" stope.] frequent ore-chutes through the level timbers, or from the sublevels, are necessary to prevent lodgment of broken ore between such passes, because it is usually too dangerous for men to enter the emptying stope to shovel out the lodged remnants. where the ore-body is wide, and in order that there may be no lodgment of ore, the timbers over the level are set so as to form a trough along the level; or where pillars are left, they are made "a"-shaped between the chutes, as indicated in figure 37. [illustration: fig. 39.--cross-section of "shrinkage" stope.] the method of breaking the ore in conjunction with this means of support in comparatively narrow deposits can be on the rill, in order to have the advantage of down holes. usually, however, flat-back or horizontal cuts are desirable, as in such an arrangement it is less troublesome to regulate the drawing of the ore so as to provide proper head room. where stopes are wide, ore is sometimes cut arch-shaped from wall to wall to assure its standing. where this method of support is not of avail, short, sharply tapering stulls are put in from the broken ore to the face (fig. 39). when the cut above these stulls is taken out, they are pulled up and are used again. this method of stoping is only applicable when:-1. the deposit dips over 60°, and thus broken material will freely settle downward to be drawn off from the bottom. 2. the ore is consistently payable in character. no selection can be done in breaking, as all material broken must be drawn off together. 3. the hanging wall is strong, and will not crush or spall off waste into the ore. 4. the ore-body is regular in size, else loose ore will lodge on the foot wall. stopes opened in this manner when partially empty are too dangerous for men to enter for shoveling out remnants. the advantages of this system over others, where it is applicable, are:-(_a_) a greater distance between levels can be operated and few winzes and rises are necessary, thus a great saving of development work can be effected. a stope 800 to 1000 feet long can be operated with a winze at either end and with levels 200 or 220 feet apart. (_b_) there is no shoveling in the stopes at all. (_c_) no timber is required. as compared with timbering by stulling, it will apply to stopes too wide and walls too heavy for this method. moreover, little staging is required for working the face, since ore can be drawn from below in such a manner as to allow just the right head room. (_d_) compared to the system of filling with waste, coincidentally with breaking (second method), it saves altogether in some cases the cost of filling. in any event, it saves the cost of ore-passes, of shoveling into them, and of the detailed distribution of the filling. compared with other methods, the system has the following disadvantages, that: _a_. the ore requires to be broken in the stopes to a degree of fineness which will prevent blocking of the chutes at the level. when pieces too large reach the chutes, nothing will open them but blasting,--to the damage of timbers and chutes. some large rocks are always liable to be buried in the course of ore-breaking. _b_. practically no such perfection of walls exists, but some spalling of waste into the ore will take place. a crushing of the walls would soon mean the loss of large amounts of ore. _c_. there is no possibility of regulating the mixture of grade of ore by varying the working points. it is months after the ore is broken before it can reach the levels. _d_. the breaking of 60% more ore than immediate treatment demands results in the investment of a considerable sum of money. an equilibrium is ultimately established in a mine worked on this system when a certain number of stopes full of completely broken ore are available for entire withdrawal, and there is no further accumulation. but, in any event, a considerable amount of broken ore must be held in reserve. in one mine worked on this plan, with which the writer has had experience, the annual production is about 250,000 tons and the broken ore represents an investment which, at 5%, means an annual loss of interest amounting to 7 cents per ton of ore treated. _e_. a mine once started on the system is most difficult to alter, owing to the lack of frequent winzes or passes. especially is this so if the only alternative is filling, for an alteration to the system of filling coincident with breaking finds the mine short of filling winzes. as the conditions of walls and ore often alter with depth, change of system may be necessary and the situation may become very embarrassing. _f_. the restoping of the walls for lower-grade ore at a later period is impossible, for the walls of the stope will be crushed, or, if filled with waste, will usually crush when it is drawn off to send to a lower stope. the system has much to recommend it where conditions are favorable. like all other alternative methods of mining, it requires the most careful study in the light of the special conditions involved. in many mines it can be used for some stopes where not adaptable generally. it often solves the problem of blind ore-bodies, for they can by this means be frequently worked with an opening underneath only. thus the cost of driving a roadway overhead is avoided, which would be required if timber or coincident filling were the alternatives. in such cases ventilation can be managed without an opening above, by so directing the current of air that it will rise through a winze from the level below, flow along the stope and into the level again at the further end of the stope through another winze. [illustration: fig. 40.--longitudinal section. ore-pillar support in narrow stopes.] support by pillars of ore.--as a method of mining metals of the sort under discussion, the use of ore-pillars except in conjunction with some other means of support has no general application. to use them without assistance implies walls sufficiently strong to hold between pillars; to leave them permanently anywhere implies that the ore abandoned would not repay the labor and the material of a substitute. there are cases of large, very low-grade mines where to abandon one-half the ore as pillars is more profitable than total extraction, but the margin of payability in such ore must be very, very narrow. unpayable spots are always left as pillars, for obvious reasons. permanent ore-pillars as an adjunct to other methods of support are in use. such are the rib-pillars in the alaska treadwell, the form of which is indicated by the upward extension of the pillars adjacent to the winzes, shown in figure 37. always a careful balance must be cast as to the value of the ore left, and as to the cost of a substitute, because every ore-pillar can be removed at some outlay. temporary pillars are not unusual, particularly to protect roadways and shafts. they are, when left for these purposes, removed ultimately, usually by beginning at the farther end and working back to the final exit. [illustration: fig. 41.--horizontal plan at levels of broken hill. method of alternate stopes and ore-pillars.] [illustration: fig. 42.--longitudinal section of figure 41.] a form of temporary ore-pillars in very wide deposits is made use of in conjunction with both filling and timbering (figs. 37, 39, 40). in the use of temporary pillars for ore-bodies 100 to 250 feet wide at broken hill, stopes are carried up at right angles to the strike, each fifty feet wide and clear across the ore-body (figs. 41 and 42). a solid pillar of the same width is left in the first instance between adjacent stopes, and the initial series of stopes are walled with one square-set on the sides as the stope is broken upward. the room between these two lines of sets is filled with waste alternating with ore-breaking in the usual filling method. when the ore from the first group of alternate stopes (_abc_, fig. 42) is completely removed, the pillars are stoped out and replaced with waste. the square-sets of the first set of stopes thus become the boundaries of the second set. entry and ventilation are obtained through these lines of square-sets, and the ore is passed out of the stopes through them. [illustration: fig. 43.--cross-section of stull support with waste reënforcement.] artificial pillars.--this system also implies a roof so strong as not to demand continuous support. artificial pillars are built in many different ways. the method most current in fairly narrow deposits is to reënforce stulls by packing waste above them (figs. 43 and 44). not only is it thus possible to economize in stulls by using the waste which accumulates underground, but the principle applies also to cases where the stulls alone are not sufficient support, and yet where complete filling or square-setting is unnecessary. when the conditions are propitious for this method, it has the comparative advantage over timber systems of saving timber, and over filling systems of saving imported filling. moreover, these constructions being pillar-shaped (fig. 44), the intervals between them provide outlets for broken ore, and specially built passes are unnecessary. the method has two disadvantages as against the square-set or filling process, in that more staging must be provided from which to work, and in stopes over six feet the erection of machine-drill columns is tedious and costly in time and wages. [illustration: fig. 44.--longitudinal section of stull and waste pillars.] in wide deposits of markedly flat, irregular ore-bodies, where a definite system is difficult and where timber is expensive, cribs of cord-wood or logs filled with waste after the order shown in figure 31, often make fairly sound pillars. they will not last indefinitely and are best adapted to the temporary support of the ore-roof pending filling. the increased difficulty in setting up machine drills in such stopes adds to the breaking costs,--often enough to warrant another method of support. [illustration: fig. 45.--sublevel caving system.] caving systems.--this method, with variations, has been applied to large iron deposits, to the kimberley diamond mines, to some copper mines, but in general it has little application to the metal mines under consideration, as few ore-bodies are of sufficiently large horizontal area. the system is dependent upon a large area of loose or "heavy" ground pressing directly on the ore with weight, such that if the ore be cut into pillars, these will crush. the details of the system vary, but in general the _modus operandi_ is to prepare roadways through the ore, and from the roadways to put rises, from which sublevels are driven close under the floating mass of waste and ore,--sometimes called the "matte" (fig. 45). the pillars between these sublevels are then cut away until the weight above crushes them down. when all the crushed ore which can be safely reached is extracted, retreat is made and another series of subopenings is then driven close under the "matte." the pillar is reduced until it crushes and the operation is repeated. eventually the bottom strata of the "matte" become largely ore, and a sort of equilibrium is reached when there is not much loss in this direction. "top slicing" is a variation of the above method by carrying a horizontal stope from the rises immediately under the matte, supporting the floating material with timber. at kimberley the system is varied in that galleries are run out to the edge of the diamond-iferous area and enlarged until the pillar between crushes. in the caving methods, between 40 and 50% of the ore is removed by the preliminary openings, and as they are all headings of some sort, the average cost per ton of this particular ore is higher than by ordinary stoping methods. on the other hand, the remaining 50 to 60% of the ore costs nothing to break, and the average cost is often remarkably low. as said, the system implies bodies of large horizontal area. they must start near enough to the surface that the whole superincumbent mass may cave and give crushing weight, or the immediately overhanging roof must easily cave. all of these are conditions not often met with in mines of the character under review. chapter xii. mechanical equipment. conditions bearing on mine equipment; winding appliances; haulage equipment in shafts; lateral underground transport; transport in stopes. there is no type of mechanical engineering which presents such complexities in determination of the best equipment as does that of mining. not only does the economic side dominate over pure mechanics, but machines must be installed and operated under difficulties which arise from the most exceptional and conflicting conditions, none of which can be entirely satisfied. compromise between capital outlay, operating efficiency, and conflicting demands is the key-note of the work. these compromises are brought about by influences which lie outside the questions of mechanics of individual machines, and are mainly as follows:- 1. continuous change in horizon of operations. 2. uncertain life of the enterprise. 3. care and preservation of human life. 4. unequal adaptability of power transmission mediums. 5. origin of power. _first._--the depth to be served and the volume of ore and water to be handled, are not only unknown at the initial equipment, but they are bound to change continuously in quantity, location, and horizon with the extension of the workings. _second._--from the mine manager's point of view, which must embrace that of the mechanical engineer, further difficulty presents itself because the life of the enterprise is usually unknown, and therefore a manifest necessity arises for an economic balance of capital outlay and of operating efficiency commensurate with the prospects of the mine. moreover, the initial capital is often limited, and makeshifts for this reason alone must be provided. in net result, no mineral deposit of speculative ultimate volume of ore warrants an initial equipment of the sort that will meet every eventuality, or of the kind that will give even the maximum efficiency which a free choice of mining machinery could obtain. _third._--in the design and selection of mining machines, the safety of human life, the preservation of the health of workmen under conditions of limited space and ventilation, together with reliability and convenience in installing and working large mechanical tools, all dominate mechanical efficiency. for example, compressed-air transmission of power best meets the requirements of drilling, yet the mechanical losses in the generation, the transmission, and the application of compressed air probably total, from first to last, 70 to 85%. _fourth._--all machines, except those for shaft haulage, must be operated by power transmitted from the surface, as obviously power generation underground is impossible. the conversion of power into a transmission medium and its transmission are, at the outset, bound to be the occasions of loss. not only are the various forms of transmission by steam, electricity, compressed air, or rods, of different efficiency, but no one system lends itself to universal or economical application to all kinds of mining machines. therefore it is not uncommon to find three or four different media of power transmission employed on the same mine. to illustrate: from the point of view of safety, reliability, control, and in most cases economy as well, we may say that direct steam is the best motive force for winding-engines; that for mechanical efficiency and reliability, rods constitute the best media of power transmission to pumps; that, considering ventilation and convenience, compressed air affords the best medium for drills. yet there are other conditions as to character of the work, volume of water or ore, and the origin of power which must in special instances modify each and every one of these generalizations. for example, although pumping water with compressed air is mechanically the most inefficient of devices, it often becomes the most advantageous, because compressed air may be of necessity laid on for other purposes, and the extra power required to operate a small pump may be thus most cheaply provided. _fifth._--further limitations and modifications arise out of the origin of power, for the sources of power have an intimate bearing on the type of machine and media of transmission. this very circumstance often compels giving away efficiency and convenience in some machines to gain more in others. this is evident enough if the principal origins of power generation be examined. they are in the main as follows:-_a_. water-power available at the mine. _b_. water-power available at a less distance than three or four miles. _c_. water-power available some miles away, thus necessitating electrical transmission (or purchased electrical power). _d_. steam-power to be generated at the mine. _e_. gas-power to be generated at the mine. _a_. with water-power at the mine, winding engines can be operated by direct hydraulic application with a gain in economy over direct steam, although with the sacrifice of control and reliability. rods for pumps can be driven directly with water, but this superiority in working economy means, as discussed later, a loss of flexibility and increased total outlay over other forms of transmission to pumps. as compressed air must be transmitted for drills, the compressor would be operated direct from water-wheels, but with less control in regularity of pressure delivery. _b_. with water-power a short distance from the mine, it would normally be transmitted either by compressed air or by electricity. compressed-air transmission would better satisfy winding and drilling requirements, but would show a great comparative loss in efficiency over electricity when applied to pumping. despite the latter drawback, air transmission is a method growing in favor, especially in view of the advance made in effecting compression by falling water. _c_. in the situation of transmission too far for using compressed air, there is no alternative but electricity. in these cases, direct electric winding is done, but under such disadvantages that it requires a comparatively very cheap power to take precedence over a subsidiary steam plant for this purpose. electric air-compressors work under the material disadvantage of constant speed on a variable load, but this installation is also a question of economics. the pumping service is well performed by direct electrical pumps. _d_. in this instance, winding and air-compression are well accomplished by direct steam applications; but pumping is beset with wholly undesirable alternatives, among which it is difficult to choose. _e_. with internal combustion engines, gasoline (petrol) motors have more of a position in experimental than in systematic mining, for their application to winding and pumping and drilling is fraught with many losses. the engine must be under constant motion, and that, too, with variable loads. where power from producer gas is used, there is a greater possibility of installing large equipments, and it is generally applied to the winding and lesser units by conversion into compressed air or electricity as an intermediate stage. one thing becomes certain from these examples cited, that the right installation for any particular portion of the mine's equipment cannot be determined without reference to all the others. the whole system of power generation for surface work, as well as the transmission underground, must be formulated with regard to furnishing the best total result from all the complicated primary and secondary motors, even at the sacrifice of some members. each mine is a unique problem, and while it would be easy to sketch an ideal plant, there is no mine within the writer's knowledge upon which the ideal would, under the many variable conditions, be the most economical of installation or the most efficient of operation. the dominant feature of the task is an endeavor to find a compromise between efficiency and capital outlay. the result is a series of choices between unsatisfying alternatives, a number of which are usually found to have been wrong upon further extension of the mine in depth. in a general way, it may be stated that where power is generated on the mine, economy in labor of handling fuel, driving engines, generation and condensing steam where steam is used, demand a consolidated power plant for the whole mine equipment. the principal motors should be driven direct by steam or gas, with power distribution by electricity to all outlying surface motors and sometimes to underground motors, and also to some underground motors by compressed air. much progress has been made in the past few years in the perfection of larger mining tools. inherently many of our devices are of a wasteful character, not only on account of the need of special forms of transmission, but because they are required to operate under greatly varying loads. as an outcome of transmission losses and of providing capacity to cope with heavy peak loads, their efficiency on the basis of actual foot-pounds of work accomplished is very low. the adoption of electric transmission in mine work, while in certain phases beneficial, has not decreased the perplexity which arises from many added alternatives, none of which are as yet a complete or desirable answer to any mine problem. when a satisfactory electric drill is invented, and a method is evolved of applying electricity to winding-engines that will not involve such abnormal losses due to high peak load then we will have a solution to our most difficult mechanical problems, and electricity will deserve the universal blessing which it has received in other branches of mechanical engineering. it is not intended to discuss mine equipment problems from the machinery standpoint,--there are thousands of different devices,--but from the point of view of the mine administrator who finds in the manufactory the various machines which are applicable, and whose work then becomes that of choosing, arranging, and operating these tools. the principal mechanical questions of a mine may be examined under the following heads:- 1. shaft haulage. 2. lateral underground transport. 3. drainage. 4. rock drilling. 5. workshops. 6. improvements in equipment. shaft haulage. winding appliances.--no device has yet been found to displace the single load pulled up the shaft by winding a rope on a drum. of driving mechanisms for drum motors the alternatives are the steam-engine, the electrical motor, and infrequently water-power or gas engines. all these have to cope with one condition which, on the basis of work accomplished, gives them a very low mechanical efficiency. this difficulty is that the load is intermittent, and it must be started and accelerated at the point of maximum weight, and from that moment the power required diminishes to less than nothing at the end of the haul. a large number of devices are in use to equalize partially the inequalities of the load at different stages of the lift. the main lines of progress in this direction have been:-_a_. the handling of two cages or skips with one engine or motor, the descending skip partially balancing the ascending one. _b_. the use of tail-ropes or balance weights to compensate the increasing weight of the descending rope. _c_. the use of skips instead of cages, thus permitting of a greater percentage of paying load. _d_. the direct coupling of the motor to the drum shaft. _e_. the cone-shaped construction of drums,--this latter being now largely displaced by the use of the tail-rope. the first and third of these are absolutely essential for anything like economy and speed; the others are refinements depending on the work to be accomplished and the capital available. steam winding-engines require large cylinders to start the load, but when once started the requisite power is much reduced and the load is too small for steam economy. the throttling of the engine for controlling speed and reversing the engine at periodic stoppages militates against the maximum expansion and condensation of the steam and further increases the steam consumption. in result, the best of direct compound condensing engines consume from 60 to 100 pounds of steam per horse-power hour, against a possible efficiency of such an engine working under constant load of less than 16 pounds of steam per horse-power hour. it is only within very recent years that electrical motors have been applied to winding. even yet, all things considered, this application is of doubtful value except in localities of extremely cheap electrical power. the constant speed of alternating current motors at once places them at a disadvantage for this work of high peak and intermittent loads. while continuous-current motors can be made to partially overcome this drawback, such a current, where power is purchased or transmitted a long distance, is available only by conversion, which further increases the losses. however, schemes of electrical winding are in course of development which bid fair, by a sort of storage of power in heavy fly-wheels or storage batteries after the peak load, to reduce the total power consumption; but the very high first cost so far prevents their very general adoption for metal mining. winding-engines driven by direct wateror gas-power are of too rare application to warrant much discussion. gasoline driven hoists have a distinct place in prospecting and early-stage mining, especially in desert countries where transport and fuel conditions are onerous, for both the machines and their fuel are easy of transport. as direct gas-engines entail constant motion of the engine at the power demand of the peak load, they are hopeless in mechanical efficiency. like all other motors in mining, the size and arrangement of the motor and drum are dependent upon the duty which they will be called upon to perform. this is primarily dependent upon the depth to be hoisted from, the volume of the ore, and the size of the load. for shallow depths and tonnages up to, say, 200 tons daily, geared engines have a place on account of their low capital cost. where great rope speed is not essential they are fully as economical as direct-coupled engines. with great depths and greater capacities, speed becomes a momentous factor, and direct-coupled engines are necessary. where the depth exceeds 3,000 feet, another element enters which has given rise to much debate and experiment; that is, the great increase of starting load due to the increased length and size of ropes and the drum space required to hold it. so far the most advantageous device seems to be the whiting hoist, a combination of double drums and tail rope. on mines worked from near the surface, where depth is gained by the gradual exhaustion of the ore, the only prudent course is to put in a new hoist periodically, when the demand for increased winding speed and power warrants. the lack of economy in winding machines is greatly augmented if they are much over-sized for the duty. an engine installed to handle a given tonnage to a depth of 3,000 feet will have operated with more loss during the years the mine is progressing from the surface to that depth than several intermediate-sized engines would have cost. on most mines the uncertainty of extension in depth would hardly warrant such a preliminary equipment. more mines are equipped with over-sized than with under-sized engines. for shafts on going metal mines where the future is speculative, an engine will suffice whose size provides for an extension in depth of 1,000 feet beyond that reached at the time of its installation. the cost of the engine will depend more largely upon the winding speed desired than upon any other one factor. the proper speed to be arranged is obviously dependent upon the depth of the haulage, for it is useless to have an engine able to wind 3,000 feet a minute on a shaft 500 feet deep, since it could never even get under way; and besides, the relative operating loss, as said, would be enormous. haulage equipment in the shaft.--originally, material was hoisted through shafts in buckets. then came the cage for transporting mine cars, and in more recent years the "skip" has been developed. the aggrandized bucket or "kibble" of the cornishman has practically disappeared, but the cage still remains in many mines. the advantages of the skip over the cage are many. some of them are:- _a_. it permits 25 to 40% greater load of material in proportion to the dead weight of the vehicle. _b_. the load can be confined within a smaller horizontal space, thus the area of the shaft need not be so great for large tonnages. _c_. loading and discharging are more rapid, and the latter is automatic, thus permitting more trips per hour and requiring less labor. _d_. skips must be loaded from bins underground, and by providing in the bins storage capacity, shaft haulage is rendered independent of the lateral transport in the mine, and there are no delays to the engine awaiting loads. the result is that ore-winding can be concentrated into fewer hours, and indirect economies in labor and power are thus effected. _e_. skips save the time of the men engaged in the lateral haulage, as they have no delay waiting for the winding engine. loads equivalent to those from skips are obtained in some mines by double-decked cages; but, aside from waste weight of the cage, this arrangement necessitates either stopping the engine to load the lower deck, or a double-deck loading station. double-deck loading stations are as costly to install and more expensive to work than skip-loading station ore-bins. cages are also constructed large enough to take as many as four trucks on one deck. this entails a shaft compartment double the size required for skips of the same capacity, and thus enormously increases shaft cost without gaining anything. altogether the advantages of the skip are so certain and so important that it is difficult to see the justification for the cage under but a few conditions. these conditions are those which surround mines of small output where rapidity of haulage is no object, where the cost of station-bins can thus be evaded, and the convenience of the cage for the men can still be preserved. the easy change of the skip to the cage for hauling men removes the last objection on larger mines. there occurs also the situation in which ore is broken under contract at so much per truck, and where it is desirable to inspect the contents of the truck when discharging it, but even this objection to the skip can be obviated by contracting on a cubic-foot basis. skips are constructed to carry loads of from two to seven tons, the general tendency being toward larger loads every year. one of the most feasible lines of improvement in winding is in the direction of larger loads and less speed, for in this way the sum total of dead weight of the vehicle and rope to the tonnage of ore hauled will be decreased, and the efficiency of the engine will be increased by a less high peak demand, because of this less proportion of dead weight and the less need of high acceleration. lateral underground transport. inasmuch as the majority of metal mines dip at considerable angles, the useful life of a roadway in a metal mine is very short because particular horizons of ore are soon exhausted. therefore any method of transport has to be calculated upon a very quick redemption of the capital laid out. furthermore, a roadway is limited in its daily traffic to the product of the stopes which it serves. men and animals.--some means of transport must be provided, and the basic equipment is light tracks with push-cars, in capacity from half a ton to a ton. the latter load is, however, too heavy to be pushed by one man. as but one car can be pushed at a time, hand-trucking is both slow and expensive. at average american or australian wages, the cost works out between 25 and 35 cents a ton per mile. an improvement of growing import where hand-trucking is necessary is the overhead mono-rail instead of the track. if the supply to any particular roadway is such as to fully employ horses or mules, the number of cars per trip can be increased up to seven or eight. in this case the expense, including wages of the men and wear, tear, and care of mules, will work out roughly at from 7 to 10 cents per ton mile. manifestly, if the ore-supply to a particular roadway is insufficient to keep a mule busy, the economy soon runs off. mechanical haulage.--mechanical haulage is seldom applicable to metal mines, for most metal deposits dip at considerable angles, and therefore, unlike most coal-mines, the horizon of haulage must frequently change, and there are no main arteries along which haulage continues through the life of the mine. any mechanical system entails a good deal of expense for installation, and the useful life of any particular roadway, as above said, is very short. moreover, the crooked roadways of most metal mines present difficulties of negotiation not to be overlooked. in order to use such systems it is necessary to condense the haulage to as few roadways as possible. where the tonnage on one level is not sufficient to warrant other than men or animals, it sometimes pays (if the dip is steep enough) to dump everything through winzes from one to two levels to a main road below where mechanical equipment can be advantageously provided. the cost of shaft-winding the extra depth is inconsiderable compared to other factors, for the extra vertical distance of haulage can be done at a cost of one or two cents per ton mile. moreover, from such an arrangement follows the concentration of shaft-bins, and of shaft labor, and winding is accomplished without so much shifting as to horizon, all of which economies equalize the extra distance of the lift. there are three principal methods of mechanical transport in use:- 1. cable-ways. 2. compressed-air locomotives. 3. electrical haulage. cable-ways or endless ropes are expensive to install, and to work to the best advantage require double tracks and fairly straight roads. while they are economical in operation and work with little danger to operatives, the limitations mentioned preclude them from adoption in metal mines, except in very special circumstances such as main crosscuts or adit tunnels, where the haulage is straight and concentrated from many sources of supply. compressed-air locomotives are somewhat heavy and cumbersome, and therefore require well-built tracks with heavy rails, but they have very great advantages for metal mine work. they need but a single track and are of low initial cost where compressed air is already a requirement of the mine. no subsidiary line equipment is needed, and thus they are free to traverse any road in the mine and can be readily shifted from one level to another. their mechanical efficiency is not so low in the long run as might appear from the low efficiency of pneumatic machines generally, for by storage of compressed air at the charging station a more even rate of energy consumption is possible than in the constant cable and electrical power supply which must be equal to the maximum demand, while the air-plant consumes but the average demand. electrical haulage has the advantage of a much more compact locomotive and the drawback of more expensive track equipment, due to the necessity of transmission wire, etc. it has the further disadvantages of uselessness outside the equipped haulage way and of the dangers of the live wire in low and often wet tunnels. in general, compressed-air locomotives possess many attractions for metal mine work, where air is in use in any event and where any mechanical system is at all justified. any of the mechanical systems where tonnage is sufficient in quantity to justify their employment will handle material for from 1.5 to 4 cents per ton mile. tracks.--tracks for hand, mule, or rope haulage are usually built with from 12to 16-pound rails, but when compressed-air or electrical locomotives are to be used, less than 24-pound rails are impossible. as to tracks in general, it may be said that careful laying out with even grades and gentle curves repays itself many times over in their subsequent operation. further care in repair and lubrication of cars will often make a difference of 75% in the track resistance. transport in stopes.--owing to the even shorter life of individual stopes than levels, the actual transport of ore or waste in them is often a function of the aboriginal shovel plus gravity. as shoveling is the most costly system of transport known, any means of stoping that decreases the need for it has merit. shrinkage-stoping eliminates it altogether. in the other methods, gravity helps in proportion to the steepness of the dip. when the underlie becomes too flat for the ore to "run," transport can sometimes be helped by pitching the ore-passes at a steeper angle than the dip (fig. 36). in some cases of flat deposits, crosscuts into the walls, or even levels under the ore-body, are justifiable. the more numerous the ore-passes, the less the lateral shoveling, but as passes cost money for construction and for repair, there is a nice economic balance in their frequency. mechanical haulage in stopes has been tried and finds a field under some conditions. in dips under 25° and possessing fairly sound hanging-wall, where long-wall or flat-back cuts are employed, temporary tracks can often be laid in the stopes and the ore run in cars to the main passes. in such cases, the tracks are pushed up close to the face after each cut. further self-acting inclines to lower cars to the levels can sometimes be installed to advantage. this arrangement also permits greater intervals between levels and less number of ore-passes. for dips between 25° and 50° where the mine is worked without stope support or with occasional pillars, a very useful contrivance is the sheet-iron trough--about eighteen inches wide and six inches deep--made in sections ten or twelve feet long and readily bolted together. in dips 35° to 50° this trough, laid on the foot-wall, gives a sufficiently smooth surface for the ore to run upon. when the dip is flat, the trough, if hung from plugs in the hanging-wall, may be swung backward and forward. the use of this "bumping-trough" saves much shoveling. for handling filling or ore in flat runs it deserves wider adoption. it is, of course, inapplicable in passes as a "bumping-trough," but can be fixed to give smooth surface. in flat mines it permits a wider interval between levels and therefore saves development work. the life of this contrivance is short when used in open stopes, owing to the dangers of bombardment from blasting. in dips steeper than 50° much of the shoveling into passes can be saved by rill-stoping, as described on page 100. where flat-backed stopes are used in wide ore-bodies with filling, temporary tracks laid on the filling to the ore-passes are useful, for they permit wider intervals between passes. in that underground engineer's paradise, the witwatersrand, where the stopes require neither timber nor filling, the long, moderately pitched openings lend themselves particularly to the swinging iron troughs, and even endless wire ropes have been found advantageous in certain cases. where the roof is heavy and close support is required, and where the deposits are very irregular in shape and dip, there is little hope of mechanical assistance in stope transport. chapter xiii. mechanical equipment. (_continued_). drainage: controlling factors; volume and head of water; flexibility; reliability; power conditions; mechanical efficiency; capital outlay. systems of drainage,--steam pumps, compressed-air pumps, electrical pumps, rod-driven pumps, bailing; comparative value of various systems. with the exception of drainage tunnels--more fully described in chapter viii--all drainage must be mechanical. as the bulk of mine water usually lies near the surface, saving in pumping can sometimes be effected by leaving a complete pillar of ore under some of the upper levels. in many deposits, however, the ore has too many channels to render this of much avail. there are six factors which enter into a determination of mechanical drainage systems for metal mines:- 1. volume and head of water. 2. flexibility to fluctuation in volume and head. 3. reliability. 4. capital cost. 5. the general power conditions. 6. mechanical efficiency. in the drainage appliances, more than in any other feature of the equipment, must mechanical efficiency be subordinated to the other issues. flexibility.--flexibility in plant is necessary because volume and head of water are fluctuating factors. in wet regions the volume of water usually increases for a certain distance with the extension of openings in depth. in dry climates it generally decreases with the downward extension of the workings after a certain depth. moreover, as depth progresses, the water follows the openings more or less and must be pumped against an ever greater head. in most cases the volume varies with the seasons. what increase will occur, from what horizon it must be lifted, and what the fluctuations in volume are likely to be, are all unknown at the time of installation. if a pumping system were to be laid out for a new mine, which would peradventure meet every possible contingency, the capital outlay would be enormous, and the operating efficiency would be very low during the long period in which it would be working below its capacity. the question of flexibility does not arise so prominently in coal-mines, for the more or less flat deposits give a fixed factor of depth. the flow is also more steady, and the volume can be in a measure approximated from general experience. reliability.--the factor of reliability was at one time of more importance than in these days of high-class manufacture of many different pumping systems. practically speaking, the only insurance from flooding in any event lies in the provision of a relief system of some sort,--duplicate pumps, or the simplest and most usual thing, bailing tanks. only cornish and compressed-air pumps will work with any security when drowned, and electrical pumps are easily ruined. general power conditions.--the question of pumping installation is much dependent upon the power installation and other power requirements of the mine. for instance, where electrical power is purchased or generated by water-power, then electrical pumps have every advantage. or where a large number of subsidiary motors can be economically driven from one central steamor gas-driven electrical generation plant, they again have a strong call,--especially if the amount of water to be handled is moderate. where the water is of limited volume and compressed-air plant a necessity for the mine, then air-driven pumps may be the most advantageous, etc. mechanical efficiency.--the mechanical efficiency of drainage machinery is very largely a question of method of power application. the actual pump can be built to almost the same efficiency for any power application, and with the exception of the limited field of bailing with tanks, mechanical drainage is a matter of pumps. all pumps must be set below their load, barring a few possible feet of suction lift, and they are therefore perforce underground, and in consequence all power must be transmitted from the surface. transmission itself means loss of power varying from 10 to 60%, depending upon the medium used. it is therefore the choice of transmission medium that largely governs the mechanical efficiency. systems of drainage.--the ideal pumping system for metal mines would be one which could be built in units and could be expanded or contracted unit by unit with the fluctuation in volume; which could also be easily moved to meet the differences of lifts; and in which each independent unit could be of the highest mechanical efficiency and would require but little space for erection. such an ideal is unobtainable among any of the appliances with which the writer is familiar. the wide variations in the origin of power, in the form of transmission, and in the method of final application, and the many combinations of these factors, meet the demands for flexibility, efficiency, capital cost, and reliability in various degrees depending upon the environment of the mine. power nowadays is generated primarily with steam, water, and gas. these origins admit the transmission of power to the pumps by direct steam, compressed air, electricity, rods, or hydraulic columns. direct steam-pumps.--direct steam has the disadvantage of radiated heat in the workings, of loss by the radiation, and, worse still, of the impracticability of placing and operating a highly efficient steam-engine underground. it is all but impossible to derive benefit from the vacuum, as any form of surface condenser here is impossible, and there can be no return of the hot soft water to the boilers. steam-pumps fall into two classes, rotary and direct-acting; the former have the great advantage of permitting the use of steam expansively and affording some field for effective use of condensation, but they are more costly, require much room, and are not fool-proof. the direct-acting pumps have all the advantage of compactness and the disadvantage of being the most inefficient of pumping machines used in mining. taking the steam consumption of a good surface steam plant at 15 pounds per horse-power hour, the efficiency of rotary pumps with well-insulated pipes is probably not over 50%, and of direct-acting pumps from 40% down to 10%. the advantage of all steam-pumps lies in the low capital outlay,--hence their convenient application to experimental mining and temporary pumping requirements. for final equipment they afford a great deal of flexibility, for if properly constructed they can be, with slight alteration, moved from one horizon to another without loss of relative efficiency. thus the system can be rearranged for an increased volume of water, by decreasing the lift and increasing the number of pumps from different horizons. compressed-air pumps.--compressed-air transmission has an application similar to direct steam, but it is of still lower mechanical efficiency, because of the great loss in compression. it has the superiority of not heating the workings, and there is no difficulty as to the disposal of the exhaust, as with steam. moreover, such pumps will work when drowned. compressed air has a distinct place for minor pumping units, especially those removed from the shaft, for they can be run as an adjunct to the air-drill system of the mine, and by this arrangement much capital outlay may be saved. the cost of the extra power consumed by such an arrangement is less than the average cost of compressed-air power, because many of the compressor charges have to be paid anyway. when compressed air is water-generated, they have a field for permanent installations. the efficiency of even rotary air-driven pumps, based on power delivered into a good compressor, is probably not over 25%. electrical pumps.--electrical pumps have somewhat less flexibility than steamor air-driven apparatus, in that the speed of the pumps can be varied only within small limits. they have the same great advantage in the easy reorganization of the system to altered conditions of water-flow. electricity, when steam-generated, has the handicap of the losses of two conversions, the actual pump efficiency being about 60% in well-constructed plants; the efficiency is therefore greater than direct steam or compressed air. where the mine is operated with water-power, purchased electric current, or where there is an installation of electrical generating plant by steam or gas for other purposes, electrically driven pumps take precedence over all others on account of their combined moderate capital outlay, great flexibility, and reasonable efficiency. in late years, direct-coupled, electric-driven centrifugal pumps have entered the mining field, but their efficiency, despite makers' claims, is low. while they show comparatively good results on low lifts the slip increases with the lift. in heads over 200 feet their efficiency is probably not 30% of the power delivered to the electrical generator. their chief attractions are small capital cost and the compact size which admits of easy installation. rod-driven pumps.--pumps of the cornish type in vertical shafts, if operated to full load and if driven by modern engines, have an efficiency much higher than any other sort of installation, and records of 85 to 90% are not unusual. the highest efficiency in these pumps yet obtained has been by driving the pump with rope transmission from a high-speed triple expansion engine, and in this plant an actual consumption of only 17 pounds of steam per horse-power hour for actual water lifted has been accomplished. to provide, however, for increase of flow and change of horizon, rod-driven pumps must be so overpowered at the earlier stage of the mine that they operate with great loss. of all pumping systems they are the most expensive to provide. they have no place in crooked openings and only work in inclines with many disadvantages. in general their lack of flexibility is fast putting them out of the metal miner's purview. where the pumping depth and volume of water are approximately known, as is often the case in coal mines, this, the father of all pumps, still holds its own. hydraulic pumps.--hydraulic pumps, in which a column of water is used as the transmission fluid from a surface pump to a corresponding pump underground has had some adoption in coal mines, but little in metal mines. they have a certain amount of flexibility but low efficiency, and are not likely to have much field against electrical pumps. bailing.--bailing deserves to be mentioned among drainage methods, for under certain conditions it is a most useful system, and at all times a mine should be equipped with tanks against accident to the pumps. where the amount of water is limited,--up to, say, 50,000 gallons daily,--and where the ore output of the mine permits the use of the winding-engine for part of the time on water haulage, there is in the method an almost total saving of capital outlay. inasmuch as the winding-engine, even when the ore haulage is finished for the day, must be under steam for handling men in emergencies, and as the labor of stokers, engine-drivers, shaft-men, etc., is therefore necessary, the cost of power consumed by bailing is not great, despite the low efficiency of winding-engines. comparison of various systems.--if it is assumed that flexibility, reliability, mechanical efficiency, and capital cost can each be divided into four figures of relative importance,--_a_, _b_, _c_, and _d_, with _a_ representing the most desirable result,--it is possible to indicate roughly the comparative values of various pumping systems. it is not pretended that the four degrees are of equal import. in all cases the factor of general power conditions on the mine may alter the relative positions. ==================================================================== |direct|compressed| |steam-| | |steam | air |electricity|driven|hydraulic|bailing |pumps | | | rods | columns | tanks -------------|------|----------|-----------|------|---------|------flexibility. | _a_ | _a_ | _b_ | _d_ | _b_ | _a_ reliability. | _b_ | _b_ | _b_ | _a_ | _d_ | _a_ mechanical | | | | | | efficiency.| _c_ | _d_ | _b_ | _a_ | _c_ | _d_ capital cost | _a_ | _b_ | _b_ | _d_ | _d_ | -==================================================================== as each mine has its special environment, it is impossible to formulate any final conclusion on a subject so involved. the attempt would lead to a discussion of a thousand supposititious cases and hypothetical remedies. further, the description alone of pumping machines would fill volumes, and the subject will never be exhausted. the engineer confronted with pumping problems must marshal all the alternatives, count his money, and apply the tests of flexibility, reliability, efficiency, and cost, choose the system of least disadvantages, and finally deprecate the whole affair, for it is but a parasite growth on the mine. chapter xiv. mechanical equipment (_concluded_). machine drilling: power transmission; compressed air _vs_. electricity; air drills; machine _vs_. hand drilling. work-shops. improvement in equipment. for over two hundred years from the introduction of drill-holes for blasting by caspar weindel in hungary, to the invention of the first practicable steam percussion drill by j. j. crouch of philadelphia, in 1849, all drilling was done by hand. since crouch's time a host of mechanical drills to be actuated by all sorts of power have come forward, and even yet the machine-drill has not reached a stage of development where it can displace hand-work under all conditions. steam-power was never adapted to underground work, and a serviceable drill for this purpose was not found until compressed air for transmission was demonstrated by dommeiller on the mt. cenis tunnel in 1861. the ideal requirements for a drill combine:- a. power transmission adapted to underground conditions. b. lightness. c. simplicity of construction. d. strength. e. rapidity and strength of blow. f. ease of erection. g. reliability. h. mechanical efficiency. i. low capital cost. no drill invented yet fills all these requirements, and all are a compromise on some point. power transmission; compressed air _vs_. electricity.--the only transmissions adapted to underground drill-work are compressed air and electricity, and as yet an electric-driven drill has not been produced which meets as many of the requirements of the metal miner as do compressed-air drills. the latter, up to date, have superiority in simplicity, lightness, ease of erection, reliability, and strength over electric machines. air has another advantage in that it affords some assistance to ventilation, but it has the disadvantage of remarkably low mechanical efficiency. the actual work performed by the standard 3-3/4-inch air-drill probably does not amount to over two or three horse-power against from fifteen to eighteen horse-power delivered into the compressor, or mechanical efficiency of less than 25%. as electrical power can be delivered to the drill with much less loss than compressed air, the field for a more economical drill on this line is wide enough to create eventually the proper tool to apply it. the most satisfactory electric drill produced has been the temple drill, which is really an air-drill driven by a small electrically-driven compressor placed near the drill itself. but even this has considerable deficiencies in mining work; the difficulties of setting up, especially for stoping work, and the more cumbersome apparatus to remove before blasting are serious drawbacks. it has deficiencies in reliability and greater complication of machinery than direct air. air-compression.--the method of air-compression so long accomplished only by power-driven pistons has now an alternative in some situations by the use of falling water. this latter system is a development of the last twelve years, and, due to the low initial outlay and extremely low operating costs, bids fair in those regions where water head is available not only to displace the machine compressor, but also to extend the application of compressed air to mine motors generally, and to stay in some environments the encroachment of electricity into the compressed-air field. installations of this sort in the west kootenay, b.c., and at the victoria copper mine, michigan, are giving results worthy of careful attention. mechanical air-compressors are steam-, water-, electrical-, and gas-driven, the alternative obviously depending on the source and cost of power. electricaland gasand water-driven compressors work under the disadvantage of constant speed motors and respond little to the variation in load, a partial remedy for which lies in enlarged air-storage capacity. inasmuch as compressed air, so far as our knowledge goes at present, must be provided for drills, it forms a convenient transmission of power to various motors underground, such as small pumps, winches, or locomotives. as stated in discussing those machines, it is not primarily a transmission of even moderate mechanical efficiency for such purposes; but as against the installation and operation of independent transmission, such as steam or electricity, the economic advantage often compensates the technical losses. where such motors are fixed, as in pumps and winches, a considerable gain in efficiency can be obtained by reheating. it is not proposed to enter a discussion of mechanical details of air-compression, more than to call attention to the most common delinquency in the installation of such plants. this deficiency lies in insufficient compression capacity for the needs of the mine and consequent effective operation of drills, for with under 75 pounds pressure the drills decrease remarkably in rapidity of stroke and force of the blow. the consequent decrease in actual accomplishment is far beyond the ratio that might be expected on the basis of mere difference of pressure. another form of the same chronic ill lies in insufficient air-storage capacity to provide for maintenance of pressure against moments when all drills or motors in the mine synchronize in heavy demand for air, and thus lower the pressure at certain periods. air-drills.--air-drills are from a mechanical point of view broadly of two types,--the first, in which the drill is the piston extension; and the second, a more recent development for mining work, in which the piston acts as a hammer striking the head of the drill. from an economic point of view drills may be divided into three classes. first, heavy drills, weighing from 150 to 400 pounds, which require two men for their operation; second, "baby" drills of the piston type, weighing from 110 to 150 pounds, requiring one man with occasional assistance in setting up; and third, very light drills almost wholly of the hammer type. this type is built in two forms: a heavier type for mounting on columns, weighing about 80 pounds; and a type after the order of the pneumatic riveter, weighing as low as 20 pounds and worked without mounting. the weight and consequent mobility of a drill, aside from labor questions, have a marked effect on costs, for the lighter the drill the less difficulty and delay in erection, and consequent less loss of time and less tendency to drill holes from one radius, regardless of pointing to take best advantage of breaking planes. moreover, smaller diameter and shorter holes consume less explosives per foot advanced or per ton broken. the best results in tonnage broken and explosive consumed, if measured by the foot of drill-hole necessary, can be accomplished from hand-drilling and the lighter the machine drill, assuming equal reliability, the nearer it approximates these advantages. the blow, and therefore size and depth of hole and rapidity of drilling, are somewhat dependent upon the size of cylinders and length of stroke, and therefore the heavier types are better adapted to hard ground and to the deep holes of some development points. their advantages over the other classes lie chiefly in this ability to bore exceedingly hard material and in the greater speed of advance possible in development work; but except for these two special purposes they are not as economical per foot advanced or per ton of ore broken as the lighter drills. the second class, where men can be induced to work them one man per drill, saves in labor and gains in mobility. many tests show great economy of the "baby" type of piston drills in average ground over the heavier machines for stoping and for most lateral development. all piston types are somewhat cumbersome and the heavier types require at least four feet of head room. the "baby" type can be operated in less space than this, but for narrow stopes they do not lend themselves with the same facility as the third class. the third class of drills is still in process of development, but it bids fair to displace much of the occupation of the piston types of drill. aside from being a one-man drill, by its mobility it will apparently largely reproduce the advantage of hand-drilling in ability to place short holes from the most advantageous angles and for use in narrow places. as compared with other drills it bids fair to require less time for setting up and removal and for change of bits; to destroy less steel by breakages; to dull the bits less rapidly per foot of hole; to be more economical of power; to require much less skill in operation, for judgment is less called upon in delivering speed; and to evade difficulties of fissured ground, etc. and finally the cost is only one-half, initially and for spares. its disadvantage so far is a lack of reliability due to lightness of construction, but this is very rapidly being overcome. this type, however, is limited in depth of hole possible, for, from lack of positive reverse movement, there is a tendency for the spoil to pack around the bit, and as a result about four feet seems the limit. the performance of a machine-drill under show conditions may be anything up to ten or twelve feet of hole per hour on rock such as compact granite; but in underground work a large proportion of the time is lost in picking down loose ore, setting up machines, removal for blasting, clearing away spoil, making adjustments, etc. the amount of lost time is often dependent upon the width of stope or shaft and the method of stoping. situations which require long drill columns or special scaffolds greatly accentuate the loss of time. further, the difficulties in setting up reflect indirectly on efficiency to a greater extent in that a larger proportion of holes are drilled from one radius and thus less adapted to the best breaking results than where the drill can easily be reset from various angles. the usual duty of a heavy drill per eight-hour shift using two men is from 20 to 40 feet of hole, depending upon the rock, facilities for setting up, etc., etc.[*] the lighter drills have a less average duty, averaging from 15 to 25 feet per shift. [footnote *: over the year 1907 in twenty-eight mines compiled from alaska to australia, an average of 23.5 feet was drilled per eight-hour shift by machines larger than three-inch cylinder.] machine _vs_. hand-drilling.--the advantages of hand-drilling over machine-drilling lie, first, in the total saving of power, the absence of capital cost, repairs, depreciation, etc., on power, compresser and drill plant; second, the time required for setting up machine-drills does not warrant frequent blasts, so that a number of holes on one radius are a necessity, and therefore machine-holes generally cannot be pointed to such advantage as hand-holes. hand-holes can be set to any angle, and by thus frequent blasting yield greater tonnage per foot of hole. third, a large number of comparative statistics from american, south african, and australian mines show a saving of about 25% in explosives for the same tonnage or foot of advance by hand-holes over medium and heavy drill-holes. the duty of a skilled white man, single-handed, in rock such as is usually met below the zone of oxidation, is from 5 to 7 feet per shift, depending on the rock and the man. two men hand-drilling will therefore do from 1/4 to 2/3 of the same footage of holes that can be done by two men with a heavy machine-drill, and two men hand-drilling will do from 1/5 to 1/2 the footage of two men with two light drills. the saving in labor of from 75 to 33% by machine-drilling may or may not be made up by the other costs involved in machine-work. the comparative value of machineand hand-drilling is not subject to sweeping generalization. a large amount of data from various parts of the world, with skilled white men, shows machine-work to cost from half as much per ton or foot advanced as hand-work to 25% more than handwork, depending on the situation, type of drill, etc. in a general way hand-work can more nearly compete with heavy machines than light ones. the situations where hand-work can compete with even light machines are in very narrow stopes where drills cannot be pointed to advantage, and where the increased working space necessary for machine drills results in breaking more waste. further, hand-drilling can often compete with machine-work in wide stopes where long columns or platforms must be used and therefore there is much delay in taking down, reërection, etc. many other factors enter into a comparison, however, for machine-drilling produces a greater number of deeper holes and permits larger blasts and therefore more rapid progress. in driving levels under average conditions monthly footage is from two to three times as great with heavy machines as by hand-drilling, and by lighter machines a somewhat less proportion of greater speed. the greater speed obtained in development work, the greater tonnage obtained per man in stoping, with consequent reduction in the number of men employed, and in reduction of superintendence and general charges are indirect advantages for machine-drilling not to be overlooked. the results obtained in south africa by hand-drilling in shafts, and its very general adoption there, seem to indicate that better speed and more economical work can be obtained in that way in very large shafts than by machine-drilling. how far special reasons there apply to smaller shafts or labor conditions elsewhere have yet to be demonstrated. in large-dimension shafts demanding a large number of machines, the handling of long machine bars and machines generally results in a great loss of time. the large charges in deep holes break the walls very irregularly; misfires cause more delay; timbering is more difficult in the face of heavy blasting charges; and the larger amount of spoil broken at one time delays renewed drilling, and altogether the advantages seem to lie with hand-drilling in shafts of large horizontal section. the rapid development of special drills for particular conditions has eliminated the advantage of hand-work in many situations during the past ten years, and the invention of the hammer type of drill bids fair to render hand-drilling a thing of the past. one generalization is possible, and that is, if drills are run on 40-50 pounds' pressure they are no economy over hand-drilling. workshops. in addition to the ordinary blacksmithy, which is a necessity, the modern tendency has been to elaborate the shops on mines to cover machine-work, pattern-making and foundry-work, in order that delays may be minimized by quick repairs. to provide, however, for such contingencies a staff of men must be kept larger than the demand of average requirements. the result is an effort to provide jobs or to do work extravagantly or unnecessarily well. in general, it is an easy spot for fungi to start growing on the administration, and if custom repair shops are available at all, mine shops can be easily overdone. a number of machines are now in use for sharpening drills. machine-sharpening is much cheaper than hand-work, although the drills thus sharpened are rather less efficient owing to the difficulty of tempering them to the same nicety; however, the net results are in favor of the machines. improvement in equipment. not only is every mine a progressive industry until the bottom gives out, but the technology of the industry is always progressing, so that the manager is almost daily confronted with improvements which could be made in his equipment that would result in decreasing expenses or increasing metal recovery. there is one test to the advisability of such alterations: how long will it take to recover the capital outlay from the savings effected? and over and above this recovery of capital there must be some very considerable gain. the life of mines is at least secured over the period exposed in the ore-reserves, and if the proposed alteration will show its recovery and profit in that period, then it is certainly justified. if it takes longer than this on the average speculative ore-deposit, it is a gamble on finding further ore. as a matter of practical policy it will be found that an improvement in equipment which requires more than three or four years to redeem itself out of saving, is usually a mechanical or metallurgical refinement the indulgence in which is very doubtful. chapter xv. ratio of output to the mine. determination of the possible maximum; limiting factors; cost of equipment; life of the mine; mechanical inefficiency of patchwork plant; overproduction of base metal; security of investment. the output obtainable from a given mine is obviously dependent not only on the size of the deposit, but also on the equipment provided,--in which equipment means the whole working appliances, surface and underground. a rough and ready idea of output possibilities of inclined deposits can be secured by calculating the tonnage available per foot of depth from the horizontal cross-section of the ore-bodies exposed and assuming an annual depth of exhaustion, or in horizontal deposits from an assumption of a given area of exhaustion. few mines, at the time of initial equipment, are developed to an extent from which their possibilities in production are evident, for wise finance usually leads to the erection of some equipment and production before development has been advanced to a point that warrants a large or final installation. moreover, even were the full possibilities of the mine known, the limitations of finance usually necessitate a less plant to start with than is finally contemplated. therefore output and equipment are usually growing possibilities during the early life of a mine. there is no better instance in mine engineering where pure theory must give way to practical necessities of finance than in the determination of the size of equipment and therefore output. moreover, where finance even is no obstruction, there are other limitations of a very practical order which must dominate the question of the size of plant giving the greatest technical economy. it is, however, useful to state the theoretical considerations in determining the ultimate volume of output and therefore the size of equipments, for the theory will serve to illuminate the practical limitations. the discussion will also again demonstrate that all engineering is a series of compromises with natural and economic forces. output giving least production cost.--as one of the most important objectives is to work the ore at the least cost per ton, it is not difficult to demonstrate that the minimum working costs can be obtained only by the most intensive production. to prove this, it need only be remembered that the working expenses of a mine are of two sorts: one is a factor of the tonnage handled, such as stoping and ore-dressing; the other is wholly or partially dependent upon time. a large number of items are of this last order. pumping and head-office expenses are almost entirely charges independent of the tonnage handled. superintendence and staff salaries and the like are in a large proportion dependent upon time. many other elements of expense, such as the number of engine-drivers, etc., do not increase proportionately to increase in tonnage. these charges, or the part of them dependent upon time apart from tonnage, may be termed the "fixed charges." there is another fixed charge more obscure yet no less certain. ore standing in a mine is like money in a bank drawing no interest, and this item of interest may be considered a "fixed charge," for if the ore were realized earlier, this loss could be partially saved. this subject is further referred to under "amortization." if, therefore, the time required to exhaust the mine be prolonged by the failure to maintain the maximum output, the total cost of working it will be greater by the fixed charges over such an increased period. conversely, by equipping on a larger scale, the mine will be exhausted more quickly, a saving in total cost can be made, and the ultimate profit can be increased by an amount corresponding to the time saved from the ravages of fixed charges. in fine, the working costs may be reduced by larger operations, and therefore the value of the mine increased. the problem in practice usually takes the form of the relative superiority of more or of fewer units of plant, and it can be considered in more detail if the production be supposed to consist of units averaging say 100 tons per day each. the advantage of more units over less will be that the extra ones can be produced free of fixed charges, for these are an expense already involved in the lesser units. this extra production will also enjoy the interest which can be earned over the period of its earlier production. moreover, operations on a larger scale result in various minor economies throughout the whole production, not entirely included in the type of expenditure mentioned as "fixed charges." we may call these various advantages the "saving of fixed charges" due to larger-scale operations. the saving of fixed charges amounts to very considerable sums. in general the items of working cost alone, mentioned above, which do not increase proportionately to the tonnage, aggregate from 10 to 25% of the total costs. where much pumping is involved, the percentage will become even greater. the question of the value of the mine as affected by the volume of output becomes very prominent in low-grade mines, where, if equipped for output on too small a scale, no profits at all could be earned, and a sufficient production is absolutely imperative for any gain. there are many mines in every country which with one-third of their present rate of production would lose money. that is, the fixed charges, if spread over small output, would be so great per ton that the profit would be extinguished by them. in the theoretical view, therefore, it would appear clear that the greatest ultimate profit from a mine can be secured only by ore extraction under the highest pressure. as a corollary to this it follows that development must proceed with the maximum speed. further, it follows that the present value of a mine is at least partially a factor of the volume of output contemplated. factors limiting the output. although the above argument can be academically defended, there are, as said at the start, practical limitations to the maximum intensity of production, arising out of many other considerations to which weight must be given. in the main, there are five principal limitations:- 1. cost of equipment. 2. life of the mine. 3. mechanical inefficiency of patchwork plant. 4. overproduction of base metal. 5. security of investment. cost of equipment.--the "saving of fixed charges" can only be obtained by larger equipment, which represents an investment. mining works, shafts, machinery, treatment plants, and all the paraphernalia cost large sums of money. they become either worn out or practically valueless through the exhaustion of the mines. even surface machinery when in good condition will seldom realize more than one-tenth of its expense if useless at its original site. all mines are ephemeral; therefore virtually the entire capital outlay of such works must be redeemed during the life of the mine, and the interest on it must also be recovered. the certain life, with the exception of banket and a few other types of deposit, is that shown by the ore in sight, plus something for extension of the deposit beyond exposures. so, against the "savings" to be made, must be set the cost of obtaining them, for obviously it is of no use investing a dollar to save a total of ninety cents. the economies by increased production are, however, of such an important character that the cost of almost any number of added units (within the ability of the mine to supply them) can be redeemed from these savings in a few years. for instance, in a californian gold mine where the working expenses are $3 and the fixed charges are at the low rate of 30 cents per ton, one unit of increased production would show a saving of over $10,000 per annum from the saving of fixed charges. in about three years this sum would repay the cost of the additional treatment equipment. if further shaft capacity were required, the period would be much extended. on a western copper mine, where the costs are $8 and the fixed charges are 80 cents per ton, one unit of increased production would effect a saving of the fixed charges equal to the cost of the extra unit in about three years. that is, the total sum would amount to $80,000, or enough to provide almost any type of mechanical equipment for such additional tonnage. the first result of vigorous development is to increase the ore in sight,--the visible life of the mine. when such visible life has been so lengthened that the period in which the "saving of fixed charges" will equal the amount involved in expansion of equipment, then from the standpoint of this limitation only is the added installation justified. the equipment if expanded on this practice will grow upon the heels of rapid development until the maximum production from the mine is reached, and a kind of equilibrium establishes itself. conversely, this argument leads to the conclusion that, regardless of other considerations, an equipment, and therefore output, should not be expanded beyond the redemption by way of "saving from fixed charges" of the visible or certain life of the mine. in those mines, such as at the witwatersrand, where there is a fairly sound assurance of definite life, it is possible to calculate at once the size of plant which by saving of "fixed charges" will be eventually the most economical, but even here the other limitations step in to vitiate such policy of management,--chiefly the limitation through security of investment. life of the mine.--if carried to its logical extreme, the above program means a most rapid exhaustion of the mine. the maximum output will depend eventually upon the rapidity with which development work may be extended. as levels and other subsidiary development openings can be prepared in inclined deposits much more quickly than the shaft can be sunk, the critical point is the shaft-sinking. as a shaft may by exertion be deepened at least 400 feet a year on a going mine, the provision of an equipment to eat up the ore-body at this rate of sinking means very early exhaustion indeed. in fact, had such a theory of production been put into practice by our forefathers, the mining profession might find difficulty in obtaining employment to-day. such rapid exhaustion would mean a depletion of the mineral resources of the state at a pace which would be alarming. mechanical inefficiency of patchwork plant.--mine equipments on speculative mines (the vast majority) are often enough patchwork, for they usually grow from small beginnings; but any scheme of expansion based upon the above doctrine would need to be modified to the extent that additions could be in units large in ratio to previous installations, or their patchwork character would be still further accentuated. it would be impossible to maintain mechanical efficiency under detail expansion. overproduction of base metal.--were this intensity of production of general application to base metal mines it would flood the markets, and, by an overproduction of metal depress prices to a point where the advantages of such large-scale operations would quickly vanish. the theoretical solution in this situation would be, if metals fell below normal prices, let the output be reduced, or let the products be stored until the price recovers. from a practical point of view either alternative is a policy difficult to face. in the first case, reduction of output means an increase of working expenses by the spread of fixed charges over less tonnage, and this in the face of reduced metal prices. it may be contended, however, that a falling metal market is usually the accompaniment of a drop in all commodities, wherefore working costs can be reduced somewhat in such times of depression, thereby partially compensating the other elements making for increased costs. falls in commodities are also the accompaniment of hard times. consideration of one's workpeople and the wholesale slaughter of dividends to the then needy stockholders, resulting from a policy of reduced production, are usually sufficient deterrents to diminished output. the second alternative, that of storing metal, means equally a loss of dividends by the investment of a large sum in unrealized products, and the interest on this sum. the detriment to the market of large amounts of unsold metal renders such a course not without further disadvantages. security of investment.--another point of view antagonistic to such wholesale intensity of production, and one worthy of careful consideration, is that of the investor in mines. the root-value of mining stocks is, or should be, the profit in sight. if the policy of greatest economy in production costs be followed as outlined above, the economic limit of ore-reserves gives an apparently very short life, for the ore in sight will never represent a life beyond the time required to justify more plant. thus the "economic limit of ore in reserve" will be a store equivalencing a period during which additional equipment can be redeemed from the "saving of fixed charges," or three or four years, usually. the investor has the right to say that he wants the guarantee of longer life to his investment,--he will in effect pay insurance for it by a loss of some ultimate profit. that this view, contradictory to the economics of the case, is not simply academic, can be observed by any one who studies what mines are in best repute on any stock exchange. all engineers must wish to have the industry under them in high repute. the writer knows of several mines paying 20% on their stocks which yet stand lower in price on account of short ore-reserves than mines paying less annual returns. the speculator, who is an element not to be wholly disregarded, wishes a rise in his mining stock, and if development proceeds at a pace in advance of production, he will gain a legitimate rise through the increase in ore-reserves. the investor's and speculator's idea of the desirability of a proved long life readily supports the technical policy of high-pressure development work, but not of expansion of production, for they desire an increasing ore-reserve. even the metal operator who is afraid of overproduction does not object to increased ore-reserves. on the point of maximum intensity of development work in a mine all views coincide. the mining engineer, if he takes a machiavellian view, must agree with the investor and the metal dealer, for the engineer is a "fixed charge" the continuance of which is important to his daily needs. the net result of all these limitations is therefore an invariable compromise upon some output below the possible maximum. the initial output to be contemplated is obviously one upon which the working costs will be low enough to show a margin of profit. the medium between these two extremes is determinable by a consideration of the limitations set out,--and the cash available. when the volume of output is once determined, it must be considered as a factor in valuation, as discussed under "amortization." chapter xvi. administration. labor efficiency; skill; intelligence; application coordination; contract work; labor unions; real basis of wages. the realization from a mine of the profits estimated from the other factors in the case is in the end dependent upon the management. good mine management is based upon three elementals: first, sound engineering; second, proper coördination and efficiency of every human unit; third, economy in the purchase and consumption of supplies. the previous chapters have been devoted to a more or less extended exposition of economic engineering. while the second and third requirements are equally important, they range in many ways out of the engineering and into the human field. for this latter reason no complete manual will ever be published upon "how to become a good mine manager." it is purposed, however, to analyze some features of these second and third fundamentals, especially in their interdependent phases, and next to consider the subject of mine statistics, for the latter are truly the microscopes through which the competence of the administration must be examined. the human units in mine organization can be divided into officers and men. the choice of mine officers is the assembling of specialized brains. their control, stimulation, and inspiration is the main work of the administrative head. success in the selection and control of staff is the index of executive ability. there are no mathematical, mechanical, or chemical formulas for dealing with the human mind or human energies. labor.--the whole question of handling labor can be reduced to the one term "efficiency." not only does the actual labor outlay represent from 60 to 70% of the total underground expenses, but the capacity or incapacity of its units is responsible for wider fluctuations in production costs than the bare predominance in expenditure might indicate. the remaining expense is for supplies, such as dynamite, timber, steel, power, etc., and the economical application of these materials by the workman has the widest bearing upon their consumption. efficiency of the mass is the resultant of that of each individual under a direction which coördinates effectively all units. the lack of effectiveness in one individual diminishes the returns not simply from that man alone; it lowers the results from numbers of men associated with the weak member through the delaying and clogging of their work, and of the machines operated by them. coördination of work is a necessary factor of final efficiency. this is a matter of organization and administration. the most zealous stoping-gang in the world if associated with half the proper number of truckers must fail to get the desired result. efficiency in the single man is the product of three factors,--skill, intelligence, and application. a great proportion of underground work in a mine is of a type which can be performed after a fashion by absolutely unskilled and even unintelligent men, as witness the breaking-in of savages of low average mentality, like the south african kaffirs. although most duties can be performed by this crudest order of labor, skill and intelligence can be applied to it with such economic results as to compensate for the difference in wage. the reason for this is that the last fifty years have seen a substitution of labor-saving machines for muscle. such machines displace hundreds of raw laborers. not only do they initially cost large sums, but they require large expenditure for power and up-keep. these fixed charges against the machine demand that it shall be worked at its maximum. for interest, power, and up-keep go on in any event, and the saving on crude labor displaced is not so great but that it quickly disappears if the machine is run under its capacity. to get its greatest efficiency, a high degree of skill and intelligence is required. nor are skill and intelligence alone applicable to labor-saving devices themselves, because drilling and blasting rock and executing other works underground are matters in which experience and judgment in the individual workman count to the highest degree. how far skill affects production costs has had a thorough demonstration in west australia. for a time after the opening of those mines only a small proportion of experienced men were obtainable. during this period the rock broken per man employed underground did not exceed the rate of 300 tons a year. in the large mines it has now, after some eight years, attained 600 to 700 tons. how far intelligence is a factor indispensable to skill can be well illustrated by a comparison of the results obtained from working labor of a low mental order, such as asiatics and negroes, with those achieved by american or australian miners. in a general way, it may be stated with confidence that the white miners above mentioned can, under the same physical conditions, and with from five to ten times the wage, produce the same economic result,--that is, an equal or lower cost per unit of production. much observation and experience in working asiatics and negroes as well as americans and australians in mines, leads the writer to the conclusion that, averaging actual results, one white man equals from two to three of the colored races, even in the simplest forms of mine work such as shoveling or tramming. in the most highly skilled branches, such as mechanics, the average ratio is as one to seven, or in extreme cases even eleven. the question is not entirely a comparison of bare efficiency individually; it is one of the sum total of results. in mining work the lower races require a greatly increased amount of direction, and this excess of supervisors consists of men not in themselves directly productive. there is always, too, a waste of supplies, more accidents, and more ground to be kept open for accommodating increased staff, and the maintenance of these openings must be paid for. there is an added expense for handling larger numbers in and out of the mine, and the lower intelligence reacts in many ways in lack of coördination and inability to take initiative. taking all divisions of labor together, the ratio of efficiency as measured in amount of output works out from four to five colored men as the equivalent of one white man of the class stated. the ratio of costs, for reasons already mentioned, and in other than quantity relation, figures still more in favor of the higher intelligence. the following comparisons, which like all mine statistics must necessarily be accepted with reservation because of some dissimilarity of economic surroundings, are yet on sufficiently common ground to demonstrate the main issue,--that is, the bearing of inherent intelligence in the workmen and their consequent skill. four groups of gold mines have been taken, from india, west australia, south africa, and western america. all of those chosen are of the same stoping width, 4 to 5 feet. all are working in depth and with every labor-saving device available. all dip at about the same angle and are therefore in much the same position as to handling rock. the other conditions are against the white-manned mines and in favor of the colored. that is, the indian mines have water-generated electric power and south africa has cheaper fuel than either the american or australian examples. in both the white-manned groups, the stopes are supported, while in the others no support is required. ======================================================================= | tons of | average |tons | | material | number of men | per |cost per group of mines | excavated | employed | man | ton of |over period|---------------| per |material |compiled[5]|colored| white |annum| broken ----------------------------|-----------|-------|-------|-----|-------four kolar mines[1] | 963,950 | 13,611| 302 | 69.3| $3.85 six australian mines[2] | 1,027,718 | - | 1,534 |669.9| 2.47 three witwatersrand mines[3]| 2,962,640 | 13,560| 1,595 |195.5| 2.68 five american mines[4] | 1,089,500 | - | 1,524 |713.3| 1.92 ======================================================================= [footnote 1: indian wages average about 20 cents per day.] [footnote 2: white men's wages average about $3 per day.] [footnote 3: about two-fifths of the colored workers were negroes, and three-fifths chinamen. negroes average about 60 cents, and chinamen about 45 cents per day, including keep.] [footnote 4: wages about $3.50. tunnel entry in two mines.] [footnote 5: includes rock broken in development work. in the case of the specified african mines, the white labor is employed almost wholly in positions of actual or semi-superintendence, such as one white man in charge of two or three drills. in the indian case, in addition to the white men who are wholly in superintendence, there were of the natives enumerated some 1000 in positions of semi-superintendence, as contractors or headmen, working-gangers, etc.] one issue arises out of these facts, and that is that no engineer or investor in valuing mines is justified in anticipating lower costs in regions where cheap labor exists. in supplement to sheer skill and intelligence, efficiency can be gained only by the application of the man himself. a few months ago a mine in california changed managers. the new head reduced the number employed one-third without impairing the amount of work accomplished. this was not the result of higher skill or intelligence in the men, but in the manager. better application and coördination were secured from the working force. inspiration to increase of exertion is created less by "driving" than by recognition of individual effort, in larger pay, and by extending justifiable hope of promotion. a great factor in the proficiency of the mine manager is his ability to create an _esprit-de-corps_ through the whole staff, down to the last tool boy. friendly interest in the welfare of the men and stimulation by competitions between various works and groups all contribute to this end. contract work.--the advantage both to employer and employed of piece work over wage needs no argument. in a general way, contract work honorably carried out puts a premium upon individual effort, and thus makes for efficiency. there are some portions of mine work which cannot be contracted, but the development, stoping, and trucking can be largely managed in this way, and these items cover 65 to 75% of the total labor expenditure underground. in development there are two ways of basing contracts,--the first on the footage of holes drilled, and the second on the footage of heading advanced. in contract-stoping there are four methods depending on the feet of hole drilled, on tonnage, on cubic space, and on square area broken. all these systems have their rightful application, conditioned upon the class of labor and character of the deposit. in the "hole" system, the holes are "pointed" by some mine official and are blasted by a special crew. the miner therefore has little interest in the result of the breaking. if he is a skilled white man, the hours which he has wherein to contemplate the face usually enable him to place holes to better advantage than the occasional visiting foreman. with colored labor, the lack of intelligence in placing holes and blasting usually justifies contracts per "foot drilled." then the holes are pointed and blasted by superintending men. on development work with the foot-hole system, unless two working faces can be provided for each contracting party, they are likely to lose time through having finished their round of holes before the end of the shift. as blasting must be done outside the contractor's shifts, it means that one shift per day must be set aside for the purpose. therefore not nearly such progress can be made as where working the face with three shifts. for these reasons, the "hole" system is not so advantageous in development as the "foot of advance" basis. in stoping, the "hole" system has not only a wider, but a sounder application. in large ore-bodies where there are waste inclusions, it has one superiority over any system of excavation measurement, namely, that the miner has no interest in breaking waste into the ore. the plan of contracting stopes by the ton has the disadvantage that either the ore produced by each contractor must be weighed separately, or truckers must be trusted to count correctly, and to see that the cars are full. moreover, trucks must be inspected for waste,--a thing hard to do underground. so great are these detailed difficulties that many mines are sending cars to the surface in cages when they should be equipped for bin-loading and self-dumping skips. the method of contracting by the cubic foot of excavation saves all necessity for determining the weight of the output of each contractor. moreover, he has no object in mixing waste with the ore, barring the breaking of the walls. this system therefore requires the least superintendence, permits the modern type of hoisting, and therefore leaves little justification for the survival of the tonnage basis. where veins are narrow, stoping under contract by the square foot or fathom measured parallel to the walls has an advantage. the miner has no object then in breaking wall-rock, and the thoroughness of the ore-extraction is easily determined by inspection. bonus systems.--by giving cash bonuses for special accomplishment, much the same results can be obtained in some departments as by contracting. a bonus per foot of heading gained above a minimum, or an excess of trucks trammed beyond a minimum, or prizes for the largest amount done during the week or month in special works or in different shifts,--all these have a useful application in creating efficiency. a high level of results once established is easily maintained. labor unions.--there is another phase of the labor question which must be considered and that is the general relations of employer and employed. in these days of largely corporate proprietorship, the owners of mines are guided in their relations with labor by engineers occupying executive positions. on them falls the responsibility in such matters, and the engineer becomes thus a buffer between labor and capital. as corporations have grown, so likewise have the labor unions. in general, they are normal and proper antidotes for unlimited capitalistic organization. labor unions usually pass through two phases. first, the inertia of the unorganized labor is too often stirred only by demagogic means. after organization through these and other agencies, the lack of balance in the leaders often makes for injustice in demands, and for violence to obtain them and disregard of agreements entered upon. as time goes on, men become educated in regard to the rights of their employers, and to the reflection of these rights in ultimate benefit to labor itself. then the men, as well as the intelligent employer, endeavor to safeguard both interests. when this stage arrives, violence disappears in favor of negotiation on economic principles, and the unions achieve their greatest real gains. given a union with leaders who can control the members, and who are disposed to approach differences in a business spirit, there are few sounder positions for the employer, for agreements honorably carried out dismiss the constant harassments of possible strikes. such unions exist in dozens of trades in this country, and they are entitled to greater recognition. the time when the employer could ride roughshod over his labor is disappearing with the doctrine of "_laissez faire_," on which it was founded. the sooner the fact is recognized, the better for the employer. the sooner some miners' unions develop from the first into the second stage, the more speedily will their organizations secure general respect and influence.[*] [footnote *: some years of experience with compulsory arbitration in australia and new zealand are convincing that although the law there has many defects, still it is a step in the right direction, and the result has been of almost unmixed good to both sides. one of its minor, yet really great, benefits has been a considerable extinction of the parasite who lives by creating violence.] the crying need of labor unions, and of some employers as well, is education on a fundamental of economics too long disregarded by all classes and especially by the academic economist. when the latter abandon the theory that wages are the result of supply and demand, and recognize that in these days of international flow of labor, commodities and capital, the real controlling factor in wages is efficiency, then such an educational campaign may become possible. then will the employer and employee find a common ground on which each can benefit. there lives no engineer who has not seen insensate dispute as to wages where the real difficulty was inefficiency. no administrator begrudges a division with his men of the increased profit arising from increased efficiency. but every administrator begrudges the wage level demanded by labor unions whose policy is decreased efficiency in the false belief that they are providing for more labor. chapter xvii. administration (_continued_). accounts and technical data and reports; working costs; division of expenditure; inherent limitations in accuracy of working costs; working cost sheets. general technical data; labor, supplies, power, surveys, sampling, and assaying. first and foremost, mine accounts are for guidance in the distribution of expenditure and in the collection of revenue; secondly, they are to determine the financial progress of the enterprise, its profit or loss; and thirdly, they are to furnish statistical data to assist the management in its interminable battle to reduce expenses and increase revenue, and to enable the owner to determine the efficiency of his administrators. bookkeeping _per se_ is no part of this discussion. the fundamental purpose of that art is to cover the first two objects, and, as such, does not differ from its application to other commercial concerns. in addition to these accounting matters there is a further type of administrative report of equal importance--that is the periodic statements as to the physical condition of the property, the results of exploration in the mine, and the condition of the equipment. accounts. the special features of mine accounting reports which are a development to meet the needs of this particular business are the determination of working costs, and the final presentation of these data in a form available for comparative purposes. the subject may be discussed under:- 1. classes of mine expenditure. 2. working costs. 3. the dissection of expenditures departmentally. 4. inherent limitations in the accuracy of working costs. 5. working cost sheets. in a wide view, mine expenditures fall into three classes, which maybe termed the "fixed charges," "proportional charges," and "suspense charges" or "capital expenditure." "fixed charges" are those which, like pumping and superintendence, depend upon time rather than tonnage and material handled. they are expenditures that would not decrease relatively to output. "proportional charges" are those which, like ore-breaking, stoping, supporting stopes, and tramming, are a direct coefficient of the ore extracted. "suspense charges" are those which are an indirect factor of the cost of the ore produced, such as equipment and development. these expenditures are preliminary to output, and they thus represent a storage of expense to be charged off when the ore is won. this outlay is often called "capital expenditure." such a term, though in common use, is not strictly correct, for the capital value vanishes when the ore is extracted, but in conformity with current usage the term "capital expenditure" will be adopted. except for the purpose of special inquiry, such as outlined under the chapter on "ratio of output," "fixed charges" are not customarily a special division in accounts. in a general way, such expenditures, combined with the "proportional charges," are called "revenue expenditure," as distinguished from the capital, or "suspense," expenditures. in other words, "revenue" expenditures are those involved in the daily turnover of the business and resulting in immediate returns. the inherent difference in character of revenue and capital expenditures is responsible for most of the difficulties in the determination of working costs, and most of the discussion on the subject. working costs.--"working costs" are a division of expenditure for some unit,--the foot of opening, ton of ore, a pound of metal, cubic yard or fathom of material excavated, or some other measure. the costs per unit are usually deduced for each month and each year. they are generally determined for each of the different departments of the mine or special works separately. further, the various sorts of expenditure in these departments are likewise segregated. in metal mining the ton is the universal unit of distribution for administrative purpose, although the pound of metal is often used to indicate final financial results. the object of determination of "working costs" is fundamentally for comparative purposes. together with other technical data, they are the nerves of the administration, for by comparison of detailed and aggregate results with other mines and internally in the same mine, over various periods and between different works, a most valuable check on efficiency is possible. further, there is one collateral value in all statistical data not to be overlooked, which is that the knowledge of its existence induces in the subordinate staff both solicitude and emulation. the fact must not be lost sight of, however, that the wide variations in physical and economic environment are so likely to vitiate conclusions from comparisons of statistics from two mines or from two detailed works on the same mine, or even from two different months on the same work, that the greatest care and discrimination are demanded in their application. moreover, the inherent difficulties in segregating and dividing the accounts which underlie such data, render it most desirable to offer some warning regarding the limits to which segregation and division may be carried to advantage. as working costs are primarily for comparisons, in order that they may have value for this purpose they must include only such items of expenditure as will regularly recur. if this limitation were more generally recognized, a good deal of dispute and polemics on the subject might be saved. for this reason it is quite impossible that all the expenditure on the mine should be charged into working costs, particularly some items that arise through "capital expenditure." the dissection of expenditures departmentally.--the final division in the dissection of the mine expenditure is in the main:- /(1) general expenses. / ore-breaking. \ | | supporting stopes. | various _revenue._< (2) ore extraction. < trucking ore. | expenditures | \ hoisting. | for labor, \(3) pumping. | supplies, power, / shaft-sinking. | repairs, etc., | station-cutting. > worked out per | crosscutting. | ton or foot /(4) development. < driving. | advanced _capital | | rising. | over each or < | winzes. | department. suspense._ | \ diamond drilling. / | | (5) construction and \ various works. \ equipment. / the detailed dissection of expenditures in these various departments with view to determine amount of various sorts of expenditure over the department, or over some special work in that department, is full of unsolvable complications. the allocation of the direct expenditure of labor and supplies applied to the above divisions or special departments in them, is easily accomplished, but beyond this point two sorts of difficulties immediately arise and offer infinite field for opinion and method. the first of these difficulties arises from supplementary departments on the mine, such as "power," "repairs and maintenance," "sampling and assaying." these departments must be "spread" over the divisions outlined above, for such charges are in part or whole a portion of the expense of these divisions. further, all of these "spread" departments are applied to surface as well as to underground works, and must be divided not only over the above departments but also over the surface departments,--not under discussion here. the common method is to distribute "power" on a basis of an approximation of the amount used in each department; to distribute "repairs and maintenance," either on a basis of shop returns, or a distribution over all departments on the basis of the labor employed in those departments, on the theory that such repairs arise in this proportion; to distribute sampling and assaying over the actual points to which they relate at the average cost per sample or assay. "general expenses," that is, superintendence, etc., are often not included in the final departments as above, but are sometimes "spread" in an attempt to charge a proportion of superintendence to each particular work. as, however, such "spreading" must take place on the basis of the relative expenditure in each department, the result is of little value, for such a basis does not truly represent the proportion of general superintendence, etc., devoted to each department. if they are distributed over all departments, capital as well as revenue, on the basis of total expenditure, they inflate the "capital expenditure" departments against a day of reckoning when these charges come to be distributed over working costs. although it may be contended that the capital departments also require supervision, such a practice is a favorite device for showing apparently low working costs in the revenue departments. the most courageous way is not to distribute general expenses at all, but to charge them separately and directly to revenue accounts and thus wholly into working costs. the second problem is to reduce the "suspense" or capital charges to a final cost per ton, and this is no simple matter. development expenditures bear a relation to the tonnage developed and not to that extracted in any particular period. if it is desired to preserve any value for comparative purposes in the mining costs, such outlay must be charged out on the basis of the tonnage developed, and such portion of the ore as is extracted must be written off at this rate; otherwise one month may see double the amount of development in progress which another records, and the underground costs would be swelled or diminished thereby in a way to ruin their comparative value from month to month. the ore developed cannot be satisfactorily determined at short intervals, but it can be known at least annually, and a price may be deduced as to its cost per ton. in many mines a figure is arrived at by estimating ore-reserves at the end of the year, and this figure is used during the succeeding year as a "redemption of development" and as such charged to working costs, and thus into revenue account in proportion to the tonnage extracted. this matter is further elaborated in some mines, in that winzes and rises are written off at one rate, levels and crosscuts at another, and shafts at one still lower, on the theory that they lost their usefulness in this progression as the ore is extracted. this course, however, is a refinement hardly warranted. plant and equipment constitute another "suspense" account even harder to charge up logically to tonnage costs, for it is in many items dependent upon the life of the mine, which is an unknown factor. most managers debit repairs and maintenance directly to the revenue account and leave the reduction of the construction outlay to an annual depreciation on the final balance sheet, on the theory that the plant is maintained out of costs to its original value. this subject will be discussed further on. inherent limitations in accuracy of working costs.--there are three types of such limitations which arise in the determination of costs and render too detailed dissection of such costs hopeless of accuracy and of little value for comparative purposes. they are, first, the difficulty of determining all of even direct expenditure on any particular crosscut, stope, haulage, etc.; second, the leveling effect of distributing the "spread" expenditures, such as power, repairs, etc.; and third, the difficulties arising out of the borderland of various departments. of the first of these limitations the instance may be cited that foremen and timekeepers can indicate very closely the destination of labor expense, and also that of some of the large items of supply, such as timber and explosives, but the distribution of minor supplies, such as candles, drills, picks, and shovels, is impossible of accurate knowledge without an expense wholly unwarranted by the information gained. to determine at a particular crosscut the exact amount of steel, and of tools consumed, and the cost of sharpening them, would entail their separate and special delivery to the same place of attack and a final weighing-up to learn the consumption. of the second sort of limitations, the effect of "spread" expenditure, the instance may be given that the repairs and maintenance are done by many men at work on timbers, tracks, machinery, etc. it is hopeless to try and tell how much of their work should be charged specifically to detailed points. in the distribution of power may be taken the instance of air-drills. although the work upon which the drill is employed can be known, the power required for compression usually comes from a common power-plant, so that the portion of power debited to the air compressor is an approximation. the assumption of an equal consumption of air by all drills is a further approximation. in practice, therefore, many expenses are distributed on the theory that they arise in proportion to the labor employed, or the machines used in the various departments. the net result is to level down expensive points and level up inexpensive ones. the third sort of limitation of accounting difficulty referred to, arises in determining into which department are actually to be allocated the charges which lie in the borderland between various primary classes of expenditure. for instance, in ore won from development,--in some months three times as much development may be in ore as in other months. if the total expense of development work which yields ore be charged to stoping account, and if cost be worked out on the total tonnage of ore hoisted, then the stoping cost deduced will be erratic, and the true figures will be obscured. on the other hand, if all development is charged to 'capital account' and the stoping cost worked out on all ore hoisted, it will include a fluctuating amount of ore not actually paid for by the revenue departments or charged into costs. this fluctuation either way vitiates the whole comparative value of the stoping costs. in the following system a compromise is reached by crediting "development" with an amount representing the ore won from development at the average cost of stoping, and by charging this amount into "stoping." a number of such questions arise where the proper division is simply a matter of opinion. the result of all these limitations is that a point in detail is quickly reached where no further dissection of expenditure is justified, since it becomes merely an approximation. the writer's own impression is that without an unwarrantable number of accountants, no manager can tell with any accuracy the cost of any particular stope, or of any particular development heading. therefore, aside from some large items, such detailed statistics, if given, are to be taken with great reserve. working cost sheets.--there are an infinite number of forms of working cost sheets, practically every manager having a system of his own. to be of greatest value, such sheets should show on their face the method by which the "spread" departments are handled, and how revenue and suspense departments are segregated. when too much detail is presented, it is but a waste of accounting and consequent expense. where to draw the line in this regard is, however, a matter of great difficulty. no cost sheet is entirely satisfactory. the appended sheet is in use at a number of mines. it is no more perfect than many others. it will be noticed that the effect of this system is to throw the general expenses into the revenue expenditures, and as little as possible into the "suspense" account. general technical data. for the purposes of efficient management, the information gathered under this head is of equal, if not superior, importance to that under "working costs." such data fall generally under the following heads:-labor.--returns of the shifts worked in the various departments for each day and for the month; worked out on a monthly basis of footage progress, tonnage produced or tons handled per man; also where possible the footage of holes drilled, worked out per man and per machine. supplies.--daily returns of supplies used; the principal items worked out monthly in quantity per foot of progress, or per ton of ore produced. power.--fuel, lubricant, etc., consumed in steam production, worked out into units of steam produced, and this production allocated to the various engines. where electrical power is used, the consumption of the various motors is set out. surveys.--the need of accurate plans requires no discussion. aside from these, the survey-office furnishes the returns of development footage, measurements under contracts, and the like. sampling and assaying.--mine sampling and assaying fall under two heads,--the determination of the value of standing ore, and of products from the mine. the sampling and assaying on a going mine call for the same care and method as in cases of valuation of the mine for purchase,--the details of which have been presented under "mine valuation,"--for through it, guidance must not only be had to the value of the mine and for reports to owners, but the detailed development and ore extraction depend on an absolute knowledge of where the values lie. chapter xviii. administration (_concluded_). administrative reports. in addition to financial returns showing the monthly receipts, expenditures, and working costs, there must be in proper administration periodic reports from the officers of the mine to the owners or directors as to the physical progress of the enterprise. such reports must embrace details of ore extraction, metal contents, treatment recoveries, construction of equipment, and the results of underground development. the value of mines is so much affected by the monthly or even daily result of exploration that reports of such work are needed very frequently,--weekly or even daily if critical work is in progress. these reports must show the width, length, and value of the ore disclosed. the tangible result of development work is the tonnage and grade of ore opened up. how often this stock-taking should take place is much dependent upon the character of the ore. the result of exploration in irregular ore-bodies often does not, over short periods, show anything tangible in definite measurable tonnage, but at least annually the ore reserve can be estimated. in mines owned by companies, the question arises almost daily as to how much of and how often the above information should be placed before stockholders (and therefore the public) by the directors. in a general way, any company whose shares are offered on the stock exchange is indirectly inviting the public to become partners in the business, and these partners are entitled to all the information which affects the value of their property and are entitled to it promptly. moreover, mining is a business where competition is so obscure and so much a matter of indifference, that suppression of important facts in documents for public circulation has no justification. on the other hand, both the technical progress of the industry and its position in public esteem demand the fullest disclosure and greatest care in preparation of reports. most stockholders' ignorance of mining technology and of details of their particular mine demands a great deal of care and discretion in the preparation of these public reports that they may not be misled. development results may mean little or much, depending upon the location of the work done in relation to the ore-bodies, etc., and this should be clearly set forth. the best opportunity of clear, well-balanced statements lies in the preparation of the annual report and accounts. such reports are of three parts:-1. the "profit and loss" account, or the "revenue account." 2. the balance sheet; that is, the assets and liabilities statement. 3. the reports of the directors, manager, and consulting engineer. the first two items are largely matters of bookkeeping. they or the report should show the working costs per ton for the year. what must be here included in costs is easier of determination than in the detailed monthly cost sheets of the administration; for at the annual review, it is not difficult to assess the amount chargeable to development. equipment expenditure, however, presents an annual difficulty, for, as said, the distribution of this item is a factor of the life of the mine, and that is unknown. if such a plant has been paid for out of the earnings, there is no object in carrying it on the company's books as an asset, and most well-conducted companies write it off at once. on the other hand, where the plant is paid for out of capital provided for the purpose, even to write off depreciation means that a corresponding sum of cash must be held in the company's treasury in order to balance the accounts,--in other words, depreciation in such an instance becomes a return of capital. the question then is one of policy in the company's finance, and in neither case is it a matter which can be brought into working costs and leave them any value for comparative purposes. indeed, the true cost of working the ore from any mine can only be told when the mine is exhausted; then the dividends can be subtracted from the capital sunk and metal sold, and the difference divided over the total tonnage produced. the third section of the report affords wide scope for the best efforts of the administration. this portion of the report falls into three divisions: (_a_) the construction and equipment work of the year, (_b_) the ore extraction and treatment, and (_c_) the results of development work. the first requires a statement of the plant constructed, its object and accomplishment; the second a disclosure of tonnage produced, values, metallurgical and mechanical efficiency. the third is of the utmost importance to the stockholder, and is the one most often disregarded and obscured. upon this hinges the value of the property. there is no reason why, with plans and simplicity of terms, such reports cannot be presented in a manner from which the novice can judge of the intrinsic position of the property. a statement of the tonnage of ore-reserves and their value, or of the number of years' supply of the current output, together with details of ore disclosed in development work, and the working costs, give the ground data upon which any stockholder who takes interest in his investment may judge for himself. failure to provide such data will some day be understood by the investing public as a _prima facie_ index of either incapacity or villainy. by the insistence of the many engineers in administration of mines upon the publication of such data, and by the insistence of other engineers upon such data for their clients before investment, and by the exposure of the delinquents in the press, a more practicable "protection of investors" can be reached than by years of academic discussion. chapter xix. the amount of risk in mining investments. risk in valuation of mines; in mines as compared with other commercial enterprises. from the constant reiteration of the risks and difficulties involved in every step of mining enterprise from the valuation of the mine to its administration as a going concern, the impression may be gained that the whole business is one great gamble; in other words, that the point whereat certainties stop and conjecture steps in is so vital as to render the whole highly speculative. far from denying that mining is, in comparison with better-class government bonds, a speculative type of investment, it is desirable to avow and emphasize the fact. but it is none the less well to inquire what degree of hazard enters in and how it compares with that in other forms of industrial enterprise. mining business, from an investment view, is of two sorts,--prospecting ventures and developed mines; that is, mines where little or no ore is exposed, and mines where a definite quantity of ore is measurable or can be reasonably anticipated. the great hazards and likewise the aladdin caves of mining are mainly confined to the first class. although all mines must pass through the prospecting stage, the great industry of metal production is based on developed mines, and it is these which should come into the purview of the non-professional investor. the first class should be reserved invariably for speculators, and a speculator may be defined as one who hazards all to gain much. it is with mining as an investment, however, that this discussion is concerned. risk in valuation of mines.--assuming a competent collection of data and efficient management of the property, the risks in valuing are from step to step:-1. the risk of continuity in metal contents beyond sample faces. 2. the risk of continuity in volume through the blocks estimated. 3. the risk of successful metallurgical treatment. 4. the risk of metal prices, in all but gold. 5. the risk of properly estimating costs. 6. the risk of extension of the ore beyond exposures. 7. the risk of management. as to the continuity of values and volumes through the estimated area, the experience of hundreds of engineers in hundreds of mines has shown that when the estimates are based on properly secured data for "proved ore," here at least there is absolutely no hazard. metallurgical treatment, if determined by past experience on the ore itself, carries no chance; and where determined by experiment, the risk is eliminated if the work be sufficiently exhaustive. the risk of metal price is simply a question of how conservative a figure is used in estimating. it can be eliminated if a price low enough be taken. risk of extension in depth or beyond exposures cannot be avoided. it can be reduced in proportion to the distance assumed. obviously, if no extension is counted, there is nothing chanced. the risk of proper appreciation of costs is negligible where experience in the district exists. otherwise, it can be eliminated if a sufficiently large allowance is taken. the risk of failure to secure good management can be eliminated if proved men are chosen. there is, therefore, a basic value to every mine. the "proved" ore taken on known metallurgical grounds, under known conditions of costs on minimum prices of metals, has a value as certain as that of money in one's own vault. this is the value previously referred to as the "_a_" value. if the price (and interest on it pending recovery) falls within this amount, there is no question that the mine is worth the price. what the risk is in mining is simply what amount the price of the investment demands shall be won from extension of the deposit beyond known exposures, or what higher price of metal must be realized than that calculated in the "_a_" value. the demands on this _x, y_ portion of the mine can be converted into tons of ore, life of production, or higher prices, and these can be weighed with the geological weights and the industrial outlook. mines compared to other commercial enterprises.--the profits from a mining venture over and above the bed-rock value _a_, that is, the return to be derived from more extensive ore-recovery and a higher price of metal, may be compared to the value included in other forms of commercial enterprise for "good-will." such forms of enterprise are valued on a basis of the amount which will replace the net assets plus (or minus) an amount for "good-will," that is, the earning capacity. this good-will is a speculation of varying risk depending on the character of the enterprise. for natural monopolies, like some railways and waterworks, the risk is less and for shoe factories more. even natural monopolies are subject to the risks of antagonistic legislation and industrial storms. but, eliminating this class of enterprise, the speculative value of a good-will involves a greater risk than prospective value in mines, if properly measured; because the dangers of competition and industrial storms do not enter to such a degree, nor is the future so dependent upon the human genius of the founder or manager. mining has reached such a stage of development as a science that management proceeds upon comparatively well-known lines. it is subject to known checks through the opportunity of comparisons by which efficiency can be determined in a manner more open for the investor to learn than in any other form of industry. while in mining an estimate of a certain minimum of extension in depth, as indicated by collateral factors, may occasionally fall short, it will, in nine cases out of ten, be exceeded. if investment in mines be spread over ten cases, similarly valued as to minimum of extension, the risk has been virtually eliminated. the industry, if reduced to the above basis for financial guidance, is a more profitable business and is one of less hazards than competitive forms of commercial enterprises. in view of what has been said before, it may be unnecessary to refer again to the subject, but the constant reiteration by wiseacres that the weak point in mining investments lies in their short life and possible loss of capital, warrants a repetition that the _a, b, c_ of proper investment in mines is to be assured, by the "_a_" value, of a return of the whole or major portion of the capital. the risk of interest and profit may be deferred to the _x, y_ value, and in such case it is on a plane with "good-will." it should be said at once to that class who want large returns on investment without investigation as to merits, or assurance as to the management of the business, that there is no field in this world for the employment of their money at over 4%. unfortunately for the reputation of the mining industry, and metal mines especially, the business is often not conducted or valued on lines which have been outlined in these chapters. there is often the desire to sell stocks beyond their value. there is always the possibility that extension in depth will reveal a glorious eldorado. it occasionally does, and the report echoes round the world for years, together with tributes to the great judgment of the exploiters. the volume of sound allures undue numbers of the venturesome, untrained, and ill-advised public to the business, together with a mob of camp-followers whose objective is to exploit the ignorant by preying on their gambling instincts. thus a considerable section of metal mining industry is in the hands of these classes, and a cloud of disrepute hangs ever in the horizon. there has been a great educational campaign in progress during the past few years through the technical training of men for conduct of the industry, by the example of reputable companies in regularly publishing the essential facts upon which the value of their mines is based, and through understandable nontechnical discussion in and by some sections of the financial and general press. the real investor is being educated to distinguish between reputable concerns and the counters of gamesters. moreover, yearly, men of technical knowledge are taking a stronger and more influential part in mining finance and in the direction of mining and exploration companies. the net result of these forces will be to put mining on a better plane. chapter xx. the character, training, and obligations of the mining engineering profession. in a discussion of some problems of metal mining from the point of view of the direction of mining operations it may not be amiss to discuss the character of the mining engineering profession in its bearings on training and practice, and its relations to the public. the most dominant characteristic of the mining engineering profession is the vast preponderance of the commercial over the technical in the daily work of the engineer. for years a gradual evolution has been in progress altering the larger demands on this branch of the engineering profession from advisory to executive work. the mining engineer is no longer the technician who concocts reports and blue prints. it is demanded of him that he devise the finance, construct and manage the works which he advises. the demands of such executive work are largely commercial; although the commercial experience and executive ability thus become one pier in the foundation of training, the bridge no less requires two piers, and the second is based on technical knowledge. far from being deprecated, these commercial phases cannot be too strongly emphasized. on the other hand, i am far from contending that our vocation is a business rather than a profession. for many years after the dawn of modern engineering, the members of our profession were men who rose through the ranks of workmen, and as a result, we are to this day in the public mind a sort of superior artisan, for to many the engine-driver is equally an engineer with the designer of the engine, yet their real relation is but as the hand to the brain. at a later period the recruits entered by apprenticeship to those men who had established their intellectual superiority to their fellow-workers. these men were nearly always employed in an advisory way--subjective to the executive head. during the last few decades, the advance of science and the complication of industry have demanded a wholly broader basis of scientific and general training for its leaders. executive heads are demanded who have technical training. this has resulted in the establishment of special technical colleges, and compelled a place for engineering in the great universities. the high intelligence demanded by the vocation itself, and the revolution in training caused by the strengthening of its foundations in general education, has finally, beyond all question, raised the work of application of science to industry to the dignity of a profession on a par with the law, medicine, and science. it demands of its members equally high mental attainments,--and a more rigorous training and experience. despite all this, industry is conducted for commercial purposes, and leaves no room for the haughty intellectual superiority assumed by some professions over business callings. there is now demanded of the mining specialist a wide knowledge of certain branches of civil, mechanical, electrical, and chemical engineering, geology, economics, the humanities, and what not; and in addition to all this, engineering sense, executive ability, business experience, and financial insight. engineering sense is that fine blend of honesty, ingenuity, and intuition which is a mental endowment apart from knowledge and experience. its possession is the test of the real engineer. it distinguishes engineering as a profession from engineering as a trade. it is this sense that elevates the possessor to the profession which is, of all others, the most difficult and the most comprehensive. financial insight can only come by experience in the commercial world. likewise must come the experience in technical work which gives balance to theoretical training. executive ability is that capacity to coördinate and command the best results from other men,--it is a natural endowment. which can be cultivated only in actual use. the practice of mine engineering being so large a mixture of business, it follows that the whole of the training of this profession cannot be had in schools and universities. the commercial and executive side of the work cannot be taught; it must be absorbed by actual participation in the industry. nor is it impossible to rise to great eminence in the profession without university training, as witness some of our greatest engineers. the university can do much; it can give a broad basis of knowledge and mental training, and can inculcate moral feeling, which entitles men to lead their fellows. it can teach the technical fundamentals of the multifold sciences which the engineer should know and must apply. but after the university must come a schooling in men and things equally thorough and more arduous. in this predominating demand for commercial qualifications over the technical ones, the mining profession has differentiated to a great degree from its brother engineering branches. that this is true will be most apparent if we examine the course through which engineering projects march, and the demands of each stage on their road to completion. the life of all engineering projects in a general way may be divided into five phases:[*]-[footnote *: these phases do not necessarily proceed step by step. for an expanding works especially, all of them may be in process at the same time, but if each item be considered to itself, this is the usual progress, or should be when properly engineered.] 1. determination of the value of the project. 2. determination of the method of attack. 3. the detailed delineation of method, means, and tools. 4. the execution of the works. 5. the operation of the completed works. these various stages of the resolution of an engineering project require in each more or less of every quality of intellect, training, and character. at the different stages, certain of these qualities are in predominant demand: in the first stage, financial insight; in the second, "engineering sense"; in the third, training and experience; in the fourth and fifth, executive ability. a certain amount of compass over the project during the whole five stages is required by all branches of the engineering profession,--harbor, canal, railway, waterworks, bridge, mechanical, electrical, etc.; but in none of them so completely and in such constant combination is this demanded as in mining. the determination of the commercial value of projects is a greater section of the mining engineer's occupation than of the other engineering branches. mines are operated only to earn immediate profits. no question of public utility enters, so that all mining projects have by this necessity to be from the first weighed from a profit point of view alone. the determination of this question is one which demands such an amount of technical knowledge and experience that those who are not experts cannot enter the field,--therefore the service of the engineer is always demanded in their satisfactory solution. moreover, unlike most other engineering projects, mines have a faculty of changing owners several times during their career, so that every one has to survive a periodic revaluation. from the other branches of engineering, the electrical engineer is the most often called upon to weigh the probabilities of financial success of the enterprise, but usually his presence in this capacity is called upon only at the initial stage, for electrical enterprises seldom change hands. the mechanical and chemical branches are usually called upon for purely technical service on the demand of the operator, who decides the financial problems for himself, or upon works forming but units in undertakings where the opinion on the financial advisability is compassed by some other branch of the engineering profession. the other engineering branches, even less often, are called in for financial advice, and in those branches involving works of public utility the profit-and-loss phase scarcely enters at all. given that the project has been determined upon, and that the enterprise has entered upon the second stage, that of determination of method of attack, the immediate commercial result limits the mining engineer's every plan and design to a greater degree than it does the other engineering specialists. the question of capital and profit dogs his every footstep, for all mines are ephemeral; the life of any given mine is short. metal mines have indeed the shortest lives of any. while some exceptional ones may produce through one generation, under the stress of modern methods a much larger proportion extend only over a decade or two. but of more pertinent force is the fact that as the certain life of a metal mine can be positively known in most cases but a short period beyond the actual time required to exhaust the ore in sight, not even a decade of life to the enterprise is available for the estimates of the mining engineer. mining works are of no value when the mine is exhausted; the capital invested must be recovered in very short periods, and therefore all mining works must be of the most temporary character that will answer. the mining engineer cannot erect a works that will last as long as possible; it is to last as long as the mine only, and, in laying it out, forefront in his mind must be the question, can its cost be redeemed in the period of use of which i am certain it will find employment? if not, will some cheaper device, which gives less efficiency, do? the harbor engineer, the railway engineer, the mechanical engineer, build as solidly as they can, for the demand for the work will exist till after their materials are worn out, however soundly they construct. our engineer cousins can, in a greater degree by study and investigation, marshal in advance the factors with which they have to deal. the mining engineer's works, on the other hand, depend at all times on many elements which, from the nature of things, must remain unknown. no mine is laid bare to study and resolve in advance. we have to deal with conditions buried in the earth. especially in metal mines we cannot know, when our works are initiated, what the size, mineralization, or surroundings of the ore-bodies will be. we must plunge into them and learn,--and repent. not only is the useful life of our mining works indeterminate, but the very character of them is uncertain in advance. all our works must be in a way doubly tentative, for they are subject to constant alterations as they proceed. not only does this apply to our initial plans, but to our daily amendment of them as we proceed into the unknown. mining engineering is, therefore, never ended with the initial determination of a method. it is called upon daily to replan and reconceive, coincidentally with the daily progress of the constructions and operation. weary with disappointment in his wisest conception, many a mining engineer looks jealously upon his happier engineering cousin, who, when he designs a bridge, can know its size, its strains, and its cost, and can wash his hands of it finally when the contractor steps in to its construction. and, above all, it is no concern of his whether it will pay. did he start to build a bridge over a water, the width or depth or bottom of which he could not know in advance, and require to get its cost back in ten years, with a profit, his would be a task of similar harassments. as said before, it is becoming more general every year to employ the mining engineer as the executive head in the operation of mining engineering projects, that is, in the fourth and fifth stages of the enterprise. he is becoming the foreman, manager, and president of the company, or as it may be contended by some, the executive head is coming to have technical qualifications. either way, in no branch of enterprise founded on engineering is the operative head of necessity so much a technical director. not only is this caused by the necessity of executive knowledge before valuations can be properly done, but the incorporation of the executive work with the technical has been brought about by several other forces. we have a type of works which, by reason of the new conditions and constant revisions which arise from pushing into the unknown coincidentally with operating, demands an intimate continuous daily employment of engineering sense and design through the whole history of the enterprise. these works are of themselves of a character which requires a constant vigilant eye on financial outcome. the advances in metallurgy, and the decreased cost of production by larger capacities, require yearly larger, more complicated, and more costly plants. thus, larger and larger capitals are required, and enterprise is passing from the hands of the individual to the financially stronger corporation. this altered position as to the works and finance has made keener demands, both technically and in an administrative way, for the highly trained man. in the early stages of american mining, with the moderate demand on capital and the simpler forms of engineering involved, mining was largely a matter of individual enterprise and ownership. these owners were men to whom experience had brought some of the needful technical qualifications. they usually held the reins of business management in their own hands and employed the engineer subjectively, when they employed him at all. they were also, as a rule, distinguished by their contempt for university-trained engineers. the gradually increasing employment of the engineer as combined executive and technical head, was largely of american development. many english and european mines still maintain the two separate bureaus, the technical and the financial. such organization is open to much objection from the point of view of the owner's interests, and still more from that of the engineer. in such an organization the latter is always subordinate to the financial control,--hence the least paid and least respected. when two bureaus exist, the technical lacks that balance of commercial purpose which it should have. the ambition of the theoretical engineer, divorced from commercial result, is complete technical nicety of works and low production costs without the regard for capital outlay which the commercial experience and temporary character of mining constructions demand. on the other hand, the purely financial bureau usually begrudges the capital outlay which sound engineering may warrant. the result is an administration that is not comparable to the single head with both qualifications and an even balance in both spheres. in america, we still have a relic of this form of administration in the consulting mining engineer, but barring his functions as a valuer of mines, he is disappearing in connection with the industry, in favor of the manager, or the president of the company, who has administrative control. the mining engineer's field of employment is therefore not only wider by this general inclusion of administrative work, but one of more responsibility. while he must conduct all five phases of engineering projects coincidentally, the other branches of the profession are more or less confined to one phase or another. they can draw sharper limitations of their engagements or specialization and confine themselves to more purely technical work. the civil engineer may construct railway or harbor works; the mechanical engineer may design and build engines; the naval architect may build ships; but given that he designed to do the work in the most effectual manner, it is no concern of his whether they subsequently earn dividends. he does not have to operate them, to find the income, to feed the mill, or sell the product. the profit and loss does not hound his footsteps after his construction is complete. although it is desirable to emphasize the commercial side of the practice of the mining engineer's profession, there are other sides of no less moment. there is the right of every red-blooded man to be assured that his work will be a daily satisfaction to himself; that it is a work which is contributing to the welfare and advance of his country; and that it will build for him a position of dignity and consequence among his fellows. there are the moral and public obligations upon the profession. there are to-day the demands upon the engineers which are the demands upon their positions as leaders of a great industry. in an industry that lends itself so much to speculation and chicanery, there is the duty of every engineer to diminish the opportunity of the vulture so far as is possible. where he can enter these lists has been suggested in the previous pages. further than to the "investor" in mines, he has a duty to his brothers in the profession. in no profession does competition enter so obscurely, nor in no other are men of a profession thrown into such terms of intimacy in professional work. from these causes there has arisen a freedom of disclosure of technical results and a comradery of members greater than that in any other profession. no profession is so subject to the capriciousness of fortune, and he whose position is assured to-day is not assured to-morrow unless it be coupled with a consideration of those members not so fortunate. especially is there an obligation to the younger members that they may have opportunity of training and a right start in the work. the very essence of the profession is that it calls upon its members to direct men. they are the officers in the great industrial army. from the nature of things, metal mines do not, like our cities and settlements, lie in those regions covered deep in rich soils. our mines must be found in the mountains and deserts where rocks are exposed to search. thus they lie away from the centers of comfort and culture,--they are the outposts of civilization. the engineer is an officer on outpost duty, and in these places he is the camp leader. by his position as a leader in the community he has a chieftainship that carries a responsibility besides mere mine management. his is the responsibility of example in fair dealing and good government in the community. in but few of its greatest works does the personality of its real creator reach the ears of the world; the real engineer does not advertise himself. but the engineering profession generally rises yearly in dignity and importance as the rest of the world learns more of where the real brains of industrial progress are. the time will come when people will ask, not who paid for a thing, but who built it. to the engineer falls the work of creating from the dry bones of scientific fact the living body of industry. it is he whose intellect and direction bring to the world the comforts and necessities of daily need. unlike the doctor, his is not the constant struggle to save the weak. unlike the soldier, destruction is not his prime function. unlike the lawyer, quarrels are not his daily bread. engineering is the profession of creation and of construction, of stimulation of human effort and accomplishment. index. accounts. administration. administrative reports. air-compression. -drills. alteration, secondary. alternative shafts to inclined deposit. amortization of capital and interest. animals for underground transport. annual demand for base metals. report. artificial pillars. assay foot. inch. of samples. plans. assaying. a value of mine. averages, calculation. bailing. balance sheet. basic price. value of mine. benches. bend in combined shafts. bins. blocked-out ore. blocks. bonanzas, origin. bonus systems, of work. breaking ore. broken hill, levels. ore-pillars. bumping-trough. cable-ways. cages. calculation of averages. of quantities of ore. capital expenditure. caving systems. churn-drills. chutes, loading, in vertical shaft. classification of ore in sight. combined shaft. stopes. commercial value of projects, determination. compartments for shaft. compressed-air locomotives. -air pumps. _vs_. electricity for drills. content, average metal, determining. metal, differences. contract work. copper, annual demand. deposits. ores, enrichment. cost of entry into mine. of equipment. production. per foot of sinking. working. cribs. crosscuts. cross-section of inclined deposit which must be attacked in depth. showing auxiliary vertical outlet. crouch, j. j. cubic feet per ton of ore. foot contents of block. deep-level mines. demand for metals. departmental dissection of expenditures. deposits, _in situ_. ore, classes. regularity. size. structure. depth of exhaustion. determination of average metal contents of ore. development in early prospecting stage. in neighboring mines. of mines. diamond-drilling. diluting narrow samples to a stoping width. dip. direct-acting steam-pumps. distribution of values. dividend, annual, present value. dommeiler. down holes. drainage. comparison of different systems. systems. drifts. drill, requirements. drilling. drives. dry walling with timber caps. efficiency, factors of. of mass. electrical haulage. pumps. electricity for drills. engine, size for winding appliances. engineer, mining, as executive. engineering projects, phases of. enrichment. at cross-veins. entry, to mine. to vertical or horizontal deposits. equipment, cost. improvements. mechanical. erosion. error, percentage in estimates from sampling. escape. examination of mining property. excavation, supporting. exhaustion, depth. expenditures, departmental dissection. mine. extension in depth. factor of safety in calculating averages of samples. filling. system combined with square-setting. with broken ore subsequently withdrawn. waste. fissure veins. fissuring. depth. fixed charges. flat-back stope. flexibility in drainage system. floors. folding. foot-drilled system of contract work. -hole system of contract work. of advance system of contract work. value. fraud, precautions against in sampling. general expenses. gold deposits. deposits, alteration. enrichment. hammer type of drill. hand-drilling. -trucking. haulage, electrical. equipment in shaft. mechanical. hole system of contract work. horizons of ore-deposits. horizontal deposits, entry. stope. filled with waste. hydraulic pumps. impregnation deposits. inch, assay. inclined deposits to be worked from outcrop or near it. deposits which must be attacked in depth. shaft. inclines. capacity. infiltration type of deposits. intelligence as factor of skill. interest calculations in mine valuation. intervals, level. inwood's tables. iron hat. leaching. ivanhoe mine, west australia. kibble. labor, general technical data. handling. unions. lateral underground transport. le roi mine. lead, annual demand. deposits. enriching. prices, 1884-1908. -zinc ores, enrichment. lenses. levels. intervals. of broken hill. protection. life, in sight. of mine. locomotives, compressed-air. lode mines, valuation. lodes. long-wall stope. machine-drill, performance. drilling. _vs_. hand-drilling. management, mine. matte. mechanical efficiency of drainage machinery. equipment. men for underground transport. metal content, determining. contents, differences. demand for. mine, value. price. mines compared to other commercial enterprises. equipment. expenditures. mines--_continued._ life of. metal, value of. of moderate depths. to be worked to great depths. valuation. mining engineering profession. mt. cenis tunnel. morgan gold mine. normal price. obligations of engineering profession. openings, position in relation to secondary alteration. ore, average width in block. blocked-out. -bodies. shapes. -breaking, methods. calculation of quantities of. -chutes in shrinkage-stoping. -deposits, classes. determination of average metal contents. developed. developing. expectant. in sight. sight, classification. -pillars. support in narrow stopes. -shoots. weight of a cubic foot. width for one sample. origin of deposit. outcrop mines. output, factors limiting. giving least production cost. maximum, determination. overhand stapes. overproduction of base metal. oxidation. patchwork plant, mechanical inefficiency of. pay areas, formation. pillars, artificial. positive ore. value of metal mine. possible ore. power conditions. general technical data. sources. transmission. preliminary inspection. previous yield. price of metals. probable ore. producing stage of mine. production, cost. profit and loss account. factors determining. in sight. proportional charges. prospecting stage of mine. prospective ore. value. protection of levels. proved ore. pumping systems. pumps, compressed-air. electrical. hydraulic. rod-driven. ratio of output to mine. recoverable percentage of gross assay value. recovery of ore. rectangular shaft. redemption of capital and interest. reduction of output. regularity of deposit. reliability of drainage system. replacement. reports. administrative. resuing. revenue account. rill-cut overhand stope. method of incline cuts. -stopes. filled with waste. -stoping. rises. risk in mining investments. in valuation of mines. roadways, protecting in shrinkage-stoping. rod-driven pumps. rotary steam-pumps. round vertical shafts. runs of value. test-treatment. safety, factor of, in calculating averages of samples. sample, assay of. average value. narrow, diluting to a stoping width. sections. taking, physical details. manner of taking. sampling. accuracy. percentage of error in estimates from. precautions against fraud. saving of fixed charges. secondary alteration. enrichment. security of investment. self-dumping skip. sets. shafts. arrangement for very deep inclined shafts. compartments. different depths. haulage. location. number. output capacity. shape. size. shrinkage-stope. -stoping. advantages. disadvantages. when applicable. silver deposits. deposits, enrichment. prices. sinking, speed. size of deposit. skill, effect on production cost. skips. balanced. haulage in vertical shaft. sollars. solubility of minerals. specific volume of ores. speculative values of metal mine. value of mine. spelter, annual demand. square-set. -set timbering. stations. arrangement for skip haulage in vertical shaft. steam-pumps, direct. steepening winzes and ore passes. stope filled with broken ore. minimum width. stoping. contract systems. storing metal. structural character of deposit. structure of deposit. stull and waste pillars. support with waste reënforcement. -supported stope. stulls. wood. subheading. sublevel caving system. subsidiary development. superficial enrichment. supplies, general technical data. support by pillars of ore. supporting excavation. surveys. suspense charges. test parcels. sections. -treatment runs. timber, cost. timbered shaft design. timbering. tin, annual demand. deposits. ore, migration and enrichment. tools. top slicing. tracks. transport in stopes. tunnel entry. feet paid for in 10 years. size. underhand stopes. uppers. valuation, mine. of lode mines. mines, risk in. mines with little or no ore in sight. on second-hand data. value, average, of samples. discrepancy between estimated and actual. distribution. of extension in depth, estimating. positive, of metal mine. present, of an annual dividend. of $1 or £1, payable in -years. runs of. speculative, of metal mine. valuing ore in course of breaking. ventilation. vertical deposits, entry. interval between levels. shafts. capacity. volume, specific, of ores. waste-filled stope. water-power. weight per cubic foot of ore. weindel, caspar. whiting hoist. width of ore for one sample. winding appliances. winzes. in shrinkage-stoping. to be used for filling. working cost. inherent limitations in accuracy of. sheets. workshops. yield, previous. years of life required to yield --% interest. zinc deposits. leaching. scamping tricks and odd knowledge occasionally practised upon public works. chronicled from the confessions of some old practitioners. by john newman, assoc. m. inst. c.e., author of 'earthwork slips and subsidences upon public works'; 'notes on concrete and works in concrete'; 'iron cylinder bridge piers'; 'queer scenes of railway life.' e. & f. n. spon, 125, strand, london. new york: 12, cortlandt street. 1891. preface. the following pages have been written with the view to record a few scamping tricks occasionally practised upon public works, and to name some methods founded on practical experience adopted by sub-contractors and others to cheaply and quickly execute work. all who have had the direction or charge of an extensive or even comparatively insignificant public enterprise will agree that it is impossible for a resident or contractor's engineer to know the manner in which everything is proceeding on his division, and in some measure he is compelled to rely upon others; nevertheless, it is quite as important to ascertain that the work is carried out according to the specification and drawings as to elaborate a perfect specification and then have to partly leave the execution to the care of the beneficent fairies. if a finger-post has been correctly pointed in the direction in which a favourable field for scamping tricks may exist, the author's object in writing this book will have been attained. to the less experienced, the incidents and scrap-knowledge described may be more particularly useful, and on consideration it was thought that the conversational tone adopted would best expose the subject and indicate the ethics of somewhat conscience-proof sub-contractors and workmen, and also the way in which their earnest endeavours to practise the science of scamping may be exercised upon materials and under circumstances not especially referred to herein. j. n. london, 1891. contents. page chapter i. introduction 1 chapter ii. screw piles--general consideration--manipulation for "extra profit" 3 chapter iii. screw piles--details 13 chapter iv. iron piles--arrangement--driving--sinking by water-jet 25 chapter v. timber piles--pile-driving--general consideration 32 chapter vi. timber piles--manipulation for "extra" profit 42 chapter vii. masonry bridges 53 chapter viii. tunnels 61 chapter ix. cylinder bridge piers 69 chapter x. drain pipes--blasting, and powder-carriage 76 chapter xi. concrete--puddle 85 chapter xii. brickwork--tidal warnings--pipe joints--dredging 93 chapter xiii. permanent way 103 chapter xiv. "extra" measurements--toad-stool contractors--testimonials 114 chapter xv. men and wages--"sub" from the wood--a sub-contractor's scout and free traveller 121 scamping tricks and odd knowledge occasionally practised upon public works. chapter i. introduction. "take this letter to my old partner as quickly as you can. wait for an answer, and come back straight." "all right, sir." "now, my wife, when my old partner arrives, leave the room. i want the coast clear as i am going to talk and have a sort of mutual confession of some tricks and dodges we have played and learned during the last forty years or so to get a bit 'extra' on the quiet; and forty years knocking about with your eyes bound to be on full glare ought to teach one a thing or two, and they have. they have! yes; and i have been in the swim. "stir up the fire, if only to keep things all alike and as hot as possible; and put a couple of glasses handy, and some water and.... "so you've got back. where is the letter?" "have got no letter, sir; but it is all right; your old partner will be round about 7 o'clock and will stay till he is turned out, so he said." "oh! i am glad." "why, sir, he is knocking now." "so he is." "here i am, old chap, what's the matter?" "i feel pasty, but am better now you have come. bring your chair near the fire. well, i want to talk to you on the quiet very badly. it will do me good, and i am sure it will not be long before the white muslin is spread over me and i'm still in death. you've come to stop?" "yes, as long as you like." "that is good, and i am glad and feel better now you have said it. before i begin, taste our home-brewed elder. it's all right, for my wife was a cook, but it's a long time ago; and between you and me, my profits don't run to providing her with as large an assortment of materials as she says is necessary to keep her fairly up to art in the cookery department." "that is very good--the best i have tasted. well, what is it, old partner? shake fins." "it's to talk over old times, and the tricks and dodges we have played, and known others do, to get 'extra' profit on the different works we have been." "a kind of confession?" "that's it. don't laugh. i can't help it now." "i understand you. start the fun, and i will follow." "we can talk pretty to each other, and lucky the young master is not here, for he would think that we are as bad as old nick himself; still, we have not done many tricks for some time, and could, perhaps, put him up to a thing or two concerning the execution of work." "very likely; but we are all tarred with the same brush; it's only a question of quantity and thickness and what colour the paint is." "i suppose we are bound to work up an excuse somehow or other; and if i moralize a bit tender at first, by way of a diversion, you won't mind, for it is part of the stock in trade of such rare old sharks as us, and i will cut it as short and tasty as i can. "i was brought up right, like you; and many a time have had my shoulder patted by the good folks and been told not to think of myself too much, and to remember the feelings of others. in my salad days, you know, i used to think whether or not it was coming it rough on chaps, innocent unborn babes that will have to work in the next century, should the world hold out till then, putting in too strong work, and said to myself, is it acting kindly towards them? no, i said, it is not treating them right to give them so much trouble to make alterations. i won't call them repairs and additions, nor improvements. i soon humbugged myself into thinking it was not being really benevolent to those who will have to work when we are all lying flat, and i hope quiet--but there, of course, such thoughts hardly make one act honestly; however, i have done moralizing now, and perhaps it ill becomes me, and i will have no more of it or it may stop my tongue. now to business, and i am going to speak pretty freely." chapter ii. screw piles. general consideration--manipulation for "extra" profit. "you want to know my experiences with screw piles first." "yes." "they do very well when the water is not deep and the ground loose sand, silty sand, or sandy fine gravel, and nothing else; and i prefer disc piles for sand, provided the water power can be easily obtained. "the whole area of a screw blade is often taken as bearing support; but i doubt if it should be, for it is not a bared foundation--that is, one you can see and know the character of, as in a cylinder pier, for instance; but some appear to assume it is, and then claim that a lot of metal is saved and the same or more bearing obtained. the screw blade may always be right and it may not be, and no one positively knows; because no one can see whether it is down straight, turned, or broken, but the difference between the actual and the breaking strain comes to the rescue. "still, it is no certainty that the screw blade is resting upon the same soil, and even if it does it may not receive the load in a vertical line, and may be strained more upon one side than another. and how about the rusting of the blade, for it is thin, and seldom more than half an inch at the ends and two and a half at the pile shaft, and nearly all surface? in a cylinder pier the hearting is placed on the bared ground, and you know it is there, and it cannot rust, that's certain. i don't see the good of iron rings above a few feet higher than highest flood level, for after the hearting is set, if it be of portland cement concrete, you can give it a coating of nearly neat portland cement. however, we are talking about screw piles. "i have seen screw piles screwed into soft ground for fully fifteen feet, and they seemed quite right, and yet when they were loaded they vanished. i have also known them to be twisted about something like a corkscrew, and to be impossible to get down at all when they have reached a hard layer of gravel, and nearly so when they met with a streak of hard stiff clay. sometimes they are overscrewed, and made to penetrate somehow or other; and i remember once, when they were loaded for testing and were thought to be right, a washout occurred at one place, owing to a mistake in dredging, and the piles, although they screwed, were found to be twisted about into all sorts of shapes, and at the bottom were turned up a trifle and never went down more than a few feet, and while it was thought we were screwing them down we were screwing part of them aside. they were small solid wrought-iron piles. it is well not to forget that sand varies very much; for it is found nearly everywhere, and may be anything from large hard angular deposit that will bind, to little round mites easily blown away, and it is mixed with pretty well everything; and therefore sand is a thing you must be careful with before you take it to be just the thing for watersunk disc piles or screw piles, and you ought to know all about it. well, assuming that it is right, and the soil will not become jammed in the screw blade, it is always advisable to try whether the sand grains will roll well together and do not wedge; for you want sand, if it is to be nice for pile sinking, just the reverse of sand for mortar or concrete, for that with round grains is the kind to screw in and not that with sharp angular grains, and if it is slimy, so much the better--just the opposite of that for mortar or concrete. "the soil must be loose, and if it is silty so much the better. don't undertake to screw piles into hard and compact sand, gravel, stiff clay, or where there are boulders in the ground or streaks or layers of soil of which you hardly know the character. if you do, good-bye to profit from any screwing, and may be to the screw blades, and your fishes must be got out of 'extras' by omitting a length, smashing a screw blade, or short screwing. be careful to be paid for all piles you have screwed down directly you have done them, and take no maintenance; for i have known a ship drift, or a gale arise, and sweep away the unbraced piles like sticks, and if you are only paid when you have finished screwing a cluster of them, where are you then, and who's which? suppose you have nearly fixed a cluster of piles, they will say you ought to have braced them at once, and you will be charged for breakages, and not be paid for having screwed them. you may talk as long as you like, and say, how could i get them all braced when the piles must be screwed separately? you will only be told that is your look-out, and that you knew the terms of the contract and must have considered any risk in the prices. so i bar injury from waves or wind, earthquakes and shakes, collisions from vessels or other floating or moving substances; and believe the last to cover all fishes, from sea-serpents, whales, porpoises, and sprats, to balloons, stray air-balls, wreckage, and mermaids; and it gives you a chance of wriggling out of squalls with an i'm-so-sorry-at-your-loss sort of countenance. "you have to think over the staging. fixed staging may be out of the question because of the expense; then you must either screw from the finished end of the pier as you proceed with the work, or from a floating stage, but you may not be able to get sufficient power to screw the piles from any moored floating stage. the shore piles of a pier may screw easily, but when you get out in the sea fixed staging may soon be smashed, and in that case you are compelled to do it from the end of the finished portion of the pier. there is a good deal of uncertainty, as you can judge, and you want to well consider whether and how you can get the power cheaply to screw the piles. "the idea of the screw pile was that it should easily enter the ground and push aside any obstruction in its descent without much disturbance of the soil, with the ultimate object of obtaining, by reason of the screw blade, a strong resistance to upward and downward strain. well, it is all right if the whole of the blade bears equally upon the soil and the earth is of the same character; but if it is not, the strain upon the screw blade is unequal, and it will sooner or later crack or break; and except in any earth like fine sand or silt and all of one kind, i should be sorry to say that the whole area of the blade does the work as i said before. and here comes in the value of an allowance of extra strength, for you cannot tell how much it has been weakened by corrosion, nor can you inspect, paint, or do anything to the screws when they are down. if i was engineer of an iron pile structure, i should have a few piles screwed at convenient places independently of the pier, but near to it, and have, say, one or two taken up every few years--say every seven or ten--just to have a look to see how matters seemed to be, and have a piece of the iron analysed, and compare it with the original analysis; and i should take care the piles were all the same quality of metal, so that the makers should not get up to fun at the foundry. "the piles have to bear a heavy twisting strain during screwing; and take my advice, always see that the joint flanges are not light, for when piles break in screwing, they usually fail at the flanges. what i have learned shows me it is a great mistake to have the screws of very large diameter, so as to have few of them; let the blades be small rather than large, and they are best for screwing when of moderate size, and are also likely to be sounder metal. there is not the same risk of breaking them in screwing, and you may be able to screw a small blade when a big one would be smashed, and besides it is as well to have the load distributed as much as possible. a screw pile shaft should not be a thin casting because of the strain upon it in screwing, and it should be thicker on this account than a disc pile, but the latter will not do for any soils except those named before. i have known screw piles to penetrate hard and dense sand, gravel, soft sandy ground, limy gravel, loose silt, limy clay ground something like marl, stiff mud, chalk, clay, marl, and all kinds of water-deposited soil, and in almost every earth except firm rock, but it is not advisable to use them for anything much harder than fine sandy gravel, for the blades must then be strained very much and the pile and screw may be injured. it is not using them rightly, or for the purpose for which they were designed, and another system of foundations should be used except under special circumstances. "don't attempt to screw piles into ground having boulders in it. it is always difficult to penetrate, as also is spongy mud and stiff tenacious clay. in any ground harder than loose sand, silty and alluvial soil screwing is not easy, and you cannot say what it will cost to obtain the necessary power to screw. as regards that kind of screwing i always feel so benevolent that i like some one else to do it. do you understand?" "yes; when you know a loss looks more likely than profit." "if you like to put it that way it is not in me to object. i'm too polite. saying 'yes' and agreeing with every one, gets you a nice character as an agreeable man, whereas you are a big fraud and a high old liar." "parliamentary language, please; no matter what you think." "all right, then. you know what pure sand is?" "you mean quite clean angular grains, and hard, too, like broken-up quartz rock?" "yes. well, avoid it for screw piles, for then it is very difficult to screw them to any considerable depth. you can't displace the sand enough. it wedges and binds almost like rock." "you mean it wedges up, and will not move?" "that's near enough. well, avoid clean, sharp, angular sand and shingle gravel as much as you can, and take screwing in dirty sand instead. i mean round-grained dirty sand with some clay upon it, or sandy gravel. what is wanted is something to separate the particles of the soil and act like grease so as to make them roll and not compress and become bound. you can't be too careful about this." "i will put that down in my note-book so as not to forget it." "to save bother, be sure to ascertain whether the work is in rough ground; and if you are abroad see that about five per cent. is allowed for breakages of all kinds, or the piles may run short. "i have seen piles screwed into a kind of clay rock seam, the end of the pile was made like a saw, toothed, in fact, and stiffened from the bottom to the underside of the screw blade with ribs shaped to cut the ground as the pile was turned, and i doubt if they could have been screwed without. they seemed to steady the pile; but care must be taken when there is a projecting end and it is tapered to a less diameter than the pile shaft, as generally is the case, that the axis is true, or the pile will not screw vertically. "once i had to screw a few wrought-iron unpointed piles with a small screw blade made of angle iron fixed _inside_ as well as the large screw blade outside. the outside blade was about 4 feet in diameter, and of half-inch plate, the inside blade projected about 3-1/2 inches, and both blades had the same pitch; but the engineer, after having tried a few, discontinued having an inside screw, and said he thought it even arrested progress, because it interfered with the internal excavation. the experience we had with them was against their use, and they seemed to make the screwing harder, and no one was able to discover any advantage in them, although they did all they knew to flatter the novelty. "now a word as to cast or wrought-iron for screw piles. the question of relative corrosion can be decided at some scientific institution, and there will be hot fighting over that between the cast-iron and the wrought-iron partisans. i merely refer to screwing cast or wrought-iron screw piles into the ground. as regards the blade of the screw, it should be as stiff as possible, and therefore cast-iron is better than wrought-iron, also cheaper; and although a cast-iron screw will break easily, a wrought-iron blade will buckle and bend and give. to me, cast-iron blades seem somewhat easier to screw, if they are good clean castings. i have screwed wrought-iron piles or columns when they have been fixed to cast-iron screws, but in any case when the piles must be long, to have them of cast-iron is my wish. solid wrought-iron piles can be obtained of a long length, but the price increases, and when they are long and of small diameter, as they must be, they are difficult to screw in a desired direction." "what do you think of solid piles as against hollow ones?" "well, i heard a discussion between two engineers about it, and they agreed that solid piles only do for little or medium heights, and i asked one to write a line or two for my guidance, and this is what he dashed off. read it." "no. read it to me." "well, it runs:--'in designing solid piles it should be remembered that the strength of solid round columns to resist torsion, torsional _strength_ (he means strength against twisting strain) is as the cubes of their diameters, therefore a solid round bar 4 inches in diameter will bear eight times the torsional strain of a bar 2 inches, the lengths being the same.'" "how's that?" "why, 2 ã� 2 ã� 2 = 8, 4 ã� 4 ã� 4 = 64, and 64/8 = 8." "i understand." "in the case of hollow columns, the exterior diameter must be cubed, and the cube of the interior diameter deducted from it when the relative values of different-sized columns can be compared. for transmitting motion, and here torsional _stiffness_ is referred to, the resistance of shafts of equal stiffness is proportional to the fourth power of their diameters. a 2-inch shaft will transmit 16 times the force which would be transmitted by a 1-inch shaft without being twisted through a greater angle. when the height of the pile is considerable the diameter should be relatively larger, in order that the metal may not be subject to severe torsional strain. so don't forget the piles should be of large and not small diameter, or you may have trouble in screwing them." "you remember old bill marr?" "rather, who did the iron pilework on the shore railway. i should think i did, for old spoil'em, we called him, and i were in 'co.' together more than once." "oh! you were, were you?" "yes. well, there is not much to be got that way unless it is soft ground for a good depth and the piles are long and the range of tide considerable, then you may pick an odd plum now and again by a bit of useful forgetfulness. i mean this way:--by using an odd making-up length or two instead of the right length, and getting it fixed on the quiet just as the tide is rising, then you have a nice peaceful few hours in which to get the joint well covered and down before next low water; but it wants some management to keep the coast clear, and you can't do very much at it--still little fish are sweet. one day i was nearly caught at the game of 'extra' profit, and as we had only just begun, of course at the shore end, it would have been awkward for me if i had been found out, and i might have been ordered change of air and scene by the engineer. it happened like this, the piles had been going down very easily, and acting up to the principle of making hay while the sun shines, i had a couple of short lengths put on six of them. we were screwing them in triangles, so one i got to right length, and two did not find the same home, because they could not, not being long enough. i dodged the lengths so that the joints were all right for the bracing above low water. now the road was clear, so i ordered a new length to be put on all of them before the tide turned, and that each of them was to be down 3 feet or so before the tide began falling to allow them to set, and told them that then they were to proceed as before. now, i consider the chap that first went in for making up lengths was born right and with an eye to business and nicked profits. we were working two triangles of screw piles i thought lovely, and said, innocent-like, to my ganger, 'get the joint of each one down say 3 feet below low-water mark so as to protect it, for no joint is so strong as the solid pile, and then you can screw them down till all the tops are level and right for the bracing.' of course they said nothing, and i am sure never thought anything or wanted to do, too much trouble. it is not my place to teach them, either." "no, certainly not; there you are right." "well, somehow or other, the ground turned hard, or we got into a streak of compact gravel. i did not trouble further about the piles after i had given orders, as the tide had started rising and the joints were well covered. it was rather an up and down shore. i felt certain in a few hours none of them could be seen except by divers, so i had a bit of business on shore which took me nearly two hours before i got back on the work. my ganger said, 'i am glad you have come back, because they stick; i have tried to get the lot down, but not one has screwed in more than a foot.' that was not exactly what i wanted, and said, 'why, the long ones went down easily?' 'yes,' said my ganger, 'but they were at the point of the triangle, and these others are all on one line or nearly so, and have struck hard ground.' i will cut it short, although it got exciting, for it was a race between screwing and, i might say, banging them in, and the tide that was going down; and i was clocking and measuring, and hot and cold, according as the race went, as i thought they would find me out; but i was left pretty well alone, as they cared much more about inspecting the piles than knowing how they were screwed down, besides the engineer was very busy with a lot of groynes and ticklish work improving the harbour channel. however, we just managed; but it made me feverish, and i expect the blades, if they could be seen, are not exactly as when they left the foundry; but there, there is a good deal in pilework that has to be taken on trust, it is not like a foundation you can see and walk upon if so minded. still, screw piles are all right for some soils, but i like disc piles better for sand, those that sink by water-pressure i mean. i don't think there is the same fear of the disc being broken as there is in the case of the screw, and the sinking is so easy and soft that no parts get strained as in screwing, but the ground must be soft, or there may be a bother. "after this shave from being bowled out, i always took care to dodge in a short one, now and then, when i knew the ground must be right, and i never got scared again. it was lucky, too, that a good many of the lengths varied, as on most jobs they are all the same, except the making-up lengths, and then down they all have to go unless a whole length can be left out when a seam of hard soil is reached, and that is not often the case, and there is not much chance of a bit of 'extras' that way on the quiet. i have known the game of 'extra' profit carried to breaking off a screw blade purposely, but i draw the line before i come to that." "do you? i should not have thought it, as you don't mind cutting off the heads of timber piles, so you have promised to tell me." "that is a different material and consequently requires different treatment. you understand? let me also tell you, i once heard a big westminster engineer say, 'timber we understand, iron we know a good deal about, and steel also; but we have plenty to find out yet both in the manufacture and use of nearly all metals,' or something like that, he said. "i acted up to that; and always say to myself, we understand timber, and know how to treat it--and so i don't mind cutting it, as i know what i am about with it, although i represent unskilled more than skilled labour. metals are different goods, and it wants skilled labour to tackle them nicely." "there you are right." "yes, different goods. so, following the lead of the engineer, i leave the iron piles as delivered, as we have yet something to learn about the metal; and things that i don't know much about i avoid as much as possible, and consequently there are good grounds for getting in some short lengths as occasion offers, just to have as little to do with the material that you don't know much about and that is a bit mysterious in its behaviour. so i lessen the handling of it, and shorten the lengths, and so increase the odds against the chance of it not turning out as one thought it would; and i ought to be thanked for it, i consider. you look a bit puzzled. i tell you, you are getting thick, and want fresh pointing up to sharpen you. listen to me. now, suppose you buy a dozen eggs, and you think and know, on the average, at the price two are bad; you take one away and find it's bad, then you have 11 to 1 odds as against 12 to 2 or 6 to 1, and there can't be so much chance of another bad one turning up so quickly. if you don't understand my meaning i can't make you. there may or may not be a different application of explaining the egg business, but mine is what i mean you to take, and i don't intend to bother about any one else. you are younger than i thought you were, or your brain is all of a tangle." "wait a minute. all right. i understand now; you lessen the chances of failure and the extent of it when it occurs by having a little less to do with goods that are made of material no one seems to knows everything about." "now you have it. shake fins. glad we have worked on to the right road again, as it looked like a collision just now." chapter iii. screw piles. details. "now for some details. "solid piles are usually from 4 to 8 inches in diameter, and hollow cast-iron from 10 to 30 inches, and generally 10 to 20 inches. avoid any cast-iron screw piles that are less than half an inch in thickness. when they are from 1/12th to 1/18th of the diameter is perhaps the best, according as their length is little or great; but of course they have to be of a thickness that will stand the load, and what is the best foundry practice should not be forgotten. "now as to the blade of the screw. if of wrought-iron, which seems to me the wrong material for that purpose, it should not be less than half an inch in thickness; if of cast-iron, as usually is the case, the thickness of the blade of the screw at the pile shaft should be about 1â·25 to 1â·50 that of the column, and at the edge not less than half an inch, and it should taper equally on both sides, and care be taken that the metal is the very best and so cast as to ensure uniformity and strength. "all sizes of screws from twice to six times the diameter of the pile when hollow i have screwed, but the best are from 2 to 1 to 3 to 1, and when they are more than 4 to 1 it is to be feared they will break before they can be made to penetrate far enough to say nothing about. solid piles with screws four to seven times the diameter of pile i have also fixed, and 5 to 1 to 6 to 1 is quite large enough; but the kind of ground and the depth to which they must be got down should govern the size and the pitch. the greatest depth, apart from imagination for measurement, to which i have ever screwed a pile is about 25 feet. without special tackle i have made a 2 feet in diameter screw penetrate hard clay, dense sand, and other hard soil from 8 to as much as 17 feet; but then 10 to 15 feet is deep enough, for there is such a thing as overscrewing. a 3 to 4 feet in diameter screw i have fixed all depths from 10 to 20 feet in ordinary sand, clay, and sandy gravel. a 4 feet to as large as a 5 feet screw, which great size should only be used for soft soils, from 15 to 25 feet, and the most usual depth is about 15 feet, and hardly ever above 20 feet. "a 9 feet 6 inches screw blade has been used on a 7 feet in diameter cylinder, but that is the largest i have heard of, but then it only projected 2 feet 6 inches beyond the column. five feet is usually about the largest, and is only used for very soft soils. when more than that size they are unwieldy and very liable to be broken, and if the screws are fixed to a shaft and have to be shipped they are awkward things, and the freight becomes expensive. for hard soil, and that which will not compress nicely, about 2 to 3 feet is large enough for the diameter of the screw, and 3 to 5 feet for soft soils. the pitch of the screw is generally from one-third to one-seventh of the outside diameter of the blade. it varies according to the hardness and softness of the ground and is steeper as it becomes harder. when the pitch is increased the effect of the power applied to screw it is reduced, therefore the steeper or greater the pitch the harder the screwing. "piles can be screwed with a small pitch when sufficient power cannot be obtained to make a steep-pitched screw penetrate. piles with a single turn of the screw, it seems to me, are the best, although the double-threaded screw may be right in soft marshy ground; but the usefulness of a double thread is doubtful, for i believe it breaks up the ground for no good, although some state that the screw threads work in parallel lines, and that a double-threaded screw is steadier; for they say a single-threaded pile is always likely to turn on the outside edge of the blade, and that the double-threaded is not, as it has a lip on both sides. "generally the screw has rather more than one entire turn round the pile, and when it is below the ground each side of the blade steadies the other, for the turns range from one to about two. sometimes the edge of the blade is notched like a saw; but it is a question whether the saw-edge blade will screw into ground that an ordinary blade will not, and until it is proved by experiment it can only be a matter of opinion; but there is one thing to consider, a saw-cut edge blade may to some extent wedge the soil between the teeth; still, i have used them, and they penetrated thin limestone, chalk, and compact gravel seams. instead of double threads, double points are the thing, and all screw piles should have a point of some kind. for soft ground, a single gimlet, and a double for hard soils, and i have noticed what i call a double gimlet point is best for keeping a pile in the required position, as each point prevents the other departing from a correct line. by points i mean the ends are spread out about 3 to 4 inches on each side of the axis of pile like spiral cutters. "unless it is certain the ground is easy and uniform, a pile with a screw having one turn to two turns for bearing purposes, and two, three, or four solid inclined screw-threads projecting about three-quarters of an inch with two end spiral cutters as just named, is my desire, or in addition to the bearing blade a single-turn thread of about 3 to 4 inches projection and the same kind of point; then unless it will screw, none will. they are less trouble when cast in one piece with the pile; but not for transport or shipping, or foreign work generally, because to be able to detach the screws is an advantage in many ways, such as packing, defects, breakages, carriage, and i think the castings are better when the blade is not cast on the pile. it may also happen that a rocky bed is unexpectedly encountered, then the pile is useless with the screw, but might be fixed firmly in portland cement without the blade in a hole made in the rock. at the top of the screw blade seat in which a pile has to be fixed there should be a wrought-iron ring about half to three-quarters of an inch in thickness, and not less than 2 inches in width, to relieve any strain on the casting. it may be put on hot, so as to cool sufficiently tight but not strain the casting. a firm and even bearing for the pile on the socket seat is important, and it should fit accurately. "i have heard of screw piles in which the blade was made of two or more separate segments so as to obtain, it was supposed, equal pressure all round, and to ease screwing, but rather fancy they might be inclined to jam the ground, as they would be not unlike a lot of very large round saw teeth. they may be right, but it has to be proved they will screw where a plain blade will not, provided the latter pile has double cutter-points to steady it. "give me a screw blade not more than about 2 feet from the points, and not one with a blade 10 feet or so above the points and say from 5 to 6 feet in the ground, for then, should the screw work at all crooked and the pile be not exactly upright at the commencement of screwing, it is no easy task to get it to stand vertically upon applying the power, because such piles are generally long and slender, and shift about until the blade is screwed. they want careful and constant guidance. of course, the idea of placing the screw a little way down is that when the ground bears as well at that place as at the point, and there is no scour, it is no use putting the bearing blade lower. that is right; but then it always occurs to me to ask what is the use of anything below the bearing level if the foundation be protected from scour, for a thin pile by itself has little lateral strength. "of course, you are bound to make out a pile requires a lot of screwing or you will be considered as making too much profit, but always take care to watch how the first pile screws, and measure the distance every few minutes. what the ground is can then be judged, and you will be able to think out things for 'extra' profit. it causes me a lot of consideration sometimes, but after a struggle i generally manage to think rightly for my pocket, and work it all serene. what a beautiful sharpener of one's brain 'extras' are! "it is not always an experimental pile is screwed so as to judge of the distance the permanent piles should penetrate, and therefore a guess has to be made from the experience of screw piles under the same conditions of screwing and in the same soil. there is a good deal of chance about it, for although the soil may be of the same general character it often varies in hardness; and that is where the bother is, for it makes the 'extras' to be wrong way about for some time. what i do then is to work the oracle, and try to make out the screw blades will be broken or injured for certain if i am compelled to screw them as ordered, and i work on the proverb that equal support is not to be obtained at a uniform depth when the ground varies, which is true; and i state that the resistance is different and offer to screw on, but say am afraid the blade may be broken, and in that how-kind-i-am-to-consider-your-interests sort of way generally manage to obtain a bit 'extra,' or save something that would have been loss, and get the pile measured at once for a making-up length, and really without damaging any one, for if the ground is harder at one place than at another there is no occasion to go so deep, always provided scour is not to be feared. so i am pleased, and it does not hurt them. "now for a hint or two on screwing piles. i shall not refer to the columns above the ground, but to the bearing piles below, i.e., the part that has to be screwed into the ground. however, i will just say that upon the top of some of the columns the usual hinged shoes of bearing-blocks should be placed to receive the ends of the girders, and by that means the pressure on the columns will be on the centre of the pile, and allowance be made for expansion and contraction, and that is important. "fixed staging is far the best from which to screw piles, but the chances must be considered of its being swept away by floods in a river, or smashed by the sea, and on any exposed coast there may not be time to construct it during the working season, so as to give a sufficient number of days for screwing operations. when a fixed stage cannot be erected, or the work be done from the end of a finished pier, pontoons or rafts are then a makeshift, but care must be taken that they do not break from the moorings. a couple of pontoons well braced together will do with a space between them to screw the pile, but in a steady or shallow river, perhaps making a timber stage upon the shore and floating it out can be done if a centre pile is fixed on the bed of the river to be certain it is in the right position when grounded. the staging must be equally weighted to make it sink, and arrangements made so that it can be floated away at any time if necessary. "piles can also be fixed in a medium depth of water by ordinary gantries, but if they are in the sea the road on the staging should be kept from 12 to 15 feet above high water on an open sea coast or the inclined struts and ties and rail tops as well are very likely to be destroyed, and it is also advisable to construct the flooring of the stage so that it can be easily taken away in case of storms. the stage piles also require to be well stiffened by struts, transoms, diagonals, and capping sills. i have screwed piles from a floor that has been suspended from staging by chains and ropes to the height wanted, and when lowered it was fixed temporarily and as many guides as possible were made for the piles. perhaps as good a way as any is to fix, say four guide piles having a space between them a shade larger than the outside dimensions of the screw blade and braced to the rest of the stage, and after the screw is in position and ready for screwing in the ground, place, say a couple of frames, one at top and one as low as possible between the guide piles, about an eighth of an inch more than the outside dimension of the pile shaft, for then the pile is kept in its right position as it is screwed. the guide frames should be at about every 10 or 15 feet of the height above the ground, and at some point between the capstan level and the ground. should it be a tidal river, fix guide booms if a properly made iron frame cannot be placed, and remember the more a pile is guided the easier it is to screw, and especially so at the start. "the size and strength of the staging must be regulated according to the power available for screwing the piles, but the length of the lever arms and the capstan bars require a space in which to revolve, from, say, 35 to 60 feet square. no timber stage is immovable, for the wood yields. it is well to have two floors in a stage if it does not cost too much, and there is plenty of tackle and a lot of screwing to do; say, one fixed above high-water level and the other about half tide in order to obtain double power, and sufficient power to screw the piles cannot sometimes be otherwise secured. a word about floating stages. with them it is not easy to make a pile screw vertically unless the ground is uniform, and should a pile meet a boulder it will most probably be forced out of position. according to the power required--which really means the nature of the ground, as the harder the soil the harder the screwing--the form of the pile and the depth to which it has to be screwed, so must be the size and strength of the raft, pontoon, or lighter, and the moorings must hold it tightly. in some places a screw cannot be fixed from a floating stage, for the water may nearly always be too disturbed, and the pontoons may sway too much, for in all cases men, horses, or bullocks must have a steady footing, and screwing machinery also requires a firm base. unless the moorings are very secure the platform will be unsteady. its level should be as little above the water as practicable for work, so as to keep the point of resistance and that at which the screwing power is applied as near together as possible, and the lower the pontoon the less it rolls. it does not matter much what craft is used so long as it is broad and steady and not high, as a platform or deck must be made upon it in any case. to do any good with floating stages the power required should be little, and the ground soft and uniform, for sufficient force to screw may not be obtainable from a floating body, and in hard soil it may only be possible to screw piles a little way down and not to a sufficient depth for the load they will have to bear. "of course, vertical pile screwing is the easiest, and to try to screw them at a greater angle than 63â°, or about 1/2 to 1, is unadvisable, and may not succeed, and even if they do it is too steep to be nice. 1 in 10 to 1 in 20 for raking piles is enough; for if they have to carry girder ends, the more the batter the greater the strain on the pile, and the same during screwing. "sometimes in loose soil it is difficult to start screwing, and then a good plan is to cast some clay or solid earth round the pitch; it steadies the pile and will probably make it bite properly, or a heavy weight placed on the pile may make it catch hold of the ground; if not, a few blows from a ram may do it. as a hollow pile penetrates, the core requires to be removed, so as to help it to descend. if it is not large enough for boys to get inside, scoops and tackle can be used. water forced down makes sand boil round the screw blade, and when the pile is empty the unbalanced head of water outside relieves the pile and the screw blade from some of the surface friction. if water pressure cannot be used, the water inside the pile should be removed either by pumps or buckets so as to help to loosen the ground. "piles do not generally screw to the full pitch, but when a pile descends _more_ than the pitch at the last turn, it can be considered the weight of the pile is too great for the ground. the slip usually increases according to the yielding or plastic nature of the soil, and the depth to which the pile is screwed. when water reaches such soils the slip is increased, but not perceptibly in sand and loose grained soils. suppose the full pitch is 9 inches. the slip may be anything from about 1 inch to as much as 4 inches. by watching the way in which the screw penetrates, and whether it descends about the same distance _each_ turn, or regularly decreases, it can be judged whether the bite of the screw is right. some slip will generally take place, therefore note at first how much it is, and consider whether it will not churn up the ground, for if the screw blade turns on nearly the same lines, the bite will be gradually destroyed, and then it may be very difficult to obtain a fresh hold of the ground, and the pile will most probably not screw vertically, and the screw blade is liable to be injured and may become worn away considerably. "piles can be screwed by means of men, horses, oxen, and machines. man-power can be used anywhere, machines in most places, but horses and oxen only on land when the piles are screwed on a foreshore or between tides; of course all live power works at the end of the capstan bars. once i had the option of screwing by horses or oxen, and chose oxen. another man had horses. i made more profit than he did, and the piles screwed easier than his. i did not let him come near me when screwing; but if you have the choice, use oxen in preference to horses. of course, i am speaking of those countries where they are used to the yoke." "why?" "because they do not stop at any time or back like horses, not even when the resistance of the pile becomes too great without more power, but continue to pull, and therefore backward motion of the pile is prevented. the oxen were yoked to two cross-arms attached to the end of the lever. "there are several machines for screwing piles worked by steam or other power, and when the ground is not easy to penetrate, and a large number of piles have to be screwed, their cost will be saved in the regularity, quickness, and ease in screwing, and in stiff soil by machine power i have known them screwed at the rate of 4 to 6 inches per minute. of course, it is a special machine, and not easily sold when not further wanted except at a much less price than has been paid for it, and that has to be considered. there are several different methods of screwing piles from a fixed stage; for instance, suppose a pile of sufficient length and with the screw attached is brought to the site by barge or otherwise, the capstan head is then fixed, and the pile swung vertically over the pitch by sling-chains fastened to temporary eye-bolts passing through the bolt-holes in the flanges or otherwise, and is moved either by a jib crane, a derrick upon a raft, or some such hoisting apparatus; it is lowered into its place between the guide-piles or steadied by sling-chains or other means, then the capstan bars are put into the sockets of the capstan head, which should be at equal distances apart, and the pile is ready for screwing after it is known that it is vertical. "where circumstances did not allow of room for capstan bars of sufficient length for men to walk round, i have screwed piles by ropes, but it will only do when the soil is easy to penetrate. the way we worked was something like this, we had two endless ropes passing round the ends of short capstan bars and round two double purchase crabs placed upon opposite sides of the pile, about six or eight men worked at each crab, four or five winding, and two or three hauling in the slack, one rope being passed through a sufficiently deep upper slot in the capstan bar end so that it did not slip, also one in the lower slot same end. both the taut and the slack ends of the lower and upper ropes were attached each to its own crab. a man must be stationed at the end of the capstan bars to put the slack ends of the taut and slack ropes into the slots. one rope gives the capstan half a turn when it is taut, and then it falls out of its slot and is slack, and so with the other rope, but it is not easy to keep the two ends of the rope equally tight, and the power obtained is not great and may not be sufficient. it is a kind of makeshift." "how do you fix the capstan head to the pile shaft?" "in many different ways. sometimes it is keyed on or clamped tightly to the top of the pile length by steel wedges, also placed upon the pile length and fixed by temporary bolts passing through the top flanges of the pile length, and also by fixing a temporary ribbed pile into the capstan head, and by connecting it with the permanent pile by bolts or slots, and so wedging is not wanted and it can be raised and lowered. another way is, two of the internal sides of the pile at top are cast flat for a foot or so down into which the capstan head fits, and the inside diameter is lessened for an inch or two to prevent the capstan head slipping down, but it generally can't do that, even without the narrowing of the pile for that object. "as the capstan is subject to great wear and tear and sudden strain, it should be strong, for if it breaks the work is stopped. wrought-iron capstan heads are used, but cast-iron are perhaps better. sometimes the capstan sockets are made to fit the ends of rails, if rails instead of timber are used for the capstan bars, but rail bars are rather heavy and are not nice to handle. the capstan socket is generally made to receive from eight to ten or more radial lever arms, and the lengths of the bars are anything from 5 to 40 feet, but the latter is rather too long as it is very difficult to control the strain and the bar usually bends and springs. the best working lengths are from about 8 to 20 feet, if the staging is so large. the best height for the capstan bars above the floor stage is from 3 feet 6 inches to 4 feet 6 inches. the capstan bars have to be lifted and again fixed as the pile penetrates, or a temporary pile of different length has to be fixed in it, unless the capstan head can be slipped up and down on a ribbed pile, hence you may want a platform you can raise or lower easily when required. if you use double-headed rails of the same section top and bottom for the bars, you can have them bent up a little near the capstan head, and when you start, the bent end is lowest, and then the bars can be reversed and so the work proceeds. "put the men, horses, or oxen in the most natural position for exerting their full strength or a loss of power will result, and therefore it will cost more to screw the piles. "should there be gantry staging on the site, the piles can be pitched from a traverser, or by means of an ordinary crab winch. they can also be screwed from the permanent structure by means of a projecting stage temporarily fixed to it, and of a length sufficient to reach the next span. the pile is run forward upon rollers and placed in the right position. then it is screwed on the endless rope system previously described, or by passing the rope round a deep groove in the capstan bar ends, and the rope is held tightly by being placed round a smaller grooved pulley fixed about a hundred feet or so back towards the shore. the men haul the endless rope and so the screwing is done. the worst of screwing by endless ropes this way is that the pile very probably may be pulled over towards the source of power as it comes from _one_ direction, therefore, support is required on the side of the pile to prevent this tendency. the circumference of the ropes used varied from 4-1/2 to 6 inches, but i have used a 10 inch rope. small ropes are generally relatively stronger than large ones. stretch a rope well before using, as it yields, especially hemp ropes. the distance between the point at which the power is applied, and the ground should be as little as possible. in firm sand, when the power has been more than about 20 to 25 feet above the ground, it is often very difficult to screw piles by ordinary means to more than a small depth, as two places in the pile are wanted from which to apply the screwing force, and both as low down as convenient; but in screwing from a second stage care should be taken that the pile shaft is not bent, for it may then be strained like a girder and not merely as a column, also when much power to screw is required it is not easy to avoid pulling them out of the vertical. always screw them steadily and prevent jerking. any obstruction, such as a boulder, tends to displace a pile, and loosens the ground around it. in soft soils it may be possible to pull piles upright by pushing aside an obstruction if the pile is given a turn or two after meeting it and before pulling; but it must be carefully done, or the pile may be smashed, and it is only safe to pull it over in easy soils and when much force is not required." "how much power is generally wanted for screwing?" "that is not so easily answered as asked. it varies very much, and, of course, depends upon the kind of soil and the size and pitch of the screw. ten men may be sufficient and a single stage, but two stages may be necessary should the pile be 50 or 60 feet in length, and then not far from one hundred men. an engineer told me the force generally required for piles of usual sizes under ordinary screwing circumstances varies from about 8 to 10 tons to as much as 50 tons, and usually from about 10 to 25 tons, and, of course, the number of men to screw in proportion. "ordinary piles and screws have gone down 21 feet in sand in eight hours, and by steam machinery in clay at the rate of 6 inches per minute, and also, to my loss only about 1 foot in a day--and then it is time to stop altogether, should many piles hold like that. to compare what has been done with what has to be done is misleading unless the conditions are alike, for if they are otherwise the power required, cost, and rate of screwing will all be different. i have screwed a 6-inch pile with a 2-feet one-turn screw into 20 feet of ordinary sand with an applied power of 30 tons as calculated by an engineer from measurements and the force of men applied at the capstan bars. there is the surface friction on the screw blade and the pile shaft in the ground, the cutting of the earth by the edge of the blade and the points, and the loss of power from torsion and that applied compared with the effective force, slip, friction, &c., to consider; and the relative surface of the blades, width, and thickness of the cutting edge and the pitch--for a steep pitch means harder screwing. by using capstan bars and men at them, instead of ropes at the ends of the arms worked by crabs, you will find about one-fifth more power is gained, or rather is not lost. of course, place the men as near to the end of the capstan bar as convenient for work. my lecture is finished, and i am parched." chapter iv. iron piles. arrangement--driving--sinking by water-jet. "tell me what you have learned about iron pile fixing, same as you have promised me you will about timber piles." "very well. here goes, then; first a word as to iron piles generally. "although a group of piles when properly strutted, tied, and braced have plenty of stiffness, if you have to deal with them singly they are never stiff, but they can be made steadier when getting them down by having two large pieces of wood with a half hole in them, something like the shape of the old village stocks, and by putting or lowering it at low water until it is bedded in the ground. it must be weighted though, so as to prevent it floating. it acts like a waling, and is useful when the ground is treacherous, and provided it is level. "from watching the behaviour of piles when doing repairs and at other times, i think it wants a lot of careful arrangement to be sure the load is acting equally on the whole group, or, as may be intended, on say a few piles, and straight down the centre of each pile, for it makes a lot of difference to the strain on them, and it is not easy to make them all take the load at once as wished. it wants a good deal of attention, and the piles are not unlike a pair of horses that are not matched and don't work together properly--kind of now me, now you business. before finishing reference to driving and screwing, let me say all the parts should be properly fitted together at the works and numbered so that the putting up on the ground is easier and in order to be certain all the bolt-holes agree; and it is well to have the lengths interchangeable and all the same, except the making-up pieces, and all bolt-holes as well as the flanges should fit in every respect. "when columns rest on a masonry, brickwork, or concrete base the piles ought to have a ring or base-plate right round them to hold them tightly together. it lessens the pier being shaken, and saves the side pushing of the holding-down bolts. i heard an engineer say the weight of the pier above their ends should be not less than about four times any force that might tend to lift them. the anchor-plates should be well bedded upon a solid mass or the strain upon the pier may go in one direction, and that the one not wanted. don't be afraid of bracing and strutting piles, the more of it the better. i don't think much of a single turn of a screw blade a few feet below the ground for taking a load, although some good for steadying purposes generally, because the bed may become scoured out below the blade and then the screw is no use. therefore the depth of possible scour ought to be positively known before relying upon the blade for permanent support. a lot can be said as to the grouping of piles, whether in triangles or in rows. in a triangle, although the load upon the foundations is spread over a larger area, it does not give as much lateral strength as when the piles are placed in one row, and taking everything into consideration i think if i had six piles to put down i should not place one at the top of a triangle, two lower down, and three at the base, but have two parallel rows of three piles; besides it lessens the length of the struts and the bracing, and that is something, but, of course, each case requires to be treated in a special way, and i have noticed when doing repairs that if there are six piles fixed thus, [illustration] in a triangle, the wind and other force acts principally upon the bracing between the parallel rows, and the pile at the point does not do much towards keeping the others in the right place; anyhow the bracing there does not seem to hold as tightly as it does between the parallel rows, and i have had to watch groups of them in storms, and when the sea has been high, and that is my opinion." "now, as to fixing iron piles." "when the ends have to be placed in rock, which has sometimes to be done in shore pieces, 'jumping' the holes in more than about 2 feet of water is to be avoided, for if the water is not still the holes become filled with sand and drift, and you must not take the jumper out but keep on continuously making the hole. it is ticklish business, because sometimes the rock grinds the jumper, and then the wings and point wear away. occasionally they have to be worked inside a cylinder by ropes, rods, and gearing fixed in it, the cylinder being movable and held from the end of the part of the pier that is finished, but where the water is deep the ends must be put in the rock in portland cement by divers. "i have driven a good many iron piles with a ram, but you have to be careful, no matter whether the soil is sand, gravel, clay, or silt. i like a copper ring on the head of the iron pile and a good long timber 'dolly,' not less than 4 or 5 feet in length, and then the ram does not burst the top. when the ground is hard the best way is to make a hole by jumpers of about 3 inches less diameter than the pile to be fixed, and in chalk soil it is doubtful whether they will go down right unless that is done; perhaps they won't drive at all, or a lot of them will be broken. i have used a ram weighing from 1 to 1-1/2 ton for an 8 to a 10 inch pile and about a 3-feet fall, and never more than 4 feet, unless you want to deal with some old metal merchant that will give a good price for the scrap, and it does not matter how many get broken, or it is a positive advantage to break a certain quantity out of every lot, so as to have a big price for such difficult driving, and get 'extras' that way." "i understand, no breakages deducted." "that's it. i have driven them at the rate of fully 6 inches a minute for a few feet. they often rebound, so i had a boy with a lever, the end of it being clinched to the pile. directly the ram fell, he gave the pile from quarter to half a turn for the first 4 or 5 feet of driving, and they scarcely rebounded at all; and he earned his wages, for i considered fully one pile extra was got down out of about every ten by the turning movement. the points require to be regulated according to the ground. from 1-1/2 to twice the diameter or width for the length of the point is about right, but if it is made too sharp it may break. iron piles that have to be driven are seldom more than 12 inches in width, and the thickness of the metal is generally from one-ninth to one-twelfth of the diameter. i heard an engineer say, i think it was mr. cubitt, experiments showed that a t-shaped cast-iron pile about 30 feet in length, should have the top of the t two and a quarter times the length of the upright part, and the thickness a twelfth of the top. of course, the length of the pile must be considered. i doubt if you can get equally sound metal throughout when the thickness is much more than 2-1/2 inches. from 3/4 to 1-1/2 inch is best, and piles i have broken up always seemed more even throughout about those thicknesses; but there, i suppose it is all a question of care in casting and proper machinery. "one thing, don't drive any piles from a floating stage on the sea if you can help it, it will make you pay for the privilege; besides i have known some places where the sea was always so disturbed it could not be done, even if the moorings were as tight as you dare make them. driven iron piles are not much seen now, and portland cement concrete seems the fashion, and no doubt it is better. still, iron piles can be driven in deep water without much trouble from it, and one might combine the two nicely--the iron to act as a shield to the concrete while depositing it, and give it time to set without disturbance and preserve the face." "have you sunk any disc piles?" "yes, they are all right for fine sand and silt, but you must be careful the discs are the same in form and dimensions upon all sides, or a pile will almost certainly tilt and sink crookedly. i was busy on the lancashire coast once, and heard that mr., now sir james brunlees, tried a lot of different kinds of hollow disc piles, and that the best was one with a plain flange base three times the diameter of the pile, and circular, with the bottom nearly closed, it only having a hole in it in the centre of the base 3 inches in diameter. some ribs and cutters were cast on the bottom of the disc to break the ground up if it was hard. this is what i know about disc piles and have been put up to. "when piles have to be sunk by water pressure, rotate the pile, and don't let it be still long, so as to lessen or prevent surface friction on the pile shaft and the sand settling round it. always have circular discs and not too large, not above 3 feet in diameter, for they do not sink nearly so easily as the size of the disc is increased. about 2 feet discs are my choice as they go down much quicker than 2 feet 6 inches or 3 feet. "don't try to sink them in sand to a greater depth than 18 to 20 feet, and remember that although they may sink easily for about 12 or 15 feet, afterwards they will want some labour. when you have finished sinking piles with the water-jet, it is best to drive them down an inch or two further by a heavy ram and a very small fall, or heavily weight them as soon as possible after having done with the jet; then the disc has a bearing on firm and undisturbed ground, and if you are afraid of a blow on the pile you can have a heavy weight placed on it to help it into position and the sand to become solid. obtain considerable pressure of water, and always cause the pile to rotate when sinking. don't let the pressure get much below 40 lbs. per square inch, and use about 60 lbs. if you can get it. i have worked up to 100 lbs. per square inch but not beyond, and fancy there is then too much pressure, and that more sand is disturbed than is necessary. all that is wanted is to make the sand boil and remove itself from the underside of the pile and disc, but always have a few ribs or cutters on the underside of the disc as they loosen the sand as the pile is rotated--besides, should there be a strip of harder soil, it may be impossible to sink the pile without them. a rather large tube and a moderate pressure are best, and a tube not less than about 2 to 4 inches in diameter according to the size of the pile, and it is better from 3 to 6 inches, of course, if the pressure is high a larger size jet can be used, but if it is less than 2 inches it will only make a small hole, and too much below the disc, and not enough water passes through it. try to ascertain what pressure of water makes the piles sink the easiest. sometimes they will go down at the start as much as 3 feet in a minute, and often 2 feet, and from that to 1 foot they should do for about the first 6 or 8 feet in sand, but then the rate quickly decreases. the nozzle should be properly shaped so that the jet is whole. i mean the shape of the pipe at the place where it touches the sand. what is wanted is to get just enough force to cause the sand to separate and boil and to push it away from the disc and no further, or some of the water power is wasted, therefore a good volume of water is as necessary as a high pressure. you understand?" "yes." "the tube should project about 6 inches below the bottom of the disc. a toothed tube can be fixed round it so as to help to disturb the ground and strengthen the pipe. the water supply may perhaps be obtained at a sufficient pressure from the local water-works company, then, probably, a force pump will not be required, but the pressure that can always be relied upon should be known. "in sand, and when the water power can be easily obtained, i prefer disc piles to screw piles, because there is hardly any chance of breaking or injuring the disc; you always know where the disc is, but cannot positively say where the screw is--it may be sound and may not be; in addition, the disc is stronger than a screw blade, as it can be strengthened by ribs almost as much as one likes, and the disc in sinking is hardly strained at all compared with a screw pile. they can be sunk quicker, and do not require nearly as much plant to do it, for when you have a force pump, a guide frame--something like an ordinary pile-driving machine 25 or 30 feet in height, with a grooved pulley at top in which the chain or rope runs so that one end can be attached to the pile flange either by jaws or temporary bolts, and the other to a crab winch, which, with the guide frame, is used for lowering and keeping the pile in position, and stay the top of the guide frame by ropes to short piles driven into the ground--and a hose and two levers, with a collar to grasp the pile so as to rotate it, you have about all the _special_ plant that is wanted. "of course, piles can be sunk by water pressure from a floating stage such as a barge, pontoon, or raft, so long as the pile is kept vertical, but there are the same objections to that method as with other piles. piles are, however, got down much quicker and easier by the water jet than by screwing or driving, but the ground must be loose granular soil, such as ordinary sand. "there is not much 'extra' to be got out of iron piles. you can only dodge a bit with a length short now and then when you have the right parties to work with, and the inspector is cross-eyed or a star-gazer, but you may get something 'extra' out of the filling them in. as usual i draw the line somewhere. everything on earth has a boundary line. this is where i draw it. listen! "after as much water as possible--possible is a nice elastic word--is got out of the pile, and it is as clear of deposit as convenient--another nice easy word--and before commencing the filling, i put inside the pile everything i can get hold of that is dry, for just then i have but one way of looking at anything, and that is to consider it portland cement concrete, unless it costs me more to use it; but when the filling is concrete, i make that as dry as mixing will allow, and sometimes hardly that. the inside of the pile is sure to be wet, and that will help the mixing. i never ram the concrete, but gently cast it in. it is only a sort of anti-rust covering, and is put in for that and to keep water out, and no weight comes upon it--it is not like the hearting of cylinder bridge piers. ramming the concrete is not far from being a mistake, because the pile should have a chance of contracting without straining, and may be it will crack; and it is just as well to remember that although by ramming tightly you may get more solid filling and better protect the inside from rust, the pile may be strained, and it is a choice of evils, possible rust, or strain." chapter v. timber piles. pile-driving. general consideration. "now, as promised, i will tell you of a little bit of free trade with some timber pilework." "that's it. i am waiting for it." "well, they let me have 400 feet run of pile-driving. double row of 16 to 12 inch piles, and there were some fine sticks nearly 55 feet long, and that is a long length for a sound pile, and you have to pay for them." "before you begin to tell me how you scamped it, give me a hint or two about piling, and say what you have learned from experience." "all right. first, when a pile is some distance below the bottom waling, which should be fixed as low as possible, a lot must be taken for granted, and it cannot be controlled much. i know this from drawing many piles; hundreds, i may say. after they are down about 5 or 6 feet they begin to do as they like, and take to irregular habits, and you cannot be certain the points are straight unless the ground is the same throughout, and it hardly ever is. in fact, the resistance they meet with varies, and then they accommodate themselves to circumstances; and even when the ground is very soft they turn to the line of least resistance, and if they have to be driven through several feet of soft earth to reach the solid, they may play tricks and bend about in the soft soil in go-as-you-please style, yet seem to be driving nicely; or they may stick between boulders and can't be driven further and appear to be firm as a rock, and so they may be as long as the boulders do not move, but they often do after a time, should the ground become wet, and sometimes when the next pile is being driven. "always be careful to see that the shoe has as large a bearing as possible for the end of the pile, and is long in the point, and more pointed as the soil is harder. take a 12-inch pile with a 4-inch or so seat in the shoe for the stick. well, 12 by 12 is 144, and 4 by 4 is 16, and therefore the pile end has a bearing area upon the pile shoe of one-ninth of the area of the pile. no wonder the bottom often becomes ragged and the pile shifts. the shoe should have a good hold of the timber, and be put on true to a hair, so that the point is in the exact centre line of the pile, or look out for squalls. now high falls and light monkeys are out of fashion, and short falls and heavy monkeys are the thing, not so many piles are injured. pushing them down is better than breaking them to bits. you should have the monkey so that its centre falls upon the centre line of the pile. the average centre of the pile should be marked on as exact as possible, and the end of the pile be cut to a template, so as to make it fit tightly to the shoe, or it may not drive straightly. i always take a lot of trouble that way and seldom have to draw a ragged one, and believe they used to drive straight. i mean from start to finish about the same number of blows and to the same depth and vertically. "when hand-driving in soft earth--it's slow business at the best--weight the pile when the monkey is being lifted so as to stop the quivering and press it down and keep it from springing. provided the work was of importance, and i was the cã¦sar of it, before any pile was pitched ready for driving it should be inspected, its dimensions taken, it should be numbered, numbers be burnt in, and every foot from top to bottom should be marked on by a brand; and perhaps the numbers should begin at the bottom and work up, as there is not so much chance to tamper with two figures as with one, &c. "pile-driving is fickle work, for sometimes the piles stick because the points can't pierce the earth, and at others because they are held by friction on the surface of the piles. i have known the shoe to be cast, and the pile end look like a bass broom, and to be all in shreds. when piles split a great deal and they must be driven, the best thing to do is to get harder wood, lessen the fall and increase the weight of the monkey; same as in tunnel lining, when stock bricks are crushed, blue bricks have to be put in. the nature of the ground should govern the hardness of the wood for piles. i always pick out darkish even-coloured wood, and sniff for the resin, and the more in it the better for me. you don't catch me driving many white wood piles, for they become dry and break off short, and are not the timber for piles. once a bother arose about some piles. there was a layer of hard gravel, and by the way the piles were driving i knew they would split, so i gave the word that memel piles were not hard enough for such gravel; and i worked it humble like, and said to the engineer, 'i think you will agree, sir, you can't expect me to be answerable for smashing them until we get into the soft ground again. it wants rock elm or as strong timber for this soil.' after smashing a few to shreds, they supplied us with rock elm piles, and then we managed. it is true to say in the same soil the harder the pile the better it will drive, and therefore with less trouble and expense. the monkey should have an even widened-out base where it touches the pile head, so as to get the weight as near the head of the pile as possible; it also falls straighter than the long thin rams of nearly the same width throughout. grease the ways well, and take care they are as straight as a die, and exactly vertical if it is upright pile-driving, and you'll save money. make the blows quickly in fine-grained soil, so that it has not time to settle round the pile. in clay there is no occasion for such quick-driving, but take care to prevent the piles rebounding. remember the same system does not do for every soil, for quick driving in hard soil sometimes smashes the piles; perhaps the earth has not had time to become displaced nicely and settle before being jammed again, and then the pile point turns and quivers and soon shreds, and cannot be driven down properly. anyone that says piles make the ground itself firmer when they are driven into it, and so cause it to support a heavier load, will have to prove it before that can be swallowed. it is the friction on the sides of the piles that principally sustains them and not the bearing of the points. in hard soils drive slowly, for it is like chipping up a stone with a hammer. you must do it gently, or it will break the tool; and as you can't clear out the hole in driving piles, it seems to me time is required instead, so that the pressed out soil may settle away and take a bearing. i tricked a chap once pile-driving from a barge." "how did you do it?" "well, it was bound to be driving from a barge or nothing, and there were three pile-drivers for us, almost as many as we could work, as the driving had to be done by degrees. some of the work was let to a chap i did not like too much, and the rest to me. they gave me the choice of plant, so i said to the engineer, 'may i have two of the pile-drivers upon my barge, as faggitts'--that was the other chap's name--'only wants one.' i got the two. now faggitts knew about driving piles on land, but had never done any driving from a barge, so i had a bit in hand of him. if you take any pile-driving and it has to be done from a barge, have more than one pile-driver on it if you have the chance; but don't place them close together, make one steady the other, and have as many as you can conveniently work at once; because, in my experience, the more you have the less the swaying, and the piles drive more regularly and the barge is steadier, and you don't have so much bother with the moorings. of course, if the monkey does not fall flat upon the pile head the pile does not receive the full force of the blow in the right direction, the pile may be driven slightly crooked and it does not get properly treated and won't penetrate so easily, and therefore you lose money. old faggitts found that out in the soft soil we were driving them into. i said nothing to him, but he did to me. i never told him. "i have read somewhere that it is wearying work going into details, but when you have to do the work yourself, unless you take care of the details you'll find they will make it hot for you; and after all, any one can speak generally, but when they have to explain in detail what they think they mean, and have to do the work themselves, they will soon find out that unless you know the details and attend to them carefully, that you won't make a profit nor anyone else. anybody can talk tallish after about a fortnight's training, but then they have to pull up or they will fall at the next fence, which i label 'details wanted.' that's by the way, and i may have made it too strong, but it is as well to sound your engineer. no general is successful unless he knows the strength of his enemy and as much more about him as he can, and acts accordingly, and chooses his own time and place for a battle. "driving piles in groups, especially if the ground is soft, and not singly, is good. they go down more regularly and fit tighter, and they seem to drive quicker. i have driven cheap fir piles between elm piles that way, and a good many of the soft ones split when we had to drive them singly. have as few key piles as possible, because they are liable to be jammed before they are down to the right depth, and then, if it is a cofferdam, it is probable a leak will occur under the key pile, because it is the easiest place for the water to soak through, and the other piles being down below it, stop the flow, and it soon finds out the short-driven key pile. when i notice a spot in a cofferdam at which water leaks through the bottom, unless it is an old stream bed, it occurs to me that the piles have not gone down properly, have got bruised, bent, turned up, or broken off, and i have found out that was the case on drawing them when the cofferdam was of no further use. once i was ordered to drive some three-cornered piles at the turns in a cofferdam on a river front, but said, 'square or circular shall be driven, but any other shape i will try to get down properly, provided they are carefully fitted and bevelled, but you really can't expect me to be answerable.' they deducted a fixed amount if after the piles were pitched there were more than a certain number visibly damaged or smashed, so you may depend i had a good look at the sticks before they were driven. "i have driven piles 60 feet in length, kind of giant sticks, but 45 to 50 feet is long enough for good sound piles. socket pile driving piecework i avoid, for the joints are ticklish business; and if a pile of ordinary length will not do, i throw out a mild hint whether the better system to use would not be indian brick or concrete wells, or to spread out the foundations so as to get a sufficiently large bearing, or have a fascine platform, and sink it till it is firm, and test its stability properly by a load. "there is a great deal in starting the driving correctly. i always am very careful at the start, and experiment and watch how the piles drive, and vary the fall a little until the best is known. few considerable stretches of ground are of the same kind, and to fix a certain fall throughout is not the thing, it generally wants varying. i have easily driven piles in fine sand by having two small pipes, one each back and front, reaching a few inches below the point of the pile, and sending water down them under pressure, and by keeping the pipes on the move so that they can't be gripped. i worked out with the pipes the place where the pile had to be pitched and made a profit that way, because not only did the piles go down much quicker, and a lot of blows were therefore saved, but the piles were easier to start right. i used to call my two pipes the two bobbies, because they steered straight for their station, and these two did the same office for the piles. "now a word as to systems of driving; the method must suit the ground. i knew a man that believed in nothing but driving by gunpowder; he must have been going in strong for gunpowder tea, or have been in the militia, for the soil he had to do with was not homogeneous, and had boulders and other hard obstructions in it. it was not like soft sand and clay, consequently many of the piles were broken. the noise also was a nuisance in the dock, and cattle that had to be unshipped from the steamers were so unruly that they had to stop the gunpowder pile-drivers; besides, to do much good with them, a large charge is required, or it costs too much. the power necessary to work the machines is better obtained by other means, and can be without so much noise or shock. "i have used all sorts and sizes of monkeys, from half a hundredweight to four tons, but heavy rams and short falls are the best, and steam for the power if the contract is considerable and will pay for such plant; otherwise hand, unless the piles are large and have to be driven a long way. a sixteen hundredweight monkey is about heavy enough to work nicely by hand, but it is not sufficiently heavy for a 12-inch pile, except in soft ground. for sheet piles a hand machine is good enough, for it can be moved easily, and six to eight tons weight, being about that of a steam pile-driver, costs something to shift, unless there are rails and tackle handy. of course the blows are quicker with a steam pile-driver, and in sand that is a great point as the ground has no time to settle round a pile; but should the soil vary and be hard and soft, it is well to slow down the machine at first to lessen the fear of smashing the piles and shaking them till they tremble to destruction. i have worked a lot of different kinds of plant, and driven many piles at once, and the power was obtained from one engine giving the motion by driving bands, and in another case with drums fixed on the engine shafts, the chains being carried over sheaves to the different pile engines. "this is my idea of pile-driving:-"1. steam driving. 2. hand driving, if the piles must be driven very slowly, and there are not many to drive. 3. never use gunpowder pile-drivers, always prefer steam, hydraulic, atmospheric, or some other motive power. "gunpowder is more for blowing up than anything else, in my opinion, and i know the pile shoes often shed in driving with it; that is, they loose their hold of the piles and become detached. "a pile should penetrate regularly, and after the first few blows drive less and less, as then you have a good idea it is all right and uninjured. uneven penetration is a proof that piles are not all right, and when they sink suddenly there is almost sure to be something wrong, and they are most likely being over-driven, shredded, frayed, shoe-cast, or split up. the rate of descent should be noted. it may be considered they are driving properly if they sink about a foot at a blow for the first one or more, and then 8 or 6 inches, and when they get down to one-eighth, one-fourth, or half-an-inch a blow for some successive blows it is time to stop and consider. i have driven piles with as few as ten blows in sand with the aid of two water pipes at work fore and aft, as mentioned before, and have had to give a pile as many as 300 blows, and when they want as many as that, with all due deference to everyone, the ground is firm enough to build upon for permanent foundations without piles. my experience goes to show that piles are often driven further than they need be, if only for use as a cofferdam, and that back struts and counterforts are better than extra depth in the ground, provided leakage is prevented. 8 to 10 feet down for solid clay, 10 to 12 feet in gravel, and about 15 feet for ordinary soils, and more care taken to ascertain the piles are where they should be, and that they are sound and whole, and not turned aside, bulged, and injured, would be my practice. in boulder ground, in my opinion, piles should not be adopted; for broken, crushed, and twisted fibre bass-broom shreds are not piles; they are out of place and should be used for clearing leaves from garden walks. the longer the piles the softer should be the ground they have to be driven into, or they shake so much, and cost more to drive. "unless always well buried and at such a depth that neither the moistness nor condition of the earth vary, i scarcely believe in timber pile foundations at all, except in very peculiar cases, and as a kind of aid to the main support or to help to prevent the toe of a wall from being thrust forward, but for cofferdams, jetties, piers, and such structures, of course they are useful. in hard and most gravelly soil avoid them, and also in sharp sand, if you cannot use the previously-mentioned water-pipe arrangement fore and aft; and although in ordinary clays they drive nicely, and you make a bigger profit than in sand, it puzzles me to discern what is the use of them for permanent foundations, except to help to prevent a wall sliding forward, because when a pile is driven into most clays the clay becomes tempered and softer, and a layer of concrete put in a proper distance down is better and much more certain, and distributes the load more equally. elastic soil is bad in which to drive piles, for it yields and then rebounds. a pile will sometimes spring back almost as much as it is driven, and in such a case it is well to let the ram or monkey rest on the pile immediately after the blow is given, if you are hand-driving, or have an arrangement so that it is weighted directly each blow is delivered, and perhaps the best way is to hang heavy weights on the pile. in driving in firm sand the ground at the surface becomes considerably displaced, in clay about half as much as in sand. "pile-driving is different to masonry, and i always read the specification for pile work, and then judge whether and how a bit 'extra' is to be obtained, and guess as to the knowledge of those i have to deal with, and act accordingly. sometimes a specification simply says all the piles are to be driven to the same depth or as shown on the drawings. that may be right should the ground have been tested by experimental driving, or the nature of it be known; but if not, i don't take much notice of the specification, because i hate waste, and can't afford the luxury; and it stands to reason that simply because a lot of piles are driven to the same depth they are not equally firm, nor will they support the same load unless the soil is exactly the same, and they drive well and regularly to the same depth and all nearly alike inches by inches, and this seldom occurs. often 'extra' profit is to be had, as you will soon hear described, for when piles will not drive further than half or a quarter of an inch a blow they satisfy me they are tight enough for the purpose intended if they are at a fair depth and not wedged by boulders; but between ourselves, should a building of any kind have to be erected on piles, and anyone i really cared about had to live in it, i should always weight the piles for as long a time as possible after finishing the driving and reasonably more than the permanent load, watch the effects, and act accordingly, particularly in elastic soil. "remember a pile sinks less after it has rested than if it be driven continuously, therefore always take note of the set when the driving is proceeding, and not just at the start, or after an interval, although one does that for one's own benefit, and with a view to 'extras'; and no one wants to drive a pile an inch more than can be helped--at least i don't, nor have i, and it is certain never shall. "you want to know when to stop driving. the time has arrived when a pile penetrates very little, and nearly equal for several successive blows of the heaviest ram by which it has been driven at the usual fall. "a word as to tie and sheet piles before referring to the way i have worked piles for 'extra' profit. it is difficult to make a main pile and a tie act together, one or the other is nearly sure to have to bear more than its proper strain, and the tie rod becomes eaten by rust, bent, and loose in the piles. in taking down old banks and quays you will generally find the main pile and the tie pile are not held tightly by the tie rod, the tie pile is loose or pulled over, perhaps when first strained, and then becomes disengaged when the main pile has set to the strain. the tie rods want to be very carefully and frequently adjusted, if possible, and big washers and cleats on them are required. they hold best in firm sand, not so well in clay, and in large light loose soil, such as ashes, they are not much good. it is an impotent arrangement and it is always uncertain whether they will act together. don't undertake to tighten up the rods. fix the piles, and let the engineer see to the tightening up, as you may injure the piles. "when i have to drive a lot of sheet piles, of course the piles are supplied to me, and i only take the driving. you may be sure the timber is right, and that the edges are sawn square so as to drive tightly together, and that the point is in order. i find it always pays well to temporarily place a baulk at the ground line like a waling, but not fixed to the sheet piling, as it guides the piles, lessens the shaking, and they drive easier and better. it appears to me piles cannot vibrate without force, and that is not where it is wanted, so it is wasted motion. agitation when drawing piles is all right, but when you are driving you want it in the ground itself, and not in the piles. once when i had to drive some thin sheet piles, i made a movable guide frame, the side against the sheet piling being planed and greased. it was like one bay of a timber-lattice bridge, and it well paid for itself as it steadied the piles. "in taking a contract for drawing piles always find out how long the piles have been driven, for if they have been down many years they will be much harder to draw than if they have only been fixed a few months. they can be drawn by lever, hydraulic jack, and chains, and pontoons in a tide way." chapter vi. timber piles. manipulation for "extra" profit. "now, i'll tell you about a bit of 'extra' dodging that rather scared me. first, let me say, no one can ever know how much i hate waste--it can't be measured." "you and me are alike, a couple of turtle doves on that question." "we are. finish up, and we will have another. i remember lord palmerston said, dirt was matter out of place, or something like that. now i think piles are often good timber out of place, so i followed that lesson and said to myself 'what a lot of good timber is going to be buried; and really it is breaking and loosening the ground too much to please me, and that's a mistake, besides placing extra weight on it'; so after dwelling on the subject as much as suited me, i decided it was waste, and that it was poison to me. i had trouble on my mind about it and it made me feel thirsty and does now. pour another out." "there you are." "i'm better now. well, i wrestled over the waste question some time, and finally made up my mind not to be a party to it, it being against my principles, and, like us all, no man shall make me swerve from them, especially when they agree with my pocket." "certainly; shake hands. that is good!" "well, there was only one way to do it, so in order that every one might have their way to a certain extent i decided to drive first one pile to the depth as ordered and one to the depth that suited me, and therefore both parties were satisfied and believed they had got what they wanted; for while i left the other man, that is the engineer--excuse the disrespect--to his happy thoughts, i descended to simple practice in a way very comforting to me. knowing it is not every pile which is driven that drives whole, or is according to drawing, many often being twisted and knocked to shreds--although i have seen them driven through a layer of old brickwork, and whole, too--and that there is a lot of uncertainty about them in some ground, i dwelt on the matter, and came to the conclusion that according to the drawings every other pile would be driven about 3 to 4 feet too far down, and that all concerned hardly agreed upon the depth to which all of them should be driven, and that i was the chief one to be considered; so i cut off a few feet of the top of nearly every other pile, and varied the length according to whether the pile happened to drive hardly or went down gently." "precisely." "somehow or other the ground seemed really grateful to me, for more of the piles were cut off than i originally intended. they must have passed the tip--may be the worms did it; anyhow the ground, after a few had been driven, seemed to become harder, and we had more sawing to do than ever. i like sawing. you see your work, and all is above board and nothing hidden and no deception. suits our principles. now, you are like me, you don't wish to disturb other people's minds, we are built on the lines of love too much, and tenderness is better than anger any day." "that's it. i consider you were doing a kindness all round, or as near to it as makes no difference!" "well, in order not to disturb any one, it took some thinking over as to the best time to ease off the tops. i mean cut the heads off and put the rings on again, and give the tops a properly seasoned appearance. i used to call it put their hair right. now, you know docks are not like railway works, for the men are nearly all at one place; here we were in the middle of a large town, but you'll excuse my naming the place, i am too polite to do such a thing without permission. no one was about at dinner time, for all the chaps passed the gates. the place where my work was was shut in nicely, and as there was always a row going on from the traffic close by on road and river, and loading and unloading, it was a really nice little home in which to do a bit of engineering-up-to-date." "i understand; a convenient spot for scientific experiments in saving labour and the waste of good material." "that's the lesson. i found dinner time was the best after a week's scouting, and that the road was clear as daylight, for all the spies were away, and there was only one that ever hung about, and he was a young engineer just come to the docks straight from westminster. he was a nice sort of chap, and a smart one, and had the kind of face a girl looks fond upon from what i have noticed of their tricks. of course, he did not know much of actual work, being a new pupil, i heard. by the way, what a lot of pupils to be sure some engineers turn out. i almost fancy a few of them must make as much from the schooling branch of the profession as they do from work; but let them, it is nothing to do with me, but this pupil i can say was no fool, though, the same as all new hands, the work was a novelty to him, like a new toy to a child. "now, the only thing to interfere with the 'extra' business as described was this pupil, so i decided to fix his attention, if i could, in another direction, and sweetly, so thought it out, and said to myself, 'you have had more difficult things to steer through than this--rather hotter, i fancy.' "it so happened, just then, they had pulled down an old tavern, and built on the site a showy crib with balcony overlooking the river, and they had a lot of relics on view, and two nicish girls were there. good figures, you know, and fairly on; so i made myself particularly gracious to mr. pupil and pointed out, submissive to his superior knowledge like, a few things on the work. then the plot was let loose this way. i started a kind expression on my face, and said-"'i'm afraid you find it rather rough, sir, here; there are not the nice feeding places they have in town, in fact, i think there is only one near here, sir, at all fit for you.'" "'where is that?' "'it is the anchor and hope hotel, sir. i can hardly direct you to it; but you have plenty of time to go there and get back fully a quarter of an hour before the men's dinner time is over, if you will allow me to show you the place, and they have almost a museum of relics of the river.' "the relics settled it, and he took on all right, and i knew then things were working smoothly and the wind was getting round to a nice steady breeze from the proper quarter. he was a good-natured chap, and one could see liked inspecting the woman portion of creation better than works, at least, during dinner-time, and i don't blame him; some men are built that way, and can hardly say 'no' to a woman, for if they do they think they have done wrong and been unkind. poor things! well, we got to the place, and, fortunately, no one was in the private bar." "you mean lobby. don't insult the place." "i humbly beg pardon. "in we went, and it was lucky, for the better of the two girls was on parade; they were nieces of the landlord, so had more latitude than paid slaves. i went in first, and mr. pupil turned to me and said, 'i will be with you in a minute.' now, that was just what i wanted, a word or two of priming for polly. so after shaking hands with her, said:-"'polly, in a second or two a young swell will be here just new on the works, and will be on the job to the finish, three years, so make yourself pleasant as possible. three years' presents and fun, to say nothing of odd trips out, are not to be snuffed at; and he is rich they tell me, and should be real good business all round, if you work him right.' "she laughed; and before i could say any more the door was on the move, and in mr. pupil came. i kept my weather eye on him, for i can generally tell, when they run young, whether a chap is smitten sufficient. i saw the place would be a pleasant diversion, just seeing one of the tender gender occasionally, after being all day among men; so to make it appear i was a wolf on business, said, 'please excuse me, sir, but i have to meet a gentleman at half-past twelve.' "'certainly. do not let me detain you.' "i just turned to polly, and said, 'show this gentleman your museum of relics, and the private room looking across the river, as i think it may perhaps suit him for an odd lunch now and then.' polly twigged. "i saw they were started on the road of mutual admiration, and travelling pretty, and that he meant calling again. she also seemed to like the prospect, and knew how to work the game of fascination right, and she did; so the only one in the way of preventing my doing a bit of engineering-up-to-date with the pile-driving was now removed in a nice harmonious way, and to the entire satisfaction of the company's resident engineer--no, hardly that, i mean mine. i consider i did a kind action to all parties, not excepting myself. what a blessing women are, if you use them right. mr. pupil had his lunch at the place every day, and polly and he understood each other, and got on a 1, so i was told. it is soothing work bringing happiness to two young hearts as beat soft. "_next day we started cutting off the pile-heads_, while polly and mr. pupil were occasionally very likely pitching their heads together so that i should not have all the fun. well, we managed to so drive the piles after a day or two as to be able to cut off, generally during dinner time, from 2 to 4 feet, and i should think must have done over 200, when one day, just as we had nearly sawn one through, up turned mr. pupil. polly and her sister were visiting, and never told me they were going, so the anchor and hope did not weigh-in much from him that day. my ganger, who was doing the sawing trick with me, looked a bit down, but he is not so educated as me; so i turned to mr. pupil and said--as he asked me what i was doing, and what was the matter--'got the pile down wrong, sir, and shall have to lift it. i think it's broken off, or gone ragged, may be it has struck an old anchor.' "he just looked very hard at me, nodded, and went away. it was a close shave, and lucky it was not the chief engineer. however, we had a quarter of an hour to work on that pile before the men came back, and we soon ruined it with bars and tackle. anyhow, we raised it in no time, for we had the best tackle and everything you could wish for. we split the pile right across. it was only down 5 feet, and most of it in mud. we quickly cut it up into cleats; and out of misfortunes, between you and me, i always make as much as i can. so when mr. pupil returned i said to him, 'it wants a lot of experience to know when piles are not driving right, but 25 years has not been lost on me, sir, and i will have good work or none.' perhaps 'none' would have been the correct word; but anyhow i used it coupled, and you can't complain, for if the pile had been cut there would have been none in the place where it was thought there was. we saved a lot of driving, and i said to myself, 'it is lucky this bit of wharf wall is left to me pretty well, because, as nearly most of the piles are a bit short, the wall may settle if they load it much or build on it; still i think it will settle equally, and then it won't matter so much, and they are not going to build on or near it, that i know,' so i saved nearly 1000 feet of driving on the lot; but here comes the shake. i forgot to say the piles were driven, and a platform fixed on the top for the wall in the old style, but it has gone out now, since portland cement concrete came into fashion. one day the engineer walked over the work with two or three directors, and, after a lot of talk, they decided to build some 3-floor warehouses upon the quay, after some figuring and dwelling on it. that made me think. i heard someone say, 'the piles are 15 feet in the solid ground, and therefore will safely bear the load.' so they would if they had been, but not many hundreds of them were, and many were in 5 feet of little better than mud, and as some had been cut off 4 feet, those piles were only 6 feet in the solid ground. understand, this wharf piling was only the beginning of a long two or three years profit for me, and i knew the warehouses would be sure to settle, and if they did unequally, over would go the show. i always avoided the quay wall afterwards; it seemed like a sort of spectre to me. "one day the engineer sent for me to come to the office. of course i was there sharp. he said:-"'i want you to tell me your idea of the character of the ground upon which the western quay wall is erected?' "don't you think i was lucky, old pal? here was my deliverance. it was not exactly a path of roses--there are not many knocking about now--because if i said it was soft ground he could reply, 'you had a very high price for such driving.' if i said it was firm, i felt sure, should they build a warehouse on it such as i heard them talk about, it would sink or topple over, so i had to be careful how the ship was sailed. i answered the engineer like this: 'if you'll excuse me talking to you freely, sir, i will speak my mind; but i most feel abashed with such as you, for you know a thousand times better than me.' he then said to me:-"'be at your ease. i wish to hear exactly what you would do in the matter if you were in my position. i have made up my mind; in fact, i have already committed my views to writing.' "'thank you, sir. well, sir, i think it is a risky place, although the piles were many of them dreadfully hard to drive, and wanted a lot of care and all had it, i think, judging from the variation in the depth to which they went down under the same number of blows, that the ground is a bit mixed, and therefore i should choose another site, as there is plenty of room.' "'your opinion somewhat coincides with mine. your idea, i may say, is one which the configuration of the ground leads me to think is the case without doubt. it is therefore probable that in a few days i may have a considerable length of the quay loaded with rails, nearly 2000 tons will arrive for the main and branch lines before the end of the week, as i intend to load part of the quay with about 8 tons per square foot in order to test it. in any case, much as i am urged to commence the warehouses at once, i shall not do so until the quay has withstood the test during at least a month.' "'that is a heavy test, sir.' "'you can go now!' he bowed, and smiled his thanks, and i withdrew. of course, i said nothing to anyone. it don't do to annoy the guv'nor. well, in a few days the rails came, about 2500 tons of them. the engineer sent for me again and said, 'i wish you to see the rails stacked on part of the quay in accordance with instructions you will receive.' "i could only say, 'very well, sir,' and withdraw. i felt i was had again, and went straight away and had a pull of rum. there was no help for it now. i was in the fix and had to get out of it somehow, and what made it doubly worse was being ordered to superintend my own ruin. listen, for you will when i tell you i might have been tried for having killed or injured 400 men and one director! it was a near squeak for the lot, and as it was--no! i'll tell you in a few minutes what happened. "well, we stacked the rails over the place according to the engineer's directions, after mr. pupil had taken the levels--he also took them every day, to see how things were going. i made no remarks, for fear i might say something that would lead to further enquiries, and took the cue from a chap i once knew, the biggest rogue out he was; he could please them pretty, and never had any fixed opinions about anything, like some of our politicians, or could twist them about to suit the times; and he set his sails according to circumstances, so as to be pleasant to everyone, and was liked and respected by a lot that knew no better and could not see through him, but he had not a bit of honesty in him. fact was, knowing i had got all i could out of short driving and cutting off these piles, i played a mild game of respectful bluff, more particularly as mr. pupil told me the ground had only gone down a mere decimal of an inch. "one day the engineer walked over by himself and said to me, 'come to the quay wall.' "we got there, and i felt i had soft sawder enough in me for anything. he led off by saying, 'although this is a severe test it is not altogether satisfactory to me. the rails shall remain in their present position for at least another month. i have known, as in cylinder sinking, subsidence to occur very suddenly and unexpectedly. i do not like the system of foundations upon piles, but have been overruled here.' "now what he said pleased me much, because i thought to myself if the wall does break up it will not be exactly a heart-breaking trial to him. well, all went on as usual for a fortnight, and i heard nothing further till one friday about 5 o'clock. it was near low water, and mr. pupil came to me and said the engineer wanted to see me. i went towards the office, but on the way met him and the engineer and three or four other swells, two of them that came before. i touched my hat, and walked behind. i heard the engineer say, 'mr. selectus, although the position is very good, i am not satisfied with regard to the foundations, more especially as i believe the ground to be varied in character; and on an old plan, dated 1720, i note a stream marked here; in fact, mr. pupil has searched and found a water-course existed almost from the earliest known times.' "if he did not say exactly that, it was just like it, anyhow he spoke up pretty straight. one of the directors (i heard they were all such afterwards) said, addressing the engineer, 'i have an idea. the men will cease work, i think, very soon?' 'they will,' said the engineer. 'have you any objection to their marching and marking time, as it were, upon the rails, as a final test, as i remember we so tested a suspension bridge i had erected at my place?' "the engineer assented, and remarked that although the weight of 500 men was not much compared to the weight of the rails, the vibration they would create might cause a sudden subsidence. however, he slightly bowed to the director, and said, 'i leave the experiment entirely to you, although i may say it is not unattended with risk; for the test load now imposed is a very severe one for such unstable soil, and the effects of vibratory motion are usually most deleterious.' "however, the director, after some talking, had his way, so the men were fetched. we had about 700 at work then, the company's own men. i will cut it short. well, the director told the foreman, as the engineer asked him to do so, what he wished to be done, and the men marched up and down i should think six or seven times. it did not take long, and they soon got into step, for we had a lot of militia chaps at work; and then the director, who seemed to be enjoying himself, said, 'now we will try three trips, double quick,' so the men went by once all on the smile, and we were as near laughing as smiling allows, when!---"it chokes me to think of it. fill up the glass, so that i may keep my pipes open. thank you, i was near being blocked up. well, about half of the men were behind the rails, and we were all, except the director-in-command i'll call him, looking on and stationed on a mound close by. i shouted out--seemed a sort of sudden impulse-"'look out! the ground is settling. run for your lives.' about half of the men heard me, and got away, but the front lot went on. i should think 200 of them. bless you, the ground began to yaw and sink with the rails very quickly, and the wall pressed forward and toppled over in one place for about a 30-feet length with men upon the top of it, and the director as well, and fell very slowly, and quite majestically, right into the river, and there was a splash and crash. i said before it was nearly low water, and i should think there was about 5 feet on the sill and 2 feet of mud. after all, somehow or other, only about thirty men and the director were cast, and they were all taken out right, for there was plenty of assistance. still one man had his arm broken, which was a good thing for him as it turned out, for the director made him one of his lodge-keepers; but as he was a smart-looking chap, and had been brought up right, and could not work much after, it was an even bargain." "how about the director?" "ah! that's the only fun we had; for i tell you, when i saw the men and the wall go over it made me take root, and my boots were nearly pressed into the ground, and they said i went awfully white in the face. it did give me a shock; but it was lucky the break-up was so slow, for those that could not get off had time to jump and get clear of the rails, but i tell you it was a shave. as it turned out, the director had the worst ducking of the lot that fell in. he went sprawling into the mud; but he could swim, and when we saw him i nearly burst out laughing, only my feelings had been so shaken, for he was smothered in slime from head to foot, and looked like a real savage. all his hair, face, and beard were thick with mud, to say nothing of his tailoring; and i tell you he put me in mind of a baboon just then, and i don't think he will attempt any more testing. "of course, the warehouses were not erected upon the quay, and the engineer was not sorry at the way things had turned out. anyhow, he let me do the clearing away the rails and the rebuilding; and i drove in the piles just the same length as the others, and nothing was said to me or suspected. it worked all right; but suppose a lot of the men had been killed, and the director as well! i tell you it was a near shave, and all before my eyes. it would just have killed me; for i should have known about another 3 feet down of those piles would have made them stand all serene. as it was, my wife said i was that disturbed in my sleep, and kicked so, that she hardly got a wink of rest, and had to double herself up in bed for fear of having her legs broken; however, it wore off in time, although once i sent myself and my old woman clean off the bedstead, and i saw by the light of the moon we were sitting on the floor, and the clothes were all of a heap close by. it made a nice picture of domestic bliss. my wife gave it me hot, and she said she would stand it no longer. i said, 'don't grumble, you have not got to stand. you are sitting down now, and you ought to know it.' she said she heard me mumble several times in my sleep 'cut 3 feet off her, bill!' that was my ganger's name, and, of course, my brain was alluding to cutting off the piles; she thought it was her--no fear. still, she always makes out i was not so good as i once was, and she felt sure old nick and me had night conversations. i laugh over the whole thing now. i hardly did then." chapter vii. masonry bridges. "now i'll tell you how we got on with some masonry bridges. being more of a scholar than most of them--thanks to the parish school--and being able to read, write, and sum a bit, i knew a trifle extra to the other chaps, and was made a ganger when very young. somehow or other, i drifted into being crafty, and just then made friends with a man that was up to every game, and remembered old george stephenson. he could tell and teach you something, and did me; but even i have known the time when we hardly ever had a drawing to work to, except the section, and have walked many miles behind an engineer, and heard him say to my partner--who was a mason, and a real good one--'joe, put a bridge there, the same span and width between the inside of the parapets as the others.' 'all right, sir!' "you know that was the time of the rush for railways, and few understood the business. too many do now, i think, and the old country is too full of mouths generally. then there was scarcely time to think, much more for many drawings; they were made after. "we used to take a bridge at a time, at so much the cubic yard, and we did put it in thick, abutments, counterforts, wingwalls, and parapets, and all the work was as straight as could be made; and i have known my partner, joe, nearly drawn into tears when he was forced by circumstances over which he had no control to own an arch to a bridge was not exactly a straight line. spirals and winders made him that waspish as i took good care to make myself particularly wanted somewhere else than at the bridge at which he was busy when he had to do them. "some of the bridges we built have enough masonry in them to nearly build a church or a small breakwater, and lucky they have, as it gave one the chance of a bit of profit; and the depth of the foundations was hardly so deep as shown in the drawings made after we had built a bridge. somehow or other our imagination used to scare away reality, and we generally were paid for a foot or more extra depth all round. "joe said that was the way he got his professional fees for building a bridge without a drawing, and the only way he could and, moreover, did; but he always put the masonry in solid, that is to say, when he considered it should be, although hardly, perhaps, to the specification throughout, but the face looked lovely; and if the inside work was rather rough and tumble and really "random," he knew what a good bond was, and would have it, and was really clever at selecting the right rock in the cuttings for masonry; but there, no one can expect the filling-in work to be done the same way as the facework. "of course, it was not exactly honest to be paid for more work than we had done; but it is only fair to say we were generous with our _extra_ profits, and always treated the inspector and our men right. we were bound to educate them and enlighten their minds. i own it was not right, and, after all, it would want an 'old parliamentary hand' to tell the difference in dishonesty between over-measurement founded on lies and stealing. however, one is supposed to be the result of cleverness, the other, crime. "i forgot to tell you we took a cue from a director who occasionally walked over the line, and who always showed about half-an-inch of his cheque-book sticking up out of his pocket. we were told he wore his cheque-book like the mashers do their pocket-handkerchiefs; but that he was not worth much, and was on the war path for 'plunder,' and so were we, and took his tip. i said to myself, as he has brought a new fashion into play in these parts, let us take the hint. "'so we will,' said my partner. "'how long is the specification for masonry? "'i am sure i don't know. what _are_ you talking about? i never read such things. all i want to know is for what purpose the bridge is to be erected, and whether it is to be coursed work, ashlar, or the same as the others, and up it goes according to my specification. i'm above other people's specifications, thank you. what's the use of my education if i am not? do you think the alphabet must be again taught me?' "'i beg pardon, partner, you are right; but appearances go a long way, and shamming is fashionable.' "'oh, well, have your way; we all look better when we are properly clothed; and i once heard an engineer say he never felt right when on any works without a plan in his hand, and we know a music-hall singer is generally not at home without a hat; besides, it will please them to see we have the specification always on the premises.' "'that is what i think.' "well, i made two copies of it, one for joe, my partner then, and one for me, and wrote in large letters on the top, 'specification--masonry --bridges and culverts.' then we both showed the top out of our pockets, with that writing on it, in the same way the director did his cheque-book. it worked beautifully; for a few days after a big engineer came down, and we heard he had said he thought we were the smartest masons on the work, and he was pleased to see we appeared careful to comply with the specification, for he noticed we each had a copy in our pockets. "the fun was, my partner had never read it at all; i only when copying. "the game worked really lovely; we were looked upon as downright straight ones, and the inspector--who wanted some dodging, i can tell you, as well as a tip, now and again--was taken away and posted at the other end of the work, and then we made hay while the sun shone, and no mistake. we used to make the bridges rise out of the ground; we gave some drink to our chaps; and then, as soon as the wagons with the rock arrived from the cutting, in it went. the difficulty was to keep the face going fast enough for the filling-in work. it was a game. first a wagon-load of rock, and then--well, i suppose i must say--the mortar, but it is squeezing the truth very hard indeed. there was joe, my partner, superintending in his own style, the raking and mortar business, and i was busy at the facework looking after our best mason. "give my partner his due, he was always careful about bond and throughs, and he was fond of mixing up the flat stones a bit, for he said it prevented their sliding on the beds, and always maintained that the weight above kept all tight enough and more than the mortar, so long as the stones were flat and large. i said, it's lucky it did. "one day he frightened me. we were short of stone, owing to a mistake in the cutting, and so the facework was up a good height. at last joe caught sight of the engine and wagons coming round the hill, and said to me-"'hold hard, here they come, thirteen wagons; they will fill you up both sides.' "'i agree with you; they will, and more.' "it was then past one o'clock, and joe called out to me-"'before we leave i mean to be level with you, but you must help.' "'joe, it can't be done.' "'away with your cant's; it _shall_ be done.' "well, it was tempting us too much, such a lot of rock to work on all at once; if we had only had a little more than sufficient for one day's work at a time, we could not have done what we did. by jove, he did go it. down came the rock--i know you will kindly excuse me from calling it building stone. "'easy does it, joe, or you will burst the show.' "'not i,' he shouted. "now listen to me, for this _is_ truth. never since the foundation of this world did bridges grow at this rate. it beats mustard-and-cress raising and high farming into fits. "'smash them in, lads, bar them down; give them a dose of gravel liquor. now then, for some real cream mortar.'" "these, and such-like, were his war-cries." "'bless me, if the mortar is not as thin-placed as the powder on a girl's face, joe.'" "'it's pretty.' "'now, lads, five minutes for beer.' "all was soon comparatively silent. "'joe, you must draw it milder, for the row going on is more like an earthquake let loose than anything else i can think of, and it may spoil the game, for it is bound to draw a crowd.' "'all right, partner, i never thought of that. talk about jack and the beanstalk, this beats it to squash. it's lucky the rock works in flat, and is not hollow. of course, all the stones are on their natural beds, according to the specification--understand that. don't let us have any mistake as to the catechism; if they are not, they will grow used to their new ones and shake down to rest.' "i've never built a bridge that fell or gave much, perhaps a wingwall has bulged, but then it is the want of proper drainage and backing and nothing to do with the masonry. _we_ only attend to the masonry according to the specification. chorus--according to the specification. but they all do it, as the song says. "it's my firm conviction that the man that invented wall-plates ought to have a marble monument in his native town, for they are beautiful distributors of weight, and when the stones are small, they are salvation for such masonry as we made rise." "i agree with you, they cover a multitude of sins, and are powerful agents in the cause of unity and good behaviour." "that is right." "have a sip?" "yes." "i nearly got bowled out once at the masonry game. this is between ourselves." "of course, we understand each other; shake hands." "they nearly caught me." "how?" "we were walking over the work--when i say we, i mean a party of directors, a couple of engineers, and the resident engineer. an unlucky thing happened. someone said, 'i should think a good view of the surrounding country is to be obtained from the top of this bridge.' now, you know, in those days, some engineers liked offsets at the back of a wall very close together, say about every two feet, as they thought the backing remained on them, and helped to prevent the wall overturning; but it seldom does, the backing is usually drawn away from such off-sets. however, unfortunately, most of these directors had only recently returned from switzerland, and had been up the mortarhorn, i think they said--or thought they had, or read about it in a guide book. anyhow, they started climbing up the back of one of the abutments. they ought to have known our work is not quite so solid as nature, nor as the romans made in the old slow days when they were not fighting; but it is all right for the purpose intended, at least, for what we intend it, and that is enough. the abutment of the bridge i am referring to was 50 feet in length, and what must they all do but start at once at the climbing business, like a lot of schoolboys eager to get there first, and i had only time to think a moment, and to shout, "'be careful, gentlemen, please, the mortar has not had time to set yet, it's green.' "lucky, i said 'yet'; but between you and me, i should be an old one, and no mistake, if i had to wait till it set right. "they got upon the first offset all serene; but when they footed it on the third, down they came, and humpty-dumpty was not in it with the show. it was a flat procession and a general lay-out, and such a rubbing of mid-backs occurred as few have seen before. they fell soft, though, as we had partly finished backing up the bridge. i was nearly had; but i had a bit in hand with which to squeeze home at the finish, and get in the first words. they were:-"'gentlemen, i had no time to warn you, but the mortar has not had time to set all round, it is green; and where it has set, it is that powerful it often shifts the stones first, and then clenches them tight, and there is no parting them at all; they become gripped together just as by nature in the quarry. it is wonderful material, and the best lime known, or that i have had to do with during thirty years of hard working experience." "of course, the directors could say nothing; they were bankers and solicitors, or such-like, nor could the engineers. it did not do to make out the masonry had not been properly executed. i thought i had got off beautifully, and the whole party were just going to start when out of the blessed wall, there and then, flew two pheasants!" "well, i never!" "you wait. yes; and before we could speak, out came a fox. i own i was nearly beaten, but one of the directors, turning to us, said, 'you appear to have a veritable noah's ark here, and we know a pheasant is a gallinaceous bird.' "we all laughed. he then went on to say, 'perhaps if we wait long enough the procession will continue. this may be the ancestral home of the dodo or the mastodon. who can say it is not?' they again laughed. "now, you know, there is no denying, neither a pheasant nor a fox can squeeze themselves through an ordinary-sized mortar joint. while laughing i got my mind right, and said, 'gentlemen, i feel sure the poachers have been on the prowl here, and have disturbed the work.' "'yes,' said the director. the others seemed afraid to speak. there is always a cock in every farmyard, and he was in this. 'a four-legged poacher--the fox; and i am afraid, if we do not exercise due care, the board will be charged with larceny.' "then we all thought we ought to laugh, and did. 'gentlemen,' i said, 'i'm sure the bridge has been tampered with, and no doubt if we keep watch we shall find the rascals.' "excuse me now saying 'rascals' to you, but, old chum, of course between ourselves, that is you and me, we have never done any poaching." "not we, certainly: at least we forget doing it if we did. a good memory is not always a blessing, or to be owned to, although it's useful." "shake. that's right. as we understand each other, i will now tell you how things ended. i went on to say to the gentlemen, 'i will root out this matter; and may i ask you to say nothing to anyone. my partner and myself will get to the bottom of it. trust your old servants, gentlemen.' then i raised my hat. that fetched them; for one turned, and said to me:-"'i cannot send my keepers to-night, but to-morrow they shall meet you here at six. please watch to-night.' "he then handed to me a five-pound note. blessed if he did not own the land for miles round and i did not know it. i beamed all over, and said i would, and looked as humble as only an old sinner can; and i was just going to forget to tell you i put that 'fiver' carefully away, to keep it from the poachers." "i could believe that of you; i could, old chap, without your saying it." "well, now talk about 'all's well that ends well;' this was better than that--simply crumbs of comfort, except the awkwardness of the situation before the finish. "i suppose you want to know all about the cause of the tumbling show." "yes; i am waiting to know." "very well, i will tell you. i had become greedy, and as there was not much more work for me on that railway, i used to make it a rule, wherever i was, and before leaving, to have a final haul in by way of a loving remembrance of a past country in which i had spent some part of my life in opening up to civilization, and the immeasurable benefits of rapid and cheap locomotion. is that good enough?" "rather; it likes me much." "now this bridge was a beauty to draw on, so we just left a few voids here and there. tipping the backing must have broken a bit of the wall unknown to me, or something must have given way in the night; and i suppose the birds walked in, and the fox after them, and then the abutment settled and the backing pushed it closer together. now the birds got to a place where the fox could not reach, and there very likely they would have been, three caged-up skeletons; but the swiss mountain climbing spoilt that fun, and pulled down the wall sufficiently to raise the curtain on the show. "it so happened that all the engineers and residents had to go away on some land case--i like _other_ people to go to law; and so we had three clear days to put things in order; and we did, you bet, and began almost before the break of day. i had an untarnished reputation at stake, and was on my metal. my partner and myself just about both smiled over the fun real mutual admiration." "the engineers did not say much for we had been paid, and they knew they would get nothing out of us, and therefore proceeded on the principle that it is no use stirring dirty water, and i say, and maintain, that on the whole--not _in_ the hole, mind you--never was more solid and firmer masonry put together than our work, although we took care to do as we liked, and relieved the foundations of some strain now and again, and improved the specification. "i forget whether i watched for poachers that night, but i might have done for a few minutes, so as to make it all right; but as my memory is not clear on the point, i had better say i fancy i did not, but i met the keepers next night; and did a three hours watch and told them a lot, and got well rewarded. pay me and i'll patter pretty; but no pay, no patter, is my motto. the only thing that grieved me was losing those pheasants and the fox's brush and head. that was hard luck, but there! life is full of disappointments which are hard to bear." chapter viii. tunnels. "have i told you of my scare in a tunnel i got some 'extra' profit out of by real scamping?" "not that i remember." "well, that was a whitener, for i was almost trapped, nearly caught, and paid out. retributed, i think it is called, but there, i am not sufficiently educated, although you and me have had a good deal more schooling than any others on this work, which perhaps is not too much of a recommendation. anyhow, you agree, don't you?" "of course i do!" "well, let us drink. now we are oiled, the machinery will start again easy and soft, and continue going for some time, but don't you consider we know enough to suit us. i have watched various guv'nors i have had, and they seem to be thinking and puzzling their brains even when they are eating, and i don't think their digestion is improved by it. a peaceful mind needs no pills. it is medicine for the upper works, and exercise and good food is the right physic for the body unless you are half a corpse when born. now, when we eat, we have a look at the goods first, and all we trouble about is to divide the vegetables, meat, and bread, and beer, so that they last the show out in their proper quantity to the finish." "that's it, but what has that to do with the scare at the tunnel and the scamping?" "you wait. really you should know impatience is not polite; and to be a good listener, and look as if every word that was said to you was virgin information and pure wisdom, is the best game to play." "that is enough, get to the tunnel scare and scamping." "well, why i named about my food was, my old woman was queer just then, a lying up on the cherub business, and the party that she had to look after things was no cook, few are, and i believe she was paid by some of those pill proprietors to make people ill and then pill them. anyhow i got queer and dreadfully out of sorts, and just at the time i was a regular nigger, and had taken a length of tunnel lining, and in such ground, horrid dark yellow clay, and it smelt awfully bad. we called the tunnel the pest-hole. what with the food being wrong, and the hateful place, i did the worst bit of scamping i ever was guilty of." "fortunately, the engineer knew what he was about, and our profiles were nearly round, that is, the section of the tunnel was nearly circular; if they had not been, that tunnel would have been filled up by this time, and perhaps been the grave of hundreds, and it nearly was. there were eight rings in the lining, and therefore some bulk to play with. i got frightfully pesky about the job, and meant getting out of it as quickly as possible, and did. i am not the one to play about and squat, action is my motto; and i am busy if there is anything to be got, and keen on the scent." "you are right there. you generally find a fox, and get his brush, too." "i was roused. the brickwork was in portland cement, and believe me, i never would have done what i did if it had been lime mortar. must draw the line somewhere, and the easiest conscience has a limit to being trifled with. you know, tunnel work gives one chances that are not to be had in the open, and the temptation is strong. i dropped word on the quiet, 'be careful to-night with the first two rings and then'--well, they twigged, and i had no occasion to say much. afterwards, the material that was given them went in anyhow. but bless me, we had portland cement, it was supplied by the company, you understand. it held almost anything together, firm as a rock. i said to my ganger, whatever material you are given, so long as it is clean, will do, and it will be just like conglomerate. the inspector was inclined to be my way of thinking, and, by a manual operation on my part, he fully agreed with me, and said he had always been of the same opinion, only other people failed to comprehend his meaning. it has been said the pen is mightier than the sword, and so it may be; but ten hours writing, and a ten hours speech full of argument, have not the same force with some inspectors as a few sovereigns judiciously placed to aid them in arriving at a proper view of a subject." "you are right; bribes and lies are twin brothers." "well, it was just a scamper all round. yes, scamper and scamping. i had some good brickies then--militia chaps, smart, and they could stay. they made the rings grow; i forget how much we got in that night, but a good length, for the bricks ran short at one end of the tunnel, and we were close up to the face at the other end. no one that i did not want to see was about. after measuring, i found we were short at least twenty yards of bricks, and only about two thousand or so left, so i said, 'lads, if you finish the ring by five o'clock, you shall have a quid amongst you; but do it, and keep the beautiful clean face on for all you are worth.' "i looked a bit crafty at them, and they twigged the tune to play. i took old bond--he was my ganger--with me, and said to him, 'how are we going to do the lining?' we can't fetch bricks from the other end, and i draw the line at timber to do duty as bricks. i waited, and the 'extra' profit string of my brain worked right, and i pointed and said, 'there is a heap of broken bricks and no one knows what; well, twenty yards of that won't be noticed if you take it equally all round; put that in, and dose it with cement, and rake it well on the top of the rings, and don't forget to finish the top nicely and clean to a hair if you have not time to fill in all of it. keep the best stuff for near the finish, and enough bricks to make a solid strip or two, and i am otherwise engaged or tired-out till four. wake me then; i'm off for a peaceful snooze.' well, they got it all in, and nothing was known till--i won't name it yet, it must wait." "i suppose the bricks you took from the brick-yard were tallied, and deliveries checked with the work done in the lining?" "yes; but there is tallying of all sorts, and, of course, the right amount of bricks were taken from the yard early next morning, but where they went is best known to the yard foreman, the inspector of brickwork, and the dealer; but as my partnership with them is now at an end, of course my memory fails me, and i am sorry i can't give you any more information in that direction. it grieves me to keep back anything from you, and is so unlike me." "i don't want to hurt your feelings. all right, i understand." "talk about varieties of concrete, why we had sardine and meat tins, all sorts and sizes and weights and ages, tiles, ashes, bones, glass, broken crockery, oyster shells, and a lot of black-beetles and such-like shining members of creation. they all did their duty to the best of their ability. what else there was i would rather not try to remember, but it was _not_ bricks." "don't trouble, i can understand. we are all pushed a bit for the right goods sometimes, and have to make shift; but it is hard, very hard, to have to do it." "well, i found out that the bricks were not quite so many as i thought, and for a 5 feet length, about 15 feet from shaft no. 7, they had to do with one ring of brickwork, and the rest, my patent midnight conglomerate. that frightened me, and had i known it at the time, i would have stopped the show; of course i would, you know me. i always draw the line somewhere." "right you are; although 'somewhere' is an easy-stretching sort of place, and there is not much of a fixed abode about it; but it can generally be found on a foggy night." "it's my belief they did not put in enough cement mortar, and carry out my orders, which indeed was very wrong of them." "what do you mean, your orders were wrong?" "oh dear no, of course not, not likely--_their_ orders were wrong, not mine. you don't follow me rightly. you understand now? dwell on it, and i'll wait." "oh yes, it was stupid of me. there, i am not so young as i was, nor so quick." "now we are coming to the scare. pass my glass, it makes me feel weak, it does. "that conglomerate length stood all right, more by luck than anything else, till one night, although all the rest was sound work and done properly, for it was well looked after, and there was no chance of a slide towards extra profit; besides, the ground would not have stood unbared long, and, of course, short lengths had to be the order, and were bound to be carried out, for the clay soon got dropsy and swelled. "well, my guv'nor took a contract for a line about 20 miles away from the tunnel. i had some work on it, and had to go to london, it was abroad, for i was called up by him, it was a slow train, and followed an express goods. there was a signal box at each end of the tunnel, and a fair traffic, and fast trains passed. something got wrong with a wagon of the express goods train--i never knew exactly what it was but anyhow, nothing very serious, for the permanent way was all right and so were the wheels and axles. we were stopped by hand-signal in the tunnel, and there may have been something wrong with the signals, but that does not matter for what i am going to tell you." "were you scared to think the train after you would telescope you?" "no, for there was none for an hour and a half. "well, the carriage i was in pulled up just under the place where that patent midnight conglomerate length was put in, and i looked up and saw the old spot had bulged, and was yawning, and looked to me as wide and moving as the straits of dover in a s.w. gale, and a lot worse, and it seemed to be getting wider every minute, and i saw something drop. i was alone in the compartment, and it was fortunate i was for many reasons or i know they would have found me out. i knew the place. how could i forget it? it was just by the shaft. the passengers were talking to the guards, or were otherwise engaged. presently i heard the down mail coming at a rare speed. i said to myself, 'there is not much the matter, or they would not let her go through.' she was the last passenger train down that night, and lucky she was, you will soon say. oh! dear me, when i heard her i felt cold and hot, and my heart got to my teeth, and i believe if i had not kept my mouth shut it would have jumped out, that's true. what scared me most was not about the mail train, i knew she would be right, and would be past the spot before the ground had time to tumble in. she was going too quick, but our train, _and me_, right under the place, and bound to be there _after_ the mail had shaken it to bits! that's what made me feverish. "i said to myself, 'you are paid out in your own coin, you are.' before i had time to think more the mail went by all serene, and i hardly dare move, but slid up on the seat just in time to see her tail lights vanish. i then looked up, and if it had been my scaffold it could not have been worse. oh! fill my glass up, nearly neat, while i wipe my forehead. thank you. yes, i looked up, and saw the crack had widened and was becoming wider, and chips were falling now and again as large as hailstones! i knew it was bound to come down. i looked to my watch, another full hour had to pass before the next train was due behind us. i was just going to get out, when i heard the guard coming along on the footboard, and he said, 'another five minutes and we are off, gentlemen.' he did not see the falling pieces, as the carriage hid them, but i did, and the engine blowing off steam prevented him hearing them. soon he reached my carriage, and said, 'you are the only gentleman in this carriage.' he would not say anything more. i heard him repeat the same words almost as he moved along the train, 'five minutes and we are off, gentlemen.' "i said to myself, 'five minutes more and i am buried and off for ever somewhere,' for i was certain in five-and-a-half the lining would burst and down everything would come and crush us to powder. i did not care to think what else or how much. i cannot describe how i felt, but drink squalls are nothing to it. i kept my watch out of my pocket, and gazed at it till i hated it. one minute passed--two--three--and then i watched the second-hand go round. what i suffered cannot be told. i looked out of the window. i heard a whistle. it did not sound like our engine, it seemed too shrill. i had no fear of a train being behind us as i knew our road was blocked. was it a down special excursion, or a down special goods, i said, tremblingly, to myself, for i knew all the down ordinaries had gone for the night. 'if it is,' i said to myself, 'you are settled and corpsed, and have made your own grave, and it will be a rough one.' i won't say what i did then, but know it would suit a clergyman. "thank goodness i was wrong, the whistle was from _our_ engine, but it had been low and now was shrill. i was so feverish that i forgot the steam was blowing off. at last we started, and i looked at my watch. it was five minutes ten seconds from when the guard spoke. i knew i was safe, but thought i would look back. i was just able to see in the glimmering, as the fire-box was open, and by the tail lamps the last carriage had well cleared the shaft when there was a horrid hollow sound like waves breaking in a long cavern, and i saw something come down like a veil across the metals. the tunnel was in, fallen in with a slow smash, and not a minute after we started! "i don't know how long it took the train to get to the signal-box at the entrance, but we pulled up there, and the first thing i remembered was the guard saying to me, 'no one is hurt, you need not be frightened, but we have to thank god for it. terrible shave. the tunnel has fallen in, and just where your carriage stood!' "i said, 'oh!' and sank back upon the seat. the guard again came to me and popped his head in and said 'you are the only passenger that knows what is up. keep it quiet, if you please. shouting will do no good, and i shall be much obliged to you. it's no fault of mine or the company's. are you ill, sir?' "'no, but i saw the tunnel fall in.'" "'traffic is stopped, sir, at both ends. the wires are right as we had reply from the other end of the tunnel. i thought you must have seen it fall in, because you looked very white, and were clasping the window frame with both hands and shaking so. i was afraid you had been almost scared with fright.' "'no, i am not ill, but i saw it fall.'" "'well, sir, it is no fault of mine or the company's, although i am sorry it has frightened you a little.' he then went away and we started again." "when he said, 'it is no fault of mine,' bless you, it near cut my vitals out, it did; for i knew it was my fault and no other person's, and that it was only by the act of providence the mail was not smashed to bits, and us too. i made a vow there and then never to have anything more to do with tunnels, and whenever i go through one i always feel wrong and twitchy, and shut my eyes till the rattle tones down and i know we are in the open." "how much fell in?" "about 20 yards altogether in length. traffic had to go round for a month, but the rest of the work was all-right, and so it really was, and i ought to know. no one found out that nearly the whole of the fallen length had been scamped, for everything was broken and mixed up, and, as luck would have it, a spring burst out there and the flow had to be led away to one entrance, and the falling-in was always put down to that, and that only; still i know the ground was a bit cracked, and underground waters have mighty force, and are best guided and not tried to be stopped, for they will come out somewhere. "i met my guv'nor next day, and he quietly said to me, 'i have let the tunnel work on your length to an old foreman,' and then he looked clean through me. i know he thought a lot, and i'm afraid i can't play the game of bluff as good as some can, and so work 'extra' profit out of ruins. what do you think of that scare?" "i don't want to think about it. glad i had nothing to do with it. dreadful! no wonder you have a wrinkle or two. what shocking hardships we all have to pass through in getting 'extra' profit, and so undeserved!" chapter ix. cylinder bridge piers. "deep river bridge foundations are not to be easily worked for 'extra' profit as they are generally too carefully looked after; still, even there, you get a chance occasionally, if you know how to work things. i was always on the scent for 'extras,' and once got a bit out of a cylinder bridge, more by luck than anything else." "how did you do it?" "listen, and then you'll know." "the bed of the river was soft for a depth of nearly 50 feet, then firm watertight ground, and into that we had to go about 15 feet. our cylinders were 15 feet in diameter, of cast-iron, and in one piece 6 feet in height i will just name that there is more chance of a bit 'extra' profit when the rings are little in height than if they are in pieces and have vertical joints and are about 9 feet long as usual. a 15 feet ring, 6 feet in length in one piece was not often seen then, but they are now cast much heavier; still, they may be made too large to handle nicely without special tackle, and foundry cleverness should be considered less than ease in fixing on the site." "why are short lengths best for 'extra' profit?" "because you may have a chance of leaving out a ring if the coast is clear, and nice people around you." "i see." "well, the company's foreman had to lay up for three days, for he had ricked himself, and i had an old pal with me, and two of my nephews working the crane, and other relations about. all had been properly schooled, and knew crumbs of comfort were to be got out of a bit 'extra,' so i embraced the opportunity as we were such a charming family party, quite a happy farmyard. "the rings went down rather easily as the bed of the river was soft; in fact, they sunk into the mud for the first 6 to 10 feet by their own weight. so i gave the office, and we just dropped a 6 feet ring over the side into the mud, for i knew it would sink all right, and that by the time the company's foreman returned to work we should have pumped out the water from the cylinder and got enough concrete in to seal the bottom; of course, after the resident engineer had gone down to see the foundation was right, and i felt sure it would be, and that he would only look at the foundation, and not bother about the height of the cylinder or the number of rings; and if he did, we could dodge him a bit, as there would be four or five of us, and stages were fixed on the horizontal ring-flanges, and no numbers were cast on the rings, as they all were made to fit together. he went down, just as i thought, to see the foundation only, although he measured about a bit, and enjoyed himself. we worked the tape right--it takes two with a tape. by-the-bye, i hate measuring-rods, they are not good business for 'extras.' they are so unobliging. a tape you can pull a bit, and tuck under, according as you want a thing to appear to be of a different length to what it is. one of my gangers made a false end for a tape. he used to turn the end of the true tape under for a few inches and slip on his false end, or he added a false length if he wanted. he took good care to hold the end, and he could slip it on and off like a flash of lightning, and good enough for a conjurer. he could lengthen or shorten a tape a few inches at will; all he wanted was to hold the ring at the end. his false end was a bit of a real tape with his attachment, and i have seen him trick them really pretty. "considering we had about sixteen rings altogether, top to bottom; there was a good length on which to dodge, but our game would have been too risky i fancy with eight or ten rings, and in a strong light, because one could count the flanges pretty easily; but it is not many that suspect a ring may be omitted. "we were some 8 feet in the hard soil, and i considered that enough, for the ground did not help much to keep the cylinders in place for 50 feet of the height above it, but they were well braced above high water and at top. when i consider a thing enough, you don't catch me let them have much more if i can help it. i hate waste. "the foundations were declared to be all right, and so they were, and we at once began the hearting, and sealed up the bottom after cleaning up, and we put in good portland cement concrete, for all the materials were supplied to us. "of course, the company's foreman, when he came back, could not tell, nor could anyone else, that we had been having a happy time; but give him his due, he did all he knew to find the rings were in. you know the ring we got rid of for 'extras' we took care should be sunk in the middle, between the two columns, and well away from each one. the bridge was wide,--about four lines of rails on top--so we slung the ring out very quickly, after the men had gone for the day, just about midway between the cylinders, and down it went pretty quickly, and it was bound to be in the mud fully 8 feet by the morning, and sure to sink a bit more, for i had it dropped sharp, and i thought it would be certain to break up where it fell. we worked it so nicely, and all was as lovely and serene and merry as a marriage, and real crumbs of comfort, and i thought no more about it. "we sank the ring purposely midway between the other two cylinders, so that if the bridge had to be widened it would not be found. but we were had for once, and no mistake this time, and all our own fault, and just where we thought we had been clever, for one day the engineer came down and sniffed about. i wish he had stopped at home instead of coming bothering; however, he did not, but came. the result was the resident engineer handed to me a tracing with a new cylinder marked on in the middle of a line drawn through the centre of the two cylinders, and just where i had sunk the 6 feet length i thought i had got a bit 'extra' out of so sweet, and i might have just as well sunk it outside. well, i took two pills that night to brace me up and set my machinery in perfect trim; and no one can know what i suffered, for i meant getting out of the fix somehow or other, but could not see my road much ahead. "you know i was certain we were bound to find that 'extra' ring. if we could have broken it up, or have been sure it was broken, there might have been no harm; but we did not know exactly where it was, and if we did we could not raise it. i felt certain we should come to it, and tried the crane to see if we could fix the spot, but we had to chance it. it was no use humbugging ourselves into thinking we knew where it was, when no one could possibly know. as i said before, i was positive we should meet it in sinking the cylinder, and as the ground was soft for some distance that it would tilt the centre rings--and then the game i had played would be found out, for cast-iron is hardly as soft as mud. "i felt my reputation was at stake--in fact, all my noble past--and all for a 15 feet cast-iron cylinder, 6 feet in height, and 1-1/4 inch in thickness! i thought of blowing up the surface before the men were at work, and doing a bit of subaqueous mining; but it was too risky and desperate, so i saved myself for the final round, that is, i waited with my teeth set till i met that sunken 'extra' ring, and meant getting clear and settling it in one round, you bet, for i considered the situation very degrading, not to say insulting. "we quickly erected the staging, and i tried all i knew to get the foreman away and the resident engineer. still i dare not play the same tune too much, or they would suspect, but they were too 'fly' to be drawn off. i arranged with my nephews at the crane to give me the office, if i was not on the spot, by sharply twice turning on the blow-off cock. "i happened to be on the top of a column on the next land-pier with the resident engineer who had called me, and the foreman was there also, when i heard the two puffs. i pretended to take no notice, nor did he or the foreman, and i managed to govern myself and keep myself quiet, just like the old nobility do, and think a lot. "before i left the resident engineer i found he was going at once to some meeting, and i just wished he would take the foreman with him, if only out of the love i had for him and give him a holiday; however, i got to know on the quiet he had to superintend some unloading at a wharf half a mile or more away, so the road was pretty clear. directly i got to the cylinder i knew what was up, for it had tilted. "we could not pump out the water, and divers could not go down unless the bottom was sealed, because of the almost liquid mud at the depth we had reached, but in another 8 or 10 feet it could have been done. i thought for an instant and then gave the word. 'weight her down, lads, get some more kentledge and then we will pull her straight. it's only a piece of a wreck, or a bit of timber or stone.' "i forget whether i told you that it was only my family party that knew of the 'extra' ring being sunk, the rest of my men did not. my game was to wreck the cylinder if i could, and tilt it over so that it would fall, and then fetch the foreman when i knew it would go. if i could manage that i felt i was right. anyhow i was bound to smash up the bottom ring, at least, i thought so then. cutting out the obstruction i was thankful could not be done, nor drawing it in, nor splitting it up inside the cylinder. that was certain. i did not much care to tackle lifting the rings. i wanted to smash them. compressed air i did not want to hear of, for that would have bowled me clean out, and shown the whole game. i wanted to try to thrust the cylinder through the obstruction, although, of course, i was not supposed to know what it was, as that usually fails and ends in smash more or less, and i was certain it would in this case, for it was cast-iron against cast-iron on an earth bed. attempting to thrust a cylinder ring through anything and everything is always a dangerous operation, and one to be avoided. "now they knew exactly how many cylinder rings had been delivered by the manufacturers, and if they had found the one we played 'extras' with, they could soon see it was the same size and make, and could easily tell how many were on the work and in the piers. i beg pardon, i should have said, _supposed_ to have been in, and it was 1000 to 1 all would not be well. "it occurred in the summer, and the foreman came and sent a telegram to the resident engineer, and before he arrived we had weighted the side that was up and endeavoured to get it straight by hauling, but it was no good; at least i think i tried to get it vertical, but i may also have tried to smash it. i expected, and was afraid, they would lift it by pontoons the next tide. "well, the resident engineer came. he tried a few figures over, and said to the foreman, 'if we do not mind, it will cost more trying to right it than it will to lift the lot.' "anyhow we got more power and more weights. he had the soil loosened on the upper side of the ring; but, of course, as it was iron at the bottom, it did not do much good; and we tried pretty well every dodge in turn that is known, but i need hardly say with very little effect. "the resident engineer said, 'compressed air will be too expensive for this one cylinder, but i think we can sufficiently clear the interior by a force pump and dredger for a diver to go down.' now the chief engineer was abroad for a fortnight, so we left it alone that night; but i tried all i knew, bar hammering, for that i dare not do, to smash the rings and they would not break, the soil was too soft and even. i was certain i could pull them over, but then they would most likely lift the rings and might find out the cause of the bother. "however, i let everything rest, and trusted to luck. the resident engineer decided to have the cylinder raised, as we had two large pontoons handy, so the top rings were removed to as low a depth above water as possible, and chains were fixed round the rings and also to bolts in the flanges, and in two tides all the rings were pulled up." "'so you got out of the trouble all right?" "you wait, don't be too sure. the resident engineer and the foreman were pacing up and down just as we were lifting the cutting ring, and we did that by the crane. they were at the other end of the staging though. the cutting edge was within a few inches of the water-level when i saw that a bit of the ring i had sunk for 'extras' was actually jammed into and hanging to the cutting ring." "oh! save my nerves, that was bad." "well, i had the crane stopped in a second, for my nephew was watching like a vulture, and i and my ganger had provided ourselves with a bar each, and were standing on the flanges. the cutting ring was only 3 feet 6 inches in height, and after two smashing taps it dropped, neither the foreman nor the resident engineer saw the fun closely; but as the resident asked us what we had been barring at, i said 'a small bit of a wreck got wedged on, sir, and would have stuck between the pontoons, and i am very sorry we could not land it to show you." "that's good enough old pal. pass on, please." "i thought you would laugh. well, the pontoon had been brought to the side of the staging as a precaution in case the chains might break or an accident occur, so as to be away from the line of the bridge, and so it did not matter where we dropped the cylinder ring i had 'extra' out of, but it was an ugly fish to hook i can tell you, and is about the only one i ever wished to get away, or did not want to see. "of course the cylinder went down all right afterwards, and the cause of the tilting was considered to be the remains of a wreck; but it strikes me, should they have to drive piles or sink cylinders anywhere near that pier, they may meet with some obstruction, and perhaps think they have struck rock; anyhow they will find out they have not 'struck oil,' and may send forth the news that a recent discovery has shown the early britons built ironclads, and it was certain they sank, but there was not sufficient evidence to show whether the warships floated for many days." chapter x. drain pipes. blasting, and powder-carriage. "the experience you had with cylinder bridge piers reminds me of a near shave for a bowl out i had. they let me a quarter of a mile of work, and i had to put in an 18-inch pipe at the deepest part of an embankment, just to take any surface-water that might accumulate now and again. of course, an 18-inch pipe will take a lot of water, and i think we agree it is hardly right and proper to throw away good material or provide against events which, an earthquake always excepted, cannot occur in the opinion of the most experienced. you can't accuse me of being wasteful, it's not in me; for i've heard my mother say she never knew me upset anything i could eat or drink, and that i always licked my plate and never lost a crumb. you know it is a quality born in you, and i don't wish to take any credit myself, not me; i'm constructed different. nor do i wish to say you are not so careful as me, and perhaps more; only, of course, you may put in a lot of strong work when i am not looking, and i think you'll have to do to get level with me. it never was in my heart to see anything wasted. it is against my principles. i hate it, i do. "i said to myself, 'you shall not waste any material.' so what i did was to put five lengths of 18-inch pipe at each end of the slope, and 9-inch in the middle. the tip was almost on the spot, so i put in the 18-inch and the other pipes, and left a couple of lengths bare each end. the embankment was over 40 feet in height, the slopes were one and a-half to one, and the drain was about 50 yards in length, so it was not bad business. "i never forget what the engineers tell me, and when i hear a discussion among them i always make a note of it, and wait till i have an opportunity of making a bit 'extra' profit by it. what is the use to the likes of us of a bit of education if we can't turn it into gold? not much; almost sheer waste, and i hate waste--abominate it. well, one day the resident engineer was talking to another swell about how a splayed nozzle to a pipe caused an increased discharge. "so, ever ready to learn, as you and me always are, i said to myself, fond-like and quiet, 'try it; put it into practice.' and i did, as i told you just now, by the insertion in true scientific manner of smaller pipes in the middle. i wrestled with the subject, and said to myself, 'now, look here, if i put in all 18-inch pipes that drain can't have a splayed nozzle, that's sure; in fact, it is fact.' so i said, continuing the discussion with myself, 'don't be beaten. let science lead you.' and i did." "fill up your glass, lad. grasp. i'm hearty to you." "now, it was in the summer, and we are coming to my scare. i said to my men, 'come an hour earlier to-morrow morning, for i have got a little extra work, and some of you call at my place on your road.' "they came, and i had the 9-inch pipes handy, and away we went, about fifty of us, with a pipe or two each. it did not take long laying the pipes, nor covering up the lot. in any case you could hardly see through such a length, but as a precaution, i had the pipes put in a shade zigzag after the first six or seven lengths, so everything seemed all serene, at least, i thought so; but it was not, for i had the nearest shave for a bowl out that i ever had, and all on account of a bow-wow." "how did it happen?" "well, the resident engineer came over with his pet dog, and i took to patting him, and felt really happy at the little bit of 'extra' i was to get out of these pipes, when the blessed dog began sniffing about one end and jumping up. the resident engineer got a bit excited. "'rat, is it, dasher?' he said to his dog. "the dog barked his reply to his master. the resident then said to me, 'stop here with dasher until i call him at the other end, as i intend him to go through the drain.' "before i could say a word, he was up and down the slopes, and at the other end of the pipe. i sat, or fell down, i don't know which, i did feel bad. i heard him call 'dasher, dasher.' the blessed dog rushed in, and then came back. his size was right for the 18-inch pipes but he was near too big in the barrel for a 9-inch pipe. "to think that after working the show so smoothly and lovely to the satisfaction of all mankind as knew of it, and then to be bowled out by a 'phobia-breeding animal as hardly knows how to scratch his back, was too much. so i braced myself up, and said to myself, 'mister dasher you have not done me yet, not you, hardly. it will take a man to do it.' "i patted him, and smiled pretty at him, and gave him a bit of biscuit, and grasped him round the middle just to see if he could get through the 9-inch lengths. i felt seven years younger when i found he could just manage it, but he would have to do it more like swimming than walking. "now i knew the pipes were all sound and whole, for i never put in broken goods, however small they may be. "the engineer kept calling 'dasher, dasher,' so i said to him, through the pipe, 'wait a minute, sir; dasher, i fancy is not so used to tunnels as you and me. what do you say to try the other way in, sir, we all have our fancies?' "i knew it was no use attempting to work him off, as he meant what he said, and would be sure to get suspicious--as he was no flat, i can tell you. "well, after a lot of urging, in went the blessed dog, and stanley's journey in darkest africa was outdone then, i'm sure, and dasher's rear-guard was in trouble. "we waited, and called, and whistled, but could hear nothing. we must have waited half an hour i should say, at least it seemed to me as long, and the resident engineer shouted to me two or three times, 'if dasher does not appear in a few minutes, your men must dig him out.' "lawks me, it makes me ill to think of the squalls there would have been if i had had to do that. i wished just then that no dogs had ever been made nor nothing on four legs except horses, cattle, sheep, and pigs; but i turned sympathetic like and went to the top of the embankment, and said, 'perhaps there may be vermin up there; and i know dasher is a game one, and won't back.' "this pleased the resident engineer. believe me, i would have given at that moment a sovereign to anyone who could have produced that dog. "old pal, you need not put your hand out, i said, 'at that moment.' don't excite yourself. i know you are always thirsty, but you have got the gold hunger bad as well. just keep quiet, and put your hand in your pocket." "i beg your pardon, i was forgetting myself." "all right. now i'll go on again. well, i thought the dog had got jammed in, and knew what tight lacing was, and so he did. at last we thought we heard him, and he came out looking more like a turnspit than a well-bred fox terrier. "some blood was on him. he had had a squeeze and no mistake, and was about done, but no bones were broken. "i said slow and solemn like, 'sir, he has tackled them.' "'what do you think it was?' "i said, 'you mean they, sir. he has had more than one against him.' "i then took up dasher and carried him to a tub of water and washed him. i did feel very sorry for the dog. i said, 'he has had a regular battle of waterloo, but it is his high-breeding and proper training that has pulled him through the fight he has finished the lot, sir, you bet.' "the resident engineer looked pleased, and i am sure i was. dasher soon recovered and we walked away. don't forget, what the eye does not see the heart does not grieve for, that is to say, i escaped all right; and those pipes were considered to be 18 inches in diameter, and you know it is not right and proper nor becoming to differ with one's superiors too much, it almost amounts to foolishness i consider in such cases. i always keep my brain in curb till i get a lean measurement, and then i speak, but it don't do to differ with your governor too much. the wheedling lay is the best game to play, and i have an aversion to a quarrel with anyone when you can get more by oil and smiles. "take my advice, and before you try splayed nozzles, know whether your guv'nors or the engineers have dogs, and, if so, the size of their barrels and whether they have done growing and laying on bulk, because, to be safe, you must work the pipes to fit the bow-wows. remember i had a near squeak, and so did the dog. i always keep in with them now, and dasher gets a biscuit from me whenever i see him, but he nearly cost me all i had. it is indeed a real pleasure to have the opportunity of rewarding virtue in men or dogs." "that's right. fill them up." "the thought of that day rather makes me nervous and dry." "that pipe and dog business was not exactly a holiday, but i had a worse nerve-shaker than that, for it is a wonder you see me now when i come to think of it. but there, providence shields us all, good and bad, just to give the bad ones a chance to alter, and to test whether the good ones are really good. still, i never meant anything wrong, of course not--no one ever does. it is always the surrounding circumstances that make things bad; and so we all humbug ourselves into thinking we are very right and proper and good, and we have our private opinion about other people." "stop that. speak for yourself, and never mind about other people." "all right. don't get testy." "well, they let me take a cutting in hard marl down at throatisfield junction. it wanted a lot of blasting, for it was deceptive material. the powder used to go very quick and not split or move the ground much either. i would fifty times rather had a real rock cutting than this hardened lime and clay soil that won't cleave, and when the blast is fixed it only about blows up the tamping and makes a noise for nothing, but blasting marl rock is often vexatious work. one day, by a mistake, the firm i had the powder from did not send the weekly quantity by road as they ought to have done. i always paid for it prompt. they knew me, as i was an old customer. it was nothing to do with the cash, but a mistake in their office, so the only thing to be done was to fetch it; and as seventy pounds' weight of powder is no joke, and i did not want to lose a relation just then, i got it myself by train, and it nearly cost me my life. i took a large box, just like a cheese box, planed inside and as smooth as glass. we used the large-grained glazed powder. i thought to myself, 'i'll take it in the front van, and ride with it, and then i know all will be safe.' "now, there never was much luggage by this local train, although a lot of passengers, and hardly ever above a case or two in the front van. i knew the guards, and all would have gone pretty, but the usual front one had got a day off to bury a relation, and that nearly buried me and a lot more. after the front guard knew from the other who i was, he let me ride in his van when i showed my ticket. we had about 30 miles to travel, and stopped at nearly every station, about six of them altogether. it was nearly a two hours' journey. i got a chap to pack the powder safely for me, and all i had to do was to keep it from flame and heat and being knocked about. of course the guard did not know what was in my box, and did not seem to care--he had other things to attend to that were, or seemed to be, more important. i sat on the box, and began a yarn about railway travelling, and was making the necessary impression upon him, just to show i knew a few swells and things. there may have been a trifle more imagination than fact about my talk, but not too much, just enough to season it. we were getting on very pleasantly, and nothing ugly occurred till we got two stations from home, then there was a crowd on the platform. been a football match. the result was that three swells got into the guard's van. the old guard always locked the door, this new one did not. no room in the first, or anywhere else. now i should not have cared a rap, as these three swells were as sober as judges, but one turned to the guard and said, 'you will not object to our smoking, i suppose?' asking a question that way always seems to me more than half a command. the guard took it that way, i think, for he said, 'no, gentlemen, as the carriages are full; but if you can keep it as quiet as you can at the stations i shall thank you kindly, as there is a superintendent here as has pickled pork and coffee for tea, that considers smoking worse than poison, and it is against the rules.' "well, you can imagine i was just about fit to sink, as i knew there was enough pent-up force in that box to elevate me higher than i wanted to go by that sort of machinery. two of the swells were free and easy kind, the other rather a lady's man, sort of feminine man--the latter began the game, and said, 'charlie, have you a vesuvian?' "i dared not say a word, but i thought, 'my noble swell, i have not, but i have a vesuvius here--in fact, i'm sitting on it--and if you are not careful the real one will have to take a back seat, and ashes will be large goods to what we shall be like.' well, they all started smoking, and threw the fusees out of the window. after all, i thought to myself, there's nothing much to fear now, although it would be considerably more pleasant if you were in some other train somewhere. when i got in i put my box just a little way from the side, so that it should not jar, and there they had me. soon we got near to the last station we had to stop before mine, and these swells all took their cigars out of their mouths, and as there was no place upon which to put them except on my box, _they put them there_! pass me the bottle. oh dear, oh dear, the thought of it! and they said to me, so nicely, 'you won't mind, i know.' before i could think almost there were three cigars alight and red, been well puffed, and within 2 inches of 70 lbs. of the best glazed blasting powder, and me sitting on it as a sort of stoker! "i dared not say anything; but worse was to come, for they kept taking a whiff and putting the cigars down again! "after the train started the van jerked a bit over the crossing or a badly-packed sleeper, and just as one of the swells was going to pick up his cigar, it slipped, fell upon the top of my box of powder and then upon the floor, and the sparks did fly!" "no wonder you felt bad. i feel for you now, i do. it makes me dry." "stop! worse is to come--worse. pass the bottle. wait a minute; i can say no more until i have loosened my collar." "well, true as i am here, if there was not a fizz, a few grains had got loose. my box had a hole in it; a knot in the wood had shaken out! i knew the fizz was not like that of sporting powder, but my powder--and to think there might have been a train self-laid right up to the bottom of the box! providence again." "shake." "i'm hearty to you. it must have been an angel that broke the train of powder, for on looking carefully about i saw a dozen or more grains. luckily for me, the guard had his head out of the window all the time, as the whistle had been sounding. the swells only laughed at the fizzle. i did not; i knew what a fearfully narrow squeak i had had. i expect they thought it was a match end. however, i have had a life of narrow squeaks, and so i got over it pretty soon, and said, 'the next station is mine, gentlemen!' i moved my box a trifle, and noticed there was a bit of paper on one side sticking out. i saw one of the swells also noticed it, and seemed thoughtful. he soon made me understand that he knew the paper. it was specially prepared, and a peculiar colour. his father was the owner of the powder mills, and lived about five miles from my cutting. if i was not previously blown up, i knew it was in his power to have me fined fearfully heavy, if not imprisoned. he stared at me, and as we were going down a long 1 in 50 gradient and corkscrew line the guard looked out for squalls and two of the swells on the other side. he then whispered in my ear, 'is your name dark?' "i could not speak, it took me back so; but i managed to nod. he said, 'why did you not telegraph? i would have had it delivered specially'; and he pointed to my box. he gave me a half-dollar, and put out his cigar. i quickly and carefully filled up the hole and picked up the stray grains, and no one knew anything, except him and me. he then said, 'take my advice, don't try that game again; for if you manage to struggle through such a journey without becoming a million or two atoms you will probably be hanged'; and he motioned with hand to his throat. 'this time i shall say nothing.' "i thanked him. i never felt so small and weak in my life. well, i arrived at my station, and got my box out and sat upon it for some time till the reaction on my nervous system had worked; but i would have given just then some one else's gold-mines for a strong lap-up of something neat. mind you, about five minutes before we stopped the up mail passed us, and we were both going full forty miles an hour. suppose the box had fizzled out just then, it would have wrecked both trains, killed a few hundreds, blown a big hole in the line, spoilt the dividends for some time, shocked the world, made widows and orphans of half the country round pretty nigh, have ruined a few speculators who were on the 'bull' lay in the main line shares, and have smashed into chips more than half the 'bucket-shop' outside benevolent (?) institutions for the distribution of wealth as were operating for a rise." "it seems to me you lost a grand opportunity of being a big pot for once, and showing them who's which--but there! you always had a kind heart, and i remember you have often said a too sudden rise in the world never did any one much lasting good." "you are right; but perhaps it is as well for me. i am so modest, and ambition knows me not." _note._--on all public works it is advisable to know by what means any blasting agents are brought to the works. daily use not infrequently causes the men to be very reckless, and stringent regulations in conformity with the various acts and general experience should be made, and every care taken to have them faithfully observed. chapter xi. concrete. puddle. "have you managed to squeeze any 'extra' profit on the quiet out of concrete?" "yes, twenty or thirty years ago, but there is not much to be got now. since a few engineers took to writing upon the subject they have reminded or informed others pretty well what to look after, but there were not many thirty years back that knew how it ought to be made; and you see, although one receives the materials, the concrete has to be made with them, manufactured, as it were, on the work, and you can spoil the best portland cement that is, was, or ever will be made in the proportioning, mixing, and blending it with bad sand and gravel, or dirty broken rock. "they handed me the portland cement, and all the specification said was, 'all concrete shall consist of 1 of portland cement to 6 of clean gravel, and shall be mixed and deposited in a workmanlike manner [which we consider means as the workmen like] to the entire satisfaction of the company's engineer.' "this was drawn up by a civil and mechanical engineer, which is a big-drum kind of title, and i should think covered corkscrews and manufacturing machinery, and everything else under the sun that can be handled at any time, including a 6-inch drain, the forth bridge, and the channel tunnel thrown in. it's too much, it seems to me, for one man to completely understand; and i once heard a celebrated engineer say that, with a few brilliant exceptions, such a man knew thoroughly neither civil nor mechanical engineering--life was too short. i don't presume to say anything, but his specifications of our kind of work might have been more exact; still they were sources of joy and comfort to us. "machine mixing was hardly known at the time i am particularly referring to, and the portland cement was of all qualities, good, bad, and indifferent, and some as i really can't say had any quality in it at all, and was utterly unlike what you get now. it was then sometimes bought on the same principle as going to the first shop handy, and saying, 'small bag of cement. how much?' there was no name on the bag, for no one wished to own he had made the cement, and it was indeed of illegitimate origin, and had no parents. "the cement came, and we did pretty well as we liked, for the inspector knew nothing about it; in fact, we were all in the same boat. but what a lucky thing it is that there is such a thing as a margin of safety!" "you mean the difference between the strain a thing has to bear in ordinary use and what will break it?" "yes, that is it. one day an engineer said to me, 'there is a large factor of safety in this case, which is fortunate.' i thought he was talking about a flour factor near the works that also sold fire-escapes and fire-extinguishers, so i said, 'he weighs nearly eighteen stone, and i should call him big rather than large, for he is like the prices at which he sells flour, and charges a penny a quartern too much; but he is greatly respected in the neighbourhood by those who don't know what fair prices are, for he is so oily and civil, as just suits a lot.' between you and me, he swindled them, and beat us for 'extra' profit. "the engineer looked as if he could not at first make out what i was talking about, and, as it turned out, i did not know what _he_ was. he seemed to enjoy himself, and let me finish my sermon. he then explained to me what we call 'margins' of safety, and what they call 'factors' of safety are the same goods." "you have learnt something now." "i have, another name; no doubt their word is the right one, but they ought to consider the likes of us are not poets, or fed on stewed grammar, and should remember we were boss-gangers once, and have blossomed into sub-contractors. "let that pass. you should have seen the cement. it was lucky we never had to sift it as we do now, or we should never have got any through a forty-to-the-inch mesh. it was just like fine sand, and nearly the colour of it, too, instead of grey. i have had a fair experience with portland cement now, for we had testing-rooms, machines and troughs, fresh and sea water, slabs, and a host of other detective apparatus at the last dock works i was on. however, the cement we had and i was just referring to, was pretty nearly all residue, and of course it did not stick the gravel together except in streaks that had good luck rather than anything else. and the gravel! well, it is an elastic truth to call it gravel, for it was dirty; and i conscientiously feel i am close to thinking i am not speaking in accordance with the principles of strict veracity if i call it gravel. "and the mixing! well, there was not much of it, just a turning over or two, and we deluged the stuff with water so as to make it easy to handle, and we hurled it into the foundations as we pleased and at all sorts of heights, just as might happen to be convenient. i did not trouble myself about it then, but i do now, for i had a month or two in and about the testing places when there was no other job for me that suited, and i firmly believe almost all the failures of portland cement concrete occur because the men that used it do not understand it, or the specification is not carried out, or is wrong somewhere. the best goods in the world want proper treatment, and, after all, the abuse of a thing is no argument against its use. some quarry owners and stone merchants don't like cement concrete; it is poison to them, because it hurts their trade. it is my opinion, founded on what i have seen and know, that portland cement concrete is grand stuff when properly made; but you can't make the 'extra' profit on it you could, unless you can forget to rightly proportion the material. i mean leave out anything on the quiet you find is more profitable when it is absent; and now mixing machines are always used on works of importance where concrete is made in any considerable quantity, that is the only way you get a chance of a bit 'extra,' at least so runs my experience. "bless me! when i come to think of it, it is really wonderful that some of the concrete i have cast in has set at all, and don't believe it can all have set; for, first, the cement was wrong, then the gravel was not gravel, the sand was like road siftings, no trouble was taken to proportion the materials properly, and no mixing was done rightly, only an apology for it. the water was dirty, and used anyhow, and if a lump got a bit stiff it was rolled over, broken up in the trench and watered down below. some went in like the soup that has balls in it, and we threw the concrete (?) down just anyhow. the inspector, as i said before, knew nothing much about it, although he was a beautiful kidder and could patter sweet and pretty just as if he were courting, and the engineer was away, so the road was clear for a bit 'extra,' and we took it." "now, how the dickens could any concrete be right with such treatment? it is cruelty to expect it." "i left those works, and the engineer got corpsed, so he is past blaming; but, fortunately, the middle wall of the dock that got strained the most--the one in which was some of the concrete (?) i have been telling you about--had to be removed for improvements, and when they pulled it down i heard the concrete was in layers like thick streaky bacon, a layer of gravel with hardly a bit of cement in it, then a few lumps of solid on the top and hard as all would have been if the cement, gravel, sand, proportioning, mixing, and the putting into place had been done properly; then another layer of open stuff that had stuck together a bit, and then a lot of soft oozy rubbish, like decayed cheese, bad, coarse cement, you know, that would not or could not hold together and had done the 'fly' trick, you know, had cracked about, the coarsest part of the cement the streaks were there because we watered the cement so much that it was not concrete but weak grout, and bad too; and it could not drain down because one of the thin, hardish streaks, already set, stopped it, and it was bound to make friends with the gravel and dirt somehow, although trying to shun such company by running away and so get off duty. it was the same all the way through, and there were a lot of holes in it caused by the nearly set lumps coming together and slightly sticking, and therefore preventing the other material from filling the voids. _hardly a cubic yard of the whole mass was the same._ "that is what i call a real bit of scamping; but, honestly, i did not think i was putting it in so bad as that, but i then knew hardly anything about the material. i shall never do it again, for i know i shall not get the chance, besides we all must draw the line somewhere; but there, a lot is now known about concrete that was only in the brains of a very few then. "as the cement is now supplied to you, i often put it in a bit thick, that is when i have to find the gravel and sand. it would be the other way about under different circumstances; but at the present time, with carey's concrete mixer--which, luckily for plunder for us, is the only machine that measures and mixes the materials mechanically, and turns out from 10 to 70 cubic yards of concrete per hour--you do not get much chance of 'extras' and none with it; and concrete mixing is now nearly done as carefully as mixing medicine, and i don't regard concrete as fondly as i used to, for no 'extras' worth thinking of are to be made out of it. my old love, consequently, is cooling off, becoming warm and perhaps distant respect, not much else; but good portland cement concrete is the best material, bar granite, i know of, if properly used, as it is then all the same strength--that is when the portland cement is right, the proportions, mixing, and depositing even and proper, and the gravel and sand really clean sharp gravel and sand. you see, in that case, it is uniform throughout, and, after all, what is the good of the hardest stone or brick when you have a weak mortar to join them together which cannot nearly stand the same strain in any direction as the stone or brick?" "you are right, it is simply waste. like deluging good spirits with pure water, and spoiling them both. lucky you had finally left those dock works before they pulled the middle wall down, or you might have had a bad quarter of an hour in a very sultry atmosphere." "after that we will have a toothful neat." "that's warming and is real comfort." "i have never had much to do with concrete, but i remember seeing a lot go in on some dock works where i had some puddle to make for the cofferdam, and i got something 'extra' out of that." "how did you do it?" "well, you know, working such stuff all day and nothing else makes anyone rather sick of it, it is like breaking stones for metalling, i should think, and the weariness of it makes the big stones have a tendency to hide and cause the face to look small and even. i had a dozen men besides casuals, and all old hands at the game of 'extras.' we had to, or were supposed to, work up a certain right proportion of sand with the clay so as to prevent the puddle cracking and keep it sufficiently moist. i own we sometimes let the clay have a taste of peace; in fact, between you and me, we were going express speed, and 'extras' was the name of our engine. "one day the resident engineer came, and somehow got up close to us rather unawares, and took us by surprise. of course, the material ought to have been worked the same throughout, and we nearly did it, but nearly is not quite. he seemed to sniff out that all was not just as right as it might be, and said:-"'don't forget to work it up thoroughly. you have a good price, and it is important the clay should be uniformly mixed with a little sand.' "'certainly, sir.' "i generally agree with my boss, it pays best. so i at once called out sharp to my chaps, as if all i loved in this world was at stake, 'don't fear mixing it, lads. get it well mixed.' "one of them, he was a new chap to me, and belonged to the militia i found out, turned round, and said:-"'all right, boss; i always make the broad-arrow kitchens in the camp, and the flues and the openings for the flanders kettles, so i know how it ought to be done; but if you think i'm a white-faced doughey [i.e. a baker's man] i am not, and you had better fetch a batch of dougheys and start them at work feet and hands. it will make them sweat. that puddle, i tell you, is as well mixed as the dougheys do the different kinds of flour, and call all the bake the best and purest bread, and make it smell sweet with hay water.'" "i suppose you silenced him quickly?" "no, i pretended to take no notice, for i knew i had spoken too sharp, but the resident engineer smiled downwards and passed on. "we had a heap of clay on one side and the same of sand on the other, and the inspector saw we had from time to time a small mound of clay and one of sand put separate and measured ready for mixing. we had a few piles of clay and sand at first measured exactly, and then we got used to it, and did it by sight only. we were close to the river, or rather estuary, and used to fill a barrow now and again with the sand and shoot it over the entrance jetty. a little was taken from each heap. the engineer knew his book, and would not have it worked from one or two big heaps, and the sand brought to it, but he would have separate mounds of about 20 cubic yards at a time. there were nearly 5000 cubic yards of puddle to work up, and as the clay came from the trenches so we worked it up. a kind of filling and discharging, and everything on the move. "i made a nice thing 'extra' that way, but nearly got bowled out, for one day there was an extraordinary low tide, a low tide was expected, but a land wind was blowing great guns, and it was the lowest tide known for fifty years or so. now, when you start the game of 'extra' profit you will agree with me, it is necessary to have someone you can rely upon, or else things may not go exactly as you expect. they may work wrong, and then you have to look out for squalls when they lay you bare and find out all. here, i had been getting a rise out of my bosses, and blessed if old ginger's snip, his boy, whom i paid a bit extra to do the harrowing well out, did not get a rise out of me. it caused a near shave, too. "well, the tide ran down till it laid dry a little sandbank, that is, some of the stuff that should have been at home in the puddle, had travelled by the wrong road by the entrance jetty. i did give ginger's snip a talking-to, i tell you, after; but it was a near shave, as you will soon know. i saw the bank, so i sent him down the jetty with two chaps that knew what was up and got duly rewarded by me. they knew me. i never forget friends--too good, i am. not even to borrow from them, if occasion requires, so that they should remember me in their dreams. i said to them: 'stir up the sand, lads, for i think i saw a leg in it, and a bit of a dress; it may be there has been another midnight horror. it's really shocking!' and that was true, for i thought the sand was shocking, and that murder will out, as the saying goes. it was a shave, for just as the tide began to turn, up came the resident engineer, and there could not have been more than an inch or two over the sand, but it soon rises, as you know, and almost walks up. i had not time to call the men, and there they were, stirring away. it was lucky i thought of the leg and the woman's dress. so i shouted, 'come up, lads, it's nothing.' "then the resident engineer started asking me questions; and i was afraid he might ask the men something, so i kept him as long as i could, and spun a yarn, and pointed out the spot where a body was found some time ago, and talked away like a paid spouter, for every minute that passed was good business, for the water was rising quickly, and i knew the tide would soon just about put it right. after a little while the resident engineer went away, and i was rubbing my waistcoat thinking i had been in another near squeak, but won on the post by a short head owing to jockeyship, when i saw him down below with a large black retriever, and the blessed dog was half out of the water. i kept as far away as i could, but i saw he had taken off his boots and turned up his trousers, and was walking about on the heap probing with his stick. he did not stop long, as he knew the tide was rising, and then he came to me afterwards and said that a sandbank had been deposited at least 30 feet in length. "'very likely, sir; but did you find the leg, or body, or dress of a woman?' 'no. but i found a lot of sand that would have been better in the puddle.' and he looked straight at me. "well, i had to put on my best sweet, innocent child face, and i hazarded the mild remark, 'it's the eddies that have done it. i have known them bring stuff for miles, sir.' it was no use saying from the other side or nearer, because there was no sand like we had to mix with the clay for the puddle for many miles, nor could i declare that a barge had got upset. he did not say anything more, but called his dog and went to the office. let me impress upon you that the last 1500 or so yards of puddle had more sand in them than the first 3500. tides i like, and they are healthy and useful; but it is the deuce to pay if you think you can go against them, as king canute showed his courtiers, when he did the chair trick upon the sea-shore. do you know i go so far as to think that if a floating caisson were taken about and sunk so as to lay bare the bed of the thames in certain places, things would be found by a little digging that neither you nor me dream of, and perhaps might not like to see, for even sandbanks at certain times and places are not pleasant to gaze upon. eh?" chapter xii. brickwork. tidal warnings. pipe joints. dredging. "you remember my old partner on the last dock works we were on?" "rather. he had been properly educated, and knew the time of day, and there are few things he ever had to do with he did not get a bit 'extra' out of. on that you can bet the family plate." "right you are. old partner, do you know i have a weakness. i liked the old times when there was plenty of work to be had, and few that knew how to do it. then the likes of you and me were regarded at their proper value, and estimated as worth something extra. now there are about a million too many of us, and not half the work to be done. old england is not like a big place that wants opening up, and it is a rare high old breeding country, and a lot of folks seem to wish it to be nothing else. "my then partner took, labour only, a lot of brickwork in cement. it was a dock wall, and it averaged not far from 20 feet in thickness. it was a wall, and not a mere facing like little bridges. it gave a man a chance of something to work on. when a chap takes a contract, labour only, not having to find the materials, it is no use turning your attention to saving them; the only game to play is to use the mortar nearly liquid, so that it runs about of itself almost, and put some random work in between the face work and the back, and trust to mortar-rakes and grout, and oiling the human wheels as much as required. i don't like the word bribe the inspectors. for two chaps like us, that will have what we consider good work, it is not bribery, it is downright pure philanthropy that prompts us to give a sovereign away now and then in the proper and most deserving direction, which i generally find to be the inspector. i never give gold away without knowing it will come back well married, and may bring a family, and they are welcome to my best spread. that's just where our education enables us to grasp things right. what a shame it is for people to find fault with the school board rate, when it is only about four times more than its promised highest figure, and the school buildings are such models of art and strength; and how thankful we ought to be to the teachers for their kind attendance, given for almost nothing! how pleased our old schoolmaster would be when he knew we took every advantage to make a profit somehow or other from what he taught us." "i guess he would be, the joy might kill him; but how did you apply your schooling to the brickwork?" "wait, patience please! as i said before, or nearly did, there was not much face work compared with bulk in the wall. i had a lot of militia chaps, and well paid and lushed them. they were something like brickies. bless me, the wall used to rise up; and i was half afraid if those at the office worked out the check time, and compared it with our cubic measurement, they would think i was paying all my chaps more than any other member of creation ever did, or making too big a profit to suit them, and don't you mistake. but there! the company did the work themselves, or let it in bits, and of course the check-time game was not played anything like so strong as if we had been working for a boss contractor. "well, we were doing trench work, and had shoots for the materials to travel from the surface down to the wall, and the trench was about 50 feet in depth from the top to the foundation. we had one shoot for bricks and another for mortar in between each frame, and that would have been plenty if all the work had been laid to a bond, but when only about 4 feet in the front and 2 feet at the back was, and the rest raked in level, except a course or two now and again, we used to want a couple of shoots for each. i had the face of the wall made really pretty, just like a doll's house, and pointed up lovely; but let me give a bit of credit to the company, for they gave us the best materials with which i ever had to do." "you mean the bricks and mortar were such that it would have been a downright waste of good muscle to put the bond the same throughout, simply pampering up the materials and turning them sickly, like some people do children, so as to appear so fond of them before other people!" "precisely; so after my partner got the face in right, the stuff went down and in. all we had to be careful about was not to smash the bricks. we soon managed that, and we had few broken ones, for they were good, hard, and dark. well, in they went, and when we began to work the show, some of the scenery was hard to get right. of course the inspector began to find fault, that was what he was paid for, and was about the only way he could work round for his 'extras.' after oiling him a little, and pleasing him in the old-fashioned way, we managed gradually to overcome the natural dulness of his mind, and we became a happy crew--a lot of brickies with a single thought, and hearts that beat as one. "well, in the stuff went; and after working out the averages according to the rules of the exact sciences, me and my partner arrived at the conclusion accordingly that about one-half or a trifle more bricks were put in by hand, and the rest were like machine-made bread, unsoiled by hand, and therefore must have been good and pure, as those alone know who work on the same lines. my partner, in his younger days, before he took to brickwork, had been to sea, and all the men used to call him 'captain.' when he wanted to give the chaps in the office the straight griffin, he used to say, 'nelson's my guide.' that meant give them 'biff,' in other words, finish off the enemy as quick as you know how." "you mean get the bricks in as fast as you can _only get them in quick_." "yes, that's it. if good old nelson sent his shots in as fast as these bricks were squatted, all i can say is the guns did not get much time to cool. let me give my partner all praise, for although he had a nice spot to work on--as of course the timber in the trenches hid a lot of the work, and made a nice gloom--as a precaution he kept the ladder away from the top of the trenches, so that anyone had to walk along the top strut and then get down, consequently there was not much chance of being caught; and after the bottom courses were in and the face and back right, it was easy work, because there was always time to get the road right and all went as peacefully as could be wished. but the old captain, on the same dock, nearly overdid it one day, and all to save him scarcely one hundred pence, but he got so eager that money to him was food, and it is my opinion if he had been born rich he would have made a fine miser; but apart from that, he knew how to make a contract and what work was, and the training on board ship he had in his young days set him right, and he was always on the work looking out for a bit 'extra,' or on scout. but once he nearly overreached himself." "how did he do that?" "i will tell you, if you keep quiet." "right away." "it happened like this, and might have wrecked the whole place, and was the consequence of working against orders. at one part of the works there was an old slope at the end of the dock which was no use without a new entrance. where the trenches had been dug out for a wall a piece of earth was left in at the dock end, and was stepped down like a retaining wall, although only earth. well, the orders were to keep it 4 feet above a certain level, which made it not so nice for unloading from barges as 2 feet or so. as that end of the dock was only sloped off, and left to itself, for no one ever seemed to go there, and it was a good height, and up and down a bit at top, been stuff run to spoil, my partner, the old captain thought he might as well take another 2 feet off for about 10 feet or so, and ease the unloading the bricks, cement, and sand, and made certain it would not be noticed. now of course it did not take long to pare a slice from that short length sufficient to help the unloading, and i should have said this was done soon after we began the brickwork. i remember the day well enough, for if i had not have happened to have been having my dinner by myself on the cofferdam, i believe we might have been flooded out and wrecked. "the wind was blowing strong and had been for several days from the same quarter, and it brought the water up till it was heaped. before the wind began to blow it had been very wet, and it was also the time high tides were expected, so everything worked in the direction for a real high one. i began my dinner before the usual time, feeling a bit hollow, and had done by a quarter of an hour after the whistle had blown. i was just lighting my pipe when i happened to look upon the water. it wanted about an hour or more to high water, i watched the tide flowing up, and, all of a sudden, it struck me it would be a topper; but as the cofferdam was a long way above high water, so as to stop any waves breaking over, for the estuary was nearly one mile in width, and as this dam was a really well strutted one, it did not trouble me. i dare say i smoked for nearly ten minutes, and was thinking it was a nice job, and that 'extras' would have a good look in, when, just as things that frighten you do occur to you very quickly, it struck me--how about the captain and his two feet off, pared off, up at the trench end bank? well, i did not stop, but went at once to the place, although a good half mile away, and was soon there. i saw it must be a near squeak, and i knew there was no chance of the entrance gates being shut because a lot of craft was waiting to go into the dock, besides it would give the office that something was wrong, and i knew the chances were a thousand to one no one would come near as it was right away one end of the works, and nothing doing there except for us when we were unloading. most of the chaps had never been that end of the works at all. now this was all very pretty looked at from getting a bit of 'extra,' but it was hardly the same when that game was played by the tide putting in a bit 'extra' and rising nearly 2 feet more than ever recorded before. i looked at my watch and knew the tide had about an hour yet to run up. i got out my rule and measured, and then i was sure it would not be far off two feet over the dip the old captain had cut to save an odd penny or two. i was just turning round to go to fetch him--for i knew where he was, and of course we always let one another know, although we don't name it--when i saw him coming pretty sharp with his ganger and a few trusty chaps. i beckoned to him. he was alongside very quickly, and i said, 'the tide will be over.' "he answered: 'i thought it might, as the bottom of the tenth step down on the landing place was just the same level as the top of the dip. i knew it by the water.' "i said, 'there may be a chance about it, but i don't think so, for this tide is running up so strongly that i know, from experience of the estuary, that it will beat the highest tide ever recorded.' "while i was speaking he measured, and took out his watch and timed five minutes. he measured again, and then off went his coat like greased lightning, and we all followed suit as if we were a lot of figures pulled by strings, and he shouted, 'we have not a moment to lose. it will rise 1 foot 6 inches above where we are.' "he then clenched his teeth. 'planks, stakes, bags, tarpaulins, bring anything you can get, and come back at once or we are drowned out, wrecked, and lost, all ends up.' "we soon got some stakes in, and some planks, and we set to work, all six of us, raising the dip in the bank the old captain had made. he turned white as a sheet, and said, 'she is on us, simply romping in. half a dollar each if you can stop her.' "we all worked like black devils flying from torture, for we only had half an inch start of the tide. it was a sort of life and death race, and death for choice. "'she is still rising, captain.' "he then cried out: 'by thunder! she's over the far end at the plank dip. once really over, and all will go.' "he stood still for a moment and then dashed to the place and laid down on his side full length, and shouted: 'give me a short plank, and my coat.' he would not get up although we asked him. he had got the frights, so we let him be. he placed the plank in front of him, and his coat over it, and there we were filling in stuff at the back of him as fast as we could, and putting in stakes for the planks. the tide was still rising, he turned his head, and said: 'are you ready?' "'yes.' "he then rose, and a pretty mess he was in. "'by thunder! that was a close shave. if we had only had another tarpaulin or two we should have been right sooner. there was some sand there, i remember we upset a wagon-load.' "he looked scared, but soon brightened up and said: 'we are right now though. the tide has stopped, but keep at it, lads, we must bury everything and get a good 2 feet higher, for if once the water runs over, the tail-race of the largest mill stream in creation will be a fool to it, and it would only be a question of minutes before the whole earth-bank would burst and let in ten acres or more of dock water, and the sea, and perhaps break up a lot of craft and wreck the whole place. lads, i well remember seeing a catch-water earth-bank give way, and it is soon over when the water runs down the back slope, and there is not much chance of stopping a breach.' "the men went away, and the captain said to me: 'my word, i shall not forget this.' he then sat down and wiped his forehead and said on the quiet to me: 'there is one blessing, no one on the work knows about it but us, and, if we are careful, no one will.' "'you had better get home at once and have a rub down and change and sixpenn'orth or more, hot. i know what to do, and will see all is put right.' he took the hint and skipped, but came back in half an hour, and then we had a talk.' "i tell you what it is, one can play a lot of tricks on land, and get 'extras' many roads, but water won't stand it. it is too honest, and turns upon you and soon finds you out. i never did like water much, you can't beat it, that's why i left the sea. it's an unsociable element, and is most always in the way except when you're boating, washing, fishing, or mixing something. you can't educate it so as to look at work from an 'extras' point of view, for it cares for no one. "take my advice and always give it a margin and allow in temporary structures a good 3 feet above the highest recorded water line, unless you want the work wrecked, and then add a height necessary to keep out the waves." "you are right, for i remember getting a bit 'extra' out of some pipe joints. instead of making all the joints according to the specification, we made a good many with brown paper and covered them up quickly. the pipes were laid at a depth of some 20 feet, and it took a considerable time before they began to leak. at last there was a burst up, but it was so powerful that all the jointing was washed out, so they never knew who was to blame. the place where that happened is fully a couple of hundred miles away, and will never see me in it again as i did not like the people, so i said to myself, all right, i will leave something behind that will tickle you up, and cost the lot of you some beans to put right, and i did, and so got even with them all. it was one of those lovely small towns where everyone knew everybody's business much better than their own." "do you remember carotty jack?" "yes, rather. you mean him who was up to snuff in spoon-bag dredging. 'old tenpenny labor' only was his 'chaff' name." "he was the sharpest card, so i was told, on the river for getting 'extras' out of dredging. he was measured by the barge, and paid accordingly. i confess i don't quite know how he worked it, but he did for years, and never got found out. you see, what is ten or twenty yards of dredging, nothing either way? it is never noticed, and you can't measure under the water as you can on land. it can't be done, except in new cuts, when new cross-sections have been taken over the ground. the beds of most rivers being always more or less on the move, water then becomes a nice servant to work a bit of 'extras' out of, and that is about the only way i am aware of where it comes in useful in that direction. "how carotty did it, as i said before, i don't quite know, although i saw the thing, but he used to work it somehow or other by movable boards fixed on a pivot. he had three or four of them, and could fit them together just about as quick as the roulette tables are fastened by racecourse thieves and stowed away. they had two flaps at the sides covered with stiff tarpaulin, and the ends were closed by planks loosely fastened by a catch to the pivot. they were well made and fitted splendidly, just like hinged box-lids, and the whole thing was similar to a box with the bottom out and the sides hinged and ends to slide up and down. i believe carotty would have made furniture a 1, if he had turned his attention to it. "he had an old ship's boat of his own. the apparatus was stowed away in it, and i might further say it resembled a shallow box upside down, with the lid off, working on a saddle, and the flaps at the sides moved as the box got pushed down on either side; but they kept the stuff from getting under it almost always; for when they measured the barge-load for depth, if they put the measuring-rod down on one side and touched the board, it went up a foot or so on the other, and no one suspected anything. the barges were all narrow ones, as usual with spoon-bag dredging. the measurer used to walk round the barge and be busy trying the stuff here and there, to see if there was no gammon. the mud was thick, and went up and down very slowly. carotty always had two or three of these boxes fixed on the saddle, and just the right distance to be out of reach, and he did not fix them on the same line. he kept the frames two or three feet apart, so that if by any chance two men started probing on the same line he would soon shift them a little, and say it was an odd brick, or a tin, or a bottle, and then everything went down easily upon both sides, and for one place where they were extra sharp, he made the machinery in very short lengths, and zigzag fashion. he told me he got pretty nearly from six to ten yards extra out of every barge, according as the stuff and the size of the barge was kind towards 'extras.' of course, from the solid dredging he had the best haul. carotty was a cool card at the game of 'extras,' and had a face on him like a nun, and could look that innocent and lamb-like as only humbugs can. he used to laugh over it. "he told me that he had known the time when no 'extra' machinery such as his was needed, for plenty of water, some boxes, a false bottom, and a few planks, were all the things that were wanted. then they had to be given up, and he said he was really compelled to make himself a present of the first small pump he could privately annex, and soon found the chance on one of the works where he had a little contract. "he got some old bags, mended them, and soaked them in some solution that made them tight, and he used to fill them with water and weight them with a stone or two. he had a rope with a draw-knot attached to short lengths of line so that he could let the bags loose or fasten them against a hook when he discharged the barge out at sea or elsewhere. generally he used to unscrew the stopper of each bag at the side of the barge, and when on the return journey let out the water and then haul up. although it cost him some labour, he said he used to get one way or other a bit of gold 'extra' by that means every barge load, or, rather, what was thought to be; and sometimes he did not let the water out of the bags at all if the people he had to deal with were easy, but now times were very hard on him, as he had to work at night to keep the machinery right, and he thought it very cruel of them, as it gave him a very short eight hours' recreation, as was the cry now for the third part of a day. "he was clever, and i believe he could have made an iron-clad out of old fire-irons and coal scuttles if they had given him enough goods, plenty of time, and paid him sufficiently, and you may bet the ship would have answered its rudder all serene. "he told me he actually got twopence a yard more on one occasion by using the boxes right for a week, on the ground of extra hard dredging, for, of course, all the stones and heaviest dredgings fall to the bottom. he put in his machinery pretty close together, and heaped up the stuff in the middle, and did the injured innocence business properly, and after they had done a lot of probing about, during which he told me the machinery worked lovely, they gave him another twopence a cubic yard. measurement by the ton would have spoilt that game, though; but then it was not canal dredging he was doing, but in the open. give carotty his due, i was told there was not a man on the river who could dredge to a section as he could, and he did the work quickly and well, but he always managed to get paid for more than he did, and he told me he never meant to do otherwise. he said he considered he was cheap goods at the price, and wholesome; but he complained tremendously of the dredgers and excavators introduced lately, for they spoilt him, and there was but little chance of 'extras' now worth the trouble or the risk. in consequence, he had given up doing dredging." chapter xiii. permanent way. "will you listen to me for a few minutes?" "yes. i notice you have something pent up in your head." "well, this was rather an amusing bit i am going to tell you, but was a near shave for real squalls, as you will agree when you hear about it. "i got the guv'nor to let me do a bit of linking in at so much per chain. of course, he supplied the rails--they were flange rails--sleepers and fastenings, and they were all right. i linked in the road. we had a mixed up permanent way, nine by four and a half half-rounds, and ten by five rectangular sleepers. check pattern, an odd and even road. between you and me, i think mixing them up betwixt the joint sleepers is a mistake. it makes the road stiff one place and loose at another, and a train cannot run steadily, and i would rather have all rectangulars, and put them wider apart, and give the rail flange a bit of bearing, for half-rounds are mere sticks, although they are lighter to handle, and in that respect nicer. you see they have only about three-fifths of the bulk of rectangulars, and when they are adzed less than that, and not more than half the bearing for the rail flange. if i had to do the maintenance, no half-rounds for me, still they do for light traffic and for cheap agricultural lines." "i agree, they are temporary goods." "well, it was funny, but here we had too much and too little of a good thing, and were as near in hot squalls as could be. i expect they made a mistake in loading them; anyhow, young jack, my ganger, found he had no half-rounds, but a lot of rectangulars. he is a bit impetuous, and would not wait, it's not in him, so he put in all rectangulars that day, and, of course, with the result that they had not enough rectangulars left for the other road all through, so about six or seven chains were nearly all half-rounds, and he actually placed one rectangular one side of a rail joint, and a half-round on its back, flat end upwards, on the other, and so a lot of the half-rounds did duty for rectangulars. "it was a bit of a scurry, and as soon as the road was in the spikers, ballasters and packers were on us, and no time for thinking. well, neither me nor jack gained much by the fun, except our men would have been stopped, and they were not, and things would have been put out a bit for the day. my guv'nor did not know, or would have made us pull it all up and put it in right. now, they knew the number of sleepers, &c., that had been served out, and had sufficient confidence in me to be sure i never scamped the materials, except a bit of ballast here and there, and that is soon made up. "of course, there was no mistake six or seven chains of road were weak, and i told jack to put in a little extra good ballast and pack the sleepers well there, and what he did extra at that place was to come out of the part where all the rectangulars were, for i never throw away or lose anything on purpose." "quite right, we agree. shake, for i'm hearty to you." "he understood how i wanted the wind to blow, and it would have gone on all serene, but you know, just when you think you are out of a scrape, you sometimes find you are in it, or as near to it as wants 'an old parliamentary hand' to explain and fog away. i was down at the junction, when i saw the engineer, and some swells with him. the resident engineer was away that day. after a bit of jaw among them, they beckoned to me, and said they wanted to go to the end of the line, the very place where some of the sleepers were lying turned on their round faces. there was a bit of luck. i felt dead wrong. however, they had to walk about a couple of miles, and then wait till the engine had returned with the empties; so i said to the engineer, 'please excuse me, sir, but i will arrange that the engine is at the ballast hole at four o'clock, as you wish, and i will be back to attend upon you as quickly as i can.' "i scampered up the slope of the cutting and out with an envelope. i always keep one or two about me handy. i tore out a leaf of my note-book, and called young snipper, the brake boy, and said to him, 'jump on old leather's nag. take this to young jack, and i'll make it all right for you when i see you next time; but go quickly, and give this letter to no one else but young jack. if he is away for more than a few minutes bring the letter back to me. no--wait till he comes up, and send someone to fetch him to you. you understand.' 'yes, sir, i know what you mean.' 'now do a bit of the johnny gilpin business.' off he went, and was busy. "this is what i wrote to young jack, my ganger:--'bosses has come, and will be up to you in about an hour. x.... them. cover up the ends of the half-rounds, and sprinkle them pretty with fine ballast if you can do it in an hour. then shunt the empties or the full wagons over where the half-rounds are, and look innocent, as if you had never moved above a foot all day, and be busy, or i'll pull your throat out, much as i love you. smooth it right, and leave rest to me. pull all your gumption out ready. keep this, and hand it back to me. show no one, or i'll have you hung. if i find all right, there are two pints, and something else.' that's what i call a business letter. no double meaning about it. "young snipper got there in double quick time, and young jack was there as well. i saw he had carried out my letter of instructions. still, i knew the engineer would be likely to twig, as he was near to being hawk-eyed. now, i felt sure they would be hanging about for an hour, perhaps two, as most of them had never been up there before, and they thought of carrying the line on further to somewhere or other, but they did not on account of the expense, for several tunnels, viaducts, high retaining walls, and other heavy work would be required. here was the very place for a rack railway on some system like abt's, it seemed to me. i saw one at work in germany, and know they are safely used in austria, switzerland, italy, and in north and south america. as you know, you cannot nicely work a railway by adhesion only much above a gradient of one in fifty with sharp curves upon it, or one in forty on a straight line, consequently the rack is the thing to use then, i fancy, for on the abt rack railway the pinions on the engine can be easily put in and out of gear on the rack, and the journey be continued by simple adhesion, as by an ordinary locomotive, and the rack system works all right round moderate curves. "i should think, in hilly parts of the country there are many places where 4 feet 8-1/2 inch gauge railways could be laid out almost on the surface of the ground, and at such gradients as about one in fourteen, and there should be no difficulty in working them safely, because similar lines have been worked for many years. there must be many little feeder lines that end nowhere almost now, that could be so continued over the hills to a main line, and thus join two large traffic trunk lines, and raise the feeder from obscurity to some importance, and from the state of a mere agricultural 5l. to 10l. per mile per week line of railway to one earning more than double. however, that's by the way. now, my best game was to draw the swells away as quickly as i could, and yet not show them my hand. i started badly, though, for i said, 'gentlemen, i think a shower is coming up over the hills, and if you command me, i will tell the engine driver to run you down quickly by himself, and come back for these empties. it won't delay the work in any way, gentlemen all.' they said, 'never mind; if there was a shower they could stand upon the sleepers by the wagons and get sufficient shelter.' "that meant on the sleepers i was trying to hide. just fancy, the very half-rounds that troubled me. i felt i could sink through the earth, as i saw the engineer's eyes were doing full time as lighthouse revolving lights. i thought, he will have me chucked from this job, sure as half-rounds are not rectangulars, for he would not have bad work. "now the wagons did not quite reach all over the half round road, the swells took to walking between the roads. why, i never knew, but they did. i felt certain, if any of them took to walking upon the half-rounds, they would find it all out. i got to young jack, and on the quiet he returned to me my letter to him, which i burnt afterwards. by luck, one of the directors--that's what they were--drew the attention of the engineer to something on the station road close by; and all except two of them passed on, but two directors kept behind with me, and one started walking on the half-rounds, and on those too that were on their tops, as should have been uppermost, and one nearly got upset before he travelled five yards. so i went for him there and then, and said, 'please, sir, the road is not packed yet, and has only just been put in to take these few empties. it will be as firm as a rock in two days, sir.' i left the rest to him. he looked at me and said, 'i hope it will be, or passengers will think they are travelling over the rocky mountains.' "i smiled, and looked as pleasant and truthful as i knew how, but thought, hope with you, as with me, is grand goods, but fact is better business. they were a smart lot, and no one was going to move them on till they had seen just about all they felt inclined to, but i had a bit of luck then, and ever after have liked birds." "what was it?" "well, a cocktail rose almost at our feet. the line passed between two coppices. from that moment i was safe, as both the directors talked of nothing but shooting. i kept the game alive for all i knew and more than i did, that's certain, and before i had done had made out it was the finest part of the whole country for game, although they ran a bit wild, and wanted stopping. it is convenient to always ease down a strong sentence, then you can alter its meaning a bit when what you have said don't agree with what you are saying; so i warned them the birds wanted stopping. they all got talking and pointing about till they had no time to spare to get back so as to catch the train at the junction. i tell you it was a near squeak, and shook my constitution more than a trifle, and no fault of mine, but it ended all serene." "your escape reminds me of one i had. it was a long while ago, must be about forty years back, when railways in many parts were a sort of novelty, and the natives used to turn out, swells and all, to see what was going on, and made a line a free show. one day about seven or eight swells came bearing down on me. one i knew had put a lot of money in the line, although he was not a director, and i have no doubt got it well back in a few years by the good the railway did his estate, for houses began to spring up all round soon after we had finished. i remember, and you will, that old jack slurry used to say married folks were nothing to a new railway for increasing the population in certain parts. it brings people together as never could come before, and so up goes the number of mouths, and no sooner do houses rise than shops follow, then churches and chapels and clubs and halls and so on like a procession, till the old folks almost wonder where they are. i'm talking a bit astray of my subject, and will now to it again. "these swells came straight to me and asked me to show them through a few of the cuttings, and i did. i met my ganger in one, and managed to get in front of them and ask on the quiet who they were. he said, 'them is nobs. they be hanteaquariums. they are searching for as old goods as can be found!' i knew what he meant, so i broke a small boulder or two and showed them the impressions of shells, and i called to my young snipper and he got them a specimen each, and they were pleased. one gave me a quid when they left. they were real gentlemen, at least one was; and it is only charitable to suppose the others were in company, and this one was banker!" "i agree with you." "after looking at a few of the cuttings, and my putting in some pleasant words which seemed to be food to them, one of them opened a gate and they commenced to walk back along the fields and through the wood, near to where a culvert is, and close to a bit of marsh. they did not seem to mind the dirt or brushwood, and they asked me to come with them, and point out and say anything i thought they would like to hear, and i did. perhaps they would have liked to have known what the prices were i was paid, but i had not the heart to distract their minds from their own true-love study to such a plain thing as ⣠_s._ _d._ i ought to have told you our engineer we used to call 'old fangbolts.' they were his hobby, and it is my opinion that if he has as long fangs to his teeth as the bolts he would have put down, when they get decayed he will know what pain is, and wish they were short spikes. he had his way, of course, although there was a great waste of metal. now fangbolts are good things for getting a through grip of the sleepers when the fangs are screwed on tight, but still they don't keep the rails from spreading much more, if any, and i rather think less, than flat-faced spikes of fair length. at least, that is my experience." "and so it is mine." "between you and me the chap that first had the stern end of a bolt put uppermost in the rail, so that he could be sure the nut was on, knew what he was about, because fangs are nasty goods to screw on, and, bless you, tricks are sometimes played that way. i have known them just turned round once and then wedged by a piece of ballast, and they appeared to be tight; and when a bit of the road had to be taken up and the fang had got loose it was on the premises--perhaps, it is truer to say, just outside and at the door--and then you could always say the threads were wrong and blame the maker, or wriggle out and wrestle with the subject in the direction that looked the most serene." "you mean work your lay according to circumstances." "precisely. besides i have had two fang bolts with triangular fangs to fix in the flange of a rail almost in line, one each side of the web, and they could not be both screwed tightly, for the points of the fangs under the sleeper met when you turned them. this time, of course, none of these nobs knew what a fangbolt was, and if i had told them i dare say at first they might have believed it was a roman tooth, or a piece of chain armour, or part of an early briton's war paint. well, we were walking through a wood--it belonged to one of them--and clearing our way, for the brushwood was rather thick, when we came to a small mound, and i own i did not know what it was. one of the swells smiled, and said, 'how very interesting. this is a tumulus.' i said, 'excuse me, gentlemen, but i am always glad to learn anything, and you don't mean to say some earth has tumours and, swells a bit, because if you will tell me how to work it it would save me and others money and a lot of work forming embankments, if it does not cost too much to start the swelling.' "they smiled, and one said 'a tu-mu-lus was not a tumour, but an artificial mound raised over those who were buried in ancient times.' i touched my hat and said 'i thought there was something wrong, gentlemen;' and told them i knew there were a good many women round these parts that had wens and they swell up as big as marrows, but i did not know the ground had tumours, and was eager to learn it had, as i thought i saw a useful application of them, and they might be a new form of wonder produced by inoculation. one of them then said, 'no doubt the women have their whims and playful humours, but he trusted they were free from wens or other tumours.' then they all laughed, and one of them hazarded a remark and said, 'this is the ... formation.' it sounded to me like upper railroadian formation. i forgot myself, and turned round sharp to him and said, 'it is nothing of the kind, gentlemen. there is no such thing as a upper railroadian formation.' they did stare. i went straight on, and said straight out, 'there is no formation here at all, besides upper railroadian formation is utterly unknown on railways. the formation is at the bottom of the cuttings or the tops of the banks and nowhere else." "they stared just as if i was going to shoot them, and one of them laughed and said, 'i am afraid there is a slight misunderstanding somewhere.' then the others smiled. i thought it was time to stop my tongue. the same one turned to me and said, 'my friend was alluding to the geological character of the locality. it undoubtedly is upper si-lu-rian.' so i touched my hat, and said, 'i hoped they would excuse me, and would they kindly remember i was a bit rough.' they all said, 'oh! certainly!' and they seemed to like the business that had just passed, and were enjoying themselves, i could see that. "well, all this passed when we pulled up at the mound, which was about fifty feet away from the line, and in the thick of the brushwood. one of them began poking about with a stick, and bless me, i saw about half-a-dozen fangs here and there. i thought to myself it is lucky old fangbolts is not here. he would have shot me, and killed himself right off, or gone loose. i twigged what the mound was made of. it was only a small one, but the gentleman was at first mistaken, and no wonder, because there are a lot of real ancient mounds round and about the wood. however, this mound was a mixture of fangs that should have been screwed on the bolts and were not, that's certain, and earth and turf, and had been artfully covered up, for it was quite green except one little streak. i expect some vermin had tried it, and found it no good, and scratched away a bit, and bared it. anyhow, it might have been awkward for me, for one of the party picked up a rusty old fang, and turned to the other nobs, and said, 'i don't think that is very ancient; at least, if it be so, it is a birmingham-made ancient relic, and has been deposited upon the wrong battlefield.' "i believe that was only a sly hint to me that he meant the battlefield to be the permanent way; but, of course, i took no notice. he threw down the fang, and then we all walked on. no patter is sometimes the best game to play, and look as if you were learning a lot. however, on being asked about the mound, i said, 'it's only an old earth mound that has grown over green. it may have been there fifty years, not more, perhaps less.' "really, it was full of fangs that ought to have been screwed on the bolts, a heap of them, too. so i gave the office in the right quarter, and two of us went next morning very early, and soon dug a hole, and buried the mound, and carefully cast the excavation as close by as possible, and covered it up with a nice green top, so as to look quite natural and pretty, and when we had done we considered we had improved the scenery. it was a near squeak though, and it was lucky no engineer was with them, or i should have been had. "it is my opinion, from what i have noticed, that the engine does a good deal to keep down the rails, and as long as the rails and sleepers are right, and the ballast good, and the sleepers well packed, the fastenings have more to prevent the rails spreading, and the road bursting than keeping the rails down, although, of course, that is necessary and should be done as well." "i think you are quite right there." "old fangbolts was all for the through grip, and did not seem to care much about preventing spreading. well, engineers work in all grooves. some have one way of thinking, some another, and all perhaps are partly right, and if they would but balance accounts, instead of harping on one string, it would be a smoother world." "there we agree." "did you ever get a bit 'extra' out of rock ballast?" "no; never had a chance." "i did this way. of course, rock ballast is not equal to shingle and clean gravel, but there is more chance of 'extra' profit, for you can pitch it in big, if you have a nice cover of small ballast, so as to make it look pretty at the finish, and like a garden path, and as occasion offers you can pare off the cess between the ballast wall and the top of the slope in embankments and the foot of the slope in cuttings, a couple of inches or so and sometimes get paid the specified depth that way, although the real depth of ballast throughout is not within 2 or 3 inches of it on the average. when the guv'nors are walking over the line keep them on the outside rail on curves as much as you can, as the cant makes the ballast wall look big. you have to be careful with the packing under the rail, because, if you don't mind, it may happen the centre of the sleeper is on a bit of rock, and then the sleeper may split when doing the see-saw trick as the trains pass and sway about. "just so. you must be careful not to pack them upon a middle pivot." "i had two chaps who would almost have done for masons. they used to pack the sleepers with a few lumps where the rails rested on them, just to get the rail top nice and the rest was filled up anyhow, like nature on the sea shore; and we can't do wrong in taking a hint there, you know, for the cue is right, particularly when it runs towards 'extra' profit. still, i don't like to chance breaking a sleeper's back, so i let them lie easy between the rails, or rather under the parts of the sleepers where no rails rest." "i understand. you pack the sleepers only where they are under the rail-flange." "yes. one day the engineer said to the inspector who was a kind-hearted man and bred right, 'mind the sleepers are evenly packed and not with large pieces of rock.' he called me up and repeated it extra treble to me. 'very well, sir; but some of the rock will soon weather, and don't you think it better to keep it a bit large rather than small? the quarry runs very uneven. some of the rock is as hard as nails, sir, and some soft, and it is not exactly the best ballast to handle or in the world; and if you will excuse me, don't you think, sir, on these soft banks another 3 inches under the sleeper would be advisable?' "he did not seem to want to agree, but after a week, an order came from my guv'nor for 3 inches extra depth upon all banks. that was a good stroke, as it enabled me to do with larger stuff, and lessened the breaking it up. he was right in what he did, and so was i. i like rock ballast for 'extras,' although the walling is a nuisance. there is more chance for expansion of profits than in gravel ballast, and that is a great recommendation to us, anyhow, and is good enough apart from what things really are. i gave the tip on the quiet in the quarry to send half the rock down a trifle bigger, and it did not want so much getting or handling in the quarry, so they liked the new order, and it saved some breaking. consequently i prefer rock ballast that weathers quickly sometimes, although, of course, an engineer should avoid it for ballast if he can, and the money allows." chapter xiv. "extra" measurements. toad-stool contractors, testimonials. "have you managed to get a bit 'extra' out of measurements?" "yes, occasionally, but that game is about played out. in the good old times they used to let us all kinds of work, for we did business in company more then than we do now, and what one did not know the other did, and so we could do pretty nearly everything except metal work, so long as they supplied us with the materials. "i have already named about the 'extra' depth of foundations in bridges, and pipes that were not so large as thought. i have also got a bit 'extra' from side ditching when they had taken no cross sections of the ground by leaving a few buoys or mounds at the highest parts. i have also had a trifle out of the cuttings by rounding off the slopes a few inches when they were long but working right to the slope peg at top and nicking in an inch or two at the foot of the slope; but the game is hardly worth the candle, as they have almost given up soiling the slopes. then there was a chance both ways. you got more measurement than the actual excavation, and also a bit 'extra' for soiling that was not put in, but it does not run into enough money to make it pay safely, and as the slopes and formation are so much on show the fun is hardly worth the risk. there is more to be had, so far as earthworks are concerned, in road approaches than railway cuttings, and in docks than either." "i think you are right there." "you see the earthwork is not so much in patches in dockwork, but all together, and there is often as much in an acre or so of dock as in a whole railway four or five miles in length, and inches in dockwork are worth remembering. besides they are not noticed so much, and the excavation is soon covered up; and if it is in clay, and found out, you can always say to the bosses--'i never saw such clay to swell in patches.' be sure to say 'in patches' for then you have an excuse handy if the clay 'swells' nowhere else except at the place you have not excavated to the right depth. you can generally get the surface not exactly level throughout, and you have a large space to work on then, and every inch means sovereigns. really i think it does no one any harm, and does good to me if the bottom is a trifle elevated. it comes rather easy to most of us to make ourselves think a thing is good and nice when it would cost us something to think otherwise." "yes. money and our wishes usually work on the same main line." "i once got done out of a bit 'extra' measurement by an engineer really lovely." "did you. how was that?" "i don't mind telling you, but there will be squalls if you blab. it happened like this. it was a line that had been commenced and most of the easy work done. it was in the days when every jerry-builder and parish sewer contractor, and big linen-draper too, thought he was a railway and dock contractor. you know they borrowed a bit from a local bank, and would take any contract from a bridge of balloons to the moon to a tunnel through the earth to australia. channel tunnels, forth bridges, and panama canals would have been toys to them, and they could have made them on their heads. they sprung up just like toad-stools--can't call them mushrooms, it would be a libel on the plants--and every one of them thought they were quite as good as brassey, and could have given him points. they had cheek, that was all, just like quack doctors. well, what with, so they told me, big local loan-mongers to work the oracle and swim with them, and general recommendations--which i never take much notice of unless i know what a man has seen or done--saying they were full of the sublimest honesty and wisdom as ever had been known, and were that clever as few indeed could hope to be, the game was worked trumps for a time. tests, not general testimonials, is my motto. what you have done or seen done, not what people are kind enough to say they think you can do, and which they don't know you can do. the man that asks a chap that he is friendly with to write a recommendation has his sentimental feelings worked on, and then truth takes a back seat, and of course you are bound to say your friend is the best man that could be made for the place, just that and nothing else. it costs a chap nothing to write it, and it is only very few that care to refuse, because it does not do to tell a man whom you wish to be friendly with that you don't think much of him, and that he is quite sufficiently a shirker and polite humbug to suit a good many, or that your own private opinion is he is not far off being twin-brother to a mouse-coloured beast of burden that brays. it is not good form, so we all, from kindness i suppose, write pretty of one another except when we are owed money and can't get it, then adjectives are often necessary, and as strong as you can find, with a few put in as are only known to chaps like you and me, and are not taught in schools, although they learn a lot there as they should not. do you know when i read general testimonials i always think what a lot of saints and solomons there are wanting situations, and it must be only the sinners and fools as are in harness. what you want to know from a reliable source is, how did a chap get on upon any particular bit of work he had to do, and have it specified what it was, and in what position he was, and whether all was and is right. therefore, if i asked for a testimonial i want one specially written for the occasion and with reference to the kind of work that is in hand, and not as if i was going to let a man walk out with my daughter. i name this because, between you and me, i've found when a man is praised up as a sort of saint, and nothing said as to what he has done in work that he is near to being either a humbug or an ass. that was just the case here, for it was to one of these toad-stool contractors that the directors let the first contract, and engineers who do not advise their directors to have nothing to do with such public works contractors (!) i think deserve all the trouble they get into. surely it is better to have a contractor who knows what work is and should be, even if he has but a small capital, than one who knows next to nothing about construction, and is financed by some loan-monger, or is at the mercy of some wire-puller?" "i say, you are hot on the question." "well, i consider it about poisons some works that would otherwise have been made all right, and would have paid well too at the original capital. besides it ought to be known a man must be specially educated to properly execute large public works, and should be bred an engineer, for one that can make shanties, dust-bins and privies, may blossom into a jerry runner-up of two-story stucco villas that have the faces and insides covered with lime and mud and half-penny paper, but it wants a contractor that is just about an engineer to know how to properly carry out railways, docks, bridges, canals, harbours, and all sea works and similar undertakings, and not a bell-pull mender and drain maker, because then he hardly knows anything himself of what has to be done and he is at the mercy of others. he tenders at figures below what he ought, and then the work cannot be properly executed, or the easy portion is done somehow or other and then the man goes smash. it is just the difference between our sterling building firms and the jerry-shanty-raisers who ought not to be called builders. well, this one started with a rattle and scraped about, and then went to splinters. that's why i have named it, and because on this railway there was a road diversion. about a quarter of it was excavated and it was in an awful mess. it was in gravelly sand, and taken out in dabs, and in and out, all widths and depths. "i thought i saw a chance of a bit 'extra' and said nothing. one day i got rather fierce for 'extras,' and i sniffed out some small heaps at intervals up the approach. they were about a yard in height and four or five yards round. i felt sure they had not been put on the cross sections, which i got to know had been taken in some places as close as 15 feet apart, so i thought, 'before i get the wagon roads in and move another heap, i will see the young guv'nor.' "well, i had to go to the office, and he knew of the heaps and said 'i will allow you 30 yards for those. i had not forgotten them.' now that was what they were to a spadeful, so i thought it was good business as i knew they were not shown on the sections. he said 'in case anything should happen to you or me i will write what i mean and have it attached to the agreement.' i thought that was kind of him. now, we had worked for about a week, and i was keen on plunder. he then dictated a few lines to the timekeeper, saying that it was agreed 30 cubic yards of earth were in the heaps and they were to be paid for as an allowance in addition to the 9239 cubic yards, the total measurement of the excavation i had to do under the contract. of course it was worded right, but i give you the meaning. this i signed, and it was witnessed by the time-keeper and the young guv'nor. i made just about the same as he did of the total measurement, but was so eager after the 30 cubic yards in the heaps that i signed the paper off hand, but of course i knew then what was written, but thought no more about it. i left the office and had six of neat right off on the strength of those heaps. i will cut it short now. "well, i finished the job quickly, and one day, just before i had done, i thought to myself, 'there have not been any "extras" on this approach road, for what with slope and fence pegs being set out there has actually been no chance of a bit "extra."' after thinking i said to myself, 'it is an awkward place to measure. i will make my measurements so that they work out five hundred yards more, add a little all over, i can but give way in the end, have a nice, warm, genteel wrangle that will shake up the cockles of my heart, and i may get half or something extra if i do the oily persuasive trick, and look wronged in my countenance.' so up i went to the office and said, 'i shall about finish to-morrow, sir, and i think you will say i have done the job well and quickly, and deserve another. it has been a tight fit, and has only just kept me going.' "usual patter followed that is required on such occasions, and is kept in stock for them. i was beginning to feel real happy, and thinking i had got twenty pounds at least, and no mistake for talking pretty. so i said, 'as i am here, sir, do you mind telling me what you make the measurement?'" "'certainly. 9239 cubic yards, and 30 yards allowed for heaps. total, 9269 cubic yards.' "that did not suit me, so i started on the injured innocence lay, and said meekly and persuasive like, 'you have left out something, i think, sir.' "'no; i have not.' "'well, sir, i make 500 yards more than you; and if i don't get it it will be very bad for me, for i shall not be able to pay my men.' that did not seem to flurry him. he opened the safe, and read from the paper i had signed some months ago. blessed if it ever occurred to me to think that i had signed for the total quantities, but i had, for i was then so taken up with the 30 yards. like you, i am old enough to know that no contract is indisputable, and that many things in law have to be tried before they are law when a question arises, and that there is not much finality about the show; but here i was caught, and had made my own net, and no mistake; so, after putting in all i knew and saying to him, 'i did not take that bit of paper to mean the same as he did,' i considered it best to shake down easy as i saw i was grassed, so i took his measurement; but i wished blue ruin to the heaps, and may where they were tipped be well worried by worms and vermin. look out! i shall break something." "don't slap the table with your clenched fist like that, or we shall have to pay for damages, and have nothing left for drinks." "right you are; but it does make me wild to think of it." "you were had at your own game there!" "yes; but after all said and done, except the ground is level throughout, i heard two engineers say earthwork measurements are generally a matter of fair averaging; and if tables are used, some like this table and others that, so all are happy; but they agreed cross-sections are the best, and unless a plaster cast is made of the surface of some ground, no one could say what the measurement really was to a few yards, and that it does not much matter as the price per cubic yard is so little compared with most prices of work, such as masonry, brickwork, concrete, &c." "you have finished, i fancy?" "yes." "now i'll tell you how i once got a bit 'extra' from measurements in rather an odd way. the work was done without a contractor, it was principally let in pieces to sub-contractors, and the rest day-work; but i heard they did not gain much, if anything, by it. came to nearly the same thing, and all the bother and risk themselves, and about the same good work. "well, the funny way i made some extra profit, of course, as usual, very much against my will, was this. i happened to be in the engineer's office, and heard the resident say to his assistant, 'mr. ----, please make a list of timber required for the quay sheds, and take out the quantities.' now it is only fair to say the assistant knew his book and was up to snuff, but we are all caught tripping sometimes, and whether it was his anxiety to ascertain the exact quantities, i don't know, but he got mixed, and blessed if the timber was not ordered net lengths, and nothing allowed for mortises and making joints. just as we were going to start on the sheds they took us away, and before the foundations were excavated for the walls. it was fortunate they did, as it happened, for it afterwards occurred to the assistant that he had forgotten to allow for mortises and joints. so the sheds had to be made about a foot less width than they should have been, and we got paid for the foot or so at each end that was left out; and the inspector got the tip, i suppose, for nothing was said, and it was not noticed, for they were wide store sheds, with a line of rails through the centre, and it really did not matter at all. so you see i was forced to take a bit 'extra,' but that is the only time in the whole of my life. of course it worried me much." "no doubt it caused another wrinkle to set on your forehead." "very likely; but an old partner of mine told me he once was paid for the corners of a lot of level-crossing lodges twice over by taking the outside wall measurements all round instead of two outside and two inside, but only once, when things had to be done at a great rush; it was a case of hurry up all round, for all the final measurements of the whole line had to be done in a fortnight." chapter xv. men and wages. 'sub' from the wood. a sub-contractor's scout and free traveller. "it is nearly midnight. i am game for another hour, are you?" "yes. i like talking on the quiet, it draws you together, you know; you feel for a time as if we all belonged to one family, although we do not, and don't want; that's a fact." "precisely, old pal. let us grip and sip." "did any of your men ever play rough on you?" "not often; but i remember one. he was a good working hand, and i did not mean to lose him. ted skip was his name. this is how it occurred. one saturday night i was in the village, and saw at the corner of a lane a man standing up in a cart spouting away fit to give him heart disease, or break a blood-vessel, and getting hot so quick, that i am sure he was going to beat record time. i believe he was fed on dictionaries and stewed socialist pamphlets that did not agree with him. he was pouring it out. he said in effect that pretty nearly everybody was a thief except himself and his comrades, and that nearly all things were poison as they were, and unless we all did as he said we were fools and felons, and worse. then he went on to say, beer was poison, tobacco was poison, and the way things were now, and all went on, was worse than poison. then he talked about us, called us railway slave drivers and slaves, and i am sure there was no one or nothing that existed that was not poison to him except himself and what he possessed, and the fools that paid him. i got wild after a bit, hearing him lying away as fast as he could speak, and i shouted, 'you are all poison, you old bit of arsenic, for what is not ass about you is from old nick.' he was then shouting out 'your constitution is wrong. all the bills are of no use.' that was too much for me, so i pushed my way in and showed him my fist, and said, 'i'll soon show you whether all the bills are of no use and whether my constitution is wrong. my name is bill dark, and there are numbers of people here that know i have never been sick or sorry since i was born, and i have taken beer and smoked tobacco from the time i was fifteen. in moderation, i believe in this country it does good to most of us, and pretty well all except those that are built up peculiar, and if you want to see if i'm of no use, come on; only get a sack first, so that the pieces of you that remain, and are large enough to be found, can be taken away and burnt to-night instead of later on. you understand what i mean.' "our chaps cheered me like mad, and i suppose old arsenic thought his show was being wasted, for he threw up his arms and drove off, and we yelled him out of the village. well, now you'll hear what came of it. teddy skip was there, and heard me say that beer and tobacco in moderation in this country i believe did good to most of us. a week or so passed, and i forgot all about old arsenic when teddy skip came to me, and said, 'guv'nor, after hearing you down in the village, and feeling a bit cold now and then, i thought i would try a pipe. i find it suits me, and is quite a friend, but it costs me nearly twopence a day, at least that is what i reckon it does. i have been with you a long time, and hope you won't mind another twopence a day just to buy the tobacco as you recommended to be used in moderation.' "he had me there, so i made no bones about it, and said, 'very well then, another twopence from monday;' but i gave him a parting shot in this way, 'i know you are courting mary plush, and may be joined soon, but don't you come to me for a rise after each lot of twins is born, and say you have done a kindness to me and the public generally; because the wife and ten children lay is played out for increase of wages, and folks do with them that show as much moderation in size of families as remember i said should be used with beer and tobacco.' he began to move, and said smiling, as he cleared out, 'all right, guv'nor, thank you, i understand.'" "that was pretty for you; but did i ever tell you how i got well insulted by one of my chaps?" "no. out with it." "it was in my early days, about the first work i had on the piece. it was clearing and forming through a wood, and there were more rabbits there than trees. the contract was just started, and you know what the chaps are then, they want 'sub' nearly to their full time. well, i was not flush, in fact they nearly drained me out, so the rabbits were too much for me, besides they were wasted in my sight where they were, simply gold running loose; so i bagged a fair lot, in fact as many as i could catch. now, my men finding i was subbing them nicely seemed to think i was the man they had been looking to serve since they took to work, so i considered i ought to stop their game with another variety of sport. it does not do to let wrong ideas rest quiet in any man. it is not kind. it was thursday, and on saturday i should have a fairish draw for myself on account of work done; but as things were, i was nearly run out. about six wanted 'sub,' so i threw a rabbit to each of them, and said, 'that is tenpence, and it ought to be a shilling, for they are as big as hares and more feeding, and they are not half the trouble to cook.' they grumbled, so i growled out, 'except on saturdays, it is that this week and next most likely, or nothing, so choose your time.' one stayed behind, and said, 'boss, just you look here: eightpence is enough for that, and too much, because i know it is poached, for i saw you doing a lift among the "furrers," and when i receive stolen goods i am paid for holding them, and chancing the consequences, and i don't pay for taking care of them. do you understand? it is the last i take, and don't you mistake.' "this 'riled' me, so i said, 'off you go, or i'll flatten you out.' i was had there. of course, he was at the same game as i had been, and rabbits to him were not exactly a novelty. well, i carried on the fun there to such a tune that at last it became too hot. a dealer used to fetch them. he had an old cart. it looked like a baker's, and had some name on it, and there was a bit of green baize, and a basket or two, and a few loaves to keep up the illusion. we worked it till it turned on us, and the business had to be stopped." "i never have done much at that. not enough money for the risk to please me." "believe me, i have given up the game twenty years or more. i soon found in taking work by the piece i was bound to have a bit of capital, and, as a rule, what i want i get if it is to be had by anyone, and i generally find it is. i overdid it though, that's the worst of money, the more you get the more you want, and it's the biggest slave-driver out and spares no one. well, complaints about poaching went up to head-quarters and i was called before the guv'nor. he said to me very sharp, 'i shall measure up your work unless from this day i hear no more of your poaching.' "of course i bluffed it a bit, but it was no good. however, knowing he always liked fun, he listened to me and i went off fond as a lamb. after promising i would keep watch on the men, which he did not let me finish saying before he had advised me to have assistance, he meant someone to watch me, i went straight for some joking, just to get the venom out of the subject. there is nothing like flattery to start a talk easy, so i said, 'you, sir, know a host of things more than me, and no doubt can explain how it was my father told me when i was a boy that all the family had a natural power of attracting animals. he said it was born in us. one day, sir, he drew me close to him and whispered, after feeling my head, 'you have the family gift very powerful.' you'll excuse me, sir, but i just name this because game always follows me about, and when these rabbits come on the work there is no mistake they are trespassing, and so i punish them by taking them into custody according to the law. when i walk up and down the line they seem to be that joyful, sir, as is real touching. they will come, and the bigger they are the more they seem to like me (between ourselves, that is you and me, to-night talking quiet, small 'uns don't suit me). i have not got the heart to frighten them away, and so they come to me, and sooner than let them go back to their savage life i take them up and become like a parent to them. you cut me so hard in price for the work, sir, i cannot afford to keep them long, so they have to partly keep me." "did your guv'nor stand that?" "yes. he was a good listener and always gave a man enough rope to hang himself." "i should have punched your head if i had been him." "very likely you would have tried to, but he did not, so i went on to say, 'well, sir, it is my undoubted belief the big rabbits down here can tell the difference between some letters and others, in the same way, i suppose, as they know the difference between some shot through their ears and a cabbage leaf in their mouth, or a horse and a fox; for they always run away from every cart but mine. i was just thinking i had said enough when the guv'nor had his turn and said:-"'after what you have told me, attach a dozen white boards to the fencing, and have these words painted upon them in six-inch black letters--"rabbits are vermin," and have your name put underneath. as you say some of them can read, that will cause them to cease following you. i am determined that this poaching shall be stopped once and for all.' "'excuse me, sir, but suppose they still will come to me after the notices are up, and i can't keep them away?' "he answered, 'in such an event fix notice boards painted thus: "any rabbit found trespassing upon this railway will be prosecuted with the utmost rigour of the law, and any rabbit found destroying the fences or hedges, or committing any damage of whatsoever kind will be shot.' have your name put on it as before.' "after that i thought it was time to go, and as i went out i could hear laughter. he had me, you know, so i was compelled to take to butcher's meat again throughout, and only a spare rabbit now and then went home to see his relations by aid of my mouth." "what a row there is outside?" "it's my dog barking. he must have heard you talk of rabbits. he is clever. i trained him so that i always knew when any engineers or inspectors were on the prowl. i call him 'spot,' because he can 'spot' them so well. i made him do the spy business right round our end of the docks i was then on, and also on railway work." "what did he do?" "he used to do a tramp up and down quite naturally, about quarter of a mile in front of the tip and a quarter of a mile back of the gullet, or anywhere i had work, and not even the men knew he was on scout. he is the best watchman i have known; and so long as things were right and no bosses about he never came close to me unless i called him, but if anyone was prowling about he soon was close to me, and three pats communicated to him that i twigged, and he went on the scent again. he seemed to sniff out the faces of all my guv'nors in an instant, and looked anxious till i patted him three times, and then he turned up his eyes to meet mine, and a lovely beam of satisfaction came over him and he was as happy as he could be, and then he vanished. he was a sly dog, and useful too. he slept at the bottom of my bed in a basket. my wife did not like him on the bed; said dogs were dogs, and carried too many relations on their persons, so i hung a big basket to the tail end of our sleeping apparatus, and there he snoozed. now, wherever i was, he was, or near to; he did not seem happy except he knew where i was. i always took him wherever i went, and on free pass. it's not very often i am travelling far, except when the works are finished; still, i easily trained him to be a good free traveller after a few trials, so that i never took a ticket for him. not me. i always think it is hard, provided you have no luggage for the van, and have your dog well under control, that you cannot take him with you free, like you do a stick, an umbrella, or your pipe. a dog does not occupy a seat nor make a noise the same as a baby; but there, i don't mean to argue the question, and, personally, have no occasion, because i have not paid anything for my dog's travelling for years. the problem is solved as far as i am concerned, and the rest of creation will have to look out for themselves." "how do you do it?" "you mean, how does my dog, spot, do it? in this way. i take my ticket, and before putting it into my pocket hold it in my hand for a moment. i then go on my right platform. spot, that is my dog, then knows he is to get on that platform. he usually waits till a good many people want to pass, then he slips in beautifully quiet, sometimes by the side of a lady, or under cover of a group of passengers, and i have never known him noticed at the doors, as the ticket collectors are busy ticket snipping. i don't interfere with spot's platform arrangements, for properly educated and well-brought-up dogs would object; but there is no doubt at some of the terminal stations the game could not be worked unless all the platforms are open. suppose he was noticed on a platform, and they tried to find him, he was so good at hiding that they always thought he had gone; besides, they had plenty to do, and more serious business to look after. once i saw they were searching for him, but they did not find him. he was not on the platform at all, but under a truck in the siding and enjoying the fun. he rested there, or at a convenient place till he heard the train coming, or saw i was about to get in. he timed his movements very cleverly, and has taken me by surprise sometimes, but he was sure to be under the seat, and hiding as quietly as a mouse, and taking no notice of me; not he. "when i arrived at my station, if it was a big one, there was no trouble, i got out and spot sneaked out without taking any notice of me, nor did i of him then. he used to make straight for the wall, and you bet he got out of the station quick, or was turned out. i have seen him driven out, as the porters took him for a stray dog. once they threw a stool at him, it just caught his tail, and made him squall a trifle; but although it was a hard trial for me, i suppressed my feelings, as i had no ticket for him. i have known him sit down after following me out of the carriage, close up to the wall one end of a platform, and wait till the ticket-collector was busy sorting the tickets, and then spot would walk out like a nobleman. i waited for him at a respectful and safe distance from the station, and then we had an affectionate meeting, and he had a biscuit and i had a drink, and we were a happy two. spot is a real good dog, and as honest as the day, for i trained him in the right direction from the time he was a pup. he is a cool one; but there, it is a gift of nature like a swell singer's voice." "precisely." "now, listen; for once i was nearly had, even with spot. there were about ten people in the compartment of a long carriage, and i sat next to a fly-looking chap, and only got in just in time, with my dog handy. off the train went, and i was trying to consider what i ought to think about during the journey, when we all started, for spot barked really fierce; and i said, 'quiet.' blessed if there was not another bark, and from another member of the dog creation. i knew it was not spot, so i looked under the seat, and saw two bags, and spot looking very warm and ready on one of them, with his head a little on one side. i knew it was live game, and i saw the other bag move. i thought the railway company had got the office and caught me, and that it was a 'put up job,' but i was wrong. it was all right. the chap next to me whispered in my ear that he was a rat-catcher, and had live rats in one bag, and his dog in the other, and they were travelling as passengers' luggage. i winked, and he did. then it occurred to me, i was too friendly with him. however, of course his dog was trained to keep quiet, but mine was not in the presence of rats, so i had to look under again, and put out my stick, and say. 'quiet, bosses.' spot knew what that meant, and was quiet. "now, the other passengers steadied down very quickly, for of course they did not know we had not paid for the dogs. it was a fast local train and only stopped at the terminus, so there was no chance of their getting out before me at the station. i took care of that. it might have been awkward otherwise. the beauty of it was, this rat-catcher, i could see was not altogether satisfied when he came to dwell on it, for i fancy he thought i was a spy, and that he was caught; and i was not quite convinced he was not a detective. still, a bold game generally pays the best; anyhow, i pretended i was dozing. it was evening, and when the train had barely stopped, after saying. 'good-night all,' i got out first, and did not wait to see how the rat-catcher fared. i had spot to look after, and was afraid the guard might have heard the barking; but he did not, for if he had we should both have been had lovely, all through a bag of rats. what my dog suffered from having to leave the game alone, it grieves me to think. all i know is, he was really bad for days after; but i should say the rats were tuning up to sing, 'we are all surrounded.'" "i'm off now. good-bye, old chap. cheer up." "thank you for coming to see me, and having a good chat. it's lucky no one has heard us though, still, we have not confessed all. have we?" "not exactly. good-bye." "mind how you go, and i hope to see you to-morrow." "all right; i'm safe enough, for i have been in too many squalls not to be careful. i won't say artful." finis. _crown 8vo, cloth, price 4s. 6d._ notes on concrete and works in concrete. by john newman, assoc. m. inst. c.e. reviews of the press. engineering: _"an epitome of the best practice which may be relied upon not to mislead."_ "the successful construction of works in concrete is a difficult matter to explain in books." "all the points which open the way to bad work are carefully pointed out by our author with a pertinacious insistance which demonstrates his clear appreciation of their value." iron: "as numerous examples are cited of the use of concrete in public works, and details supplied, _the book will greatly assist engineers engaged upon such works_." the builder: "a very practical little book, carefully compiled, and _one which all writers of specifications for concrete work would do well to peruse_." "_the book contains reliable information for all engaged upon public works._" "a perusal of mr. newman's valuable little handbook will point out the importance of a more careful investigation of the subject than is usually supposed to be necessary." american press. building: "to accomplish so much in so limited a space, the subject-matter has been confined to chapters." "_we take pleasure in saying that this is the most admirable and complete handbook on concretes for engineers of which we have knowledge._" e. & f. n. spon, 125, strand, london. _crown 8vo, cloth, 7s. 6d._ earthwork slips and subsidences upon public works. by john newman, assoc. m. inst. c.e. reviews of the press. the builder: "we gladly welcome mr. newman's book on slips in earthworks as an important contribution to a right comprehension of such matters." "there is much in this book that will at all events guide the mind of the student to the points--and there are many of them--which have to be weighed by designers of engineering works, and which, if attended to and fixed on the memory, will certainly guard them against probable if not against possible slips in earthwork." "there is much to read, and read carefully, on all these points." "he then presents us with sixteen maxims to be observed, where practicable, in the consideration of the location of earthworks (hints as to what should be avoided, which are of considerable value).... the capital cost of a work and the cost of its maintenance may both be very sensibly reduced by attention to all the points alluded to by the author." "we are glad to see that the author enters at some length into the subject of the due provision of drainage at the backs of retaining walls, a matter so often neglected or overlooked, and carries this subject to a far larger one, the causes which tend to disturb the repose of dock walls. his remarks on these matters are well worthy of consideration, and are thoroughly practical, and the items which have to be taken into account in the necessary statical calculations very well introduced." "in conclusion we may say that there is plenty of good useful information to be obtained from this work, which touches a subject possessing an exceedingly scanty vocabulary." "it contains an immense deal of matter which must be swallowed sooner or later by every one who desires to be a good engineer." &c. &c. &c. &c. building news: "mr. john newman, assoc. m. inst. c.e., has written a volume on a subject that has hitherto only been treated of cursorily." "useful advice is given which the railway engineer and earthwork contractor may profit by." "the book contains a fund of useful information." &c. &c. &c. &c. builder's reporter and engineering times: "the book which mr. john newman has written imparts a new interest to earthworks. it is in fact a sort of pathological treatise, and as such may be said to be unique among books on construction, for in them failures are rarely recognised. now in mr. newman's volume the majority of the pages relate to failures, and from them the reader infers how they are to be avoided, and thus to form earthworks that will endure longer than those which are executed without much regard to risks." "the manner of dealing with the subsidences when they occur, as well as providing against them, will be found described in the book." "it can be said that the subject is thoroughly investigated, and contractors as well as engineers can learn much from mr. newman's book." &c. &c. &c. &c. e. & f. n. spon, 125, strand, london. 1891. books relating to applied science published by e. & f. n. spon, london: 125, strand. new york: 12, cortlandt street. _the engineers' sketch-book of mechanical movements, devices, appliances, contrivances, details employed in the design and construction of machinery for every purpose._ collected from numerous sources and from actual work. classified and arranged for reference. _nearly 2000 illustrations._ by t. b. barber, engineer. 8vo, cloth, 7_s._ 6_d._ _a pocket-book for chemists, chemical manufacturers, metallurgists, dyers, distillers, brewers, sugar refiners, photographers, students, etc., etc._ by thomas bayley, assoc. r.c. sc. ireland, analytical and consulting chemist and assayer. fourth edition, with additions, 437 pp., royal 32mo, roan, gilt edges, 5_s._ synopsis of contents: atomic weights and factors--useful data--chemical calculations- rules for indirect analysis--weights and measures--thermometers and barometers--chemical physics--boiling points, etc.--solubility of substances--methods of obtaining specific gravity--conversion of hydrometers--strength of solutions by specific gravity--analysis- gas analysis--water analysis--qualitative analysis and reactions- volumetric analysis--manipulation--mineralogy--assaying--alcohol --beer--sugar--miscellaneous technological matter relating to potash, soda, sulphuric acid, chlorine, tar products, petroleum, milk, tallow, photography, prices, wages, appendix, etc., etc. _the mechanician_: a treatise on the construction and manipulation of tools, for the use and instruction of young engineers and scientific amateurs, comprising the arts of blacksmithing and forging; the construction and manufacture of hand tools, and the various methods of using and grinding them; description of hand and machine processes; turning and screw cutting. by cameron knight, engineer. _containing 1147 illustrations_, and 397 pages of letter-press. fourth edition, 4to, cloth, 18_s._ _just published, in demy 8vo, cloth, containing 975 pages and 250 illustrations, price 7s. 6d._ spons' household manual: a treasury of domestic receipts and guide for home management. principal contents. hints for selecting a good house, pointing out the essential requirements for a good house as to the site, soil, trees, aspect, construction, and general arrangement; with instructions for reducing echoes, waterproofing damp walls, curing damp cellars. sanitation.--what should constitute a good sanitary arrangement; examples (with illustrations) of welland ill-drained houses; how to test drains; ventilating pipes, etc. water supply.--care of cisterns; sources of supply; pipes; pumps; purification and filtration of water. ventilation and warming.--methods of ventilating without causing cold draughts, by various means; principles of warming; health questions; combustion; open grates; open stoves; fuel economisers; varieties of grates; close-fire stoves; hot-air furnaces; gas heating; oil stoves; steam heating; chemical heaters; management of flues; and cure of smoky chimneys. lighting.--the best methods of lighting; candles, oil lamps, gas, incandescent gas, electric light; how to test gas pipes; management of gas. furniture and decoration.--hints on the selection of furniture; on the most approved methods of modern decoration; on the best methods of arranging bells and calls; how to construct an electric bell. thieves and fire.--precautions against thieves and fire; methods of detection; domestic fire escapes; fireproofing clothes, etc. the larder.--keeping food fresh for a limited time; storing food without change, such as fruits, vegetables, eggs, honey, etc. curing foods for lengthened preservation, as smoking, salting, canning, potting, pickling, bottling fruits, etc.; jams, jellies, marmalade, etc. the dairy.--the building and fitting of dairies in the most approved modern style; butter-making; cheesemaking and curing. the cellar.--building and fitting; cleaning casks and bottles; corks and corking; aã«rated drinks; syrups for drinks; beers; bitters; cordials and liqueurs; wines; miscellaneous drinks. the pantry.--bread-making; ovens and pyrometers; yeast; german yeast; biscuits; cakes; fancy breads; buns. the kitchen.--on fitting kitchens; a description of the best cooking ranges, close and open; the management and care of hot plates, baking ovens, dampers, flues, and chimneys; cooking by gas; cooking by oil; the arts of roasting, grilling, boiling, stewing, braising, frying. receipts for dishes.--soups, fish, meat, game, poultry, vegetables, salads, puddings, pastry, confectionery, ices, etc., etc.; foreign dishes. the housewife's room.--testing air, water, and foods; cleaning and renovating; destroying vermin. housekeeping, marketing. the dining-room.--dietetics; laying and waiting at table: carving; dinners, breakfasts, luncheons, teas, suppers, etc. the drawing-room.--etiquette; dancing; amateur theatricals; tricks and illusions; games (indoor). the bedroom and dressing-room; sleep; the toilet; dress; buying clothes; outfits; fancy dress. the nursery.--the room; clothing; washing; exercise; sleep; feeding; teething; illness; home training. the sick-room.--the room; the nurse; the bed; sick room accessories; feeding patients; invalid dishes and drinks; administering physic; domestic remedies; accidents and emergencies; bandaging; burns; carrying injured persons; wounds; drowning; fits; frost-bites; poisons and antidotes; sunstroke; common complaints; disinfection, etc. the bath-room.--bathing in general; management of hot-water system. the laundry.--small domestic washing machines, and methods of getting up linen, fitting up and working a steam laundry. the school-room.--the room and its fittings; teaching, etc. the playground.--air and exercise; training; outdoor games and sports. the workroom.--darning, patching, and mending garments. the library.--care of books. the garden.--calendar of operations for lawn, flower garden, and kitchen garden. the farmyard.--management of the horse, cow, pig, poultry, bees, etc., etc. small motors.--a description of the various small engines useful for domestic purposes, from 1 man to 1 horse power, worked by various methods, such as electric engines, gas engines, petroleum engines, steam engines, condensing engines, water power, wind power, and the various methods of working and managing them. household law.--the law relating to landlords and tenants, lodgers, servants, parochial authorities, juries, insurance, nuisance, etc. _on designing belt gearing_. by e. j. cowling welch, mem. inst. mech. engineers, author of 'designing valve gearing.' fcap. 8vo, sewed, 6_d._ _a handbook of formulã¦, tables, and memoranda, for architectural surveyors and others engaged in building._ by j. t. hurst, c.e. fourteenth edition, royal 32mo, roan, 5_s._ "it is no disparagement to the many excellent publications we refer to, to say that in our opinion this little pocket-book of hurst's is the very best of them all, without any exception. it would be useless to attempt a recapitulation of the contents, for it appears to contain almost _everything_ that anyone connected with building could require, and, best of all, made up in a compact form for carrying in the pocket, measuring only 5 in. by 3 in., and about 3/4 in. thick, in a limp cover. we congratulate the author on the success of his laborious and practically compiled little book, which has received unqualified and deserved praise from every professional person to whom we have shown it."--_the dublin builder._ _tabulated weights of angle, tee, bulb, round, square, and flat iron and steel_, and other information for the use of naval architects and shipbuilders. by c. h. jordan, m.i.n.a. fourth edition, 32mo, cloth, 2_s._ 6_d._ _a complete set of contract documents for a country lodge_, comprising drawings, specifications, dimensions (for quantities), abstracts, bill of quantities, form of tender and contract, with notes by j. leaning, printed in facsimile of the original documents, on single sheets fcap., in paper case, 10_s._ _a practical treatise on heat, as applied to the useful arts_; for the use of engineers, architects, &c. by thomas box. _with 14 plates._ sixth edition, crown 8vo, cloth, 12_s._ 6_d._ _a descriptive treatise on mathematical drawing instruments_: their construction, uses, qualities, selection, preservation, and suggestions for improvements, with hints upon drawing and colouring. by w. f. stanley, m.r.i. sixth edition, _with numerous illustrations_, crown 8vo, cloth, 5_s._ _quantity surveying._ by j. leaning. with 42 illustrations. second edition, revised, crown 8vo, cloth, 9_s._ _contents:_ a complete explanation of the london practice. general instructions. order of taking off. modes of measurement of the various trades. use and waste. ventilation and warming. credits, with various examples of treatment. abbreviations. squaring the dimensions. abstracting, with examples in illustration of each trade. billing. examples of preambles to each trade. form for a bill of quantities. do. bill of credits. do. bill for alternative estimate. restorations and repairs, and form of bill. variations before acceptance of tender. errors in a builder's estimate. schedule of prices. form of schedule of prices. analysis of schedule of prices. adjustment of accounts. form of a bill of variations. remarks on specifications. prices and valuation of work, with examples and remarks upon each trade. the law as it affects quantity surveyors, with law reports. taking off after the old method. northern practice. the general statement of the methods recommended by the manchester society of architects for taking quantities. examples of collections. examples of "taking off" in each trade. remarks on the past and present methods of estimating. _spons' architects' and builders' price book, with useful memoranda._ edited by w. young, architect. crown 8vo, cloth, red edges, 3_s._ 6_d._ _published annually._ seventeenth edition. now ready. _long-span railway bridges_, comprising investigations of the comparative theoretical and practical advantages of the various adopted or proposed type systems of construction, with numerous formul㦠and tables giving the weight of iron or steel required in bridges from 300 feet to the limiting spans; to which are added similar investigations and tables relating to short-span railway bridges. second and revised edition. by b. baker, assoc. inst. c.e. _plates_, crown 8vo, cloth, 5_s._ _elementary theory and calculation of iron bridges and roofs._ by august ritter, ph.d., professor at the polytechnic school at aix-la-chapelle. translated from the third german edition, by h. r. sankey, capt. r.e. with 500 _illustrations_, 8vo, cloth, 15_s._ _the elementary principles of carpentry._ by thomas tredgold. revised from the original edition, and partly re-written, by john thomas hurst. contained in 517 pages of letter-press, and _illustrated with 48 plates and 150 wood engravings_. sixth edition, reprinted from the third, crown 8vo, cloth, 12_s._ 6_d._ section i. on the equality and distribution of forces--section ii. resistance of timber--section iii. construction of floors--section iv. construction of roofs--section v. construction of domes and cupolas--section vi. construction of partitions--section vii. scaffolds, staging, and gantries--section viii. construction of centres for bridges--section ix. coffer-dams, shoring, and strutting--section x. wooden bridges and viaducts--section xi. joints, straps, and other fastenings--section xii. timber. _the builder's clerk_: a guide to the management of a builder's business. by thomas bales. fcap. 8vo, cloth, 1_s._ 6_d._ _practical gold-mining_: a comprehensive treatise on the origin and occurrence of gold-bearing gravels, rocks and ores, and the methods by which the gold is extracted. by c. g. warnford lock, co-author of 'gold: its occurrence and extraction.' _with 8 plates and 275 engravings in the text_, royal 8vo, cloth, 2_l._ 2_s._ _hot water supply_: a practical treatise upon the fitting of circulating apparatus in connection with kitchen range and other boilers, to supply hot water for domestic and general purposes. with a chapter upon estimating. _fully illustrated_, crown 8vo, cloth, 3_s._ _hot water apparatus_: an elementary guide for the fitting and fixing of boilers and apparatus for the circulation of hot water for heating and for domestic supply, and containing a chapter upon boilers and fittings for steam cooking. _32 illustrations_, fcap. 8vo, cloth, 1_s._ 6_d._ _the use and misuse, and the proper and improper fixing of a cooking range._ _illustrated_, fcap. 8vo, sewed, 6_d._ _iron roofs_: examples of design, description. _illustrated with 64 working drawings of executed roofs._ by arthur t. walmisley, assoc. mem. inst. c.e. second edition, revised, imp. 4to, half-morocco, 3_l._ 3_s._ _a history of electric telegraphy_, to the year 1837. chiefly compiled from original sources, and hitherto unpublished documents, by j. j. fahie, mem. soc. of tel. engineers, and of the international society of electricians, paris. crown 8vo, cloth, 9_s._ _spons' information for colonial engineers._ edited by j. t. hurst. demy 8vo, sewed. no. 1. ceylon. by abraham deane, c.e. 2_s._ 6_d._ contents: introductory remarks--natural productions--architecture and engineering--topography, trade, and natural history--principal stations--weights and measures, etc., etc. no. 2. southern africa, including the cape colony, natal, and the dutch republics. by henry hall, f.r.g.s., f.r.c.i. with map. 3_s._ 6_d._ contents: general description of south africa--physical geography with reference to engineering operations--notes on labour and material in cape colony--geological notes on rock formation south africa--engineering instruments for use in south in africa--principal public works in cape colony: railways, mountain roads and passes, harbour works, bridges, gas works, irrigation and water supply, lighthouses, drainage and sanitary engineering, public buildings, mines--table of woods in south africa--animals used for draught purposes--statistical notes--table of distances--rates of carriage, etc. no. 3. india. by f. c. danvers, assoc. inst. c.e. with map. 4_s._ 6_d._ contents: physical geography of india--building materials--roads- railways-bridges--irrigation--river works--harbours- lighthouse buildings-native labour--the principal trees of india--money--weights and measures--glossary of indian terms, etc. _our factories, workshops, and warehouses_: their sanitary and fire-resisting arrangements. by b. h. thwaite, assoc. mem. inst. c.e. _with 183 wood engravings_, crown 8vo, cloth, 9_s._ _a practical treatise on coal mining._ by george g. andrã�, f.g.s., assoc. inst. c.e., member of the society of engineers. _with 82 lithographic plates._ 2 vols., royal 4to, cloth, 3_l._ 12_s._ _a practical treatise on casting and founding_, including descriptions of the modern machinery employed in the art. by n. e. spretson, engineer. fifth edition, with _82 plates_ drawn to scale, 412 pp., demy 8vo, cloth, 18_s._ _a handbook of electrical testing._ by h. r. kempe, m.s.t.e. fourth edition, revised and enlarged, crown 8vo, cloth, 16_s._ _the clerk of works_: a vade-mecum for all engaged in the superintendence of building operations. by g. g. hoskins, f.r.i.b.a. third edition, fcap. 8vo, cloth, 1_s._ 6_d._ _american foundry practice_: treating of loam, dry sand, and green sand moulding, and containing a practical treatise upon the management of cupolas, and the melting of iron. by t. d. west, practical iron moulder and foundry foreman. second edition, _with numerous illustrations_, crown 8vo, cloth, 10_s._ 6_d._ _the maintenance of macadamised roads._ by t. codrington, m.i.c.e., f.g.s., general superintendent of county roads for south wales. second edition. 8vo. [_nearly ready._ _hydraulic steam and hand power lifting and pressing machinery._ by frederick colyer, m. inst. c.e., m. inst. m.e. _with 73 plates_, 8vo, cloth, 18_s._ _pumps and pumping machinery._ by f. colyer, m.i.c.e., m.i.m.e. _with 23 folding plates_, 8vo, cloth, 12_s._ 6_d._ _pumps and pumping machinery._ by f. colyer. second part. _with 11 large plates_, 8vo, cloth, 12_s._ 6_d._ _a treatise on the origin, progress, prevention, and cure of dry rot in timber_; with remarks on the means of preserving wood from destruction by sea-worms, beetles, ants, etc. by thomas allen britton, late surveyor to the metropolitan board of works, etc., etc. _with 10 plates_, crown 8vo, cloth, 7_s._ 6_d._ _the artillery of the future and the new powders._ by j. a. longridge, mem. inst. c.e. 8vo, cloth, 5_s._ _gas works_: their arrangement, construction, plant, and machinery. by f. colyer, m. inst. c.e. _with 31 folding plates_, 8vo, cloth, 12_s._ 6_d._ _the municipal and sanitary engineer's handbook._ by h. percy boulnois, mem. inst. c.e., borough engineer, portsmouth. _with numerous illustrations._ second edition, demy 8vo, cloth. contents: the appointment and duties of the town surveyor--traffic--macadamised roadways--steam rolling--road metal and breaking--pitched pavements --asphalte--wood pavements--footpaths--kerbs and gutters--street naming and numbering--street lighting--sewerage--ventilation of sewers--disposal of sewage--house drainage--disinfection--gas and water companies, etc., breaking up streets--improvement of private streets--borrowing powers--artisans' and labourers' dwellings- public conveniences--scavenging, including street cleansing- watering and the removing of snow--planting street trees--deposit of plans--dangerous buildings--hoardings--obstructions--improving street lines--cellar openings--public pleasure grounds--cemeteries --mortuaries--cattle and ordinary markets--public slaughter-houses, etc.--giving numerous forms of notices, specifications, and general information upon these and other subjects of great importance to municipal engineers and others engaged in sanitary work. _metrical tables._ by sir g. l. molesworth, m.i.c.e. 32mo, cloth, 1_s._ 6_d._ contents: general--linear measures--square measures--cubic measures--measures of capacity--weights--combinations--thermometers. _elements of construction for electro-magnets._ by count th. du moncel, mem. de l'institut de france. translated from the french by c. j. wharton. crown 8vo, cloth, 4_s._ 6_d._ _a treatise on the use of belting for the transmission of power._ by j. h. cooper. second edition, _illustrated_, 8vo, cloth, 15_s._ _a pocket-book of useful formul㦠and memoranda for civil and mechanical engineers._ by sir guilford l. molesworth, mem. inst. c.e. _with numerous illustrations_, 744 pp. twenty-second edition, 32mo, roan, 6_s._ synopsis of contents: surveying, levelling, etc.--strength and weight of materials- earthwork, brickwork, masonry, arches, etc.--struts, columns, beams, and trusses--flooring, roofing, and roof trusses--girders, bridges, etc.--railways and roads--hydraulic formulã¦--canals, sewers, waterworks, docks--irrigation and breakwaters--gas, ventilation, and warming--heat, light, colour, and sound--gravity: centres, forces, and powers--millwork, teeth of wheels, shafting, etc.--workshop recipes--sundry machinery--animal power--steam and the steam engine--water-power, water-wheels, turbines, etc.--wind and windmills--steam navigation, ship building, tonnage, etc.- gunnery, projectiles, etc.--weights, measures, and money- trigonometry, conic sections, and curves--telegraphy--mensuration --tables of areas and circumference, and arcs of circles- logarithms, square and cube roots, powers--reciprocals, etc.- useful numbers--differential and integral calculus--algebraic signs--telegraphic construction and formulã¦. _hints on architectural draughtsmanship._ by _g. w. tuxford hallatt_. fcap. 8vo, cloth, 1_s._ 6_d._ _spons' tables and memoranda for engineers_; selected and arranged by j. t. hurst, c.e., author of 'architectural surveyors' handbook,' 'hurst's tredgold's carpentry,' etc. eleventh edition, 64mo, roan, gilt edges, 1_s._; or in cloth case, 1_s._ 6_d._ this work is printed in a pearl type, and is so small, measuring only 2-1/2 in. by 1-3/4 in. by 1/4 in. thick, that it may be easily carried in the waistcoat pocket. "it is certainly an extremely rare thing for a reviewer to be called upon to notice a volume measuring but 2-1/2 in. by 1-3/4 in., yet these dimensions faithfully represent the size of the handy little book before us. the volume--which contains 118 printed pages, besides a few blank pages for memoranda--is, in fact, a true pocket-book, adapted for being carried in the waistcoat pocket, and containing a far greater amount and variety of information than most people would imagine could be compressed into so small a space.... the little volume has been compiled with considerable care and judgment, and we can cordially recommend it to our readers as a useful little pocket companion."--_engineering._ _a practical treatise on natural and artificial concrete, its varieties and constructive adaptations._ by henry reid, author of the 'science and art of the manufacture of portland cement.' new edition, _with 59 woodcuts and 5 plates_, 8vo, cloth, 15_s._ _notes on concrete and works in concrete_; especially written to assist those engaged upon public works. by john newman, assoc. mem. inst. c.e., crown 8vo, cloth, 4_s._ 6_d._ _electricity as a motive power._ by count th. du moncel, membre de l'institut de france, and frank geraldy, ingã©nieur des ponts et chaussã©es. translated and edited, with additions, by c. j. wharton, assoc. soc. tel. eng. and elec. _with 113 engravings and diagrams_, crown 8vo, cloth, 7_s._ 6_d._ _treatise on valve-gears_, with special consideration of the link-motions of locomotive engines. by dr. gustav zeuner, professor of applied mechanics at the confederated polytechnikum of zurich. translated from the fourth german edition, by professor j. f. klein, lehigh university, bethlehem, pa. _illustrated_, 8vo, cloth, 12_s._ 6_d._ _the french-polisher's manual._ by a french-polisher; containing timber staining, washing, matching, improving, painting, imitations, directions for staining, sizing, embodying, smoothing, spirit varnishing, french-polishing, directions for re-polishing. third edition, royal 32mo, sewed, 6_d._ _hops, their cultivation, commerce, and uses in various countries._ by p. l. simmonds. crown 8vo, cloth, 4_s._ 6_d._ _the principles of graphic statics._ by george sydenham clarke, major royal engineers. _with 112 illustrations._ second edition, 4to, cloth, 12_s._ 6_d._ _dynamo tenders' hand-book._ by f. b. badt, late 1st lieut. royal prussian artillery. _with 70 illustrations._ third edition, 18mo, cloth, 4_s._ 6_d._ _practical geometry, perspective, and engineering drawing_; a course of descriptive geometry adapted to the requirements of the engineering draughtsman, including the determination of cast shadows and isometric projection, each chapter being followed by numerous examples; to which are added rules for shading, shade-lining, etc., together with practical instructions as to the lining, colouring, printing, and general treatment of engineering drawings, with a chapter on drawing instruments. by george s. clarke, capt. r.e. second edition, _with 21 plates_. 2 vols., cloth, 10_s._ 6_d._ _the elements of graphic statics._ by professor karl von ott, translated from the german by g. s. clarke, capt. r.e., instructor in mechanical drawing, royal indian engineering college. _with 93 illustrations_, crown 8vo, cloth, 5_s._ _a practical treatise on the manufacture and distribution of coal gas._ by william richards. demy 4to, with _numerous wood engravings and 29 plates_, cloth, 28_s._ synopsis of contents: introduction--history of gas lighting--chemistry of gas manufacture, by lewis thompson, esq., m.r.c.s.--coal, with analyses, by j. paterson, lewis thompson, and g. r. hislop, esqrs.--retorts, iron and clay--retort setting--hydraulic main--condensers--exhausters- washers and scrubbers--purifiers--purification--history of gas holder--tanks, brick and stone, composite, concrete, cast-iron, compound annular wrought-iron--specifications--gas holders- station meter--governor--distribution--mains--gas mathematics, or formul㦠for the distribution of gas, by lewis thompson, esq.--services--consumers' meters--regulators--burners--fittings- photometer--carburization of gas--air gas and water gas- composition of coal gas, by lewis thompson, esq.--analyses of gas--influence of atmospheric pressure and temperature on gas--residual products--appendix--description of retort settings, buildings, etc., etc. _the new formula for mean velocity of discharge of rivers and canals._ by w. r. kutter. translated from articles in the 'cultur-ingã©nieur,' by lowis d'a. jackson, assoc. inst. c.e. 8vo, cloth, 12_s._ 6_d._ _the practical millwright and engineers ready reckoner_; or tables for finding the diameter and power of cog-wheels, diameter, weight, and power of shafts, diameter and strength of bolts, etc. by thomas dixon. fourth edition, 12mo, cloth, 3_s._ _tin_: describing the chief methods of mining, dressing and smelting it abroad; with notes upon arsenic, bismuth and wolfram. by arthur g. charleton, mem. american inst. of mining engineers. _with plates_, 8vo, cloth, 12_s._ 6_d._ _perspective, explained and illustrated._ by g. s. clarke, capt. r.e. _with illustrations_, 8vo, cloth, 3_s._ 6_d._ _practical hydraulics;_ a series of rules and tables for the use of engineers, etc., etc. by thomas box. ninth edition, _numerous plates_, post 8vo, cloth, 5_s._ _the essential elements of practical mechanics; based on the principle of work_, designed for engineering students. by oliver byrne, formerly professor of mathematics, college for civil engineers. third edition, _with 148 wood engravings_, post 8vo, cloth, 7_s._ 6_d._ contents: chap. 1. how work is measured by a unit, both with and without reference to a unit of time--chap. 2. the work of living agents, the influence of friction, and introduces one of the most beautiful laws of motion--chap. 3. the principles expounded in the first and second chapters are applied to the motion of bodies--chap. 4. the transmission of work by simple machines--chap. 5. useful propositions and rules. _breweries and maltings_: their arrangement, construction, machinery, and plant. by g. scamell, f.r.i.b.a. second edition, revised, enlarged, and partly rewritten. by f. colyer, m.i.c.e., m.i.m.e. _with 20 plates_, 8vo, cloth, 12_s._ 6_d._ _a practical treatise on the construction of horizontal and vertical waterwheels_, specially designed for the use of operative mechanics. by william cullen, millwright and engineer. _with 11 plates._ second edition, revised and enlarged, small 4to, cloth, 12_s._ 6_d._ _a practical treatise on mill-gearing, wheels, shafts, riggers, etc._; for the use of engineers. by thomas box. third edition, _with 11 plates_. crown 8vo, cloth, 7_s._ 6_d._ _mining machinery_: a descriptive treatise on the machinery, tools, and other appliances used in mining. by g. g. andrã�, f.g.s., assoc. inst. c.e., mem. of the society of engineers. royal 4to, uniform with the author's treatise on coal mining, containing 182 _plates_, accurately drawn to scale, with descriptive text, in 2 vols., cloth, 3_l._ 12_s._ contents: machinery for prospecting, excavating, hauling, and hoisting- ventilation--pumping--treatment of mineral products, including gold and silver, copper, tin, and lead, iron, coal sulphur, china clay, brick earth, etc. _tables for setting out curves for railways, canals, roads, etc._, varying from a radius of five chains to three miles. by a. kennedy and r. w. hackwood. _illustrated_ 32mo, cloth, 2_s._ 6_d._ _practical electrical notes and definitions for the use of engineering students and practical men._ by w. perren maycock, assoc. m. inst. e.e., instructor in electrical engineering at the pitlake institute, croydon, together with the rules and regulations to be observed in electrical installation work. second edition. royal 32mo, roan, gilt edges, 4_s._ 6_d._ _the draughtsman's handbook of plan and map drawing_; including instructions for the preparation of engineering, architectural, and mechanical drawings. _with numerous illustrations in the text, and 33 plates (15 printed in colours)._ by g. g. andrã�, f.g.s., assoc. inst. c.e. 4to, cloth, 9_s._ contents: the drawing office and its furnishings--geometrical problems- lines, dots, and their combinations--colours, shading, lettering, bordering, and north points--scales--plotting--civil engineers' and surveyors' plans--map drawing--mechanical and architectural drawing--copying and reducing trigonometrical formulã¦, etc., etc. _the boiler-maker's and iron ship-builder's companion_, comprising a series of original and carefully calculated tables, of the utmost utility to persons interested in the iron trades. by james foden, author of 'mechanical tables,' etc. second edition revised, _with illustrations_, crown 8vo, cloth, 5_s._ _rock blasting_: a practical treatise on the means employed in blasting rocks for industrial purposes. by g. g. andrã�, f.g.s., assoc. inst. c.e. _with 56 illustrations and 12 plates_, 8vo, cloth, 10_s._ 6_d._ _experimental science_: elementary, practical, and experimental physics. by geo. m. hopkins. _illustrated by 672 engravings._ in one large vol., 8vo, cloth, 18_s._ _a treatise on ropemaking as practised in public and private rope-yards_, with a description of the manufacture, rules, tables of weights, etc., adapted to the trade, shipping, mining, railways, builders, etc. by r. chapman, formerly foreman to messrs. huddart and co., limehouse, and late master ropemaker to h. m. dockyard, deptford. second edition, 12mo, cloth, 3_s._ _laxton's builders' and contractors' tables_; for the use of engineers, architects, surveyors, builders, land agents, and others. bricklayer, containing 22 tables, with nearly 30,000 calculations. 4to, cloth, 5_s._ _laxton's builders' and contractors' tables._ excavator, earth, land, water, and gas, containing 53 tables, with nearly 24,000 calculations. 4to, cloth, 5_s._ _egyptian irrigation._ by w. willcocks, m.i.c.e., indian public works department, inspector of irrigation, egypt. with introduction by lieut.-col. j. c. ross, r.e., inspector-general of irrigation. _with numerous lithographs and wood engravings_, royal 8vo, cloth, 1_l._ 16_s._ _screw cutting tables for engineers and machinists_, giving the values of the different trains of wheels required to produce screws of any pitch, calculated by lord lindsay, m.p., f.r.s., f.r.a.s., etc. cloth, oblong, 2_s._ _screw cutting tables_, for the use of mechanical engineers, showing the proper arrangement of wheels for cutting the threads of screws of any required pitch, with a table for making the universal gas-pipe threads and taps. by w. a. martin, engineer. second, edition, oblong, cloth, 1_s._, or sewed, 6_d._ _a treatise on a practical method of designing slide-valve gears by simple geometrical construction_, based upon the principles enunciated in euclid's elements, and comprising the various forms of plain slide-valve and expansion gearing; together with stephenson's, gooch's, and allan's link-motions, as applied either to reversing or to variable expansion combinations. by edward j. cowling welch, memb. inst. mechanical engineers. crown 8vo, cloth, 6_s._ _cleaning and scouring_: a manual for dyers, laundresses, and for domestic use. by s. christopher. 18mo, sewed, 6_d._ _a glossary of terms used in coal mining._ by william stukeley gresley, assoc. mem. inst c.e., f.g.s., member of the north of england institute of mining engineers. _illustrated with numerous woodcuts and diagrams_, crown 8vo, cloth, 5_s._ _a pocket-book for boiler makers and steam users_, comprising a variety of useful information for employer and workman, government inspectors, board of trade surveyors, engineers in charge of works and slips, foremen of manufactories, and the general steam-using public. by maurice john sexton. second edition, royal 32mo, roan, gilt edges, 5_s._ _electrolysis_: a practical treatise on nickeling, coppering, gilding, silvering, the refining of metals, and the treatment of ores by means of electricity. by hippolyte fontaine, translated from the french by j. a. berly, c.e., assoc. s.t.e. _with engravings._ 8vo, cloth, 9_s._ _barlow's tables of squares, cubes, square roots, cube roots, reciprocals of all integer numbers up to 10,000._ post 8vo, cloth, 6_s._ _a practical treatise on the steam engine_, containing plans and arrangements of details for fixed steam engines, with essays on the principles involved in design and construction. by arthur rigg, engineer, member of the society of engineers and of the royal institution of great britain. demy 4to, _copiously illustrated with woodcuts and 96 plates_, in one volume, half-bound morocco, 2_l._ 2_s._; or cheaper edition, cloth, 25_s._ this work is not, in any sense, an elementary treatise, or history of the steam engine, but is intended to describe examples of fixed steam engines without entering into the wide domain of locomotive or marine practice. to this end illustrations will be given of the most recent arrangements of horizontal, vertical, beam, pumping, winding, portable, semi-portable, corliss, allen, compound, and other similar engines, by the most eminent firms in great britain and america. the laws relating to the action and precautions to be observed in the construction of the various details, such as cylinders, pistons, piston-rods, connecting-rods, cross-heads, motion-blocks, eccentrics, simple, expansion, balanced, and equilibrium slide-valves, and valve-gearing will be minutely dealt with. in this connection will be found articles upon the velocity of reciprocating parts and the mode of applying the indicator, heat and expansion of steam governors, and the like. it is the writer's desire to draw illustrations from every possible source, and give only those rules that present practice deems correct. _a practical treatise on the science of land and engineering surveying, levelling, estimating quantities, etc._, with a general description of the several instruments required for surveying, levelling, plotting, etc. by h. s. merrett. fourth edition, revised by g. w. usill, assoc. mem. inst. c.e. _41 plates, with illustrations and tables_, royal 8vo, cloth, 12_s._ 6_d._ principal contents: part 1. introduction and the principles of geometry. part 2. land surveying; comprising general observations--the chain--offsets surveying by the chain only--surveying hilly ground--to survey an estate or parish by the chain only--surveying with the theodolite --mining and town surveying--railroad surveying--mapping- division and laying out of land--observations on enclosures- plane trigonometry. part 3. levelling--simple and compound levelling--the level book--parliamentary plan and section- levelling with a theodolite--gradients--wooden curves--to lay out a railway curve--setting out widths. part 4. calculating quantities generally for estimates--cuttings and embankments- tunnels--brickwork--ironwork--timber measuring. part 5. description and use of instruments in surveying and plotting- the improved dumpy level--troughton's level--the prismatic compass--proportional compass--box sextant--vernier--pantagraph- merrett's improved quadrant--improved computation scale--the diagonal scale--straight edge and sector. part 6. logarithms of numbers--logarithmic sines and co-sines, tangents and co-tangents --natural sines and co-sines--tables for earthwork, for setting out curves, and for various calculations, etc., etc., etc. _mechanical graphics._ a second course of mechanical drawing. with preface by prof. perry, b.sc., f.r.s. arranged for use in technical and science and art institutes, schools and colleges, by george halliday, whitworth scholar. 8vo, cloth, 6_s._ _the assayers manual_: an abridged treatise on the docimastic examination of ores and furnace and other artificial products. by bruno kerl. translated by w. t. brannt. _with 65 illustrations_, 8vo, cloth, 12_s._ 6_d._ _dynamo-electric machinery_: a text-book for students of electro-technology. by silvanus p. thompson, b.a., d.sc., m.s.t.e. [_new edition in the press._ _the practice of hand turning in wood, ivory, shell, etc._, with instructions for turning such work in metal as may be required in the practice of turning in wood, ivory, etc.; also an appendix on ornamental turning. (a book for beginners.) by francis campin. third edition, _with wood engravings_, crown 8vo, cloth, 6_s._ contents: on lathes--turning tools--turning wood--drilling--screw cutting- miscellaneous apparatus and processes--turning particular forms- staining--polishing--spinning metals--materials--ornamental turning, etc. _treatise on watchwork, past and present._ by the rev. h. l. nelthropp, m.a., f.s.a. _with 32 illustrations_, crown 8vo, cloth, 6_s._ 6_d._ contents: definitions of words and terms used in watchwork--tools--time- historical summary--on calculations of the numbers for wheels and pinions; their proportional sizes, trains, etc.--of dial wheels, or motion work--length of time of going without winding up--the verge--the horizontal--the duplex--the lever--the chronometer- repeating watches--keyless watches--the pendulum, or spiral spring- compensation--jewelling of pivot holes--clerkenwell--fallacies of the trade--incapacity of workmen--how to choose and use a watch, etc. _algebra self-taught._ by w. p. higgs, m.a., d.sc., ll.d., assoc. inst c.e., author of 'a handbook of the differential calculus,' etc. second edition, crown 8vo, cloth, 2_s._ 6_d._ contents: symbols and the signs of operation--the equation and the unknown quantity--positive and negative quantities--multiplication- involution--exponents--negative exponents--roots, and the use of exponents as logarithms--logarithms--tables of logarithms and proportionate parts--transformation of system of logarithms- common uses of common logarithms--compound multiplication and the binomial theorem--division, fractions, and ratio--continued proportion--the series and the summation of the series--limit of series--square and cube roots--equations--list of formulã¦, etc. _spons' dictionary of engineering, civil, mechanical, military, and naval_; with technical terms in french, german, italian, and spanish, 3100 pp., and _nearly 8000 engravings_, in super-royal 8vo, in 8 divisions, 5_l._ 8_s._ complete in 3 vols., cloth, 5_l._ 5_s._ bound in a superior manner, half-morocco, top edge gilt, 3 vols., 6_l._ 12_s._ _notes in mechanical engineering._ compiled principally for the use of the students attending the classes on this subject at the city of london college. by henry adams, mem. inst. m.e., mem. inst. c.e., mem. soc. of engineers. crown 8vo, cloth, 2_s._ 6_d._ _canoe and boat building_: a complete manual for amateurs, containing plain and comprehensive directions for the construction of canoes, rowing and sailing boats, and hunting craft. by w. p. stephens. _with numerous illustrations and 24 plates of working drawings._ crown 8vo, cloth, 9_s._ _proceedings of the national conference of electricians, philadelphia_, october 8th to 13th, 1884. 18mo, cloth, 3_s._ _dynamo-electricity_, its generation, application, transmission, storage, and measurement. by g. b. prescott. _with 545 illustrations._ 8vo, cloth, 1_l._ 1_s._ _domestic electricity for amateurs._ translated from the french of e. hospitalier, editor of "l'electricien," by c. j. wharton, assoc. soc. tel. eng. _numerous illustrations._ demy 8vo, cloth, 6_s._ contents: 1. production of the electric current--2. electric bells--3. automatic alarms--4. domestic telephones--5. electric clocks--6. electric lighters--7. domestic electric lighting--8. domestic application of the electric light--9. electric motors--10. electrical locomotion--11. electrotyping, plating, and gilding--12. electric recreations--13. various applications--workshop of the electrician. _wrinkles in electric lighting._ by vincent stephen. _with illustrations._ 18mo, cloth, 2_s._ 6_d._ contents: 1. the electric current and its production by chemical means--2. production of electric currents by mechanical means--3. dynamo-electric machines--4. electric lamps--5. lead--6. ship lighting. _foundations and foundation walls for all classes of buildings_, pile driving, building stones and bricks, pier and wall construction, mortars, limes, cements, concretes, stuccos, &c. _64 illustrations._ by g. t. powell and f. bauman. 8vo, cloth, 10_s._ 6_d._ _manual for gas engineering students._ by d. lee. 18mo, cloth, 1_s._ _telephones, their construction and management._ by f. c. allsop. crown 8vo, cloth, 5_s._ _hydraulic machinery, past and present._ a lecture delivered to the london and suburban railway officials' association. by h. adams, mem. inst. c.e. _folding plate._ 8vo, sewed, 1_s._ _twenty years with the indicator._ by thomas pray, jun., c.e., m.e., member of the american society of civil engineers. 2 vols., royal 8vo, cloth, 12_s._ 6_d._ _annual statistical report of the secretary to the members of the iron and steel association on the home and foreign iron and steel industries in 1889._ issued june 1890. 8vo, sewed, 5_s._ _bad drains, and how to test them_; with notes on the ventilation of sewers, drains, and sanitary fittings, and the origin and transmission of zymotic disease. by r. harris reeves. crown 8vo, cloth, 3_s._ 6_d._ _well sinking._ the modern practice of sinking and boring wells, with geological considerations and examples of wells. by ernest spon, assoc. mem. inst. c.e., mem. soc. eng., and of the franklin inst., etc. second edition, revised and enlarged. crown 8vo, cloth, 10_s._ 6_d._ _the voltaic accumulator_: an elementary treatise. by ã�mile reynier. translated by j. a. berly, assoc. inst. e.e. _with 62 illustrations_, 8vo, cloth, 9_s._ _ten years' experience in works of intermittent downward filtration._ by j. bailey denton, mem. inst. c.e. second edition, with additions. royal 8vo, cloth, 5_s._ _land surveying on the meridian and perpendicular system._ by william penman, c.e. 8vo, cloth, 8_s._ 6_d._ _the electromagnet and electromagnetic mechanism._ by silvanus p. thompson, d.sc., f.r.s. 8vo, cloth, 15_s._ _incandescent wiring hand-book._ by f. b. badt, late 1st lieut. royal prussian artillery. _with 41 illustrations and 5 tables._ 18mo, cloth, 4_s._ 6_d._ _a pocket-book for pharmacists, medical practitioners, students, etc., etc. (british, colonial, and american)._ by thomas bayley, assoc. r. coll. of science, consulting chemist, analyst, and assayer, author of a 'pocket-book for chemists,' 'the assay and analysis of iron and steel, iron ores, and fuel,' etc., etc. royal 32mo, boards, gilt edges, 6_s._ _the fireman's guide_; a handbook on the care of boilers. by teknolog, fã¶reningen t. i. stockholm. translated from the third edition, and revised by karl p. dahlstrom, m.e. second edition. fcap. 8vo, cloth, 2_s._ _a treatise on modern steam engines and boilers_, including land locomotive, and marine engines and boilers, for the use of students. by frederick colyer, m. inst. c.e., mem. inst. m.e. _with 36 plates._ 4to, cloth, 12_s._ 6_d._ contents: 1. introduction--2. original engines--3. boilers--4. high-pressure beam engines--5. cornish beam engines--6. horizontal engines--7. oscillating engines--8. vertical high-pressure engines--9. special engines--10. portable engines--11. locomotive engines--12. marine engines. _steam engine management_; a treatise on the working and management of steam boilers. by f. colyer, m. inst. c.e., mem. inst. m.e. 18mo, cloth, 2_s._ _a text-book of tanning_, embracing the preparation of all kinds of leather. by harry r. proctor, f.c.s., of low lights tanneries. _with illustrations._ crown 8vo, cloth, 10_s._ 6_d._ _aid book to engineering enterprise._ by ewing matheson, m. inst. c.e. the inception of public works, parliamentary procedure for railways, concessions for foreign works, and means of providing money, the points which determine success or failure, contract and purchase, commerce in coal, iron, and steel, &c. second edition, revised and enlarged, 8vo, cloth, 21_s._ _pumps, historically, theoretically, and practically considered._ by p. r. bjã�rling. _with 156 illustrations._ crown 8vo, cloth, 7_s._ 6_d._ _the marine transport of petroleum._ a book for the use of shipowners, shipbuilders, underwriters, merchants, captains and officers of petroleum-carrying vessels. by g. h. little, editor of the 'liverpool journal of commerce.' crown 8vo, cloth, 10_s._ 6_d._ _liquid fuel for mechanical and industrial purposes._ compiled by e. a. brayley hodgetts. _with wood engravings._ 8vo, cloth, 7_s._ 6_d._ _tropical agriculture_: a treatise on the culture, preparation, commerce and consumption of the principal products of the vegetable kingdom. by p. l. simmonds, f.l.s., f.r.c.i. new edition, revised and enlarged, 8vo, cloth, 21_s._ _health and comfort in house building_; or, ventilation with warm air by self-acting suction power. with review of the mode of calculating the draught in hot-air flues, and with some actual experiments by j. drysdale, m.d., and j. w. hayward, m.d. _with plates and woodcuts._ third edition, with some new sections, and the whole carefully revised, 8vo, cloth, 7_s._ 6_d._ _losses in gold amalgamation._ with notes on the concentration of gold and silver ores. _with six plates._ by w. mcdermott and p. w. duffield. 8vo, cloth, 5_s._ _a guide for the electric testing of telegraph cables._ by col. v. hoskioer, royal danish engineers. third edition, crown 8vo, cloth, 4_s._ 6_d._ _the hydraulic gold miners' manual._ by t. s. g. kirkpatrick, m.a. oxon. _with 6 plates._ crown 8vo, cloth, 6_s._ "we venture to think that this work will become a text-book on the important subject of which it treats. until comparatively recently hydraulic mines were neglected. this was scarcely to be surprised at, seeing that their working in california was brought to an abrupt termination by the action of the farmers on the dã©bris question, whilst their working in other parts of the world had not been attended with the anticipated success."--_the mining world and engineering record._ _the arithmetic of electricity._ by t. o'conor sloane. crown 8vo, cloth, 4_s._ 6_d._ _the turkish bath_: its design and construction for public and commercial purposes. by r. o. allsop, architect. _with plans and sections._ 8vo, cloth, 6_s._ _earthwork slips and subsidences upon public works_: their causes, prevention and reparation. especially written to assist those engaged in the construction or maintenance of railways, docks, canals, waterworks, river banks, reclamation embankments, drainage works, &c., &c. by john newman, assoc. mem. inst. c.e., author of 'notes on concrete,' &c. crown 8vo, cloth, 7_s._ 6_d._ _gas and petroleum engines_: a practical treatise on the internal combustion engine. by wm. robinson, m.e., senior demonstrator and lecturer on applied mechanics, physics, &c., city and guilds of london college, finsbury, assoc. mem. inst. c.e., &c. _numerous illustrations._ 8vo, cloth, 14_s._ _waterways and water transport in different countries._ with a description of the panama, suez, manchester, nicaraguan, and other canals. by j. stephen jeans, author of 'england's supremacy,' 'railway problems,' &c. _numerous illustrations._ 8vo, cloth, 14_s._ _a treatise on the richards steam-engine indicator and the development and application of force in the steam-engine._ by charles t. porter. fourth edition, revised and enlarged, 8vo, cloth, 9_s._ contents. the nature and use of the indicator: the several lines on the diagram. examination of diagram no. 1. of truth in the diagram. description of the richards indicator. practical directions for applying and taking care of the indicator. introductory remarks. units. expansion. directions for ascertaining from the diagram the power exerted by the engine. to measure from the diagram the quantity of steam consumed. to measure from the diagram the quantity of heat expended. of the real diagram, and how to construct it. of the conversion of heat into work in the steam-engine. observations on the several lines of the diagram. of the loss attending the employment of slow-piston speed, and the extent to which this is shown by the indicator. of other applications of the indicator. of the use of the tables of the properties of steam in calculating the duty of boilers. introductory. of the pressure on the crank when the connecting-rod is conceived to be of infinite length. the modification of the acceleration and retardation that is occasioned by the angular vibration of the connecting-rod. method of representing the actual pressure on the crank at every point of its revolution. the rotative effect of the pressure exerted on the crank. the transmitting parts of an engine, considered as an equaliser of motion. a ride on a buffer-beam (appendix). in demy 4to, handsomely bound in cloth, _illustrated with 220 full page plates_, price 15_s._ architectural examples in brick, stone, wood, and iron. a complete work on the details and arrangement of building construction and design. by william fullerton, architect. containing 220 plates, with numerous drawings selected from the architecture of former and present times. _the details and designs are drawn to scale, 1/8", 1/4", 1/2", and full size being chiefly used._ the plates are arranged in two parts. the first part contains details of work in the four principal building materials, the following being a few of the subjects in this part:--various forms of doors and windows, wood and iron roofs, half timber work, porches, towers, spires, belfries, flying buttresses, groining, carving, church fittings, constructive and ornamental iron work, classic and gothic molds and ornament, foliation natural and conventional, stained glass, coloured decoration, a section to scale of the great pyramid, grecian and roman work, continental and english gothic, pile foundations, chimney shafts according to the regulations of the london county council, board schools. the second part consists of drawings of plans and elevations of buildings, arranged under the following heads:--workmen's cottages and dwellings, cottage residences and dwelling houses, shops, factories, warehouses, schools, churches and chapels, public buildings, hotels and taverns, and buildings of a general character. all the plates are accompanied with particulars of the work, with explanatory notes and dimensions of the various parts. [illustration: _specimen pages, reduced from the originals._] crown 8vo, cloth, with illustrations, 5_s._ workshop receipts, first series. by ernest spon. synopsis of contents. bookbinding. bronzes and bronzing. candles. cement. cleaning. colourwashing. concretes. dipping acids. drawing office details. drying oils. dynamite. electro-metallurgy--(cleaning, dipping, scratch-brushing, batteries, baths, and deposits of every description). enamels. engraving on wood, copper, gold, silver, steel, and stone. etching and aqua tint. firework making--(rockets, stars, rains, gerbes, jets, tour-billons, candles, fires, lances, lights, wheels, fire-balloons, and minor fireworks). fluxes. foundry mixtures. freezing. fulminates. furniture creams, oils, polishes, lacquers, and pastes. gilding. glass cutting, cleaning, frosting, drilling, darkening, bending, staining, and painting. glass making. glues. gold. graining. gums. gun cotton. gunpowder. horn working. indiarubber. japans, japanning, and kindred processes. lacquers. lathing. lubricants. marble working. matches. mortars. nitro-glycerine. oils. paper. paper hanging. painting in oils, in water colours, as well as fresco, house, transparency, sign, and carriage painting. photography. plastering. polishes. pottery--(clays, bodies, glazes, colours, oils, stains, fluxes, enamels, and lustres). scouring. silvering. soap. solders. tanning. taxidermy. tempering metals. treating horn, mother-o'-pearl, and like substances. varnishes, manufacture and use of. veneering. washing. waterproofing. welding. crown 8vo, cloth, 485 pages, with illustrations, 5_s._ workshop receipts, second series. by robert haldane. synopsis of contents. acidimetry and alkalimetry. albumen. alcohol. alkaloids. baking-powders. bitters. bleaching. boiler incrustations. cements and lutes. cleansing. confectionery. copying. disinfectants. dyeing, staining, and colouring. essences. extracts. fireproofing. gelatine, glue, and size. glycerine. gut. hydrogen peroxide. ink. iodine. iodoform. isinglass. ivory substitutes. leather. luminous bodies. magnesia. matches. paper. parchment. perchloric acid. potassium oxalate. preserving. pigments, paint, and painting: embracing the preparation of _pigments_, including alumina lakes, blacks (animal, bone, frankfort, ivory, lamp, sight, soot), blues (antimony, antwerp, cobalt, cã¦ruleum, egyptian, manganate, paris, pã©ligot, prussian, smalt, ultramarine), browns (bistre, hinau, sepia, sienna, umber, vandyke), greens (baryta, brighton, brunswick, chrome, cobalt, douglas, emerald, manganese, mitis, mountain, prussian, sap, scheele's, schweinfurth, titanium, verdigris, zinc), reds (brazilwood lake, carminated lake, carmine, cassius purple, cobalt pink, cochineal lake, colcothar, indian red, madder lake, red chalk, red lead, vermilion), whites (alum, baryta, chinese, lead sulphate, white lead--by american, dutch, french, german, kremnitz, and pattinson processes, precautions in making, and composition of commercial samples--whiting, wilkinson's white, zinc white), yellows (chrome, gamboge, naples, orpiment, realgar, yellow lakes); _paint_ (vehicles, testing oils, driers, grinding, storing, applying, priming, drying, filling, coats, brushes, surface, water-colours, removing smell, discoloration; miscellaneous paints--cement paint for carton-pierre, copper paint, gold paint, iron paint, lime paints, silicated paints, steatite paint, transparent paints, tungsten paints, window paint, zinc paints); _painting_ (general instructions, proportions of ingredients, measuring paint work; carriage painting--priming paint, best putty, finishing colour, cause of cracking, mixing the paints, oils, driers, and colours, varnishing, importance of washing vehicles, re-varnishing, how to dry paint; woodwork painting). crown 8vo, cloth, 480 pages, with 183 illustrations, 5_s._ workshop receipts, third series. by c. g. warnford lock. uniform with the first and second series. synopsis of contents. alloys. aluminium. antimony. barium. beryllium. bismuth. cadmium. cã¦sium. calcium. cerium. chromium. cobalt. copper. didymium. electrics. enamels and glazes. erbium. gallium. glass. gold. indium. iridium. iron and steel. lacquers and lacquering. lanthanum. lead. lithium. lubricants. magnesium. manganese. mercury. mica. molybdenum. nickel. niobium. osmium. palladium. platinum. potassium. rhodium. rubidium. ruthenium. selenium. silver. slag. sodium. strontium. tantalum. terbium. thallium. thorium. tin. titanium. tungsten. uranium. vanadium. yttrium. zinc. zirconium. workshop receipts, fourth series, devoted mainly to handicrafts & mechanical subjects. by c. g. warnford lock. 250 illustrations, with complete index, and a general index to the four series, 5_s._ waterproofing--rubber goods, cuprammonium processes, miscellaneous preparations. packing and storing articles of delicate odour or colour, of a deliquescent character, liable to ignition, apt to suffer from insects or damp, or easily broken. embalming and preserving anatomical specimens. leather polishes. cooling air and water, producing low temperatures, making ice, cooling syrups and solutions, and separating salts from liquors by refrigeration. pumps and siphons, embracing every useful contrivance for raising and supplying water on a moderate scale, and moving corrosive, tenacious, and other liquids. desiccating--airand water-ovens, and other appliances for drying natural and artificial products. distilling--water, tinctures, extracts, pharmaceutical preparations, essences, perfumes, and alcoholic liquids. emulsifying as required by pharmacists and photographers. evaporating--saline and other solutions, and liquids demanding special precautions. filtering--water, and solutions of various kinds. percolating and macerating. electrotyping. stereotyping by both plaster and paper processes. bookbinding in all its details. straw plaiting and the fabrication of baskets, matting, etc. musical instruments--the preservation, tuning, and repair of pianos harmoniums, musical boxes, etc. clock and watch mending--adapted for intelligent amateurs. photography--recent development in rapid processes, handy apparatus, numerous recipes for sensitizing and developing solutions, and applications to modern illustrative purposes. now complete. _with nearly 1500 illustrations_, in super-royal 8vo, in 5 divisions, cloth. divisions 1 to 4, 13_s._ 6_d._ each; division 5, 17_s._ 6_d._; or 2 vols., cloth, â£3 10_s._ spons' encyclopã�dia of the industrial arts, manufactures, and commercial products. edited by c. g. warnford lock, f.l.s. among the more important of the subjects treated of, are the following:- acids, 207 pp. 220 figs. alcohol, 23 pp. 16 figs. alcoholic liquors, 13 pp. alkalies, 89 pp. 78 figs. alloys. alum. asphalt. assaying. beverages, 89 pp. 29 figs. blacks. bleaching powder, 15 pp. bleaching, 51 pp. 48 figs. candles, 18 pp. 9 figs. carbon bisulphide. celluloid, 9 pp. cements. clay. coal-tar products, 44 pp. 14 figs. cocoa, 8 pp. coffee, 32 pp. 13 figs. cork, 8 pp. 17 figs. cotton manufactures, 62 pp. 57 figs. drugs, 38 pp. dyeing and calico printing, 28 pp. 9 figs. dyestuffs, 16 pp. electro-metallurgy, 13 pp. explosives, 22 pp. 33 figs. feathers. fibrous substances, 92 pp. 79 figs. floor-cloth, 16 pp. 21 figs. food preservation, 8 pp. fruit, 8 pp. fur, 5 pp. gas, coal, 8 pp. gems. glass, 45 pp. 77 figs. graphite, 7 pp. hair, 7 pp. hair manufactures. hats, 26 pp. 26 figs. honey. hops. horn. ice, 10 pp. 14 figs. indiarubber manufactures, 23 pp. 17 figs. ink, 17 pp. ivory. jute manufactures, 11 pp. 11 figs. knitted fabrics--hosiery, 15 pp. 13 figs. lace, 13 pp. 9 figs. leather, 28 pp. 31 figs. linen manufactures, 16 pp. 6 figs. manures, 21 pp. 30 figs. matches, 17 pp. 38 figs. mordants, 13 pp. narcotics, 47 pp. nuts, 10 pp. oils and fatty substances, 125 pp. paint. paper, 26 pp. 23 figs. paraffin, 8 pp. 6 figs. pearl and coral, 8 pp. perfumes, 10 pp. photography, 13 pp. 20 figs. pigments, 9 pp. 6 figs. pottery, 46 pp. 57 figs. printing and engraving, 20 pp. 8 figs. rags. resinous and gummy substances, 75 pp. 16 figs. rope, 16 pp. 17 figs. salt, 31 pp. 23 figs. silk, 8 pp. silk manufactures, 9 pp. 11 figs. skins, 5 pp. small wares, 4 pp. soap and glycerine, 39 pp. 45 figs. spices, 16 pp. sponge, 5 pp. starch, 9 pp. 10 figs. sugar, 155 pp. 134 figs. sulphur. tannin, 18 pp. tea, 12 pp. timber, 13 pp. varnish, 15 pp. vinegar, 5 pp. wax, 5 pp. wool, 2 pp. woollen manufactures, 58 pp. 39 figs. in super-royal 8vo, 1168 pp., _with 2400 illustrations_, in 3 divisions, cloth, price 13_s._ 6_d._ each; or 1 vol., cloth, 2_l._; or half-morocco, 2_l._ 8_s._ a supplement to spons' dictionary of engineering. edited by ernest spon, memb. soc. engineers. abacus, counters, speed indicators, and slide rule. agricultural implements and machinery. air compressors. animal charcoal machinery. antimony. axles and axle-boxes. barn machinery. belts and belting. blasting. boilers. brakes. brick machinery. bridges. cages for mines. calculus, differential and integral. canals. carpentry. cast iron. cement, concrete, limes, and mortar. chimney shafts. coal cleansing and washing. coal mining. coal cutting machines. coke ovens. copper. docks. drainage. dredging machinery. dynamo-electric and magneto-electric machines. dynamometers. electrical engineering, telegraphy, electric lighting and its practical details, telephones. engines, varieties of. explosives. fans. founding, moulding and the practical work of the foundry. gas, manufacture of. hammers, steam and other power. heat. horse power. hydraulics. hydro-geology. indicators. iron. lifts, hoists, and elevators. lighthouses, buoys, and beacons. machine tools. materials of construction. meters. ores, machinery and processes employed to dress. piers. pile driving. pneumatic transmission. pumps. pyrometers. road locomotives. rock drills. rolling stock. sanitary engineering. shafting. steel. steam navvy. stone machinery. tramways. well sinking. just published. in demy 8vo, cloth, 600 pages, and 1420 illustrations, 6_s_. spons' mechanics' own book; a manual for handicraftsmen and amateurs. contents. mechanical drawing--casting and founding in iron, brass, bronze, and other alloys--forging and finishing iron--sheetmetal working- soldering, brazing, and burning--carpentry and joinery, embracing descriptions of some 400 woods, over 200 illustrations of tools and their uses, explanations (with diagrams) of 116 joints and hinges, and details of construction of workshop appliances, rough furniture, garden and yard erections, and house building- cabinet-making and veneering--carving and fretcutting--upholstery --painting, graining, and marbling--staining furniture, woods, floors, and fittings--gilding, dead and bright, on various grounds--polishing marble, metals, and wood--varnishing--mechanical movements, illustrating contrivances for transmitting motion- turning in wood and metals--masonry, embracing stonework, brickwork, terracotta, and concrete--roofing with thatch, tiles, slates, felt, zinc, &c.--glazing with and without putty, and lead glazing- plastering and whitewashing--paper-hanging--gas-fitting--bell-hanging, ordinary and electric systems--lighting--warming--ventilating- roads, pavements, and bridges--hedges, ditches, and drains--water supply and sanitation--hints on house construction suited to new countries. e. & f. n. spon, 125, strand, london. new york: 12, cortlandt street. lombard street a description of the money market. by walter bagehot chapter i. introductory. i venture to call this essay 'lombard street,' and not the 'money market,' or any such phrase, because i wish to deal, and to show that i mean to deal, with concrete realities. a notion prevails that the money market is something so impalpable that it can only be spoken of in very abstract words, and that therefore books on it must always be exceedingly difficult. but i maintain that the money market is as concrete and real as anything else; that it can be described in as plain words; that it is the writer's fault if what he says is not clear. in one respect, however, i admit that i am about to take perhaps an unfair advantage. half, and more than half, of the supposed 'difficulty' of the money market has arisen out of the controversies as to 'peel's act,' and the abstract discussions on the theory on which that act is based, or supposed to be based. but in the ensuing pages i mean to speak as little as i can of the act of 1844; and when i do speak of it, i shall deal nearly exclusively with its experienced effects, and scarcely at all, if at all, with its refined basis. for this i have several reasons,--one, that if you say anything about the act of 1844, it is little matter what else you say, for few will attend to it. most critics will seize on the passage as to the act, either to attack it or defend it, as if it were the main point. there has been so much fierce controversy as to this act of parliament--and there is still so much animosity--that a single sentence respecting it is far more interesting to very many than a whole book on any other part of the subject. two hosts of eager disputants on this subject ask of every new writer the one question--are you with us or against us? and they care for little else. of course if the act of 1844 really were, as is commonly thought, the _primum mobile_ of the english money market, the source of all good according to some, and the source of all harm according to others, the extreme irritation excited by an opinion on it would be no reason for not giving a free opinion. a writer on any subject must not neglect its cardinal fact, for fear that others may abuse him. but, in my judgment, the act of 1844 is only a subordinate matter in the money market; what has to be said on it has been said at disproportionate length; the phenomena connected with it have been magnified into greater relative importance than they at all deserve. we must never forget that a quarter of a century has passed since 1844, a period singularly remarkable for its material progress, and almost marvellous in its banking development. even, therefore, if the facts so much referred to in 1844 had the importance then ascribed to them, and i believe that in some respects they were even then overstated, there would be nothing surprising in finding that in a new world new phenomena had arisen which now are larger and stronger. in my opinion this is the truth: since 1844, lombard street is so changed that we cannot judge of it without describing and discussing a most vigorous adult world which then was small and weak. on this account i wish to say as little as is fairly possible of the act of 1844, and, as far as i can, to isolate and dwell exclusively on the 'post-peel' agencies, so that those who have had enough of that well-worn theme (and they are very many) may not be wearied, and that the new and neglected parts of the subject may be seen as they really are. the briefest and truest way of describing lombard street is to say that it is by far the greatest combination of economical power and economical delicacy that the world has even seen. of the greatness of the power there will be no doubt. money is economical power. everyone is aware that england is the greatest moneyed country in the world; everyone admits that it has much more immediately disposable and ready cash than any other country. but very few persons are aware how much greater the ready balance--the floating loan-fund which can be lent to anyone or for any purpose--is in england than it is anywhere else in the world. a very few figures will show how large the london loan-fund is, and how much greater it is than any other. the known deposits--the deposits of banks which publish their accounts--are, in london (31st december, 1872) 120,000,000 l paris (27th february, 1873) 13,000,000 l new york (february, 1873) 40,000,000 l german empire (31st january, 1873) 8,000,000 l and the unknown deposits--the deposits in banks which do not publish their accounts--are in london much greater than those many other of these cities. the bankers' deposits of london are many times greater than those of any other city--those of great britain many times greater than those of any other country. of course the deposits of bankers are not a strictly accurate measure of the resources of a money market. on the contrary, much more cash exists out of banks in france and germany, and in all non-banking countries, than could be found in england or scotland, where banking is developed. but that cash is not, so to speak, 'money-market money:' it is not attainable. nothing but their immense misfortunes, nothing but a vast loan in their own securities, could have extracted the hoards of france from the custody of the french people. the offer of no other securities would have tempted them, for they had confidence in no other securities. for all other purposes the money hoarded was useless and might as well not have been hoarded. but the english money is 'borrowable' money. our people are bolder in dealing with their money than any continental nation, and even if they were not bolder, the mere fact that their money is deposited in a bank makes it far more obtainable. a million in the hands of a single banker is a great power; he can at once lend it where he will, and borrowers can come to him, because they know or believe that he has it. but the same sum scattered in tens and fifties through a whole nation is no power at all: no one knows where to find it or whom to ask for it. concentration of money in banks, though not the sole cause, is the principal cause which has made the money market of england so exceedingly rich, so much beyond that of other countries. the effect is seen constantly. we are asked to lend, and do lend, vast sums, which it would be impossible to obtain elsewhere. it is sometimes said that any foreign country can borrow in lombard street at a price: some countries can borrow much cheaper than others; but all, it is said, can have some money if they choose to pay enough for it. perhaps this is an exaggeration; but confined, as of course it was meant to be, to civilised governments, it is not much of an exaggeration. there are very few civilised governments that could not borrow considerable sums of us if they choose, and most of them seem more and more likely to choose. if any nation wants even to make a railway--especially at all a poor nation--it is sure to come to this country--to the country of banks--for the money. it is true that english bankers are not themselves very great lenders to foreign states. but they are great lenders to those who lend. they advance on foreign stocks, as the phrase is, with 'a margin;' that is, they find eighty per cent of the money, and the nominal lender finds the rest. and it is in this way that vast works are achieved with english aid which but for that aid would never have been planned. in domestic enterprises it is the same. we have entirely lost the idea that any undertaking likely to pay, and seen to be likely, can perish for want of money; yet no idea was more familiar to our ancestors, or is more common now in most countries. a citizen of london in queen elizabeth's time could not have imagined our state of mind. he would have thought that it was of no use inventing railways (if he could have understood what a railway meant), for you would not have been able to collect the capital with which to make them. at this moment, in colonies and all rude countries, there is no large sum of transferable money; there is no fund from which you can borrow, and out of which you can make immense works. taking the world as a whole--either now or in the past--it is certain that in poor states there is no spare money for new and great undertakings, and that in most rich states the money is too scattered, and clings too close to the hands of the owners, to be often obtainable in large quantities for new purposes. a place like lombard street, where in all but the rarest times money can be always obtained upon good security or upon decent prospects of probable gain, is a luxury which no country has ever enjoyed with even comparable equality before. but though these occasional loans to new enterprises and foreign states are the most conspicuous instances of the power of lombard street, they are not by any means the most remarkable or the most important use of that power. english trade is carried on upon borrowed capital to an extent of which few foreigners have an idea, and none of our ancestors could have conceived. in every district small traders have arisen, who 'discount their bills' largely, and with the capital so borrowed, harass and press upon, if they do not eradicate, the old capitalist. the new trader has obviously an immense advantage in the struggle of trade. if a merchant have 50,000 l. all his own, to gain 10 per cent on it he must make 5,000 l. a year, and must charge for his goods accordingly; but if another has only 10,000 l., and borrows 40,000 l. by discounts (no extreme instance in our modern trade), he has the same capital of 50,000 l. to use, and can sell much cheaper. if the rate at which he borrows be 5 per cent., he will have to pay 2,000 l. a year; and if, like the old trader, he make 5,000 l. a year, he will still, after paying his interest, obtain 3,000 l. a year, or 30 per cent, on his own 10,000 l. as most merchants are content with much less than 30 per cent, he will be able, if he wishes, to forego some of that profit, lower the price of the commodity, and drive the old-fashioned trader--the man who trades on his own capital--out of the market. in modern english business, owing to the certainty of obtaining loans on discount of bills or otherwise at a moderate rate of interest, there is a steady bounty on trading with borrowed capital, and a constant discouragement to confine yourself solely or mainly to your own capital. this increasingly democratic structure of english commerce is very unpopular in many quarters, and its effects are no doubt exceedingly mixed. on the one hand, it prevents the long duration of great families of merchant princes, such as those of venice and genoa, who inherited nice cultivation as well as great wealth, and who, to some extent, combined the tastes of an aristocracy with the insight and verve of men of business. these are pushed out, so to say, by the dirty crowd of little men. after a generation or two they retire into idle luxury. upon their immense capital they can only obtain low profits, and these they do not think enough to compensate them for the rough companions and rude manners they must meet in business. this constant levelling of our commercial houses is, too, unfavourable to commercial morality. great firms, with a reputation which they have received from the past, and which they wish to transmit to the future, cannot be guilty of small frauds. they live by a continuity of trade, which detected fraud would spoil. when we scrutinise the reason of the impaired reputation of english goods, we find it is the fault of new men with little money of their own, created by bank 'discounts.' these men want business at once, and they produce an inferior article to get it. they rely on cheapness, and rely successfully. but these defects and others in the democratic structure of commerce are compensated by one great excellence. no country of great hereditary trade, no european country at least, was ever so little 'sleepy,' to use the only fit word, as england; no other was ever so prompt at once to seize new advantages. a country dependent mainly on great 'merchant princes' will never be so prompt; their commerce perpetually slips more and more into a commerce of routine. a man of large wealth, however intelligent, always thinks, more or less 'i have a great income, and i want to keep it. if things go on as they are i shall certainly keep it; but if they change i may not keep it.' consequently he considers every change of circumstance a 'bore,' and thinks of such changes as little as he can. but a new man, who has his way to make in the world, knows that such changes are his opportunities; he is always on the look-out for them, and always heeds them when he finds them. the rough and vulgar structure of english commerce is the secret of its life; for it contains 'the propensity to variation,' which, in the social as in the animal kingdom, is the principle of progress. in this constant and chronic borrowing, lombard street is the great go-between. it is a sort of standing broker between quiet saving districts of the country and the active employing districts. why particular trades settled in particular places it is often difficult to say; but one thing is certain, that when a trade has settled in any one spot, it is very difficult for another to oust it--impossible unless the second place possesses some very great intrinsic advantage. commerce is curiously conservative in its homes, unless it is imperiously obliged to migrate. partly from this cause, and partly from others, there are whole districts in england which cannot and do not employ their own money. no purely agricultural county does so. the savings of a county with good land but no manufactures and no trade much exceed what can be safely lent in the county. these savings are first lodged in the local banks, are by them sent to london, and are deposited with london bankers, or with the bill brokers. in either case the result is the same. the money thus sent up from the accumulating districts is employed in discounting the bills of the industrial districts. deposits are made with the bankers and bill brokers in lombard street by the bankers of such counties as somersetshire and hampshire, and those bill brokers and bankers employ them in the discount of bills from yorkshire and lancashire. lombard street is thus a perpetual agent between the two great divisions of england, between the rapidly-growing districts, where almost any amount of money can be well and easily employed, and the stationary and the declining districts, where there is more money than can be used. this organisation is so useful because it is so easily adjusted. political economists say that capital sets towards the most profitable trades, and that it rapidly leaves the less profitable and non-paying trades. but in ordinary countries this is a slow process, and some persons who want to have ocular demonstration of abstract truths have been inclined to doubt it because they could not see it. in england, however, the process would be visible enough if you could only see the books of the bill brokers and the bankers. their bill cases as a rule are full of the bills drawn in the most profitable trades, and _caeteris paribus_ and in comparison empty of those drawn in the less profitable. if the iron trade ceases to be as profitable as usual, less iron is sold; the fewer the sales the fewer the bills; and in consequence the number of iron bills in lombard street is diminished. on the other hand, if in consequence of a bad harvest the corn trade becomes on a sudden profitable, immediately 'corn bills' are created in great numbers, and if good are discounted in lombard street. thus english capital runs as surely and instantly where it is most wanted, and where there is most to be made of it, as water runs to find its level. this efficient and instantly-ready organisation gives us an enormous advantage in competition with less advanced countries--less advanced, that is, in this particular respect of credit. in a new trade english capital is instantly at the disposal of persons capable of understanding the new opportunities and of making good use of them. in countries where there is little money to lend, and where that little is lent tardily and reluctantly, enterprising traders are long kept back, because they cannot at once borrow the capital, without which skill and knowledge are useless. all sudden trades come to england, and in so doing often disappoint both rational probability and the predictions of philosophers. the suez canal is a curious case of this. all predicted that the canal would undo what the discovery of the passage to india round the cape effected. before that all oriental trade went to ports in the south of europe, and was thence diffused through europe. that london and liverpool should be centres of east indian commerce is a geographical anomaly, which the suez canal, it was said, would rectify. 'the greeks,' said m. de tocqueville, 'the styrians, the italians, the dalmatians, and the sicilians, are the people who will use the canal if any use it.' but, on the contrary, the main use of the canal has been by the english. none of the nations named by tocqueville had the capital, or a tithe of it, ready to build the large screw steamers which alone can use the canal profitably. ultimately these plausible predictions may or may not be right, but as yet they have been quite wrong, not because england has rich people--there are wealthy people in all countries--but because she possesses an unequalled fund of floating money, which will help in a moment any merchant who sees a great prospect of new profit. and not only does this unconscious 'organisation of capital,' to use a continental phrase, make the english specially quick in comparison with their neighbours on the continent at seizing on novel mercantile opportunities, but it makes them likely also to retain any trade on which they have once regularly fastened. mr. macculloch, following ricardo, used to teach that all old nations had a special aptitude for trades in which much capital is required. the interest of capital having been reduced in such countries, he argued, by the necessity of continually resorting to inferior soils, they can undersell countries where profit is high in all trades needing great capital. and in this theory there is doubtless much truth, though it can only be applied in practice after a number of limitations and with a number of deductions of which the older school of political economists did not take enough notice. but the same principle plainly and practically applies to england, in consequence of her habitual use of borrowed capital. as has been explained, a new man, with a small capital of his own and a large borrowed capital, can undersell a rich man who depends on his own capital only. the rich man wants the full rate of mercantile profit on the whole of the capital employed in his trade, but the poor man wants only the interest of money (perhaps not a third of the rate of profit) on very much of what he uses, and therefore an income will be an ample recompense to the poor man which would starve the rich man out of the trade. all the common notions about the new competition of foreign countries with england and its dangers--notions in which there is in other aspects much truth require to be reconsidered in relation to this aspect. england has a special machinery for getting into trade new men who will be content with low prices, and this machinery will probably secure her success, for no other country is soon likely to rival it effectually. there are many other points which might be insisted on, but it would be tedious and useless to elaborate the picture. the main conclusion is very plain--that english trade is become essentially a trade on borrowed capital, and that it is only by this refinement of our banking system that we are able to do the sort of trade we do, or to get through the quantity of it. but in exact proportion to the power of this system is its delicacy i should hardly say too much if i said its danger. only our familiarity blinds us to the marvellous nature of the system. there never was so much borrowed money collected in the world as is now collected in london. of the many millions in lombard street, infinitely the greater proportion is held by bankers or others on short notice or on demand; that is to say, the owners could ask for it all any day they please: in a panic some of them do ask for some of it. if any large fraction of that money really was demanded, our banking system and our industrial system too would be in great danger. some of those deposits too are of a peculiar and very distinct nature. since the franco-german war, we have become to a much larger extent than before the bankers of europe. a very large sum of foreign money is on various accounts and for various purposes held here. and in a time of panic it might be asked for. in 1866 we held only a much smaller sum of foreign money, but that smaller sum was demanded and we had to pay it at great cost and suffering, and it would be far worse if we had to pay the greater sums we now hold, without better resources than we had then. it may be replied, that though our instant liabilities are great, our present means are large; that though we have much we may be asked to pay at any moment, we have very much always ready to pay it with. but, on the contrary, there is no country at present, and there never was any country before, in which the ratio of the cash reserve to the bank deposits was so small as it is now in england. so far from our being able to rely on the proportional magnitude of our cash in hand, the amount of that cash is so exceedingly small that a bystander almost trembles when he compares its minuteness with the immensity of the credit which rests upon it. again, it may be said that we need not be alarmed at the magnitude of our credit system or at its refinement, for that we have learned by experience the way of controlling it, and always manage it with discretion. but we do not always manage it with discretion. there is the astounding instance of overend, gurney, and co. to the contrary. ten years ago that house stood next to the bank of england in the city of london; it was better known abroad than any similar firm known, perhaps, better than any purely english firm. the partners had great estates, which had mostly been made in the business. they still derived an immense income from it. yet in six years they lost all their own wealth, sold the business to the company, and then lost a large part of the company's capital. and these losses were made in a manner so reckless and so foolish, that one would think a child who had lent money in the city of london would have lent it better. after this example, we must not confide too surely in long-established credit, or in firmly-rooted traditions of business. we must examine the system on which these great masses of money are manipulated, and assure ourselves that it is safe and right. but it is not easy to rouse men of business to the task. they let the tide of business float before them; they make money or strive to do so while it passes, and they are unwilling to think where it is going. even the great collapse of overends, though it caused a panic, is beginning to be forgotten. most men of business think--'anyhow this system will probably last my time. it has gone on a long time, and is likely to go on still.' but the exact point is, that it has not gone on a long time. the collection of these immense sums in one place and in few hands is perfectly new. in 1844 the liabilities of the four great london joint stock banks were 10,637,000 l.; they now are more than 60,000,000 l. the private deposits of the bank of england then were 9,000,000 l.; they now are 8,000,000 l. there was in throughout the country but a fraction of the vast deposit business which now exists. we cannot appeal, therefore, to experience to prove the safety of our system as it now is, for the present magnitude of that system is entirely new. obviously a system may be fit to regulate a few millions, and yet quite inadequate when it is set to cope with many millions. and thus it may be with 'lombard street,' so rapid has been its growth, and so unprecedented is its nature. i am by no means an alarmist. i believe that our system, though curious and peculiar, may be worked safely; but if we wish so to work it, we must study it. we must not think we have an easy task when we have a difficult task, or that we are living in a natural state when we are really living in an artificial one. money will not manage itself, and lombard street has a great deal of money to manage. chapter ii. a general view of lombard street. i. the objects which you see in lombard street, and in that money world which is grouped about it, are the bank of england, the private banks, the joint stock banks, and the bill brokers. but before describing each of these separately we must look at what all have in common, and at the relation of each to the others. the distinctive function of the banker, says ricardo, 'begins as soon as he uses the money of others;' as long as he uses his own money he is only a capitalist. accordingly all the banks in lombard street (and bill brokers are for this purpose only a kind of bankers) hold much money belonging to other people on running account and on deposit. in continental language, lombard street is an organization of credit, and we are to see if it is a good or bad organization in its kind, or if, as is most likely, it turn out to be mixed, what are its merits and what are its defects? the main point on which one system of credit differs from another is 'soundness.' credit means that a certain confidence is given, and a certain trust reposed. is that trust justified? and is that confidence wise? these are the cardinal questions. to put it more simply--credit is a set of promises to pay; will those promises be kept? especially in banking, where the 'liabilities,' or promises to pay, are so large, and the time at which to pay them, if exacted, is so short, an instant capacity to meet engagements is the cardinal excellence. all which a banker wants to pay his creditors is a sufficient supply of the legal tender of the country, no matter what that legal tender may be. different countries differ in their laws of legal tender, but for the primary purposes of banking these systems are not material. a good system of currency will benefit the country, and a bad system will hurt it. indirectly, bankers will be benefited or injured with the country in which they live; but practically, and for the purposes of their daily life, they have no need to think, and never do think, on theories of currency. they look at the matter simply. they say 'i am under an obligation to pay such and such sums of legal currency; how much have i in my till, or have i at once under my command, of that currency?' in america, for example, it is quite enough for a banker to hold 'greenbacks,' though the value of these changes as the government chooses to enlarge or contract the issue. but a practical new york banker has no need to think of the goodness or badness of this system at all; he need only keep enough 'greenbacks' to pay all probable demands, and then he is fairly safe from the risk of failure. by the law of england the legal tenders are gold and silver coin (the last for small amounts only), and bank of england notes. but the number of our attainable bank notes is not, like american 'greenbacks,' dependent on the will of the state; it is limited by the provisions of the act of 1844. that act separates the bank of england into two halves. the issue department only issues notes, and can only issue 15,000,000 l. on government securities; for all the rest it must have bullion deposited. take, for example an account, which may be considered an average specimen of those of the last few years--that for the last week of 1869: _an account pursuant to the act 7th and 8th victoria, cap. 32, for the week ending on wednesday, the 29th day of december, 1869._ issue department. notes issued 33,288,640 l| government debt 11,015,100 l | other securities 3,984,900 l | gold coin and bullion 18,288,640 l | silver bullion 33,288,640| 33,288,640 l banking department. proprietors' capital 14,553,000 l| government securities 13,811,953 l rest 3,103,301 l| other securities 19,781,988 l public deposits, | notes 10,389,690 l including exchequer, | gold and silver coins 907,982 l savings' banks, | commissioners of | national debt, | and dividend | accounts 8,585,215 l| other deposits 18,204,607 l| seven-day and other | bills 445,490 l| 44,891,613 l| 44,891,613 l geo. forbes, chief cashier. dated the 30th december, 1869. there are here 15,000,000 l. bank notes issued on securities, and 18,288,640 l. represented by bullion. the bank of england has no power by law to increase the currency in any other manner. it holds the stipulated amount of securities, and for all the rest it must have bullion. this is the 'cast iron' system--the 'hard and fast' line which the opponents of the act say ruins us, and which the partizans of the act say saves us. but i have nothing to do with its expediency here. all which is to my purpose is that our paper 'legal tender,' our bank notes, can only be obtained in this manner. if, therefore, an english banker retains a sum of bank of england notes or coin in due proportion to his liabilities, he has a sufficient amount of the legal tender of this country, and he need not think of anything more. but here a distinction must be made. it is to be observed that properly speaking we should not include in the 'reserve' of a bank 'legal tenders,' or cash, which the bank keeps to transact its daily business. that is as much a part of its daily stock-in-trade as its desks or offices; or at any rate, whatever words we may choose to use, we must carefully distinguish between this cash in the till which is wanted every day, and the safety-fund, as we may call it, the special reserve held by the bank to meet extraordinary and unfrequent demands. what then, subject to this preliminary explanation, is the amount of legal tender held by our bankers against their liabilities? the answer is remarkable, and is the key to our whole system. it may be broadly said that no bank in london or out of it holds any considerable sum in hard cash or legal tender (above what is wanted for its daily business) except the banking department of the bank of england. that department had on the 29th day of december, 1869, liabilities as follows: public deposits 8,585,000 l private deposits 18,205,000 l seven-day and other bills 445,000 l ----------- total 27,235,000 l and a cash reserve of 11,297,000 l. and this is all the cash reserve, we must carefully remember, which, under the law, the banking department of the bank of england--as we cumbrously call it the bank of england for banking purposes--possesses. that department can no more multiply or manufacture bank notes than any other bank can multiply them. at that particular day the bank of england had only 11,297,000 l. in its till against liabilities of nearly three times the amount. it had 'consols' and other securities which it could offer for sale no doubt, and which, if sold, would augment its supply of bank notes--and the relation of such securities to real cash will be discussed presently; but of real cash, the bank of england for this purpose--the banking bank--had then so much and no more. and we may well think this a great deal, if we examine the position of other banks. no other bank holds any amount of substantial importance in its own till beyond what is wanted for daily purposes. all london banks keep their principal reserve on deposit at the banking department of the bank of england. this is by far the easiest and safest place for them to use. the bank of england thus has the responsibility of taking care of it. the same reasons which make it desirable for a private person to keep a banker make it also desirable for every banker, as respects his reserve, to bank with another banker if he safely can. the custody of very large sums in solid cash entails much care, and some cost; everyone wishes to shift these upon others if he can do so without suffering. accordingly, the other bankers of london, having perfect confidence in the bank of england, get that bank to keep their reserve for them. the london bill brokers do much the same. indeed, they are only a special sort of bankers who allow daily interest on deposits, and who for most of their money give security. but we have no concern now with these differences of detail. the bill brokers lend most of their money, and deposit the remnant either with the bank of england or some london banker. that london banker lends what he chooses of it, the rest he leaves at the bank of england. you always come back to the bank of england at last. but those who keep immense sums with a banker gain a convenience at the expense of a danger. they are liable to lose them if the bank fail. as all other bankers keep their banking reserve at the bank of england, they are liable to fail if it fails. they are dependent on the management of the bank of england in a day of difficulty and at a crisis for the spare money they keep to meet that difficulty and crisis. and in this there is certainly considerable risk. three times 'peel's act' has been suspended because the banking department was empty. before the act was broken- in 1847, the banking department was reduced to l 1,994,000 1857 " " l 1,462,000 1866 " " l 3,000,000 in fact, in none of those years could the banking department of the bank of england have survived if the law had not been broken. nor must it be fancied that this danger is unreal, artificial, and created by law. there is a risk of our thinking so, because we hear that the danger can be cured by breaking an act; but substantially the same danger existed before the act. in 1825, when only coin was a legal tender, and when there was only one department in the bank, the bank had reduced its reserve to 1,027,000 l., and was within an ace of stopping payment. but the danger to the depositing banks is not the sole or the principal consequence of this mode of keeping the london reserve. the main effect is to cause the reserve to be much smaller in proportion to the liabilities than it would otherwise be. the reserve of the london bankers being on deposit in the bank of england, the bank always lends a principal part of it. suppose, a favourable supposition, that the banking department holds more than two-fifths of its liabilities in cash--that it lends three-fifths of its deposits and retains in reserve only two-fifths. if then the aggregate of the bankers' deposited reserve be 5,000,000 l., 3,000,000 l. of it will be lent by the banking department, and 2,000,000 l. will be kept in the till. in consequence, that 2,000,000 l. is all which is really held in actual cash as against the liabilities of the depositing banks. if lombard street were on a sudden thrown into liquidation, and made to pay as much as it could on the spot, that 2,000,000 l. would be all which the bank of england could pay to the depositing banks, and consequently all, besides the small cash in the till, which those banks could on a sudden pay to the persons who have deposited with them. we see then that the banking reserve of the bank of england--some 10,000,000 l. on an average of years now, and formerly much less--is all which is held against the liabilities of lombard street; and if that were all, we might well be amazed at the immense development of our credit system--in plain english, at the immense amount of our debts payable on demand, and the smallness of the sum of actual money which we keep to pay them if demanded. but there is more to come. lombard street is not only a place requiring to keep a reserve, it is itself a place where reserves are kept. all country bankers keep their reserve in london. they only retain in each country town the minimum of cash necessary to the transaction of the current business of that country town. long experience has told them to a nicety how much this is, and they do not waste capital and lose profit by keeping more idle. they send the money to london, invest a part of it in securities, and keep the rest with the london bankers and the bill brokers. the habit of scotch and irish bankers is much the same. all their spare money is in london, and is invested as all other london money now is; and, therefore, the reserve in the banking department of the bank of england is the banking reserve not only of the bank of england, but of all london--and not only of all london, but of all england, ireland, and scotland too. of late there has been a still further increase in our liabilities. since the franco-german war, we may be said to keep the european reserve also. deposit banking is indeed so small on the continent, that no large reserve need be held on account of it. a reserve of the same sort which is needed in england and scotland is not needed abroad. but all great communities have at times to pay large sums in cash, and of that cash a great store must be kept somewhere. formerly there were two such stores in europe, one was the bank of france, and the other the bank of england. but since the suspension of specie payments by the bank of france, its use as a reservoir of specie is at an end. no one can draw a cheque on it and be sure of getting gold or silver for that cheque. accordingly the whole liability for such international payments in cash is thrown on the bank of england. no doubt foreigners cannot take from us our own money; they must send here 'value in some shape or other for all they take away. but they need not send 'cash;' they may send good bills and discount them in lombard street and take away any part of the produce, or all the produce, in bullion. it is only putting the same point in other words to say that all exchange operations are centering more and more in london. formerly for many purposes paris was a european settling-house, but now it has ceased to be so. the note of the bank of france has not indeed been depreciated enough to disorder ordinary transactions. but any depreciation, however small--even the liability to depreciation without its reality--is enough to disorder exchange transactions. they are calculated to such an extremity of fineness that the change of a decimal may be fatal, and may turn a profit into a loss. accordingly london has become the sole great settling-house of exchange transactions in europe, instead of being formerly one of two. and this pre-eminence london will probably maintain, for it is a natural pre-eminence. the number of mercantile bills drawn upon london incalculably surpasses those drawn on any other european city; london is the place which receives more than any other place, and pays more than any other place, and therefore it is the natural 'clearing house.' the pre-eminence of paris partly arose from a distribution of political power, which is already disturbed; but that of london depends on the regular course of commerce, which is singularly stable and hard to change. now that london is the clearing-house to foreign countries, london has a new liability to foreign countries. at whatever place many people have to make payments, at that place those people must keep money. a large deposit of foreign money in london is now necessary for the business of the world. during the immense payments from france to germany, the sum _in transitu_--the sum in london has perhaps been unusually large. but it will ordinarily be very great. the present political circumstances no doubt will soon change. we shall soon hold in lombard street far less of the money of foreign governments; but we shall hold more and more of the money of private persons; for the deposit at a clearing-house necessary to settle the balance of commerce must tend to increase as that commerce itself increases. and this foreign deposit is evidently of a delicate and peculiar nature. it depends on the good opinion of foreigners, and that opinion may diminish or may change into a bad opinion. after the panic of 1866, especially after the suspension of peel's act (which many foreigners confound with a suspension of cash payments), a large amount of foreign money was withdrawn from london. and we may reasonably presume that in proportion as we augment the deposits of cash by foreigners in london, we augment both the chances and the disasters of a 'run' upon england. and if that run should happen, the bullion to meet it must be taken from the bank. there is no other large store in the country. the great exchange dealers may have a little for their own purposes, but they have no store worth mentioning in comparison with this. if a foreign creditor is so kind as to wait his time and buy the bullion as it comes into the country, he may be paid without troubling the bank or distressing the money market. the german government has recently been so kind; it was in no respect afraid. but a creditor who takes fright will not wait, and if he wants bullion in a hurry he must come to the bank of england. in consequence all our credit system depends on the bank of england for its security. on the wisdom of the directors of that one joint stock company, it depends whether england shall be solvent or insolvent. this may seem too strong, but it is not. all banks depend on the bank of england, and all merchants depend on some banker. if a merchant have 10,000 l. at his bankers, and wants to pay it to some one in germany, he will not be able to pay it unless his banker can pay him, and the banker will not be able to pay if the bank of england should be in difficulties and cannot produce his 'reserve.' the directors of the bank are, therefore, in fact, if not in name, trustees for the public, to keep a banking reserve on their behalf; and it would naturally be expected either that they distinctly recognized this duty and engaged to perform it, or that their own self-interest was so strong in the matter that no engagement was needed. but so far from there being a distinct undertaking on the part of the bank directors to perform this duty, many of them would scarcely acknowledge it, and some altogether deny it. mr. hankey, one of the most careful and most experienced of them, says in his book on the bank of england, the best account of the practice and working of the bank which anywhere exists--'i do not intend here to enter at any length on the subject of the general management of the bank, meaning the banking department, as the principle upon which the business is conducted does not differ, as far as i am aware, from that of any well-conducted bank in london.' but, as anyone can see by the published figures, the banking department of the bank of england keeps as a great reserve in bank notes and coin between 30 and 50 per cent of its liabilities, and the other banks only keep in bank notes and coin the bare minimum they need to open shop with. and such a constant difference indicates, i conceive, that the two are not managed on the same principle. the practice of the bank has, as we all know, been much and greatly improved. they do not now manage like the other banks in lombard street. they keep an altogether different kind and quantity of reserve; but though the practice is mended the theory is not. there has never been a distinct resolution passed by the directors of the bank of england, and communicated by them to the public, stating even in the most general manner, how much reserve they mean to keep or how much they do not mean, or by what principle in this important matter they will be guided. the position of the bank directors is indeed most singular. on the one side a great city opinion--a great national opinion, i may say, for the nation has learnt much from many panics--requires the directors to keep a large reserve. the newspapers, on behalf of the nation, are always warning the directors to keep it, and watching that they do keep it; but, on the other hand, another less visible but equally constant pressure pushes the directors in exactly the reverse way, and inclines them to diminish the reserve. this is the natural desire of all directors to make a good dividend for their shareholders. the more money lying idle the less, _caeteris paribus_, is the dividend; the less money lying idle the greater is the dividend. and at almost every meeting of the proprietors of the bank of england, there is a conversation on this subject. some proprietor says that he does not see why so much money is kept idle, and hints that the dividend ought to be more. indeed, it cannot be wondered at that the bank proprietors do not quite like their position. theirs is the oldest bank in the city, but their profits do not increase, while those of other banks most rapidly increase. in 1844, the dividend on the stock of the bank of england was 7 per cent, and the price of the stock itself 212; the dividend now is 9 per cent, and the price of the stock 232. but in the same time the shares of the london and westminster bank, in spite of an addition of 100 per cent to the capital, have risen from 27 to 66, and the dividend from 6 per cent to 20 per cent. that the bank proprietors should not like to see other companies getting richer than their company is only natural. some part of the lowness of the bank dividend, and of the consequent small value of bank stock, is undoubtedly caused by the magnitude of the bank capital; but much of it is also due to the great amount of unproductive cash--of cash which yields no interest--that the banking department of the bank of england keeps lying idle. if we compare the london and westminster bank--which is the first of the joint-stock banks in the public estimation and known to be very cautiously and carefully managed--with the bank of england, we shall see the difference at once. the london and westminster has only 13 per cent of its liabilities lying idle. the banking department of the bank of england has over 40 per cent. so great a difference in the management must cause, and does cause, a great difference in the profits. inevitably the shareholders of the bank of england will dislike this great difference; more or less, they will always urge their directors to diminish (as far as possible) the unproductive reserve, and to augment as far as possible their own dividend. in most banks there would be a wholesome dread restraining the desire of the shareholders to reduce the reserve; they would fear to impair the credit of the bank. but fortunately or unfortunately, no one has any fear about the bank of england. the english world at least believes that it will not, almost that it cannot, fail. three times since 1844 the banking department has received assistance, and would have failed without it. in 1825, the entire concern almost suspended payment; in 1797, it actually did so. but still there is a faith in the bank, contrary to experience, and despising evidence. no doubt in every one of these years the condition of the bank, divided or undivided, was in a certain sense most sound; it could ultimately have paid all its creditors all it owed, and returned to its shareholders all their own capital. but ultimate payment is not what the creditors of a bank want; they want present, not postponed, payment; they want to be repaid according to agreement; the contract was that they should be paid on demand, and if they are not paid on demand they may be ruined. and that instant payment, in the years i speak of, the bank of england certainly could not have made. but no one in london ever dreams of questioning the credit of the bank, and the bank never dreams that its own credit is in danger. somehow everybody feels the bank is sure to come right. in 1797, when it had scarcely any money left, the government said not only that it need not pay away what remained, but that it must not. the 'effect of letters of licence' to break peel's act has confirmed the popular conviction that the government is close behind the bank, and will help it when wanted. neither the bank nor the banking department have ever had an idea of being put 'into liquidation;' most men would think as soon of 'winding up' the english nation. since then the bank of england, as a bank, is exempted from the perpetual apprehension that makes other bankers keep a large reserve the apprehension of discredit--it would seem particularly necessary that its managers should be themselves specially interested in keeping that reserve, and specially competent to keep it. but i need not say that the bank directors have not their personal fortune at stake in the management of the bank. they are rich city merchants, and their stake in the bank is trifling in comparison with the rest of their wealth. if the bank were wound up, most of them would hardly in their income feel the difference. and what is more, the bank directors are not trained bankers; they were not bred to the trade, and do not in general give the main power of their minds to it. they are merchants, most of whose time and most of whose real mind are occupied in making money in their own business and for themselves. it might be expected that as this great public duty was cast upon the banking department of the bank, the principal statesmen (if not parliament itself) would have enjoined on them to perform it. but no distinct resolution of parliament has ever enjoined it; scarcely any stray word of any influential statesman. and, on the contrary, there is a whole _catena_ of authorities, beginning with sir robert peel and ending with mr. lowe, which say that the banking department of the bank of england is only a bank like any other bank--a company like other companies; that in this capacity it has no peculiar position, and no public duties at all. nine-tenths of english statesmen, if they were asked as to the management of the banking department of the bank of england, would reply that it was no business of theirs or of parliament at all; that the banking department alone must look to it. the result is that we have placed the exclusive custody of our entire banking reserve in the hands of a single board of directors not particularly trained for the duty--who might be called 'amateurs,' who have no particular interest above other people in keeping it undiminished--who acknowledge no obligation to keep it undiminished who have never been told by any great statesman or public authority that they are so to keep it or that they have anything to do with it who are named by and are agents for a proprietary which would have a greater income if it was diminished, who do not fear, and who need not fear, ruin, even if it were all gone and wasted. that such an arrangement is strange must be plain; but its strangeness can only be comprehended when we know what the custody of a national banking reserve means, and how delicate and difficult it is. ii. such a reserve as we have seen is kept to meet sudden and unexpected demands. if the bankers of a country are asked for much more than is commonly wanted, then this reserve must be resorted to. what then are these extra demands? and how is this extra reserve to be used? speaking broadly, these extra demands are of two kinds--one from abroad to meet foreign payments requisite to pay large and unusual foreign debts, and the other from at home to meet sudden apprehension or panic arising in any manner, rational or irrational. no country has ever been so exposed as england to a foreign demand on its banking reserve, not only because at present england is a large borrower from foreign nations, but also (and much more) because no nation has ever had a foreign trade of such magnitude, in such varied objects, or so ramified through the world. the ordinary foreign trade of a country requires no cash; the exports on one side balance the imports on the other. but a sudden trade of import like the import of foreign corn after a bad harvestor (what is much less common, though there are cases of it) the cessation of any great export, causes a balance to become due, which must be paid in cash. now, the only source from which large sums of cash can be withdrawn in countries where banking is at all developed, is a 'bank reserve.' in england especially, except a few sums of no very considerable amount held by bullion dealers in the course of their business, there are no sums worth mentioning in cash out of the banks; an ordinary person could hardly pay a serious sum without going to some bank, even if he spent a month in trying. all persons who wish to pay a large sum in cash trench of necessity on the banking reserve. but then what is 'cash?' within a country the action of a government can settle the quantity, and therefore the value, of its currency; but outside its own country, no government can do so. bullion is the cash' of international trade; paper currencies are of no use there, and coins pass only as they contain more or less bullion. when then the legal tender of a country is purely metallic, all that is necessary is that banks should keep a sufficient store of that 'legal tender.' but when the 'legal tender' is partly metal and partly paper, it is necessary that the paper 'legal tender'--the bank note--should be convertible into bullion. and here i should pass my limits, and enter on the theory of peel's act if i began to discuss the conditions of convertibility. i deal only with the primary pre-requisite of effectual foreign payments--a sufficient supply of the local legal tender; with the afterstep--the change of the local legal tender into the universally acceptable commodity cannot deal. what i have to deal with is, for the present, ample enough. the bank of england must keep a reserve of 'legal tender' to be used for foreign payments if itself fit, and to be used in obtaining bullion if itself unfit. and foreign payments are sometimes very large, and often very sudden. the 'cotton drain,' as it is called--the drain to the east to pay for indian cotton during the american civil war took many millions from this country for a series of years. a bad harvest must take millions in a single year. in order to find such great sums, the bank of england requires the steady use of an effectual instrument. that instrument is the elevation of the rate of interest. if the interest of money be raised, it is proved by experience that money does come to lombard street, and theory shows that it ought to come. to fully explain the matter i must go deep into the theory of the exchanges, but the general notion is plain enough. loanable capital, like every other commodity, comes where there is most to be made of it. continental bankers and others instantly send great sums here, as soon as the rate of interest shows that it can be done profitably. while english credit is good, a rise of the value of money in lombard street immediately by a banking operation brings money to lombard street. and there is also a slower mercantile operation. the rise in the rate of discount acts immediately on the trade of this country. prices fall here; in consequence imports are diminished, exports are increased, and, therefore, there is more likelihood of a balance in bullion coming to this country after the rise in the rate than there was before. whatever persons--one bank or many banks--in any country hold the banking reserve of that country, ought at the very beginning of an unfavourable foreign exchange at once to raise the rate of interest, so as to prevent their reserve from being diminished farther, and so as to replenish it by imports of bullion. this duty, up to about the year 1860, the bank of england did not perform at all, as i shall show farther on. a more miserable history can hardly be found than that of the attempts of the bank--if indeed they can be called attempts--to keep a reserve and to manage a foreign drain between the year 1819 (when cash payments were resumed by the bank, and when our modern money market may be said to begin) and the year 1857. the panic of that year for the first time taught the bank directors wisdom, and converted them to sound principles. the present policy of the bank is an infinite improvement on the policy before 1857: the two must not be for an instant confounded; but nevertheless, as i shall hereafter show, the present policy is now still most defective, and much discussion and much effort, will be wanted before that policy becomes what it ought to be. a domestic drain is very different. such a drain arises from a disturbance of credit within the country, and the difficulty of dealing with it is the greater, because it is often caused, or at least often enhanced, by a foreign drain. times without number the public have been alarmed mainly because they saw that the banking reserve was already low, and that it was daily getting lower. the two maladies--an external drain and an internal--often attack the money market at once. what then ought to be done? in opposition to what might be at first sight supposed, the best way for the bank or banks who have the custody of the bank reserve to deal with a drain arising from internal discredit, is to lend freely. the first instinct of everyone is the contrary. there being a large demand on a fund which you want to preserve, the most obvious way to preserve it is to hoard it--to get in as much as you can, and to let nothing go out which you can help. but every banker knows that this is not the way to diminish discredit. this discredit means, 'an opinion that you have not got any money,' and to dissipate that opinion, you must, if possible, show that you have money: you must employ it for the public benefit in order that the public may know that you have it. the time for economy and for accumulation is before. a good banker will have accumulated in ordinary times the reserve he is to make use of in extraordinary times. ordinarily discredit does not at first settle on any particular bank, still less does it at first concentrate itself on the bank or banks holding the principal cash reserve. these banks are almost sure to be those in best credit, or they would not be in that position, and, having the reserve, they are likely to look stronger and seem stronger than any others. at first, incipient panic amounts to a kind of vague conversation: is a. b. as good as he used to be? has not c. d. lost money? and a thousand such questions. a hundred people are talked about, and a thousand think,--'am i talked about, or am i not?' 'is my credit as good as it used to be, or is it less?' and every day, as a panic grows, this floating suspicion becomes both more intense and more diffused; it attacks more persons; and attacks them all more virulently than at first. all men of experience, therefore, try to strengthen themselves,' as it is called, in the early stage of a panic; they borrow money while they can; they come to their banker and offer bills for discount, which commonly they would not have offered for days or weeks to come. and if the merchant be a regular customer, a banker does not like to refuse, because if he does he will be said, or may be said, to be in want of money, and so may attract the panic to himself. not only merchants but all persons under pecuniary liabilities--present or imminent--feel this wish to 'strengthen themselves,' and in proportion to those liabilities. especially is this the case with what may be called the auxiliary dealers in credit. under any system of banking there will always group themselves about the main bank or banks (in which is kept the reserve) a crowd of smaller money dealers, who watch the minutae of bills, look into special securities which busy bankers have not time for, and so gain a livelihood. as business grows, the number of such subsidiary persons augments. the various modes in which money may be lent have each their peculiarities, and persons who devote themselves to one only lend in that way more safely, and therefore more cheaply. in time of panic, these subordinate dealers in money will always come to the principal dealers. in ordinary times, the intercourse between the two is probably close enough. the little dealer is probably in the habit of pledging his 'securities' to the larger dealer at a rate less than he has himself charged, and of running into the market to lend again. his time and brains are his principal capital, and he wants to be always using them. but in times of incipient panic, the minor money dealer always becomes alarmed. his credit is never very established or very wide; he always fears that he may be the person on whom current suspicion will fasten, and often he is so. accordingly he asks the larger dealer for advances. a number of such persons ask all the large dealers--those who have the money--the holders of the reserve. and then the plain problem before the great dealers comes to be 'how shall we best protect ourselves? no doubt the immediate advance to these second-class dealers is annoying, but may not the refusal of it even be dangerous? a panic grows by what it feeds on; if it devours these second-class men, shall we, the first class, be safe?' a panic, in a word, is a species of neuralgia, and according to the rules of science you must not starve it. the holders of the cash reserve must be ready not only to keep it for their own liabilities, but to advance it most freely for the liabilities of others. they must lend to merchants, to minor bankers, to 'this man and that man,' whenever the security is good. in wild periods of alarm, one failure makes many, and the best way to prevent the derivative failures is to arrest the primary failure which causes them. the way in which the panic of 1825 was stopped by advancing money has been described in so broad and graphic a way that the passage has become classical. 'we lent it,' said mr. harman, on behalf of the bank of england, 'by every possible means and in modes we had never adopted before; we took in stock on security, we purchased exchequer bills, we made advances on exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount, in short, by every possible means consistent with the safety of the bank, and we were not on some occasions over-nice. seeing the dreadful state in which the public were, we rendered every assistance in our power.' after a day or two of this treatment, the entire panic subsided, and the 'city' was quite calm. the problem of managing a panic must not be thought of as mainly a 'banking' problem. it is primarily a mercantile one. all merchants are under liabilities; they have bills to meet soon, and they can only pay those bills by discounting bills on other merchants. in other words, all merchants are dependent on borrowing money, and large merchants are dependent on borrowing much money. at the slightest symptom of panic many merchants want to borrow more than usual; they think they will supply themselves with the means of meeting their bills while those means are still forthcoming. if the bankers gratify the merchants, they must lend largely just when they like it least; if they do not gratify them, there is a panic. on the surface there seems a great inconsistency in all this. first, you establish in some bank or banks a certain reserve; you make of it or them a kind of ultimate treasury, where the last shilling of the country is deposited and kept. and then you go on to say that this final treasury is also to be the last lending-house; that out of it unbounded, or at any rate immense, advances are to be made when no once else lends. this seems like saying--first, that the reserve should be kept, and then that it should not be kept. but there is no puzzle in the matter. the ultimate banking reserve of a country (by whomsoever kept) is not kept out of show, but for certain essential purposes, and one of those purposes is the meeting a demand for cash caused by an alarm within the country. it is not unreasonable that our ultimate treasure in particular cases should be lent; on the contrary, we keep that treasure for the very reason that in particular cases it should be lent. when reduced to abstract principle, the subject comes to this. an 'alarm' is an opinion that the money of certain persons will not pay their creditors when those creditors want to be paid. if possible, that alarm is best met by enabling those persons to pay their creditors to the very moment. for this purpose only a little money is wanted. if that alarm is not so met, it aggravates into a panic, which is an opinion that most people, or very many people, will not pay their creditors; and this too can only be met by enabling all those persons to pay what they owe, which takes a great deal of money. no one has enough money, or anything like enough, but the holders of the bank reserve. not that the help so given by the banks holding that reserve necessarily diminishes it. very commonly the panic extends as far, or almost as far, as the bank or banks which hold the reserve, but does not touch it or them at all. in this case it is enough if the dominant bank or banks, so to speak, pledge their credit for those who want it. under our present system it is often quite enough that a merchant or a banker gets the advance made to him put to his credit in the books of the bank of england; he may never draw a cheque on it, or, if he does, that cheque may come in again to the credit of some other customer, who lets it remain on his account. an increase of loans at such times is often an increase of the liabilities of the bank, not a diminution of its reserve. just so before 1844, an issue of notes, as in to quell a panic entirely internal did not diminish the bullion reserve. the notes went out, but they did not return. they were issued as loans to the public, but the public wanted no more; they never presented them for payment; they never asked that sovereigns should be given for them. but the acceptance of a great liability during an augmenting alarm, though not as bad as an equal advance of cash, is the thing next worst. at any moment the cash may be demanded. supposing the panic to grow, it will be demanded, and the reserve will be lessened accordingly. no doubt all precautions may, in the end, be unavailing. 'on extraordinary occasions,' says ricardo, 'a general panic may seize the country, when every one becomes desirous of possessing himself of the precious metals as the most convenient mode of realising or concealing his property, against such panic banks have no security _on any system_.' the bank or banks which hold the reserve may last a little longer than the others; but if apprehension pass a certain bound, they must perish too. the use of credit is, that it enables debtors to use a certain part of the money their creditors have lent them. if all those creditors demand all that money at once, they cannot have it, for that which their debtors have used, is for the time employed, and not to be obtained. with the advantages of credit we must take the disadvantages too; but to lessen them as much as we can, we must keep a great store of ready money always available, and advance out of it very freely in periods of panic, and in times of incipient alarm. the management of the money market is the more difficult, because, as has been said, periods of internal panic and external demand for bullion commonly occur together. the foreign drain empties the bank till, and that emptiness, and the resulting rise in the rate of discount, tend to frighten the market. the holders of the reserve have, therefore, to treat two opposite maladies at once--one requiring stringent remedies, and especially a rapid rise in the rate of interest; and the other, an alleviative treatment with large and ready loans. before we had much specific experience, it was not easy to prescribe for this compound disease; but now we know how to deal with it. we must look first to the foreign drain, and raise the rate of interest as high as may be necessary. unless you can stop the foreign export, you cannot allay the domestic alarm. the bank will get poorer and poorer, and its poverty will protract or renew the apprehension. and at the rate of interest so raised, the holders--one or more-of the final bank reserve must lend freely. very large loans at very high rates are the best remedy for the worst malady of the money market when a foreign drain is added to a domestic drain. any notion that money is not to be had, or that it may not be had at any price, only raises alarm to panic and enhances panic to madness. but though the rule is clear, the greatest delicacy, the finest and best skilled judgment, are needed to deal at once with such great and contrary evils. and great as is the delicacy of such a problem in all countries, it is far greater in england now than it was or is elsewhere. the strain thrown by a panic on the final bank reserve is proportional to the magnitude of a country's commerce, and to the number and size of the dependent banks--banks, that is, holding no cash reserve--that are grouped around the central bank or banks. and in both respects our system causes a stupendous strain. the magnitude of our commerce, and the number and magnitude of the banks which depend on the bank of england, are undeniable. there are very many more persons under great liabilities than there are, or ever were, anywhere else. at the commencement of every panic, all persons under such liabilities try to supply themselves with the means of meeting those liabilities while they can. this causes a great demand for new loans. and so far from being able to meet it, the bankers who do not keep an extra reserve at that time borrow largely, or do not renew large loans--very likely do both. london bankers, other than the bank of england, effect this in several ways. first, they have probably discounted bills to a large amount for the bill brokers, and if these bills are paid, they decline discounting any others to replace them. the directors of the london and westminster bank had, in the panic of 1857, discounted millions of such bills, and they justly said that if those bills were paid they would have an amount of cash far more than sufficient for any demand. but how were those bills to be paid? some one else must lend the money to pay them. the mercantile community could not on a sudden bear to lose so large a sum of borrowed money; they have been used to rely on it, and they could not carry on their business without it. least of all could they bear it at the beginning of a panic, when everybody wants more money than usual. speaking broadly, those bills can only be paid by the discount of other bills. when the bills (suppose) of a manchester warehouseman which he gave to the manufacturer become due, he cannot, as a rule, pay for them at once in cash; he has bought on credit, and he has sold on credit. he is but a middleman. to pay his own bill to the maker of the goods, he must discount the bills he has received from the shopkeepers to whom he has sold the goods; but if there is a sudden cessation in the means of discount, he will not be able to discount them. all our mercantile community must obtain new loans to pay old debts. if some one else did not pour into the market the money which the banks like the london and westminster bank take out of it, the bills held by the london and westminster bank could not be paid. who then is to pour in the new money? certainly not the bill brokers. they have been used to re-discount with such banks as the london and westminster millions of bills, and if they see that they are not likely to be able to re-discount those bills, they instantly protect themselves and do not discount them. their business does not allow them to keep much cash unemployed. they give interest for all the money deposited with them--an interest often nearly approaching the interest they can charge; as they can only keep a small reserve a panic tells on them more quickly than on anyone else. they stop their discounts, or much diminish their discounts, immediately. there is no new money to be had from them, and the only place at which they can have it is the bank of england. there is even a simpler case: the banker who is uncertain of his credit, and wants to increase his cash, may have money on deposit at the bill brokers. if he wants to replenish his reserve, he may ask for it, suppose, just when the alarm is beginning. but if a great number of persons do this very suddenly, the bill brokers will not at once be able to pay without borrowing. they have excellent bills in their case, but these will not be due for some days; and the demand from the more or less alarmed bankers is for payment at once and to-day. accordingly the bill broker takes refuge at the bank of england the only place where at such a moment new money is to be had. the case is just the same if the banker wants to sell consols, or to call in money lent on consols. these he reckons as part of his reserve. and in ordinary times nothing can be better. according to the saying, you 'can sell consols on a sunday.' in a time of no alarm, or in any alarm affecting that particular banker only, he can rely on such reserve without misgiving. but not so in a general panic. then, if he wants to sell 500,000 l. worth of consols, he will not find 500,000 l. of fresh money ready to come into the market. all ordinary bankers are wanting to sell, or thinking they may have to sell. the only resource is the bank of england. in a great panic, consols cannot be sold unless the bank of england will advance to the buyer, and no buyer can obtain advances on consols at such a time unless the bank of england will lend to him. the case is worse if the alarm is not confined to the great towns, but is diffused through the country. as a rule, country bankers only keep so much barren cash as is necessary for their common business. all the rest they leave at the bill brokers, or at the interest-giving banks, or invest in consols and such securities. but in a panic they come to london and want this money. and it is only from the bank of england that they can get it, for all the rest of london want their money for themselves. if we remember that the liabilities of lombard street payable on demand are far larger than those of any like market, and that the liabilities of the country are greater still, we can conceive the magnitude of the pressure on the bank of england when both lombard street and the country suddenly and at once come upon it for aid. no other bank was ever exposed to a demand so formidable, for none ever before kept the banking reserve for such a nation as the english. the mode in which the bank of england meets this great responsibility is very curious. it unquestionably does make enormous advances in every panic in 1847 the loans on 'private securities' increased from 18,963,000 l to 20,409,000 l 1857 ditto ditto 20,404,000 l to 31,350,000 l 1866 ditto ditto 18,507,000 l to 33,447,000 l but, on the other hand, as we have seen, though the bank, more or less, does its duty, it does not distinctly acknowledge that it is its duty. we are apt to be solemnly told that the banking department of the bank of england is only a bank like other banks--that it has no peculiar duty in times of panic--that it then is to look to itself alone, as other banks look. and there is this excuse for the bank. hitherto questions of banking have been so little discussed in comparison with questions of currency, that the duty of the bank in time of panic has been put on a wrong ground. it is imagined that because bank notes are a legal tender, the bank has some peculiar duty to help other people. but bank notes are only a legal tender at the issue department, not at the banking department, and the accidental combination of the two departments in the same building gives the banking department no aid in meeting a panic. if the issue department were at somerset house, and if it issued government notes there, the position of the banking department under the present law would be exactly what it is now. no doubt, formerly the bank of england could issue what it pleased, but that historical reminiscence makes it no stronger now that it can no longer so issue. we must deal with what is, not with what was. and a still worse argument is also used. it is said that because the bank of england keeps the 'state account' and is the government banker, it is a sort of 'public institution' and ought to help everybody. but the custody of the taxes which have been collected and which wait to be expended is a duty quite apart from panics. the government money may chance to be much or little when the panic comes. there is no relation or connection between the two. and the state, in getting the bank to keep what money it may chance to have, or in borrowing of it what money it may chance to want, does not hire it to stop a panic or much help it if it tries. the real reason has not been distinctly seen. as has been already said--but on account of its importance and perhaps its novelty it is worth saying again--whatever bank or banks keep the ultimate banking reserve of the country must lend that reserve most freely in time of apprehension, for that is one of the characteristic uses of the bank reserve, and the mode in which it attains one of the main ends for which it is kept. whether rightly or wrongly, at present and in fact the bank of england keeps our ultimate bank reserve, and therefore it must use it in this manner. and though the bank of england certainly do make great advances in time of panic, yet as they do not do so on any distinct principle, they naturally do it hesitatingly, reluctantly, and with misgiving. in 1847, even in 1866--the latest panic, and the one in which on the whole the bank acted the best--there was nevertheless an instant when it was believed the bank would not advance on consols, or at least hesitated to advance on them. the moment this was reported in the city and telegraphed to the country, it made the panic indefinitely worse. in fact, to make large advances in this faltering way is to incur the evil of making them without obtaining the advantage. what is wanted and what is necessary to stop a panic is to diffuse the impression, that though money may be dear, still money is to be had. if people could be really convinced that they could have money if they wait a day or two, and that utter ruin is not coming, most likely they would cease to run in such a mad way for money. either shut the bank at once, and say it will not lend more than it commonly lends, or lend freely, boldly, and so that the public may feel you mean to go on lending. to lend a great deal, and yet not give the public confidence that you will lend sufficiently and effectually, is the worst of all policies; but it is the policy now pursued. in truth, the bank do not lend from the motives which should make a bank lend. the holders of the bank reserve ought to lend at once and most freely in an incipient panic, because they fear destruction in the panic. they ought not to do it to serve others; they ought to do it to serve themselves. they ought to know that this bold policy is the only safe one, and for that reason they ought to choose it. but the bank directors are not afraid. even at the last moment they say that 'whatever happens to the community, they can preserve themselves.' both in 1847 and 1857 (i believe also in 1866, though there is no printed evidence of it) the bank directors contended that the banking department was quite safe though its reserve was nearly all gone, and that it could strengthen itself by selling securities and by refusing to discount. but this is a complete dream. the bank of england could not sell 'securities,' for in an extreme panic there is no one else to buy securities. the bank cannot stay still and wait till its bills are paid, and so fill its coffers, for unless it discounts equivalent bills, the bills which it has already discounted will not be paid. 'when the reserve in the ultimate bank or banks--those keeping the reserve--runs low, it cannot be augmented by the same means that other and dependent banks commonly adopt to maintain their reserve, for the dependent banks trust that at such moments the ultimate banks will be discounting more than usual and lending more than usual. but ultimate banks have no similar rear-guard to rely upon. i shall have failed in my purpose if i have not proved that the system of entrusting all our reserve to a single board, like that of the bank directors, is very anomalous; that it is very dangerous; that its bad consequences, though much felt, have not been fully seen; that they have been obscured by traditional arguments and hidden in the dust of ancient controversies. but it will be said--what would be better? what other system could there be? we are so accustomed to a system of banking, dependent for its cardinal function on a single bank, that we can hardly conceive of any other. but the natural system--that which would have sprung up if government had let banking alone--is that of many banks of equal or not altogether unequal size. in all other trades competition brings the traders to a rough approximate equality. in cotton spinning, no single firm far and permanently outstrips the others. there is no tendency to a monarchy in the cotton world; nor, where banking has been left free, is there any tendency to a monarchy in banking either. in manchester, in liverpool, and all through england, we have a great number of banks, each with a business more or less good, but we have no single bank with any sort of predominance; nor is there any such bank in scotland. in the new world of joint stock banks outside the bank of england, we see much the same phenomenon. one or more get for a time a better business than the others, but no single bank permanently obtains an unquestioned predominance. none of them gets so much before the others that the others voluntarily place their reserves in its keeping. a republic with many competitors of a size or sizes suitable to the business, is the constitution of every trade if left to itself, and of banking as much as any other. a monarchy in any trade is a sign of some anomalous advantage, and of some intervention from without. i shall be at once asked--do you propose a revolution? do you propose to abandon the one-reserve system, and create anew a many-reserve system? my plain answer is that i do not propose it. i know it would be childish. credit in business is like loyalty in government. you must take what you can find of it, and work with it if possible. a theorist may easily map out a scheme of government in which queen victoria could be dispensed with. he may make a theory that, since we admit and we know that the house of commons is the real sovereign, any other sovereign is superfluous; but for practical purposes, it is not even worth while to examine these arguments. queen victoria is loyally obeyed--without doubt, and without reasoning--by millions of human beings. if those millions began to argue, it would not be easy to persuade them to obey queen victoria, or anything else. effectual arguments to convince the people who need convincing are wanting. just so, an immense system of credit, founded on the bank of england as its pivot and its basis, now exists. the english people, and foreigners too, trust it implicitly. every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone: but what we have requires no proof. the whole rests on an instinctive confidence generated by use and years. nothing would persuade the english people to abolish the bank of england; and if some calamity swept it away, generations must elapse before at all the same trust would be placed in any other equivalent. a many-reserve system, if some miracle should put it down in lombard street, would seem monstrous there. nobody would understand it, or confide in it. credit is a power which may grow, but cannot be constructed. those who live under a great and firm system of credit must consider that if they break up that one they will never see another, for it will take years upon years to make a successor to it. on this account, i do not suggest that we should return to a natural or many-reserve system of banking. i should only incur useless ridicule if i did suggest it. nor can i propose that we should adopt the simple and straightforward expedient by which the french have extricated themselves from the same difficulty. in france all banking rests on the bank of france, even more than in england all rests on the bank of england. the bank of france keeps the final banking reserve, and it keeps the currency reserve too. but the state does not trust such a function to a board of merchants, named by shareholders. the nation itself--the executive government--names the governor and deputy-governor of the bank of france. these officers have, indeed, beside them a council of 'regents,' or directors, named by the shareholders. but they need not attend to that council unless they think fit; they are appointed to watch over the national interest, and, in so doing, they may disregard the murmurs of the 'regents' if they like. and in theory, there is much to be said for this plan. the keeping the single banking reserve being a national function, it is at least plausible to argue that government should choose the functionaries. no doubt such a political intervention is contrary to the sound economical doctrine that 'banking is a trade, and only a trade.' but government forgot that doctrine when, by privileges and monopolies, it made a single bank predominant over all others, and established the one-reserve system. as that system exists, a logical frenchman consistently enough argues that the state should watch and manage it. but no such plan would answer in england. we have not been trained to care for logical sequence in our institutions, or rather we have been trained not to care for it. and the practical result for which we do care would in this case be bad. the governor of the bank would be a high parliamentary official, perhaps in the cabinet, and would change as chance majorities and the strength of parties decide. a trade peculiarly requiring consistency and special attainment would be managed by a shifting and untrained ruler. in fact, the whole plan would seem to an englishman of business palpably absurd; he would not consider it, he would not think it worth considering. that it works fairly well in france, and that there are specious arguments of theory for it, would not be sufficient to his mind. all such changes being out of the question, i can propose only three remedies. first. there should be a clear understanding between the bank and the public that, since the bank hold out ultimate banking reserve, they will recognise and act on the obligations which this implies; that they will replenish it in times of foreign demand as fully, and lend it in times of internal panic as freely and readily, as plain principles of banking require. this looks very different from the french plan, but it is not so different in reality. in england we can often effect, by the indirect compulsion of opinion, what other countries must effect by the direct compulsion of government. we can do so in this case. the bank directors now fear public opinion exceedingly; probably no kind of persons are so sensitive to newspaper criticism. and this is very natural. our statesmen, it is true, are much more blamed, but they have generally served a long apprenticeship to sharp criticism. if they still care for it (and some do after years of experience much more than the world thinks), they care less for it than at first, and have come to regard it as an unavoidable and incessant irritant, of which they shall never be rid. but a bank director undergoes no similar training and hardening. his functions at the bank fill a very small part of his time; all the rest of his life (unless he be in parliament) is spent in retired and mercantile industry. he is not subjected to keen and public criticism, and is not taught to bear it. especially when once in his life he becomes, by rotation, governor, he is most anxious that the two years of office shall 'go off well.' he is apt to be irritated even by objections to principles on which he acts, and cannot bear with equanimity censure which is pointed and personal. at present i am not sure if this sensitiveness is beneficial. as the exact position of the bank of england in the money market is indistinctly seen, there is no standard to which a bank governor can appeal. he is always in fear that 'something may be said;' but not quite knowing on what side that 'something' may be, his fear is but an indifferent guide to him. but if the cardinal doctrine were accepted, if it were acknowledged that the bank is charged with the custody of our sole banking reserve, and is bound to deal with it according to admitted principles, then a governor of the bank could look to those principles. he would know which way criticism was coming. if he was guided by the code, he would have a plain defence. and then we may be sure that old men of business would not deviate from the code. at present the board of directors are a sort of semi-trustees for the nation. i would have them real trustees, and with a good trust deed. secondly. the government of the bank should be improved in a manner to be explained. we should diminish the 'amateur' element; we should augment the trained banking element; and we should ensure more constancy in the administration. thirdly. as these two suggestions are designed to make the bank as strong as possible, we should look at the rest of our banking system, and try to reduce the demands on the bank as much as we can. the central machinery being inevitably frail, we should carefully and as much as possible diminish the strain upon it. but to explain these proposals, and to gain a full understanding of many arguments that have been used, we must look more in detail at the component parts of lombard street, and at the curious set of causes which have made it assume its present singular structure. chapter iii. how lombard street came to exist, and why it assumed its present form. in the last century, a favourite subject of literary ingenuity was 'conjectural history,' as it was then called. upon grounds of probability a fictitious sketch was made of the possible origin of things existing. if this kind of speculation were now applied to banking, the natural and first idea would be that large systems of deposit banking grew up in the early world, just as they grow up now in any large english colony. as soon as any such community becomes rich enough to have much money, and compact enough to be able to lodge its money in single banks, it at once begins so to do. english colonists do not like the risk of keeping their money, and they wish to make an interest on it. they carry from home the idea and the habit of banking, and they take to it as soon as they can in their new world. conjectural history would be inclined to say that all banking began thus: but such history is rarely of any value. the basis of it is false. it assumes that what works most easily when established is that which it would be the most easy to establish, and that what seems simplest when familiar would be most easily appreciated by the mind though unfamiliar. but exactly the contrary is true. many things which seem simple and which work well when firmly established, are very hard to establish among new people, and not very easy to explain to them. deposit banking is of this sort. its essence is that a very large number of persons agree to trust a very few persons, or some one person. banking would not be a profitable trade if bankers were not a small number, and depositors in comparison an immense number. but to get a great number of persons to do exactly the same thing is always very difficult, and nothing but a very palpable necessity will make them on a sudden begin to do it. and there is no such palpable necessity in banking. if you take a country town in france, even now, you will not find any such system of banking as ours. cheque-books are unknown, and money kept on running account by bankers is rare. people store their money in a caisse at their houses. steady savings, which are waiting for investment, and which are sure not to be soon wanted, may be lodged with bankers; but the common floating cash of the community is kept by the community themselves at home. they prefer to keep it so, and it would not answer a banker's purpose to make expensive arrangements for keeping it otherwise. if a 'branch,' such as the national provincial bank opens in an english country town, were opened in a corresponding french one, it would not pay its expenses. you could not get any sufficient number of frenchmen to agree to put their money there. and so it is in all countries not of british descent, though in various degrees. deposit banking is a very difficult thing to begin, because people do not like to let their money out of their sight, especially do not like to let it out of sight without security--still more, cannot all at once agree on any single person to whom they are content to trust it unseen and unsecured. hypothetical history, which explains the past by what is simplest and commonest in the present, is in banking, as in most things, quite untrue. the real history is very different. new wants are mostly supplied by adaptation, not by creation or foundation. something having been created to satisfy an extreme want, it is used to satisfy less pressing wants, or to supply additional conveniences. on this account, political government--the oldest institution in the world--has been the hardest worked. at the beginning of history, we find it doing everything which society wants done, and forbidding everything which society does not wish done. in trade, at present, the first commerce in a new place is a general shop, which, beginning with articles of real necessity, comes shortly to supply the oddest accumulation of petty comforts. and the history of banking has been the same. the first banks were not founded for our system of deposit banking, or for anything like it. they were founded for much more pressing reasons, and having been founded, they, or copies from them, were applied to our modern uses. the earliest banks of italy, where the name began, were finance companies. the bank of st. george, at genoa, and other banks founded in imitation of it, were at first only companies to make loans to, and float loans for, the governments of the cities in which they were formed. the want of money is an urgent want of governments at most periods, and seldom more urgent than it was in the tumultuous italian republics of the middle ages. after these banks had been long established, they began to do what we call banking business; but at first they never thought of it. the great banks of the north of europe had their origin in a want still more curious. the notion of its being a prime business of a bank to give good coin has passed out of men's memories; but wherever it is felt, there is no want of business more keen and urgent. adam smith describes it so admirably that it would be stupid not to quote his words:--'the currency of a great state, such as france or england, generally consists almost entirely of its own coin. should this currency, therefore, be at any time worn, clipt, or otherwise degraded below its standard value, the state by a reformation of its coin can effectually re-establish its currency. but the currency of a small state, such as genoa or hamburgh, can seldom consist altogether in its own coin, but must be made up, in a great measure, of the coins of all the neighbouring states with which its inhabitants have a continual intercourse. such a state, therefore, by reforming its coin, will not always be able to reform its currency. if foreign bills of exchange are paid in this currency, the uncertain value of any sum, of what is in its own nature so uncertain, must render the exchange always very much against such a state, its currency being, in all foreign states, necessarily valued even below what it is worth. 'in order to remedy the inconvenience to which this disadvantageous exchange must have subjected their merchants, such small states, when they began to attend to the interest of trade, have frequently enacted, that foreign bills of exchange of a certain value should be paid, not in common currency, but by an order upon, or by a transfer in, the books of a certain bank, established upon the credit, and under the protection of the state, this bank being always obliged to pay, in good and true money, exactly according to the standard of the state. the banks of venice, genoa, amsterdam, hamburgh and nuremburg, seem to have been all originally established with this view, though some of them may have afterwards been made subservient to other purposes. the money of such banks, being better than the common currency of the country, necessarily bore an agio, which was greater or smaller, according as the currency was supposed to be more or less degraded below the standard of the state. the agio of the bank of hamburgh, for example, which is said to be commonly about fourteen per cent, is the supposed difference between the good standard money of the state, and the clipt, worn, and diminished currency poured into it from all the neighbouring states. 'before 1609 the great quantity of clipt and worn foreign coin, which the extensive trade of amsterdam brought from all parts of europe, reduced the value of its currency about 9 per cent below that of good money fresh from the mint. such money no sooner appeared than it was melted down or carried away, as it always is in such circumstances. the merchants, with plenty of currency, could not always find a sufficient quantity of good money to pay their bills of exchange; and the value of those bills, in spite of several regulations which were made to prevent it, became in a great measure uncertain. 'in order to remedy these inconveniences, a bank was established in 1609 under the guarantee of the city. this bank received both foreign coin, and the light and worn coin of the country at its real intrinsic value in the good standard money of the country, deducting only so much as was necessary for defraying the expense of coinage, and the other necessary expense of management. for the value which remained, after this small deduction was made, it gave a credit in its books. this credit was called bank money, which, as it represented money exactly according to the standard of the mint, was always of the same real value, and intrinsically worth more than current money. it was at the same time enacted, that all bills drawn upon or negotiated at amsterdam of the value of six hundred guilders and upwards should be paid in bank money, which at once took away all uncertainty in the value of those bills. every merchant, in consequence of this regulation, was obliged to keep an account with the bank in order to pay his foreign bills of exchange, which necessarily occasioned a certain demand for bank money.' again, a most important function of early banks is one which the present banks retain, though it is subsidiary to their main use; viz. the function of remitting money. a man brings money to the bank to meet a payment which he desires to make at a great distance, and the bank, having a connection with other banks, sends it where it is wanted. as soon as bills of exchange are given upon a large scale, this remittance is a very pressing requirement. such bills must be made payable at a place convenient to the seller of the goods in payment of which they are given, perhaps at the great town where his warehouse is. but this may be very far from the retail shop of the buyer who bought those goods to sell them again in the country. for these, and a multitude of purposes, the instant and regular remittance of money is an early necessity of growing trade; and that remittance it was a first object of early banks to accomplish. these are all uses other than those of deposit banking which banks supplied that afterwards became in our english sense deposit banks. by supplying these uses, they gained the credit that afterwards enabled them to gain a living as deposit banks. being trusted for one purpose, they came to be trusted for a purpose quite different, ultimately far more important, though at first less keenly pressing. but these wants only affect a few persons, and therefore bring the bank under the notice of a few only. the real introductory function which deposit banks at first perform is much more popular, and it is only when they can perform this more popular kind of business that deposit banking ever spreads quickly and extensively. this function is the supply of the paper circulation to the country, and it will be observed that i am not about to overstep my limits and discuss this as a question of currency. in what form the best paper currency can be supplied to a country is a question of economical theory with which i do not meddle here. i am only narrating unquestionable history, not dealing with an argument where every step is disputed. and part of this certain history is that the best way to diffuse banking in a community is to allow the banker to issue bank-notes of small amount that can supersede the metal currency. this amounts to a subsidy to each banker to enable him to keep open a bank till depositors choose to come to it. the country where deposit banking is most diffused is scotland, and there the original profits were entirely derived from the circulation. the note issue is now a most trifling part of the liabilities of the scotch banks, but it was once their mainstay and source of profit. a curious book, lately published, has enabled us to follow the course of this in detail. the bank of dundee, now amalgamated with the royal bank of scotland, was founded in 1763, and had become before its amalgamation, eight or nine years since, a bank of considerable deposits. but for twenty-five years from its foundation it had no deposits at all. it subsisted mostly on its note issue, and a little on its remittance business. only in 1792, after nearly thirty years, it began to gain deposits, but from that time they augmented very rapidly. the banking history of england has been the same, though we have no country bank accounts in detail which go back so far. but probably up to 1830 in england, or thereabouts, the main profit of banks was derived from the circulation, and for many years after that the deposits were treated as very minor matters, and the whole of so-called banking discussion turned on questions of circulation. we are still living in the debris of that controversy, for, as i have so often said, people can hardly think of the structure of lombard street, except with reference to the paper currency and to the act of 1844, which regulates it now. the french are still in the same epoch of the subject. the great enquete of 1865 is almost wholly taken up with currency matters, and mere banking is treated as subordinate. and the accounts of the bank of france show why. the last weekly statement before the german war showed that the circulation of the bank of france was as much as 59,244,000 l., and that the private deposits were only 17,127,000 l. now the private deposits are about the same, and the circulation is 112,000,000 l. so difficult is it in even a great country like france for the deposit system of banking to take root, and establish itself with the strength and vigour that it has in england. the experience of germany is the same. the accounts preceding the war in north germany showed the circulation of the issuing banks to be 39,875,000 l., and the deposits to be 6,472,000 l. while the corresponding figures at the present moment are--circulation, 60,000,000 l. and deposits 8,000,000 l. it would be idle to multiply instances. the reason why the use of bank paper commonly precedes the habit of making deposits in banks is very plain. it is a far easier habit to establish. in the issue of notes the banker, the person to be most benefited, can do something. he can pay away his own 'promises' in loans, in wages, or in payment of debts. but in the getting of deposits he is passive. his issues depend on himself; his deposits on the favour of others. and to the public the change is far easier too. to collect a great mass of deposits with the same banker, a great number of persons must agree to do something. but to establish a note circulation, a large number of persons need only do nothing. they receive the banker's notes in the common course of their business, and they have only not to take those notes to the banker for payment. if the public refrain from taking trouble, a paper circulation is immediately in existence. a paper circulation is begun by the banker, and requires no effort on the part of the public; on the contrary, it needs an effort of the public to be rid of notes once issued; but deposit banking cannot be begun by the banker, and requires a spontaneous and consistent effort in the community. and therefore paper issue is the natural prelude to deposit banking. the way in which the issue of notes by a banker prepares the way for the deposit of money with him is very plain. when a private person begins to possess a great heap of bank-notes, it will soon strike him that he is trusting the banker very much, and that in re turn he is getting nothing. he runs the risk of loss and robbery just as if he were hoarding coin. he would run no more risk by the failure of the bank if he made a deposit there, and he would be free from the risk of keeping the cash. no doubt it takes time before even this simple reasoning is understood by uneducated minds. so strong is the wish of most people to see their money that they for some time continue to hoard bank-notes: for a long period a few do so. but in the end common sense conquers. the circulation of bank-notes decreases, and the deposit of money with the banker increases. the credit of the banker having been efficiently advertised by the note, and accepted by the public, he lives on the credit so gained years after the note issue itself has ceased to be very important to him. the efficiency of this introduction is proportional to the diffusion of the right of note issue. a single monopolist issuer, like the bank of france, works its way with difficulty through a country, and advertises banking very slowly. even now the bank of france, which, i believe, by law ought to have a branch in each department, has only branches in sixty out of eighty-six. on the other hand, the swiss banks, where there is always one or more to every canton, diffuse banking rapidly. we have seen that the liabilities of the bank of france stand thus: notes l 112,000,000 deposits l 15,000,000 but the aggregate swiss banks, on the contrary, stand: notes l 761,000 deposits l 4,709,000 the reason is that a central bank which is governed in the capital and descends on a country district, has much fewer modes of lending money safely than a bank of which the partners belong to that district, and know the men and things in it. a note issue is mainly begun by loans; there are then no deposits to be paid. but the mass of loans in a rural district are of small amount; the bills to be discounted are trifling; the persons borrowing are of small means and only local repute; the value of any property they wish to pledge depends on local changes and local circumstances. a banker who lives in the district, who has always lived there, whose whole mind is a history of the district and its changes, is easily able to lend money safely there. but a manager deputed by a single central establishment does so with difficulty. the worst people will come to him and ask for loans. his ignorance is a mark for all the shrewd and crafty people thereabouts. he will have endless difficulties in establishing the circulation of the distant bank, because he has not the local knowledge which alone can teach him how to issue that circulation with safety. a system of note issues is therefore the best introduction to a large system of deposit banking. as yet, historically, it is the only introduction: no nation as yet has arrived at a great system of deposit banking without going first through the preliminary stage of note issue, and of such note issues the quickest and most efficient in this way is one made by individuals resident in the district, and conversant with it. and this explains why deposit banking is so rare. such a note issue as has been described is possible only in a country exempt from invasion, and free from revolution. during an invasion note-issuing banks must stop payment; a run is nearly inevitable at such a time, and in a revolution too. in such great and close civil dangers a nation is always demoralised; everyone looks to himself, and everyone likes to possess himself of the precious metals. these are sure to be valuable, invasion or no invasion, revolution or no revolution. but the goodness of bank-notes depends on the solvency of the banker, and that solvency may be impaired if the invasion is not repelled or the revolution resisted. hardly any continental country has been till now exempt for long periods both from invasion and revolution. in holland and germany--two countries where note issue and deposit banking would seem as natural as in england and scotland--there was never any security from foreign war. a profound apprehension of external invasion penetrated their whole habits, and men of business would have thought it insane not to contemplate a contingency so frequent in their history, and perhaps witnessed by themselves. france indeed, before 1789, was an exception. for many years under the old regime she was exempt from serious invasion or attempted revolution. her government was fixed, as was then thought, and powerful; it could resist any external enemy, and the prestige on which it rested seemed too firm to fear any enemy from within. but then it was not an honest government, and it had shown its dishonesty in this particular matter of note issue. the regent in law's time had given a monopoly of note issue to a bad bank, and had paid off the debts of the nation in worthless paper. the government had created a machinery of ruin, and had thriven on it. among so apprehensive a race as the french the result was fatal. for many years no attempt at note issue or deposit banking was possible in france. so late as the foundation of the caisse d'escompte, in turgot's time, the remembrance of law's failure was distinctly felt, and impeded the commencement of better attempts. this therefore is the reason why lombard street exists; that is, why england is a very great money market, and other european countries but small ones in comparison. in england and scotland a diffused system of note issues started banks all over the country; in these banks the savings of the country have been lodged, and by these they have been sent to london. no similar system arose elsewhere, and in consequence london is full of money, and all continental cities are empty as compared with it. ii. the monarchical form of lombard street is due also to the note issue. the origin of the bank of england has been told by macaulay, and it is never wise for an ordinary writer to tell again what he has told so much better. nor is it necessary, for his writings are in everyone's hands. still i must remind my readers of the curious story. of all institutions in the world the bank of england is now probably the most remote from party politics and from 'financing.' but in its origin it was not only a finance company, but a whig finance company. it was founded by a whig government because it was in desperate want of money, and supported by the 'city' because the 'city' was whig. very briefly, the story was this. the government of charles ii. (under the cabal ministry) had brought the credit of the english state to the lowest possible point. it had perpetrated one of those monstrous frauds, which are likewise gross blunders. the goldsmiths, who then carried on upon a trifling scale what we should now call banking, used to deposit their reserve of treasure in the 'exchequer,' with the sanction and under the care of the government. in many european countries the credit of the state had been so much better than any other credit, that it had been used to strengthen the beginnings of banking. the credit of the state had been so used in england: though there had lately been a civil war and several revolutions, the honesty of the english government was trusted implicitly. but charles ii. showed that it was trusted undeservedly. he shut up the 'exchequer,' would pay no one, and so the 'goldsmiths' were ruined. the credit of the stuart government never recovered from this monstrous robbery, and the government created by the revolution of 1688 could hardly expect to be more trusted with money than its predecessor. a government created by a revolution hardly ever is. there is a taint of violence which capitalists dread instinctively, and there is always a rational apprehension that the government which one revolution thought fit to set up another revolution may think fit to pull down. in 1694, the credit of william iii.'s government was so low in london that it was impossible for it to borrow any large sum; and the evil was the greater, because in consequence of the french war the financial straits of the government were extreme. at last a scheme was hit upon which would relieve their necessities. 'the plan,' says macaulay, 'was that twelve hundred thousand pounds should be raised at what was then considered as the moderate rate of 8 per cent.' in order to induce the subscribers to advance the money promptly on terms so unfavourable to the public, the subscribers were to be incorporated by the name of the governor and company of the bank of england. they were so incorporated, and the 1,200,000 l. was obtained. on many succeeding occasions, their credit was of essential use to the government. without their aid, our national debt could not have been borrowed; and if we had not been able to raise that money we should have been conquered by france and compelled to take back james ii. and for many years afterwards the existence of that debt was a main reason why the industrial classes never would think of recalling the pretender, or of upsetting the revolution settlement. the 'fund-holder' is always considered in the books of that time as opposed to his 'legitimate' sovereign, because it was to be feared that this sovereign would repudiate the debt which was raised by those who dethroned him, and which was spent in resisting him and his allies. for a long time the bank of england was the focus of london liberalism, and in that capacity rendered to the state inestimable services. in return for these substantial benefits the bank of england received from the government, either at first or afterwards, three most important privileges. first. the bank of england had the exclusive possession of the government balances. in its first period, as i have shown, the bank gave credit to the government, but afterwards it derived credit from the government. there is a natural tendency in men to follow the example of the government under which they live. the government is the largest, most important, and most conspicuous entity with which the mass of any people are acquainted; its range of knowledge must always be infinitely greater than the average of their knowledge, and therefore, unless there is a conspicuous warning to the contrary, most men are inclined to think their government right, and, when they can, to do what it does. especially in money matters a man might fairly reason--'if the government is right in trusting the bank of england with the great balance of the nation, i cannot be wrong in trusting it with my little balance.' second. the bank of england had, till lately, the monopoly of limited liability in england. the common law of england knows nothing of any such principle. it is only possible by royal charter or statute law. and by neither of these was any real bank (i do not count absurd schemes such as chamberlayne's land bank) permitted with limited liability in england till within these few years. indeed, a good many people thought it was right for the bank of england, but not right for any other bank. i remember hearing the conversation of a distinguished merchant in the city of london, who well represented the ideas then most current. he was declaiming against banks of limited liability, and some one asked--'why, what do you say, then, to the bank of england, where you keep your own account?' 'oh!' he replied, 'that is an exceptional case.' and no doubt it was an exception of the greatest value to the bank of england, because it induced many quiet and careful merchants to be directors of the bank, who certainly would not have joined any bank where all their fortunes were liable, and where the liability was not limited. thirdly. the bank of england had the privilege of being the sole joint stock company permitted to issue bank notes in england. private london bankers did indeed issue notes down to the middle of the last century, but no joint stock company could do so. the explanatory clause of the act of 1742 sounds most curiously to our modern ears. 'and to prevent any doubt that may arise concerning the privilege or power given to the said governor and company' that is, the bank of england' of exclusive banking; and also in regard to creating any other bank or banks by parliament, or restraining other persons from banking during the continuance of the said privilege granted to the governor and company of the bank of england, as before recited; it is hereby further enacted and declared by the authority aforesaid, that it is the true intent and meaning of the said act that no other bank shall be created, established, or allowed by parliament, and that it shall not be lawful for any body politic or corporate whatsoever created or to be created, or for any other persons whatsoever united or to be united in covenants or partnership exceeding the number of six persons in that part of great britain called england, to borrow, owe, or take up any sum or sums of money on their bills or notes payable on demand or at any less time than six months from the borrowing thereof during the continuance of such said privilege to the said governor and company, who are hereby declared to be and remain a corporation with the privilege of exclusive banking, as before recited.' to our modern ears these words seem to mean more than they did. the term banking was then applied only to the issue of notes and the taking up of money on bills on demand. our present system of deposit banking, in which no bills or promissory notes are issued, was not then known on a great scale, and was not called banking. but its effect was very important. it in time gave the bank of england the monopoly of the note issue of the metropolis. it had at that time no branches, and so it did not compete for the country circulation. but in the metropolis, where it did compete, it was completely victorious. no company but the bank of england could issue notes, and unincorporated individuals gradually gave way, and ceased to do so. up to 1844 london private bankers might have issued notes if they pleased, but almost a hundred years ago they were forced out of the field. the bank of england has so long had a practical monopoly of the circulation, that it is commonly believed always to have had a legal monopoly. and the practical effect of the clause went further: it was believed to make the bank of england the only joint stock company that could receive deposits, as well as the only company that could issue notes. the gift of 'exclusive banking' to the bank of england was read in its most natural modern sense: it was thought to prohibit any other banking company from carrying on our present system of banking. after joint stock banking was permitted in the country, people began to inquire why it should not exist in the metropolis too? and then it was seen that the words i have quoted only forbid the issue of negotiable instruments, and not the receiving of money when no such instrument is given. upon this construction, the london and westminster bank and all our older joint stock banks were founded. but till they began, the bank of england had among companies not only the exclusive privilege of note issue, but that of deposit banking too. it was in every sense the only banking company in london. with so many advantages over all competitors, it is quite natural that the bank of england should have far outstripped them all. inevitably it became the bank in london; all the other bankers grouped themselves round it, and lodged their reserve with it. thus our one reserve system of banking was not deliberately founded upon definite reasons; it was the gradual consequence of many singular events, and of an accumulation of legal privileges on a single bank which has now been altered, and which no one would now defend. chapter iv. the position of the chancellor of the exchequer in the money market. nothing can be truer in theory than the economical principle that banking is a trade and only a trade, and nothing can be more surely established by a larger experience than that a government which interferes with any trade injures that trade. the best thing undeniably that a government can do with the money market is to let it take care of itself. but a government can only carry out this principle universally if it observe one condition: it must keep its own money. the government is necessarily at times possessed of large sums in cash. it is by far the richest corporation in the country; its annual revenue payable in money far surpasses that of any other body or person. and if it begins to deposit this immense income as it accrues at any bank, at once it becomes interested in the welfare of that bank. it cannot pay the interest on its debt if that bank cannot produce the public deposits when that interest becomes due; it cannot pay its salaries, and defray its miscellaneous expenses, if that bank fail at any time. a modern government is like a very rich man with very great debts which he cannot well pay; its credit is necessary to its prosperity, almost to its existence, and if its banker fail when one of its debts becomes due its difficulty is intense. another banker, it will be said, may take up the government account. he may advance, as is so often done in other bank failures, what the government needs for the moment in order to secure the government account in future. but the imperfection of this remedy is that it fails in the very worst case. in a panic, and at a general collapse of credit, no such banker will probably be found. the old banker who possesses the government deposit cannot repay it, and no banker not having that deposit will, at a bad crisis, be able to find the 5,000,000 l. or 6,000,000 l. which the quarter day of a government such as ours requires. if a finance minister, having entrusted his money to a bank, begins to act strictly, and say he will in all cases let the money market take care of itself, the reply is that in one case the money market will take care of him too, and he will be insolvent. in the infancy of banking it is probably much better that a government should as a rule keep its own money. if there are not banks in which it can place secure reliance, it should not seem to rely upon them. still less should it give peculiar favour to any one, and by entrusting it with the government account secure to it a mischievous supremacy above all other banks. the skill of a financier in such an age is to equalise the receipt of taxation, and the outgoing of expenditure; it should be a principal care with him to make sure that more should not be locked up at a particular moment in the government coffers than is usually locked up there. if the amount of dead capital so buried in the treasury does not at any time much exceed the common average, the evil so caused is inconsiderable: it is only the loss of interest on a certain sum of money, which would not be much of a burden on the whole nation; the additional taxation it would cause would be inconsiderable. such an evil is nothing in comparison with that of losing the money necessary for inevitable expence by entrusting it to a bad bank, or that of recovering this money by identifying the national credit with the bad bank and so propping it up and perpetuating it. so long as the security of the money market is not entirely to be relied on, the government of a country had much better leave it to itself and keep its own money. if the banks are bad, they will certainly continue bad and will probably become worse if the government sustains and encourages them. the cardinal maxim is, that any aid to a present bad bank is the surest mode of preventing the establishment of a future good bank. when the trade of banking began to be better understood, when the banking system was thoroughly secure, the government might begin to lend gradually; especially to lend the unusually large sums which even under the most equable system of finance will at times accumulate in the public exchequer. under a natural system of banking it would have every facility. where there were many banks keeping their own reserve, and each most anxious to keep a sufficient reserve, because its own life and credit depended on it, the risk of the government in keeping a banker would be reduced to a minimum. it would have the choice of many bankers, and would not be restricted to any one. its course would be very simple, and be analogous to that of other public bodies in the country. the metropolitan board of works, which collects a great revenue in london, has an account at the london and westminster bank, for which that bank makes a deposit of consols as a security. the chancellor of the exchequer would have no difficulty in getting such security either. if, as is likely, his account would be thought to be larger than any single bank ought to be entrusted with, the public deposits might be divided between several. each would give security, and the whole public money would be safe. if at any time the floating money in the hands of government were exceptionally large, he might require augmented security to be lodged, and he might obtain an interest. he would be a lender of such magnitude and so much influence, that he might command his own terms. he might get his account kept safe if anyone could. if, on the other hand, the chancellor of the exchequer were a borrower, as at times he is, he would have every facility in obtaining what he wanted. the credit of the english government is so good that he could borrow better than anyone else in the world. he would have greater facility, indeed, than now, for, except with the leave of parliament, the chancellor of the exchequer cannot borrow by our present laws in the open market. he can only borrow from the bank of england on what are called 'deficiency bills.' in a natural system, he would borrow of any one out of many competing banks, selecting the one that would lend cheapest; but under our present artificial system, he is confined to a single bank, which can fix its own charge. if contrary to expectation a collapse occurred, the government might withdraw, as the american government actually has withdrawn, its balance from the bankers. it might give its aid, lend exchequer bills, or otherwise pledge its credit for the moment, but when the exigency was passed it might let the offending banks suffer. there would be a penalty for their misconduct. new and better banks, who might take warning from that misconduct, would arise. as in all natural trades, what is old and, rotten would perish, what is new and good would replace it. and till the new banks had proved, by good conduct, their fitness for state confidence, the state need not give it. the government could use its favour as a bounty on prudence, and the withdrawal of that favour as a punishment for culpable folly. under a good system of banking, a great collapse, except from rebellion or invasion, would probably not happen. a large number of banks, each feeling that their credit was at stake in keeping a good reserve, probably would keep one; if any one did not, it would be criticised constantly, and would soon lose its standing, and in the end disappear. and such banks would meet an incipient panic freely, and generously; they would advance out of their reserve boldly and largely, for each individual bank would fear suspicion, and know that at such periods it must 'show strength,' if at such times it wishes to be thought to have strength. such a system reduces to a minimum the risk that is caused by the deposit. if the national money can safely be deposited in banks in any way, this is the way to make it safe. but this system is nearly the opposite to that which the law and circumstances have created for us in england. the english government, far from keeping cash from the money market till the position of that market was reasonably secure, at a very early moment, and while credit of all kinds was most insecure, for its own interests entered into the money market. in order to effect loans better, it gave the custody and profit of its own money (along with other privileges) to a single bank, and therefore practically and in fact it is identified with the bank of this hour. it cannot let the money market take care of itself because it has deposited much money in that market, and it cannot pay its way if it loses that money. nor would any english statesman propose to 'wind up' the bank of england. a theorist might put such a suggestion on paper, but no responsible government would think of it. at the worst crisis and in the worst misconduct of the bank, no such plea has been thought of: in 1825 when its till was empty, in 1837 when it had to ask aid from the bank of france, no such idea was suggested. by irresistible tradition the english government was obliged to deposit its money in the money market and to deposit with this particular bank. and this system has plain and grave evils. 1st. because being created by state aid, it is more likely than a natural system to require state help. 2ndly. because, being a one-reserve system, it reduces the spare cash of the money market to a smaller amount than any other system, and so makes that market more delicate. there being a less hoard to meet liabilities, any error in the management of that reserve has a proportionately greater effect. 3rdly. because, our one reserve is, by the necessity of its nature, given over to one board of directors, and we are therefore dependent on the wisdom of that one only, and cannot, as in most trades, strike an average of the wisdom and the folly, the discretion and the indiscretion, of many competitors. lastly. because that board of directors is, like every other board, pressed on by its shareholders to make a high dividend, and therefore to keep a small reserve, whereas the public interest imperatively requires that they shall keep a large one. these four evils were inseparable from the system, but there is besides an additional and accidental evil. the english government not only created this singular system, but it proceeded to impair it, and demoralise all the public opinion respecting it. for more than a century after its creation (notwithstanding occasional errors) the bank of england, in the main, acted with judgment and with caution. its business was but small as we should now reckon, but for the most part it conducted that business with prudence and discretion. in 1696, it had been involved in the most serious difficulties, and had been obliged to refuse to pay some of its notes. for a long period it was in wholesome dread of public opinion, and the necessity of retaining public confidence made it cautious. but the english government removed that necessity. in 1797, mr. pitt feared that he might not be able to obtain sufficient species for foreign payments, in consequence of the low state of the bank reserve, and he therefore required the bank not to pay in cash. he removed the preservative apprehension which is the best security of all banks. for this reason the period under which the bank of england did not pay gold for its notes--the period from 1797 to 1819--is always called the period of the bank restriction. as the bank during that period did not perform, and was not compelled by law to perform, its contract of paying its notes in cash, it might apparently have been well called the period of bank license. but the word 'restriction' was quite right, and was the only proper word as a description of, the policy of 1797. mr. pitt did not say that the bank of england need not pay its notes in specie; he 'restricted' them from doing so; he said that they must not. in consequence, from 1797 to 1844 (when a new era begins), there never was a proper caution on the part of the bank directors. at heart they considered that the bank of england had a kind of charmed life, and that it was above the ordinary banking anxiety to pay its way. and this feeling was very natural. a bank of issue, which need not pay its notes in cash, has a charmed life; it can lend what it wishes, and issue what it likes, with no fear of harm to itself, and with no substantial check but its own inclination. for nearly a quarter of a century, the bank of england was such a bank, for all that time it could not be in any danger. and naturally the public mind was demoralised also. since 1797, the public have always expected the government to help the bank if necessary. i cannot fully discuss the suspensions of the act of 1844 in 1847, 1857, and 1866; but indisputably one of their effects is to make people think that government will always help the bank if the bank is in extremity. and this is the sort of anticipation which tends to justify itself, and to cause what it expects. on the whole, therefore, the position of the chancellor of the exchequer in our money market is that of one who deposits largely in it, who created it, and who demoralised it. he cannot, therefore, banish it from his thoughts, or decline responsibility for it. he must arrange his finances so as not to intensify panics, but to mitigate them. he must aid the bank of england in the discharge of its duties; he must not impede or prevent it. his aid may be most efficient. he is, on finance, the natural exponent of the public opinion of england. and it is by that opinion that we wish the bank of england to be guided. under a natural system of banking we should have relied on self-interest, but the state prevented that; we now rely on opinion instead; the public approval is a reward, its disapproval a severe penalty, on the bank directors; and of these it is most important that the finance minister should be a sound and felicitous exponent. chapter v. the mode in which the value of money is settled in lombard street. many persons believe that the bank of england has some peculiar power of fixing the value of money. they see that the bank of england varies its minimum rate of discount from time to time, and that, more or less, all other banks follow its lead, and charge much as it charges; and they are puzzled why this should be. 'money,' as economists teach, 'is a commodity, and only a commodity;' why then, it is asked, is its value fixed in so odd a way, and not the way in which the value of all other commodities is fixed? there is at bottom, however, no difficulty in the matter. the value of money is settled, like that of all other commodities, by supply and demand, and only the form is essentially different. in other commodities all the large dealers fix their own price; they try to underbid one another, and that keeps down the price; they try to get as much as they can out of the buyer, and that keeps up the price. between the two what adam smith calls the higgling of the market settles it. and this is the most simple and natural mode of doing business, but it is not the only mode. if circumstances make it convenient another may be adopted. a single large holder--especially if he be by far the greatest holder--may fix his price, and other dealers may say whether or not they will undersell him, or whether or not they will ask more than he does. a very considerable holder of an article may, for a time, vitally affect its value if he lay down the minimum price which he will take, and obstinately adhere to it. this is the way in which the value of money in lombard street is settled. the bank of england used to be a predominant, and is still a most important, dealer in money. it lays down the least price at which alone it will dispose of its stock, and this, for the most part, enables other dealers to obtain that price, or something near it. the reason is obvious. at all ordinary moments there is not money enough in lombard street to discount all the bills in lombard street without taking some money from the bank of england. as soon as the bank rate is fixed, a great many persons who have bills to discount try how much cheaper than the bank they can get these bills discounted. but they seldom can get them discounted very much cheaper, for if they did everyone would leave the bank, and the outer market would have more bills than it could bear. in practice, when the bank finds this process beginning, and sees that its business is much diminishing, it lowers the rate, so as to secure a reasonable portion of the business to itself, and to keep a fair part of its deposits employed. at dutch auctions an upset or maximum price used to be fixed by the seller, and he came down in his bidding till he found a buyer. the value of money is fixed in lombard street in much the same way, only that the upset price is not that of all sellers, but that of one very important seller, some part of whose supply is essential. the notion that the bank of england has a control over the money market, and can fix the rate of discount as it likes, has survived from the old days before 1844, when the bank could issue as many notes as it liked. but even then the notion was a mistake. a bank with a monopoly of note issue has great sudden power in the money market, but no permanent power: it can affect the rate of discount at any particular moment, but it cannot affect the average rate. and the reason is, that any momentary fall in money, caused by the caprice of such a bank, of itself tends to create an immediate and equal rise, so that upon an average the value is not altered. what happens is this. if a bank with a monopoly of note issue suddenly lends (suppose) 2,000,000 l. more than usual, it causes a proportionate increase of trade and increase of prices. the persons to whom that 2,000,000 l. was lent, did not borrow it to lock it up; they borrow it, in the language of the market, to 'operate with' that is, they try to buy with it; and that new attempt to buy--that new demand raises prices. and this rise of prices has three consequences. first. it makes everybody else want to borrow money. money is not so efficient in buying as it was, and therefore operators require more money for the same dealings. if railway stock is 10 per cent dearer this year than last, a speculator who borrows money to enable him to deal must borrow 10 per cent more this year than last, and in consequence there is an augmented demand for loans. secondly. this is an effectual demand, for the increased price of railway stock enables those who wish it to borrow more upon it. the common practice is to lend a certain portion of the market value of such securities, and if that value increases, the amount of the usual loan to be obtained on them increases too. in this way, therefore, any artificial reduction in the value of money causes a new augmentation of the demand for money, and thus restores that value to its natural level. in all business this is well known by experience: a stimulated market soon becomes a tight market, for so sanguine are enterprising men, that as soon as they get any unusual ease they always fancy that the relaxation is greater than it is, and speculate till they want more than they can obtain. in these two ways sudden loans by an issuer of notes, though they may temporarily lower the value of money, do not lower it permanently, because they generate their own counteraction. and this they do whether the notes issued are convertible into coin or not. during the period of bank restriction, from 1797 to 1819, the bank of england could not absolutely control the money market, any more than it could after 1819, when it was compelled to pay its notes in coin. but in the case of convertible notes there is a third effect, which works in the same direction, and works more quickly. a rise of prices, confined to one country, tends to increase imports, because other countries can obtain more for their goods if they send them there, and it discourages exports, because a merchant who would have gained a profit before the rise by buying here to sell again will not gain so much, if any, profit after that rise. by this augmentation of imports the indebtedness of this country is augmented, and by this diminution of exports the proportion of that indebtedness which is paid in the usual way is decreased also. in consequence, there is a larger balance to be paid in bullion; the store in the bank or banks keeping the reserve is diminished, and the rate of interest must be raised by them to stay the efflux. and the tightness so produced is often greater than, and always equal to, the preceding unnatural laxity. there is, therefore, no ground for believing, as is so common, that the value of money is settled by different causes than those which affect the value of other commodities, or that the bank of england has any despotism in that matter. it has the power of a large holder of money, and no more. even formerly, when its monetary powers were greater and its rivals weaker, it had no absolute control. it was simply a large corporate dealer, making bids and much influencing--though in no sense compelling--other dealers thereby. but though the value of money is not settled in an exceptional way, there is nevertheless a peculiarity about it, as there is about many articles. it is a commodity subject to great fluctuations of value, and those fluctuations are easily produced by a slight excess or a slight deficiency of quantity. up to a certain point money is a necessity. if a merchant has acceptances to meet to-morrow, money he must and will find to-day at some price or other. and it is this urgent need of the whole body of merchants which runs up the value of money so wildly and to such a height in a great panic. on the other hand, money easily becomes a 'drug,' as the phrase is, and there is soon too much of it. the number of accepted securities is limited, and cannot be rapidly increased; if the amount of money seeking these accepted securities is more than can be lent on them the value of money soon goes down. you may often hear in the market that bills are not to be had, meaning good bills of course, and when you hear this you may be sure that the value of money is very low. if money were all held by the owners of it, or by banks which did not pay an interest for it, the value of money might not fall so fast. money would, in the market phrase, be 'well held.' the possessors would be under no necessity to employ it all; they might employ part at a high rate rather than all at a low rate. but in lombard street money is very largely held by those who do pay an interest for it, and such persons must employ it all, or almost all, for they have much to pay out with one hand, and unless they receive much with the other they will be ruined. such persons do not so much care what is the rate of interest at which they employ their money: they can reduce the interest they pay in proportion to that which they can make. the vital points to them is to employ it at some rate. if you hold (as in lombard street some persons do) millions of other people's money at interest, arithmetic teaches that you will soon be ruined if you make nothing of it even if the interest you pay is not high. the fluctuations in the value of money are therefore greater than those on the value of most other commodities. at times there is an excessive pressure to borrow it, and at times an excessive pressure to lend it, and so the price is forced up and down. these considerations enable us to estimate the responsibility which is thrown on the bank of england by our system, and by every system on the bank or banks who by it keep the reserve of bullion or of legal tender exchangeable for bullion. these banks can in no degree control the permanent value of money, but they can completely control its momentary value. they cannot change the average value, but they can determine the deviations from the average. if the dominant banks manage ill, the rate of interest will at one time be excessively high, and at another time excessively low: there will be first a pernicious excitement, and next a fatal collapse. but if they manage well, the rate of interest will not deviate so much from the average rate; it will neither ascend so high nor descend so low. as far as anything can be steady the value of money will then be steady, and probably in consequence trade will be steady too--at least a principal cause of periodical disturbance will have been withdrawn from it. chapter vi. why lombard street is often very dull, and sometimes extremely excited. any sudden event which creates a great demand for actual cash may cause, and will tend to cause, a panic in a country where cash is much economised, and where debts payable on demand are large. in such a country an immense credit rests on a small cash reserve, and an unexpected and large diminution of that reserve may easily break up and shatter very much, if not the whole, of that credit. such accidental events are of the most various nature: a bad harvest, an apprehension of foreign invasion, the sudden failure of a great firm which everybody trusted, and many other similar events, have all caused a sudden demand for cash. and some writers have endeavoured to classify panics according to the nature of the particular accidents producing them. but little, however, is, i believe, to be gained by such classifications. there is little difference in the effect of one accident and another upon our credit system. we must be prepared for all of them, and we must prepare for all of them in the same way--by keeping a large cash reserve. but it is of great importance to point out that our industrial organisation is liable not only to irregular external accidents, but likewise to regular internal changes; that these changes make our credit system much more delicate at some times than at others; and that it is the recurrence of these periodical seasons of delicacy which has given rise to the notion that panics come according to a fixed rule, that every ten years or so we must have one of them. most persons who begin to think of the subject are puzzled on the threshold. they hear much of 'good times' and 'bad times,' meaning by 'good' times in which nearly everyone is very well off, and by 'bad' times in which nearly everyone is comparatively ill off. and at first it is natural to ask why should everybody, or almost everybody, be well off together? why should there be any great tides of industry, with large diffused profit by way of flow, and large diffused want of profit, or loss, by way of ebb? the main answer is hardly given distinctly in our common books of political economy. these books do not tell you what is the fund out of which large general profits are paid in good times, nor do they ex plain why that fund is not available for the same purpose in bad times. our current political economy does not sufficiently take account of time as an element in trade operations; but as soon as the division of labour has once established itself in a community, two principles at once begin to be important, of which time is the very essence. these are: first. that as goods are produced to be exchanged, it is good that they should be exchanged as quickly as possible. secondly. that as every producer is mainly occupied in producing what others want, and not what he wants himself, it is desirable that he should always be able to find, without effort, without delay, and without uncertainty, others who want what he can produce. in themselves these principles are self-evident. everyone will admit it to be expedient that all goods wanting to be sold should be sold as soon as they are ready; that every man who wants to work should find employment as soon as he is ready for it. obviously also, as soon as the 'division of labour' is really established, there is a difficulty about both of these principles. a produces what he thinks b wants, but it may be a mistake, and b may not want it. a may be able and willing to produce what b wants, but he may not be able to find b--he may not know of his existence. the general truth of these principles is obvious, but what is not obvious is the extreme greatness of their effects. taken together, they make the whole difference between times of brisk trade and great prosperity, and times of stagnant trade and great adversity, so far as that prosperity and that adversity are real and not illusory. if they are satisfied, everyone knows whom to work for, and what to make, and he can get immediately in exchange what he wants himself. there is no idle labour and no sluggish capital in the whole community, and, in consequence, all which can be produced is produced, the effectiveness of human industry is augmented, and both kinds of producers--both capitalists and labourers--are much richer than usual, because the amount to be divided between them is also much greater than usual. and there is a partnership in industries. no single large industry can be depressed without injury to other industries; still less can any great group of industries. each industry when prosperous buys and consumes the produce probably of most (certainly of very many) other industries, and if industry a fail and is in difficulty, industries b, and c, and d, which used to sell to it, will not be able to sell that which they had produced in reliance on a's demand, and in future they will stand idle till industry a recovers, because in default of a there will be no one to buy the commodities which they create. then as industry b buys of c, d, &c., the adversity of b tells on c, d, &c., and as these buy of e, f, &c., the effect is propagated through the whole alphabet. and in a certain sense it rebounds. z feels the want caused by the diminished custom of a, b, & c, and so it does not earn so much; in consequence, it cannot lay out as much on the produce of a, b, & c, and so these do not earn as much either. in all this money is but an instrument. the same thing would happen equally well in a trade of barter, if a state of barter on a very large scale were not practically impossible, on account of the time and trouble which it would necessarily require. as has been explained, the fundamental cause is that under a system in which everyone is dependent on the labour of everyone else, the loss of one spreads and multiplies through all, and spreads and multiplies the faster the higher the previous perfection of the system of divided labour, and the more nice and effectual the mode of interchange. and the entire effect of a depression in any single large trade requires a considerable time before it can be produced. it has to be propagated, and to be returned through a variety of industries, before it is complete. short depressions, in consequence, have scarcely any discernible consequences; they are over before we think of their effects. it is only in the case of continuous and considerable depressions that the cause is in action long enough to produce discernible effects. the most common, and by far the most important, case where the depression in one trade causes depression in all others, is that of depressed agriculture. when the agriculture of the world is ill off, food is dear. and as the amount of absolute necessaries which a people consumes cannot be much diminished, the additional amount which has to be spent on them is so much subtracted from what used to be spent on other things. all the industries, a, b, c, d, up to z, are somewhat affected by an augmentation in the price of corn, and the most affected are the large ones, which produce the objects in ordinary times most consumed by the working classes. the clothing trades feel the difference at once, and in this country the liquor trade (a great source of english revenue) feels it almost equally soon. especially when for two or three years harvests have been bad, and corn has long been dear, every industry is impoverished, and almost every one, by becoming poorer, makes every other poorer too. all trades are slack from diminished custom, and the consequence is a vast stagnant capital, much idle labour, and a greatly retarded production. it takes two or three years to produce this full calamity, and the recovery from it takes two or three years also. if corn should long be cheap, the labouring classes have much to spend on what they like besides. the producers of those things become prosperous, and have a greater purchasing power. they exercise it, and that creates in the class they deal with another purchasing power, and so all through society. the whole machine of industry is stimulated to its maximum of energy, just as before much of it was slackened almost to its minimum. a great calamity to any great industry will tend to produce the same effect, but the fortunes of the industries on which the wages of labour are expended are much more important than those of all others, because they act much more quickly upon a larger mass of purchasers. on principle, if there was a perfect division of labour, every industry would have to be perfectly prosperous in order that any one might be so. so far, therefore, from its being at all natural that trade should develop constantly, steadily, and equably, it is plain, without going farther, from theory as well as from experience, that there are inevitably periods of rapid dilatation, and as inevitably periods of contraction and of stagnation. nor is this the only changeable element in modern industrial societies. credit--the disposition of one man to trust another--is singularly varying. in england, after a great calamity, everybody is suspicious of everybody; as soon as that calamity is forgotten, everybody again confides in everybody. on the continent there has been a stiff controversy as to whether credit should or should not be called capital:' in england, even the little attention once paid to abstract economics is now diverted, and no one cares in the least for refined questions of this kind: the material practical point is that, in m. chevalier's language, credit is 'additive,' or additional--that is, in times when credit is good productive power is more efficient, and in times when credit is bad productive power is less efficient. and the state of credit is thus influential, because of the two principles which have just been explained. in a good state of credit, goods lie on hand a much less time than when credit is bad; sales are quicker; intermediate dealers borrow easily to augment their trade, and so more and more goods are more quickly and more easily transmitted from the producer to the consumer. these two variable causes are causes of real prosperity. they augment trade and production, and so are plainly beneficial, except where by mistake the wrong things are produced, or where also by mistake misplaced credit is given, and a man who cannot produce anything which is wanted gets the produce of other people's labour upon a false idea that he will produce it. but there is another variable cause which produces far more of apparent than of real prosperity and of which the effect is in actual life mostly confused with those of the others. in our common speculations we do not enough remember that interest on money is a refined idea, and not a universal one. so far indeed is it from being universal, that the majority of saving persons in most countries would reject it. most savings in most countries are held in hoarded specie. in asia, in africa, in south america, largely even in europe, they are thus held, and it would frighten most of the owners to let them out of their keeping. an englishman--a modern englishman at least--assumes as a first principle that he ought to be able to 'put his money into something safe that will yield 5 per cent;' but most saving persons in most countries are afraid to 'put their money' into anything. nothing is safe to their minds; indeed, in most countries, owing to a bad government and a backward industry, no investment, or hardly any, really is safe. in most countries most men are content to forego interest; but in more advanced countries, at some times there are more savings seeking investment than there are known investments for; at other times there is no such superabundance. lord macaulay has graphically described one of the periods of excess. he says--'during the interval between the restoration and the revolution the riches of the nation had been rapidly increasing. thousands of busy men found every christmas that, after the expenses of the year's housekeeping had been defrayed out of the year's income, a surplus remained; and how that surplus was to be employed was a question of some difficulty. in our time, to invest such a surplus, at something more than three per cent, on the best security that has ever been known in the world, is the work of a few minutes. but in the seventeenth century, a lawyer, a physician, a retired merchant, who had saved some thousands, and who wished to place them safely and profitably, was often greatly embarrassed. three generations earlier, a man who had accumulated wealth in a profession generally purchased real property, or lent his savings on mortgage. but the number of acres in the kingdom had remained the same; and the value of those acres, though it had greatly increased, had by no means increased so fast as the quantity of capital which was seeking for employment. many too wished to put their money where they could find it at an hour's notice, and looked about for some species of property which could be more readily transferred than a house or a field. a capitalist might lend on bottomry or on personal security; but, if he did so, he ran a great risk of losing interest and principal. there were a few joint stock companies, among which the east india company held the foremost place; but the demand for the stock of such companies was far greater than the supply. indeed the cry for a new east india company was chiefly raised by persons who had found difficulty in placing their savings at interest on good security. so great was that difficulty that the practice of hoarding was common. we are told that the father of pope, the poet, who retired from business in the city about the time of the revolution, carried to a retreat in the country a strong box containing near twenty thousand pounds, and took out from time to time what was required for household expenses; and it is highly probable that this was not a solitary case. at present the quantity of coin which is hoarded by private persons is so small, that it would, if brought forth, make no perceptible addition to the circulation. but, in the earlier part of the reign of william the third, all the greatest writers on currency were of opinion that a very considerable mass of gold and silver was hidden in secret drawers and behind wainscots. 'the natural effect of this state of things was that a crowd of projectors, ingenious and absurd, honest and knavish, employed themselves in devising new schemes for the employment of redundant capital. it was about the year 1688 that the word stockjobber was first heard in london. in the short space of four years a crowd of companies, every one of which confidently held out to subscribers the hope of immense gains, sprang into existence--the insurance company, the paper company, the lutestring company, the pearl fishery company, the glass bottle company, the alum company, the blythe coal company, the swordblade company. there was a tapestry company, which would soon furnish pretty hangings for all the parlours of the middle class, and for all the bed-chambers of the higher. there was a copper company, which proposed to explore the mines of england, and held out a hope that they would prove not less valuable than those of potosi. there was a diving company, which undertook to bring up precious effects from shipwrecked vessels, and which announced that it had laid in a stock of wonderful machines resembling complete suits of armour. in front of the helmet was a huge glass eye like that of a cyclops; and out of the crest went a pipe through which the air was to be admitted. the whole process was exhibited on the thames. fine gentlemen and fine ladies were invited to the show, were hospitably regaled, and were delighted by seeing the divers in their panoply descend into the river and return laden with old iron and ship's tackle. there was a greenland fishing company, which could not fail to drive the dutch whalers and herring busses out of the northern ocean. there was a tanning company, which promised to furnish leather superior to the best that was brought from turkey or russia. there was a society which undertook the office of giving gentlemen a liberal education on low terms, and which assumed the sounding name of the royal academies company. in a pompous advertisement it was announced that the directors of the royal academies company had engaged the best masters in every branch of knowledge, and were about to issue twenty thousand tickets at twenty shillings each. there was to be a lottery--two thousand prizes were to be drawn; and the fortunate holders of the prizes were to be taught, at the charge of the company, latin, greek, hebrew, french, spanish, conic sections, trigonometry, heraldry, japaning, fortification, bookkeeping, and the art of playing the theorbo.' the panic was forgotten till lord macaulay revived the memory of it. but, in fact, in the south sea bubble, which has always been remembered, the form was the same, only a little more extravagant; the companies in that mania were for objects such as these:--' "wrecks to be fished for on the irish coast--insurance of horses and other cattle (two millions)--insurance of losses by servants--to make salt water fresh--for building of hospitals for bastard children--for building of ships against pirates--for making of oil from sun-flower seeds--for improving of malt liquors--for recovery of seamen's wages--for extracting of silver from lead--for the transmuting of quicksilver into a malleable and fine metal--for making of iron with pit-coal--for importing a number of large jack asses from spain--for trading in human hair--for fatting of hogs--for a wheel of perpetual motion." but the most strange of all, perhaps, was "for an undertaking which shall in due time be revealed." each subscriber was to pay down two guineas, and hereafter to receive a share of one hundred, with a disclosure of the object; and so tempting was the offer, that 1,000 of these subscriptions were paid the same morning, with which the projector went off in the afternoon.' in 1825 there were speculations in companies nearly as wild, and just before 1866 there were some of a like nature, though not equally extravagant. the fact is, that the owners of savings not finding, in adequate quantities, their usual kind of investments, rush into anything that promises speciously, and when they find that these specious investments can be disposed of at a high profit, they rush into them more and more. the first taste is for high interest, but that taste soon becomes secondary. there is a second appetite for large gains to be made by selling the principal which is to yield the interest. so long as such sales can be effected the mania continues; when it ceases to be possible to effect them, ruin begins. so long as the savings remain in possession of their owners, these hazardous gamblings in speculative undertakings are almost the whole effect of an excess of accumulation over tested investment. little effect is produced on the general trade of the country. the owners of the savings are too scattered and far from the market to change the majority of mercantile transactions. but when these savings come to be lodged in the hands of bankers, a much wider result is produced. bankers are close to mercantile life; they are always ready to lend on good mercantile securities; they wish to lend on such securities a large part of the money entrusted to them. when, therefore, the money so entrusted is unusually large, and when it long continues so, the general trade of the country is, in the course of time, changed. bankers are daily more and more ready to lend money to mercantile men; more is lent to such men; more bargains are made in consequence; commodities are more sought after; and, in consequence, prices rise more and more. the rise of prices is quickest in an improving state of credit. prices in general are mostly determined by wholesale transactions. the retail dealer adds a percentage to the wholesale prices, not, of course, always the same percentage, but still mostly the same. given the wholesale price of most articles, you can commonly tell their retail price. now wholesale transactions are commonly not cash transactions, but bill transactions. the duration of the bill varies with the custom of the trade; it may be two, three months, or six weeks, but there is always a bill. times of credit mean times in which the bills of many people are taken readily; times of bad credit, times when the bills of much fewer people are taken, and even of those suspiciously. in times of good credit there are a great number of strong purchasers, and in times of bad credit only a smaller number of weak ones; and, therefore, years of improving credit, if there be no disturbing cause, are years of rising price, and years of decaying credit, years of falling price. this is the meaning of the saying 'john bull can stand many things, but he cannot stand two per cent:' it means that the greatest effect of the three great causes is nearly peculiar to england; here, and here almost alone, the excess of savings over investments is deposited in banks; here, and here only, is it made use of so as to affect trade at large; here, and here only, are prices gravely affected. in these circumstances, a low rate of interest, long protracted, is equivalent to a total depreciation of the precious metals. in his book on the effect of the great gold discoveries, professor jevons showed, and so far as i know, was the first to show, the necessity of eliminating these temporary changes of value in gold before you could judge properly of the permanent depreciation. he proved, that in the years preceding both 1847 and 1857 there was a general rise of prices; and in the years succeeding these years, a great fall. the same might be shown of the years before and after 1866, _mutatis mutandis_. and at the present moment we have a still more remarkable example, which was thus analysed in the economist of the 30th december, 1871, in an article which i venture to quote as a whole: 'the great rise in the price of commodities. 'most persons are aware that the trade of the country is in a state of great activity. all the usual tests indicate that--the state of the revenue, the bankers' clearing-house figures, the returns of exports and imports are all plain, and all speak the same language. but few have, we think, considered one most remarkable feature of the present time, or have sufficiently examined its consequences. that feature is the great rise in the price of most of the leading articles of trade during the past year. we give at the foot of this paper a list of articles, comprising most first-rate articles of commerce, and it will be seen that the rise of price, though not universal and not uniform, is nevertheless very striking and very general. the most remarkable cases are- january december l, s. d. l, s. d. wool--south down hogs per pack 13 0 0 21 15 0 cotton--upland ordinary per lb. 0 0 7-1/4 0 0 8-3/8 no. 40 mule yarn, &c. per lb. 0 1 1-1/2 0 1 2-1/2 iron--bars, british per ton 7 2 6 8 17 6 pig, no. 1 clyde per ton 2 13 3 3 16 0 lead per ton 18 7 6 8 17 6 tin per ton 137 0 0 157 0 0 copper--sheeting per ton 75 10 0 95 0 0 wheat (gazette average) per qr. 2 12 0 2 15 8 --and in other cases there is a tendency upwards in price much more often than there is a tendency downwards. 'this general rise of price must be due either to a diminution in the supply of the quoted articles, or to an increased demand for them. in some cases there has no doubt been a short supply. thus in wool, the diminution in the home breed of sheep has had a great effect on the price- in 1869 the home stock of sheep was 29,538,000 in 1871 27,133,000 --------- diminution 2,405,000 equal to 8.1 per cent and in the case of some other articles there may be a similar cause operating. but taking the whole mass of the supply of commodities in this country, as shown by the plain test of the quantities imported, it has not diminished, but augmented. the returns of the board of trade prove this in the most striking manner, and we give below a table of some of the important articles. the rise in prices must, therefore, be due to an increased demand, and the first question is, to what is that demand due? 'we believe it to be due to the combined operation of three causes cheap money, cheap corn, and improved credit. as to the first indeed, it might be said at first sight that so general an increase must be due to a depreciation of the precious metals. certainly in many controversies facts far less striking have been alleged as proving it. and indeed there plainly is a diminution in the purchasing power of money, though that diminution is not general and permanent, but local and temporary. the peculiarity of the precious metals is that their value depends for unusually long periods on the quantity of them which is in the market. in the long run, their value, like that of all others, is determined by the cost at which they can be brought to market. but for all temporary purposes, it is the supply in the market which governs the price, and that supply in this country is exceedingly variable. after a commercial crisis, 1866 for example, two things happen: first, we call in the debts which are owing to us in foreign countries; and we require these debts to be paid to us, not in commodities, but in money. from this cause principally, and omitting minor causes, the bullion in the bank of england, which was 13,156,000 l. in may 1866, rose to 19,413,000 l. in january 1867, being an increase of over 6,000,000 l. and then there comes also a second cause, tending in the same direction. during a depressed period the savings of the country increase considerably faster than the outlet for them. a person who has made savings does not know what to do with them. and this new unemployed saving means additional money. till a saving is invested or employed it exists only in the form of money: a farmer who has sold his wheat and has 100 l. 'to the good,' holds that 100 l. in money, or some equivalent for money, till he sees some advantageous use to be made of it. probably he places it in a bank, and this enables it to do more work. if 3,000,000 l. of coin be deposited in a bank, and it need only keep 1,000,000 l. as a reserve, that sets 2,000,000 l. free, and is for the time equivalent to an increase of so much coin. as a principle it may be laid down that all new unemployed savings require _either an increased stock of the precious metals, or an increase in the efficiency of the banking expedients by which these metals are economised_. in other words, in a saving and uninvesting period of the national industry, we accumulate gold, and augment the efficiency of our gold. if therefore such a saving period follows close upon an occasion when foreign credits have been diminished and foreign debts called in, the augmentation in the effective quantity of gold in the country is extremely great. the old money called in from abroad and the new money representing the new saving co-operate with one another. and their natural tendency is to cause a general rise in price, and what is the same thing, a diffused diminution in the purchasing power of money. 'up to this point there is nothing special in the recent history of the money market. similar events happened both after the panic of 1847, and after that of 1857. but there is another cause of the same kind, and acting in the same direction, which is peculiar to the present time; this cause is the amount of the foreign money, and especially of the money of foreign governments, now in london. no government probably ever had nearly as much at its command as the german government now has. speaking broadly, two things happened: during the war england was the best place of shelter for foreign money, and this made money more cheap here than it would otherwise have been; after the war england became the most convenient paying place, and the most convenient resting place for money, and this again has made money cheaper. the commercial causes, for which there are many precedents, have been aided by a political cause for the efficacy of which there is no precedent. 'but though plentiful money is necessary to high prices, and though it has a natural tendency to produce these prices, yet it is not of itself sufficient to produce them. in the cases we are dealing with, in order to lower prices there must not only be additional money, but a satisfactory mode of employing that additional money. this is obvious if we remember whence that augmented money is derived. it is derived from the savings of the people, and will only be invested in the manner which the holders for the time being consider suitable to such savings. it will not be used in mere expenditure; it would be contrary to the very nature of it so to use it. a new channel of demand is required to take off the new money, or that new money will not raise prices. it will lie idle in the banks, as we have often seen it. we should still see the frequent, the common phenomenon of dull trade and cheap money existing side by side. 'the demand in this case arose in the most effective of all ways. in 1867 and the first half of 1868 corn was dear, as the following figures show: gazette average price of wheat. s. d. december, 1866 60 3 january, 1867 61 4 february 60 10 march 59 9 april 61 6 may 64 8 june 65 8 july 65 0 august 67 8 september 62 8 october 1867 66 6 november 69 5 december 67 4 january, 1868 70 3 february 73 0 march 73 0 april 73 3 may 73 9 june 67 11 july 65 5 from that time it fell, and it was very cheap during the whole of 1869 and 1870. the effect of this cheapness is great in every department of industry. the working classes, having cheaper food, need to spend so much less on that food, and have more to spend on other things. in consequence, there is a gentle augmentation of demand through almost all departments of trade. and this almost always causes a great augmentation in what may be called the instrumental trades--that is, in the trades which deal in machines and instruments used in many branches of commerce, and in the materials for such. take, for instance, the iron trade- in the year 1869 we exported 2,568,000 tons " 1870 " 2,716,000 tons -------------5,284,000 tons " 1867 " 1,881,000 tons " 1868 " 1,944,000 tons -------------3,826,000 tons ------------- increase 1,458,000 tons that is to say, cheap corn operating throughout the world, created a new demand for many kinds of articles; the production of a large number of such articles being aided by iron in some one of its many forms, iron to that extent was exported. and the effect is cumulative. the manufacture of iron being stimulated, all persons concerned in that great manufacture are well off, have more to spend, and by spending it encourage other branches of manufacture, which again propagate the demand; they receive and so encourage industries in a third degree dependent and removed. 'it is quite true that corn has not been quite so cheap during the present year. but even if it had been dearer than it is, it would not all at once arrest the great trade which former cheapness had created. the "ball," if we may so say, "was set rolling" in 1869 and 1870, and a great increase of demand was then created in certain trades and propagated through all trades. a continuance of very high prices would produce the reverse effect; it would slacken demand in certain trades, and the effect would be gradually diffused through all trades. but a slight rise such as that of this year has no perceptible effect. 'when the stimulus of cheap corn is added to that of cheap money, the full conditions of a great and diffused rise of prices are satisfied. this new employment supplies a mode in which money can be invested. bills are drawn of greater number and greater magnitude, and through the agencies of banks and discount houses, the savings of the country are invested in such bills. there is thus a new want and a new purchase-money to supply that want, and the consequence is the diffused and remarkable rise of price which the figures show to have occurred. 'the rise has also been aided by the revival of credit. this, as need not be at length explained, is a great aid to buying, and consequently a great aid to a rise of price. since 1866, credit has been gradually, though very slowly, recovering, and it is probably as good as it is reasonable or proper that it should be. we are now trusting as many people as we ought to trust, and as yet there is no wild excess of misplaced confidence which would make us trust those whom we ought not to trust.' the process thus explained is the common process. the surplus of loanable capital which lies in the hands of bankers is not employed by them in any original way; it is almost always lent to a trade already growing and already improving. the use of it develops that trade yet farther, and this again augments and stimulates other trades. capital may long lie idle in a stagnant condition of industry; the mercantile securities which experienced bankers know to be good do not augment, and they will not invent other securities, or take bad ones. in most great periods of expanding industry, the three great causes--much loanable capital, good credit, and the increased profits derived from better-used labour and better-used capital--have acted simultaneously; and though either may act by itself, there is a permanent reason why mostly they will act together. they both tend to grow together, if you begin from a period of depression. in such periods credit is bad, and industry unemployed; very generally provisions are high in price, and their dearness was one of the causes which made the times bad. whether there was or was not too much loanable capital when that period begins, there soon comes to be too much. quiet people continue to save part of their incomes in bad times as well as in good; indeed, of the two, people of slightly-varying and fixed incomes have better means of saving in bad times because prices are lower. quiescent trade affords no new securities in which the new saving can be invested, and therefore there comes soon to be an excess of loanable capital. in a year or two after a crisis credit usually improves, as the remembrance of the disasters which at the crisis impaired credit is becoming fainter and fainter. provisions get back to their usual price, or some great industry makes, from some temporary cause, a quick step forward. at these moments, therefore, the three agencies which, as has been explained, greatly develope trade, combine to develope it simultaneously. the certain result is a bound of national prosperity; the country leaps forward as if by magic. but only part of that prosperity has a solid reason. as far as prosperity is based on a greater quantity of production, and that of the right articles--as far as it is based on the increased rapidity with which commodities of every kind reach those who want them--its basis is good. human industry is more efficient, and therefore there is more to be divided among mankind. but in so far as that prosperity is based on a general rise of prices, it is only imaginary. a general rise of prices is a rise only in name; whatever anyone gains on the article which he has to sell he loses on the articles which he has to buy, and so he is just where he was. the only real effects of a general rise of prices are these: first, it straitens people of fixed incomes, who suffer as purchasers, but who have no gain to correspond; and secondly, it gives an extra profit to fixed capital created before the rise happened. here the sellers gain, but without any equivalent loss as buyers. thirdly, this gain on fixed capital is greatest in what may be called the industrial 'implements,' such as coal and iron. these are wanted in all industries, and in any general increase of prices, they are sure to rise much more than other things. everybody wants them; the supply of them cannot be rapidly augmented, and therefore their price rises very quickly. but to the country as a whole, the general rise of prices is no benefit at all; it is simply a change of nomenclature for an identical relative value in the same commodities. nevertheless, most people are happier for it; they think they are getting richer, though they are not. and as the rise does not happen on all articles at the same moment, but is propagated gradually through society, those to whom it first comes gain really; and as at first every one believes that he will gain when his own article is rising, a buoyant cheerfulness overflows the mercantile world. this prosperity is precarious as far as it is real, and transitory in so far as it is fictitious. the augmented production, which is the reason of the real prosperity, depends on the full working of the whole industrial organisation--of all capitalists and labourers; that prosperity was caused by that full working, and will cease with it. but that full working is liable to be destroyed by the occurrence of any great misfortune to any considerable industry. this would cause misfortune to the industries dependent on that one, and, as has been explained, all through society and back again. but every such industry is liable to grave fluctuations, and the most important--the provision industries--to the gravest and the suddenest. they are dependent on the casualties of the seasons. a single bad harvest diffused over the world, a succession of two or three bad harvests, even in england only, will raise the price of corn exceedingly, and will keep it high. and a great and protracted rise in the price of corn will at once destroy all the real part of the unusual prosperity of previous good times. it will change the full working of the industrial machine into an imperfect working; it will make the produce of that machine less than usual instead of more than usual; instead of there being more than the average of general dividend to be distributed between the producers, there will immediately be less than the average. and in so far as the apparent prosperity is caused by an unusual plentifulness of loanable capital and a consequent rise in prices, that prosperity is not only liable to reaction, but certain to be exposed to reaction. the same causes which generate this prosperity will, after they have been acting a little longer, generate an equivalent adversity. the process is this: the plentifulness of loanable capital causes a rise of prices; that rise of prices makes it necessary to have more loanable capital to carry on the same trade. 100,000 l. will not buy as much when prices are high as it will when prices are low, it will not be so effectual for carrying on business; more money is necessary in dear times than in cheap times to produce the same changes in the same commodities. even supposing trade to have remained stationary, a greater capital would be required to carry it on after such a rise of prices as has been described than was necessary before that rise. but in this case the trade will not have remained stationary; it will have increased--certainly to some extent, probably to a great extent. the 'loanable capital,' the lending of which caused the rise of prices, was lent to enable it--to augment. the loanable capital lay idle in the banks till some trade started into prosperity, and then was lent in order to develope that trade; that trade caused other secondary developments; those secondary developments enabled more loanable capital to be lent; and that lending caused a tertiary development of trade; and so on through society. in consequence, a long-continued low rate of interest is almost always followed by a rapid rise in that rate. till the available trade is found it lies idle, and can scarcely be lent at all; some of it is not lent. but the moment the available trade is discovered--the moment that prices have risen--the demand for loanable capital becomes keen. for the most part, men of business must carry on their regular trade; if it cannot be carried on without borrowing 10 per cent more capital, 10 per cent more capital they must borrow. very often they have incurred obligations which must be met; and if that is so the rate of interest which they pay is comparatively indifferent. what is necessary to meet their acceptances they will borrow, pay for it what they may; they had better pay any price than permit those acceptances to be dishonoured. and in less extreme eases men of business have a fixed capital, which cannot lie idle except at a great loss; a set of labourers which must be, if possible, kept together; a steady connection of customers, which they would very unwillingly lose. to keep all these, they borrow; and in a period of high prices many merchants are peculiarly anxious to borrow, because the augmentation of the price of the article in which they deal makes them really see, or imagine that they see, peculiar opportunities of profit. an immense new borrowing soon follows upon the new and great trade, and the rate of interest rises at once, and generally rises rapidly. this is the surer to happen that lombard street is, as has been shown before, a very delicate market. a large amount of money is held there by bankers and by bill-brokers at interest: this they must employ, or they will be ruined. it is better for them to reduce the rate they charge, and compensate themselves by reducing the rate they pay, rather than to keep up the rate of charge, if by so doing they cannot employ all their money. it is vital to them to employ all the money on which they pay interest. a little excess therefore forces down the rate of interest very much. but if that low rate of interest should cause, or should aid in causing, a great growth of trade, the rise is sure to be quick, and is apt to be violent. the figures of trade are reckoned by hundreds of millions, where those of loanable capital count only by millions. a great increase in the borrowing demands of english commerce almost always changes an excess of loanable capital above the demand to a greater deficiency below the demand. that deficiency causes adversity, or apparent adversity, in trade, just as, and in the same manner, that the previous excess caused prosperity, or apparent prosperity. it causes a fall of price that runs through society; that fall causes a decline of activity and a diminution of profits--a painful contraction instead of the previous pleasant expansion. the change is generally quicker because some check to credit happens at an early stage of it. the mercantile community will have been unusually fortunate if during the period of rising prices it has not made great mistakes. such a period naturally excites the sanguine and the ardent; they fancy that the prosperity they see will last always, that it is only the beginning of a greater prosperity. they altogether over-estimate the demand for the article they deal in, or the work they do. they all in their degree--and the ablest and the cleverest the most--work much more than they should, and trade far above their means. every great crisis reveals the excessive speculations of many houses which no one before suspected, and which commonly indeed had not begun or had not carried very far those speculations, till they were tempted by the daily rise of price and the surrounding fever. the case is worse, because at most periods of great commercial excitement there is some mixture of the older and simpler kind of investing mania. though the money of saving persons is in the hands of banks, and though, by offering interest, banks retain the command of much of it, yet they do not retain the command of the whole, or anything near the whole; all of it can be used, and much of it is used, by its owners. they speculate with it in bubble companies and in worthless shares, just as they did in the time of the south sea mania, when there were no banks, and as they would again in england supposing that banks ceased to exist. the mania of 1825 and the mania of 1866 were striking examples of this; in their case to a great extent, as in most similar modern periods to a less extent, the delirium of ancient gambling co-operated with the milder madness of modern overtrading. at the very beginning of adversity, the counters in the gambling mama, the shares in the companies created to feed the mania, are discovered to be worthless; down they all go, and with them much of credit. the good times too of high price almost always engender much fraud. all people are most credulous when they are most happy; and when much money has just been made, when some people are really making it, when most people think they are making it, there is a happy opportunity for ingenious mendacity. almost everything will be believed for a little while, and long before discovery the worst and most adroit deceivers are geographically or legally beyond the reach of punishment. but the harm they have done diffuses harm, for it weakens credit still farther. when we understand that lombard street is subject to severe alternations of opposite causes, we should cease to be surprised at its seeming cycles. we should cease too to be surprised at the sudden panics. during the period of reaction and adversity, just even at the last instant of prosperity, the whole structure is delicate. the peculiar essence of our banking system is an unprecedented trust between man and man: and when that trust is much weakened by hidden causes, a small accident may greatly hurt it, and a great accident for a moment may almost destroy it. now too that we comprehend the inevitable vicissitudes of lombard street, we can also thoroughly comprehend the cardinal importance of always retaining a great banking reserve. whether the times of adversity are well met or ill met depends far more on this than on any other single circumstance. if the reserve be large, its magnitude sustains credit; and if it be small, its diminution stimulates the gravest apprehensions. and the better we comprehend the importance of the banking reserve, the higher we shall estimate the responsibility of those who keep it. chapter vii. a more exact account of the mode in which the bank of england has discharged its duty of retaining a good bank reserve, and of administering it effectually. the preceding chapters have in some degree enabled us to appreciate the importance of the duties which the bank of england is bound to discharge as to its banking reserve. if we ask how the bank of england has discharged this great responsibility, we shall be struck by three things: first, as has been said before, the bank has never by any corporate act or authorised utterance acknowledged the duty, and some of its directors deny it; second (what is even more remarkable), no resolution of parliament, no report of any committee of parliament (as far as i know), no remembered speech of a responsible statesman, has assigned or enforced that duty on the bank; third (what is more remarkable still), the distinct teaching of our highest authorities has often been that no public duty of any kind is imposed on the banking department of the bank; that, for banking purposes, it is only a joint stock bank like any other bank; that its managers should look only to the interest of the proprietors and their dividend; that they are to manage as the london and westminster bank or the union bank manages. at first, it seems exceedingly strange that so important a responsibility should be unimposed, unacknowledged, and denied; but the explanation is this. we are living amid the vestiges of old controversies, and we speak their language, though we are dealing with different thoughts and different facts. for more than fifty years--from 1793 down to 1844--there was a keen controversy as to the public duties of the bank. it was said to be the 'manager' of the paper currency, and on that account many expected much good from it; others said it did great harm; others again that it could do neither good nor harm. but for the whole period there was an incessant and fierce discussion. that discussion was terminated by the act of 1844. by that act the currency manages itself; the entire working is automatic. the bank of england plainly does not manage--cannot even be said to manage--the currency any more. and naturally, but rashly, the only reason upon which a public responsibility used to be assigned to the bank having now clearly come to an end, it was inferred by many that the bank had no responsibility. the complete uncertainty as to the degree of responsibility acknowledged by the bank of england is best illustrated by what has been said by the bank directors themselves as to the panic of 1866. the panic of that year, it will be remembered, happened, contrary to precedent, in the spring, and at the next meeting of the court of bank proprietors--the september meeting--there was a very remarkable discussion, which i give at length below, and of which all that is most material was thus described in the 'economist': 'the great importance of the late meeting of the proprietors of the bank of england. 'the late meeting of the proprietors of the bank of england has a very unusual importance. there can be no effectual inquiry now into the history of the late crisis. a parliamentary committee next year would, unless something strange occur in the interval, be a great waste of time. men of business have keen sensations but short memories, and they will care no more next february for the events of last may than they now care for the events of october 1864. a _pro forma_ inquiry, on which no real mind is spent, and which everyone knows will lead to nothing, is far worse than no inquiry at all. under these circumstances the official statements of the governor of the bank are the only authentic expositions we shall have of the policy of the bank directors, whether as respects the past or the future. and when we examine the proceedings with care, we shall find that they contain matter of the gravest import. 'this meeting may be considered to admit and recognise the fact that the bank of england keeps the sole banking reserve of the country. we do not now mix up this matter with the country circulation, or the question whether there should be many issuers of notes or only one. we speak not of the currency reserve, but of the banking reserve--the reserve held against deposits, and not the reserve held against notes. we have often insisted in these columns that the bank of england does keep the sole real reserve--the sole considerable unoccupied mass of cash in the country; but there has been no universal agreement about it. great authorities have been unwilling to admit it. they have not, indeed, formally and explicitly contended against it. if they had, they must have pointed out some other great store of unused cash besides that at the bank, and they could not find such store. but they have attempted distinctions; have said that the doctrine that the bank of england keeps the sole banking reserve of the country was "not a good way of putting it," was exaggerated, and was calculated to mislead. 'but the late meeting is a complete admission that such is the fact. the governor of the bank said: "'a great strain has within the last few months been put upon the resources of this house, and of the whole banking community of london; and i think i am entitled to say that not only this house, but the entire banking body, acquitted themselves most honourably and creditably throughout that very trying period. banking is a very peculiar business, and it depends so much upon credit that the least blast of suspicion is sufficient to sweep away, as it were, the harvest of a whole year. but the manner in which the banking establishments generally in london met the demands made upon them during the greater portion of the past half-year affords a most satisfactory proof of the soundness of the principles on which their business is conducted. this house exerted itself to the utmost--and exerted itself most successfully--to meet the crisis. we did not flinch from our post. when the storm came upon us, on the morning on which it became known that the house of overend and co. had failed, we were in as sound and healthy a position as any banking establishment could hold, and on that day and throughout the succeeding week we made advances which would hardly be credited. i do not believe that anyone would have thought of predicting, even at the shortest period beforehand, the greatness of those advances. it was not unnatural that in this state of things a certain degree of alarm should have taken possession of the public mind, and that those who required accommodation from the bank should have gone to the chancellor of the exchequer and requested the government to empower us to issue notes beyond the statutory amount, if we should think that such a measure was desirable. but we had to act before we could receive any such power, and before the chancellor of the exchequer was perhaps out of his bed we had advanced one-half of our reserves, which were certainly thus reduced to an amount which we could not witness without regret. but we would not flinch from the duty which we conceived was imposed upon us of supporting the banking community, and i am not aware that any legitimate application made for assistance to this house was refused. every gentleman who came here with adequate security was liberally dealt with, and if accommodation could not be afforded to the full extent which was demanded, no one who offered proper security failed to obtain relief from this house." 'now this is distinctly saying that the other banks of the country need not keep any such banking reserve--any such sum of actual cash--of real sovereigns and bank notes, as will help them through a sudden panic. it acknowledges a "duty" on the part of the bank of england to "support the banking community," to make the reserve of the bank of england do for them as well as for itself. 'in our judgment this language is most just, and the governor of the bank could scarcely have done a greater public service than by using language so business-like and so distinct. let us know precisely who is to keep the banking reserve. if the joint stock banks and the private banks and the country banks are to keep their share, let us determine on that; mr. gladstone appeared not long since to say in parliament that it ought to be so. but at any rate there should be no doubt whose duty it is. upon grounds which we have often stated, we believe that the anomaly of one bank keeping the sole banking reserve is so fixed in our system that we cannot change it if we would. the great evil to be feared was an indistinct conception of the fact, and that is now avoided. 'the importance of these declarations by the bank is greater, because after the panic of 1857 the bank did not hold exactly the same language. a person who loves concise expressions said lately "that overends broke the bank in 1866 because it went, and in 1857 because it was not let go." we need not too precisely examine such language; the element of truth in it is very plain--the great advances made to overends were a principal event in the panic of 1857; the bill-brokers were then very much what the bankers were lately they were the borrowers who wanted sudden and incalculable advances. but the bill-brokers were told not to expect the like again. but alderman salomons, on the part of the london bankers, said, "he wished to take that opportunity of stating that he believed nothing could be more satisfactory to the managers and shareholders of joint stock banks than the testimony which the governor of the bank of england had that day borne to the sound and honourable manner in which their business was conducted. it was manifestly desirable that the joint stock banks and the banking interest generally should work in harmony with the bank of england; and he sincerely thanked the governor of the bank for the kindly manner in which he had alluded to the mode in which the joint stock banks had met the late monetary crisis." the bank of england agrees to give other banks the requisite assistance in case of need, and the other banks agree to ask for it. 'secondly. the bank agrees, in fact, if not in name, to make limited advances on proper security to anyone who applies for it. on the present occasion 45,000,000 l. was so advanced in three months. and the bank do not say to the mercantile community, or to the bankers, "do not come to us again. we helped you once. but do not look upon it as a precedent. we will not help you again." on the contrary, the evident and intended implication is that under like circumstances the bank would act again as it has now acted.' this article was much disliked by many of the bank directors, and especially by some whose opinion is of great authority. they thought that the 'economist' drew 'rash deductions' from a speech which was in itself 'open to some objection--'which was, like all such speeches, defective in theoretical precision, and which was at best only the expression of an opinion by the governor of that day, which had not been authorised by the court of directors, which could not bind the bank. however the article had at least this use, that it brought out the facts. all the directors would have felt a difficulty in commenting upon, or limiting, or in differing from, a speech of a governor from the chair. but there was no difficulty or delicacy in attacking the 'economist.' accordingly mr. hankey, one of the most experienced bank directors, not long after, took occasion to observe: 'the "economist" newspaper has put forth what in my opinion is the most mischievous doctrine ever broached in the monetary or banking world in this country; viz, that it is the proper function of the bank of england to keep money available at all times to supply the demands of bankers who have rendered their own assets unavailable. until such a doctrine is repudiated by the banking interest, the difficulty of pursuing any sound principle of banking in london will be always very great. but i do not believe that such a doctrine as that bankers are justified in relying on the bank of england to assist them in time of need is generally held by the bankers in london. 'i consider it to be the undoubted duty of the bank of england to hold its banking deposits (reserving generally about one-third in cash) in the most available securities; and in the event of a sudden pressure in the money market, by whatever circumstance it may be caused, to bear its full share of a drain on its resources. i am ready to admit, however, that a general opinion has long prevailed that the bank of england ought to be prepared to do much more than this, though i confess my surprise at finding an advocate for such an opinion in the "economist." if it were practicable for the bank to retain money unemployed to meet such an emergency, it would be a very unwise thing to do so. but i contend that it is quite impracticable, and if it were possible, it would be most inexpedient; and i can only express my regret that the bank, from a desire to do everything in its power to afford general assistance in times of banking or commercial distress, should ever have acted in a way to encourage such an opinion. the more the conduct of the affairs of the bank is made to assimilate to the conduct of every other well-managed bank in the united kingdom, the better for the bank, and the better for the community at large.' i am scarcely a judge, but i do not think mr. hankey replies to the 'economist' very conclusively. first. he should have observed that the question is not as to what 'ought to be,' but as to what is. the 'economist' did not say that the system of a single bank reserve was a good system, but that it was the system which existed, and which must be worked, as you could not change it. secondly. mr. hankey should have shown 'some other store of unused cash' except the reserve in the banking department of the bank of england out of which advances in time of panic could be made. these advances are necessary, and must be made by someone. the 'reserves' of london bankers are not such store; they are used cash, not unused; they are part of the bank deposits, and lent as such. thirdly. mr. hankey should have observed that we know by the published figures that the joint stock banks of london do not keep one-third, or anything like one-third, of their liabilities in 'cash' even meaning by 'cash' a deposit at the bank of england. one-third of the deposits in joint stock banks, not to speak of the private banks, would be 30,000,000 l.; and the private deposits of the bank of england are 18,000,000 l. according to his own statement, there is a conspicuous contrast. the joint stock banks, and the private banks, no doubt, too, keep one sort of reserve, and the bank of england a different kind of reserve altogether. mr. hankey says that the two ought to be managed on the same principle; but if so, he should have said whether he would assimilate the practice of the bank of england to that of the other banks, or that of the other banks to the practice of the bank of england. fourthly. mr. hankey should have observed that, as has been explained, in most panics, the principal use of a 'banking reserve' is not to advance to bankers; the largest amount is almost always advanced to the mercantile public and to bill-brokers. but the point is, that by our system all extra pressure is thrown upon the bank of england. in the worst part of the crisis of 1866, 50,000 l. 'fresh money' could not be borrowed, even on the best security--even on consols except at the bank of england. there was no other lender to new borrowers. but my object now is not to revive a past controversy, but to show in what an unsatisfactory and uncertain condition that controversy has left a most important subject. mr. hankey's is the last explanation we have had of the policy of the bank. he is a very experienced and attentive director, and i think expresses, more or less, the opinions of other directors. and what do we find? setting aside and saying nothing about the remarkable speech of the governor in 1866, which at least (according to the interpretation of the 'economist') was clear and excellent, mr. hankey leaves us in doubt altogether as to what will be the policy of the bank of england in the next panic, and as to what amount of aid the public may then expect from it. his words are too vague. no one can tell what a 'fair share' means; still less can we tell what other people at some future time will say it means. theory suggests, and experience proves, that in a panic the holders of the ultimate bank reserve (whether one bank or many) should lend to all that bring good securities quickly, freely, and readily. by that policy they allay a panic; by every other policy they intensify it. the public have a right to know whether the bank of england--the holders of our ultimate bank reserve--acknowledge this duty, and are ready to perform it. but this is now very uncertain. if we refer to history, and examine what in fact has been the conduct of the bank directors, we find that they have acted exactly as persons of their type, character, and position might have been expected to act. they are a board of plain, sensible, prosperous english merchants; and they have both done and left undone what such a board might have been expected to do and not to do. nobody could expect great attainments in economical science from such a board; laborious study is for the most part foreign to the habits of english merchants. nor could we expect original views on banking, for banking is a special trade, and english merchants, as a body, have had no experience in it. a 'board' can scarcely ever make improvements, for the policy of a board is determined by the opinions of the most numerous class of its members--its average members--and these are never prepared for sudden improvements. a board of upright and sensible merchants will always act according to what it considers 'safe' principles--that is, according to the received maxims of the mercantile world then and there--and in this manner the directors of the bank of england have acted nearly uniformly. their strength and their weakness were curiously exemplified at the time when they had the most power. after the suspension of cash payments in 1797, the directors of the bank of england could issue what notes they liked. there was no check; these notes could not come back upon the bank for payment; there was a great temptation to extravagant issue, and no present penalty upon it. but the directors of the bank withstood the temptation; they did not issue their inconvertible notes extravagantly. and the proof is, that for more than ten years after the suspension of cash payments the bank paper was undepreciated, and circulated at no discount in comparison with gold. though the bank directors of that day at last fell into errors, yet on the whole they acted with singular judgment and moderation. but when, in 1810, they came to be examined as to their reasons, they gave answers that have become almost classical by their nonsense. mr. pearse, the governor of the bank, said: 'in considering this subject, with reference to the manner in which bank-notes are issued, resulting from the applications made for discounts to supply the necessary want of bank-notes, by which their issue in amount is so controlled that it can never amount to an excess, i cannot see how the amount of bank-notes issued can operate upon the price of bullion, or the state of the exchanges; and therefore i am individually of opinion that the price of bullion, or the state of the exchanges, can never be a reason for lessening the amount of bank-notes to be issued, always understanding the control which i have already described. 'is the governor of the bank of the same opinion which has now been expressed by the deputy-governor? 'mr. whitmore, i am so much of the same opinion, that i never think it necessary to advert to the price of gold, or the state of the exchange, on the days on which we make our advances. 'do you advert to these two circumstances with a view to regulate the general amount of your advances?--i do not advert to it with a view to our general advances, conceiving it not to bear upon the question. and mr. harman, another bank director, expressed his opinion in these terms: 'i must very materially alter my opinions before i can suppose that the exchanges will be influenced by any modifications of our paper currency.' very few persons perhaps could have managed to commit so many blunders in so few words. but it is no disgrace at all to the bank directors of that day to have committed these blunders. they spoke according to the best mercantile opinion of england. the city of london and the house of commons both approved of what they said; those who dissented were said to be abstract thinkers and unpractical men. the bank directors adopted the ordinary opinions, and pursued the usual practice of their time. it was this 'routine' that caused their moderation. they believed that so long as they issued 'notes' only at 5 per cent, and only on the discount of good bills, those notes could not be depreciated. and as the number of 'good' bills--bills which sound merchants know to be good--does not rapidly increase, and as the market rate of interest was often less than 5 per cent, these checks on over-issue were very effective. they failed in time, and the theory upon which they were defended was nonsense; but for a time their operation was powerful and excellent. unluckily, in the management of the matter before us--the management of the bank reserve--the directors of the bank of england were neither acquainted with right principles, nor were they protected by a judicious routine. they could not be expected themselves to discover such principles. the abstract thinking of the world is never to be expected from persons in high places; the administration of first-rate current transactions is a most engrossing business, and those charged with them are usually but little inclined to think on points of theory, even when such thinking most nearly concerns those transactions. no doubt when men's own fortunes are at stake, the instinct of the trader does somehow anticipate the conclusions of the closet. but a board has no instincts when it is not getting an income for its members, and when it is only discharging a duty of office. during the suspension of cash payments--a suspension which lasted twenty-two years--all traditions as to a cash reserve had died away. after 1819 the bank directors had to discharge the duty of keeping a banking reserve, and (as the law then stood) a currency reserve also, without the guidance either of keen interests, or good principles, or wise traditions. under such circumstances, the bank directors inevitably made mistakes of the gravest magnitude. the first time of trial came in 1825. in that year the bank directors allowed their stock of bullion to fall in the most alarming manner: on dec. 24, 1824, the coin and bullion in the bank was l 10,721,000 on dec. 25, 1825, it was reduced to l 1,260,000 and the consequence was a panic so tremendous that its results are well remembered after nearly fifty years. in the next period of extreme trial--in 1837-9--the bank was compelled to draw for 2,000,000 l. on the bank of france; and even after that aid the directors permitted their bullion, which was still the currency reserve as well as the banking reserve, to be reduced to 2,404,000 l.: a great alarm pervaded society, and generated an eager controversy, out of which ultimately emerged the act of 1844. the next trial came in 1847, and then the bank permitted its banking reserve (which the law had now distinctly separated) to fall to 1,176,000 l.; and so intense was the alarm, that the executive government issued a letter of licence, permitting the bank, if necessary, to break the new law, and, if necessary, to borrow from the currency reserve, which was full, in aid of the banking reserve, which was empty. till 1857 there was an unusual calm in the money market, but in the autumn of that year the bank directors let the banking reserve, which even in october was far too small, fall thus: oct. 10 4,024,000 l " 17 3,217,000 l " 24 3,485,000 l " 31 2,258,000 l nov. 6 2,155,000 l " 13 957,000 l and then a letter of licence like that of 1847 was not only issued, but used. the ministry of the day authorised the bank to borrow from the currency reserve in aid of the banking reserve, and the bank of england did so borrow several hundred pounds till the end of the month of november. a more miserable catalogue than that of the failures of the bank of england to keep a good banking reserve in all the seasons of trouble between 1825 and 1857 is scarcely to be found in history. but since 1857 there has been a great improvement. by painful events and incessant discussions, men of business have now been trained to see that a large banking reserve is necessary, and to understand that, in the curious constitution of the english banking world, the bank of england is the only body which could effectually keep it. they have never acknowledged the duty; some of them, as we have seen, deny the duty; still they have to a considerable extent begun to perform the duty. the bank directors, being experienced and able men of business, comprehended this like other men of business. since 1857 they have always kept, i do not say a sufficient banking reserve, but a fair and creditable banking reserve, and one altogether different from any which they kept before. at one period the bank directors even went farther: they made a distinct step in advance of the public intelligence; they adopted a particular mode of raising the rate of interest, which is far more efficient than any other mode. mr. goschen observes, in his book on the exchanges: 'between the rates in london and paris, the expense of sending gold to and fro having been reduced to a minimum between the two cities, the difference can never be very great; but it must not be forgotten that, the interest being taken at a percentage calculated per annum, and the probable profit having, when an operation in three-month bills is contemplated, to be divided by four, whereas the percentage of expense has to be wholly borne by the one transaction, a very slight expense becomes a great impediment. if the cost is only 1/2 per cent, there must be a profit of 2 per cent in the rate of interest, or 1/2 per cent on three months, before any advantage commences; and thus, supposing that paris capitalists calculate that they may send their gold over to england for 1/2 per cent expense, and chance their being so favoured by the exchanges as to be able to draw it back without any cost at all, there must nevertheless be an excess of more than 2 per cent in the london rate of interest over that in paris, before the operation of sending gold over from france, merely for the sake of the higher interest, will pay.' accordingly, mr. goschen recommended that the bank of england should, as a rule, raise their rate by steps of 1 per cent at a time when the object of the rise was to affect the 'foreign exchanges.' and the bank of england, from 1860 onward, have acted upon that principle. before that time they used to raise their rate almost always by steps of 1/2 per cent, and there was nothing in the general state of mercantile opinion to compel them to change their policy. the change was, on the contrary, most unpopular. on this occasion, and, as far as i know, on this occasion alone, the bank of england made an excellent alteration of their policy, which was not exacted by contemporary opinion, and which was in advance of it. the beneficial results of the improved policy of the bank were palpable and speedy. we were enabled by it to sustain the great drain of silver from europe to india to pay for indian cotton in the years between 18621865. in the autumn of 1864 there was especial danger; but, by a rapid and able use of their new policy, the bank of england maintained an adequate reserve, and preserved the country from calamities which, if we had looked only to precedent, would have seemed inevitable. all the causes which produced the panic of 1857 were in action in 1864--the drain of silver in 1864 and the preceding year was beyond comparison greater than in 1857 and the years before it--and yet in 1864 there was no panic. the bank of england was almost immediately rewarded for its adoption of right principles by finding that those principles, at a severe crisis, preserved public credit. in 1866 undoubtedly a panic occurred, but i do not think that the bank of england can be blamed for it. they had in their till an exceedingly good reserve according to the estimate of that time--a sufficient reserve, in all probability, to have coped with the crises of 1847 and 1857. the suspension of overend and gurney--the most trusted private firm in england caused an alarm, in suddenness and magnitude, without example. what was the effect of the act of 1844 on the panic of 1866 is a question on which opinion will be long divided; but i think it will be generally agreed that, acting under the provisions of that law, the directors of the bank of england had in their banking department in that year a fairly large reserve quite as large a reserve as anyone expected them to keep--to meet unexpected and painful contingencies. from 1866 to 1870 there was almost an unbroken calm on the money market. the bank of england had no difficulties to cope with; there was no opportunity for much discretion. the money market took care of itself. but in 1870 the bank of france suspended specie payments, and from that time a new era begins. the demands on this market for bullion have been greater, and have been more incessant, than they ever were before, for this is now the only bullion market. this has made it necessary for the bank of england to hold a much larger banking reserve than was ever before required, and to be much more watchful than in former times lest that banking reserve should on a sudden be dangerously diminished. the forces are greater and quicker than they used to be, and a firmer protection and a surer solicitude are necessary. but i do not think the bank of england is sufficiently aware of this. all the governing body of the bank certainly are not aware of it. the same eminent director to whom i have before referred, mr. hankey, published in the 'times' an elaborate letter, saying again that one-third of the liabilities were, even in these altered times, a sufficient reserve for the banking department of the bank of england, and that it was no part of the business of the bank to keep a supply of 'bullion for exportation,' which was exactly the most mischievous doctrine that could be maintained when the banking department of the bank of england had become the only great repository in europe where gold could at once be obtained, and when, therefore, a far greater store of bullion ought to be kept than at any former period. and besides this defect of the present time, there are some chronic faults in the policy of the bank of england, which arise, as will be presently explained, from grave defects in its form of government. there is almost always some hesitation when a governor begins to reign. he is the prime minister of the bank cabinet; and when so important a functionary changes, naturally much else changes too. if the governor be weak, this kind of vacillation and hesitation continues throughout his term of office. the usual defect then is, that the bank of england does not raise the rate of interest sufficiently quickly. it does raise it; in the end it takes the alarm, but it does not take the alarm sufficiently soon. a cautious man, in a new office, does not like strong measures. bank governors are generally cautious men; they are taken from a most cautious class; in consequence they are very apt to temporise and delay. but almost always the delay in creating a stringency only makes a greater stringency inevitable. the effect of a timid policy has been to let the gold out of the bank, and that gold must be recovered. it would really have been far easier to have maintained the reserve by timely measures than to have replenished it by delayed measures; but new governors rarely see this. secondly. those defects are apt, in part, or as a whole, to be continued throughout the reign of a weak governor. the objection to a decided policy, and the indisposition to a timely action, which are excusable in one whose influence is beginning, and whose reign is new, is continued through the whole reign of one to whom those defects are natural, and who exhibits those defects in all his affairs. thirdly. this defect is enhanced, because, as has so often been said, there is now no adequate rule recognised in the management of the banking reserve. mr. weguelin, the last bank governor who has been examined, said that it was sufficient for the bank to keep from one-fourth to one-third of its banking liabilities as a reserve. but no one now would ever be content if the banking reserve were near to one-fourth of its liabilities. mr. hankey, as i have shown, considers 'about a third' as the proportion of reserve to liability at which the bank should aim; but he does not say whether he regards a third as the minimum below which the reserve in the banking department should never be, or as a fair average, about which the reserve may fluctuate, sometimes being greater, or at others less. in a future chapter i shall endeavour to show that one-third of its banking liabilities is at present by no means an adequate reserve for the banking department--that it is not even a proper minimum, far less a fair average; and i shall allege what seem to me good reasons for thinking that, unless the bank aim by a different method at a higher standard, its own position may hereafter be perilous, and the public may be exposed to disaster. ii. but, as has been explained, the bank of england is bound, according to our system, not only to keep a good reserve against a time of panic, but to use that reserve effectually when that time of panic comes. the keepers of the banking reserve, whether one or many, are obliged then to use that reserve for their own safety. if they permit all other forms of credit to perish, their own will perish immediately, and in consequence. as to the bank of england, however, this is denied. it is alleged that the bank of england can keep aloof in a panic; that it can, if it will, let other banks and trades fail; that if it chooses, it can stand alone, and survive intact while all else perishes around it. on various occasions, most influential persons, both in the government of the bank and out of it, have said that such was their opinion. and we must at once see whether this opinion is true or false, for it is absurd to attempt to estimate the conduct of the bank of england during panics before we know what the precise position of the bank in a panic really is. the holders of this opinion in its most extreme form say, that in a panic the bank of england can stay its hand at any time; that, though it has advanced much, it may refuse to advance more; that though the reserve may have been reduced by such advances, it may refuse to lessen it still further; that it can refuse to make any further dis counts; that the bills which it has discounted will become due; that it can refill its reserve by the payment of those bills; that it can sell stock or other securities, and so replenish its reserve still further. but in this form the notion scarcely merits serious refutation. if the bank reserve has once become low, there are, in a panic, no means of raising it again. money parted with at such a time is very hard to get back; those who have taken it will not let it go--not, at least, unless they are sure of getting other money in its place. and at such instant the recovery of money is as hard for the bank of england as for any one else, probably even harder. the difficulty is this: if the bank decline to discount, the holders of the bills previously discounted cannot pay. as has been shown, trade in england is largely carried on with borrowed money. if you propose greatly to reduce that amount, you will cause many failures unless you can pour in from elsewhere some equivalent amount of new money. but in a panic there is no new money to be had; everybody who has it clings to it, and will not part with it. especially what has been advanced to merchants cannot easily be recovered; they are under immense liabilities, and they will not give back a penny which they imagine that even possibly they may need to discharge those liabilities. and bankers are in even greater terror. in a panic they will not discount a host of new bills; they are engrossed with their own liabilities and those of their own customers, and do not care for those of others. the notion that the bank of england can stop discounting in a panic, and so obtain fresh money, is a delusion. it can stop discounting, of course, at pleasure. but if it does, it will get in no new money; its bill case will daily be more and more packed with bills 'returned unpaid.' the sale of stock, too, by the bank of england in the middle of a panic is impossible. the bank at such a time is the only lender on stock, and it is only by loans from a bank that large purchases, at such a moment, can be made. unless the bank of england lend, no stock will be bought. there is not in the country any large sum of unused ready money ready to buy it. the only unused sum is the reserve in the banking department of the bank of england: if, therefore, in a panic that department itself attempt to sell stock, the failure would be ridiculous. it would hardly be able to sell any at all. probably it would not sell fifty pounds' worth. the idea that the bank can, during a panic, replenish its reserve in this or in any other manner when that reserve has once been allowed to become empty, or nearly empty, is too absurd to be steadily maintained, though i fear that it is not yet wholly abandoned. the second and more reasonable conception of the independence of the bank of england is, however, this: it may be said, and it is said, that if the bank of england stop at the beginning of a panic, if it refuse to advance a shilling more than usual, if it begin the battle with a good banking reserve, and do not diminish it by extra loans, the bank of england is sure to be safe. but this form of the opinion, though more reasonable and moderate, is not, therefore, more true. the panic of 1866 is the best instance to test it. as everyone knows, that panic began quite suddenly, on the fall of 'overends.' just before, the bank had 5,812,000 l. in its reserve; in fact, it advanced 13,000,000 l. of new money in the next few days, and its reserve went down to nothing, and the government had to help. but if the bank had not made these advances, could it have kept its reserve? certainly it could not. it could not have retained its own deposits. a large part of these are the deposits of bankers, and they would not consent to help the bank of england in a policy of isolation. they would not agree to suspend payments themselves, and permit the bank of england to survive, and get all their business. they would withdraw their deposits from the bank; they would not assist it to stand erect amid their ruin. but even if this were not so, even if the banks were willing to keep their deposits at the bank while it was not lending, they would soon find that they could not do it. they are only able to keep those deposits at the bank by the aid of the clearing-house system, and if a panic were to pass a certain height, that system, which rests on confidence, would be destroyed by terror. the common course of business is this. a b having to receive 50,000 l. from c d takes c d's cheque on a banker crossed, as it is called, and, therefore, only payable to another banker. he pays that cheque to his own credit with his own banker, who presents it to the banker on whom it is drawn, and if good it is an item between them in the general clearing or settlement of the afternoon. but this is evidently a very refined machinery, which a panic will be apt to destroy. at the first stage a b may say to his debtor c d, 'i cannot take your cheque, i must have bank-notes.' if it is a debt on securities, he will be very apt to say this. the usual practice--credit being good--is for the creditor to take the debtor's cheque, and to give up the securities. but if the 'securities' really secure him in a time of difficulty, he will not like to give them up, and take a bit of paper--a mere cheque, which may be paid or not paid. he will say to his debtor, 'i can only give you your securities if you will give me bank-notes.' and if he does say so, the debtor must go to his bank, and draw out the 50,000 l. if he has it. but if this were done on a large scale, the bank's 'cash in house' would soon be gone; as the clearing-house was gradually superseded it would have to trench on its deposit at the bank of england; and then the bankers would have to pay so much over the counter that they would be unable to keep much money at the bank, even if they wished. they would soon be obliged to draw out every shilling. the diminished use of the clearing-house, in consequence of the panic, would intensify that panic. by far the greater part of the bargains of the country in moneyed securities is settled on the stock exchange twice a month, and the number of securities then given up for mere cheques, and the number of cheques then passing at the clearing-house are enormous. if that system collapse, the number of failures would be incalculable, and each failure would add to the discredit that caused the collapse. the non-banking customers of the bank of england would be discredited as well as other people; their cheques would not be taken any more than those of others; they would have to draw out bank-notes, and the bank reserve would not be enough for a tithe of such payments. the matter would come shortly to this: a great number of brokers and dealers are under obligations to pay immense sums, and in common times they obtain these sums by the transfer of certain securities. if, as we said just now, no. 1 has borrowed 50,000 l. of no. 2 on exchequer bills, he, for the most part, cannot pay no. 2 till he has sold or pledged those bills to some one else. but till he has the bills he cannot pledge or sell them; and if no. 2 will not give them up till he gets his money, no. 1 will be ruined, because he cannot pay it. and if no. 2 has no. 3 to pay, as is very likely, he may be ruined because of no. 1's default, and no. 4 only on account of no. 3's default; and so on without end. on settling day, without the clearing-house, there would be a mass of failures, and a bundle of securities. the effect of these failures would be a general run on all bankers, and on the bank of england particularly. it may indeed be said that the money thus taken from the banking department of the bank of england would return there immediately; that the public who borrowed it would not know where else to deposit it; that it would be taken out in the morning, and put back in the evening. but, in the first place, this argument assumes that the banking department would have enough money to pay the demands on it; and this is a mistake: the banking department would not have a hundredth part of the necessary funds. and in the second, a great panic which deranged the clearing-house would soon be diffused all through the country. the money therefore taken from the bank of england could not be soon returned to the bank; it would not come back on the evening of the day on which it was taken out, or for many days; it would be distributed through the length and breadth of the country, wherever there were bankers, wherever there was trade, wherever there were liabilities, wherever there was terror. and even in london, so immense a panic would soon impair the credit of the banking department of the bank of england. that department has no great prestige. it was only created in 1844, and it has failed three times since. the world would imagine that what has happened before will happen again; and when they have got money, they will not deposit it at an establishment which may not be able to repay it. this did not happen in former panics, because the case we are considering never arose. the bank was helping the public, and, more or less confidently, it was believed that the government would help the bank. but if the policy be relinquished which formerly assuaged alarm, that alarm will be protracted and enhanced, till it touch the banking department of the bank itself. i do not imagine that it would touch the issue department. i think that the public would be quite satisfied if they obtained bank-notes. generally nothing is gained by holding the notes of a bank instead of depositing them at a bank. but in the bank of england there is a great difference: their notes are legal tender. whoever holds them can always pay his debts, and, except for foreign payments, he could want no more. the rush would be for bank-notes; those that could be obtained would be carried north, south, east, and west, and, as there would not be enough for all the country, the banking department would soon pay away all it had. nothing, therefore, can be more certain than that the bank of england has in this respect no peculiar privilege; that it is simply in the position of a bank keeping the banking reserve of the country; that it must in time of panic do what all other similar banks must do; that in time of panic it must advance freely and vigorously to the public out of the reserve. and with the bank of england, as with other banks in the same case, these advances, if they are to be made at all, should be made so as if possible to obtain the object for which they are made. the end is to stay the panic; and the advances should, if possible, stay the panic. and for this purpose there are two rules: first. that these loans should only be made at a very high rate of interest. this will operate as a heavy fine on unreasonable timidity, and will prevent the greatest number of applications by persons who do not require it. the rate should be raised early in the panic, so that the fine may be paid early; that no one may borrow out of idle precaution without paying well for it; that the banking reserve may be protected as far as possible. secondly. that at this rate these advances should be made on all good banking securities, and as largely as the public ask for them. the reason is plain. the object is to stay alarm, and nothing therefore should be done to cause alarm. but the way to cause alarm is to refuse some one who has good security to offer. the news of this will spread in an instant through all the money market at a moment of terror; no one can say exactly who carries it, but in half an hour it will be carried on all sides, and will intensify the terror everywhere. no advances indeed need be made by which the bank will ultimately lose. the amount of bad business in commercial countries is an infinitesimally small fraction of the whole business. that in a panic the bank, or banks, holding the ultimate reserve should refuse bad bills or bad securities will not make the panic really worse; the 'unsound' people are a feeble minority, and they are afraid even to look frightened for fear their unsoundness may be detected. the great majority, the majority to be protected, are the 'sound' people, the people who have good security to offer. if it is known that the bank of england is freely advancing on what in ordinary times is reckoned a good security--on what is then commonly pledged and easily convertible--the alarm of the solvent merchants and bankers will be stayed. but if securities, really good and usually convertible, are refused by the bank, the alarm will not abate, the other loans made will fail in obtaining their end, and the panic will become worse and worse. it may be said that the reserve in the banking department will not be enough for all such loans. if that be so, the banking department must fail. but lending is, nevertheless, its best expedient. this is the method of making its money go the farthest, and of enabling it to get through the panic if anything will so enable it. making no loans as we have seen will ruin it; making large loans and stopping, as we have also seen, will ruin it. the only safe plan for the bank is the brave plan, to lend in a panic on every kind of current security, or every sort on which money is ordinarily and usually lent. this policy may not save the bank; but if it do not, nothing will save it. if we examine the manner in which the bank of england has fulfilled these duties, we shall find, as we found before, that the true principle has never been grasped; that the policy has been inconsistent; that, though the policy has much improved, there still remain important particulars in which it might be better than it is. the first panic of which it is necessary here to speak, is that of 1825: i hardly think we should derive much instruction from those of 1793 and 1797; the world has changed too much since; and during the long period of inconvertible currency from 1797 to 1819, the problems to be solved were altogether different from our present ones. in the panic of 1825, the bank of england at first acted as unwisely as it was possible to act. by every means it tried to restrict its advances. the reserve being very small, it endeavoured to protect that reserve by lending as little as possible. the result was a period of frantic and almost inconceivable violence; scarcely any one knew whom to trust; credit was almost suspended; the country was, as mr. huskisson expressed it, within twenty-four hours of a state of barter. applications for assistance were made to the government, but though it was well known that the government refused to act, there was not, as far as i know, until lately any authentic narrative of the real facts. in the 'correspondence' of the duke of wellington, of all places in the world, there is a full account of them. the duke was then on a mission at st. petersburg, and sir r. peel wrote to him a letter of which the following is a part: 'we have been placed in a very unpleasant predicament on the other question--the issue of exchequer bills by government. the feeling of the city, of many of our friends, of some of the opposition, was decidedly in favour of the issue of exchequer bills to relieve the merchants and manufacturers. 'it was said in favour of the issue, that the same measure had been tried and succeeded in 1793 and 1811. our friends whispered about that we were acting quite in a different manner from that in which mr. pitt did act, and would have acted had he been alive. 'we felt satisfied that, however plausible were the reasons urged in favour of the issue of exchequer bills, yet that the measure was a dangerous one, and ought to be resisted by the government. 'there are thirty millions of exchequer bills outstanding. the purchases lately made by the bank can hardly maintain them at par. if there were a new issue to such an amount as that contemplated--viz., five millions--there would be a great danger that the whole mass of exchequer bills would be at a discount, and would be paid into the revenue. if the new exchequer bills were to be issued at a different rate of interest from the outstanding ones--say bearing an interest of five per cent--the old ones would be immediately at a great discount unless the interest were raised. if the interest were raised, the charge on the revenue would be of course proportionate to the increase of rate of interest. we found that the bank had the power to lend money on deposit of goods. as our issue of exchequer bills would have been useless unless the bank cashed them, as therefore the intervention of the bank was in any event absolutely necessary, and as its intervention would be chiefly useful by the effect which it would have in increasing the circulating medium, we advised the bank to take the whole affair into their own hands at once, to issue their notes on the security of goods, instead of issuing them on exchequer bills, such bills being themselves issued on that security. 'they reluctantly consented, and rescued us from a very embarrassing predicament.' the success of the bank of england on this occasion was owing to its complete adoption of right principles. the bank adopted these principles very late; but when it adopted them it adopted them completely. according to the official statement which i quoted before, 'we,' that is, the bank directors, 'lent money by every possible means, and in modes which we had never adopted before; we took in stock on security, we purchased exchequer bills, we made advances on exchequer bills, we not only discounted outright, but we made advances on deposits of bills of exchange to an immense amount--in short, by every possible means consistent with the safety of the bank.' and for the complete and courageous adoption of this policy at the last moment the directors of the bank of england at that time deserve great praise, for the subject was then less understood even than it is now; but the directors of the bank deserve also severe censure, for previously choosing a contrary policy; for being reluctant to adopt the new one; and for at last adopting it only at the request of, and upon a joint responsibility with, the executive government. after 1825, there was not again a real panic in the money market till 1847. both of the crises of 1837 and 1839 were severe, but neither terminated in a panic: both were arrested before the alarm reached its final intensity; in neither, therefore, could the policy of the bank at the last stage of fear be tested. in the three panics since 1844--in 1847, 1857, and 1866--the policy of the bank has been more or less affected by the act of 1844, and i cannot therefore discuss it fully within the limits which i have pre scribed for myself. i can only state two things: first, that the directors of the bank above all things maintain, that they have not been in the earlier stage of panic prevented by the act of 1844 from making any advances which they would otherwise have then made. secondly, that in the last stage of panic, the act of 1844 has been already suspended, rightly or wrongly, on these occasions; that no similar occasion has ever yet occurred in which it has not been suspended; and that, rightly or wrongly, the world confidently expects and relies that in all similar cases it will be suspended again. whatever theory may prescribe, the logic of facts seems peremptory so far. and these principles taken together amount to saying that, by the doctrine of the directors, the bank of england ought, as far as they can, to manage a panic with the act of 1844, pretty much as they would manage one without it--in the early stage of the panic because then they are not fettered, and in the latter because then the fetter has been removed. we can therefore estimate the policy of the bank of england in the three panics which have happened since the act of 1844, without inquiring into the effect of the act itself. it is certain that in all of these panics the bank has made very large advances indeed. it is certain, too, that in all of them the bank has been quicker than it was in 1825; that in all of them it has less hesitated to use its banking reserve in making the advances which it is one principal object of maintaining that reserve to make, and to make at once. but there is still a considerable evil. no one knows on what kind of securities the bank of england will at such periods make the advances which it is necessary to make. as we have seen, principle requires that such advances, if made at all for the purpose of curing panic, should be made in the manner most likely to cure that panic. and for this purpose, they should be made on everything which in common times is good 'banking security.' the evil is, that owing to terror, what is commonly good security has ceased to be so; and the true policy is so to use the banking reserve, that if possible the temporary evil may be stayed, and the common course of business be restored. and this can only be effected by advancing on all good banking securities. unfortunately, the bank of england do not take this course. the discount office is open for the discount of good bills, and makes immense advances accordingly. the bank also advances on consols and india securities, though there was, in the crisis of 1866, believed to be for a moment a hesitation in so doing. but these are only a small part of the securities on which money in ordinary times can be readily obtained, and by which its repayment is fully secured. railway debenture stock is as good a security as a commercial bill, and many people, of whom i own i am one, think it safer than india stock; on the whole, a great railway is, we think, less liable to unforeseen accidents than the strange empire of india. but i doubt if the bank of england in a panic would advance on railway debenture stock, at any rate no one has any authorised reason for saying that it would. and there are many other such securities. the amount of the advance is the main consideration for the bank of england, and not the nature of the security on which the advance is made, always assuming the security to be good. an idea prevails (as i believe) at the bank of england that they ought not to advance during a panic on any kind of security on which they do not commonly advance. but if bankers for the most part do advance on such security in common times, and if that security is indisputably good, the ordinary practice of the bank of england is immaterial. in ordinary times the bank is only one of many lenders, whereas in a panic it is the sole lender, and we want, as far as we can, to bring back the unusual state of a time of panic to the common state of ordinary times. in common opinion there is always great uncertainty as to the conduct of the bank: the bank has never laid down any clear and sound policy on the subject. as we have seen, some of its directors (like mr. hankey) advocate an erroneous policy. the public is never sure what policy will be adopted at the most important moment: it is not sure what amount of advance will be made, or on what security it will be made. the best palliative to a panic is a confidence in the adequate amount of the bank reserve, and in the efficient use of that reserve. and until we have on this point a clear understanding with the bank of england, both our liability to crises and our terror at crises will always be greater than they would otherwise be. chapter viii. the government of the bank of england. the bank of england is governed by a board of directors, a governor, and a deputy-governor; and the mode in which these are chosen, and the time for which they hold office, affect the whole of its business. the board of directors is in fact self-electing. in theory a certain portion go out annually, remain out for a year, and are subject to re-election by the proprietors. but in fact they are nearly always, and always if the other directors wish it, re-elected after a year. such has been the unbroken practice of many years, and it would be hardly possible now to break it. when a vacancy occurs by death or resignation, the whole board chooses the new member, and they do it, as i am told, with great care. for a peculiar reason, it is important that the directors should be young when they begin; and accordingly the board run over the names of the most attentive and promising young men in the old-established firms of london, and select the one who, they think, will be most suitable for a bank director. there is a considerable ambition to fill the office. the status which is given by it, both to the individual who fills it and to the firm of merchants to which he belongs, is considerable. there is surprisingly little favour shown in the selection; there is a great wish on the part of the bank directors for the time being to provide, to the best of their ability, for the future good government of the bank. very few selections in the world are made with nearly equal purity. there is a sincere desire to do the best for the bank, and to appoint a well-conducted young man who has begun to attend to business, and who seems likely to be fairly sensible and fairly efficient twenty years later. the age is a primary matter. the offices of governor and deputy-governor are given in rotation. the deputy-governor always succeeds the governor, and usually the oldest director who has not been in office becomes deputy-governor. sometimes, from personal reasons, such as ill-health or special temporary occupation, the time at which a director becomes deputy-governor may be a little deferred, and, in some few cases, merchants in the greatest business have been permitted to decline entirely. but for all general purposes, the rule may be taken as absolute. save in rare cases, a director must serve his time as governor and deputy-governor nearly when his turn comes, and he will not be asked to serve much before his turn. it is usually about twenty years from the time of a man's first election that he arrives, as it is called, at the chair. and as the offices of governor and deputy-governor are very important, a man who fills them should be still in the vigour of life. accordingly, bank directors, when first chosen by the board, are always young men. at first this has rather a singular effect; a stranger hardly knows what to make of it. many years since, i remember seeing a very fresh and nice-looking young gentleman, and being struck with astonishment at being told that he was a director of the bank of england. i had always imagined such directors to be men of tried sagacity and long experience, and i was amazed that a cheerful young man should be one of them. i believe i thought it was a little dangerous. i thought such young men could not manage the bank well. i feared they had the power to do mischief. further inquiry, however, soon convinced me that they had not the power. naturally, young men have not much influence at a board where there are many older members. and in the bank of england there is a special provision for depriving them of it if they get it. some of the directors, as i have said, retire annually, but by courtesy it is always the young ones. those who have passed the chair--that is, who have served the office of governor--always remain. the young part of the board is the fluctuating part, and the old part is the permanent part; and therefore it is not surprising that the young part has little influence. the bank directors may be blamed for many things, but they cannot be blamed for the changeableness and excitability of a neocracy. indeed, still better to prevent it, the elder members of the board--that is, those who have passed the chair--form a standing committee of indefinite powers, which is called the committee of treasury. i say 'indefinite powers,' for i am not aware that any precise description has ever been given of them, and i doubt if they can be precisely described. they are sometimes said to exercise a particular control over the relations and negotiations between the bank and the government. but i confess that i believe that this varies very much with the character of the governor for the time being. a strong governor does much mainly upon his own responsibility, and a weak governor does little. still the influence of the committee of treasury is always considerable, though not always the same. they form a a cabinet of mature, declining, and old men, just close to the executive; and for good or evil such a cabinet must have much power. by old usage, the directors of the bank of england cannot be themselves by trade bankers. this is a relic of old times. every bank was supposed to be necessarily, more or less, in opposition to every other bank--banks in the same place to be especially in opposition. in consequence, in london, no banker has a chance of being a bank director, or would ever think of attempting to be one. i am here speaking of bankers in the english sense, and in the sense that would surprise a foreigner. one of the rothschilds is on the bank direction, and a foreigner would be apt to think that they were bankers if any one was. but this only illustrates the essential difference between our english notions of banking and the continental. ours have attained a much fuller development than theirs. messrs. rothschild are immense capitalists, having, doubtless, much borrowed money in their hands. but they do not take 100 l. payable on demand, and pay it back in cheques of 5 l. each, and that is our english banking. the borrowed money which they have is in large sums, borrowed for terms more or less long. english bankers deal with an aggregate of small sums, all of which are repayable on short notice, or on demand. and the way the two employ their money is different also. a foreigner thinks 'an exchange business'--that is, the buying and selling bills on foreign countries--a main part of banking. as i have explained, remittance is one of the subsidiary conveniences which early banks subserve before deposit banking begins. but the mass of english country bankers only give bills on places in england or on london, and in london the principal remittance business has escaped out of the hands of the bankers. most of them would not know how to carry through a great 'exchange operation,' or to 'bring home the returns.' they would as soon think of turning silk merchants. the exchange trade is carried on by a small and special body of foreign bill-brokers, of whom messrs. rothschild are the greatest. one of that firm may, therefore, well be on the bank direction, notwithstanding the rule forbidding bankers to be there, for he and his family are not english bankers, either by the terms on which they borrow money, or the mode in which they employ it. but as to bankers in the english sense of the word, the rule is rigid and absolute. not only no private banker is a director of the bank of england, but no director of any joint stock bank would be allowed to become such. the two situations would be taken to be incompatible. the mass of the bank directors are merchants of experience, employing a considerable capital in trades in which they have been brought up, and with which they are well acquainted. many of them have information as to the present course of trade, and as to the character and wealth of merchants, which is most valuable, or rather is all but invaluable, to the bank. many of them, too, are quiet, serious men, who, by habit and nature, watch with some kind of care every kind of business in which they are engaged, and give an anxious opinion on it. most of them have a good deal of leisure, for the life of a man of business who employs only his own capital, and employs it nearly always in the same way, is by no means fully employed. hardly any capital is enough to employ the principal partner's time, and if such a man is very busy, it is a sign of something wrong. either he is working at detail, which subordinates would do better, and which he had better leave alone, or he is engaged in too many speculations, is incurring more liabilities than his capital will bear, and so may be ruined. in consequence, every commercial city abounds in men who have great business ability and experience, who are not fully occupied, who wish to be occupied, and who are very glad to become directors of public companies in order to be occupied. the direction of the bank of england has, for many generations, been composed of such men. such a government for a joint stock company is very good if its essential nature be attended to, and very bad if that nature be not attended to. that government is composed of men with a high average of general good sense, with an excellent knowledge of business in general, but without any special knowledge of the particular business in which they are engaged. ordinarily, in joint stock banks and companies this deficiency is cured by the selection of a manager of the company, who has been specially trained to that particular trade, and who engages to devote all his experience and all his ability to the affairs of the company. the directors, and often a select committee of them more especially, consult with the manager, and after hearing what he has to say, decide on the affairs of the company. there is in all ordinary joint stock companies a fixed executive specially skilled, and a somewhat varying council not specially skilled. the fixed manager ensures continuity and experience in the management, and a good board of directors ensures general wisdom. but in the bank of england there is no fixed executive. the governor and deputy-governor, who form that executive, change every two years. i believe, indeed, that such was not the original intention of the founders. in the old days of few and great privileged companies, the chairman, though periodically elected, was practically permanent so long as his policy was popular. he was the head of the ministry, and ordinarily did not change unless the opposition came in. but this idea has no present relation to the constitution of the bank of england. at present, the governor and deputy-governor almost always change at the end of two years; the case of any longer occupation of the chair is so very rare, that it need not be taken account of. and the governor and deputy-governor of the bank cannot well be shadows. they are expected to be constantly present; to see all applicants for advances out of the ordinary routine; to carry on the almost continuous correspondence between the bank and its largest customer--the government; to bring all necessary matters before the board of directors or the committee of treasury, in a word, to do very much of what falls to the lot of the manager in most companies. under this shifting chief executive, there are indeed very valuable heads of departments. the head of the discount department is especially required to be a man of ability and experience. but these officers are essentially subordinate; no one of them is like the general manager of an ordinary bank--the head of all action. the perpetually present executive--the governor and deputy-governor--make it impossible that any subordinate should have that position. a really able and active-minded governor, being required to sit all day in the bank, in fact does, and can hardly help doing, its principal business. in theory, nothing can be worse than this government for a bank a shifting executive; a board of directors chosen too young for it to be known whether they are able; a committee of management, in which seniority is the necessary qualification, and old age the common result; and no trained bankers anywhere. even if the bank of england were an ordinary bank, such a constitution would be insufficient; but its inadequacy is greater, and the consequences of that inadequacy far worse, because of its greater functions. the bank of england has to keep the sole banking reserve of the country; has to keep it through all changes of the money market, and all turns of the exchanges; has to decide on the instant in a panic what sort of advances should be made, to what amounts, and for what dates; and yet it has a constitution plainly defective. so far the government of the bank of england being better than that of any other bank--as it ought to be, considering that its functions are much harder and graver--any one would be laughed at who proposed it as a model for the government of a new bank; and that government, if it were so proposed, would on all hands be called old-fashioned, and curious. as was natural, the effects--good and evil--of its constitution are to be seen in every part of the bank's history. on one vital point the bank's management has been excellent. it has done perhaps less 'bad business,' certainly less very bad business, than any bank of the same size and the same age. in all its history i do not know that its name has ever been connected with a single large and discreditable bad debt. there has never been a suspicion that it was 'worked' for the benefit of any one man, or any combination of men. the great respectability of the directors, and the steady attention many of them have always given the business of the bank, have kept it entirely free from anything dishonorable and discreditable. steady merchants collected in council are an admirable judge of bills and securities. they always know the questionable standing of dangerous persons; they are quick to note the smallest signs of corrupt transactions; and no sophistry will persuade the best of them out of their good instincts. you could not have made the directors of the bank of england do the sort of business which 'overends' at last did, except by a moral miracle--except by changing their nature. and the fatal career of the bank of the united states would, under their management, have been equally impossible. of the ultimate solvency of the bank of england, or of the eventual safety of its vast capital, even at the worst periods of its history, there has not been the least doubt. but nevertheless, as we have seen, the policy of the bank has frequently been deplorable, and at such times the defects of its government have aggravated if not caused its calamities. in truth the executive of the bank of england is now much such as the executive of a public department of the foreign office or the home office would be in which there was no responsible permanent head. in these departments of government, the actual chief changes nearly, though not quite, as often as the governor of the bank of england. the parliamentary under-secretary--the deputy-governor, so to speak, of that office--changes nearly as often. and if the administration solely, or in its details, depended on these two, it would stop. new men could not carry it on with vigour and efficiency; indeed they could not carry it on at all. but, in fact, they are assisted by a permanent under-secretary, who manages all the routine business, who is the depository of the secrets of the office, who embodies its traditions, who is the hyphen between changing administrations. in consequence of this assistance, the continuous business of the department is, for the most part, managed sufficiently well, notwithstanding frequent changes in the heads of administration. and it is only by such assistance that such business could be so managed. the present administration of the bank is an attempt to manage a great, a growing, and a permanently continuous business without an adequate permanent element, and a competent connecting link. in answer, it may be said that the duties which press on the governor and deputy-governor of the bank are not so great or so urgent as those which press upon the heads of official departments. and perhaps, in point of mere labour, the governor of the bank has the advantage. banking never ought to be an exceedingly laborious trade. there must be a great want of system and a great deficiency in skilled assistance if extreme labour is thrown upon the chief. but in importance, the functions of the head of the bank rank as high as those of any department. the cash reserve of the country is as precious a deposit as any set of men can have the care of. and the difficulty of dealing with a panic (as the administration of the bank is forced to deal with it) is perhaps a more formidable instant difficulty than presses upon any single minister. at any rate, it comes more suddenly, and must be dealt with more immediately, than most comparable difficulties; and the judgment, the nerve, and the vigour needful to deal with it are plainly rare and great. the natural remedy would be to appoint a permanent governor of the bank. nor, as i have said, can there be much doubt that such was the intention of its founders. all the old companies which have their beginning in the seventeenth century had the same constitution, and those of them which have lingered down to our time retain it. the hudson's bay company, the south sea company, the east india company, were all founded with a sort of sovereign executive, intended to be permanent, and intended to be efficient. this is, indeed, the most natural mode of forming a company in the minds of those to whom companies are new. such persons will have always seen business transacted a good deal despotically; they will have learnt the value of prompt decision and of consistent policy; they will have often seen that business is best managed when those who are conducting it could scarcely justify the course they are pursuing by distinct argument which others could understand. all 'city' people make their money by investments, for which there are often good argumentative reasons; but they would hardly ever be able, if required before a parliamentary committee, to state those reasons. they have become used to act on them without distinctly analysing them, and, in a monarchical way, with continued success only as a test of their goodness. naturally such persons, when proceeding to form a company, make it upon the model of that which they have been used to see successful. they provide for the executive first and above all things. how much this was in the minds of the founders of the bank of england may be judged of by the name which they gave it. its corporate name is the 'governor and company of the bank of england.' so important did the founders think the executive that they mentioned it distinctly, and mentioned it first. and not only is this constitution of a company the most natural in the early days when companies were new, it is also that which experience has shown to be the most efficient now that companies have long been tried. great railway companies are managed upon no other. scarcely any instance of great success in a railway can be mentioned in which the chairman has not been an active and judicious man of business, constantly attending to the affairs of the company. a thousand instances of railway disaster can be easily found in which the chairman was only a nominal head--a nobleman, or something of that sort--chosen for show. 'railway chairmanship' has become a profession, so much is efficiency valued in it, and so indispensable has ability been found to be. the plan of appointing a permanent 'chairman' at the bank of england is strongly supported by much modern experience. nevertheless, i hesitate as to its expediency; at any rate, there are other plans which, for several reasons, should, i think, first be tried in preference. first. this plan would be exceedingly unpopular. a permanent governor of the bank of england would be one of the greatest men in england. he would be a little 'monarch' in the city; he would be far greater than the 'lord mayor.' he would be the personal embodiment of the bank of england; he would be constantly clothed with an almost indefinite prestige. everybody in business would bow down before him and try to stand well with him, for he might in a panic be able to save almost anyone he liked, and to ruin almost anyone he liked. a day might come when his favour might mean prosperity, and his distrust might mean ruin. a position with so much real power and so much apparent dignity would be intensely coveted. practical men would be apt to say that it was better than the prime ministership, for it would last much longer, and would have a greater jurisdiction over that which practical men would most value, over money. at all events, such a governor, if he understood his business, might make the fortunes of fifty men where the prime minister can make that of one. scarcely anything could be more unpopular in the city than the appointment of a little king to reign over them. secondly. i do not believe that we should always get the best man for the post; often i fear that we should not even get a tolerable man. there are many cases in which the offer of too high a pay would prevent our obtaining the man we wish for, and this is one of them. a very high pay of prestige is almost always very dangerous. it causes the post to be desired by vain men, by lazy men, by men of rank; and when that post is one of real and technical business, and when, therefore, it requires much previous training, much continuous labour, and much patient and quick judgment, all such men are dangerous. but they are sure to covet all posts of splendid dignity, and can only be kept out of them with the greatest difficulty. probably, in every cabinet there are still some members (in the days of the old close boroughs there were many) whose posts have come to them not from personal ability or inherent merit, but from their rank, their wealth, or even their imposing exterior. the highest political offices are, indeed, kept clear of such people, for in them serious and important duties must constantly be performed in the face of the world. a prime minister, or a chancellor of the exchequer, or a secretary of state must explain his policy and defend his actions in parliament, and the discriminating tact of a critical assembly--abounding in experience, and guided by tradition--will soon discover what he is. but the governor of the bank would only perform quiet functions, which look like routine, though they are not, in which there is no immediate risk of success or failure; which years hence may indeed issue in a crop of bad debts, but which any grave persons may make at the time to look fair and plausible. a large bank is exactly the place where a vain and shallow person in authority, if he be a man of gravity and method, as such men often are, may do infinite evil in no long time, and before he is detected. if he is lucky enough to begin at a time of expansion in trade, he is nearly sure not to be found out till the time of contraction has arrived, and then very large figures will be required to reckon the evil he has done. and thirdly, i fear that the possession of such patronage would ruin any set of persons in whose gift it was. the election of the chairman must be placed either in the court of proprietors or that of the directors. if the proprietors choose, there will be something like the evils of an american presidential election. bank stock will be bought in order to confer the qualification of voting at the election of the 'chief of the city.' the chairman, when elected, may well find that his most active supporters are large borrowers of the bank, and he may well be puzzled to decide between his duty to the bank and his gratitude to those who chose him. probably, if he be a cautious man of average ability, he will combine both evils; he will not lend so much money as he is asked for, and so will offend his own supporters; but will lend some which will be lost, and so the profits of the bank will be reduced. a large body of bank proprietors would make but a bad elective body for an office of great prestige; they would not commonly choose a good person, and the person they did choose would be bound by promises that would make him less good. the court of directors would choose better; a small body of men of business would not easily be persuaded to choose an extremely unfit man. but they would not often choose an extremely good man. the really best man would probably not be so rich as the majority of the directors, nor of so much standing, and not unnaturally they would much dislike to elevate to the headship of the city, one who was much less in the estimation of the city than themselves. and they would be canvassed in every way and on every side to appoint a man of mercantile dignity or mercantile influence. many people of the greatest prestige and rank in the city would covet so great a dignity; if not for themselves, at least for some friend, or some relative, and so the directors would be set upon from every side. an election so liable to be disturbed by powerful vitiating causes would rarely end in a good choice. the best candidate would almost never be chosen; often, i fear, one would be chosen altogether unfit for a post so important. and the excitement of so keen an election would altogether disturb the quiet of the bank. the good and efficient working of a board of bank directors depends on its internal harmony, and that harmony would be broken for ever by the excitement, the sayings, and the acts of a great election. the board of directors would almost certainly be demoralised by having to choose a sovereign, and there is no certainty, nor any great likelihood, indeed, that they would choose a good one. in france the difficulty of finding a good body to choose the governor of the bank has been met characteristically. the bank of france keeps the money of the state, and the state appoints its governor. the french have generally a logical reason to give for all they do, though perhaps the results of their actions are not always so good as the reasons for them. the governor of the bank of france has not always, i am told, been a very competent person; the sub-governor, whom the state also appoints, is, as we might expect, usually better. but for our english purposes it would be useless to inquire minutely into this. no english statesman would consent to be responsible for the choice of the governor of the bank of england. after every panic, the opposition would say in parliament that the calamity had been 'grievously aggravated,' if not wholly caused, by the 'gross misconduct' of the governor appointed by the ministry. or, possibly, offices may have changed occupants and the ministry in power at the panic would be the opponents of the ministry which at a former time appointed the governor. in that case they would be apt to feel, and to intimate, a 'grave regret' at the course which the nominee of their adversaries had 'thought it desirable to pursue.' they would not much mind hurting his feelings, and if he resigned they would have themselves a valuable piece of patronage to confer on one of their own friends. no result could be worse than that the conduct of the bank and the management should be made a matter of party politics, and men of all parties would agree in this, even if they agreed in almost nothing else. i am therefore afraid that we must abandon the plan of improving the government of the bank of england by the appointment of a permanent governor, because we should not be sure of choosing a good governor, and should indeed run a great risk, for the most part, of choosing a bad one. i think, however, that much of the advantage, with little of the risk, might be secured by a humbler scheme. in english political offices, as was observed before, the evil of a changing head is made possible by the permanence of a dignified subordinate. though the parliamentary secretary of state and the parliamentary under-secretary go in and out with each administration, another under-secretary remains through all such changes, and is on that account called 'permanent.' now this system seems to me in its principle perfectly applicable to the administration of the bank of england. for the reasons which have just been given, a permanent ruler of the bank of england cannot be appointed; for other reasons, which were just before given, some most influential permanent functionary is essential in the proper conduct of the business of the bank; and, mutatis mutandis, these are the very difficulties, and the very advantages which have led us to frame our principal offices of state in the present fashion. such a deputy-governor would not be at all a 'king' in the city. there would be no mischievous prestige about the office; there would be no attraction in it for a vain man; and there would be nothing to make it an object of a violent canvass or of unscrupulous electioneering. the office would be essentially subordinate in its character, just like the permanent secretary in a political office. the pay should be high, for good ability is wanted--but no pay would attract the most dangerous class of people. the very influential, but not very wise, city dignitary who would be so very dangerous is usually very opulent; he would hardly have such influence he were not opulent: what he wants is not money, but 'position.' a governorship of the bank of england he would take almost without salary; perhaps he would even pay to get it: but a minor office of essential subordination would not attract him at all. we may augment the pay enough to get a good man, without fearing that by such pay we may tempt--as by social privilege we should tempt--exactly the sort of man we do not want. undoubtedly such a permanent official should be a trained banker. there is a cardinal difference between banking and other kinds of commerce; you can afford to run much less risk in banking than in commerce, and you must take much greater precautions. in common business, the trader can add to the cost price of the goods he sells a large mercantile profit, say 10 to 15 per cent; but the banker has to be content with the interest of money, which in england is not so much as per cent upon the average. the business of a banker therefore cannot bear so many bad debts as that of a merchant, and he must be much more cautious to whom he gives credit. real money is a commodity much more coveted than common goods: for one deceit which is attempted on a manufacturer or a merchant, twenty or more are attempted on a banker. and besides, a banker, dealing with the money of others, and money payable on demand, must be always, as it were, looking behind him and seeing that he has reserve enough in store if payment should be asked for, which a merchant dealing mostly with his own capital need not think of. adventure is the life of commerce, but caution, i had almost said timidity, is the life of banking; and i cannot imagine that the long series of great errors made by the bank of england in the management of its reserve till after 1857, would have been possible if the merchants in the bank court had not erroneously taken the same view of the bank's business that they must properly take of their own mercantile business. the bank directors have almost always been too cheerful as to the bank's business, and too little disposed to take alarm. what we want to introduce into the bank court is a wise apprehensiveness, and this every trained banker is taught by the habits of his trade, and the atmosphere of his life. the permanent governor ought to give his whole time to the business of the bank. he ought to be forbidden to engage in any other concern. all the present directors, including the governor and deputy-governor, are engaged in their own business, and it is very possible, indeed it must perpetually have happened, that their own business as merchants most occupied the minds of most of them just when it was most important that the business of the bank should occupy them. it is at a panic and just before a panic that the business of the bank is most exacting and most engrossing. but just at that time the business of most merchants must be unusually occupying and may be exceedingly critical. by the present constitution of the bank, the attention of its sole rulers is most apt to be diverted from the bank's affairs just when those affairs require that attention the most. and the only remedy is the appointment of a permanent and influential man, who will have no business save that of the bank, and who therefore presumably will attend most to it at the critical instant when attention is most required. his mind, at any rate, will in a panic be free from pecuniary anxiety, whereas many, if not all, of the present directors must be incessantly thinking of their own affairs and unable to banish them from their minds. the permanent deputy-governor must be a director and a man of fair position. he must not have to say 'sir' to the governor. there is no fair argument between an inferior who has to exhibit respect and a superior who has to receive respect. the superior can always, and does mostly, refute the bad arguments of his inferior; but the inferior rarely ventures to try to refute the bad arguments of his superior. and he still more rarely states his case effectually; he pauses, hesitates, does not use the best word or the most apt illustration, perhaps he uses a faulty illustration or a wrong word, and so fails because the superior immediately exposes him. important business can only be sufficiently discussed by persons who can say very much what they like very much as they like to one another. the thought of the speaker should come out as it was in his mind, and not be hidden in respectful expressions or enfeebled by affected doubt. what is wanted at the bank is not a new clerk to the directors--they have excellent clerks of great experience now--but a permanent equal to the directors, who shall be able to discuss on equal terms with them the business of the bank, and have this advantage over them in discussion, that he has no other business than that of the bank to think of. the formal duties of such a permanent officer could only be defined by some one conversant with the business of the bank, and could scarcely be intelligibly discussed before the public. nor are the precise duties of the least importance. such an officer, if sound, able, and industrious, would soon rule the affairs of the bank. he would be acquainted better than anyone else, both with the traditions of the past and with the facts of the present; he would have a great experience; he would have seen many anxious times; he would always be on the watch for their recurrence. and he would have a peculiar power of guidance at such moments from the nature of the men with whom he has most to deal. most governors of the bank of england are cautious merchants, not profoundly skilled in banking, but most anxious that their period of office should be prosperous and that they should themselves escape censure. if a 'safe' course is pressed upon them they are likely to take that course. now it would almost always be 'safe' to follow the advice of the great standing 'authority'; it would always be most 'unsafe' not to follow it. if the changing governor act on the advice of the permanent deputy-governor, most of the blame in case of mischance would fall on the latter; it would be said that a shifting officer like the governor might very likely not know what should be done, but that the permanent official was put there to know it and paid to know it. but if, on the other hand, the changing governor should disregard the advice of his permanent colleague, and the consequence should be bad, he would be blamed exceedingly. it would be said that, 'being without experience, he had taken upon him to overrule men who had much experience; that when the constitution of the bank had provided them with skilled counsel, he had taken on himself to act of his own head, and to disregard that counsel;' and so on ad infinitum. and there could be no sort of conversation more injurious to a man in the city; the world there would say, rightly or wrongly, 'we must never be too severe on errors of judgment; we are all making them every day; if responsible persons do their best we can expect no more. but this case is different: the governor acted on a wrong system; he took upon himself an unnecessary responsibility:' and so a governor who incurred disaster by disregarding his skilled counsellor would be thought a fool in the city for ever. in consequence, the one skilled counsellor would in fact rule the bank. i believe that the appointment of the new permanent and skilled authority at the bank is the greatest reform which can be made there, and that which is most wanted. i believe that such a person would give to the decision of the bank that foresight, that quickness, and that consistency in which those decisions are undeniably now deficient. as far as i can judge, this change in the constitution of the bank is by far the most necessary, and is perhaps more important even than all other changes. but, nevertheless, we should reform the other points which we have seen to be defective. first, the london bankers should not be altogether excluded from the court of directors. the old idea, as i have explained, was that the london bankers were the competitors of the bank of england, and would hurt it if they could. but now the london bankers have another relation to the bank which did not then exist, and was not then imagined. among private people they are the principal depositors in the bank; they are therefore particularly interested in its stability; they are especially interested in the maintenance of a good banking reserve, for their own credit and the safety of their large deposits depend on it. and they can bring to the court of directors an experience of banking itself, got outside the bank of england, which none of the present directors possess, for they have learned all they know of banking at the bank itself. there was also an old notion that the secrets of the bank would be divulged if they were imparted to bankers. but probably bankers are better trained to silence and secrecy than most people. and there is only a thin partition now between the bankers and the secrets of the bank. only lately a firm failed of which one partner was a director of the london and westminster bank, and another a director of the bank of england. who can define or class the confidential communications of such persons under such circumstances? as i observed before, the line drawn at present against bankers is very technical and exclusively english. according to continental ideas, messrs. rothschild are bankers, if any one is a banker. but the house of rothschild is represented on the bank direction. and it is most desirable that it should be represented, for members of that firm can give if they choose confidential information of great value to the bank. but, nevertheless, the objection which is urged against english bankers is at least equally applicable to these foreign bankers. they have, or may have, at certain periods an interest opposite to the policy of the bank. as the greatest exchange dealers, they may wish to export gold just when the bank of england is raising its rate of interest to prevent anyone from exporting gold. the vote of a great exchange dealer might be objected to for plausible reasons of contrary interest, if any such reasons were worth regarding. but in fact the particular interest of single directors is not to be regarded; almost all directors who bring special information labour under a suspicion of interest; they can only have acquired that information in present business, and such business may very possibly be affected for good or evil by the policy of the bank. but you must not on this account seal up the bank hermetically against living information; you must make a fair body of directors upon the whole, and trust that the bias of some individual interests will disappear and be lost in the whole. and if this is to be the guiding principle, it is not consistent to exclude english bankers from the court. objection is often also taken to the constitution of the committee of treasury. that body is composed of the governor and deputy-governor and all the directors who have held those offices; but as those offices in the main pass in rotation, this mode of election very much comes to an election by seniority, and there are obvious objections to giving, not only a preponderance to age, but a monopoly to age. in some cases, indeed, this monopoly i believe has already been infringed. when directors have on account of the magnitude of their transactions, and the consequent engrossing nature of their business, declined to fill the chair, in some cases they have been asked to be members of the committee of treasury notwithstanding. and it would certainly upon principle seem wiser to choose a committee which for some purposes approximates to a committee of management by competence rather than by seniority. an objection is also taken to the large number of bank directors. there are twenty-four directors, a governor and a deputy-governor, making a total court of twenty-six persons, which is obviously too large for the real discussion of any difficult business. and the case is worse because the court only meets once a week, and only sits a very short time. it has been said, with exaggeration, but not without a basis of truth, that if the bank directors were to sit for four hours, there would be 'a panic solely from that.' 'the court,' says mr. tooke, 'meets at half-past eleven or twelve; and, if the sitting be prolonged beyond half-past one, the stock exchange and the money market become excited, under the idea that a change of importance is under discussion; and persons congregate about the doors of the bank parlour to obtain the earliest intimation of the decision.' and he proceeds to conjecture that the knowledge of the impatience without must cause haste, if not impatience, within. that the decisions of such a court should be of incalculable importance is plainly very strange. there should be no delicacy as to altering the constitution of the bank of england. the existing constitution was framed in times that have passed away, and was intended to be used for purposes very different from the present. the founders may have considered that it would lend money to the government, that it would keep the money of the government, that it would issue notes payable to bearer, but that it would keep the 'banking reserve' of a great nation no one in the seventeenth century imagined. and when the use to which we are putting an old thing is a new use, in common sense we should think whether the old thing is quite fit for the use to which we are setting it. 'putting new wine into old bottles' is safe only when you watch the condition of the bottle, and adapt its structure most carefully. chapter ix. the joint stock banks. the joint stock banks of this country are a most remarkable success. generally speaking the career of joint stock companies in this country has been chequered. adam smith, many years since, threw out many pregnant hints on the difficulty of such undertakings--hints which even after so many years will well repay perusal. but joint stock banking has been an exception to this rule. four years ago i threw together the facts on the subject and the reasons for them; and i venture to quote the article, because subsequent experience suggests, i think, little to be added to it. 'the main classes of joint stock companies which have answered are three:--1st. those in which the capital is used not to work the business but to guarantee the business. thus a banker's business--his proper business--does not begin while he is using his own money: it commences when he begins to use the capital of others. an insurance office in the long run needs no capital; the premiums which are received ought to exceed the claims which accrue. in both cases, the capital is wanted to assure the public and to induce it to trust the concern. 2ndly. those companies have answered which have an exclusive privilege which they have used with judgment, or which possibly was so very profitable as to enable them to thrive with little judgment. 3rdly. those which have undertaken a business both large and simple--employing more money than most individuals or private firms have at command, and yet such that, in adam smith's words, "the operations are capable of being reduced to a routine or such an uniformity of method as admits of no variation." 'as a rule, the most profitable of these companies are banks. indeed, all the favouring conditions just mentioned concur in many banks. an old-established bank has a "prestige," which amounts to a "privileged opportunity"; though no exclusive right is given to it by law, a peculiar power is given to it by opinion. the business of banking ought to be simple; if it is hard it is wrong. the only securities which a banker, using money that he may be asked at short notice to repay, ought to touch, are those which are easily saleable and easily intelligible. if there is a difficulty or a doubt, the security should be declined. no business can of course be quite reduced to fixed rules. there must be occasional cases which no pre-conceived theory can define. but banking comes as near to fixed rules certainly as any existing business, perhaps as any possible business. the business of an old-established bank has the full advantage of being a simple business, and in part the advantage of being a monopoly business. competition with it is only open in the sense in which competition with "the london tavern" is open; anyone that has to do with either will pay dear for it. 'but the main source of the profitableness of established banking is the smallness of the requisite capital. being only wanted as a "moral influence," it need not be more than is necessary to secure that influence. although, therefore, a banker deals only with the most sure securities, and with those which yield the least interest, he can nevertheless gain and divide a very large profit upon his own capital, because the money in his hands is so much larger than that capital. 'experience, as shown by plain figures, confirms these conclusions. we print at the end of this article the respective profits of 110 banks in england, and scotland, and ireland, being all in those countries of which we have sufficient information--the bank of england excepted. there are no doubt others, but they are not quoted even on local stock exchange lists, and in most cases publish no reports. the result of these banks, as regards the dividends they pay, is- no. of companies capital l above 20 per cent 15 5,302,767 between 15 and 20 per cent 20 5,439,439 " 10 and 15 per cent 36 14,056,950 " 5 and 10 per cent 36 14,182,379 under 5 per cent 3 1,350,000 ---------------- 110 40,331,535 that is to say, above 25 per cent of the capital employed in these banks pays over 15 per cent, and 62 1/2 per cent of the capital pays more than 10 per cent. so striking a result is not to be shown in any other joint stock trade. 'the period to which these accounts refer was certainly not a particularly profitable one--on the contrary, it has been specially unprofitable. the rate of interest has been very low, and the amount of good security in the market small. many banks--to some extent most banks--probably had in their books painful reminiscences of 1866. the fever of excitement which passed over the nation was strongest in the classes to whom banks lent most, and consequently the losses of even the most careful banks (save of those in rural and sheltered situations) were probably greater than usual. but even tried by this very unfavourable test banking is a trade profitable far beyond the average of trades. 'there is no attempt in these banks on the whole and as a rule to divide too much--on the contrary, they have accumulated about 13,000,000 l., or nearly 1/3 rd of their capital, principally out of undivided profits. the directors of some of them have been anxious to put away as much as possible and to divide as little as possible. 'the reason is plain; out of the banks which pay more than 20 per cent, all but one were old-established banks, and all those paying between 15 and 20 per cent were old banks too. the "privileged opportunity" of which we spoke is singularly conspicuous in such figures; it enables banks to pay much, which without it would not have paid much. the amount of the profit is clearly proportional to the value of the "privileged opportunity." all the banks which pay above 20 per cent, save one, are banks more than 25 years old; all those which pay between 15 and 20 are so too. a new bank could not make these profits, or even by its competition much reduce these profits; in attempting to do so, it would simply ruin itself. not possessing the accumulated credit of years, it would have to wind up before it attained that credit. 'the value of the opportunity too is proportioned to what has to be paid for it. some old banks have to pay interest for all their money; some have much for which they pay nothing. those who give much to their customers have of course less left for their shareholders. thus scotland, where there is always a daily interest, has no bank in the lists paying over 15 per cent. the profits of scotch banks run thus: capital dividend l bank of scotland 1,500,000 12 british linen company 1,000,000 3 caledonian 125,000 10 clydesdale 900,000 10 commercial bank of scotland 1,000,000 13 national bank of scotland 1,000,000 112 north of scotland 280,000 10 union bank of scotland 1,000,000 10 city of glasgow 870,000 8 royal bank 2,000,000 8 -------- 9,675,000 good profits enough, but not at all like the profits of the london and westminster, or the other most lucrative banks of the south. 'the bank of england, it is true, does not seem to pay so much as other english banks in this way of reckoning. it makes an immense profit, but then its capital is immense too. in fact, the bank of england suffers under two difficulties. being much older than the other joint stock banks, it belongs to a less profitable era. when it was founded, banks looked rather to the profit on their own capital, and to the gains of note issue than to the use of deposits. the first relations with the state were more like those of a finance company than of a bank, as we now think of banking. if the bank had not made loans to the government, which we should now think dubious, the bank would not have existed, for the government would never have permitted it. not only is the capital of the bank of england relatively greater, but the means of making profit in the bank of england are relatively less also. by custom and understanding the bank of england keep a much greater reserve in unprofitable cash than other banks; if they do not keep it, either our whole system must be changed or we should break up in utter bankruptcy. the earning faculty of the bank of england is in proportion less than that of other banks, and also the sum on which it has to pay dividend is altogether greater than theirs. 'it is interesting to compare the facts of joint stock banking with the fears of it which were felt. in 1832, lord overstone observed: "i think that joint stock banks are deficient in everything requisite for the conduct of the banking business except extended responsibility; the banking business requires peculiarly persons attentive to all its details, constantly, daily, and hourly watchful of every transaction, much more than mercantile or trading business. it also requires immediate prompt decisions upon circumstances when they arise, in many cases a decision that does not admit of delay for consultation; it also requires a discretion to be exercised with reference to the special circumstances of each case. joint stock banks being of course obliged to act through agents and not by a principal, and therefore under the restraint of general rules, cannot be guided by so nice a reference to degrees of difference in the character of responsibility of parties; nor can they undertake to regulate the assistance to be granted to concerns under temporary embarrassment by so accurate a reference to the circumstances, favourable or unfavourable, of each case." 'but in this very respect, joint stock banks have probably improved the business of banking. the old private banks in former times used to lend much to private individuals; the banker, as lord overstone on another occasion explained, could have no security, but he formed his judgment of the discretion, the sense, and the solvency of those to whom he lent. and when london was by comparison a small city, and when by comparison everyone stuck to his proper business, this practice might have been safe. but now that london is enormous and that no one can watch anyone, such a trade would be disastrous; at present, it would hardly be safe in a country town. the joint stock banks were quite unfit for the business lord overstone meant, but then that business is quite unfit for the present time. this success of joint stock banking is very contrary to the general expectation at its origin. not only private bankers, such as lord overstone then was, but a great number of thinking persons feared that the joint stock banks would fast ruin themselves, and then cause a collapse and panic in the country. the whole of english commercial literature between 1830 and 1840 is filled with that idea. nor did it cease in 1840. so late as 1845, sir r. peel thought the foundation of joint stock banks so dangerous that he subjected it to grave and exceptional difficulty. under the act of 1845, which he proposed, no such companies could be founded except with shares of 100 l. with 50 l.; paid up on each; which effectually checked the progress of such banks, for few new ones were established for many years, or till that act had been repealed. but in this, as in many other cases, perhaps sir r. peel will be found to have been clear-sighted rather than far-sighted. he was afraid of certain joint stock banks which he saw rising around him; but the effect of his legislation was to give to these very banks, if not a monopoly, at any rate an exemption from new rivals. no one now founds or can found a new private bank, and sir r. peel by law prevented new joint stock banks from being established. though he was exceedingly distrustful of the joint stock banks founded between 1826 and 1845, yet in fact he was their especial patron, and he more than any other man encouraged and protected them. but in this wonderful success there are two dubious points, two considerations of different kinds, which forbid us to say that in other countries, even in countries with the capacity of co-operation, joint stock banks would succeed as well as we have seen that they succeed in england. 1st. these great banks have not had to keep so large a reserve against their liabilities as it was natural that they should, being of first-rate magnitude, keep. they were at first, of course, very small in comparison with what they are now. they found a number of private bankers grouped round the bank of england, and they added themselves to the group. not only did they keep their reserve from the beginning at the bank of england, but they did not keep so much reserve as they would have kept if there had been no bank of england. for a long time this was hardly noticed. for many years questions of the 'currency,' particularly questions as to the act of 1844, engrossed the attention of all who were occupied with these subjects. even those who were most anxious to speak evil of joint stock banks, did not mention this particular evil. the first time, as far as i know, that it was commented on in any important document, was in an official letter written in 1857 by mr. weguelin, who was then governor of the bank, to sir george lewis, who was then chancellor of the exchequer. the governor and the directors of the bank of england had been asked by sir george lewis severally to give their opinions on the act of 1844, and all their replies were published. in his, mr. weguelin says: 'if the amount of the reserve kept by the bank of england be contrasted with the reserve kept by the joint stock banks, a new and hitherto little considered source of danger to the credit of the country will present itself. the joint stock banks of london, judging by their published accounts, have deposits to the amount of 30,000,000 l. their capital is not more than 3,000,000 l., and they have on an average 31,000,000 l., invested in one way or another, leaving only 2,000,000 l. as a reserve against all this mass of liabilities.' but these remarkable words were little observed in the discussions of that time. the air was obscured by other matters. but in this work i have said so much on the subject that i need say little now. the joint stock banks now keep a main part of their reserve on deposit with the bill-brokers, or in good and convertible interest-bearing securities. from these they obtain a large income, and that income swells their profits. if they had to keep a much larger part than now of that reserve in barren cash, their dividends would be reduced, and their present success would become less conspicuous. the second misgiving, which many calm observers more and more feel as to our largest joint stock banks, fastens itself on their government. is that government sufficient to lend well and keep safe so many millions? they are governed, as every one knows, by a board of directors, assisted by a general manager, and there are in london unrivalled materials for composing good boards of directors. there are very many men of good means, of great sagacity and great experience in business, who are obliged to be in the city every day, and to remain there during the day, but who have very much time on their hands. a merchant employing solely or principally his own capital has often a great deal of leisure. he is obliged to be on the market, and to hear what is doing. every day he has some business to transact, but his transactions can be but few. his capital can bear only a limited number of purchases; if he bought as much as would fill his time from day to day he would soon be ruined, for he could not pay for it. accordingly, many excellent men of business are quite ready to become members of boards of directors, and to attend to the business of companies, a good deal for the employment's sake. to have an interesting occupation which brings dignity and power with it pleases them very much. as the aggregation of commerce in great cities grows, the number of such men augments. a council of grave, careful, and experienced men can, without difficulty, be collected for a great bank in london, such as never could have been collected before, and such as cannot now be collected elsewhere. there are facilities, too, for engaging a good banker to be a manager such as there never were before in the world. the number of such persons is much on the increase. any careful person who is experienced in figures, and has real sound sense, may easily make himself a good banker. the modes in which money can be safely lent by a banker are not many, and a clear-headed, quiet, industrious person may soon learn all that is necessary about them. our intricate law of real property is an impediment in country banking, for it requires some special study even to comprehend the elements of a law which is full of technical words, and which can only be explained by narrating its history. but the banking of great cities is little concerned with loans on landed property. and all the rest of the knowledge requisite for a banker can easily be obtained by anyone who has the sort of mind which takes to it. no doubt there is a vast routine of work to be learned, and the manager of a large bank must have a great facility in transacting business rapidly. but a great number of persons are now bred from their earliest manhood in the very midst of that routine; they learn it as they would learn a language, and come to be no more able to unlearn it than they could unlearn a language. and the able ones among them acquire an almost magical rapidity in effecting the business connected with that routine. a very good manager and very good board of directors can, without unreasonable difficulty, be provided for a bank at present in london. it will be asked, what more can be required? i reply, a great deal. all which the best board of directors can really accomplish, is to form a good decision on the points which the manager presents to them, and perhaps on a few others which one or two zealous members of their body may select for discussion. a meeting of fifteen or eighteen persons is wholly unequal to the transaction of more business than this; it will be fortunate, and it must be well guided, if it should be found to be equal to so much. the discussion even of simple practical points by such a number of persons is a somewhat tedious affair. many of them will wish to speak on every decision of moment, and some of them--some of the best of them perhaps--will only speak with difficulty and slowly. very generally, several points will be started at once, unless the discussion is strictly watched by a rigid chairman; and even on a single point the arguments will often raise grave questions which cannot be answered, and suggest many more issues than can be advantageously decided by the meeting. the time required by many persons for discussing many questions, would alone prevent an assembly of many persons from overlooking a large and complicated business. nor is this the only difficulty. not only would a real supervision of a large business by a board of directors require much more time than the board would consent to occupy in meeting, it would also require much more time and much more thought than the individual directors would consent to give. these directors are only employing on the business of the bank the vacant moments of their time, and the spare energies of their minds. they cannot give the bank more; the rest is required for the safe conduct of their own affairs, and if they diverted it from these affairs they would be ruined. a few of them may have little other business, or they may have other partners in the business, on whose industry they can rely, and whose judgment they can trust; one or two may have retired from business. but for the most part, directors of a company cannot attend principally and anxiously to the affairs of a company without so far neglecting their own business as to run great risk of ruin; and if they are ruined, their trustworthiness ceases, and they are no longer permitted by custom to be directors. nor, even if it were possible really to supervise a business by the effectual and constant inspection of fifteen or sixteen rich and capable persons, would even the largest business easily bear the expense of such a supervision. i say rich, because the members of a board governing a large bank must be men of standing and note besides, or they would discredit the bank; they need not be rich in the sense of being worth millions, but they must be known to possess a fair amount of capital and be seen to be transacting a fair quantity of business. but the labour of such persons, i do not say their spare powers, but their principal energies, fetches a high price. business is really a profession often requiring for its practice quite as much knowledge, and quite as much skill, as law and medicine; and requiring also the possession of money. a thorough man of business, employing a fair capital in a trade, which he thoroughly comprehends, not only earns a profit on that capital, but really makes of his professional skill a large income. he has a revenue from talent as well as from money; and to induce sixteen or eighteen persons to abandon such a position and such an income in order to devote their entire attention to the affairs of a joint stock company, a salary must be given too large for the bank to pay or for anyone to wish to propose. and an effectual supervision by the whole board being impossible, there is a great risk that the whole business may fall to the general manager. many unhappy cases have proved this to be very dangerous. even when the business of joint stock banks was far less, and when the deposits entrusted to them were very much smaller, a manager sometimes committed frauds which were dangerous, and still oftener made mistakes that were ruinous. actual crime will always be rare; but, as an uninspected manager of a great bank has the control of untold millions, sometimes we must expect to see it: the magnitude of the temptation will occasionally prevail over the feebleness of human nature. but error is far more formidable than fraud: the mistakes of a sanguine manager are, far more to be dreaded than the theft of a dishonest manager. easy misconception is far more common than long-sighted deceit. and the losses to which an adventurous and plausible manager, in complete good faith, would readily commit a bank, are beyond comparison greater than any which a fraudulent manager would be able to conceal, even with the utmost ingenuity. if the losses by mistake in banking and the losses by fraud were put side by side, those by mistake would be incomparably the greater. there is no more unsafe government for a bank than that of an eager and active manager, subject only to the supervision of a numerous board of directors, even though that board be excellent, for the manager may easily glide into dangerous and insecure transactions, nor can the board effectually check him. the remedy is this: a certain number of the directors, either those who have more spare time than others, or those who are more ready to sell a large part of their time to the bank, must be formed into a real working committee, which must meet constantly, must investigate every large transaction, must be acquainted with the means and standing of every large borrower, and must be in such incessant communication with the manager that it will be impossible for him to engage in hazardous enterprises of dangerous magnitude without their knowing it and having an opportunity of forbidding it. in almost all cases they would forbid it; all committees are cautious, and a committee of careful men of business, picked from a large city, will usually err on the side of caution if it err at all. the daily attention of a small but competent minor council, to whom most of the powers of the directors are delegated, and who, like a cabinet, guide the deliberations of the board at its meetings, is the only adequate security of a large bank from the rash engagements of a despotic and active general manager. fraud, in the face of such a committee, would probably never be attempted, and even now it is a rare and minor evil. some such committees are vaguely known to exist in most, if not all, our large joint stock banks. but their real constitution is not known. no customer and no shareholder knows the names of the managing committee, perhaps, in any of these large banks. and this is a grave error. a large depositor ought to be able to ascertain who really are the persons that dispose of his money; and still more a large shareholder ought not to rest till he knows who it is that makes engagements on his behalf, and who it is that may ruin him if they choose. the committee ought to be composed of quiet men of business, who can be ascertained by inquiry to be of high character and well-judging mind. and if the public and the shareholder knew that there was such a committee, they would have sufficient reasons for the confidence which now is given without such reasons. a certain number of directors attending daily by rotation is, it should be said, no substitute for a permanent committee. it has no sufficient responsibility. a changing body cannot have any responsibility. the transactions which were agreed to by one set of directors present on the monday might be exactly those which would be much disapproved by directors present on the wednesday. it is essential to the decisions of most business, and not least of the banking business, that they should be made constantly by the same persons; the chain of transactions must pass through the same minds. a large business may be managed tolerably by a quiet group of second-rate men if those men be always the same; but it cannot be managed at all by a fluctuating body, even of the very cleverest men. you might as well attempt to guide the affairs of the nation by means of a cabinet similarly changing. our great joint stock bands are imprudent in so carefully concealing the details of their government, and in secluding those details from the risk of discussion. the answer, no doubt will be, 'let well alone; as you have admitted, there hardly ever before was so great a success as these banks of ours: what more do you or can you want?' i can only say that i want further to confirm this great success and to make it secure for the future. at present there is at least the possibility of a great reaction. supposing that, owing to defects in its government, one even of the greater london joint stock banks failed, there would be an instant suspicion of the whole system. one _terra incognita_ being seen to be faulty, every other _terra incognita_ would be suspected. if the real government of these banks had for years been known, and if the subsisting banks had been known not to be ruled by the bad mode of government which had ruined the bank that had fallen, then the ruin of that bank would not be hurtful. the other banks would be seen to be exempt from the cause which had destroyed it. but at present the ruin of one of these great banks would greatly impair the credit of all. scarcely any one knows the precise government of any one; in no case has that government been described on authority; and the fall of one by grave misgovernment would be taken to show that the others might as easily be misgoverned also. and a tardy disclosure even of an admirable constitution would not much help the surviving banks: as it was extracted by necessity, it would be received with suspicion. a sceptical world would say 'of course they say they are all perfect now; it would not do for them to say anything else.' and not only the depositors and the shareholders of these large banks have a grave interest in their good government, but the public also. we have seen that our banking reserve is, as compared with our liabilities, singularly small; we have seen that the rise of these great banks has lessened the proportion of that reserve to those liabilities; we have seen that the greatest strain on the banking reserve is a 'panic.' now, no cause is more capable of producing a panic, perhaps none is so capable, as the failure of a first-rate joint stock bank in london. such an event would have something like the effect of the failure of overend, gurney and co.; scarcely any other event would have an equal effect. and therefore, under the existing constitution of our banking system the government of these great banks is of primary importance to us all. chapter x. the private banks. perhaps some readers of the last part of the last chapter have been inclined to say that i must be a latent enemy to joint stock banking. at any rate, i have pointed out what i think grave defects in it. but i fear that a reader of this chapter may, on like grounds, suppose that i am an enemy to private banking. and i can only hope that the two impressions may counteract one another, and may show that i do not intend to be unfair. i can imagine nothing better in theory or more successful in practice than private banks as they were in the beginning. a man of known wealth, known integrity, and known ability is largely entrusted with the money of his neighbours. the confidence is strictly personal. his neighbours know him, and trust him because they know him. they see daily his manner of life, and judge from it that their confidence is deserved. in rural districts, and in former times, it was difficult for a man to ruin himself except at the place in which he lived; for the most part he spent his money there, and speculated there if he speculated at all. those who lived there also would soon see if he was acting in a manner to shake their confidence. even in large cities, as cities then were, it was possible for most persons to ascertain with fair certainty the real position of conspicuous persons, and to learn all which was material in fixing their credit. accordingly the bankers who for a long series of years passed successfully this strict and continual investigation, became very wealthy and very powerful. the name 'london banker' had especially a charmed value. he was supposed to represent, and often did represent, a certain union of pecuniary sagacity and educated refinement which was scarcely to be found in any other part of society. in a time when the trading classes were much ruder than they now are, many private bankers possessed variety of knowledge and a delicacy of attainment which would even now be very rare. such a position is indeed singularly favourable. the calling is hereditary; the credit of the bank descends from father to son: this inherited wealth soon begins inherited refinement. banking is a watchful, but not a laborious trade. a banker, even in large business, can feel pretty sure that all his transactions are sound, and yet have much spare mind. a certain part of his time, and a considerable part of his thoughts, he can readily devote to other pursuits. and a london banker can also have the most intellectual society in the world if he chooses it. there has probably very rarely ever been so happy a position as that of a london private banker; and never perhaps a happier. it is painful to have to doubt of the continuance of such a class, and yet, i fear, we must doubt of it. the evidence of figures is against it. in 1810 there were 40 private banks in lombard street admitted to the clearing-house: there now are only 3. though the business of banking has increased so much since 1810, this species of banks is fewer in number than it was then. nor is this the worst. the race is not renewed. there are not many recognised impossibilities in business, but everybody admits 'that you cannot found a new private bank.' no such has been founded in london, or, as far as i know, in the country, for many years. the old ones merge or die, and so the number is lessened; but no new ones begin so as to increase that number again. the truth is that the circumstances which originally favoured the establishment of private banks have now almost passed away. the world has become so large and complicated that it is not easy to ascertain who is rich and who is poor. no doubt there are some enormously wealthy men in england whose means everybody has heard of, and has no doubt of. but these are not the men to incur the vast liabilities of private banking. if they were bred in it they might stay in it; but they would never begin it for themselves. and if they did, i expect people would begin to doubt even of their wealth. it would be said, 'what does a b go into banking for? he cannot be as rich as we thought.' a millionaire commonly shrinks from liability, and the essence of great banking is great liability. no doubt there are many 'second-rate' rich men, as we now count riches, who would be quite ready to add to their income the profit of a private bank if only they could manage it. but unluckily they cannot manage it. their wealth is not sufficiently familiar to the world; they cannot obtain the necessary confidence. no new private bank is founded in england because men of first-rate wealth will not found one, and men not of absolutely first-rate wealth cannot. in the present day, also, private banking is exposed to a competition against which in its origin it had not to struggle. owing to the changes of which i have before spoken, joint stock banking has begun to compete with it. in old times this was impossible; the bank of england had a monopoly in banking of the principle of association. but now large joint stock banks of deposit are among the most conspicuous banks in lombard street. they have a large paid-up capital and intelligible published accounts; they use these as an incessant advertisement, in a manner in which no individual can use his own wealth. by their increasing progress they effectually prevent the foundation of any new private bank. the amount of the present business of private banks is perfectly unknown. their balance sheets are effective secrets--rigidly guarded. but none of them, except a few of the largest, are believed at all to gain business. the common repute of lombard street might be wrong in a particular case, but upon the general doctrine it is almost sure to be right. there are a few well-known exceptions, but according to universal belief the deposits of most private bankers in london tend rather to diminish than to increase. as to the smaller banks, this naturally would be so. a large bank always tends to become larger, and a small one tends to become smaller. people naturally choose for their banker the banker who has most present credit, and the one who has most money in hand is the one who possesses such credit. this is what is meant by saying that a long established and rich bank has a 'privileged opportunity'; it is in a better position to do its business than any one else is; it has a great advantage over old competitors and an overwhelming superiority over new comers. new people coming into lombard street judge by results; they give to those who have: they take their money to the biggest bank because it is the biggest. i confess i cannot, looking far forward into the future, expect that the smaller private banks will maintain their ground. their old connections will not leave them; there will be no fatal ruin, no sudden mortality. but the tide will gently ebb, and the course of business will be carried elsewhere. sooner or later, appearances indicate, and principle suggests, that the business of lombard street will be divided between the joint stock banks and a few large private banks. and then we have to ask ourselves the question, can those large private banks be permanent? i am sure i should be very sorry to say that they certainly cannot, but at the same time i cannot be blind to the grave difficulties which they must surmount. in the first place, an hereditary business of great magnitude is dangerous. the management of such a business needs more than common industry and more than common ability. but there is no security at all that these will be regularly continued in each generation. the case of overend, gurney and co., the model instance of all evil in business, is a most alarming example of this evil. no cleverer men of business probably (cleverer i mean for the purposes of their particular calling) could well be found than the founders and first managers of that house. but in a very few years the rule in it passed to a generation whose folly surpassed the usual limit of imaginable incapacity. in a short time they substituted ruin for prosperity and changed opulence into insolvency. such great folly is happily rare; and the business of a bank is not nearly as difficult as the business of a discount company. still much folly is common, and the business of a great bank requires a great deal of ability, and an even rarer degree of trained and sober judgment. that which happened so marvelously in the green tree may happen also in the dry. a great private bank might easily become very rotten by a change from discretion to foolishness in those who conduct it. we have had as yet in london, happily, no example of this; indeed, we have hardly as yet had the opportunity. till now private banks have been small; small as we now reckon banks. for their exigencies a moderate degree of ability and an anxious caution will suffice. but if the size of the banks is augmented and greater ability is required, the constant difficulty of an hereditary government will begin to be felt. 'the father had great brains and created the business: but the son had less brains and lost or lessened it.' this is the history of all great monarchies, and it may be the history of great private banks. the peculiarity in the case of overend, gurney and co. at least, one peculiarity is that the evil was soon discovered. the richest partners had least concern in the management; and when they found that incredible losses were ruining them, they stopped the concern and turned it into a company. but they had done nothing; if at least they had only prevented farther losses, the firm might have been in existence and in the highest credit now. it was the publicity of their losses which ruined them. but if they had continued to be a private partnership they need not have disclosed those losses: they might have written them off quietly out of the immense profits they could have accumulated. they had some ten millions of other people's money in their hands which no one thought of disturbing. the perturbation through the country which their failure caused in the end, shows how diffused and how unimpaired their popular reputation was. no one in the rural districts (as i know by experience) would ever believe a word against them, say what you might. the catastrophe came because at the change the partners in the old private firm--the gurney family especially--had guaranteed the new company against the previous losses: those losses turned out to be much greater than was expected. to pay what was necessary the 'gurneys' had to sell their estates, and their visible ruin destroyed the credit of the concern. but if there had been no such guarantee, and no sale of estates, if the great losses had slept a quiet sleep in a hidden ledger, no one would have been alarmed, and the credit and the business of 'overends' might have existed till now, and their name still continued to be one of our first names. the difficulty of propagating a good management by inheritance for generations is greatest in private banks and discount firms because of their essential secrecy. the danger may indeed be surmounted by the continual infusion of new and able partners. the deterioration of the old blood may be compensated by the excellent quality of the fresh blood. but to this again there is an objection, of little value perhaps in seeming, but of much real influence in practice. the infusion of new partners requires from the old partners a considerable sacrifice of income; the old must give up that which the new receive, and the old will not like this. the effectual remedy is so painful that i fear it often may be postponed too long. i cannot, therefore, expect with certainty the continuance of our system of private banking. i am sure that the days of small banks will before many years come to an end, and that the difficulties of large private banks are very important. in the mean time it is very important that large private banks should be well managed. and the present state of banking makes this peculiarly difficult. the detail of the business is augmenting with an overwhelming rapidity. more cheques are drawn year by year; not only more absolutely, but more by each person, and more in proportion to his income. the payments in, and payments out of a common account are very much more numerous than they formerly were. and this causes an enormous growth of detail. and besides, bankers have of late begun almost a new business. they now not only keep people's money, but also collect their incomes for them. many persons live entirely on the income of shares, or debentures, or foreign bonds, which is paid in coupons, and these are handed in for the bank to collect. often enough the debenture, or the certificate, or the bond is in the custody of the banker, and he is expected to see when the coupon is due, and to cut it off and transmit it for payment. and the detail of all this is incredible, and it needs a special machinery to cope with it. a large joint stock bank, if well-worked, has that machinery. it has at the head of the executive a general manager who was tried in the detail of banking, who is devoted to it, and who is content to live almost wholly in it. he thinks of little else, and ought to think of little else. one of his first duties is to form a hierarchy of inferior officers, whose respective duties are defined, and to see that they can perform and do perform those duties. but a private bank of the type usual in london has no such officer. it is managed by the partners; now these are generally rich men, are seldom able to grapple with great business of detail, and are not disposed to spend their whole lives and devote their entire minds to it if they were able. a person with the accumulated wealth, the education and the social place of a great london banker would be a 'fool so to devote himself. he would sacrifice a suitable and a pleasant life for an unpleasant and an unsuitable life. but still the detail must be well done; and some one must be specially chosen to watch it and to preside over it, or it will not be well done. until now, or until lately, this difficulty has not been fully felt. the detail of the business of a small private bank was moderate enough to be superintended effectually by the partners. but, as has been said, the detail of banking--the proportion of detail to the size of the bank--is everywhere increasing. the size of the private banks will have to augment if private banks are not to cease; and therefore the necessity of a good organisation for detail is urgent. if the bank grows, and simultaneously the detail grows in proportion to the bank, a frightful confusion is near unless care be taken. the only organisation which i can imagine to be effectual is that which exists in the antagonistic establishments. the great private banks will have, i believe, to appoint in some form or other, and under some name or other, some species of general manager who will watch, contrive, and arrange the detail for them. the precise shape of the organisation is immaterial; each bank may have its own shape, but the man must be there. the true business of the private partners in such a bank is much that of the directors in a joint stock bank. they should form a permanent committee to consult with their general manager, to watch him, and to attend to large loans and points of principle. they should not themselves be responsible for detail; if they do there will be two evils at once: the detail will be done badly, and the minds of those who ought to decide principal things will be distracted from those principal things. there will be a continual worry in the bank, and in a worry bad loans are apt to be made and money is apt to be lost. a subsidiary advantage of this organisation is that it would render the transition from private banking to joint stock banking easier, if that transition should be necessary. the one might merge in the other as convenience suggested and as events required. there is nothing intrusive in discussing this subject. the organisation of the private is just like that of the joint stock banks; all the public are interested that it should be good. the want of a good organisation may cause the failure of one or more of these banks; and such failure of such banks may intensify a panic, even if it should not cause one. chapter xi. the bill-brokers. under every system of banking, whether that in which the reserve is kept in many banks, or one in which it is kept in a single bank only, there will always be a class of persons who examine more carefully than busy bankers can the nature of different securities; and who, by attending only to one class, come to be particularly well acquainted with that class. and as these specially qualified dealers can for the most part lend much more than their own capital, they will always be ready to borrow largely from bankers and others, and to deposit the securities which they know to be good as a pledge for the loan. they act thus as intermediaries between the borrowing public and the less qualified capitalist; knowing better than the ordinary capitalist which loans are better and which are worse, they borrow from him, and gain a profit by charging to the public more than they pay to him. many stock brokers transact such business upon a great scale. they lend large sums on foreign bonds or railway shares or other such securities, and borrow those sums from bankers, depositing the securities with the bankers, and generally, though not always, giving their guarantee. but by far the greatest of these intermediate dealers are the bill-brokers. mercantile bills are an exceedingly difficult kind of security to understand. the relative credit of different merchants is a great 'tradition'; it is a large mass of most valuable knowledge which has never been described in books and is probably incapable of being so described. the subject matter of it, too, is shifting and changing daily; an accurate representation of the trustworthiness of houses at the beginning of a year might easily be a most fatal representation at the end of it. in all years there are great changes; some houses rise a good deal and some fall. and in some particular years the changes are immense; in years like 1871 many active men make so much money that at the end of the year they are worthy of altogether greater credit than anyone would have dreamed of giving to them at the beginning. on the other hand, in years like 1866 a contagious ruin destroys the trustworthiness of very many firms and persons, and often, especially, of many who stood highest immediately before. such years alter altogether an important part of the mercantile world: the final question of bill-brokers, 'which bills will be paid and which will not? which bills are second-rate and which first-rate?' would be answered very differently at the beginning of the year and at the end. no one can be a good bill-broker who has not learnt the great mercantile tradition of what is called 'the standing of parties' and who does not watch personally and incessantly the inevitable changes which from hour to hour impair the truth of that tradition. the 'credit' of a person--that is, the reliance which may be placed on his pecuniary fidelity--is a different thing from his property. no doubt, other things being equal, a rich man is more likely to pay than a poor man. but on the other hand, there are many men not of much wealth who are trusted in the market, 'as a matter of business,' for sums much exceeding the wealth of those who are many times richer. a firm or a person who have been long known to 'meet their engagements,' inspire a degree of confidence not dependent on the quantity of his or their property. persons who buy to sell again soon are often liable for amounts altogether much greater than their own capital; and the power of obtaining those sums depends upon their 'respectability,' their 'standing,' and their 'credit,' as the technical terms express it, and more simply upon the opinion which those who deal with them have formed of them. the principal mode in which money is raised by traders is by 'bills of exchange;' the estimated certainty of their paying those bills on the day they fall due is the measure of their credit; and those who estimate that liability best, the only persons indeed who can estimate it exceedingly well, are the bill-brokers. and these dealers, taking advantage of their peculiar knowledge, borrow immense sums from bankers and others; they generally deposit the bills as a security; and they generally give their own guarantee of the goodness of the bill: but neither of such practices indeed is essential, though both are the ordinary rule. when overends failed, as i have said before, they had borrowed in this way very largely. there are others now in the trade who have borrowed quite as much. as is usually the case, this kind of business has grown up only gradually. in the year 1810 there was no such business precisely answering to what we now call bill-broking in london. mr. richardson, the principal 'bill-broker' of the time, as the term was then understood, thus described his business to the 'bullion committee:' 'what is the nature of the agency for country banks?--it is twofold: in the first place to procure money for country bankers on bills when they have occasion to borrow on discount, which is not often the case; and in the next place, to lend the money for the country bankers on bills on discount. the sums of money which i lend for country bankers on discount are fifty times more than the sums borrowed for country bankers. 'do you send london bills into the country for discount?--yes. 'do you receive bills from the country upon london in return, at a date, to be discounted?--yes, to a very considerable amount, from particular parts of the country. 'are not both sets of bills by this means under discount?--no, the bills received from one part of the country are sent down to another part for discount. 'and they are not discounted in london?--no. in some parts of the country there is but little circulation of bills drawn upon london, as in norfolk, suffolk, essex, sussex, &c.; but there is there a considerable circulation in country bank-notes, principally optional notes. in lancashire there is little or no circulation of country bank-notes; but there is a great circulation of bills drawn upon london at two or three months' date. i receive bills to a considerable amount from lancashire in particular, and remit them to norfolk, suffolk, &c., where the bankers have large lodgments, and much surplus money to advance on bills for discount.' mr. richardson was only a broker who found money for bills and bills for money. he is further asked: 'do you guarantee the bills you discount, and what is your charge per cent?--no, we do not guarantee them; our charge is one-eighth per cent brokerage upon the bill discounted, but we make no charge to the lender of the money. 'do you consider that brokerage as a compensation for the skill which you exercise in selecting the bills which you thus get discounted?--yes, for selecting of the bills, writing letters, and other trouble. 'does the party who furnishes the money give you any kind of compensation?--none at all. 'does he not consider you as his agent, and in some degree responsible for the safety of the bills which you give him?--not at all. 'does he not prefer you on the score of his judging that you will give him good intelligence upon that subject?--yes, he relies upon us. 'do you then exercise a discretion as to the probable safety of the bills?--yes; if a bill comes to us which we conceive not to be safe, we return it. 'do you not then conceive yourselves to depend in a great measure for the quantity of business which you can perform on the favour of the party lending the money?--yes, very much so. if we manage our business well, we retain our friends; if we do not, we lose them.' it was natural enough that the owners of the money should not pay, though the owner of the bill did, for in almost all ages the borrower has been a seeker more or less anxious; he has always been ready to pay for those who will find him the money he is in search of. but the possessor of money has rarely been willing to pay anything; he has usually and rightly believed that the borrower would discover him soon. notwithstanding other changes, the distribution of the customers of the bill-brokers in different parts of the country still remains much as mr. richardson described it sixty years ago. for the most part, agricultural counties do not employ as much money as they save; manufacturing counties, on the other hand, can employ much more than they save; and therefore the money of norfolk or of somersetshire is deposited with the london bill-brokers, who use it to discount the bills of lancashire and yorkshire. the old practice of bill-broking, which mr. richardson describes, also still exists. there are many brokers to be seen about lombard street with bills which they wish to discount but which they do not guarantee. they have sometimes discounted these bills with their own capital, and if they can re-discount them at a slightly lower rate they gain a difference which at first seems but trifling, but with which they are quite content, because this system of lending first and borrowing again immediately enables them to turn their capital very frequently, and on a few thousand pounds of capital to discount hundreds of thousands of bills; as the transactions are so many, they can be content with a smaller profit on each. in other cases, these non-guaranteeing brokers are only agents who are seeking money for bills which they have undertaken to get discounted. but in either case, as far as the banker or other ultimate capitalist is concerned, the transaction is essentially that which mr. richardson describes. the loan by such banker is a re-discount of the bill; that banker cannot obtain repayment of that loan, except by the payment of the bill at maturity. he has no claim upon the agent who brought him the bill. bill-broking, in this which we may call its archaic form, is simply one of the modes in which bankers obtain bills which are acceptable to them and which they re-discount. no reference is made in it to the credit of the bill-broker; the bills being discounted 'without recourse' to him are as good if taken from a pauper as if taken from a millionaire. the lender exercises his own judgment on the goodness of the bill. but in modern bill-broking the credit of the bill-broker is a vital element. the lender considers that the bill-broker--no matter whether an individual, a company, or a firm--has considerable wealth, and he takes the 'bills,' relying that the broker would not venture that wealth by guaranteeing them unless he thought them good. the lender thinks, too, that the bill-broker being daily conversant with bills and bills only, knows probably all about bills: he lends partly in reliance on the wealth of the broker and partly in reliance on his skill. he does not exercise much judgment of his own on the bills deposited with him: he often does not watch them very closely. probably not one-thousandth part of the creditors on security of overend, gurney and co., had ever expected to have to rely on that security, or had ever given much real attention to it. sometimes, indeed, the confidence in the bill-brokers goes farther. a considerable number of persons lend to them, not only without much looking at the security but even without taking any security. this is the exact reverse of the practice which mr. richardson described in 1810; then the lender relied wholly on the goodness of the bill, now, in these particular cases, he relies solely on the bill-broker, and does not take a bill in any shape. nothing can be more natural or more inevitable than this change. it was certain that the bill-broker, being supposed to understand bills well, would be asked by the lenders to evince his reliance on the bills he offered by giving a guarantee for them. it was also most natural that the bill-brokers, having by the constant practice of this lucrative trade obtained high standing and acquired great wealth, should become, more or less, bankers too, and should receive money on deposit without giving any security for it. but the effects of the change have been very remarkable. in the practice as mr. richardson described it, there is no peculiarity very likely to affect the money market. the bill-broker brought bills to the banker, just as others brought them; nothing at all could be said as to it except that the bank must not discount bad bills, must not discount too many bills, and must keep a good reserve. but the modern practice introduces more complex considerations. in the trade of bill-broking, as it now exists, there is one great difficulty; the bill-broker has to pay interest for all the money which he receives. how this arose we have just seen. the present lender to the bill-broker at first always used to discount a bill, which is as much as saying that he was always a lender at interest. when he came to take the guarantee of the broker, and only to look at the bills as a collateral security, naturally he did not forego his interest: still less did he forego it when he ceased to take security at all. the bill-broker has, in one shape or other, to pay interest on every sixpence left with him, and that constant habit of giving interest has this grave consequence: the bill-broker cannot afford to keep much money unemployed. he has become a banker owing large sums which he may be called on to repay, but he cannot hold as much as an ordinary banker, or nearly as much, of such sums in cash, because the loss of interest would ruin him. competition reduces the rate which the bill-broker can charge, and raises the rate which the bill-broker must give, so that he has to live on a difference exceedingly narrow. and if he constantly kept a large hoard of barren money he would soon be found in the 'gazette.' the difficulty is aggravated by the terms upon which a great part of the money at the bill-brokers is deposited with them. very much of it is repayable at demand, or at very short notice. the demands on a broker in periods of alarm may consequently be very great, and in practice they often, are so. in times of panic there is always a very heavy call, if not a run upon them; and in consequence of the essential nature of their business, they cannot constantly keep a large unemployed reserve of their own in actual cash, they are obliged to ask help of some one who possesses that cash. by the conditions of his trade, the bill-broker is forced to belong to a class of 'dependent money-dealers,' as we may term them, that is, of dealers who do not keep their own reserve, and must, therefore, at every crisis of great difficulty revert to others. in a natural state of banking, that in which all the principal banks kept their own reserve, this demand of the bill-brokers and other dependent dealers would be one of the principal calls on that reserve. at every period of incipient panic the holders of it would perceive that it was of great importance to themselves to support these dependent dealers. if the panic destroyed those dealers it would grow by what it fed upon (as is its nature), and might probably destroy also the bankers, the holders of the reserve. the public terror at such times is indiscriminate. when one house of good credit has perished, other houses of equal credit though of different nature are in danger of perishing. the many holders of the banking reserve would under the natural system of banking be obliged to advance out of that reserve to uphold bill-brokers and similar dealers. it would be essential to their own preservation not to let such dealers fail, and the protection of such dealers would therefore be reckoned among the necessary purposes for which they retained that reserve. nor probably would the demands on the bill-brokers in such a system of banking be exceedingly formidable. considerable sums would no doubt be drawn from them, but there would be no special reason why money should be demanded from them more than from any other money dealers. they would share the panic with the bankers who kept the reserve, but they would not feel it more than the bankers. in each crisis the set of the storm would be determined by the cause which had excited it, but there would not be anything in the nature of bill-broking to attract the advance of the alarm peculiarly to them. they would not be more likely to suffer than other persons; the only difference would be that when they did suffer, having no adequate reserve of their own, they would be obliged to ask the aid of others. but under a one-reserve system of banking, the position of the bill-brokers is much more singular and much more precarious. in fact, in lombard street, the principal depositors of the bill-brokers are the bankers, whether of london, or of provincial england, or of scotland, or ireland. such deposits are, in fact, a portion of the reserve of these bankers; they make an essential part of the sums which they have provided and laid by against a panic. accordingly, in every panic these sums are sure to be called in from the bill-brokers; they were wanted to be used by their owners in time of panic, and in time of panic they ask for them. 'perhaps it may be interesting,' said alderman salomons, speaking on behalf of the london and westminster bank, after the panic of 1857, to the committee, 'to know that, on november 11, we held discounted bills for brokers to the amount of 5,623,000 l. out of these bills 2,800,000 l. matured between november 1 and december 4; 2,000,000 l. more between december 1 and december 31; consequently we were prepared merely by the maturing of our bills of exchange for any demand that might come upon us.' this is not indeed a direct withdrawal of money on deposit, but its principal effect is identical. at the beginning of the time the london and westminster bank had lent 5,000,000 l. more to the bill-brokers than they had at the end of it; and that 5,000,000 l. the bank had added to its reserve against a time of difficulty. the intensity of the demand on the bill-broker is aggravated therefore by our peculiar system of banking. just at the moment when, by the nature of their business, they have to resort to the reserves of bankers for necessary support, the bankers remove from them large sums in order to strengthen those reserves. a great additional strain is thrown upon them just at the moment when they are least able to bear it; and it is thrown by those who under a natural system of banking would not aggravate the pressure on the bill-brokers, but relieve it. and the profits of bill-broking are proportionably raised. the reserves of the bankers so deposited with the bill-broker form a most profitable part of his business; they are on the whole of very large amount, and at all times, except those of panic, may well be depended upon. the bankers are pretty sure to keep them there, just because they must keep a reserve, and they consider it one of the best places in which to keep it. under a more natural system, no part of the banking reserve would ever be lodged at the brokers. bankers would deposit with the brokers only their extra money, the money which they considered they could safely lend, and which they would not require during a panic. in the eye of the banker, money at the brokers would then be one of the investments of cash, it would not be a part of such cash. the deposits of bill-brokers and the profits of bill-broking are increased by our present system, just in proportion as the dangers of bill-brokers during a panic are increased by it. the strain, too, on our banking reserve which is caused by the demands of the bill-brokers, is also more dangerous than it would be under a natural system, because that reserve is in itself less. the system of keeping the entire ultimate reserve at a single bank, undoubtedly diminishes the amount of reserve which is kept. and exactly on that very account the danger of any particular demand on that reserve is augmented, because the magnitude of the fund upon which that demand falls is diminished. so that our one-reserve system of banking combines two evils: first, it makes the demand of the brokers upon the final reserve greater, because under it so many bankers remove so much money from the brokers; and under it also the final reserve is reduced to its minimum point, and the entire system of credit is made more delicate, and more sensitive. the peculiarity, indeed, of the effects of the one reserve is indeed even greater in this respect. under the natural system, the bill-brokers would be in no respect the rivals of the bankers which kept the ultimate reserve. they would be rather the agents for these bankers in lending upon certain securities which they did not themselves like, or on which they did not feel competent to lend safely. the bankers who in time of panic had to help them would in ordinary times derive much advantage from them. but under our present system all this is reversed. the bank of england never deposits any money with the bill-brokers; in ordinary times it never derives any advantage from them. on the other hand, as the bank carries on itself a large discount business, as it considers that it is itself competent to lend on all kinds of bills, the bill-brokers are its most formidable rivals. as they constantly give high rates for money it is necessary that they should undersell the bank, and in ordinary times they do undersell it. but as the bank of england alone keeps the final banking reserve, the bill-brokers of necessity have to resort to that final reserve; so that at every panic, and by the essential constitution of the money market, the bank of england has to help, has to maintain in existence, the dealers, who never in return help the bank at any time, but who are in ordinary times its closest competitors and its keenest rivals. it might be expected that such a state of things would cause much discontent at the bank of england, and in matter of fact there has been much discussion about it, and much objection taken to it. after the panic of 1857, this was so especially. during that panic, the bank of england advanced to the bill-brokers more than 9,000,000 l., though their advances to bankers, whether london or country, were only 8,000,000 l.; and, not unnaturally, the bank thought it unreasonable that so large an inroad upon their resources should be made by their rivals. in consequence, in 1858 they made a rule that they would only advance to the bill-brokers at certain seasons of the year, when the public money is particularly large at the bank, and that at other times any application for an advance should be considered exceptional, and dealt with accordingly. and the object of that regulation was officially stated to be 'to make them keep their own reserve, and not to be dependent on the bank of england.' as might be supposed, this rule was exceedingly unpopular with the brokers, and the greatest of them, overend, gurney and co., resolved on a strange policy in the hope of abolishing it. they thought they could frighten the bank of england, and could show that if they were dependent on it, it was also dependent on them. they accordingly accumulated a large deposit at the bank to the amount of 3,000,000 l., and then withdrew it all at once. but this policy had no effect, except that of exciting a distrust of 'overends': the credit of the bank of england was not diminished; overends had to return the money in a few days, and had the dissatisfaction of feeling that they had in vain attempted to assail the solid basis of everyone's credit, and that everyone disliked them for doing so. but though this un-conceived attempt failed as it deserved, the rule itself could not be maintained. the bank does, in fact, at every period of pressure, advance to the bin-brokers; the case may be considered 'exceptional,' but the advance is always made if the security offered is really good. however much the bank may dislike to aid their rivals, yet they must aid them; at a crisis they feel that they would only be aggravating incipient demand, and be augmenting the probable pressure on themselves if they refused to do so. i shall be asked if this anomaly is inevitable, and i am afraid that for practical purposes we must consider it to be so. it may be lessened; the bill-brokers may, and should, discourage as much as they can the deposit of money with them on demand, and encourage the deposit of it at distant fixed dates or long notice. this will diminish the anomaly, but it will not cure it. practically, bin-brokers cannot refuse to receive money at call. in every market a dealer must conduct his business according to the custom of the market, or he will not be able to conduct it at all. all the bin-brokers can do is to offer better rates for more permanent money, and this (though possibly not so much as might be wished) they do at present. in its essence, this anomaly is, i believe, an inevitable part of the system of banking which history has given us, and which we have only to make the best of, since we cannot alter it. chapter xii. the principles which should regulate the amount of the banking reserve to be kept by the bank of england. there is a very common notion that the amount of the reserve which the bank of england ought to keep can be determined at once from the face of their weekly balance sheet. it is imagined that you have only to take the liabilities of the banking department, and that a third or some other fixed proportion will in all cases be the amount of reserve which the bank should keep against those liabilities. but to this there are several objections, some arising from the general nature of the banking trade, and others from the special position of the bank of england. that the amount of the liabilities of a bank is a principal element in determining the proper amount of its reserve is plainly true; but that it is the only element by which that amount is determined is plainly false. the intrinsic nature of these liabilities must be considered, as well as their numerical quantity. for example, no one would say that the same amount of reserve ought to be kept against acceptances which cannot be paid except at a certain day, and against deposits at call, which may be demanded at any moment. if a bank groups these liabilities together in the balance-sheet, you cannot tell the amount of reserve it ought to keep. the necessary information is not given you. nor can you certainly determine the amount of reserve necessary to be kept against deposits unless you know something as to the nature of these deposits. if out of 3,000,000 l. of money, one depositor has 1,000,000 l. to his credit, and may draw it out when he pleases, a much larger reserve will be necessary against that liability of 1,000,000 l. than against the remaining 2,000,000 l. the intensity of the liability, so to say, is much greater; and therefore the provision in store must be much greater also. on the other hand, supposing that this single depositor is one of calculable habits--suppose that it is a public body, the time of whose demands is known, and the time of whose receipts is known also--this single liability requires a less reserve than that of an equal amount of ordinary liabilities. the danger that it will be called for is much less; and therefore the security taken against it may be much less too. unless the quality of the liabilities is considered as well as their quantity, the due provision for their payment cannot be determined. these are general truths as to all banks, and they have a very particular application to the bank of england. the first application is favourable to the bank; for it shows the danger of one of the principal liabilities to be much smaller than it seems. the largest account at the bank of england is that of the english government; and probably there has never been any account of which it was so easy in time of peace to calculate the course. all the material facts relative to the english revenue, and the english expenditure, are exceedingly well known; and the amount of the coming payments to and from this account are always, except in war times, to be calculated with wonderful accuracy. in war, no doubt, this is all reversed; the account of a government at war is probably the most uncertain of all accounts, especially of a government of a scattered empire, like the english, whose places of outlay in time of war are so many and so distant, and the amount of whose payments is therefore so incalculable. ordinarily, however, there is no account of which the course can be so easily predicted; and therefore no account which needs in ordinary times so little reserve. the principal payments, when they are made, are also of the most satisfactory kind to a banker; they are, to a great extent, made to another account at his bank. these largest ordinary payments of the government are the dividends on the debt, and these are mostly made to bankers who act as agents for the creditors of the nation. the payment of the dividends for the government is, therefore, in great part a transfer from the account of the government to the accounts of the various bankers. a certain amount no doubt goes almost at once to the non-banking classes; to those who keep coin and notes in house, and have no account at any bank. but even this amount is calculable, for it is always nearly the same. and the entire operation is, to those who can watch it, singularly invariable time after time. but it is important to observe, that the published accounts of the bank give no such information to the public as will enable them to make their own calculations. the account of which we have been speaking is the yearly account of the english government--what we may call the budget account, that of revenue and expenditure. and the laws of this are, as we have shown, already known. but under the head 'public deposits' in the accounts of the bank, are contained also other accounts, and particularly that of the secretary for india in council, the laws of which must be different and are quite unknown. the secretary for india is a large lender on its account. if any one proposed to give such power to the chancellor of the exchequer, there would be great fear and outcry. but so much depends on habit and tradition, that the india office on one side of downing street can do without remark, and with universal assent, what it would be thought 'unsound' and extravagant to propose that the other side should do. the present india office inherits this independence from the old board of the company, which, being mercantile and business-like, used to lend its own money on the stock exchange as it pleased; the council of india, its successor, retains the power. nothing can be better than that it should be allowed to do as it likes; but the mixing up the account of a body which has such a power, and which draws money from india, with that of the home government clearly prevents the general public from being able to draw inferences as to the course of the combined account from its knowledge of home finance only. the account of 'public deposits' in the bank return includes other accounts too, as the savings' bank balance, the chancery funds account, and others; and in consequence, till lately the public had but little knowledge of the real changes of the account of our government, properly so called. but mr. lowe has lately given us a weekly account, and from this, and not from the bank account, we are able to form a judgment. this account and the return of the bank of england, it is true, unhappily appear on different days; but except for that accident our knowledge would be perfect; and as it is, for almost all purposes what we know is reasonably sufficient. we can now calculate the course of the government account nearly as well as it is possible to calculate it. so far, as we have said, an analysis of the return of the bank of england is very favourable to the bank. so great a reserve need not usually be kept against the government account as if it were a common account. we know the laws of its changes peculiarly well: we can tell when its principal changes will happen with great accuracy; and we know that at such changes most of what is paid away by the government is only paid to other depositors at the bank, and that it will really stay at the bank, though under another name. if we look to the private deposits of the bank of england, at first sight we may think that the result is the same. by far the most important of these are the 'bankers' deposits'; and, for the most part, these deposits as a whole are likely to vary very little. each banker, we will suppose, keeps as little as he can, but in all domestic transactions payment from one is really payment to the other. all the most important transactions in the country are settled by cheques; these cheques are paid in to the 'clearing-house,' and the balances resulting from them are settled by transfers from the account of one banker to another at the bank of england. payments out of the bankers' balances, therefore, correspond with payments in. as a whole, the deposit of the bankers' balances at the bank of england would at first sight seem to be a deposit singularly stable. indeed, they would seem, so to say, to be better than stable. they augment when everything else tends to diminish. at a panic, when all other deposits are likely to be taken away, the bankers' deposits, augment; in fact they did so in 1866, though we do not know the particulars; and it is natural that they should so increase. at such moments all bankers are extremely anxious, and they try to strengthen themselves by every means in their power; they try to have as much money as it is possible at command; they augment their reserve as much as they can, and they place that reserve at the bank of england. a deposit which is not likely to vary in ordinary times, and which is likely to augment in times of danger, seems, in some sort, the model of a deposit. it might seem not only that a large proportion of it might be lent, but that the whole of it might be so. but a further analysis will, as i believe, show that this conclusion is entirely false; that the bankers' deposits are a singularly treacherous form of liability; that the utmost caution ought to be used in dealing with them; that, as a rule, a less proportion of them ought to be lent than of ordinary deposits. the easiest mode of explaining anything is, usually, to exemplify it by a single actual case. and in this subject, fortunately, there is a most conspicuous case near at hand. the german government has lately taken large sums in bullion from this country, in part from the bank of england, and in part not, according as it chose. it was in the main well advised, and considerate in its action; and did not take nearly as much from the bank as it might, or as would have been dangerous. still it took large sums from the bank; and it might easily have taken more. how then did the german government obtain this vast power over the bank? the answer is, that it obtained it by means of the bankers' balances, and that it did so in two ways. first, the german government had a large balance of its own lying at a particular joint stock bank. that bank lent this balance at its own discretion, to bill-brokers or others, and it formed a single item in the general funds of the london market. there was nothing special about it, except that it belonged to a foreign government, and that its owner was always likely to call it in, and sometimes did so. as long as it stayed unlent in the london joint stock bank, it increased the balances of that bank at the bank of england; but so soon as it was lent, say, to a bill-broker, it increased the bill-broker's balance; and as soon as it was employed by the bill-broker in the discount of bills, the owners of those bills paid it to their credit at their separate banks, and it augmented the balances of those bankers at the bank of england. of course if it were employed in the discount of bills belonging to foreigners, the money might be taken abroad, and by similar operations it might also be transferred to the english provinces or to scotland. but, as a rule, such money when deposited in london, for a considerable time remains in london; and so long as it does so, it swells the aggregate balances of the body of bankers at the bank of england. it is now in the balance of one bank, now of another, but it is always dispersed about those balances somewhere. the evident consequence is that this part of the bankers' balances is at the mercy of the german government when it chooses to apply for it. supposing, then, the sum to be three or four millions and i believe that on more than one occasion in the last year or two it has been quite as much, if not more--that sum might at once be withdrawn from the bank of england. in this case the bank of england is in the position of a banker who is liable for a large amount to a single customer, but with this addition, that it is liable for an unknown amount. the german government, as is well known, keeps its account (and a very valuable one it must be) at the london joint stock bank; but the bank of england has no access to the account of the german government at that bank; they cannot tell how much german money is lying to the credit there. nor can the bank of england infer much from the balance of the london joint stock bank in their bank, for the german money was probably paid in various sums to that bank, and lent out again in other various sums. it might to some extent augment that bank's balance at the bank of england, or it might not, but it certainly would not be so much added to that balance; and inspection of that bank's balance would not enable the bank of england to determine even in the vaguest manner what the entire sum was for which it might be asked at any moment. nor would the inspection of the bankers' balances as a whole lead to any certain and sure conclusions. something might be inferred from them, but not anything certain. those balances are no doubt in a state of constant fluctuation; and very possibly during the time that the german money was coming in some other might be going out. any sudden increase in the bankers' balances would be a probable indication of new foreign money, but new foreign money might come in without causing an increase, since some other and contemporaneous cause might effect a counteracting decrease. this is the first, and the plainest way in which the german government could take, and did take, money from this country; and in which it might have broken the bank of england if it had liked. the german government had money here and took it away, which is very easy to understand. but the government also possessed a far greater power, of a somewhat more complex kind. it was the owner of many debts from england. a large part of the 'indemnity' was paid by france to germany in bills on england, and the german government, as those bills became due, acquired an unprecedented command over the market. as each bill arrived at maturity, the german government could, if it chose, take the proceeds abroad; and it could do so in bullion, as for coinage purposes it wanted bullion. this would at first naturally cause a reduction in the bankers' balances; at least that would be its tendency. supposing the german government to hold bill a, a good bill, the banker at whose bank bill a was payable would have to pay it; and that would reduce his balance; and as the sum so paid would go to germany, it would not appear to the credit of any other banker: the aggregate of the bankers' balances would thus be reduced. but this reduction would not be permanent. a banker who has to pay 100,000 l. cannot afford to reduce his balance at the bank of england 100,000 l.; suppose that his liabilities are 2,000,000 l., and that as a rule he finds it necessary to keep at the bank one-tenth of these liabilities, or 200,000 l., the payment of 100,000 l. would reduce his reserve to 100,000 l.; but his liabilities would be still 1,900,000 l. and therefore to keep up his tenth he would have 90,000 l. to find. his process for finding it is this: he calls in, say, a loan to the bill-brokers; and if no equal additional money is contemporaneously carried to these brokers (which in the case of a large withdrawal of foreign money is not probable), they must reduce their business and discount less. but the effect of this is to throw additional business on the bank of england. they hold the ultimate reserve of the country, and they must discount out of it if no one else will: if they declined to do so there would be panic and collapse. as soon, therefore, as the withdrawal of the german money reduces the bankers' balances, there is a new demand on the bank for fresh discounts to make up those balances. the drain on the bank is twofold: first, the banking reserve is reduced by exportation of the german money, which reduces the means of the bank of england; and then out of those reduced means the bank of england has to make greater advances. the same result may be arrived at more easily. supposing any foreign government or person to have any sort of securities which he can pledge in the market, that operation gives it, or him, a credit on some banker, and enables it, or him, to take money from the banking reserve at the bank of england, and from the bankers' balances; and to replace the bankers' balances at their inevitable minimum, the bank of england must lend. every sudden demand on the country causes, in proportion to its magnitude, this peculiar effect. and this is the reason why the bank of england ought, i think, to deal most cautiously and delicately with their banking deposits. they are the symbol of an indefinite liability: by means of them, as we see, an amount of money so great that it is impossible to assign a limit to it might be abstracted from the bank of england. as the bank of england lends money to keep up the bankers' balances, at their usual amount, and as by means of that usual amount whatever sum foreigners can get credit for may be taken from us, it is not possible to assign a superior limit (to use the scientific word) to the demands which by means of the bankers' balances may be made upon the bank of england. the result comes round to the simple point, on which this book is a commentary: the bank of england, by the effect of a long history, holds the ultimate cash reserve of the country; whatever cash the country has to pay comes out of that reserve, and therefore the bank of england has to pay it. and it is as the bankers' bank that the bank of england has to pay it, for it is by being so that it becomes the keeper of the final cash reserve. some persons have been so much impressed with such considerations as these, that they have contended that the bank of england ought never to lend the 'bankers' balances' at all, that they ought to keep them intact, and as an unused deposit. i am not sure, indeed, that i have seen that extreme form of the opinion in print, but i have often heard it in lombard street, from persons very influential and very qualified to judge; even in print i have seen close approximations to it. but i am satisfied that the laying down such a 'hard and fast' rule would be very dangerous; in very important and very changeable business rigid rules are apt to be often dangerous. in a panic, as has been said, the bankers' balances greatly augment. it is true the bank of england has to lend the money by which they are filled. the banker calls in his money from the bill-broker, ceases to re-discount for that broker, or borrows on securities, or sells securities; and in one or other of these ways he causes a new demand for money which can only at such times be met from the bank of england. every one else is in want too. but without inquiring into the origin of the increase at panics, the amount of the bankers' deposits in fact increases very rapidly; an immense amount of unused money is at such moments often poured by them into the bank of england. and nothing can more surely aggravate the panic than to forbid the bank of england to lend that money. just when money is most scarce you happen to have an unusually large fund of this particular species of money, and you should lend it as fast as you can at such moments, for it is ready lending which cures panics, and non-lending or niggardly lending which aggravates them. at other times, particularly at the quarterly payment of the dividends, an absolute rule which laid down that the bankers' balances were never to be lent, would be productive of great inconvenience. a large sum is just then paid from the government balance to the bankers' balances, and if you permitted the bank to lend it while it was still in the hands of the government, but forbad them to lend it when it came into the hands of the bankers, a great tilt upwards in the value of money would be the consequence, for a most important amount of it would suddenly have become ineffective. but the idea that the bankers' balances ought never to be lent is only a natural aggravation of the truth that these balances ought to be used with extreme caution; that as they entail a liability peculiarly great and singularly difficult to foresee, they ought never to be used like a common deposit. it follows from what has been said that there are always possible and very heavy demands on the bank of england which are not shown in the account of the banking department at all: these demands may be greatest when the liabilities shown by that account are smallest, and lowest when those liabilities are largest. if, for example, the german government brings bills or other good securities to this market, obtains money with them, and removes that money from the market in bullion, that money may, if the german government choose, be taken wholly from the bank of england. if the wants of the german government be urgent, and if the amount of gold 'arrivals,' that is, the gold coming here from the mining countries, be but small, that gold will be taken from the bank of england, for there is no other large store in the country. the german government is only a conspicuous example of a foreign power which happens lately to have had an unusual command of good securities, and an unusually continuous wish to use them in england. any foreign state hereafter which wants cash will be likely to come here for it; so long as the bank of france should continue not to pay in specie, a foreign state which wants it must of necessity come to london for it. and no indication of the likelihood or unlikelihood of that want can be found in the books of the bank of england. what is almost a revolution in the policy of the bank of england necessarily follows: no certain or fixed proportion of its liabilities can in the present times be laid down as that which the bank ought to keep in reserve. the old notion that one-third, or any other such fraction, is in all cases enough, must be abandoned. the probable demands upon the bank are so various in amount, and so little disclosed by the figures of the account, that no simple and easy calculation is a sufficient guide. a definite proportion of the liabilities might often be too small for the reserve, and sometimes too great. the forces of the enemy being variable, those of the defence cannot always be the same. i admit that this conclusion is very inconvenient. in past times it has been a great aid to the bank and to the public to be able to decide on the proper policy of the bank from a mere inspection of its account. in that way the bank knew easily what to do and the public knew easily what to foresee. but, unhappily, the rule which is most simple is not always the rule which is most to be relied upon. the practical difficulties of life often cannot be met by very simple rules; those dangers being complex and many, the rules for encountering them cannot well be single or simple. a uniform remedy for many diseases often ends by killing the patient. another simple rule often laid down for the management of the bank of england must now be abandoned also. it has been said that the bank of england should look to the market rate, and make its own rate conform to that. this rule was, indeed, always erroneous. the first duty of the bank of england was to protect the ultimate cash of the country, and to raise the rate of interest so as to protect it. but this rule was never so erroneous as now, because the number of sudden demands upon that reserve was never formerly so great. the market rate of lombard street is not influenced by those demands. that rate is determined by the amount of deposits in the hands of bill-brokers and bankers, and the amount of good bills and acceptable securities offered at the moment. the probable efflux of bullion from the bank scarcely affects it at all; even the real efflux affects it but little; if the open market did not believe that the bank rate would be altered in consequence of such effluxes the market rate would not rise. if the bank choose to let its bullion go unheeded, and is seen to be going so to choose, the value of money in lombard street will remain unaltered. the more numerous the demands on the bank for bullion, and the more variable their magnitude, the more dangerous is the rule that the bank rate of discount should conform to the market rate. in former quiet times the influence, or the partial influence, of that rule has often produced grave disasters. in the present difficult times an adherence to it is a recipe for making a large number of panics. a more distinct view of abstract principle must be taken before we can fix on the amount of the reserve which the bank of england ought to keep. why should a bank keep any reserve? because it may be called on to pay certain liabilities at once and in a moment. why does any bank publish an account? in order to satisfy the public that it possesses cash--or available securities--enough to meet its liabilities. the object of publishing the account of the banking department of the bank of england is to let the nation see how the national reserve of cash stands, to assure the public that there is enough and more than enough to meet not only all probable calls, but all calls of which there can be a chance of reasonable apprehension. and there is no doubt that the publication of the bank account gives more stability to the money market than any other kind of precaution would give. some persons, indeed, feared that the opposite result would happen; they feared that the constant publication of the incessant changes in the reserve would terrify and harass the public mind. an old banker once told me: 'sir, i was on lord althorp's committee which decided on the publication of the bank account, and i voted against it. i thought it would frighten people. but i am bound to own that the committee was right and i was wrong, for that publication has given the money market a greater sense of security than anything else which has happened in my time.' the diffusion of confidence through lombard street and the world is the object of the publication of the bank accounts and of the bank reserve. but that object is not attained if the amount of that reserve when so published is not enough to tranquillise people. a panic is sure to be caused if that reserve is, from whatever cause, exceedingly low. at every moment there is a certain minimum which i will call the apprehension minimum,' below which the reserve cannot fall without great risk of diffused fear; and by this i do not mean absolute panic, but only a vague fright and timorousness which spreads itself instantly, and as if by magic, over the public mind. such seasons of incipient alarm are exceedingly dangerous, because they beget the calamities they dread. what is most feared at such moments of susceptibility is the destruction of credit; and if any grave failure or bad event happens at such moments, the public fancy seizes on it, there is a general run, and credit is suspended. the bank reserve then never ought to be diminished below the 'apprehension point.' and this is as much as to say, that it never ought very closely to approach that point; since, if it gets very near, some accident may easily bring it down to that point and cause the evil that is feared. there is no 'royal road' to the amount of the 'apprehension minimum': no abstract argument, and no mathematical computation will teach it to us. and we cannot expect that they should. credit is an opinion generated by circumstances and varying with those circumstances. the state of credit at any particular time is a matter of fact only to be ascertained like other matters of fact; it can only be known by trial and inquiry. and in the same way, nothing but experience can tell us what amount of 'reserve' will create a diffused confidence; on such a subject there is no way of arriving at a just conclusion except by incessantly watching the public mind, and seeing at each juncture how it is affected. of course in such a matter the cardinal rule to be observed is, that errors of excess are innocuous but errors of defect are destructive. too much reserve only means a small loss of profit, but too small a reserve may mean 'ruin.' credit may be at once shaken, and if some terrifying accident happen to supervene, there may be a run on the banking department that may be too much for it, as in 1857 and 1866, and may make it unable to pay its way without assistance--as it was in those years. and the observance of this maxim is the more necessary because the 'apprehension minimum' is not always the same. on the contrary, in times when the public has recently seen the bank of england exposed to remarkable demands, it is likely to expect that such demands may come again. conspicuous and recent events educate it, so to speak; it expects that much will be demanded when much has of late often been demanded, and that little will be so, when in general but little has been so. a bank like the bank of england must always, therefore, be on the watch for a rise, if i may so express it, in the apprehension minimum; it must provide an adequate fund not only to allay the misgivings of to-day, but also to allay what may be the still greater misgivings of to-morrow. and the only practical mode of obtaining this object is--to keep the actual reserve always in advance of the minimum 'apprehension' reserve. and this involves something much more. as the actual reserve is never to be less, and is always, if possible, to exceed by a reasonable amount the 'minimum' apprehension reserve, it must when the bank is quiet and taking no precautions very considerably exceed that minimum. all the precautions of the bank take time to operate. the principal precaution is a rise in the rate of discount, and such a rise certainly does attract money from the continent and from all the world much faster than could have been anticipated. but it does not act instantaneously; even the right rate, the ultimately attractive rate, requires an interval for its action, and before the money can come here. and the right rate is often not discovered for some time. it requires several 'moves,' as the phrase goes, several augmentations of the rate of discount by the bank, before the really effectual rate is reached, and in the mean time bullion is ebbing away and the 'reserve' is diminishing. unless, therefore, in times without precaution the actual reserve exceed the 'apprehension minimum' by at least the amount which may be taken away in the inevitable interval, and before the available precautions begin to operate, the rule prescribed will be infringed, and the actual reserve will be less than the 'apprehension' minimum. in time the precautions taken may attract gold and raise the reserve to the needful amount, but in the interim the evils may happen against which the rule was devised, diffused apprehension may arise, and then any unlucky accident may cause many calamities. i may be asked, 'what does all this reasoning in practice come to? at the present moment how much reserve do you say the bank of england should keep? state your recommendation clearly (i know it will be said) if you wish to have it attended to.' and i will answer the question plainly, though in so doing there is a great risk that the principles i advocate may be in some degree injured through some mistake i may make in applying them. i should say that at the present time the mind of the monetary world would become feverish and fearful if the reserve in the banking department of the bank of england went below 10,000,000 l. estimated by the idea of old times, by the idea even of ten years ago, that sum, i know, sounds extremely large. my own nerves were educated to smaller figures, because i was trained in times when the demands on us were less, when neither was so much reserve wanted nor did the public expect so much. but i judge from such observations as i can make of the present state of men's minds, that in fact, and whether justifiably or not, the important and intelligent part of the public which watches the bank reserve becomes anxious and dissatisfied if that reserve falls below 10,000,000 l. that sum, therefore, i call the 'apprehension minimum' for the present times. circumstances may change and may make it less or more, but according to the most careful estimate i can make, that is what i should call it now. it will be said that this estimate is arbitrary and these figures are conjectures. i reply that i only submit them for the judgment of others. the main question is one of fact--does not the public mind begin to be anxious and timorous just where i have placed the apprehension point? and the deductions from that are comparatively simple questions of mixed fact and reasoning. the final appeal in such cases necessarily is to those who are conversant with and who closely watch the facts. i shall perhaps be told also that a body like the court of the directors of the bank of england cannot act on estimates like these: that such a body must have a plain rule and keep to it. i say in reply, that if the correct framing of such estimates is necessary for the good guidance of the bank, we must make a governing body which can correctly frame such estimates. we must not suffer from a dangerous policy because we have inherited an imperfect form of administration. i have before explained in what manner the government of the bank of england should, i consider, be strengthened, and that government so strengthened would, i believe, be altogether competent to a wise policy. then i should say, putting the foregoing reasoning into figures, that the bank ought never to keep less than 11,000,000 l.. or 11,500,000 l. since experience shows that a million, or a million and a half, may be taken from us at any time. i should regard this as the practical minimum at which, roughly of course, the bank should aim, and which it should try never to be below. and, in order not to be below 11,500,000 l., the bank must begin to take precautions when the reserve is between 14,000,000 l. and 15,000,000 l.; for experience shows that between 2,000,000 l. and 3,000,000 l. may, probably enough, be withdrawn from the bank store before the right rate of interest is found which will attract money from abroad, and before that rate has had time to attract it. when the reserve is between 14,000,000 l. and 15,000,000 l., and when it begins to be diminished by foreign demand, the bank of england should, i think, begin to act, and to raise the rate of interest. chapter xiii. conclusion. i know it will be said that in this work i have pointed out a deep malady, and only suggested a superficial remedy. i have tediously insisted that the natural system of banking is that of many banks keeping their own cash reserve, with the penalty of failure before them if they neglect it. i have shown that our system is that of a single bank keeping the whole reserve under no effectual penalty of failure. and yet i propose to retain that system, and only attempt to mend and palliate it. i can only reply that i propose to retain this system because i am quite sure that it is of no manner of use proposing to alter it. a system of credit which has slowly grown up as years went on, which has suited itself to the course of business, which has forced itself on the habits of men, will not be altered because theorists disapprove of it, or because books are written against it. you might as well, or better, try to alter the english monarchy and substitute a republic, as to alter the present constitution of the english money market, founded on the bank of england, and substitute for it a system in which each bank shall keep its own reserve. there is no force to be found adequate to so vast a reconstruction, and so vast a destructions and therefore it is useless proposing them. no one who has not long considered the subject can have a notion how much this dependence on the bank of england is fixed in our national habits. i have given so many illustrations in this book that i fear i must have exhausted my reader's patience, but i will risk giving another. i suppose almost everyone thinks that our system of savings' banks is sound and good. almost everyone would be surprised to hear that there is any possible objection to it. yet see what it amounts to. by the last return the savings' banks--the old and the post office together--contain about 60,000,000 l. of deposits, and against this they hold in the funds securities of the best kind. but they hold no cash whatever. they have of course the petty cash about the various branches necessary for daily work. but of cash in ultimate reserve--cash in reserve against a panic--the savings' banks have not a sixpence. these banks depend on being able in a panic to realise their securities. but it has been shown over and over again, that in a panic such securities can only be realised by the help of the bank of england--that it is only the bank with the ultimate cash reserve which has at such moments any new money, or any power to lend and act. if in a general panic there were a run on the savings' banks, those banks could not sell 100,000 l. of consols without the help of the bank of england; not holding themselves a cash reserve for times of panic, they are entirely dependent on the one bank which does hold that reserve. this is only a single additional instance beyond the innumerable ones given, which shows how deeply our system of banking is fixed in our ways of thinking. the government keeps the money of the poor upon it, and the nation fully approves of their doing so. no one hears a syllable of objection. and every practical man--every man who knows the scene of action--will agree that our system of banking, based on a single reserve in the bank of england, cannot be altered, or a system of many banks, each keeping its own reserve, be substituted for it. nothing but a revolution would effect it, and there is nothing to cause a revolution. this being so, there is nothing for it but to make the best of our banking system, and to work it in the best way that it is capable of. we can only use palliatives, and the point is to get the best palliative we can. i have endeavoured to show why it seems to me that the palliatives which i have suggested are the best that are at our disposal. i have explained why the french plan will not suit our english world. the direct appointment of the governor and deputy-governor of the bank of england by the executive government would not lessen our evils or help our difficulties. i fear it would rather make both worse. but possibly it may be suggested that i ought to explain why the american system, or some modification, would not or might not be suitable to us. the american law says that each national bank shall have a fixed proportion of cash to its liabilities (there are two classes of banks, and two different proportions; but that is not to the present purpose), and it ascertains by inspectors, who inspect at their own times, whether the required amount of cash is in the bank or not. it may be asked, could nothing like this be attempted in england? could not it, or some modification, help us out of our difficulties? as far as the american banking system is one of many reserves, i have said why i think it is of no use considering whether we should adopt it or not. we cannot adopt it if we would. the one-reserve system is fixed upon us. the only practical imitation of the american system would be to enact that the banking department of the bank of england should always keep a fixed proportion--say one-third of its liabilities--in reserve. but, as we have seen before, a fixed proportion of the liabilities, even when that proportion is voluntarily chosen by the directors, and not imposed by law, is not the proper standard for a bank reserve. liabilities may be imminent or distant, and a fixed rule which imposes the same reserve for both will sometimes err by excess, and sometimes by defect. it will waste profits by over-provision against ordinary danger, and yet it may not always save the bank; for this provision is often likely enough to be insufficient against rare and unusual dangers. but bad as is this system when voluntarily chosen, it becomes far worse when legally and compulsorily imposed. in a sensitive state of the english money market the near approach to the legal limit of reserve would be a sure incentive to panic; if one-third were fixed by law, the moment the banks were close to one-third, alarm would begin, and would run like magic. and the fear would be worse because it would not be unfounded--at least, not wholly. if you say that the bank shall always hold one-third of its liabilities as a reserve, you say in fact that this one-third shall always be useless, for out of it the bank cannot make advances, cannot give extra help, cannot do what we have seen the holders of the ultimate reserve ought to do and must do. there is no help for us in the american system; its very essence and principle are faulty. we must therefore, i think, have recourse to feeble and humble palliatives such as i have suggested. with good sense, good judgment, and good care, i have no doubt that they may be enough. but i have written in vain if i require to say now that the problem is delicate, that the solution is varying and difficult, and that the result is inestimable to us all. appendix. note a. liabilities and cash reserve of the chief banking systems. the following is a comparison of the liabilities to the public, and of the cash reserve, of the banking systems of the united kingdom, france, germany, and the united states. for the united kingdom the figures are the most defective, as they only include the deposits of the bank of england, and of the london joint stock banks, and the banking reserve of the bank of england, which is the only cash available against these liabilities is also the only cash reserve against the similar liabilities of the london private banks, the provincial english banks, and the scotch and irish banks. in the case of england, therefore, the method of comparison exhibits a larger proportion of cash to liabilities than what really exists. (1) english banking. liabilities. deposits of bank of england, less estimated joint stock bank balances, at december 31, 1872 l 29,000,000 deposits of london joint stock banks at december 31 1872 (see 'economist,' february 8, 1873) l 91,000,000 ----------- total liabilities l 120,000,000 ============= reserve of cash banking reserve in bank of england. l 13,500,000 ============= making proportion of cash reserve to liabilities to the public about 11'2 per cent. (2) bank of france (february, 1873). liabilities circulation l 110,000,000 deposits l 15,000,000 ------------ total liabilities l 125,000,000 ============= reserve of cash. coin and bullion in hand l 32,000,000 making proportion of cash reserve to liabilities to the public about 25 per cent. (3) banks of germany (january, 1873). liabilities circulation l 63,000,000 deposits l 8,000,000 acceptances and indorsements l 17,000,000 ----------- total liabilities l 88,000,000 ============ reserves of cash cash in hand l 41,000,000 ============ making proportion of cash reserve to liabilities to the public about per cent. (4) national banks of united states (october 3, 1872). liabilities circulation l 67,000,000 deposits l 145,000,000 ------------ total liabilities l 212,000,000 ============= reserve of cash coin and legal tenders in hand l 26,000,000 ============ making proportion of cash reserve to liabilities to the public about 12.3 per cent. summary liabilities cash held proportion of cash to the public to liabilities per cent bank of england and london joint stock banks 20,000,000 13,500,000 11.2 bank of france 125,000,000 32,000,000 25.0 banks of germany 88,000,000 41,000,000 47.0 national banks of united states 212,000,000 26,000,000 12.3 note b. extract from evidence given by mr. alderman salomons before house of commons select committee in 1858. 1146. [chairman.] the effect upon yourselves of the pressure in november was, i presume, to induce you to increase your reserve in your own hands, and also to increase your deposits with the bank of england?--yes, that was so; but i wish to tell the committee that that was done almost entirely by allowing the bills of exchange which we held to mature, and not by raising any money, or curtailing our accommodation to our customers. perhaps it may be interesting to the committee to know that on the 11th of november we held discounted bills for brokers to the amount of 5,623,000 l. out of those bills, 2,800,000 l. matured between the 11th of november and the 4th of december, and 2,000,000 l. more between the 4th of december and the 31st. so that about 5,000,000 l. of bills matured between the 11th of november and the 31st of december; consequently we were prepared, merely by the maturing of our bills of exchange, for any demands that might possibly come upon us. 1147. i understand you to say that you did not withdraw your usual accommodation from your own customers, but that you ceased to have in deposit with the bill-brokers so large a sum of money as you had before?--not exactly that; the bills which we had discounted were allowed to mature, and we discounted less; we kept a large reserve of cash. 1148. that is to say, you withdrew from the commercial world a part of that accommodation which you had previously given, and at the same time you increased your deposits with the bank of england?--yes, our deposits with the bank of england were increased. we did not otherwise withdraw accommodation. 1149. [mr. weguelin.] had you any money at call with the bill-brokers?--a small amount; perhaps about 500,000 l. or less, which we did not call in. 1150. [chairman.] what i understand you to say is, that the effect of the commercial pressure upon you was to induce you upon the whole to withdraw from commerce an amount of accommodation which in other times you had given, and at the same time to increase your deposits with the bank of england?--so far only as ceasing to discount with strangers, persons not having current accounts with us. 1151. or to give the same amount to the bill-broker?--for a while, instead of discounting for brokers and strangers, we allowed our bills to mature, and remained quiescent with a view to enable us to meet any demand that might be made on ourselves. 1152. except what you felt bound to your own customers to continue to give, you ceased to make advances?--quite so; perhaps i might say at the same time, that besides a large balance which we kept at the bank of england, which of course was as available as in our own tills, we increased our notes in our tills at the head office and at all the branches. 1153. i suppose at that time large sales of public securities were made by the london joint stock banks, which securities were purchased by the public?--it is understood that some joint stock and other banks sold, but i believe it is quite certain that the public purchased largely, because they always purchase when the funds fall. 1154. are you prepared to give the committee any opinion of your own as to the effect, one way or the other, which the system of the joint stock banks may have produced with regard to aggravating or diminishing the commercial pressure in the autumn of last year?--i should state, generally, that the joint stock banks, as well as all other banks, in london, by collecting money from those who had it to spare, must of necessity have assisted, and could not do otherwise than assist commerce, both then and at all other times. 1155. you say that your discounts, either at your own counter or through the bill-brokers, are ordinarily very large, but that at the time of severest pressure you contracted them so far as you thought was just to your own immediate customers?--yes; but the capital was still there, because it was at the bank of england, and it was capable of being used for short periods; if we did not want it, others might have used it. 1156. [mr. weguelin.] in fact, it was used by the bank of england?-undoubtedly; i should suppose so; there is no question about it. 1157. you, of course, felt quite certain that your deposits in the bank of england might be had upon demand?--we had no doubt about it. 1158 you did not take into consideration the effect of the law of 1844, which might have placed the banking department of the bank of england in such a position as not to be able to meet the demands of its depositors? i must say that that never gave us the smallest concern. 1159. you therefore considered that, if the time should arrive, the government would interfere with some measure as they had previously done to enable the bank to meet the demands upon it?--we should always have thought that if the bank of england had stopped payment, all the machinery of government would have stopped with it, and we never could have believed that so formidable a calamity would have arisen if the government could have prevented it. 1160. [chairman.] the notion of the convertibility of the note being in danger never crossed your mind?--never for a moment; nothing of the kind. 1161. [mr. weguelin.] i refer not to the convertibility of the note, but to the state of the banking department of the bank of england?--if we had thought that there was any doubt whatever about it, we should have taken our bank-notes and put them in our own strong chest. we could never for a moment believe an event of that kind as likely to happen. 1162. therefore you think that the measure taken by the government, of issuing a letter authorising the bank of england to increase their issues of notes upon securities, was what was generally expected by the commercial world, and what in future the commercial world would look to in such a conjunction of circumstances?--we looked for some measure of that nature. that, no doubt, was the most obvious one. we had great doubts whether it would come when it did, until the very last moment. 1163. have you ever contemplated the possibility of the bank refusing to advance, under circumstances similar to those which existed in november, 1857, upon good banking securities?--of course i have, and it is a very difficult question to answer as to what its effect might be; but the notion appears to me to be so thoroughly ingrained in the minds of the commercial world, that whenever you have good security it ought to be convertible at the bank in some shape or way, that i have very great doubt indeed whether the bank can ever take a position to refuse to assist persons who have good commercial securities to offer. 1164. [mr. cayley.] when you say that you have come to some fresh arrangement with regard to your allowance of interest upon deposits, do you speak of yourselves as the london and westminster bank, or of some of the other banks in combination with yourselves?--i think all the banks have come to an understanding that it is not desirable, either for their proprietors or for the public, to follow closely at all times the alterations of the bank. i believe it is understood amongst them all that they do not intend following that course in future. 1165. is that from a feeling that it is rather dangerous under particular circumstances?--i cannot admit as to its being dangerous, but there can be no doubt of this, that there is a notion in the public mind which we ought not to contend against, that when you offer a high rate of interest for money, you rather do it because you want the person's money, than because you are obeying the market rate; and i think it is desirable that we should show that if persons wish to employ their money, and want an excessive rate, they may take it away and employ it themselves. 1166. you think that there is now a general understanding amongst the banks which you have mentioned, to act upon a different principle from that on which they acted during last october and november?--i think i may say that i know that to be the case. 1167. was not it the fact that this system of giving so high a rate of interest upon money at call commenced very much with the establishment of some banks during the last year or two, which, instead of demanding 10 days' or a month's notice, were willing to allow interest upon only three days' notice; did not that system begin about two years ago?--i do not think it began with the new banks; i think it began with one of the older banks; i know that as regards my own bank, that we were forced into it; i forgot to say, that with regard to ourselves in taking money on deposit, the parties must leave the money a month, or they lose interest. we do not take money from any depositor at interest unless upon the understanding and condition that it remains a month with us; he may withdraw it within the month, but then he forfeits interest; it will not carry interest unless it is with us a month, and then it is removable on demand without notice. 1168. is it or is it not a fact that some of the banks pay interest upon their current accounts?--yes, i think most of the new banks do so; and the union bank of london does it. 1169. at a smaller rate than upon their deposits, i presume?--i think at a smaller rate, but i believe it is a fixed rate on the minimum balance for some period, either six months or one month, i do not exactly know the period. i think i ought to add (and i believe it is the case with all the banks) that the london and westminster bank, from the day of its first institution until the present day, has never re-discounted a bill. no bill has ever left our bank unless it has been for payment. 1170. is not that generally the case with the london joint stock banks?--i believe it is the case. 1171. [mr. weguelin.] but you sometimes lend money upon bills deposited with you by bill-brokers?--yes. 1172. and you occasionally call in that money and re-deliver those securities?--yes; but that we do to a very small extent. 1173. is not that equivalent to a re-discount of bills?--no; the discount of a bill and the lending money on bills are very different things. when we discount a bill, that bill becomes our property; it is in our control, and we keep it and lock it up until it falls due; but when brokers come to us and want to borrow, say 50,000 l. on a deposit of bills, and we let them have the money and afterwards return those bills to them and we get back our money, surely that is not a re-discount. 1174. when you want to employ your money for a short period, do you not frequently take bills of long date, and advance upon them?--but that is not a re-discount on our part. very often brokers in borrowing money send in bills of long date, and afterwards we call in that loan; but that is no more a re-discount than lending money upon consols and calling in that money again. it is not an advance of ours; we do not seek it; they come to us and borrow our money, and give us a security; when we want our money we call for that money, and return their security. surely that is not a re-discount. 1175. [mr. hankey.] is there not this clear distinction between returning a bill on which you have made an advance and discounting a bill, that if you have discounted a bill your liability continues upon the bill until that bill has come to maturity?--yes. 1176. in the other case you have no further liability whatever?--certainly. 1177. should you not consider that a very important distinction?--i think it is an important distinction. take this case: suppose a party comes to us and borrows 50,000 l., and we lend it him, and when the loan becomes due we take our money back again. surely that is not a discount on our part. 1178. is there not this distinction, that if you re-discount you may go on pledging the liability of your bank to an almost unlimited amount, whereas in the other case you only get back that money which you have lent?--undoubtedly. 1179. [mr. cayley.] the late chancellor of the exchequer stated before the adjournment, in a speech in the house of commons, that during the monday, tuesday, wednesday, and thursday of the panic, the bank was almost, if not entirely, the only body that discounted commercial bills; how can you reconcile that with what you have said, that you gave as much accommodation as usual to your customers?--i am not responsible for what the chancellor of the exchequer said; i am responsible for what i am now stating as to the course of our bank, that our advances to our customers on the 31st of december were nearly 500,000 l. higher than they were on the 1st of october. with regard to our not discounting for other parties, it was in consequence of the discredit which prevailed, that it was necessary we should hold a portion of our deposits in order that they should be available in case persons called for them; a certain number of persons did so; in the month of november we had a reduction of our deposits, and if we had gone on discounting for brokers we should have had to go into the market ourselves to raise money on our government securities, but we avoided that by not discounting, and leaving our money at the bank of england. 1180. then you did not discount as much as usual for your customers during that period?--yes, we did, and more. 1181. but not to strangers?--not to strangers; i make a distinction between our transactions with our customers, who of course expect us to give accommodation, and discounts for brokers, which is entirely voluntary, depending upon our having money to employ. 1182. how would it have been if the letter had not issued at the last moment? that is a question which i can hardly answer. 1183. what do you mean by that general expression of yours?--it is impossible to predicate what may happen in time of panic and alarm. a great alarm prevailed certainly amongst the commercial world, and it could never have been alleviated, except by some extraordinary means of relief. we might probably have been in the state in which hamburg was, where they have no bank-notes in circulation. 1184. [mr. spooner.] what did you mean by the expression, 'the last moment'? you said that the letter came out at the last moment; the last moment of what?--it was late in the day; it was a day of great distress. for two days there was a great deal of anxiety, and everybody expected that there would be some relief; and it was when expectation, i suppose, was highly excited that the letter came, and it gave relief. 1185. cannot you tell us what your opinion would have been, if that last moment had happened to have elapsed, and the letter had not come?--it is very difficult to say; it is too much to say that it could not have been got over. there can be no doubt whatever that what created the difficulty existed out of london, and not in it; and therefore it is much more difficult for me to give an opinion. i believe that the banking interest, both private and joint stock, was in a perfectly sound condition, and able to bear any strain which might have been brought upon it in london. 1186. [mr. hankey.] can you give the committee any idea as to what proportion of deposits you consider generally desirable to keep in reserve?--you must be very much guided by circumstances. in times of alarm, when there are failures, of course all bankers strengthen their reserves; our reserve then is larger. in times of ordinary business we find, both as regards our deposits at interest as well as those which are not at interest, that there is a constant circulation; that the receipts of money very nearly meet the payments. 1187. you probably keep at all times a certain amount of your deposits totally unemployed; in reserve?--yes. 1188. in a normal state of commercial affairs, is there any fixed proportion, or can you give the committee any idea of what you would consider about a fair and desirable proportion which should be so kept unemployed?--i think the best idea which i can give upon that subject is to give our annual statement, or balance sheet, for the 31st of december. 1189. does that show what amount of unemployed money you had on that day?--yes. i will put in a statement, which perhaps will be the best means of meeting the question, showing the cash in hand on the 30th of june and the 31st of december in every year, as shown by our published accounts, together with our money at call and our government securities; that will be perhaps the best and most convenient way of giving the information you desire to have. (see table below.) 1190. do you consider that when your deposits are materially on the increase it is necessary to keep a larger amount of money in reserve than you would keep at other times?--i may say that, as a general rule, our reserve would always bear some proportion to our deposits. _total lodgments with london and westminster bank; also amount of cash in hand, moneys with bill-brokers at call, and government securities held by the bank._ date deposits cash money government total. in hand at call securities l l l l l 31 december 1845 3,590,014 563,072 628,500 1,039,745 2,231,317 31 december 1846 3,280,864 634,575 423,060 938,717 1,996,352 31 december 1847 2,733,753 7,231,325 350,108 791,899 1,863,332 30 june 1848 3,170,118 588,871 159,724 1,295,047 2,043,642 31 december 1848 3,089,659 645,468 176,824 1,189,213 2,011,505 30 june 1849 3,392,857 552,642 246,494 964,800 1,763,936 31 december 1849 3,680,623 686,761 264,577 973,691 1,224,029 30 june 1850 3,821,022 654,649 258,177 972,055 1,884,881 31 december 1850 3,969,648 566,039 334,982 1,089,794 1,990,815 30 june 1851 4,414,179 691,719 424,195 1,054,018 2,169,932 31 december 1851 4,677,298 653,946 378,337 1,054,018 2,080,301 30 june 1852 5,245,135 861,778 136,687 1,054,018 2,122,483 31 december 1852 5,581,706 855,057 397,087 1,119,477 2,371,621 30 june 1853 6,219,817 904,252 499,467 1,218,852 2,622,571 31 december 1853 6,259,540 791,699 677,392 1,468,902 2,937,993 30 june 1854 6,892,470 827,397 917,557 1,457,415 3,202,369 31 december 1854 7,177,244 694,309 486,400 1,451,074 2,631,783 30 june 1855 8,166,553 722,243 483,890 1,754,074 2,960,207 31 december 1855 8,744,095 847,856 451,575 1,949,074 3,248,505 30 june 1856 11,170,010 906,876 601,800 1,980,489 3,489,165 31 december 1856 11,438,461 1,119,591 432,000 2,922,625 4,474,216 30 june 1857 13,913,058 967,078 687,730 3,353,179 5,007,987 31 december 1857 113,889,021 2,226,441 1,115,883 3,582,797 6,923,121 1191. do you employ your money in the discounting of bills for other persons than your own customers?--discount brokers. 1192. only to discount brokers? yes. 1193. not to strangers who are in the habit of bringing you in bills; commercial houses?--i should say generally not. we have one or two houses for whom we discount who have not accounts with us as bankers, but generally we do not discount except for our customers or for bill-brokers. 1194. do you consider that any advantage can arise to the public by the bank of england advancing to a greater extent than can be considered strictly prudent on the soundest principle of banking, under the idea of their affording aid to the commercial world?--as i said before, as long as there are good bills in circulation, that is, bills about which there would be no doubt of their being paid at maturity, there should be some means by which those bills could be discounted. 1195. and do you think that it is part of the functions of the bank of england to discount a bill for anybody, merely because the party holding the bill wishes to convert it into cash?--as i said before, the bank of england will have great difficulty in getting rid of that inconvenient idea which there is in the mind of the public, that the bank of england is something more than an ordinary joint stock bank. i think it must depend very much upon circumstances whether you can or cannot refuse the discount of good bills which are offered to you. note c. statement of circulation and deposits of the bank of dundee at intervals of ten years between 1764 and 1864. year circulation deposits l l 1764 30,395 - 1774 27,670 - 1784 56,342 - 1794 50,354 - 1804 54,096 157,821 1814 46,627 445,066 1824 29,675 343,948 1834 26,467 563,202 1844 27,504 535,253 1854 40,774 705,222 1864 41,118 684,898 the bank did not begin to receive deposits until 1792, in which year they amounted to 35,944 l. note d. meeting of the proprietors of the bank of england. september 13, 1866. (from 'economist,' september 22, 1866.) a general court of the bank of england was held at the bank at twelve o'clock on the 3th instant, for the purpose of declaring a dividend for the past half-year. mr. launcelot holland, the governor of the bank, who presided upon the occasion, addressed the proprietors as follows: this is one of the quarterly general courts appointed by our charter, and it is also one of our half-yearly general courts, held under our bye-laws, for the purpose of declaring a dividend. from a statement which i hold in my hand it appears that the net profits of the bank for the half-year ending on the 31st of august last amounted to 970,014 l. 17s. 10d.; making the amount of the rest on that day, 3,981,783 l. 18s. 11d.; and after providing for a dividend at the rate of 6 l. 10s. per cent, the rest will stand at 3,035,838 l.. 18s. 11d. the court of directors, therefore, propose that a half-yearly dividend of interest and profits, to the amount of 6 l. 10s. per cent, without deduction on account of income tax, shall be made on the 10th of october next. that is the proposal i have now to lay before the general court; but as important events have occurred since we last met, i think it right i should briefly advert to them upon this occasion. a great strain has within the last few months been put upon the resources of this house, and of the whole banking community of london; and i think i am entitled to say that not only this house but the entire banking body acquitted themselves most honourably and creditably throughout that very trying period. banking is a very peculiar business, and it depends so much upon credit that the least blast of suspicion is sufficient to sweep away, as it were, the harvest of a whole year. but the manner in which the banking establishments generally of london met the demands made upon them during the greater portion of the past half-year affords a most satisfactory proof of the soundness of the principles on which their business is conducted. this house exerted itself to the utmost--and exerted itself most successfully--to meet the crisis. we did not flinch from our post. when the storm came upon us, on the morning on which it became known that the house of overend and co. had failed, we were in as sound and healthy a position as any banking establishment could hold; and on that day and throughout the succeeding week, we made advances which would hardly be credited. i do not believe that any one would have thought of predicting, even at the shortest period beforehand, the greatness of those advances. it was not unnatural that in this state of things a certain degree of alarm should have taken possession of the public mind, and that those who required accommodation from the bank should have gone to the chancellor of the exchequer and requested the government to empower us to issue notes beyond the statutory amount, if we should think that such a measure was desirable. but we had to act before we could receive any such power, and before the chancellor of the exchequer was perhaps out of his bed we had advanced one-half of our reserves, which were certainly thus reduced to an amount which we could not witness without regret. but we could not flinch from the duty which we conceived was imposed upon us of supporting the banking community, and i am not aware that any legitimate application for assistance made to this house was refused. every gentleman who came here with adequate security was liberally dealt with, and if accommodation could not be afforded to the full extent which was demanded, no one who offered proper security failed to obtain relief from this house. i have perhaps gone a little more into details than is customary upon these occasions, but the times have been unusually interesting, and i thought it desirable to say this much in justification of the course adopted by this house of running its balances down to a point which some gentlemen may consider dangerous. looking back, however, upon recent events, i cannot take any blame to this court for not having been prepared for such a tornado as that which burst upon us on the 11th of may; and i hope the court of proprietors will feel that their directors acted properly upon that occasion, and that they did their best to meet a very extraordinary state of circumstances. i have now only to move that a dividend be declared at the rate of 6 l. 10s. per cent for the past half-year. mr. hyam said that before the question was put he wished to offer a few observations to the court. he believed that the statement of accounts which had just been laid before them was perfectly satisfactory. he also thought that the directors had done their best to assist the commercial classes throughout the late monetary crisis; but it appeared to him at the same time that they were in fault in not having applied at an earlier period to the chancellor of the exchequer for a suspension of the bank act. it was well known that the demand on the bank was materially lessened in the earlier part of the day, in consequence of a rumour which had been extensively circulated that permission to overstep the limits laid down in the act had been granted. that concession, however, had only been made after the most urgent representations had been addressed to the chancellor of the exchequer at a late hour in the night, and if it had then been refused he felt persuaded that the state of affairs would have been much worse on the saturday than it had been on the friday. the fact was that the act of 1844 was totally unsuited to the present requirements of the country, which since that period had tripled or quadrupled its commerce; and he was sorry to know that the measure seemed to meet with the approval of many of their directors. any one who read the speeches made in the course of the discussion on mr. watkins' motion must see that the subject called for further inquiry; and he trusted that the demand for that inquiry would yet be conceded. mr. jones said he entirely dissented from the views with respect to the bank act entertained by the hon. proprietor who had just addressed the court. in his opinion the main cause of the recent monetary crisis was that, while we had bought 275,000,000 l. worth of foreign produce in the year 1865, the value of our exports had only been 165,000,000 l., so that we had a balance against us to the amount of 110,000,000 l. he believed that the bank acted wisely in resisting every attempt to increase the paper currency, and he felt convinced that the working classes would be the people least likely to benefit by the rise in prices which would take place under such a change. mr. moxon said he should be glad to know what was the amount of bad debts made by the bank during the past half-year. it was stated very confidently out of doors that during that period the directors had between 3,000,000 l. and 4,000,000 l. of bills returned to them. the governor of the bank.--may i ask what is your authority for that statement? we are rather amused at hearing it, and we have never been able to trace any rumour of the kind to an authentic source. mr. moxon continued--whether the bad debts were large or small, he thought it was desirable that they should all know what was their actual amount. they had been told at their last meeting that the bank held a great many railway debentures; and he should like to know whether any of those debentures came from railway companies that had since been unable to meet their obligations. he understood that a portion of their property was locked up in advances made on account of the thames embankment, and in other ways which did not leave the money available for general banking and commercial purposes; and if that were so, he should express his disapproval of such a policy. there was another important point to which he wished to advert. he was anxious to know what was the aggregate balance of the joint stock banks in the bank of england. he feared that some time or other the joint stock banks would be in a position to command perhaps the stoppage of the bank of england. if that were not so, the sooner the public were full & informed upon the point the better. but if ten or twelve joint stock banks had large balances in the bank of england, and if the bank balances were to run very low, people would naturally begin to suspect that the joint stock banks had more power over the bank of england than they ought to have. he wished further to ask whether the directors had of late taken into consideration the expediency of paying interest on deposits. he believed that under their present mode of carrying on their business they were foregoing large profits which they might receive with advantage to themselves and to the public; and he would recommend that they should undertake the custody of securities after the system adopted by the bank of france. in conclusion, he proposed to move three resolutions, for the purpose of providing, first, that a list of all the proprietors of bank stock should be printed, with a separate entry of the names of all those persons not entitled to vote from the smallness of their stock, or from the shortness of time during which they held it; secondly, that a copy of the charter of the bank, with the rules, orders, and bye-laws passed for the good government of their corporation, should be printed for the use of the shareholders; and thirdly, that auditors should be appointed to make detailed audits of their accounts. mr. gerstenberg recommended that the directors should take some step for the purpose of preventing the spread of such erroneous notions as that which lately prevailed on the continent, that the bank was about to suspend specie payments. mr. w. botly said he wished to see the directors taking into their consideration the expediency of allowing interest on deposits. mr. alderman salomons said he wished to take that opportunity of stating that he believed nothing could be more satisfactory to the managers and shareholders of joint stock banks than the testimony which the governor of the bank of england had that day borne to the sound and honourable manner in which their business was conducted. it was mainfestly desirable that the joint stock banks and the banking interest generally should work in harmony with the bank of england; and he sincerely thanked the governor of the bank for the kindly manner in which he had alluded to the mode in which the joint stock banks had met the late monetary crisis. the governor of the bank said--before putting the question for the declaration of a dividend, i wish to refer to one or two points that have been raised by the gentlemen who have addressed the court on this occasion. the most prominent topic brought under our notice is the expediency of allowing interest on deposits; and upon that point i must say that i believe a more dangerous innovation could not be made in the practice of the bank of england. the downfall of overend and gurney, and of many other houses, must be traced to the policy which they adopted of paying interest on deposits at call, while they were themselves tempted to invest the money so received in speculations in ireland or in america, or at the bottom of the sea, where it was not available when a moment of pressure arrived. mr. botly said he did not mean deposits on call. the governor of the bank of england continued--that is only a matter of detail; the main question is whether we ought to pay interest on deposits, and of such policy i must express my entire disapproval. mr. moxon has referred to the amount of our debts, but, as i stated when i took the liberty of interrupting him, we could never trace the origin of any rumour which prevailed upon that subject. as far as it can be said to have ever existed it had its origin most probably in the vast amount advanced by the bank. it must, however, be remembered that we did not make our advances without ample security, and the best proof of that is the marvelously small amount of bad debts which we contracted. it has never been a feature of the bank to state what was the precise amount of those debts; but i believe that if i were to mention it upon the present occasion, it would be found to be so inconsiderable that i should hardly obtain credence for the announcement i should have to make. i am convinced that our present dividend has been as honestly and as hardly earned as any that we have ever realised; but it has been obtained by means of great vigilance and great anxiety on the part of each and all of your directors; and i will add that i believe you would only diminish their sense of responsibility, and introduce confusion into the management of your business, if you were to transfer to auditors the making up of your accounts. if your directors deserve your confidence they are surely capable of performing that duty, and if they do not deserve it you ought not to continue them in their present office. with regard to the supposed lock-up of our capital, i must observe that, with 14,000,000 l. on our hands, we must necessarily invest it in a variety of securities; but there is no ground for imagining that our money is locked up and is not available for the purpose of making commercial advances. we advanced in the space of three months the sum of 45,000,000 l.; and what more than that do you want? it has been recommended that we should take charge of securities; but we have found it necessary to refuse all securities except those of our customers; and i believe the custody of securities is becoming a growing evil. with regard to railway debentures, i do not believe we have one of a doubtful character. we have no debentures except those of first-class railway companies and companies which we know are acting within their parliamentary limits. having alluded to those subjects, i will now put the motion for the declaration of the dividend. the motion was accordingly put and unanimously adopted. the chairman then announced that that resolution should be confirmed by ballot on tuesday next, inasmuch as the bank could not, under the provisions of its act of parliament, declare otherwise than in that form a dividend higher than that which it had distributed during the preceding half-year. the three resolutions proposed by mr. moxon were then read; but they were not put to the meeting, inasmuch as they found no seconders. mr. alderman salomons said that their governor had observed that he thought the payment of interests on deposits was objectionable; and everyone must see that such a practice ought not to be adopted by the bank of england. but he took it for granted that the governor did not mean that his statement should apply to joint stock banks which he had himself told them had conducted their business so creditably and so successfully. the governor of the bank said that what he stated was that such a system would be dangerous for the bank of england, and dangerous if carried into effect in the way contemplated by mr. moxon. mr. p. n. laurie said he understood the governor of the bank to say that it would be dangerous to take deposits on call, and in that opinion he concurred. mr. alderman salomons said that he, too, was of the same opinion. on the motion of mr. alderman salomons, seconded by mr. botly, a vote of thanks was passed to the governor and the directors for their able and successful management of the bank during the past half-year, and the proceedings then terminated. the god in the car _a novel_ by anthony hope author of the prisoner of zenda, etc. [illustration] new york d. appleton and company 1894 copyright, 1894. by d. appleton and company. contents. chapter page i.--an insolent memory 1 ii.--the coining of a nickname 14 iii.--mrs. dennison's orders 26 iv.--two young gentlemen 39 v.--a telegram to frankfort 52 vi.--whose shall it be? 66 vii.--an attempt to stop the wheels 81 viii.--converts and heretics 96 ix.--an oppressive atmosphere 108 x.--a lady's bit of work 120 xi.--against his coming 134 xii.--it can wait 148 xiii.--a spasm of penitence 160 xiv.--the thing or the man 173 xv.--the work of a week 185 xvi.--the last barriers 200 xvii.--a sound in the night 217 xviii.--on the matter of a railway 231 xix.--past praying for 248 xx.--the baron's contribution 258 xxi.--a joint in his armour 271 xxii.--a toast in champagne 287 xxiii.--the cutting of the knot 304 xxiv.--the return of a friend 317 xxv.--the moving car 332 the god in the car. chapter i. an insolent memory. "i'm so blind," said miss ferrars plaintively. "where are my glasses?" "what do you want to see?" asked lord semingham. "the man in the corner, talking to mr. loring." "oh, you won't know him even with the glasses. he's the sort of man you must be introduced to three times before there's any chance of a permanent impression." "you seem to recognise him." "i know him in business. we are, or rather are going to be, fellow-directors of a company." "oh, then i shall see you in the dock together some day." "what touching faith in the public prosecutor! does nothing shake your optimism?" "perhaps your witticisms." "peace, peace!" "well, who is he?" "he was once," observed lord semingham, as though stating a curious fact, "in a government. his name is foster belford, and he is still asked to the state concerts." "i knew i knew him! why, harry dennison thinks great things of him!" "it is possible." "and he, not to be behindhand in politeness, thinks greater of maggie dennison." "his task is the easier." "and you and he are going to have the effrontery to ask shareholders to trust their money to you?" "oh, it isn't us; it's ruston." "mr. ruston? i've heard of him." "you very rarely admit that about anybody." "moreover, i've met him." "he's quite coming to the front, of late, i know." "is there any positive harm in being in the fashion? i like now and then to talk to the people one is obliged to talk about." "go on," said lord semingham, urbanely. "but, my dear lord semingham----" "hush! keep the truth from me, like a kind woman. ah! here comes tom loring----how are you, loring? where's dennison?" "at the house. i ought to be there, too." "why, of course. the place of a private secretary is by the side of----" "his chief's wife. we all know that," interposed adela ferrars. "when you grow old, you'll be sorry for all the wicked things you've said," observed loring. "well, there'll be nothing else to do. where are you going, lord semingham?" "home." "why?" "because i've done my duty. oh, but here's dennison, and i want a word with him." lord semingham passed on, leaving the other two together. "has harry dennison been speaking to-day?" asked miss ferrars. "well, he had something prepared." "he had something! you know you write them." mr. loring frowned. "yes, and i know we aren't allowed to say so," pursued adela. "it's neither just nor kind to dennison." miss ferrars looked at him, her brows slightly raised. "and you are both just and kind, really," he added. "and you, mr. loring, are a wonderful man. you're not ashamed to be serious! oh, yes, i've annoyed--you're quite right. i was--whatever i was--on the ninth of last march, and i think i'm too old to be lectured." tom loring laughed, and, an instant later, adela followed suit. "i suppose it was horrid of me," she said. "can't we turn it round and consider it as a compliment to you?" tom looked doubtful, but, before he could answer, adela cried: "oh, here's evan haselden, and--yes--it's mr. ruston with him?" as the two men entered, mrs. dennison rose from her chair. she was a tall woman; her years fell one or two short of thirty. she was not a beauty, but her broad brow and expressive features, joined to a certain subdued dignity of manner and much grace of movement, made her conspicuous among the women in her drawing-room. young evan haselden seemed to appreciate her, for he bowed his glossy curly head, and shook hands in a way that almost turned the greeting into a deferentially distant caress. mrs. dennison acknowledged his hinted homage with a bright smile, and turned to ruston. "at last!" she said, with another smile. "the first time after--how many years?" "eight, i believe," he answered. "oh, you're terribly definite. and what have you been doing with yourself?" he shrugged his square shoulders, and she did not press her question, but let her eyes wander over him. "well?" he asked. "oh--improved. and i?" suddenly ruston laughed. "last time we met," he said, "you swore you'd never speak to me again." "i'd quite forgotten my fearful threat." he looked straight in her face for a moment, as he asked-"and the cause of it?" mrs. dennison coloured. "yes, quite," she answered; and conscious that her words carried no conviction to him, she added hastily, "go and speak to harry. there he is." ruston obeyed her, and being left for a moment alone, she sat down on the chair placed ready near the door for her short intervals of rest. there was a slight pucker on her brow. the sight of ruston and his question stirred in her thoughts, which were never long dormant, and which his coming woke into sudden activity. she had not anticipated that he would venture to recall to her that incident--at least, not at once--in the first instant of meeting, at such a time and such a place. but as he had, she found herself yielding to the reminiscence he induced. forgotten the cause of her anger with him? for the first two or three years of her married life, she would have answered, "yes, i have forgotten it." then had come a period when now and again it recurred to her, not for his sake or its own, but as a summary of her stifled feeling; and during that period she had resolutely struggled not to remember it. of late that struggle had ceased, and the thing lay a perpetual background to her thoughts: when there was nothing else to think about, when the stage of her mind was empty of moving figures, it snatched at the chance of prominence, and thus became a recurrent consciousness from which her interests and her occupations could not permanently rescue her. for example, here she was thinking of it in the very midst of her party. yet this persistence of memory seemed impertinent, unreasonable, almost insolent. for, as she told herself, finding it necessary to tell herself more and more often, her husband was still all that he had been when he had won her heart--good-looking, good-tempered, infinitely kind and devoted. when she married she had triumphed confidently in these qualities; and the unanimous cry of surprised congratulations at the match she was making had confirmed her own joy and exultation in it. it had been a great match; and yet, beyond all question, also a love match. but now the chorus of wondering applause was forgotten, and there remained only the one voice which had been raised to break the harmony of approbation--a voice that nobody, herself least of all, had listened to then. how should it be listened to? it came from a nobody--a young man of no account, whose opinion none cared to ask; whose judgment, had it been worth anything in itself, lay under suspicion of being biassed by jealousy. willie ruston had never declared himself her suitor; yet (she clung hard to this) he would not have said what he did had not the chagrin of a defeated rival inspired him; and a defeated rival, as everybody knows, will say anything. certainly she had been right not to listen, and was wrong to remember. to this she had often made up her mind, and to this she returned now as she sat watching her husband and willie ruston, forgetful of all the chattering crowd beside. as to what it was she resolved not to remember, and did remember, it was just one sentence--his only comment on the news of her engagement, his only hint of any opinion or feeling about it. it was short, sharp, decisive, and, as his judgments were, even in the days when he, alone of all the world, held them of any moment, absolutely confident; it was also, she had felt on hearing it, utterly untrue, unjust, and ungenerous. it had rung out like a pistol-shot, "maggie, you're marrying a fool," and then a snap of tight-fitting lips, a glance of scornful eyes, and a quick, unhesitating stride away that hardly waited for a contemptuous smile at her angry cry, "i'll never speak to you again." she had been in a fury of wrath--she had a power of wrath--that a plain, awkward, penniless, and obscure youth--one whom she sometimes disliked for his arrogance, and sometimes derided for his self-confidence--should dare to say such a thing about her harry, whom she was so proud to love, and so proud to have won. it was indeed an insolent memory that flung the thing again and again in her teeth. the party began to melt away. the first good-bye roused mrs. dennison from her enveloping reverie. lady valentine, from whom it came, lingered for a gush of voluble confidences about the charm of the house, and the people, and the smart little band that played softly in an alcove, and what not; her daughter stood by, learning, it is to be hoped, how it is meet to behave in society, and scanning evan haselden's trim figure with wary, critical glances, alert to turn aside if he should glance her way. mrs. dennison returned the ball of civility, and, released by several more departures, joined adela ferrars. adela stood facing haselden and tom loring, who were arm-in-arm. at the other end of the room harry dennison and ruston were still in conversation. "these _men_, maggie," began adela--and it seemed a mere caprice of pronunciation, that the word did not shape itself into "monkeys"--"are the absurdest creatures. they say i'm not fit to take part in politics! and why?" mrs. dennison shook her head, and smiled. "because, if you please, i'm too emotional. emotional, indeed! and i can't generalise! oh, couldn't i generalise about men!" "women can never say 'no,'" observed evan haselden, not in the least as if he were repeating a commonplace. "you'll find you're wrong when you grow up," retorted adela. "i doubt that," said mrs. dennison, with the kindest of smiles. "maggie, you spoil the boy. isn't it enough that he should have gone straight from the fourth form--where, i suppose, he learnt to generalise----" "at any rate, not to be emotional," murmured loring. "into parliament, without having his head turned by----" "you'd better go, evan," suggested loring in a warning tone. "i shall go too," announced adela. "i'm walking your way," said evan, who seemed to bear no malice. "how delightful!" "you don't object?" "not the least. i'm driving." "a mere schoolboy score!" "how stupid of me! you haven't had time to forget them." "oh, take her away," said mrs. dennison, and they disappeared in a fire of retorts, happy, or happy enough for happy people, and probably evan drove with the lady after all. mrs. dennison walked towards where her husband and ruston sat on a sofa in talk. "what are you two conspiring about?" she asked. "ruston had something to say to me about business." "what, already?" "oh, we've met in the city, mrs. dennison," explained ruston, with a confidential nod to harry. "and that was the object of your appearance here to-day? i was flattering my party, it seems." "no. i didn't expect to find your husband. i thought he would be at the house." "ah, harry, how did the speech go?" "oh, really pretty well, i think," answered harry dennison, with a contented air. "i got nearly half through before we were counted out." a very faint smile showed on his wife's face. "so you were counted out?" she asked. "yes, or i shouldn't be here." "you see, i am acquitted, mrs. dennison. only an accident brought him here." "an accident impossible to foresee," she acquiesced, with the slightest trace of bitterness--so slight that her husband did not notice it. ruston rose. "well, you'd better talk to semingham about it," he remarked to harry dennison; "he's one of us, you know." "yes, i will. and i'll just get you that pamphlet of mine; you can put it in your pocket." he ran out of the room to fetch what he promised. mrs. dennison, still faintly smiling, held out her hand to ruston. "it's been very pleasant to see you again," she said graciously. "i hope it won't be eight years before our next meeting." "oh, no; you see i'm floating now." "floating?" she repeated, with a smile of enquiry. "yes; on the surface. i've been in the depths till very lately, and there one meets no good society." "ah! you've had a struggle?" "yes," he answered, laughing; "you may call it a bit of a struggle." she looked at him with grave curious eyes. "and you are not married?" she asked abruptly. "no, i'm glad to say." "why glad, mr. ruston? some people like being married." "oh, i don't claim to be above it, mrs. dennison," he answered with a laugh, "but a wife would have been a great hindrance to me all these years." there was a simple and _bona fide_ air about his statement; it was not raillery; and mrs. dennison laughed in her turn. "oh, how like you!" she murmured. mr. ruston, with a passing gleam of surprise at her merriment, bade her a very unemotional farewell, and left her. she sat down and waited idly for her husband's return. presently he came in. he had caught ruston in the hall, delivered his pamphlet, and was whistling cheerfully. he took a chair near his wife. "rum chap that!" he said. "but he's got a good deal of stuff in him;" and he resumed his lively tune. the tune annoyed mrs. dennison. to suffer whistling without visible offence was one of her daily trials. harry's emotions and reflections were prone to express themselves through that medium. "i didn't do half-badly, to-day," said harry, breaking off again. "old tom had got it all splendidly in shape for me--by jove, i don't know what i should do without tom--and i think i put it pretty well. but, of course, it's a subject that doesn't catch on with everybody." it was the dullest subject in the world; it was also, in all likelihood, one of the most unimportant; and dull subjects are so seldom unimportant that the perversity of the combination moved maggie dennison to a wondering pity. she rose and came behind the chair where her husband sat. leaning over the back, she rested her elbows on his shoulders, and lightly clasped her hands round his neck. he stopped his whistle, which had grown soft and contented, laughed, and kissed one of the encircling hands, and she, bending lower, kissed him on the forehead as he turned his face up to look at her. "you poor dear old thing!" she said with a smile and a sigh. chapter ii. the coining of a nickname. when it was no later than the middle of june, adela ferrars, having her reputation to maintain, ventured to sum up the season. it was, she said, a ruston-cum-violetta season. violetta's doings and unexampled triumphs have, perhaps luckily, no place here; her dancing was higher and her songs more surpassing in another dimension than those of any performer who had hitherto won the smiles of society; and young men who are getting on in life still talk about her. ruston's fame was less widespread, but his appearance was an undeniable fact of the year. when a man, the first five years of whose adult life have been spent on a stool in a coal merchant's office, and the second five somewhere (an absolutely vague somewhere) in southern or central africa, comes before the public, offering in one closed hand a new empire, or, to avoid all exaggeration, at least a province, asking with the other opened hand for three million pounds, the public is bound to afford him the tribute of some curiosity. when he enlists in his scheme men of eminence like mr. foster belford, of rank like lord semingham, of great financial resources like dennison sons & company, he becomes one whom it is expedient to bid to dinner and examine with scrutinising enquiry. he may have a bag of gold for you; or you may enjoy the pleasure of exploding his _prestige_; at least, you are timely and up-to-date, and none can say that your house is a den of fogies, or yourself, in the language made to express these things (for how otherwise should they get themselves expressed?) on other than "the inner rail." it chanced that miss ferrars arrived early at the seminghams, and she talked with her host on the hearth-rug, while lady semingham was elaborately surveying her small but comely person in a mirror at the other end of the long room. lord semingham was rather short and rather stout; he hardly looked as if his ancestors had fought at hastings--perhaps they had not, though the peerage said they had. he wore close-cut black whiskers, and the blue of his jowl witnessed a suppressed beard of great vitality. his single eye-glass reflected answering twinkles to adela's _pince-nez_, and his mouth was puckered at the world's constant entertainment; men said that he found his wife alone a sufficient and inexhaustible amusement. "the heathers are coming," he said, "and lady val and marjory, and young haselden, and ruston." "_toujours_ ruston," murmured adela. "and one or two more. what's wrong with ruston? there is, my dear adela, no attitude more offensive than that of indifference to what the common herd finds interesting." "he's a fright," said adela. "you'd spike yourself on that bristly beard of his." "if you happened to be near enough, you mean?--a danger my sex and our national habits render remote. bessie!" lady semingham came towards them, with one last craning look at her own back as she turned. she always left the neighbourhood of a mirror with regret. "well?" she asked with a patient little sigh. "adela is abusing your friend ruston." "he's not my friend, alfred. what's the matter, adela?" "i don't think i like him. he's hard." "he's got a demon, you see," said semingham. "for that matter we all have, but his is a whopper." "oh, what's my demon?" cried adela. is not oneself always the most interesting subject? "yours? cleverness; he goads you into saying things one can't see the meaning of." "thanks! and yours?" "grinning--so i grin at your things, though i don't understand 'em." "and bessie's?" "oh, forgive me. leave us a quiet home." "and now, mr. ruston's?" "his is----" but the door opened, and the guests, all arriving in a heap, just twenty minutes late, flooded the room and drowned the topic. another five minutes passed, and people had begun furtively to count heads and wonder whom they were waiting for, when evan haselden was announced. hot on his heels came ruston, and the party was completed. mr. otto heather took adela ferrars in to dinner. her heart sank as he offered his arm. she had been heard to call him the silliest man in europe; on the other hand, his wife, and some half-dozen people besides, thought him the cleverest in london. "that man," he said, swallowing his soup and nodding his head towards ruston, "personifies all the hideous tendencies of the age--its brutality, its commercialism, its selfishness, its----" miss ferrars looked across the table. ruston was seated at lady semingham's left hand, and she was prattling to him in her sweet indistinct little voice. nothing in his appearance warranted heather's outburst, unless it were a sort of alert and almost defiant readiness, smacking of a challenge to catch him napping. "i'm not a mediã¦valist myself," she observed, and prepared to endure the penalty of an _exposã©_ of heather's theories. during its progress, she peered--for her near sight was no affectation--now and again at the occasion of her sufferings. she had heard a good deal about him--something from her host, something from harry dennison, more from the paragraphists who had scented their prey, and gathered from the four quarters of heaven (or wherever they dwelt) upon him. she knew about the coal merchant's office, the impatient flight from it, and the rush over the seas; there were stories of real naked want, where a bed and shelter bounded for the moment all a life's aspirations. she summed him up as a buccaneer modernised; and one does not expect buccaneers to be amiable, while culture in them would be an incongruity. it was, on the whole, not very surprising, she thought, that few people liked william roger ruston--nor that many believed in him. "don't you agree with me?" asked heather. "not in the least," said adela at random. the odds that he had been saying something foolish were very large. "i thought you were such friends!" exclaimed heather in surprise. "well, to confess, i was thinking of something else. who do you mean?" "why, mrs. dennison. i was saying that her calm queenly manner----" "good gracious, mr. heather, don't call women 'queenly.' you're like--what is it?--a 'dime novel.'" if this comparison were meant to relieve her from the genius' conversation for the rest of dinner, it was admirably conceived. he turned his shoulder on her in undisguised dudgeon. "and how's the great scheme?" asked somebody of ruston. "we hope to get the money," he said, turning for a moment from his hostess. "and if we do that, we're all right." "everything's going on very well," called semingham from the foot of the table. "they've killed a missionary." "how dreadful!" lisped his wife. "regrettable in itself, but the first step towards empire," explained semingham with a smile. "it's to stop things of that kind that we are going there," mr. belford pronounced; the speech was evidently meant to be repeated, and to rank as authoritative. "of course," chuckled semingham. if he had been a shopman, he could not have resisted showing his customers how the adulteration was done. in spite of herself--for she strongly objected to being one of an admiring crowd, and liked a personal _cachet_ on her emotions--adela felt pleasure when, after dinner, ruston came straight to her and, displacing evan haselden, sat down by her side. he assumed the position with a business-like air, as though he meant to stay. she often, indeed habitually, had two or three men round her, but to-night none contested ruston's exclusive possession; she fancied that the business-like air had something to do with it. she had been taken possession of, she said to herself, with a little impatience and yet a little pleasure also. "you know everybody here, i suppose?" he asked. his tone cast a doubt on the value of the knowledge. "it's my tenth season," said adela, with a laugh. "i stopped counting them once, but there comes a time when one has to begin again." he looked at her--critically, she thought--as he said, "the ravages of time no longer to be ignored?" "well, the exaggerations of friends to be checked. yes, i suppose i know most of----" she paused for a word. "the gang," he suggested, leaning back and crossing his legs. "yes, we are a gang, and all on one chain. you're a recent captive, though." "yes," he assented, "it's pretty new to me. a year ago i hadn't a dress coat." "the gods are giving you a second youth then." "well, i take it. i don't know that i have much to thank the gods for." "they've been mostly against you, haven't they? however, what does that matter, if you beat them?" he did not disdain her compliment, but neither did he accept it. he ignored it, and adela, who paid very few compliments, was amused and vexed. "perhaps," she added, "you think your victory still incomplete?" this gained no better attention. mr. ruston seemed to be following his own thoughts. "it must be a curious thing," he remarked, "to be born to a place like semingham's." "and to use it--or not to use it--like lord semingham?" "yes, i was thinking of that," he admitted. "to be eminent requires some self-deception, doesn't it? without that, it would seem too absurd. i think lord semingham is overweighted with humour." she paused and then--to show that she was not in awe of him--she added,--"now, i should say, you have very little." "very little, indeed, i should think," he agreed composedly. "you're the only man i ever heard admit that of himself; we all say it of one another." "i know what i have and haven't got pretty well." adela was beginning to be more sure that she disliked him, but the topic had its interest for her and she went on, "now i like to think i've got everything." to her annoyance, the topic seemed to lose interest for him, just in proportion as it gained interest for her. in fact, mr. ruston did not apparently care to talk about what she liked or didn't like. "who's that pretty girl over there," he asked, "talking to young haselden?" "marjory valentine," said adela curtly. "oh! i think i should like to talk to her." "pray, don't let me prevent you," said adela in very distant tones. the man seemed to have no manners. mr. ruston said nothing, but gave a short laugh. adela was not accustomed to be laughed at openly. yet she felt defenceless; this pachydermatous animal would be impervious to the pricks of her rapier. "you're amused?" she asked sharply. "why were you in such a hurry to take offence? i didn't say i wanted to go and talk to her now." "it sounded like it." "oh, well, i'm very sorry," he conceded, still smiling, and obviously thinking her very absurd. she rose from her seat. "please do, though. she'll be going soon, and you mayn't get another chance." "well, i will then," he answered simply, accompanying the remark with a nod of approval for her sensible reminder. and he went at once. she saw him touch haselden on the shoulder, and make the young man present him to marjory. ruston sat down and haselden drifted, aimless and forlorn, on a solitary passage along the length of the room. adela joined lady semingham. "that's a dreadful man, bessie," she said; "he's a regular juggernaut." she disturbed lady semingham in a moment of happiness; everybody had been provided with conversation, and the hostess could sit in peaceful silence, looking, and knowing that she looked, very dainty and pretty; she liked that much better than talking. "who's what, dear?" she murmured. "that man--mr. ruston. i say he's a juggernaut. if you're in the way, he just walks over you--and sometimes when you're not: for fun, i suppose." "alfred says he's very clever," observed lady semingham, in a tone that evaded any personal responsibility for the truth of the statement. "well, i dislike him very much," declared adela. "we won't have him again when you're coming, dear," promised her friend soothingly. adela looked at her, hesitated, opened her fan, shut it again, and smiled. "oh, i didn't mean that, bessie," she said with half a laugh. "do, please." "but if you dislike him----" "why, my dear, doesn't one hate half the men one likes meeting--and all the women!" lady semingham smiled amiably. she did not care to think out what that meant; it was adela's way, just as it was her husband's way to laugh at many things that seemed to her to afford no opening for mirth. but adela was not to escape. semingham himself appeared suddenly at her elbow, and observed, "that's either nonsense or a truism, you know." "neither," said adela with spirit; but her defence was interrupted by evan haselden. "i'm going," said he, and he looked out of temper. "i've got another place to go to. and anyhow----" "well?" "i'd like to be somewhere where that chap ruston isn't for a little while." adela glanced across. ruston was still talking to marjory valentine. "what can he find to say to her?" thought adela. "what the deuce she finds to talk about to that fellow, i can't think," pursued evan, and he flung off to bid lady semingham good-night. adela caught her host's eye and laughed. lord semingham's eyes twinkled. "it's a big province," he observed, "so there may be room for him--out there." "i," said adela, with an air of affected modesty, "have ventured, subject to your criticism, to dub him juggernaut." "h'm," said semingham, "it's a little obvious, but not so bad for you." chapter iii. mrs. dennison's orders. next door to mrs. dennison's large house in curzon street there lived, in a small house, a friend of hers, a certain mrs. cormack. she was a frenchwoman, who had been married to an englishman, and was now his most resigned widow. she did not pretend to herself, or to anybody else, that mr. cormack's death had been a pure misfortune, and by virtue of her past trials--perhaps, also, of her nationality--she was keenly awake to the seamy side of matrimony. she would rhapsodise on the joys of an ideal marriage, with a skilful hint of its rarity, and condemn transgressors with a charitable reservation for insupportable miseries. she was, she said, very romantic. tom loring, however (whose evidence was tainted by an intense dislike of her), declared that _affaires du coeur_ interested her only when one at least of the parties was lawfully bound to a third person; when both were thus trammelled, the situation was ideal. but the loves of those who were in a position to marry one another, and had no particular reason for not following that legitimate path to happiness, seemed to her (still according to tom) dull, uninspiring--all, in fact, that there was possible of english and stupid. she hardly (tom would go on, warming to his subject) believed in them at all, and she was in the habit of regarding wedlock merely as a condition precedent to its own violent dissolution. whether this unhappy mode of looking at the matter were due to her own peculiarities, or to those of the late mr. cormack, or to those of her nation, tom did not pretend to say; he confined himself to denouncing it freely, and to telling mrs. dennison that her next-door neighbour was in all respects a most undesirable acquaintance; at which outbursts mrs. dennison would smile. mrs. dennison, coming out on to the balcony to see if her carriage were in sight down the street, found her friend close to her elbow. their balconies adjoined, and friendship had led to a little gate being substituted for the usual dwarf-wall of division. tom loring erected the gate into an allegory of direful portent. mrs. cormack passed through it, and laid an affectionate grasp on maggie dennison's arm. "you're starting early," she remarked. "i'm going a long way--right up to hampstead. i've promised harry to call on some people there." "ah! who?" "their name's carlin. he knows mr. carlin in business. mr. carlin's a friend of mr. ruston's." "oh, of ruston's? i like that ruston. he is interesting--inspiring." "is he?" said mrs. dennison, buttoning her glove. "you'd better marry him, berthe." "marry him? no, indeed. i think he would beat one." "is that being inspiring? i'm glad harry's not inspiring." "oh, you know what i mean. he's a man who----" mrs. cormack threw up her arms as though praying for the inspired word. mrs. dennison did not wait for it. "there's the carriage. good-bye, dear," she said. mrs. dennison started with a smile on her face. berthe was so funny; she was like a page out of a french novel. she loved anything not quite respectable, and peopled the world with heroes of loose morals and overpowering wills. she adored a dominating mind and lived in the discovery of affinities. what nonsense it all was--so very remote from the satisfactory humdrum of real life. one kept house, and gave dinners, and made the children happy, and was fond of one's husband, and life passed most----here mrs. dennison suddenly yawned, and fell to hoping that the carlins would not be oppressively dull. she had been bored all day long; the children had been fretful, and poor harry was hurt and in low spirits because of a cruel caricature in a comic paper, and tom loring had scolded her for laughing at the caricature (it hit harry off so exactly), and nobody had come to see her, except a wretch who had once been her kitchenmaid, and had come to terrible grief, and wanted to be taken back, and of course couldn't be, and had to be sent away in tears with a sovereign, and the tears were no use and the sovereign not much. the carlins fortunately proved tolerably interesting in their own way. carlin was about fifty-five--an acute man of business, it seemed, and possessed by an unwavering confidence in the abilities of willie ruston. mrs. carlin was ten or fifteen years younger than her husband--a homely little woman, with a swarm of children. mrs. dennison wondered how they all fitted into the small house, but was told that it was larger by two good rooms than their old dwelling in the country town, whence willie had summoned them to take a hand in his schemes. willie had not insisted on the coal business being altogether abandoned--as mrs. carlin said, with a touch of timidity, it was well to have something to fall back upon--but he required most of carlin's time now, and the added work made residence in london a necessity. in spite of mr. carlin's air of hard-headedness, and his wife's prudent recognition of the business aspect of life, they neither of them seemed to have a will of their own. willie--as they both called him--was the providence, and the mixture of reverence and familiarity presented her old acquaintance in a new light to maggie dennison. even the children prattled about "willie," and their mother's rebukes made "mr. ruston" no more than a strange and transitory effort. mrs. dennison wondered what there was in the man--consulting her own recollections of him in hope of enlightenment. "he takes such broad views," said carlin, and seemed to find this characteristic the sufficient justification for his faith. "i used to know him very well, you know," remarked mrs. dennison, anxious to reach a more friendly footing, and realising that to connect herself with ruston offered the best chance of it. "i daresay he's spoken of me--of maggie sherwood?" they thought not, though willie had been in carlin's employ at the time when he and mrs. dennison parted. she was even able, by comparison of dates, to identify the holiday in which that scene had occurred and that sentence been spoken; but he had never mentioned her name. she very much doubted whether he had even thought of her. the fool and the fool's wife had both been dismissed from his mind. she frowned impatiently. why should it be anything to her if they had? there was a commotion among the children, starting from one who was perched on the window-sill. ruston himself was walking up to the door, dressed in a light suit and a straw hat. after the greetings, while all were busy getting him tea, he turned to mrs. dennison. "this is very kind of you," he said in an undertone. "my husband wished me to come," she replied. he seemed in good spirits. he laughed, as he answered, "well, i didn't suppose you came to please me." "you spoke as if you did," said she, still trying to resent his tone, which she thought a better guide to the truth than his easy disclaimer. "why, you never did anything to please me!" "did you ever ask me?" she retorted. he glanced at her for a moment, as he began to answer, "well, now, i don't believe i ever did; but i----" mrs. carlin interposed with a proffered cup of tea, and he broke off. "thanks, mrs. carlin. i say, carlin, it's going first-rate. your husband's help's simply invaluable, mrs. dennison." "harry?" she said, in a tone that she regretted a moment later, for there was a passing gleam in ruston's eye before he answered gravely, "his firm carries great weight. well, we're all in it here, sink or swim; aren't we, carlin?" carlin nodded emphatically, and his wife gave an anxious little sigh. "and what's to be the end of it?" asked mrs. dennison. "ten per cent," said carlin, with conviction. he could not have spoken with more utter satisfaction of the millennium. "the end?" echoed ruston. "oh, i don't know." "at least he won't say," said carlin admiringly. mrs. dennison rose to go, engaging the carlins to dine with her--an invitation accepted with some nervousness, until the extension of it to ruston gave them a wing to come under. ruston, with that directness of his that shamed mere dexterity and superseded tact, bade carlin stay where he was, and himself escorted the visitor to her carriage. half-way down the garden walk she looked up at him and remarked, "i expect you're the end." his eyes had been wandering, but they came back sharply to hers. "then don't tell anybody," said he lightly. she did not know whether what he said amounted to a confession or were merely a jest. the next moment he was off at a tangent. "i like your friend miss ferrars. she says a lot of sharp things, and now and then something sensible." "now and then! poor adela!" "well, she doesn't often try. besides, she's handsome." "oh, you've found time to notice that?" "i notice that first," said mr. ruston. they were at the carriage-door. "i'm not dressed properly, so i mustn't drive with you," he said. "supposing that was the only reason," she replied, smiling, "would it stop you?" "certainly." "why?" "because of other fools." "i'll take you as far as regent's park. the other fools are on the other side of that." "i'll chance so far," and, waving his hand vaguely towards the house, he got in. it did not seem to occur to him that there was any want of ceremony in his farewell to the carlins. "i suppose," she said, "you think most of us fools?" "i've been learning to think it less and to show it less still." "you're not much changed, though." "i've had some of my corners chipped off by collision with other hard substances." "thank you for that 'other'!" cried mrs. dennison, with a little laugh. "they must have been very hard ones." "i didn't say that they weren't a little bit injured too." "poor things! i should think so." "i have my human side." "generally the other side, isn't it?" she asked with a merry glance. the talk had suddenly become very pleasant. he laughed, and stopped the carriage. a sigh escaped from mrs. dennison. "next time," he said, "we'll talk about you, or miss ferrars, or that little miss marjory valentine, not about me. good-bye," and he was gone before she could say a word to him. but it was natural that she should think a little about him. she had not, she said to herself with a weary smile, too many interesting things to think about, and she began to find him decidedly interesting; in which fact again she found a certain strangeness and some material for reflection, because she recollected very well that as a girl she had not found him very attractive. perhaps she demanded then more colouring of romance than he had infused into their intercourse; she had indeed suspected him of suppressed romance, but the suppression had been very thorough, betraying itself only doubtfully here and there, as in his judgment of her accepted suitor. moreover, let his feelings then have been what they might, he was not, she felt sure, the man to cherish a fruitless love for eight or nine years, or to suffer any resurrection of expired emotions on a renewed encounter with an old flame. he buried his dead too deep for that; if they were in the way, she could fancy him sometimes shovelling the earth over them and stamping it down without looking too curiously whether life were actually extinct or only flickering towards its extinction; if it were not quite gone at the beginning of the gravedigger's work, it would be at the end, and the result was the same. nor did she suppose that ghosts gibbered or clanked in the orderly trim mansions of his brain. in fact, she was to him a more or less pleasant acquaintance, sandwiched in his mind between adela ferrars and marjory valentine--with something attractive about her, though she might lack the sparkle of the one and had been robbed of the other's youthful freshness. this was the conclusion which she called upon herself to draw as she drove back from hampstead--the plain and sensible conclusion. yet, as she reached curzon street, there was a smile on her face; and the conclusion was hardly such as to make her smile--unless indeed she had added to it the reflection that it is ill judging of things till they are finished. her acquaintance with willie ruston was not ended yet. "maggie, maggie!" cried her husband through the open door of his study as she passed up-stairs. "great news! we're to go ahead. we settled it at the meeting this morning." harry dennison was in exuberant spirits. the great company was on the verge of actual existence. from the chrysalis of its syndicate stage it was to issue a bright butterfly. "and ruston was most complimentary to our house. he said he could never have carried it through without us. he's in high feather." mrs. dennison listened to more details, thinking, as her husband talked, that ruston's cheerful mood was fully explained, but wondering that he had not himself thought it worth while to explain to her the cause of it a little more fully. with that achievement fresh in his hand, he had been content to hold his peace. did he think her not worth telling? with a cloud on her brow and her smile eclipsed, she passed on to the drawing-room. the window was open and she saw tom loring's back in the balcony. then she heard her friend mrs. cormack's rather shrill voice. "not say such things?" the voice cried, and mrs. dennison could picture the whirl of expostulatory hands that accompanied the question. "but why not?" tom's voice answered in the careful tones of a man who is trying not to lose his temper, or, anyhow, to conceal the loss. "well, apart from anything else, suppose dennison heard you? it wouldn't be over-pleasant for him." mrs. dennison stood still, slowly peeling off her gloves. "oh, the poor man! i would not like to hurt him. i will be silent. oh, he does his very best! but you can't help it." mrs. dennison stepped a yard nearer the window. "help what?" asked tom in the deepest exasperation, no longer to be hidden. "why, what must happen? it must be that the true man----" a smile flickered over maggie dennison's face. how like berthe! but whence came this topic? "nonsense, i tell you!" cried tom with a stamp of his foot. and at the sound mrs. dennison smiled again, and drew yet nearer to the window. "oh, it's always nonsense what i say! well, we shall see, mr. loring," and mrs. cormack tripped in through her window, and wrote in her diary--she kept a diary full of reflections--that englishmen were all stupid. she had written that before, but the deep truth bore repetition. tom went in too, and found himself face to face with mrs. dennison. bright spots of colour glowed on her cheeks; had she answered the question of the origin of the topic? tom blushed and looked furtively at her. "so the great scheme is launched," she remarked, "and mr. ruston triumphs!" tom's manner betrayed intense relief, but he was still perturbed. "we're having a precious lot of ruston," he observed, leaning against the mantelpiece and putting his hands in his pockets. "_i_ like him," said maggie dennison. "those are the orders, are they?" asked tom with a rather wry smile. "yes," she answered, smiling at tom's smile. it amused her when he put her manner into words. "then we all like him," said tom, and, feeling quite secure now, he added, "mrs. cormack said we should, which is rather against him." "oh, berthe's a silly woman. never mind her. harry likes him too." "lucky for ruston he does. your husband's a useful friend. i fancy most of ruston's friends are of the useful variety." "and why shouldn't we be useful to him?" "on the contrary, it seems our destiny," grumbled tom, whose destiny appeared not to please him. chapter iv. two young gentlemen. lady valentine was the widow of a baronet of good family and respectable means; the one was to be continued and the other absorbed by her son, young sir walter, now an oxford undergraduate and just turned twenty-one years of age. lady valentine had a jointure, and marjory a pretty face. the remaining family assets were a country-house of moderate dimensions in the neighbourhood of maidenhead, and a small flat in cromwell road. lady valentine deplored the rise of the plutocracy, and had sometimes secretly hoped that a plutocrat would marry her daughter. in other respects she was an honest and unaffected woman. young sir walter, however, had his own views for his sister, and young sir walter, when he surveyed the position which the laws and customs of the realm gave him, was naturally led to suppose that his opinion had some importance. he was hardly responsible for the error, and very probably mr. ruston would have been better advised had his bearing towards the young man not indicated so very plainly that the error was an error. but in the course of the visits to cromwell road, which ruston found time to pay in the intervals of floating the omofaga company--and he was a man who found time for many things--this impression of his made itself tolerably evident, and, consequently, sir walter entertained grave doubts whether ruston were a gentleman. and, if a fellow is not a gentleman, what, he asked, do brains and all the rest of it go for? moreover, how did the chap live? to which queries marjory answered that "oxford boys" were very silly--a remark which embittered, without in the least elucidating, the question. almost everybody has one disciple who looks up to him as master and mentor, and, ill as he was suited to such a post, evan haselden filled it for walter valentine. evan had been in his fourth year when walter was a freshman, and the reverence engendered in those days had been intensified when evan had become, first, secretary to a minister and then, as he showed diligence and aptitude, a member of parliament. evan was a strong tory, but payment of members had an unholy attraction for him; this indication of his circumstances may suffice. men thought him a promising youth, women called him a nice boy, and young sir walter held him for a statesman and a man of the world. seeing that what sir walter wanted was an unfavourable opinion of ruston, he could not have done better than consult his respected friend. juggernaut--adela ferrars was pleased with the nickname, and it began to be repeated--had been crushing evan in one or two little ways lately, and he did it with an unconsciousness that increased the brutality. besides displacing him from the position he wished to occupy at more than one social gathering, ruston, being in the lobby of the house one day (perhaps on omofaga business), had likened the pretty (it was his epithet) young member, as he sped with a glass of water to his party leader, to ganymede in a frock coat--a description, evan felt, injurious to a serious politician. "a gentleman?" he said, in reply to young sir walter's inquiry. "well, everybody's a gentleman now, so i suppose ruston is." "i call him an unmannerly brute," observed walter, "and i can't think why mother and marjory are so civil to him." evan shook his head mournfully. "you meet the fellow everywhere," he sighed. "such an ugly mug as he's got too," pursued young sir walter. "but marjory says it's full of character." "character! i should think so. enough to hang him on sight," said evan bitterly. "he's been a lot to our place. marjory seems to like him. i say, haselden, do you remember what you spoke of after dinner at the savoy the other day?" evan nodded, looking rather embarrassed; indeed he blushed, and little as he liked doing that, it became him very well. "did you mean it? because, you know, i should like it awfully." "thanks, val, old man. oh, rather, i meant it." young sir walter lowered his voice and looked cautiously round--they were in the club smoking-room. "because i thought, you know, that you were rather--you know--adela ferrars?" "nothing in that, only _pour passer le temps_," evan assured him with that superb man-of-the-worldliness. it was a pity that adela could not hear him. but there was more to follow. "the truth is," resumed evan--"and, of course, i rely on your discretion, val--i thought there might be a--an obstacle." young sir walter looked knowing. "when you were good enough to suggest what you did--about your sister--i doubted for a moment how such a thing would be received by--well, at a certain house." "oh!" "i shouldn't wonder if you could guess." "n--no, i don't think so." "well, it doesn't matter where." "oh, but i say, you might as well tell me. hang it, i've learnt to hold my tongue." "you hadn't noticed it? that's all right. i'm glad to hear it," said evan, whose satisfaction was not conspicuous in his tone. "i'm so little in town, you see," said walter tactfully. "well--for heaven's sake, don't let it go any farther--curzon street." "what! of course! mrs.----" "all right, yes. but i've made up my mind. i shall drop all that. best, isn't it?" walter nodded a sagacious assent. "there was never anything in it, really," said evan, and he was not displeased with his friend's incredulous expression. it is a great luxury to speak the truth and yet not be believed. "now, what you propose," continued evan, "is most--but, i say, val, what does she think?" "she likes you--and you'll have all my influence," said the head of the family in a tone of importance. "but how do you know she likes me?" insisted evan, whose off-hand air gave place to a manner betraying some trepidation. "i don't know for certain, of course. and, i say, haselden, i believe mother's got an idea in her head about that fellow ruston." "the devil! that brute! oh, hang it, val, she can't--your sister, i mean--i tell you what, i shan't play the fool any longer." sir walter cordially approved of increased activity, and the two young gentlemen, having settled one lady's future and disposed of the claims of two others to their complete satisfaction, betook themselves to recreation. evan was not, however, of opinion that anything in the conversation above recorded, imposed upon him the obligation of avoiding entirely mrs. dennison's society. on the contrary, he took an early opportunity of going to see her. his attitude towards her was one of considerably greater deference than sir walter understood it to be, and he had a high idea of the value of her assistance. and he did not propose to deny himself such savour of sentiment as the lady would allow; and she generally allowed a little. he intended to say nothing about ruston, but as it happened that mrs. dennison's wishes set in an opposing direction, he had not been long in the drawing room at curzon street before he found himself again with the name of his enemy on his lips. he spoke with refreshing frankness and an engaging confidence in his hostess' sympathy. mrs. dennison had no difficulty in seeing that he had a special reason for his bitterness. "is it only because he called you ganymede? and it's a very good name for you, mr. haselden." to be compared to ganymede in private by a lady and in public by a scoffer, are things very different. evan smiled complacently. "there's more than that, isn't there?" asked mrs. dennison. evan admitted that there was more, and, in obedience to some skilful guidance, he revealed what there was more--what beyond mere offended dignity--between himself and mr. ruston. he had to complain of no lack of interest on the part of his listener. mrs. dennison questioned him closely as to his grounds for anticipating ruston's rivalry. the idea was evidently quite new to her; and evan was glad to detect her reluctance to accept it--she must think as he did about willie ruston. the tangible evidence appeared on examination reassuringly small, and evan, by a strange conversion, found himself driven to defend his apprehensions by insisting on just that power of attraction in his foe which he had begun by denying altogether. but that, mrs. dennison objected, only showed, even if it existed, that marjory might like ruston, not that ruston would return her liking. on the whole mrs. dennison comforted him, and, dismissing ruston from the discussion, said with a smile, "so you're thinking of settling down already, are you?" "i say, mrs. dennison, you've always been awfully good to me; i wonder if you'd help me in this?" "how could i help you?" "oh, lots of ways. well, for instance, old lady valentine doesn't ask me there often. you see, i haven't got any money." "poor boy! of course you haven't. nice young men never have any money." "so i don't get many chances of seeing her." "and i might arrange meetings for you? that's how i could help? now, why should i help?" evan was encouraged by this last question, put in his friend's doubtfully-serious doubtfully-playful manner. "it needn't," he said, in a tone rather more timid than young sir walter would have expected, "make any difference to our friendship, need it? if it meant that----" the sentence was left in expressive incompleteness. mrs. dennison wanted to laugh; but why should she hurt his feelings? he was a pleasant boy, and, in spite of his vanity, really a clever one. he had been a little spoilt; that was all. she turned her laugh in another direction. "berthe cormack would tell you that it would be sure to intensify it," she said. "seriously, i shan't hate you for marrying, and i don't suppose marjory will hate me." "then" (mrs. dennison had to smile at that little word), "you'll help me?" "perhaps," said mrs. dennison, allowing her smile to become manifest. "you won't be against me?" "perhaps not." "good-bye," said evan, pressing her hand. he had enjoyed himself very much, and mrs. dennison was glad that she had been good-natured, and had not laughed. "good-bye, and i hope you'll be very happy, if you succeed. and--evan--don't kill mr. ruston!" the laugh came at last, but he was out of the door in time, and mrs. dennison had no leisure to enjoy it fully, for, the moment her visitor was gone, mr. belford and lord semingham were announced. they came together, seeking harry dennison. there was a "little hitch" of some sort in the affairs of the omofaga company--nothing of consequence, said mr. belford reassuringly. mrs. dennison explained that harry dennison had gone off to call on mr. ruston. "oh, then he knows by now," said semingham in a tone of relief. "and it'll be all right," added belford contentedly. "mr. belford," said mrs. dennison, "i'm living in an atmosphere of omofaga. i eat it, and drink it, and wear it, and breathe it. and, what in the end, is it?" "ask ruston," interposed semingham. "i did; but i don't think he told me." "but surely, my dear mrs. dennison, your husband takes you into his confidence?" suggested mr. belford. mrs. dennison smiled, as she replied, "oh, yes, i know what you're doing. but i want to know why you're doing it. i don't believe you'll ever get anything out of it, you know." "oh, directors always get something," protested semingham. "penal servitude sometimes, but always something." "i've never had such implicit faith in any undertaking in my life," asserted mr. belford. "and i know that your husband shares my views. it's bound to be the greatest success of the day. ah, here's dennison!" harry came in wiping his brow. belford rushed to him, and drew him to the window, button-holing him with decision. lord semingham smiled lazily and pulled his whisker. "don't you want to hear the news?" mrs. dennison asked. "no! he's been to ruston." mrs. dennison looked at him for an instant with something rather like scorn in her eye. lord semingham laughed. "i'm not quite as bad as that, really," he said. "and the others?" she asked, leaning forward and taking care that her voice did not reach the other pair. "he turns belford round his fingers." "and mr. carlin?" "in his pocket." mrs. dennison cast a glance towards the window. "don't go on," implored semingham, half-seriously. "and my husband?" she asked in a still lower voice. lord semingham protested with a gesture against such cross-examination. "surely it's a good thing for me to know?" she said. "well--a great influence." "thank you." there was a pause for an instant. then she rose with a laugh and rang the bell for tea. "i hope he won't ruin us all," she said. "i've got bessie's settlement," observed lord semingham; and he added after a moment's pause, "what's the matter? i thought you were a thoroughgoing believer." "i'm a woman," she answered. "if i were a man----" "you'd be the prophet, not the disciple, eh?" she looked at him, and then across to the couple by the window. "to do belford justice," remarked semingham, reading her glance, "he never admits that he isn't a great man--though surely he must know it." "is it better to know it, or not to know it?" she asked, restlessly fingering the teapot and cups which had been placed before her. "i sometimes think that if you resolutely refuse to know it, you can alter it." belford's name had been the only name mentioned in the conversation; yet semingham knew that she was not thinking of belford nor of him. "i knew it about myself very soon," he said. "it makes a man better to know it, mrs. dennison." "oh, yes--better," she answered impatiently. the two men came and joined them. belford accepted a cup of tea, and, as he took it, he said to harry, continuing their conversation, "of course, i know his value; but, after all, we must judge for ourselves." "of course," acquiesced harry, handing him bread-and-butter. "we are the masters," pursued belford. mrs. dennison glanced at him, and a smile so full of meaning--of meaning which it was as well mr. belford should not see--appeared on her face, that lord semingham deftly interposed his person between them, and said, with apparent seriousness, "oh, he mustn't think he can do just what he likes with us." "i am entirely of your opinion," said belford, with a weighty nod. after tea, lord semingham walked slowly back to his own house. he had a trick of stopping still, when he fell into thought, and he was motionless on the pavement of piccadilly more than once on his way home. the last time he paused for nearly three minutes, till an acquaintance, passing by, clapped him on the back, and inquired what occupied his mind. "i was thinking," said semingham, laying his forefinger on his friend's arm, "that if you take what a clever man really is, and add to it what a clever woman who is interested in him thinks he is, you get a most astonishing person." the friend stared. the speculation seemed hardly pressing enough to excuse a man for blocking the pavement of piccadilly. "if, on the other hand," pursued semingham, "you take what an ordinary man isn't, and add all that a clever woman thinks he isn't, you get----" "hadn't we better go on, old fellow?" asked the friend. "no, i think we'd better not," said semingham, starting to walk again. chapter v. a telegram to frankfort. the success of lady valentine's saturday to monday party at maidenhead was spoilt by the unscrupulous, or (if the charitable view be possible) the muddle-headed conduct of certain eminent african chiefs--so small is the world, so strong the chain of gold (or shares) that binds it together. the party was marred by willie ruston's absence; and he was away because he had to go to frankfort, and he had to go to frankfort because of that little hitch in the affairs of the omofaga. the hitch was, in truth, a somewhat grave one, and it occurred, most annoyingly, immediately after a gathering, marked by uncommon enthusiasm and composed of highly influential persons, had set the impress of approval on the scheme. on the following morning, it was asserted that the said african chiefs, from whom ruston and his friends derived their title to omofaga, had acted in a manner that belied the character for honesty and simplicity in commercial matters (existing side by side with intense savagery and cruelty in social and political life) that mr. foster belford had attributed to them at the great meeting. they had, it was said, sold omofaga several times over in small parcels, and twice, at least, _en bloc_--once to the syndicate (from whom the company was acquiring it) and once to an association of german capitalists. the writer of the article, who said that he knew the chiefs well, went so far as to maintain that any person provided with a few guns and a dozen or so bottles of ardent spirits could return from omofaga with a portmanteau full of treaties, and this facility in obtaining the article could not, in accordance with the law of supply and demand, do other than gravely affect the value of it. willie ruston was inclined to make light of this disclosure; indeed, he attributed it to a desire--natural but unprincipled--on the part of certain persons to obtain omofaga shares at less than their high intrinsic value; he called it a "bear dodge" and sundry other opprobrious names, and snapped his fingers at all possible treaties in the world except his own. once let him set his foot in omofaga, and short would be the shrift of rival claims, supposing them to exist at all! but the great house of dennison, sons & company, could not go on in this happy-go-lucky fashion--so the senior partner emphatically told harry dennison--they were already, in his opinion, deep enough in this affair; if they were to go any deeper, this matter of the association of german capitalists must be inquired into. the house had not only its money, but its credit and reputation to look after; it could not touch any doubtful business, nor could it be left with a block of omofagas on its hands. in effect they were trusting too much to this mr. ruston, for he, and he alone, was their security in the matter. not another step would the house move till the german capitalists were dissolved into thin air. so willie ruston packed his portmanteau--likely enough the very one that had carried the treaties away from omofaga--and went to frankfort to track the german capitalists to their lair. meanwhile, the issue of the omofaga was postponed, and mr. carlin was set a-telegraphing to africa. thus it also happened that, contrary to her fixed intention, lady valentine was left with a bedroom to spare, and with no just or producible reason whatever for refusing her son's request that evan haselden might occupy it. this, perhaps, should, in the view of all true lovers, be regarded as an item on the credit side of the african chiefs' account, though in the hostess' eyes it aggravated their offence. adela ferrars, mr. foster belford and tom loring, who positively blessed the african chiefs, were the remaining guests. all parties cannot be successful, and, if truth be told, this of lady valentine's was no conspicuous triumph. belford and loring quarrelled about omofaga, for loring feared (he used that word) that there might be a good deal in the german treaties, and belford was loud-mouthed in declaring there could be nothing. marjory and her brother had a "row" because marjory, on the saturday afternoon, would not go out in the canadian canoe with evan, but insisted on taking a walk with mr. belford and hearing all about omofaga. finally, adela and tom loring had a rather serious dissension because--well, just because tom was so intolerably stupid and narrow-minded and rude. that was adela's own account of it, given in her own words, which seems pretty good authority. the unfortunate discussion began with an expression of opinion from tom. they were lounging very comfortably down stream in a broad-bottomed boat. it was a fine still evening and a lovely sunset. it was then most wanton of tom--even although he couched his remark in a speciously general form--to say, "i wonder at fellows who spend their life worming money out of other people for wild-cat schemes instead of taking to some honest trade." there was a pause. then adela fitted her glasses on her nose, and observed, with a careful imitation of tom's forms of expression, "i wonder at fellows who drift through life in subordinate positions without the--the _spunk_--to try and do anything for themselves." "women have no idea of honesty." "men are such jealous creatures." "i'm not jealous of him," tom blurted out. "of who?" asked adela. she was keeping the cooler of the pair. "confound those beastly flies," said tom, peevishly. there was a fly or two about, but adela smiled in a superior way. "i suppose i've some right to express an opinion," continued tom. "you know what i feel about the dennisons, and--well, it's not only the dennisons." "oh! the valentines?" "blow the valentines!" said tom, very ungratefully, inasmuch as he sat in their boat and had eaten their bread. he bent over his sculls, and adela looked at him with a doubtful little smile. she thought tom loring, on the whole, the best man she knew, the truest and loyalest; but, these qualities are not everything, and it seemed as if he meant to be secretary to harry dennison all his life. of course he had no money, there was that excuse; but to some men want of money is a reason, not for doing nothing, but for attempting everything; it had struck willie ruston in that light. therefore she was at times angry with tom--and all the more angry the more she admired him. "you do me the honour to be anxious on my account?" she asked very stiffly. "he asked me how much money you had the other day." "oh, you're insufferable; you really are. do you always tell women that men care only for their money?" "it's not a bad thing to tell them when it's true." "i call this the very vulgarest dispute i was ever entrapped into." "it's not my fault. it's----hullo!" his attention was arrested by lady valentine's footman, who stood on the bank, calling "mr. loring, sir," and holding up a telegram. "thank goodness, we're interrupted," said adela. "row ashore, mr. loring." loring obeyed, and took his despatch. it was from harry dennison, and he read it aloud. "can you come up? news from frankfort." "i must go," said tom. "oh, yes. if you're not there, mr. ruston will do something dreadful, won't he? i should like to come too. news from frankfort would be more interesting than views from mr. belford." they parted without any approach towards a reconciliation. tom was hopelessly sulky, adela persistently flippant. the shadow of omofaga lay heavy on lady valentine's party, and still shrouded tom loring on his way to town. the important despatch from frankfort had come in cipher, and when tom arrived in curzon street, he found mr. carlin, who had been sent for to read it, just leaving the house. the men nodded to one another, and carlin hastily exclaimed, "you must reassure dennison! you can do it!" and leapt into a hansom. tom smiled. if the progress of omofaga depended on encouragement from him, omofaga would remain in primitive barbarism, though missionaries fell thick as the leaves in autumn. harry dennison was walking up and down the library; his hair was roughened and his appearance indicative of much unrest; his wife sat in an armchair, looking at him and listening to lord semingham, who, poising a cigarette between his fingers, was putting, or trying to put, a meaning to ruston's message. "position critical. must act at once. will you give me a free hand? if not, wire how far i may go." that was how it ran when faithfully interpreted by mr. carlin. "you see," observed lord semingham, "it's clearly a matter of money." tom nodded. "of course it is," said he; "it's not likely to be a question of anything else." "therefore the germans have something worth paying for," continued semingham. "well," amended tom, "something ruston thinks it worth his while to pay for, anyhow." "that is to say they have treaties touching, or purporting to touch, omofaga." "and," added harry dennison, who did not lack a certain business shrewdness, "probably their government behind them to some extent." tom flung himself into a chair. "the thing's monstrous," he pronounced. "semingham and you, dennison, are, besides himself--and he's got nothing--the only people responsible up to now. and he asks you to give him an unlimited credit without giving you a word of information! it's the coolest thing i ever heard of in all my life." "of course he means the company to pay in the end," semingham reminded the hostile critic. "time enough to talk of the company when we see it," retorted tom, with an aggressive scepticism. "position critical! hum. i suppose their treaties must be worth something," pursued semingham. "dennison, i can't be drained dry over this job." harry dennison shook his head in a puzzled fashion. "carlin says it's all right," he remarked. "of course he does!" exclaimed tom impatiently. "two and two make five for him if ruston says they do." "well, tom, what's your advice?" asked semingham. "you must tell him to do nothing till he's seen you, or at least sent you full details of the position." the two men nodded. mrs. dennison rose from her chair, walked to the window, and stood looking out. "loring just confirms what i thought," said semingham. "he says he must act at once," harry reminded them; he was still wavering, and, as he spoke, he glanced uneasily at his wife; but there was nothing to show that she even heard the conversation. "oh, he hates referring to anybody," said tom. "he's to have a free hand, and you're to pay the bill. that's his programme, and a very pretty one it is--for him." tom's _animus_ was apparent, and lord semingham laughed gently. "still, you're right in substance," he conceded when the laugh was ended, and as he spoke he drew a sheet of notepaper towards him and took up a pen. "we'd better settle just what to say," he observed. "carlin will be back in half an hour, and we promised to have it ready for him. what you suggest seems all right, loring." tom nodded. harry dennison stood stock still for an instant and then said, with a sigh, "i suppose so. he'll be furious--and i hope to god we shan't lose the whole thing." lord semingham's pen-point was in actual touch with the paper before him, when mrs. dennison suddenly turned round and faced them. she rested one hand on the window-sash, and held the other up in a gesture which demanded attention. "are you really going to back out now?" she asked in a very quiet voice, but with an intonation of contempt that made all the three men raise their heads with the jerk of startled surprise. lord semingham checked the movement of his pen, and leant back in his chair, looking at her. her face was a little flushed and she was breathing quickly. "my dear," said harry dennison very apologetically, "do you think you quite understand----?" but tom loring's patience was exhausted. his interview with adela left him little reserve of toleration; and the discovery of another and even worse case of rustomania utterly overpowered his discretion. "mrs. dennison," he said, "wants us to deliver ourselves, bound hand and foot, to this fellow." "well, and if i do?" she demanded, turning on him. "can't you even follow, when you've found a man who can lead?" and then, conscious perhaps of having been goaded to an excess of warmth by tom's open scorn, she turned her face away. "lead, yes! lead us to ruin!" exclaimed tom. "you won't be ruined, anyhow," she retorted quickly, facing round on him again, reckless in her anger how she might wound him. "tom's anxious for us, maggie," her husband reminded her, and he laid his hand on tom loring's shoulder. tom's excitement was not to be soothed. "why are we all to be his instruments?" he demanded angrily. "i should be proud to be," she said haughtily. her husband smiled in an uneasy effort after nonchalance, and lord semingham shot a quick glance at her out of his observant eyes. "i should be proud of a friend like you if i were ruston," he said gently, hoping to smooth matters a little. mrs. dennison ignored his attempt. "can't you see?" she asked. "can't you see that he's a man to--to do things? it's enough for us if we can help him." she had forgotten her embarrassment; she spoke half in contempt, half in entreaty, wholly in an earnest urgency, that made her unconscious of any strangeness in her zeal. harry looked uncomfortable. semingham with a sigh blew a cloud of smoke from his cigarette. tom loring sat silent. he stretched out his legs to their full length, rested the nape of his neck on the chair-back, and stared up at the ceiling. his attitude eloquently and most rudely asserted folly--almost lunacy--in mrs. dennison. she noticed it and her eyes flashed, but she did not speak to him. she looked at semingham and surprised an expression in his eyes that made her drop her own for an instant; she knew very well what he was thinking--what a man like him would think. but she recovered herself and met his glance boldly. harry dennison sat down and slowly rubbed his brow with his handkerchief. lord semingham took up the pen and balanced it between his fingers. there was silence in the room for full three minutes. then came a loud knock at the hall door. "it's carlin," said harry dennison. no one else spoke, and for another moment there was silence. the steps of the butler and the visitor were already audible in the hall when lord semingham, with his own shrug and his own smile, as though nothing in the world were worth so much dispute or so much bitterness, said to dennison, "hang it! shall we chance it, harry?" mrs. dennison made one swift step forward towards him, her face all alight; but she stopped before she reached the table and turned to her husband. at the moment carlin was announced. he entered with a rush of eagerness. tom loring did not move. semingham wrote on his paper,- "use your discretion, but make every effort to keep down expenses. wire progress." "will that do?" he asked, handing the paper to harry dennison and leaning back with a smile on his face; and, though he handed the paper to harry, he looked at mrs. dennison. mrs. dennison was standing by her husband now, her arm through his. as he read she read also. then she took the paper from his yielding hand and came and bent over the table, shoulder to shoulder with lord semingham. taking the pen from his fingers, she dipped it in the ink, and with a firm dash she erased all save the first three words of the message. this done, she looked round into semingham's face with a smile of triumph. "well, it'll be cheap to send, anyhow," said he. he got up and motioned carlin to take his place. mrs. dennison walked back to the window, and he followed her there. they heard carlin's cry of delight, and harry dennison beginning to make excuses and trying to find business reasons for what had been done. suddenly tom loring leapt to his feet and strode swiftly out of the room, slamming the door behind him. mrs. dennison heard the sound with a smile of content. she seemed to have no misgivings and no regrets. "really," said lord semingham, sticking his eye-glass in his eye and regarding her closely, "you ought to be the queen of omofaga." with her slim fingers she began to drum gently on the window-pane. "i think there's a king already," she said, looking out into the street. "oh, yes, a king," he answered with a laugh. mrs. dennison looked round. he did not stop laughing, and presently she laughed just a little herself. "oh, of course, it's always that in a woman, isn't it?" she asked sarcastically. "generally," he answered, unashamed. she grew grave, and looked in his face almost--so it seemed to him--as though she sought there an answer to something that puzzled her. he gave her none. she sighed and drummed on the window again; then she turned to him with a sudden bright smile. "i don't care; i'm glad i did it," she said defiantly. chapter vi. whose shall it be? probably no one is always wrong; at any rate, mr. otto heather was right now and then, and he had hit the mark when he accused willie ruston of "commercialism." but he went astray when he concluded, _per saltum_, that the object of his antipathy was a money-grubbing, profit-snatching, upper-hand-getting machine, and nothing else in the world. probably, again, no one ever was. ruston had not only feelings, but also what many people consider a later development--a conscience. and, whatever the springs on which his conscience moved, it acted as a restraint upon him. both his feelings and his conscience would have told him that it would not do for him to delude his friends or the public with a scheme which was a fraud. he would have delivered this inner verdict in calm and temperate terms; it would have been accompanied by no disgust, no remorse, no revulsion at the idea having made its way into his mind; it was just that, on the whole, such a thing wouldn't do. the vagueness of the phrase faithfully embodied the spirit of the decision, for whether it wouldn't do, because it was in itself unseemly, or merely because, if found out, it would look unseemly, was precisely one of those curious points with which mr. ruston's practical intellect declined to trouble itself. if omofaga had been a fraud, then ruston would have whistled it down the wind. but omofaga was no fraud--in his hands at least no fraud. for, while he believed in omofaga to a certain extent, willie ruston believed in himself to an indefinite, perhaps an infinite, extent. he thought omofaga a fair security for anyone's money, but himself a superb one. omofaga without him--or other people's omofagas--might be a promising speculation; add him, and omofaga became a certainty. it will be seen, then, that mr. heather's inspiration had soon failed--unless, that is, machines can see visions and dream dreams, and melt down hard facts in crucibles heated to seven times in the fires of imagination. but a man may do all this, and yet not be the passive victim of his dreams and imaginings. the old buccaneers--and adela ferrars had thought ruston a buccaneer modernised--dreamt, but they sailed and fought too; and they sailed and fought and won because they dreamt. and if many of their dreams were tinted with the gleam of gold, they were none the less powerful and alluring for that. ruston had laid the whole position before baron von geltschmidt of frankfort, with--as it seemed--the utmost candour. he and his friends were not deeply committed in the matter; there was, as yet, only a small syndicate; of course they had paid something for their rights, but, as the baron knew (and willie's tone emphasised the fact that he must know) the actual sums paid out of pocket in these cases were not of staggering magnitude; no company was formed yet; none would be, unless all went smoothly. if the baron and his friends were sure of their ground, and preferred to go on--why, he and his friends were not eager to commit themselves to a long and arduous contest. there must, he supposed, be a give-and-take between them. "it looks," he said, "as far as i can judge, as if either we should have to buy you out, or you would have to buy us out." "perhaps," suggested the baron, blinking lazily behind his gold spectacles, "we could get rid of you without buying you out." "oh, if you drove us to it, by refusing to treat, we should have a shot at that too, of course," laughed willie ruston, swallowing a glass of white wine. the baron had asked him to discuss the matter over luncheon. "it seems to me," observed the baron, lighting a cigar, "that people are rather cold about speculations just now." "i should think so; but this is not a speculation; it's a certainty." "why do you tell me that, when you want to get rid of me?" "because you won't believe it. wasn't that bismarck's way?" "you are not bismarck--and a certainty is what the public thinks one." "is that philosophy or finance?" asked ruston, laughing again. the baron, who had in his day loved both the subjects referred to, drank a glass of wine and chuckled as he delivered himself of the following doctrine: "what the public thinks a certainty, is a certainty for the public--that would be philosophy, eh?" "i believe so. i never read much, and your extract doesn't raise my idea of its value." "but what the public thinks a certainty, is a certainty--for the promotors--that is finance. you see the difference is simple." "and the distinction luminous. this, baron, seems to be the age of finance." "ah, well, there are still honest men," said the baron, with the optimism of age. "yes, i'm one--and you're another." "i'm much obliged. you've been in omofaga?" "oh, yes. and you haven't, baron." "friends of mine have." "yes. they came just after i left." the baron knew that this statement was true. as his study of willie ruston progressed, he became inclined to think that it might be important. mere right (so far as such a thing could be given by prior treaties) was not of much moment; but right and ruston together might be formidable. now the baron (and his friends were friends much in the way, _mutatis mutandis_, that mr. wagg and mr. wenham were friends of the marquis of steyne, and may therefore drop out of consideration) was old and rich, and, by consequence, at a great disadvantage with a man who was young and poor. "i don't see the bearing of that," he observed, having paused for a moment to consider all its bearings. "it means that you can't have omofaga," said willie ruston. "you were too late, you see." the baron smoked and drank and laughed. "you're a young fool, my boy--or something quite different," said he, laying a hand on his companion's arm. then he asked suddenly, "what about dennisons?" "they're behind me if----" "well?" "if you're not in front of me." "but if i am, my son?" asked the baron, almost caressingly. "then i leave for omofaga by the next boat." "eh! and for what?" "never mind what. you'll find out when you come." the baron sighed and tugged his beard. "you english!" said he. "your government won't help you." "damn my government." "you english!" said the baron again, his tone struggling between admiration and a sort of oppression, while his face wore the look a man has who sees another push in front of him in a crowd, and wonders how the fellow works his way through. there was a long pause. ruston lit his pipe, and, crossing his arms on his breast, blinked at the sun; the baron puffed away, shooting a glance now and then at his young friend, then he asked, "well, my boy, what do you offer?" "shares," answered ruston composedly. the baron laughed. the impudence of the offer pleased him. "yes, shares, of course. and besides?" willie ruston turned to him. "i shan't haggle," he announced. "i'll make you one offer, baron, and it's an uncommon handsome offer for a trunk of waste paper." "what's the offer?" asked the baron, smiling with rich subdued mirth. "fifty thousand down, and the same in shares fully paid." "not enough, my son." "all right," and mr. ruston rose. "much obliged for your hospitality, baron," he added, holding out his hand. "where are you going?" asked the baron. "omofaga--_viã¢_ london." the baron caught him by the arm, and whispered in his ear, "there's not so much in it, first and last." "oh, isn't there? then why don't you take the offer?" "is it your money?" "it's good money. come, baron, you've always liked the safe side," and willie smiled down upon his host. the baron positively started. this young man stood over him and told him calmly, face-to-face, the secret of his life. it was true. how he had envied men of real nerve, of faith, of daring! but he had always liked the safe side. hence he was very rich--and a rather weary old man. two days later, willie ruston took a cab from lord semingham's, and drove to curzon street. he arrived at twelve o'clock in the morning. harry dennison had gone to a committee at the house. the butler had just told him so, when a voice cried from within, "is it you, mr. ruston?" mrs. dennison was standing in the hall. he went in, and followed her into the library. "well?" she asked, standing by the table, and wasting no time in formal greetings. "oh, it's all right," said he. "you got my telegram?" "your telegram, mrs. dennison?" said he with a smile. "i mean--the telegram," she corrected herself, smiling in her turn. "oh, yes," said ruston, and he took a step towards her. "i've seen lord semingham," he added. "yes? and these horrid germans are out of the way?" "yes; and semingham is letting his shooting this year." she laughed, and glanced at him as she asked, "then it cost a great deal?" "fifty thousand!" "oh, then we can't take lord semingham's shooting, or anybody else's. poor harry!" "he doesn't know yet?" "aren't you almost afraid to tell him, mr. ruston?" "aren't you, mrs. dennison?" he smiled as he asked, and mrs. dennison lifted her eyes to his, and let them dwell there. "why did you do it?" he asked. "will the money be lost?" "oh, i hope not; but money's always uncertain." "the thing's not uncertain?" "no; the thing's certain now." she sat down with a sigh of satisfaction, and passed her hand over her broad brow. "why did you do it?" ruston repeated; and she laughed nervously. "i hate going back," she said, twisting her hands in her lap. he had asked her the question which she had been asking herself without response. he sat down opposite her, flinging his soft cloth hat--for he had not been home since his arrival in london--on the table. "what a bad hat!" said mrs. dennison, touching it with the end of a forefinger. "it's done a journey through omofaga." "ah!" she laughed gently. "dear old hat!" "thanks to you, it'll do another soon." mrs. dennison sat up straight in her chair. "you hope----?" she began. "to be on my way in six months," he answered in solid satisfaction. "and for long?" "it must take time." "what must?" "my work there." she rose and walked to the window, as she had when she was about to send the telegram. now also she was breathing quickly, and the flush, once so rare on her cheeks, was there again. "and we," she said in a low voice, looking out of the window, "shall just hear of you once a year?" "we shall have regular mails in no time," said he. "once a year, indeed! once a month, mrs. dennison!" with a curious laugh, she dashed the blind-tassel against the window. it was not for the sake of hearing of her that he wanted the mails. with a sudden impulse she crossed the room and stood opposite him. "do you care _that_," she asked, snapping her fingers, "for any soul alive? you're delighted to leave us all and go to omofaga!" willie ruston seemed not to hear; he was mentally organizing the mail service from omofaga. "i beg pardon?" he said, after a perceptible pause. "oh!" cried maggie dennison, and at last her tone caught his attention. he looked up with a wrinkle of surprise on his brow. "why," said he, "i believe you're angry about something. you look just as you did on--on the memorable occasion." "uh, we aren't all carlins!" she exclaimed, carried away by her feelings. the least she had expected from him was grateful thanks; a homage tinged with admiration was, in truth, no more than her due; if she had been an ugly dull woman, yet she had done him a great service, and she was not an ugly dull woman. but then neither was she omofaga. "if everybody was as good a fellow as old carlin----" began willie ruston. "if everybody was as useful and docile, you mean; as good a tool for you----" at last it was too plain to be missed. "hullo!" he exclaimed. "what are you pitching into me for, mrs. dennison?" his words were ordinary enough, but at last he was looking at her, and the mails of omofaga were for a moment forgotten. "i wish i'd never made them send the wretched telegram," she flashed out passionately. "much thanks i get!" "you shall have a statue in the chief street of the chief town of----" "how dare you! i'm not a girl to be chaffed." the tears were standing in her eyes, as she threw herself back in a chair. willie ruston got up and stood by her. "you'll be proud of that telegram some day," he said, rather as though he felt bound to pay her a compliment. "oh, you think that now?" she said, unconvinced of his sincerity. "yes. though was it very difficult?" he asked with a sudden change of tone most depreciatory of her exploit. she glanced at him and smiled joyfully. she liked the depreciation better than the compliment. "not a bit," she whispered, "for me." he laughed slightly, and shut his lips close again. he began to understand mrs. dennison better. "still, though it was easy for you, it was precious valuable to me," he observed. "and how you hate being obliged to me, don't you?" he perceived that she understood him a little, but he smiled again as he asked, "oh, but what made you do it, you know?" "you mean you did? mr. ruston, i should like to see you at work in omofaga." "oh, a very humdrum business," said he, with a shrug. "you'll have soldiers?" "we shall call 'em police," he corrected, smiling. "yes; but they keep everybody down, and--and do as you order?" "if not, i shall ask 'em why." "and the natives?" "civilise 'em." "you--you'll be governor?" "oh, dear, no. local administrator." she laughed in his face; and a grim smile from him seemed to justify her. "i'm glad i sent the telegram," she half-whispered, lying back in the chair and looking up at him. "i shall have had something to do with all that, shan't i? do you want any more money?" "look here," said willie ruston, "omofaga's mine. i'll find you another place, if you like, when i've put this job through." a luxury of pleasure rippled through her laugh. she darted out her hand and caught his. "no. i like omofaga too!" she said, and as she said it, the door suddenly opened, and in walked tom loring--that is to say--in tom loring was about to walk; but when he saw what he did see, he stood still for a moment, and then, without a single word, either of greeting or apology, he turned his back, walked out again, and shut the door behind him. his entrance and exit were so quick and sudden, that mrs. dennison had hardly dropped willie ruston's hand before he was gone; she had certainly not dropped it before he came. willie ruston sat down squarely in a chair. mrs. dennison's hot mood had been suddenly cooled. she would not ask him to go, but she glanced at the hat that had been through omofaga. he detected her. "i shall stay ten minutes," he observed. she understood and nodded assent. very little was said during the ten minutes. mrs. dennison seemed tired; her eyes dropped towards the ground, and she reclined in her chair. ruston was frowning and thrumming at intervals on the table. but presently his brow cleared and he smiled. mrs. dennison saw him from under her drooping lids. "well?" she asked in a petulant tone. "i believe you were going to fight me for omofaga." "i don't know what i was doing." "is that fellow a fool?" "he's a much better man than you'll ever be, mr. ruston. really you might go now." "all right, i will. i'm going down to the city to see your husband and carlin." "i'm afraid i've wasted your time." she spoke with a bitterness which seemed impossible to miss. but he appeared to miss it. "oh, not a bit, really," he assured her anxiously. "good-bye," he added, holding out his hand. "good-bye. i've shaken hands once." he waited a moment to see if she would speak again, but she said nothing. so he left her. as he called a hansom, mrs. cormack was leaning over her balcony. she took a little jewelled watch out of her pocket and looked at it. "an hour and a quarter!" she cried. "and i know the poor man isn't at home!" chapter vii. an attempt to stop the wheels. miss adela ferrars lived in queen's gate, in company with her aunt, mrs. topham. mrs. topham's husband had been the younger son of a peer of ancient descent; and a practised observer might almost have detected the fact in her manner, for she took her station in this life as seriously as her position in the next, and, in virtue of it, assumed a responsibility for the morals of her inferiors which betrayed a considerable confidence in her own. but she was a good woman, and a widow of the pattern most opposite to that of mrs. cormack. she dwelt more truly in the grave of her husband than in queen's gate, and permitted herself no recreations except such as may privily creep into religious exercises and the ministrations of favourite clergymen; and it is pleasant to think that she was very happy. as may be supposed, however, adela (who was a good woman in quite another way, and therefore less congenial with her aunt than any mere sinner could have been) and mrs. topham saw very little of one another, and would not have thought of living together unless each had been able to supply what the other wanted. adela found money for the house, and mrs. topham lent the shelter of her name to her niece's unprotected condition. there were separate sitting-rooms for the two ladies, and, if rumour were true (which, after all, it usually is not), a separate staircase for the clergy. adela was in her drawing-room one afternoon when lord semingham was announced. he appeared to be very warm, and he carried a bundle of papers in his hand. among the papers there was one of those little smooth white volumes which epitomise so much of the joy and sorrow of this transitory life. he gave himself a shake, as he sat down, and held up the book. "the car has begun to move," he observed. "juggernaut's?" "yes; and i have been to see my bankers. i take a trip to the seaside instead of a moor this year, and have let my own pheasant shooting." he paused and added, "dennison has not taken my shooting. they go to the seaside too--with the children." he paused again and concluded, "the omofaga prospectus will be out to-morrow." adela laughed. "bessie is really quite annoyed," remarked lord semingham. "i have seldom seen her so perturbed--but i've sent ruston to talk to her." "and why did you do it?" asked adela. "i should like to tell you a little history," said he. and he told her how mrs. dennison had sent a telegram to frankfort. this history was long, for lord semingham told it dramatically, as though he enjoyed its quality. yet adela made no comment beyond asking, "and wasn't she right?" "oh, for the empire perhaps--for us, it means trips to the seaside." he drew his chair a little nearer hers, and dropped his affectation of comic plaintiveness. "a most disgusting thing has happened in curzon street," he said. "have you heard?" "no; i've seen nothing of maggie lately. you've all been buried in omofaga." "hush! no words of ill-omen, please! well, it's annoyed me immensely i can't think what the foolish fellow means. tom loring's going." "tom--loring--going?" she exclaimed with a punctuated pause between every word. "what in the world for?" "what is the ultimate cause of everything that happens to us now?" he asked, sticking his glass in his eye. adela felt as though she were playing at some absurd game of questions and answers, and must make her reply according to the rules. "oh, mr. ruston!" she said, with a grimace. her visitor nodded--as though he had been answered according to the rules. "tom broke out in the most extraordinary manner. he said he couldn't stay with dennison, if dennison let ruston lead him by the nose (_ipsissima verba_, my dear adela), and told ruston to his face that he came for no good." "were you there?" "yes. the man seemed to choose the most public opportunity. did you ever hear such a thing?" "he's mad about mr. ruston. he talked just the same way to me. what did harry dennison say?" "harry went up to him and took his hand, and shook it, and, you know old harry's way, tried to smooth it all down, and get them to shake hands. then ruston got up and said he'd go and leave them to settle it between tom and him. oh, ruston behaved very well. it was uncommonly awkward for him, you know." "yes; and when he'd gone?" "harry told tom that he must keep his engagements; but that, sooner than lose him, he'd go no deeper. that was pretty handsome, i thought, but it didn't suit tom. 'i can't stay in the house while that fellow comes,' he said." "while he comes to the house?" cried adela. lord semingham nodded. "you've hit the point," he seemed to say, and he went on, "and then they both turned and looked at maggie dennison. she'd been sitting there without speaking a single word the whole time. i couldn't go--harry wouldn't let me--so i got into a corner and looked at the photograph book. i felt rather an ass, between ourselves, you know." "and what did maggie say?" "harry was looking as puzzled as an owl, and tom as obstinate as a toad, and both stared at her. she looked first at harry, and then at tom, and smiled in that quiet way of hers. by the way, i never feel that i quite understand----" "oh, never mind! of course you don't. go on." "and then she said, 'what a fuss! i hope that after all this omofaga business is over mr. loring will come back to us.' pretty straight for tom, eh? he turned crimson, and walked right out of the room, and she sat down at the piano and began to play some infernal tune, and that soft-hearted old baby, harry, blew his nose, and damned the draught." "and he's going?" "yes." "but," she broke out, "how can he? he's got no money. what'll he live on?" "harry offered him as much as he wanted; but he said he had some savings, and wouldn't take a farthing. he said he'd write for papers, or some such stuff." "he's been with the dennisons ever since--oh, years and years! can't you take him? he'd be awfully useful to you." "my dear girl, i can't offer charity to tom loring," said semingham, and he added quickly, "no more can you, you know." "i quarrelled with him desperately a week ago," said she mournfully. "about ruston?" "oh, yes. about mr. ruston, of course." lord semingham whistled gently, and, after a pause, adela leant forward and asked, "do you feel quite comfortable about it?" "hang it, no! but i'm too deep in. i hope to heaven the public will swallow it!" "i didn't mean your wretched company." "oh, you didn't?" "no; i meant curzon street." "it hardly lies in my mouth to blame dennison, or his wife either. if they've been foolish, so have i." adela looked at him as if she thought him profoundly unsatisfactory. he was vaguely conscious of her depreciation, and added, "ruston's not a rogue, you know." "no. if i thought he was, i shouldn't be going to take shares in omofaga." "you're not?" "oh, but i am!" "another spinster lady on my conscience! i shall certainly end in the dock!" lord semingham took his hat and shook hands. just as he got to the door, he turned round, and, with an expression of deprecating helplessness, fired a last shot. "ruston came to see bessie the other day," he said. "the new mantle she's just invented is to be called--the omofaga: that is unless she changes it because of the moor. i suggested the _pis-aller_, but she didn't see it. she never does, you know. good-bye." the moment he was gone, adela put on her hat and drove to curzon street. she found mrs. dennison alone, and opened fire at once. "what have you done, maggie?" she cried, flinging her gloves on the table and facing her friend with accusing countenance. mrs. dennison was smelling a rose; she smelt it a little longer, and then replied with another question. "why can't men hate quietly? they must make a fuss. i can go on hating a woman for years and never show it." "we have the vices of servility," said adela. "harry is a melancholy sight," resumed mrs. dennison. "he spends his time looking for the blotting-paper; tom loring used to keep it, you know." her tone deepened the expression of disapproval on adela's face. "i've never been so distressed about anything in my life," said she. "oh, my dear, he'll come back." as she spoke, a sudden mischievous smile spread over her face. "you should hear berthe cormack on it!" she said. "i don't want to hear mrs. cormack at all. i hate the woman--and i think that i--at any rate--show it." it surprised adela to find her friend in such excellent spirits. the air of listlessness, which was apt to mar her manner, and even to some degree her appearance (for to look bored is not becoming), had entirely vanished. "you don't seem very sorry about poor mr. loring," adela observed. "oh, i am; but mr. loring can't stop the wheels of the world. and it's his own fault." adela sighed. it did not seem of consequence whose fault it was. "i don't think i care much about the wheels of the world," she said. "how are the children, maggie?" "oh, splendid, and in great glee about the seaside"--and mrs. dennison laughed. "and about losing tom loring?" "they cried at first." "does anyone ever do anything more than 'cry at first'?" exclaimed adela. "oh, my dear, don't be tragical, or cynical, or whatever you are being," said maggie pettishly. "mr. loring has chosen to be very silly, and there's an end of it. have you seen the prospectus? do you know mr. ruston brought it to show me before it was submitted to mr. belford and the others--the board, i mean?" "i think you see quite enough of mr. ruston," said adela, putting up her glass and examining mrs. dennison closely. she spoke coolly, but with a nervous knowledge of her presumption. mrs. dennison may have had a taste for diplomacy and the other arts of government, but she was no diplomatist. she thought herself gravely wronged by adela's suggestion, and burst out angrily, "oh, you've been listening to tom loring!" and her heightened colour seemed not to agree with the idea that, if adela had listened, tom had talked of nothing but omofaga. "i don't mind it from berthe," mrs. dennison continued, "but from you it's too bad. i suppose he told you the whole thing? i declare i wasn't dreaming of anything of the kind; i was just excited, and----" "i haven't seen mr. loring," put in adela as soon as she could. "then how do you know----?" "lord semingham told me you quarrelled with mr. loring about omofaga." "is that all?" "yes. maggie, was there any more?" "do you want to quarrel with me too?" "i believe mr. loring had good reasons." "you must believe what you like," said mrs. dennison, tearing her rose to pieces. "yes, there was some more." "what?" asked adela, expecting to be told to mind her own business. mrs. dennison flung away the rose and began to laugh. "he found me holding willie ruston's hand and telling him i--liked omofaga! that's all." "holding his hand!" exclaimed adela, justifiably scandalised and hopelessly puzzled. "what did you do that for?" "i don't know," said mrs. dennison. "it happened somehow as we were talking. we got interested, you know." adela's next question was also one at which it was possible to take offence; but she was careless now whether offence were taken or not. "are you and the children going to the seaside soon?" "oh, yes," rejoined her friend, still smiling. "we shall soon be deep in pails and spades and bathing, and buckets and paddling, and a final charming walk with harry in the moonlight." as the sentence went on, the smile became more fixed and less pleasant. "you ought to be ashamed to talk like that," said adela. mrs. dennison walked up the room and down again. "so i am," she said, pausing to look down on adela, and then resuming her walk. "i wish to goodness this omofaga affair--yes, and mr. ruston too--had never been invented. it seems to set us all wrong." "wrong!" cried mrs. dennison. "oh, yes, if it's wrong to have something one can take a little interest in!" "you're hopeless to-day, maggie. i shall go away. what did you take his hand for?" "nothing. i tell you i was excited." "well, i think he's a man one ought to keep cool with." "oh, he's cool enough. he'll keep you cool." "but he didn't----" "oh, don't--pray don't!" cried mrs. dennison. adela took her leave; and, as luck would have it, opened the door just as tom loring was walking downstairs with an enormous load of dusty papers in his hands. she pulled the door close behind her hastily, exclaiming, "why, i thought you'd gone!" "so you've heard? i'm just putting things shipshape. i go this evening." "well, i'm sorry--still, for your sake, i'm glad." "why?" "you may do something on your own account now." "i don't want to do anything," said tom obstinately. "come and see me some day. i've forgiven you, you know." "so i will." "mr. loring, are you going to say good-bye to maggie?" "i don't know. i suppose so." then he added, detecting adela's unexpressed hope, "oh, it's not a bit of use, you know." adela passed on, and, later, loring, having finished his work and being about to go, sought out mrs. dennison. "you're determined to go, are you?" she asked, with the air of one who surrenders before an inexplicable whim. "yes," said tom. "you know i must go." "why?" "i'm not a saint--nor a rogue; if i were either, i might stay." "or even if you were a sensible man," suggested maggie dennison. "being merely an honest man, i think i'll go. i've tried to put all harry's things right for him, and to make it as easy for him to get along as i can." "can he find his papers and blue-books and things?" "oh, yes; and i got abstracts ready on all the things he cares about." "he'll miss you horribly. ah, well!" "i suppose a little; but, really, i think he'll learn to get along----" mrs. dennison interrupted with a laugh. "do you know," she asked, "what we remind me of? why, of a husband and wife separating, and wondering whether the children will miss poor papa--though poor papa insists in going, and mamma is sure he must." "i never mentioned the children," said tom angrily. "i know you didn't." tom looked at her for an instant. "for god's sake," said he, "don't let him see that!" "oh, how you twist things!" she cried in impatient protest. tom only shook his head. the charge was not sincere. "good-bye, tom," she went on after a pause. "i believe, some day or other, you'll come back--or, at any rate, come and live next door--instead of berthe cormack, you know. but i don't know in what state you'll find us." "i'd just like to tell you one thing, if i may," said tom, resolutely refusing to meet the softened look in her eyes with any answering friendliness. "yes?" "you've got one of the best fellows in the world for a husband." "well, i know that, i suppose, at least, as well as you do." "that's all. good-bye." without more he left her. she drew the window-curtain aside and watched him get into his cab and be driven away. the house was very still. her husband was in his place at westminster, and the children had gone to a party. she went upstairs to the nursery, hoping to find something to criticise; then to harry's dressing-room, where she filled his pin-cushion with pins and put fresh water to the flowers in the vase. she could find no other offices of wife or mother to do, and she presently found herself looking into tom's room, which was very bare and desolate, stripped of the homelike growth of a five years' tenancy. her excitement was over; she felt terribly like a child after a tantrum; she flung open the window of the room and stood listening to the noise of the town. it was the noise of happy people, who had plenty to do; or of happier still, who did not want to do anything, and thus found content. she turned away and walked downstairs with a step as heavy as physical weariness brings with it. it came as a curious aggravation--light itself, but gaining weight from its surroundings--that, for once in a way, she had no engagements that evening. all the tide seemed to be flowing by, leaving her behind high and dry on the shore. even the children had their party, even harry his toy at westminster; and willie ruston was working might and main to give a good start to omofaga. only of her had the world no need--and no heed. chapter viii. converts and heretics. had lord semingham and harry dennison taken an opportunity which many persons would have thought that they had a right to take, they might have shifted the burden of the baron's _douceur_ and of sundry other not trifling expenses on to the shoulders of the public, and enjoyed their moors that year after all; for at the beginning omofaga obtained such a moderate and reasonable "boom" as would have enabled them to perform the operation known as "unloading" (and literary men must often admire the terse and condensed expressiveness of "city" metaphors) with much profit to themselves. but either they conceived this course of conduct to be beneath them, or they were so firm of faith in mr. ruston that they stood to their guns and their shares, and took their seats at the board, over which mr. foster belford magniloquently presided, still possessed of the strongest personal interest in the success of omofaga. lady semingham, having been made aware that omofaga shares were selling at forty shillings a piece, was quite unable to understand why alfred and mr. dennison did not sell all they had, and thereby procure moors or whatever else they wanted. willie ruston had to be sent for again, and when he told her that the same shares would shortly be worth five pounds (which he did with the most perfect confidence), she was equally at a loss to see why they were on sale to anybody who chose to pay forty shillings. ruston, who liked to make everybody a convert to his own point of view, spent the best part of an afternoon conversing with the little lady, but, when he came away, he left her placidly admiring the omofaga mantle which had just arrived from the milliner's, and promised to create an immense sensation. "i believe she's all gown," said he despairingly, at the valentines in the evening. "if you undressed her there'd be no one there." "well, there oughtn't to be many people," said young sir walter, with a hearty laugh at his boyish joke. "walter, how can you!" cried marjory. this little conversation, trivial though it be, has its importance, as indicating the very remarkable change which had occurred in young sir walter. there at least ruston had made a notable convert, and he had effected this result by the simple but audacious device of offering to take sir walter with him to omofaga. sir walter was dazzled. between spending another year or two at oxford _in statu pupillari_, vexed by schools and disciplined by proctors--between being required to be in by twelve at night and unable to visit london without permission--between this unfledged state and the position of a man among the men who were in the vanguard of the empire there rolled a flood; and the flood was mighty enough to sweep away all young sir walter's doubts about mr. ruston being a gentleman, to obliterate evan haselden's sneers, to uproot his influence--in a word, to transform that youthful legislator from a paragon of wisdom and accomplishments into "a good chap, but rather a lot of side on, you know." marjory, having learnt from literature that hers was supposed to be the fickle sex, might well open her eyes and begin to feel very sorry indeed for poor evan haselden. but she also was under the spell and hailed the sun of glory rising for her brother out of the mists of omofaga; and if poor lady valentine shed some tears before willie ruston convinced her of the rare chance it was for her only boy--and a few more after he had so convinced her--why, it would be lucky if these were the only tears lost in the process of developing omofaga; for it seems that great enterprises must always be watered by the tears of mothers and nourished on the blood of sons. _sic fortis etruria crevit._ one or two other facts may here be chronicled about omofaga. there were three great meetings: one at the cannon street hotel, purely commercial; another at the westminster town hall, commercial-political; a third at exeter hall, commercial-religious. they were all very successful, and, taken together, were considered to cover the ground pretty completely. the most unlike persons and the most disparate views found a point of union in omofaga. adela ferrars put three thousand pounds into it, lady valentine a thousand. mr. carlin finally disposed of the coal business, and his wife dreamt of the workhouse all night and scolded herself for her lack of faith all the morning. willie ruston spoke of being off in five months, and sir walter immediately bought a complete up-country outfit. suddenly there was a cloud. omofaga began to be "written down," in the most determined and able manner. the anonymous detractor--in such terms did mr. foster belford refer to the writer--used the columns of a business paper of high standing, and his letters, while preserving a judicial and temperate tone, were uncompromisingly hostile and exceedingly damaging. a large part of omofaga (he said) had not been explored, indeed, nobody knew exactly what was and what was not omofaga; let the shareholders get what comfort they could out of that; but, so far as omofaga had been explored, it had been proved to be barren of all sources of wealth. the writer grudgingly admitted that it might feed a certain head of cattle, though he hastened to add that the flies were fatal all the hot months; but as for gold, or diamonds, or any such things as companies most love, there were none, and if there were, they could not be won, and if they could be won no european could live to win them. it was a timid time on the markets then, and people took fright easily. in a few days any temptation that might have assailed lord semingham and harry dennison lost its power. omofagas were far below par, and lady semingham was entreating her husband to buy all he could against the hour when they should be worth five pounds a piece, because, as she said, mr. ruston was quite sure that they were going to be, and who knew more about it than mr. ruston? it was just about this time that tom loring, who had vanished completely for a week or two, after his departure from curzon street, came up out of the depths and called on adela ferrars in queen's gate; and her first remark showed that she was a person of some perspicacity. "isn't this rather small of you?" she asked, putting on her eyeglasses and finding an article which she indicated. "you may not like him, but still----" "how like a woman!" said tom loring in the tone of a man who expects and, on the whole, welcomes ill-usage. "how did you know it was mine?" "it's so like that article of harry dennison's. i think you might put your name, anyhow." "yes, and rob what i say of all weight. who knows my name?" adela felt an impulse to ask him angrily why nobody knew his name, but she inquired instead what he thought he knew about omofaga. she put this question in a rather offensive tone. it appeared that tom loring knew a great deal about omofaga, all, in fact, that there was to be learnt from blue-books, consular reports, gazetteers, travels, and other heavy works of a like kind. "you've been moling in the british museum," cried adela accusingly. tom admitted it without the least shame. "i knew this thing was a fraud and the man a fraud, and i determined to show him up if i could," said he. "it's because you hate him." "then it's lucky for the british investor that i do hate him." "it's not lucky for me," said adela. "you don't mean to say you've been----" "fool enough? yes, i have. no, don't quarrel again. it won't ruin me, anyhow. are the things you say really true?" tom replied by another question. "do you think i'd write 'em if i didn't believe they were?" "no, but you might believe they were because you hate him." tom seemed put out at this idea. it is not one that generally suggests itself to a man when his own views are in question. "i admit i began because i hate him," he said, with remarkable candour, after a moment's consideration; "but, by jove, as i went on i found plenty of justification. look here, you mustn't tell anyone i'm writing them." tom looked a little embarrassed as he made this request. adela hesitated for a moment. she did not like the request, either. "no, i won't," she said at last; and she added, "i'm beginning to think i hate him, too. he's turning me into an hospital." "what?" "people he wounds come to me. old lady valentine came and cried because walter's going to omofaga; and evan came and--well, swore because walter worships mr. ruston; and harry dennison came and looked bewildered, and--you know--because--oh, because of you, and so on." "and now i come, don't i?" "yes, and now you." "and has mrs. dennison come?" asked tom, with a look of disconcerting directness. "no," snapped adela, and she looked at the floor, whereupon tom diverted his eyes from her and stared at the ceiling. presently he searched in his waistcoat pocket and brought out a little note. "read that," he said, a world of disgust in his tone. "'i told you so.--b.c.'" read adela. "oh, it's that cormack woman!" she cried. "you see what it means? she means i've been got rid of in order that----" tom stopped, and brought his clenched fist down on his opened palm. "if i thought it, i'd shoot the fellow," he ended. he looked at her for the answer to his unexpressed question. adela turned the pestilential note over and over in her fingers, handling it daintily as though it might stain. "i don't think he means it," she said at last, without trying to blink the truth of tom's interpretation. tom rose and began to walk about. "women beat me," he broke out. "i don't understand 'em. how should i? i'm not one of these fellows who catch women's fancy--thank god!" "if you continue to dislike the idea, you'll probably manage to escape the reality," observed adela, and her tone, for some reason or other--perhaps merely through natural championship of her sex--was rather cold and her manner stiff. "oh, some women are all right;" and adela acknowledged the concession with a satirical bow. "look here, can't you help?" he burst out. "tell her what a brute he is." "oh, you do not understand women!" "well, then, i shall tell dennison. he won't stand nonsense of that kind." "you'll deserve horsewhipping if you do," remarked adela. "then what am i to do?" "nothing. in fact, mr. loring, you have no genius for delicate operations." "of course i'm a fool." adela played with her _pince-nez_ for a minute or two, put it on, looked at him, and then said, with just a touch of unwonted timidity in her voice, "anyhow, you happen to be a gentleman." poor tom had been a good deal buffeted of late, and a friendly stroking was a pleasant change. he looked up with a smile, but as he looked up adela looked away. "i think i'll stop those articles," said he. "yes, do," she cried, a bright smile on her face. "they've pretty well done their work, too." "don't! don't spoil it! but--but don't you get money for them?" tom was in better humour now. he held out his hand with his old friendly smile. "oh, wait till i am in the workhouse, and then you shall take me out." "i don't believe i did mean that," protested adela. "you always mean everything that--that the best woman in the world could mean," and tom wrung her hand and disappeared. adela's hand was rather crushed and hurt, and for a moment she stood regarding it ruefully. "i thought he was going to kiss it," she said. "one of those fellows who take women's fancy, perhaps, would have! and--and it wouldn't have hurt so much. ah, well, i'm very glad he's going to stop the articles." and the articles did stop; and perhaps things might have fallen out worse than that an honest man, driven hard by bitterness, should do a useful thing from a doubtful motive, and having done just enough of it, should repent and sin no more; for unquestionably the articles prevented a great many persons from paying an unduly high price for omofaga shares. this line of thought seems defensible, but it was not adela's. she rejoiced purely that tom should turn away from the doubtful thing; and if tom had been a man of greater acuteness, it would have struck him as worthy of note, perhaps even of gratification, that miss adela ferrars should care so much whether he did or did not do doubtful things. but then miss ferrars--for it seems useless to keep her secret any longer, the above recorded interview having somewhat impaired its mystery--was an improbably romantic person--such are to be met even at an age beyond twenty-five--and was very naturally ashamed of her weakness. people often are ashamed of being better than their surroundings. being better they feel better, and feeling better they feel priggish, and then they try not to be better, and happily fail. so adela was very shamefaced over her ideal, and would as soon have thought of preaching on a platform--of which practice she harboured a most bigoted horror--as of proclaiming the part that love must play in her marriage. the romantic resolve lay snug in its hidden nest, sheltered from cold gusts of ridicule by a thick screen of worldly sayings, and, when she sent away a suitor, of worldly-wise excuses. thus no one suspected it, not even tom loring, although he thought her "the best of women;" a form of praise, by the way, that gave the lady honoured by it less pleasure than less valuable commendation might have done. why best? why not most charming? well, probably because he thought the one and didn't think the other. she was the best; but there was another whose doings and whose peril had robbed tom loring of his peace, and made him do the doubtful thing. why had he done it? or (and adela smiled mockingly at this resurrection of the old woman), if he did do it, why did he do it for maggie dennison? she didn't believe he would ever do a doubtful thing for her. for that she loved him; but perhaps she would have loved him--well, not less--if he did; for how she would forgive him! after half-an-hour of this kind of thing--it was her own summary of her meditations--she dressed, went out to dinner, sat next evan haselden, and said cynical things all the evening; so that, at last evan told her that she had no more feeling than a mummified methodist. this was exactly what she wanted. chapter ix. an oppressive atmosphere. the right honourable foster belford, although not, like mr. pitt, famous for "ruining great britain gratis"--perhaps merely from want of the opportunity--had yet not made a fortune out of political life, and it had suggested a pleasant addition to his means, when willie ruston offered him the chairmanship of the omofaga company, with the promise of a very comfortable yearly honorarium. he accepted the post with alacrity, but without undue gratitude, for he considered himself well worth the price; and the surprising fact is that he was well worth it. he bulked large to the physical and mental view. his colleagues in the cabinet had taken a year or two to find out his limits, and the public had not found them out yet. therefore he was not exactly a fool. on the other hand, the limits were certainly there, and so there was no danger of his developing an inconvenient greatness. as has been previously hinted, he enjoyed harry dennison's entire confidence; and he could be relied upon not to understand lord semingham's irreverence. thus his appointment did good to the omofaga as well as to himself, and only the initiated winked when willie ruston hid himself behind this imposing figure and pulled the strings. "the best of it is," ruston remarked to semingham, "that you and carlin will have the whole thing in your own hands when i've gone out. belford won't give you any trouble." "but, my dear fellow, i don't want it all in my hands. i want to grow rich out of it without any trouble." ruston twisted his cigar in his mouth. the prospect of immediate wealth flowing in from omofaga was, as lord semingham knew very well, not assured. "loring's stopped hammering us," said ruston; "that's one thing." "oh, you found out he wrote them?" "yes; and uncommonly well he did it, confound him. i wish we could get that fellow. there's a good deal in him." "you see," observed lord semingham, "he doesn't like you. i don't know that you went the right way about to make him." the remark sounded blunt, but semingham had learnt not to waste delicate phrases on willie ruston. "well, i didn't know he was worth the trouble." "one path to greatness is said to be to make no enemies." "a very roundabout one, i should think. i'm going to make a good many enemies in omofaga." lord semingham suddenly rose, put on his hat, and left the offices of the company. mrs. dennison had, a little while ago, complained to him that she ate, drank, breathed and wore omofaga. he had detected the insincerity of her complaint, but he was becoming inclined to echo it in all genuineness on his own account. there were moments when he wondered how and why he had allowed this young man to lead him so far and so deep; moments when a convulsion of nature, redistributing africa and blotting out omofaga, would have left him some thousands of pounds poorer in purse, but appreciably more cheerful in spirit. perhaps matters would mend when the local administrator had departed to his local administration, and only the mild shadow of him which bore the name of carlin trod the boards of queen street, cheapside. ruston began to be oppressive. the restless energy and domineering mind of the man wearied semingham's indolent and dilettante spirit, and he hailed the end of the season as an excellent excuse for putting himself beyond the reach of his colleague for a few weeks. yet, the more he quailed, the more he trusted; and when a very great man, holding a very great office, met him in the house of lords, and expressed the opinion that when the company and mr. ruston went to omofaga they would find themselves in a pretty hornets' nest, lord semingham only said that he should be sorry for the hornets. "don't ask us to fetch your man out for you, that's all," said the very great man. and for an instant lord semingham, still feeling that load upon his shoulders, fancied that it would be far from his heart to prefer such a request. there might be things less just and fitting than that willie ruston and those savage tribes of omofaga should be left to fight out the quarrel by themselves, the civilised world standing aloof. and the dividends--well, of course, there were the dividends, but lord semingham had in his haste forgotten them. "ah, you don't know ruston," said he, shaking a forefinger at the great man. "don't i? he came every day to my office for a fortnight." "wanted something?" "yes, he wanted something certainly, or he wouldn't have come, you know." "got it, i suppose?" asked lord semingham, in a tone curiously indicative of resignation rather than triumph. "well, yes; i did, at last, not without hesitation, accede to his request." then lord semingham, with no apparent excuse, laughed in the face of the great man, left the house (much in the same sudden way as he had left queen street, cheapside), and passed rapidly through the lobbies till he reached westminster hall. here he met a young man, clad to perfection, but looking sad. it was evan haselden. with a sigh of relief at meeting no one of heavier metal, semingham stopped him and began to talk. evan's melancholy air enveloped his answers in a mist of gloom. moreover there was a large streak on his hat, where the nap had been rubbed the wrong way; evidently he was in trouble. presently he seized his friend by the arm, and proposed a walk in the park. "but are you paired?" asked semingham; for an important division was to occur that day in the commons. "no," said evan fiercely. "come along;" and lord semingham went, exclaiming inwardly, "a girl!" "i'm the most miserable devil alive," said evan, as they left the horse guards on the right hand. semingham put up his eyeglass. "i've always regarded you as the favourite of fortune," he said. "what's the matter?" the matter unfolded itself some half-hour after they had reached the row and sat down. it came forth with difficulty; pride obstructed the passage, and something better than pride made the young man diffuse in the telling of his trouble. lord semingham grew very grave indeed. let who would laugh at happy lovers, he had a groan for the unfortunate--a groan with reservations. "she said she liked me very much, but didn't feel--didn't, you know, look up to me enough, and so on," said poor evan in puzzled pain. "i--i can't think what's come over her. she used to be quite different. i don't know what she means by talking like that." lord semingham played a tune on his knee with the fingers of one hand. he was waiting. "young val's gone back on me too," moaned evan, who took the brother's deposal of him hardly more easily than the sister's rejection. suddenly he brightened up; a smile, but a bitter one, gleamed across his face. "i think i've put one spoke in his wheel, though," he said. "ruston's?" inquired semingham, still playing his tune. "yes. a fortnight ago, old detchmore" (lord detchmore was the very great man before referred to) "asked me if i knew loring. you know ruston's been trying to get detchmore to back him up in making a railway to omofaga?" "i didn't know," said lord semingham, with an unmoved face. "you're a director, aren't you?" "yes. go on, my dear boy." "and detchmore had seen loring's articles. well, i took tom to him, and we left him quite decided to have nothing to do with it. oh, by jove, though, i forgot; i suppose you'd be on the other side there, wouldn't you?" "i suppose i should, but it doesn't matter." "why not?" "because i fancy ruston's got what he wanted;" and lord semingham related what he had heard from the earl of detchmore. evan listened in silence, and, the tale ended, the two lay back in their chairs, and idly looked at the passing carriages. at last lord semingham spoke. "he's going to omofaga in a few months," he observed. "and, evan, you don't mean that he's your rival at the valentines'?" "i'm not so sure, confound him. you know how pretty she is." semingham knew that she was pretty; but he also knew that she was poor, and thought that she was, if not too insipid (for he recognised the unusual taste of his own mind), at least too immature to carry willie ruston off his feet, and into a love affair that promised no worldly gain. "i asked mrs. dennison what she thought," pursued evan. "oh, you did?" "but the idea seemed quite a new one to her. that's good, you know. i expect she'd have noticed if he'd shown any signs." lord semingham thought it very likely. "anyhow," evan continued, "marjory's awfully keen about him." "he'll be in omofaga in three or four months," semingham repeated. it was all the consolation he could offer. presently evan got up and strode away. lord semingham sat on, musing on the strange turmoil the coming of the man had made in the little corner of the world he dwelt in. he was reminded of what was said concerning lord byron by another poet. they all felt ruston. his intrusion into the circle had changed all the currents, so that sympathy ran no longer between old friends, and hearts answered to a new stimulus. some he attracted, some he repelled; none did he leave alone. from great to small his influence ran; from the expulsion of tom loring to the christening of the omofaga mantle. semingham had an acute sense of the absurdity of it all, but he had seen absurd things happen too often to be much relieved by his intuition. and when absurd things happen, they have consequences just as other things have. and the most exasperating fact was the utter unconsciousness of the disturber. he had no mystery-airs, no graces, no seeming fascinations. he was relentlessly business-like, unsentimental, downright; he took it all as a matter of course. he did not pry for weak spots. he went right on--on and over--and seemed not to know when he was going over. a very juggernaut indeed! semingham thanked adela for teaching him the word. he was suddenly roused by the merry laughter of children. three or four little ones were scampering along the path in the height of glee. as they came up, he recognised them. he had seen them once before. they were carlin's children. five there were, he counted now; three ran ahead; two little girls held each a hand of willie ruston's, who was laughing as merrily as his companions. the whole group knew semingham, and the eldest child was by his knees in a moment. "we've been to the exhibition," she cried exultantly; "and now willie--mr. ruston, i mean--is taking us to have ices in bond street." "a human devil!" said the astonished man to himself, as willie ruston plumped down beside him, imploring a brief halt, and earnestly asseverating that his request was in good faith, and concealed no lurking desire to evade the ices. "i met young haselden as we came along," ruston observed, wiping his brow. "ah! yes, he's been with me." the children had wandered a few yards off, and stood impatiently looking at their hero. "he's had a bit of a facer, i fancy," pursued willie ruston. "heard about it?" "something." "it'll come all right, i should think," said ruston, in a comfortably careless tone. "he's not a bad fellow, you know, though he's not over-appreciative of me." lord semingham found no comment. "i hear you're going to dieppe next week?" asked ruston. "yes. my wife and mrs. dennison have put their heads together, and fixed on that. you know we're economising." ruston laughed. "i suppose you are," he said through his white teeth. the idea seemed to amuse him. "we may meet there. i've promised to run over for a few days if i can." "the deuce you have!" would have expressed his companion's feelings; but lord semingham only said, "oh, really?" "all right, i'm coming directly," ruston cried a moment later to his young friends, and, with a friendly nod, he rose and went on his way. lord semingham watched the party till it disappeared through the park gates, hearing in turn the children's shrill laugh and willie ruston's deeper notes. the effect of the chance meeting was to make his fancies and his fancied feelings look still more absurd. that he perceived at once; the devil appeared so very human in such a mood and such surroundings. yet that attribute--that most demoniac attribute--of ubiquity loomed larger and larger. for not even a foreign land--not even a watering-place of pronounced frivolity--was to be a refuge. the man was coming to dieppe! and on whose bidding? semingham had no doubt on whose bidding; and, out of the airy forms of those absurd fancies, there seemed to rise a more material shape, a reality, a fabric not compounded wholly of dreams, but mixed of stuff that had made human comedies and human tragedies since the world began. mrs. dennison had bidden willie ruston to dieppe. that was semingham's instant conclusion; she had bidden him, not merely by a formal invitation, or by a simple acquiescence, but by the will and determination which possessed her to be of his mind and in his schemes. and perhaps evan haselden's innocent asking of her views had carried its weight also. for nearly an hour semingham sat and mused. for awhile he thought he would act; but how should he act? and why? and to what end? since what must be must, and in vain do we meddle with fate. an easy, almost eager, recognition of the inevitable in the threatened, of the necessary in everything that demanded effort for its avoidance, had stamped his life and grown deep into his mind. wherefore now, faced with possibilities that set his nerves on edge, and wrung his heart for good friends, he found nothing better to do than shrug his shoulders and thank god that his own wife's submission to the man went no deeper than the inside lining of that famous omofaga mantle, nor his own than the bottom, or near the bottom, of his trousers' pocket. "though that, in faith," he exclaimed ruefully, as at last he rose, "is, in this world of ours, pretty deep!" chapter x. a lady's bit of work. the dennison children, after a two nights' banishment, had come down to dessert again. they had been in sore disgrace, caused (it was stated to mrs. cormack, who had been invited to dine _en famille_) by a grave breach of hospitality and good manners which madge had led the younger ones--who tried to look plaintively innocent--into committing. the carlin children had come to tea, and a great dissension had arisen between the two parties. the carlins had belauded the generous donor of ices; madge had taken up the cudgels fiercely on tom loring's behalf, and dora and alfred had backed her up. each side proceeded from praise of its own favourite to sneers--by no means covert--at the other's man, and the feud had passed from the stage of words to that of deeds before it was discovered by the superior powers and crushed. on the hosts, of course, the blame had to fall; they were sent to bed, while the guests drove off in triumph, comforted by sweets and shillings. madge did not think, or pretend to think, that this was justice, and her mother's recital of her crimes to mrs. cormack, so far from reducing her to penitence, brought back to her cheeks and eyes the glow they had worn when she slapped (there is no use in blinking facts) jessie carlin, and told her that she hated mr. ruston. madge dennison was like her mother in face and temper. that may have been the reason why harry dennison squeezed her hand under the table, and by his tacit aid broke the force of his wife's cold reproofs. but there was perhaps another reason also. mrs. cormack said that she was shocked, and looked very much amused. the little history made up for the bore of having the children brought in. that was a thing she objected to very much; it stopped all rational conversation. but now her curiosity was stirred. "why don't you like mr. ruston, my child?" she asked madge. "i don't dislike him," said madge, rosy red, and speaking with elaborate slowness. she said it as though it were a lesson she had learnt. "but why, then," said mrs. cormack, whirling her hands, "beat the little carlin?" "that was before mamma told me," answered madge, the two younger ones sitting by, open-mouthed, to hear her explanation. "oh, what an obedient child! how i should have liked a little girl like you, darling!" madge hated sarcasm, and her feelings towards mrs. cormack reflected those of her idol, tom loring. "i don't know what you mean," she said curtly; and then she looked anxiously at her mother. but mrs. dennison was smiling. "let her alone, berthe," she said. "she's been punished. give her some fruit, harry." harry dennison piled up the plate eagerly held out to him. "who'll give you fruit at dieppe?" he asked, stroking his daughter's hair. mrs. cormack pricked up her ears. "didn't we tell you?" asked mrs. dennison. "harry can't come for a fortnight. that tiresome old sir george" (sir george was the senior partner in dennison, sons & company) "is down with the gout, and harry's got to stay in town. but i'll give madge fruit--if she's good." "papa gives it me anyhow," said madge, who preferred unconditional benefits. harry laughed dolefully. he had been looking forward to a holiday with his children. their uninterrupted society would have easily consoled him for the loss of the moor. "it's an awful bore," he said; "but there's no help for it. sir george can't put a foot to the ground." "anyhow," suggested mrs. cormack, "you will be able to help mr. ruston with the omofaga." "papa," broke out madge, her face bright with a really happy idea, which must, she thought, meet with general acceptance, "since you can't come, why shouldn't tom?" mrs. cormack grew more amused. oh, it was quite worth while to have the children! they were so good at saying things one couldn't say oneself; and then one could watch the effect. in an impulse of gratitude, she slid a banana on to madge's plate. "marjory valentine's coming," said mrs. dennison. "you like her, don't you, madge?" "she's a girl," said madge scornfully; and harry, with a laugh, stroked her hair again. "you're a little flirt," said he. "but why can't tom?" persisted madge, as she attacked the banana. it was mrs. cormack's gift, but--_non olet_. for a moment nobody answered. then harry dennison said--not in the least as though he believed it, or expected anybody else to believe it-"tom's got to stay and work." "have all the gentlemen we know got to stay and work?" harry nodded assent. mrs. cormack was leaning forward. a moment later she sank back, hiding a smile behind her napkin; for madge observed, in a tone of utter contentment, "oh, then, mr ruston won't come;" and she wagged her head reassuringly at the open-mouthed little ones. they were satisfied, and fell again to eating. after a few moments, mrs. dennison, who had made no comment on her daughter's inference, swept the flock off to bed, praying berthe to excuse her temporary absence. it was her habit to go upstairs with them when possible, and harry would see that coffee came. "poor madge!" said harry, when the door was shut, "what'll she say when ruston turns up?" "then he does go?" "i think so. we'd asked him to stay with us, and though he can't do that now, he and young walter valentine talk of running over for a few days. i hope they will." mrs. cormack, playing with her teaspoon, glanced at her host out of the corner of her eye. "he can go all the better, as i shall be here," continued harry. "i can look after omofaga." mrs. cormack rapped the teaspoon sharply on her cup. the man was such a fool. harry, dimly recognising her irritation, looked up inquiringly; but she hesitated before she spoke. would it spoil sport or make sport if she stirred a suspicion in him? a thought threw its weight in the balance. maggie dennison's friendship had been a trifle condescending, and the grateful friend pictured her under the indignity of enforced explanations, of protests, even of orders to alter her conduct. but how would harry take a hint? there were men silly enough to resent such hints. caution was the word. "well, i almost wish he wasn't going," she said at last. "for maggie's sake, i mean. she wants a complete rest." "oh, but she likes him. he amuses her. why, she's tremendously interested in omofaga, mrs. cormack." "ah, but he excites her too. we poor women have nerves, mr. dennison. it would be much better for her to hear nothing of omofaga for a few weeks." "has she been talking to you much about it?" asked harry, beginning to feel anxious at his guest's immensely solemn tone. indeed, little mrs. cormack spoke for the nonce quite like a family physician. "oh, yes, about it and him," she replied. "she's never off the subject. mr. loring was half right." "tom's objections were based on quite other grounds." "oh, were they really? i thought--well, anyhow, mr. ruston being there will do her no good. she'll like it immensely, of course." harry dennison rubbed his hand over his chin. "i see what you mean," he said. "yes, she'd have been better away from everything. but i can't object to ruston going. i asked him myself." "yes, when you were going." "that makes no difference." mrs. cormack said nothing. she tapped her spoon against the cup once more. "why, we should have talked all the more about it if i'd been there." his companion was still silent, her eyes turned down towards the table. harry looked at her with perplexity, and when he next spoke, there was a curious appealing note in his voice. "surely it doesn't make any difference?" he asked. "what difference can it make?" no answer came. mrs. cormack laid down the spoon and sat back in her chair. "you mean there'll be no one to make a change for her--to distract her thoughts?" mrs. cormack flung her hands out with an air of impatience. "oh, i meant nothing," said she petulantly. the clock seemed to tick very loud in the silence that followed her words. "i wish i could go," said harry at last, in a low tone. "oh, i wish you could, mr. dennison;" and as she spoke she raised her eyes, and, for the first time, looked full in his face. harry rose from his chair; at the same moment his wife re-entered the room. he started a little at the sight of her. she held a letter in her hand. "mr. ruston will be at dieppe on the 15th with walter valentine," she said, referring to it. "give me some coffee, harry." he poured it out and gave it to her, saying, "a letter from ruston? let's see what he says." "oh, there's nothing else," she answered, laying it beside her. mrs. cormack sat looking on. "may i see?" asked harry dennison. "if you like," she answered, a little surprised; and, turning to mrs. cormack, she added, "mr. ruston's a man of few words on paper." "ah, he makes every word mean something, i expect," returned that lady, who was quite capable of the same achievement herself, and exhibited it in this very speech. "what does he mean by the postscript?--'have you found another kingdom yet?'" asked harry, with a puzzled frown. "it's a joke, dear." "but what does it mean?" "oh, my dear harry, i can't explain jokes." harry laid the note down again. "it's a joke between ourselves," mrs. dennison went on. "i oughtn't to have shown you the letter. come, berthe, we'll go upstairs." and mrs. cormack had no alternative but to obey. left alone, harry dennison drew his chair up to the hearthrug. there was no fire, but he acted as though there were, leaning forward with his elbows on his knees, and gazing into the grate. he felt hurt and disconsolate. his old grievance--that people left him out--was strong upon him. he had delighted in the omofaga scheme, because he had been in the inside ring there--because he was of importance to it--because it showed him to his wife as a mover in great affairs. and now--somehow--he seemed to be being pushed outside there too. what was this joke between themselves? at dieppe they would have all that out; he would not be in the way there. then he did not understand what berthe cormack would be at. she had looked at him so curiously. he did not know what to make of it, and he wished that tom loring were on the other side of the fireplace. then he could ask him all about it. tom! why, tom had looked at him almost in the same way as berthe cormack had--just when he was wringing his hand in farewell. no, it was not the same way--and yet in part the same. tom's look had pity in it, and no derision. mrs. cormack's derision was but touched with pity. yet both seemed to ask, "don't you see?" see what? why had tom gone away? he could rely on tom. see what? there was nothing to see. he sat longer than he meant. it was past ten when he went upstairs. mrs. cormack had gone, and his wife was in an armchair by the open window. he came in softly and surprised her with her head thrown back on the cushions and a smile on her lips. and the letter was in her hands. hearing his step when he was close by her, she sat up, letting the note fall to the ground. "what a time you've been! berthe's gone. were you asleep?" "no. i was thinking; maggie, i wish i could come to dieppe with you." "ah, i wish you could," said she graciously. "but you're left in charge of omofaga." she spoke as though in that charge lay consolation more than enough. "i believe you care--i mean you think more about omofaga than about----" "anything in the world?" she asked, in playful mockery. "than about me," he went on stubbornly. "than about your coming to dieppe, you mean?" "i mean, than about me," he repeated. she looked at him wonderingly. "my dear man," said she, taking his hand, "what's the matter?" "you do wish i could come?" "must i say?" smiled mrs. dennison. "for shame, harry! you might be on your honeymoon." he moved away, and flung himself into a chair. "i don't think it's fair of ruston," he broke out, "to run away and leave it all to me." "why, you told him you could do it perfectly! i heard you say so." "how could i say anything else, when--when----" "and originally you were both to be away! after all, you're not stopping because of omofaga, but because sir george has got the gout." harry dennison, convicted of folly, had no answer, though he was hurt that he should be convicted out of his wife's mouth. he shuffled his feet about and began to whistle dolefully. mrs. dennison looked at him with smothered impatience. their little boy behaved like that when he was in a naughty mood--when he wanted the moon, or something of that kind, and thought mother and nurse cruel because it didn't come. mrs. dennison forgot that mother and nurse were fate to her little boy, or she might have sympathised with his naughty moods a little better. she rose now and walked slowly over to her husband. she had a hand on his chair, and was about to speak, when he stopped his whistling and jerked out abruptly, "what did he mean about the kingdom?" mrs. dennison's hand slid away and fell by her side. harry caught her look of cold anger. he leapt to his feet. "maggie, i'm a fool," he cried. "i don't know what's wrong with me. sit down here." he made her sit, and half-crouched, half-knelt beside her. "maggie," he went on, "are you angry? damn the joke! i don't want to know. are you sorry i'm not coming?" "what a baby you are, harry! oh, yes, awfully sorry." he knew so well what he wanted to say: he wanted to tell her that she was everything to him, that to be out of her heart was death: that to feel her slipping away was a torture: he wanted to woo and win her over again--win her more truly than he had even in those triumphant days when she gave herself to him. he wanted to show her that he understood her--that he was not a fool--that he was man enough for her! yes, that she need not turn to ruston or anybody else. oh, yes, he could understand her, really he could. not a word of it would come. he dared not begin: he feared that he would look--that she would find him--more silly still, if he began to say that sort of thing. she was smiling satirically now--indulgently but satirically, and the emphasis of her purposely childish "awfully" betrayed her estimation of his question. she did not understand the mood. she was accustomed to his admiration--worship would hardly be too strong a word. but the implied demand for a response to it seemed strange to her. her air bore in upon him the utter difference between his thoughts of her and the way she thought about him. always dimly felt, it had never pressed on him like this before. "really, i'm very sorry, dear," she said, just a little more seriously. "but it's only a fortnight. we're not separating for ever," and her smile broke out again. with a queer feeling of hopelessness, he rose to his feet. no, he couldn't make her feel it. he had suffered in the same way over his speeches; he couldn't make people feel them either. she didn't understand. it was no use. he began to whistle again, staring out of the open window. "i shall go to bed, harry. i'm tired. i've been seeing that the maid's packed what i wanted, and it's harder work than packing oneself." "give me a kiss, meg," he said, turning round. she did not do that, but she accepted his kiss, and he, turning away abruptly, shaped his lips to resume his tune. but now the tune wouldn't come. his wife left him alone. the tune came when she was there. now it wouldn't. ah, but the words would. he muttered them inaudibly to himself as he stood looking out of the window. they sounded as though they must touch any woman's heart. with an oath he threw himself on to the sofa, trying now to banish the haunting words--the words that would not come at his call, and came, in belated uselessness, to mock him now. he lay still; and they ran through his head. at last they ceased; but, before he could thank god for that, a strange sense of desolation came over him. he looked round the empty, silent room, that seemed larger now than in its busy daylight hours. the house was all still; there might have been one lying dead in it. it might have been the house of a man who had lost his wife. chapter xi. against his coming. "the great napoleon once observed----" "don't quote from 'anecdotes, new and old,'" interrupted adela unkindly. "that when his death was announced," pursued lord semingham, who thought it good for adela to take no notice of such interruptions, "everybody would say _ouf_. i say '_ouf_' now," and he stretched his arms luxuriously to their full length. "there's room here," he added, explaining the gesture. "well, who's dead?" asked adela, choosing to be exasperatingly literal. "nobody's dead; but a lot of people--and things--are a long way off." "that's not so satisfactorily final," said adela. "no, but it serves for the time. did you see me on my bicycle this morning?" "what, going round here?" and adela waved her hand circularly, as though embracing the broad path that runs round the grass by the sea at dieppe. "yes--just behind a charming _parisienne_ in a pair of--behind a charming _parisienne_ in an appropriate costume." "bessie must get one," said adela. "good heavens!" "i mean a bicycle." "oh, certainly, if she likes; but she'd as soon mount salisbury spire." "how did you learn?" "i really beg your pardon," said semingham, "but the fact is--ruston taught me." "let's change the subject," said adela, smiling. "a charming child, this marjory valentine," observed semingham. "she's too good for young evan. i'm very glad she wouldn't have him." "i'm not." "you're always sorry other girls don't marry. heaven knows why." "well, i'm sorry she didn't take evan." "why?" "i can't tell you." "not--not the forbidden topic?" "i half believe so." "but she's here with maggie dennison." "well, everybody doesn't chatter as you do," said adela incisively. "i don't believe it. she----hallo! here she is!" marjory valentine came along, bending her slim figure a little, the better to resist a fresh breeze that blew her skirts out behind her, and threatened to carry off her broad-brimmed hat. she had been bathing; the water was warm, and her cheeks glowed with a fine colour. as she came up, both adela and lord semingham put on their eyeglasses. "an uncommon pretty girl," observed the latter. "isn't it glorious?" cried marjory, yet several yards away. "walter will enjoy the bathing tremendously." "when's he coming?" "saturday," answered marjory. "where is lady semingham?" "dressing," said semingham solemnly. "costume number one, off at 11.30. costume number two, on at 12. costume number two, off at 3.30. costume----" "after all, she's your wife," said adela, in tones of grave reproach. "but for that, i shouldn't have a word to say against it. women are very queer reasoners." marjory sat down next to adela. "women do waste a lot of time on dress, don't they?" she asked, in a meditative tone; "and a lot of thought, too!" "hallo!" exclaimed lord semingham. "i mean, thought they might give to really important things. you can't imagine george eliot----" "what about queen elizabeth?" interrupted semingham. "she was a horrible woman," said adela. "phryne attached no importance to it," added semingham. "oh, i forgot! tell me about her," cried marjory. "a strong-minded woman, miss marjory." "he's talking nonsense, marjory." "i supplied a historical instance in miss valentine's favour." "i shall look her up," said marjory, at which lord semingham smiled in quiet amusement. he was a man who saw his joke a long way off, and could wait patiently for it. "yes, do," he said, lighting a cigarette. adela had grown grave, and was watching the girl's face. it was a pretty face, and not a silly one; and marjory's blue eyes gazed out to sea, as though she were looking at something a great way off. adela, with a frown of impatience, turned to her other neighbour. she would not be troubled with aspirations there. in fact, she was still annoyed with her young friend on evan haselden's account. but it was no use turning to lord semingham. his eyes were more than half-closed, and he was beating time gently to the casino band, audible in the distance. adela sighed. at last marjory broke the silence. "when mr. ruston comes," she began, "i shall ask him whether----" the sentence was not finished. "when who comes?" cried adela; and semingham opened his eyes and stilled his foot-pats. "mr. ruston." "is he coming after all? i thought, now that dennison----" "oh, yes--he's coming with walter. didn't you know?" "is he coming to-day?" "i suppose so. aren't you glad?" "of course," from adela, and "oh, uncommonly," from lord semingham, seemed at first sight answers satisfactory enough; but marjory's inquiring gaze rested on their faces. "come for a stroll," said adela abruptly, and passing her arm through marjory's, she made her rise. semingham, having gasped out his conventional reply, sat like a man of stone, but adela, for all that it was needless, whispered imperatively, "stay where you are." "well, marjory," she went on, as they began to walk, "i don't know that i am glad after all." "i believe you don't like him." "i believe i don't," said adela slowly. it was a point she had not yet quite decided. "i didn't use to." "but you do now?" "yes." adela hated the pregnant brevity of this affirmative. "mamma doesn't," laughed marjory. "she's so angry with him carrying off walter. as if it wasn't a grand thing for walter! so she's quite turned round about him." "he's not staying in--with you, i suppose?" "oh, no. though i don't see why he shouldn't. conventions are so stupid, aren't they? mrs. dennison's there," and marjory looked up with an appeal to calm reason as personified in adela. at another time, nineteen's view of twenty-nine--marjory's conception of maggie dennison as a sufficing chaperon--would have amused adela. but she was past amusement. her patience snapped, as it were, in two. she turned almost fiercely on her companion, forgetting all prudence in her irritation. "for heaven's sake, child, what do you mean? do you think he's coming to see you?" marjory drew her arm out from adela's, and retreated a step from her. "adela! i never thought----" she did not end, conscious, perhaps, that her flushed face gave her words the lie. adela swept on. "you! he's not coming to see you. i don't believe he's coming to see anyone--no, not even maggie--i mean no one, at all." the girl's look marked the fatal slip. "oh!" she gasped, just audibly. "i don't believe he cares _that_ for any of us--for anyone alive. marjory, i didn't mean what i said about maggie, i didn't indeed. don't look like that. oh, what a stupid girl you are!" and she ended with a half-hysterical laugh. for some moments they stood facing one another, saying nothing. the meaning of adela's words was sinking into marjory's mind. "let's walk on. people will wonder," said she at last; and she enlaced adela's arm again. after another long pause, during which her face expressed the turmoil of her thoughts, she whispered, "adela, is that why mr. loring went away?" "i don't know why he went away." "you think me a child, so you say you don't mean it now. you do mean it, you know. you wouldn't say a thing like that for nothing. tell me what you do mean, adela." it was almost an order. adela suddenly realised that she had struck down to a force and a character. "tell me exactly what you mean," insisted marjory; "you ought to tell me, adela." adela found herself obeying. "i don't know about him; but i'm afraid of her," she stammered, as if confessing a shameful deed of her own. a moment later she broke into entreaty. "go away, dear. don't get mixed up in it. don't have anything to do with him." "do you go away when your friends are in trouble or in danger?" adela felt suddenly small--then wise--then small because her wisdom was of a small kind. yet she gave it utterance. "but, marjory, think of--think of yourself. if you----." "i know what you're going to say. if i care for him? i don't. i hardly know him. but, if i did, i might--i might be of some use. and are you going to leave her all alone? i thought you were her friend. are you just going to look on? though you think--what you think!" adela caught hold of the girl's hands. there was a choking in her throat, and she could say nothing. "but if he sees?" she murmured, when she found speech. "he won't see. there's nothing to see. i shan't show it. adela, i shall stay. why do you think what--what you think?" people might wonder, if they would--perhaps they did--when adela drew marjory towards her, and kissed her lips. "i couldn't, my dear," she said, "but, if you can, for heaven's sake do. i may be wrong, but--i'm uneasy." marjory's lips quivered, but she held her head proudly up; then she sobbed a short quick-stifled sob, and then smiled. "i daresay it's not a bit true," she said. adela pressed her hand again, saying, "i'm an emotional old creature." "why did mr. loring go away?" demanded marjory. "i don't know. he thought it----" "best? well, he was wrong." adela could not hear tom attacked. "maggie turned him out," she said--which account of the matter was, perhaps, just a little one-sided, though containing a part of the truth. marjory meditated on it for a moment, adela still covertly looking at her. the discovery was very strange. half-an-hour ago she had smiled because the girl hinted a longing after something beyond frocks, and had laughed at her simple acceptance of semingham's joke. now she found herself turning to her, looking to her for help in the trouble that had puzzled her. in her admiration of the girl's courage, she forgot to wonder at her intuition, her grasp of evil possibilities, the knowledge of maggie dennison that her resolve implied. adda watched her, as, their farewell said, she walked, first quickly, then very slowly, towards the villa which mrs. dennison had hired, on the cliff-side, near the old castle. then, with a last sigh, she put up her parasol and sauntered back to the hã´tel de rome. costume number two would be on by now, and bessie semingham ready for luncheon. marjory, finally sunk into the slow gait that means either idleness or deep thought, made her way up to the villa. with every step she drew nearer, the burden she had taken up seemed heavier. it was not sorrow for the dawning dream that the storm-cloud had eclipsed that she really thought of. but the task loomed large in its true difficulty, as her first enthusiasm spent itself. if adela were right, what could she do? if adela were wrong, what unpardonable offence she might give. ah, was adela right? strange and new as the idea was, there was an unquestioning conviction in her manner that marjory could hardly resist. save under the stress of a conviction, speech on such a matter would have been an impossible crime. and marjory remembered, with a sinking heart, maggie dennison's smile of happy triumph when she read out the lines in which ruston told of his coming. yes, it was, or it might be, true. but where lay her power to help? coming round the elbow of the rising path, she caught sight of maggie dennison sitting in the garden. mrs. dennison wore white; her pale, clear-cut profile was towards marjory; she rested her chin on her hand, and her elbow on her knee, and she was looking on the ground. softly marjory drew near. an unopened letter from harry lay on a little table; the children had begun their mid-day meal in the room, whose open window was but a few feet behind; mrs. dennison's thoughts were far away. marjory stopped short. a stronger buffet of fear, a more overwhelming sense of helplessness, smote her. she understood better why adela had been driven to do nothing--to look on. she smiled for an instant; the idea put itself so whimsically; but she thought that, had mrs. dennison been walking over a precipice, it would need all one's courage to interfere with her. she would think it such an impertinence. and ruston? marjory saw, all in a minute, his cheerful scorn, his unshaken determination, his rapid dismissal of one more obstacle. she drew in her breath in a long inspiration, and mrs. dennison raised her eyes and smiled. "i believe i felt you there," she said, smiling. "at least, i began to think of you." marjory sat near her hostess. "did you meet anyone?" asked mrs. dennison. "adela ferrars and lord semingham." "well, had they anything to say?" "no--i don't think so," she answered slowly. "what should they have to say in this place? the children have begun. aren't you hungry?" "not very." "well, i am," and mrs. dennison arose. "i forgot it, but i am." "they didn't know mr. ruston was coming." "didn't they?" smiled mrs. dennison. "and has adela forgiven you? oh, you know, the poor boy is a friend of hers, as he is of mine." "we didn't talk about it." "and you don't want to? very well, we won't. see, here's a long letter--it's very heavy, at least--from harry. i must read it afterwards." "perhaps it's to say he can come sooner." "i expect not," said mrs. dennison, and she opened the letter. "no; a fortnight hence at the soonest," she announced, after reading a few lines. marjory was both looking and listening closely, but she detected neither disappointment nor relief. "he's seen tom loring! oh, and tom sends me his best remembrances. poor tom! marjory, does adela talk about mr. loring?" "she mentioned him once." "she thinks it was all my fault," laughed mrs. dennison. "a woman always thinks it's a woman's fault; at least, that's our natural tendency, though we're being taught to overcome it. marjory, you look dull! it will be livelier for you when your brother and mr. ruston come." the hardest thing about great resolves and lofty moods is their intermixture with everyday life. the intervals, the "waits," the mass of irrelevant trivialities that life inartistically mingles with its drama, flinging down pell-mell a heap of great and small--these cool courage and make discernment distrust itself. mrs. dennison seemed so quiet, so placid, so completely the affectionate but not anxious wife, the kind hostess, and even the human gossip, that marjory wanted to rub her eyes, wondering if all her heroics were nonsense--a girl's romance gone wrong. there was nothing to be done but eat and drink, and talk and lounge in the sun--there was no hint of a drama, no call for a rescue, no place for a sacrifice. and marjory had been all aglow to begin. her face grew dull and her eyelids half-dropped as she leant her head on the back of her chair. "_dã©jeuner!_" cried mrs. dennison merrily. "and this afternoon we're all going to gamble at _petits chevaux_, and if we win we're going to buy more omofagas. there's a picture of a speculator's family!" "mr. dennison's not a speculator, is he?" "oh, it depends on what you mean. anyhow, i am;" and mrs. dennison, waving her letter in the air and singing softly, almost danced in her merry walk to the house. then, crying her last words, "be quick!" from the door, she disappeared. a moment later she was laughing and chattering to her children. marjory heard her burlesque complaints over the utter disappearance of an omelette she had set her heart upon. that afternoon they all played at _petits chevaux_, and the only one to win was madge. but madge utterly refused to invest her gains in omofagas. she assigned no reasons, slating that her mother did not like her to declare the feeling which influenced her, and mrs. dennison laughed again. but adela ferrars would not look towards marjory, but kept her eyes on an old gentleman who had been playing also, and playing with good fortune. he had looked round curiously when, in the course of the chaff, they had mentioned omofaga, and adela detected in him the wish to look again. she wondered who he was, scrutinising his faded blue eyes and the wrinkles of weariness on his brow. willie ruston could have told her. it was baron von geltschmidt of frankfort. chapter xii. it can wait. in all things evil and good, to the world, and--a thing quite rare--to himself, willie ruston was an unaffected man. success, the evidence of power and the earnest of more power, gave him his greatest pleasure, and he received it with his greatest and most open satisfaction. it did not surprise him, but it elated him, and his habit was to conceal neither the presence of elation nor the absence of surprise. that irony in the old sense, which means the well-bred though hardly sincere depreciation of a man's own qualities and achievements, was not his. when he had done anything, he liked to dine with his friends and talk it over. he had been sharing the carlins' unfashionable six o'clock meal at hampstead this evening, and had taken the train to baker street, and was now sauntering home with a cigar. he had talked the whole thing over with them. carlin had said that no one could have managed the affair so well as he had, and mrs. carlin had not once referred to that lost _tabula in naufragio_, the coal business. yes, his attack on london had been a success. he had known nothing of london, save that its denizens were human beings, and that knowledge, whether in business or society, had been enough. his great scheme was floated; a few months more would see him in omofaga; there was money to last for a long time to come; and he had been cordially received and even made a lion of in the drawing-rooms. they would look for his name in the papers ("and find it, by jove," he interpolated). men in high places would think of him when there was a job to be "put through;" and women, famous in regions inaccessible to the vulgar, would recollect their talks with mr. ruston. decidedly they were human beings, and therefore, raw as he was (he just knew that he had come to them a little raw), he had succeeded. yet they were, some of them, strange folk. there were complications in them which he found it necessary to reconnoitre. they said a great many things which they did not think, and, _en revanche_, would often only hint what they did. and----but here he yawned, and, finding his cigar out, relit it. he was not in the mood for analysing his acquaintance. he let his fancy play more lightly. it was evening, and work was done. he liked london evenings. he had liked bandying repartees with adela ferrars (though she had been too much for him if she could have kept her temper); he liked talking to marjory valentine and seeing her occupied with his ideas. most of all, he liked trying to catch maggie dennison's thought as it flashed out for a moment, and fled to shelter again. he had laughed again and again over the talk that tom loring had interrupted--and not less because of the interruption. there was little malice in him, and he bore no grudge against tom. even his anger at the omofaga articles had been chiefly for public purposes and public consumption. it was always somebody's "game" to spoil his game, and one must not quarrel with men for playing their own hands. tom amused him, and had amused him, especially by his behaviour over that talk. no doubt the position had looked a strange one. tom had been so shocked. poor tom, it must be very serious to be so easily shocked. mr. ruston was not easily shocked. unaffected, free from self-consciousness, undividedly bent on his schemes, unheeding of everything but their accomplishment, he had spent little time in considering the considerable stir which he had, in fact, created in the circle of his more intimate associates. they had proved pliable and pleasant, and these were the qualities he liked in his neighbours. they said agreeable things to him, and they did what he wanted. he had stayed not (save once, and half in jest, with maggie dennison) to inquire why, and the quasi-real, quasi-burlesque apprehension of him--burlesqued perhaps lest it should seem too real--which had grown up among such close observers as adela ferrars and semingham, would have struck him as absurd, the outcome of that idle business of brain which weaves webs of fine fancies round the obvious, and loses the power of action in the fascination of self-created puzzles. the _nuances_ of a woman's attraction towards a man, whether it be admiration, or interest, or pass beyond--whether it be liking and just not love--or interest running into love--or love masquerading as interest, or what-not, willie ruston recked little of. he was a man, and a young man. he liked women and clever women--yes, and handsome women. but to spend your time thinking of or about women, or, worse still, of or about what women thought of you, seemed poor economy of precious days--amusing to do, maybe, in spare hours, inevitable now and again--but to be driven or laughed away when there was work to be done. such was the colour of his floating thoughts, and the loose-hung meditation brought him to his own dwelling, in a great building which overlooked hyde park. he lived high up in a small, irregular, many-cornered room, sparely-furnished, dull and pictureless. the only thing hanging on the walls was a large scale map of omofaga and the neighbouring territories; in lieu of nicnacks there stood on the mantlepiece lumps of ore, specimens from the mines of omofaga (would not these convince the most obstinate unbeliever?), and half-smothered by ill-dusted papers, a small photograph of ruston and a potent omofagan chief seated on the ground with a large piece of paper before them--a treaty no doubt. a well-worn sofa, second-hand and soft, and a deep arm-chair redeemed the place from utter comfortlessness, but it was plain that beauty in his daily surroundings was not essential to willie ruston. he did not notice furniture. he walked in briskly, but stopped short with his hand still on the knob of the door. harry dennison lay on the sofa, with his arm flung across his face. he sprang up on ruston's entrance. "hullo! been here long? i've been dining with carlin," said ruston, and, going to a cupboard, he brought out whisky and soda water. harry dennison began to explain his presence. in the first place he had nothing to do; in the second he wanted someone to talk to; in the third--at last he blurted it out--the first, second, third and only reason for his presence. "i don't believe i can manage alone in town," he said. "not manage? there's nothing to do. and carlin's here." "you see i've got other work besides omofaga," pleaded harry. "oh, i know dennisons have lots of irons in the fire. but omofaga won't trouble you. i've told carlin to wire me if any news comes, and i can be back in a few hours." harry had come to suggest that the expedition to dieppe should be abandoned for a week or two. he got no chance and sat silent. "it's all done," continued ruston. "the stores are all on their way. jackson is waiting for them on the coast. why, the train will start inland in a couple of months from now. they'll go very slow though. i shall catch them up all right." harry brightened a little. "belford said it was uncertain when you would start," he said. "it may be uncertain to belford, it's not to me," observed mr. ruston, lighting his pipe. the speech sounded unkind; but mr. belford's mind dwelt in uncertainty contentedly. "then you think of----?" "my dear dennison, i don't 'think' at all. to-day's the 12th of august. happen what may, i sail on the 10th of november. nothing will keep me after that--nothing." "belford started for the engadine to-day." "well, he won't worry you then. let it alone, my dear fellow. it's all right." clearly mr. ruston meant to go to dieppe. that was now to harry dennison bad news; but he meant to go to omofaga also, and to go soon; that was good. harry, however, had still something that he wished to convey--a bit of diplomacy to carry out. "i hope you'll find maggie better," he began. "she was rather knocked up when she went." "a few days will have put her all right," responded ruston cheerfully. he was never ill and treated fatigue with a cheery incredulousness. but, at least, he spoke with an utter absence of undue anxiety on the score of another man's wife. harry dennison, primed by mrs. cormack's suggestions, went on, "i wish you'd talk to her as little as you can about omofaga. she's very interested in it, you know, and--and very excitable--and all that. we want her mind to get a complete rest." "hum. i expect, then, i mustn't talk to her at all." the manifest impossibility of making such a request did not prevent harry yearning after it. "i don't ask that," he said, smiling weakly. "it won't hurt her," said willie ruston. "and she likes it." she liked it beyond question. "it tires her," harry persisted. "it--it gets on her nerves. it absorbs her too much." his face was turned up to ruston. as he spoke the last words, ruston directed his eyes, suddenly and rapidly, upon him. harry could not escape the encounter of eyes; hastily he averted his head, and his face flushed. ruston continued to look at him, a slight smile on his lips. "absorbs her?" he repeated slowly, fingering his beard. "well, you know what i mean." another long stare showed ruston's meditative preoccupation. harry sat uncomfortable under it, wishing he had not let fall the word. "well, i'll be careful," said ruston at last. "anything else?" harry rose. ruston carried an atmosphere of business about with him, and the visit seemed naturally to end with the business of it. taking his hat, harry moved towards the door. then, pausing, he smiled in an embarrassed way, and remarked, "you can talk to marjory valentine, you know." "so i can. she's a nice girl." harry twirled his hat in his fingers. his brain had conceived more diplomacy. "it'll be a fine chance for you to win her heart," he suggested with a tentative laugh. "i might do worse," said willie ruston. "you might--much worse," said harry eagerly. "aren't you rather giving away your friend young haselden?" "who told you, ruston?" "lady val. who told you?" "semingham." "ah! well, what would haselden say to your idea?" "well, she won't have him--he's got no chance anyhow." "all right. i'll think about it. good-night." he watched his guest depart, but did not accompany him on his way, and, left alone, sat down in the deep arm-chair. his smile was still on his lips. poor harry dennison was a transparent schemer--one of those whose clumsy efforts to avert what they fear effects naught save to suggest the doing of it. yet willie ruston's smile had more pity than scorn in it. true, it had more of amusement than of either. he could have taken a slate and written down all harry's thoughts during the interview. but whence had come the change? why had dennison himself bidden him to dieppe, to come now, a fortnight later, and beg him not to go? why did he now desire his wife to hear no more of omofaga, whose chief delight in it had been that it caught her fancy and imparted to him some of the interest she found in it? ruston saw in the transformation the working of another mind. "somebody's been putting it into his head," he muttered, still half-amused, but now half-angry also. and, with his usual rapidity of judgment, he darted unhesitatingly to a conclusion. he identified the hand in the business; he recognised whose more subtle thoughts harry dennison had stumbled over and mauled in his painful devices. but to none is it given to be infallible, and want of doubt does not always mean absence of error. forgetting this commonplace truth, willie ruston slapped his thigh, leapt up from his chair and, standing on the rug, exclaimed, "loring--by jove!" it was clear to him. loring was his enemy; he had displaced loring. loring hated him and omofaga. loring had stirred a husband's jealousy to further his own grudge. the same temper of mind that made his anger fade away when he had arrived at this certainty, prevented any surprise at the discovery. it was natural in man to seek revenge, to use the nearest weapon, to counter stroke with stroke, not to throw away any advantages for the sake of foibles of generosity. so, then, it was loring who bade him not go to dieppe, who prayed him to not to "absorb" mrs. dennison in omofaga, who was ready, notwithstanding his hatred and distrust, to see him the lover of marjory valentine sooner than the too engrossing friend of mrs. dennison! what a fool they must think him!--and, with this reflection, he put the whole matter out of his head. it could wait till he was at dieppe, and, taking hold of the great map by the roller at the bottom, he drew it to him. then he reached and lifted the lamp from the table, and set it high on the mantlepiece. its light shone now on his path, and with his finger he traced the red line that ran, curving and winding, inwards from the coast, till it touched the blue letters of the "omofaga" that sprawled across the map. the line ended in a cross of red paint. the cross was fort imperial--was to be fort imperial, at least; but willie ruston's mind overleapt all difference of tenses. he stood and looked, pulling hard and fast at his pipe. he was there--there in fort imperial already--far away from london and london folk--from weak husbands and their causes of anxiety--from the pleasing recreations of fascinating society, from the covert attacks of men whose noses he had put out of joint. he forgot them all; their feelings became naught to him. what mattered their graces, their assaults, their weal or woe? he was in omofaga, carving out of its rock a stable seat, carving on the rock face, above the seat, a name that should live. at last he turned away, flinging his empty pipe on the table and dropping the map from his hand. "i shall go to bed," he said. "three months more of it!" and to bed he went, never having thought once during the whole evening of a french lady, who liked to get amusement out of her neighbours, and had stayed in town on purpose to have some more talks with harry dennison. had willie ruston not been quite so sure that he read tom loring's character aright, he might have spared a thought for mrs. cormack. chapter xiii. a spasm of penitence. tom loring had arranged to spend the whole of the autumn in london. his omofaga articles had gained such favourable notice that his editor had engaged him to contribute a series dealing with african questions and african companies (and the latter are in the habit of producing the former), while he was occupied, on his own account, at the british museum, in making way with a treatise of a politico-philosophical description, which had been in his head for several years. he hailed with pleasure the prospect of getting on with it; the leisure afforded him by his departure from the dennisons was, in its way, a consolation for the wrench involved in the parting. could he have felt more at ease about the course of events in his absence, he would have endured his sojourn in town with equanimity. of course, the place was fast becoming a desert, but, at this moment, chance, which always objects to our taking things for granted, brought a carriage exactly opposite the bench on which tom was seated, and he heard his name called in a high-pitched voice that he recognised. looking up, he saw mrs. cormack leaning over the side of her victoria, smiling effusively and beckoning to him. that everyone should go save mrs. cormack seemed to tom the irony of circumstance. with a mutter to himself, he rose and walked up to the carriage. he then perceived, to his surprise, that it contained, hidden behind mrs. cormack's sleeves--sleeves were large that year--another inmate. it was evan haselden, and he greeted tom with an off-hand nod. "the good god," cried mrs. cormack, "evidently kept me here to console young men! are you left desolate like mr. haselden here?" "well, it's not very lively," responded tom, as amiably as he could. "no, it isn't," she agreed, with the slightest, quickest glance at evan, who was staring moodily at the tops of the trees. tom laughed. the woman amused him in spite of himself. and her failures to extract entertainment from poor heart-broken evan struck him as humorous. "but i'm at work," he went on, "so i don't mind." "ah! are you still crushing----?" "no," interrupted tom quickly. "that's done." "i should not have guessed it," said mrs. cormack, opening her eyes. "i mean, i've finished the articles on that point." "that is rather a different thing," laughed she. "i'm afraid so," said tom. "i wish to heaven it wasn't!" ejaculated evan suddenly, without shifting his gaze from the treetops. "oh, he is very very bad," whispered mrs. cormack. "poor young man! are you bad too?" "eh?" "oh, but i know." "oh, no, you don't," said tom. suddenly evan rose, opened the carriage door, got out, shut it, and lifted his hat. "good-bye," said mrs. cormack, smiling merrily. "good-bye. thanks," said evan, with unchanged melancholy, and, with another nod to tom, he walked round to the path and strode quickly away. "how absurd!" said she. "not at all. i like to see him honest about it. he's hard hit--and he's not ashamed of it." "oh, well," said mrs. cormack, shrugging the subject away in weariness of it. "and how do you stand banishment? will you get in?" "yes, if you won't assume----" "too great familiarity, mr. loring?" "oh, i was only going to say--with my affairs. with me--i should be charmed," and tom settled himself in the victoria. he had, now he came to think of it, been really very much bored; and the little woman was quite a resource. she rewarded his ironical gallantry with a look that told him she took it for what it was worth, but liked it all the same; and, after a pause, asked, "and you see mr. dennison often?" "very seldom, on the contrary. i don't know what he does with himself." "the poor man! he walks up and down. i hear him walking up and down." "what does he do that for?" "ah! what? well, he cannot be happy, can he?" "can't he?" said tom, determined to understand nothing. "you are very discreet," she said, with a malicious smile. "i'm obliged to be. somebody must be." "mr. loring," she said abruptly, "you don't like me, neither you nor miss ferrars." "i never answer for others. for myself----" "oh, i know. what does it matter? well, anyhow, i'm sorry for that poor man." "your sympathy is very ready, mrs. cormack." "you mean it is too soon--premature?" "i mean it's altogether unnecessary, to my humble thinking." "but i'm not a fool," she protested. tom could not help laughing. the laugh, however, rather spoilt his argument. "have it your own way," he conceded, conscious of his error, and trying to cover it by a burlesque surrender. "he's miserable." "well, he is." there was a placid certainty about her that disturbed tom's attitude of incredulity. "why is he?" he asked curiously. "i have talked to him. i know," she answered, with a nod full of meaning. "oh, have you?" "yes, and he--well, do you want to hear, or will you be angry and despise me as you used?" "i want to hear." "what did i use to say? that the man would come? well, he has come. _voilã  tout!_" "oh, so you say. but harry doesn't think such--i beg pardon, i was about to say, nonsense." "yes, he does. at least, he is afraid of it." "how do you know?" "i tell you, we have talked. and i saw. he almost cried that he couldn't go to dieppe, and that somebody else----" tom suddenly turned upon her. "who began the talk?" he demanded. "what do you say?" "who began?" "oh, what nonsense! who does begin to talk? how do i know? it came, mr. loring." tom said nothing. "you look as if you didn't believe me," she remarked, pouting. "i don't. he's the most unsuspicious fellow alive." "well, if you like, i began. i'm not ashamed. but i said very little. when he asked me if i thought it good that she and--the other--should be together out there and he here--well, was i to say yes?" "i think," observed tom, in quiet and deliberate tones, "that it's a great pity that some women can't be gagged." "they can, but only with kisses," said mrs. cormack, not at all offended. "oh, don't be frightened. i do not wish to be gagged at all. if i did--there is more than one man in the world." tom despised and half-hated her; but he liked her good-nature, and, in his heart, admired her for not flinching. her shamelessness was crossed with courage. "so you've made him miserable?" "well, i might say, i, a wicked frenchwoman, that it is better to be deceived than to be wretched. but you, an englishman----! oh, never, mr. loring!" tom sat silent a little while. "i don't know what to do," he said, half in reverie. "who thought you would?" asked mrs. cormack, unkindly. "i believe it's all a mare's nest." "that means a mistake, a delusion?" "it does." "then i don't think you do believe it. and, if you do, you are wrong. it is not all a--a mare's nest." she pronounced the word with unfamiliar delicateness. tom knew that he did not believe that it was all a mare's nest. he would have given everything in the world--save one thing--and that, he thought, he had not got--to believe it. "then, if you believed it, why didn't you do something?" he asked rather fiercely. "what have you all done? i, at least, warned him. yes, since you insist, i hinted it. but you--you ran away; and your adela ferrars, she looks prim and pained, oh! and shocked, and doesn't come so much." it was a queer source to learn lessons from, and tom was no less surprised than adela had been a day or two before at dieppe. "what should you do?" he asked, in new-born humility. "i? nothing. what is it to me?" "what should you do, if you were me?" "make love to her myself," smiled mrs. cormack. she was having her revenge on tom for many a scornful speech. "if you'd held your tongue, it would all have blown over!" he exclaimed in exasperation. "it will blow over still; but it will blow first," she said. "if that contents you, hold your tongue." then she turned to tom, and laid a small fore-finger on his arm. "mark this," said she, "he does not care for her. he cares for himself; she is--what would you say? an incident--an accident--i do not know how to say it--to him." "well, if you're right there----" began tom in some relief. "if i'm right there, it will make no difference--at first. but, as you say, it will blow over--and sooner." tom looked at her, and thought, and looked again. "by jove, you're not a fool, mrs. cormack," said he, almost under his breath. then he added, louder, "it's the wisdom of the devil." "oh, you surpass yourself," she smiled. "your compliments are magnificent." "you must have learnt it from him." "oh, no. from my husband," said mrs. cormack. the carriage, which during their talk had moved slowly round the circle, stopped again. mrs. cormack turned to tom. he was already looking at her. "i don't understand you," said he. "no? well, you'll hardly believe it, but that does not surprise me." "i'm not sure you don't mean well, if you weren't ashamed to confess it," said tom. for the first time since he had known her, she blushed and looked embarrassed. then she began, in a quick tone, "well, i talked. i wanted to see how he took it; and it amused me. and--well, our dear maggie--she is so very magnificent at times. she looks down so calmly--oh! from such a height--on one. she had told me that day--well, never mind that; it was true, i daresay. i don't love truth. i don't see what right people have to say things to me, just because one may know they are true." "so you made a little mischief?" "well, i hear that poor man walking up and down. i want to comfort him. i asked him to come in, and he refused. then i offered to go in--he was very frightened. oh, _mon dieu_!" and she laughed almost hysterically. this very indirect confession proved in the end to be all that mrs. cormack's penitence could drive her to, and tom left her, feeling a little softened towards her, but hardly better equipped for action. what, indeed, could be done? tom's sense of futility expressed itself in a long letter to adela ferrars. as he had no suggestions for present action, he took refuge in future promises. "it will be very awkward for me to come, but if, as time goes on, you think i should be any good, i will come." and adela, when she read it, was tempted to send for him on the spot; he would have been of no use, but he would have comforted her. but then his presence would unquestionably exasperate maggie dennison. adela decided to wait. now, by the time tom loring's letter reached dieppe, young sir walter and willie ruston were on the boat, and they arrived hard on its heels. they took up their abode at a hotel a few doors from where the seminghams were staying, and walter at once went round to pay his respects. ruston stayed in to write letters. so he said; but when he was alone he stood smoking at the window and looking at the people down below. presently, to his surprise, he saw the same old gentleman whom adela had noticed in the casino. "the baron, by jove!" he exclaimed. "now, what brings him here?" the baron was sauntering slowly by, wrapped in a cloak, and leaning heavily on a malacca cane. in a moment willie ruston was down the stairs and after him. hearing his name cried, the baron stopped and turned round. "what chance brings you here?" asked willie, holding out his hand. "oh, hardly chance," said the baron. "i always go to some seaside place, and i thought i might meet friends here," and he smiled significantly. "yes," said ruston, after a pause; "i believe i did mention it in threadneedle street. i went in there the other day." by the general term threadneedle street he meant to indicate the offices of the baron's london correspondents, which were situate there. "they keep you informed, it seems?" "i live by being kept informed," said the baron. ruston was walking by him, accommodating his pace to the old man's feeble walk. "you mean you came to see me?" he asked. "well, if you'll forgive the liberty--in part." "and why did you want me?" "oh, i've not lost all interest in omofaga." "no, you haven't," said ruston. "on the contrary, you've been increasing your interest." the baron stopped and looked at him. "oh, you know that?" "certainly." the baron laughed. "then you can tell me whether i shall lose my money," he said. "do you ever lose your money, baron?" "but am i to hear about omofaga?" asked the baron, countering question by question. "as much as you like," answered ruston, with the indifference of perfect candour. "ah, by the way, i have heard about it already. who are the ladies here who talk about it?" willie ruston gave a careful catalogue of all the persons in dieppe who were interested in the omofaga company. the baron identified the seminghams and adela. then he observed, "and the other lady is mrs. dennison, is she?" "she is. i'm going to her house to-morrow. shall i take you?" "i should be charmed." "very well. to-morrow afternoon." "and you'll dine with me to-night?" ruston was about to refuse; but the baron added, half seriously, "i've come a long way to see you." "all right, i'll come," he said. then he paused a moment, and looked at the baron curiously. "and perhaps you'll tell me then," he added. "why i've come?" "yes; and why you've been buying. you were bought out. what do you want to come in again for?" "i'll tell you all that now," said the baron. "i've come because i thought i should like to see some more of you; and i've been buying because i fancy you'll make a success of it." willie ruston pulled his beard thoughtfully. "don't you believe me?" asked the baron. "let's wait a bit," suggested ruston. then, with a sudden twinkle of his eye, his holiday mood seemed to come back again. seizing the baron's arm, he pressed it, and said with a laugh, "i say, baron, if you want to get control over omofaga----" "but, my dear friend----" protested the baron. "if you do--i only say 'if'--i'm not the only man you've got to fight. well, yes, i am the only _man_." "my dear young friend, i don't understand you," pleaded the baron. "we'll go and see mrs. dennison to-morrow," said willie ruston. chapter xiv. the thing or the man. "well?" it was the morning of the next day, mrs. dennison sat in her place in the little garden on the cliff, and willie ruston stood just at the turn of the mounting path, where marjory had paused to look at her friend. "well, here i am," said he. she did not move, but held out her hand. he advanced and took it. "i met your children down below," he went on, "but they would hardly speak to me. why don't they like me?" "never mind the children." "but i do mind. most children like me." "how is everything?" "in london? oh, first-rate. i saw your husband the----" "i mean, how is omofaga?" "capital; and here?" "it has been atrociously dull. what could you expect?" "well, i didn't expect that, or i shouldn't have come." "are the stores started?" "i thought it was holiday time? well, yes, they are." she had been looking at him ever since he came, and at last he noticed it. "do i look well?" he asked in joke. "you know, it's rather a pleasure to look at you," she replied. "i've been feeling so shut in," and she pushed her hair back from her forehead, and glanced at him with a bright smile. "and it's really going well?" "so well," he nodded, "that everything's quiet, and the preparations well ahead. in three months" (and his enthusiasm began to get hold of him) "i shall be off; in two more i hope to be actually there, and then--why, forward!" she had listened at first with sparkling eyes; as he finished, her lips drooped, and she leant back in her chair. there was a moment's silence; then she said in a low voice, "three months!" "it oughtn't to take more than two, if jackson has arranged things properly for me." evidently he was thinking of his march up country; but it was the first three mouths that were in her mind. she had longed to see the thing really started, hastened by all her efforts the hour that was to set him at work, and dreamt of the day when he should set foot in omofaga. now all this seemed assured, imminent, almost present; yet there was no exultation in her tone. "i meant, before you started," she said slowly. he looked up in surprise. "i can't manage sooner," he said, defending himself. "you know i don't waste time." he was still off the scent; and even she herself was only now, for the first time and as yet dimly, realising her own mind. "i have to do everything myself," he said. "dear old carlin can't walk a step alone, and the board"--he paused, remembering that harry dennison was on the board--"well, i find it hard to make them move as quick as i want. i had to fix a date, and i fixed the earliest i could be absolutely sure of." "why don't they help you more?" she burst out indignantly. "oh, i don't want help." "yes, but i helped you!" she exclaimed, leaning forward, full again of animation. "i can't deny it," he laughed. "you did indeed." "yes," she said, and became again silent. "_apropos_," said he. "i want to bring someone to see you this afternoon--baron von geltschmidt." "who?" "he was the german capitalist, you know." "what! why, what's he doing here?" "he came to see me--so he says. may i bring him?" "why, yes. he's a great--a great man, isn't he?" "well, he's a great financier." "and he came to see you?" "so he says." "and don't you believe him?" "i don't know. i want your opinion," answered ruston, with a smile. "are you serious?" she asked quickly. "i mean, do you really want my opinion, or are you being polite?" "i don't think _you_ a fool, you know," said willie ruston. she flashed a glance of understanding, mingled with reproach, at him, and, leaning forward again, said, "has he come about omofaga?" "that you might tell me too--or will you want all omofaga if you do so much?" for a moment she smiled in recollection. then her face grew sad. "much of omofaga i shall have!" she said. "oh, i'll write," he promised carelessly. "write!" she repeated in low, scornful tones. "would you like to be written to about it? it'll happen to you, and i'm to be written to!" "well, then, i won't write." "yes, do write." willie ruston smiled tolerantly, but his smile was suddenly cut short, for mrs. dennison, not looking at him but out to sea, asked herself in a whisper, which was plainly not meant for him though he heard it, "how shall i bear it?" he had been tilting his chair back; he brought the front legs suddenly on to the ground again and asked, "bear what?" she started to find he had heard, but attempted no evasion. "when you've gone," she answered in simple directness. he looked at her with raised eyebrows. there was no embarrassment in her face, and no tremble in her voice; and no passion could he detect in either. "how flat it will all be," she added in a tone of utter weariness. he was half-pleased, half-piqued at the way she seemed to look at him. it not only failed to satisfy him, but stirred a new dissatisfaction. it hinted much, but only, it seemed to him, to negative it. it left omofaga still all in all, and him of interest only because he would talk of and work for omofaga, and keep the omofaga atmosphere about her. now this was wrong, for omofaga existed for him, not he for omofaga; that was the faith of true disciples. "you don't care about me," he said. "it's all the company--and only the company because it gives you something to do. well, the company'll go on (i hope), and you'll hear about our doings." she turned to him with a puzzled look. "i don't know what it is," she said with a shake of her head. then, with a sudden air of understanding, as though she had caught the meaning that before eluded her, she cried, "i'm just like you, i believe. if i went to omofaga, and you had to stay----" "oh, it would be the deuce!" he laughed. "yes, yes. well, it is--the deuce," she answered, laughing in return. but in a moment she was grave again. her attraction for him--the old special attraction of the unknown and unconquered--came strongly upon him, and mingled more now with pleasure in her. her silence let him think; and he began to think how wasted she was on harry dennison. another thought followed, and to that he gave utterance. "but you've lots of things you could do at home; you could have plenty to work at, and plenty of--of influence, and so on." "yes, but--oh, it would come to mr. belford! who wants to influence mr. belford? besides, i've grown to love it now, haven't you?" "omofaga?" "yes! it's so far off--and most people don't believe in it." "no, confound them! i wish they did!" "do you? i'm not sure i do." she was so absorbed that she had not heard an approaching step, and was surprised to see ruston jump up while her last sentence was but half said. "my dear miss valentine," he cried, his face lighting up with a smile of pleasure, "how pleasant to meet you again!" there was no mistaking the sincerity of his greeting. marjory blushed as she gave him her hand, and he fixed his eyes on her in undisguised approval. "you're looking splendid," he said. "is it the air or the bathing or what?" perhaps it was both in part, but, more than either, it was a change that worked outwards from within, and was giving to her face the expression without which mere beauty of form or colour is poor in allurement. the last traces of what lord semingham meant by "insipidity" had been chased away. ruston felt the change though he could not track it. marjory, a bad dissembler, greeted him nervously, almost coldly; she was afraid to let her gaze rest on him or on mrs. dennison for long, lest it should hint her secret. her manner betrayed such uneasiness that ruston noticed it. mrs. dennison did not, for something in ruston's face had caught her attention. she had seen many expressions in his eyes as he looked at her--of sympathy, amusement, pleasure, even (what had pleased her most) puzzle, but never what she saw now. the look now was a man's homage to beauty--it differs from every other--a lover hardly seems to have it unless his love be beautiful--and she had never yet seen it when he looked at her. she turned away towards the sea, grasping the arm of her chair with a sudden grip that streaked her fingers red and white. marjory also saw, and a wild hope leapt up in her that her task needed not the doing. but a moment later ruston was back in omofaga--young sir walter being his bridge for yet another transit. "how's mr. dennison?" asked marjory, when he gave her an opportunity. "oh, he's all right. you'd have heard, i suppose, if he hadn't been?" it was true. marjory recognised the inappropriateness of her question, but mrs. dennison came to the rescue. "marjory wants a personal impression," she said. "you know she and my husband are great allies!" "well," laughed ruston, "he was a little cross with me because i would come to dieppe. i should have felt the same in his place; but he's well enough, i think." "i was going down to find lady semingham," said marjory. "are you coming down this morning, maggie?" "maggie" was something new--adopted at mrs. dennison's request. "i think not, dear." "i am," said ruston, taking up his walking stick. "i shall be up with the baron this afternoon, mrs. dennison. come along, miss valentine. we've been having no end of palaver about omofaga," and as they disappeared down the cliff mrs. dennison heard his voice talking eagerly to marjory. she felt her heart beating quickly. she had to conquer a strange impulse to rise and hurry after them. she knew that she must be jealous--jealous, she said to herself, trying to laugh, that he should talk about omofaga to other people. nonsense! why, he was always talking of it! there was a stronger feeling in her, less vague, of fuller force. it had come on her when he spoke of his going to africa, but then it was hard to understand, for with all her heart she thought she was still bent on his going. it spoke more clearly now, stirred by the threat of opposition. at first it had been the thing--the scheme--the idea--that had caught her; she had taken the man for the thing's sake, because to do such a thing proved him a man after her pattern. but now, as she sat in the little garden, she dimly traced her change--she loved the scheme because it was his. she did not shrink from testing it. "yes," she murmured, "if he gave it up now, i should go on with him to something else." then came another step--why should he not give it up? why should he go into banishment--he who might go near to rule england? why should he empty her life by going? but if he went--and she could not persuade herself that she had power to stop his going--he must go from her side, it must be she who gave him the stirrup-cup, she towards whom he would look across the sea, she for whom he would store up his brief, grim tales of victory, in whose eyes he would see the reflection of his triumphs. could she fill such a place in his life? she knew that she did not yet, but she believed in herself. "i feel large enough," she said with a smile. yet there was something that she had not yet touched in him--the thing which had put that look in his eyes, a thing that for the moment at least marjory valentine had touched. why had she not? she answered, with a strong clinging to self-approbation, that it was because she would not. she told herself that she had asked nothing from her intercourse with him save the play of mind on mind--it was her mind and nothing else that her own home failed to satisfy. she recalled the scornful disgust with which she had listened to semingham when he hinted to her that there was only one way to rule a man. it seemed less disgusting to her now than when he spoke. for, in the light of that look in his eyes, there stood revealed a new possibility--always obvious, never hitherto thought of--that another would take and wield the lower mighty power that she had disdained to grasp, and by the might of the lower wrest from her the higher. was not the lower solidly based in nature, the higher a fanciful structure resting in no sound foundation? the moment this spectre took form before her--the moment she grasped that the question might lie between her and another--that it might be not what she would take but what she could keep--her heart cried out, to ears that shrank from the tumultuous reckless cry, that less than all was nothing, that, if need be, all must be paid for all. and, swift on the horror of her discovery, came the inevitable joy in it--joy that will be silenced by no reproofs, not altogether abashed by any shame, that no pangs can rob utterly of its existence--a thing to smother, to hide, to rejoice in. yet she would not face unflinchingly what her changing mind must mean. she tried to put it aside--to think of something, ah! of anything else, of anything that would give her foothold. "i love my husband," she found herself saying. "i love poor old harry and the children." she repeated it again and again, praying the shibboleth to show its saving virtue. it was part of her creed, part of her life, to be a good wife and mother--part of her traditions that women who were not that were nothing at all, and that there was nothing a woman might take in exchange for this one splendid, all-comprehending virtue. to that she must stand--it was strange to be driven to argue with herself on such a point. she mused restlessly as she sat; she listened eagerly for her children's footsteps mounting the hill; she prayed an interruption to rescue her from her thoughts. just now she would think no more about it; it was thinking about it that did all the harm. yet while she was alone she could not choose but surrender to the thought of it--to the thought of what a price she must pay for her traditions and her creed. the payment, she cried, would leave life an empty thing. yet it must be paid--if it must. was it now come to that? was this the parting of the roads? "i must, yet i cannot! i must not, yet i must." it was the old clash of powers, the old conflict of commands, the old ruthless will of nature that makes right too hard and yet fastens anguish upon sin--that makes us yearn for and hate the higher while we love and loathe the lower. chapter xv. the work of a week. much went to spoil the stay at dieppe, but the only overt trouble was the feeble health of the baron von geltschmidt. the old man had rapidly made his way into the liking of his new acquaintances. semingham found his dry, worldly-wise, perhaps world-weary, humour an admirable sauce to conversation; adela ferrars detected kindness in him; his gallant deference pleased lady semingham. they were all grieved when the cold winds laid hold of him, forced him to keep house often, and drove him to furs and a bath-chair, even when the sun shone most brightly. although they liked him, they implored him to fly south. he would not move, finding pleasure in them, and held fast by an ever-increasing uneasy interest in willie ruston. adela quarrelled with him heartily and energetically on this score. to risk health because anyone was interesting was absurd; to risk it on ruston's account most preposterous. "i'd be ill to get away from him," she declared. the baron was obstinate, fatalistic as to his health, infatuated in his folly; stay he would, while ruston stayed. yet what ruston did, pleased him not; for the better part of the man--what led him to respond to kindness or affection, and abate something of his hardness where he met no resistance--seemed to be conspiring with his old domineering mood to lead him beyond all power of warning or recall. a week had passed since ruston paid his first visit to mrs. dennison in the cottage on the cliff. it was a bright morning. the baron was feeling stronger; he had left his chair and walked with adela to a seat. there they sat side by side, in the occasional talk and easy silences of established friendship. the baron smoked his cigar; adela looked idly at the sea; but suddenly the baron began to speak. "i had a talk with our friend, lord semingham, this morning," said he. "about anything in particular?" "i meant it to be, but he doesn't like talk that leads anywhere in particular." "no, he doesn't," said adela, with a slight smile. the baron sat silent for a moment, then he said, "may i talk to you, miss ferrars?" and he looked at her inquiringly. "why, of course," she answered. "is it about yourself, baron? you're not worse, are you?" he took no notice of her question, but pointed towards the cliff. "what is happening up there?" he asked. adela started. she had not realised that he meant to talk on that subject. he detected her shrinking and hastened to defend himself. "or are we to say nothing?" he asked. "nothing? when we all see! don't you see? doesn't miss valentine see? is she so sad for nothing? oh, don't shake your head. and the other--this mrs. dennison? am i to go on?" "no," said adela sharply; and added, a moment later, "i know." "and what does he mean?" "he?" cried adela. "oh, he's not human." "nay, but he's terribly human," said the old baron. adela looked round at him, but then turned away. "i know what i would say, but i may not say it," pursued the baron. "to you i may not say it. i know him. he will take, if he is offered." his voice sank to a whisper. "then god help her," murmured adela under her breath, while her cheeks flamed red. "yes, he will take, and he will go. ah, he is a man to follow and to believe in--to trust your money, your fortune, your plans, even your secrets to; but----" he paused, flinging away his extinct cigar. "well?" asked adela in a low tone, eager in spite of her hatred of the topic. "never your love," said he; and added, "yet i believe i, who am old enough to know better, and too old to learn better, have almost given him mine. well, i am not a woman." "he can't hurt you," said adela. "yes, he can," said the baron with a dreary smile. adela was not thinking of her companion. "why do you talk of it?" she asked impatiently. "i know i was wrong." "no, no. i mean, why do you talk of it now?" "because," said the baron, "he will not. have you seen no change in him this week? a week ago, he laughed when i talked to him. he did not mind me speaking--it was still a trifle--nonsense--a week ago; if you like, an amusement, a pastime!" "well, and now?" "now he tells me to hold my tongue. and yet i am glad for one thing. that girl will not have him for a husband." "glad! why, baron, don't you see----" "yes, i see. still i am glad." "i can't go on talking about it; but is there no hope?" "where is it? for the time--mind you for the time--he is under that other woman's power." "she's under his, you mean." "i mean both. she was a friend of yours. yes. she is not altogether a bad woman; but she has had a bad fortune. ah, there she is, and he with her." as he spoke, mrs. dennison and ruston came by. mrs. dennison flung them a glance of recognition; it was hardly more, and even for so much she seemed to grudge the interruption. ruston's greeting was more ceremonious; he smiled, but his brows contracted a little, and he said to his companion, "miss ferrars isn't pleased with me." "that hurts?" she asked lightly. "no," he answered, after a short pause, "i don't know that it does." but the frown dwelt a little longer on his face. "sit down here," she said, and they sat down in full view of adela and the baron, about twenty yards off. "she's mad," murmured adela, and the baron muttered assent. it was the time of the morning when everybody was out. presently lord and lady semingham strolled by--lady semingham did not see maggie dennison, her husband did, and adela caught the look in his eye. then down from the hill and on to the grass came marjory valentine. she saw both couples, and, for a perceptible moment, stood wavering between them. she looked pale and weary. mrs. dennison indicated her with the slightest gesture. "you were asking for her. there she is," she said to willie ruston. "well, i think i'll go and ask her." "what?" "to come for a walk." "now?" "why not?" he asked with a surprised smile. as he spoke, marjory's hesitation ended; she joined adela and the baron. "how rude you are!" exclaimed mrs. dennison angrily, "you asked me to come out with you." "so i did. by jove, so i did! but you don't walk, do you? and i feel rather like a walk now." "oh, if you prefer her society----" "her prattle," he said, smiling, "amuses me. you and i always discuss high matters, you see." "she doesn't prattle, and you know it." he looked at her for a moment. he had gone so far as to rise, but he resumed his seat. "what's the matter?" he asked tolerantly. maggie dennison's lip quivered. the week that had passed had been a stormy one to her. there had been a breaking-down of barriers--barriers of honour, conscience, and pride. all she could do to gain or keep her mastery she had done. she had all but thrown herself at his feet. she hated to think of the things she had said or half-said; and she had seen marjory's eyes look wondering horror and pitying contempt at her. of her husband she would not think. and she had won in return--she knew not what. it hung still in the balance. sometimes he would seem engrossed in her; but again he would turn to marjory or another with a kind of relief, as though she wearied him. and of her struggles, of the great humiliations she suffered, of all she sacrificed to him, he seemed unconscious. yet, cost what it might, she could not let him go now. the screen of omofaga was dropped; she knew that it was the man whose life she was resolute to fill; whether she called it love for him or what else mattered little; it seemed rather a mere condition of existence, necessary yet not sweet, even revolting; but its alternative was death. she had closed her eyes for a moment under the stress of her pain. when she opened them, he was looking at her. and the look she knew was at last in his eyes. she put up her hand to ward it off; it woke her horror, but it woke her delight also. she could not choose whether to banish it, or to live in it all her life. she tried to speak, but her utterance was choked. "why, i believe you're--jealous," said willie ruston. "but then they always say i'm a conceited chap." he spoke with a laugh, but he looked at her intently. the little scene was the climax of a week's gradual betrayal. often in all the hours they had spent together, in all the engrossing talks they had had, something of the kind had appeared and disappeared; he had wondered at her changefulness, her moods of expansion and of coldness--a rapturous greeting of him to be followed by a cold dismissal--an eager sympathy alternating with wilful indifference. she had, too, fits of prudence, when she would not go with him--and then spasms of recklessness when her manner seemed to defy all restraint and mock at the disapproval of her friends. on these puzzles--to him, preoccupied as he was and little versed in such matters, they had seemed such--the present moment shed its light. he recalled, with understanding, things that had passed meaninglessly before his eyes, that he seemed to have forgotten altogether; the ambiguous things became plain; what had been, though plain, yet strange, fell into its ordered place and became natural. the new relation between them proclaimed itself the interpretation and the work of the bygone week. her glove lay in her lap, and he touched it lightly; the gesture speaking of their sudden new familiarity. her reproach was no less eloquent; she rebuked not the thing, but the rashness of it. "don't do that. they're looking," she found voice to whisper. he withdrew his hand, and, taking off his hat, pushed the hair back from his forehead. presently he looked at her with an almost comical air of perplexity; she was conscious of the glance, but she would not meet it. he pursed his lips to whistle. "don't," she whispered sharply. "don't whistle." a whistle brought her husband to her mind. the checked whistle rudely reflected his mingled feelings. he wished that he had been more on his guard--against her and against himself. there had been enough to put him on his guard; if he had been put on his guard, this thing need not have happened. he called the thing in his thoughts "inconvenient." he was marvellously awake to the inconvenience of it; it was that which came uppermost in his mind as he sat by maggie dennison. yet, in spite of a phrase that sounded so cold and brutal, his reflections paid her no little compliment; for he called the revelation inconvenient all the more, and most of all, because he found it of immense interest, because it satisfied suddenly and to the full a sense of interest and expectation that had been upon him, because it seemed to make an immense change in his mind and to alter the conditions of his life. had it not done all this, its inconvenience would have been much less--to him and save in so far as he grieved for her--nay, it would have been, in reality, nothing. it was inconvenient because it twisted his purposes, set him at jar with himself, and cut across the orderly lines he had laid down--and because, though it did all this, he was not grieved nor angry at it. he rose to his feet. mrs. dennison looked up quickly. "i shall go for my walk now," he said, and he added in answer to her silent question, "oh, yes, alone. i've got a thing or two i want to think about." her eyes dropped as he spoke. he had smiled, and she, in spite of herself, had smiled in answer; but she could not look at him while she smiled. he stood there for an instant, smiling still; then he grew grave, and turned to walk away. her sigh witnessed the relaxation of the strain. but, after one step, he faced her again, and said, as though the idea had just struck him, "i say, when does dennison come?" "in a week," she answered. for just a moment again, he stood still, thoughtfully looking at her. then he lifted his hat, wheeled round, and walked briskly off towards the jetty at the far end of the expanse of grass. adela ferrars, twenty yards off, marked his going with a sigh of relief. mrs. dennison sat where she was a little while longer. her agitation was quickly passing, and there followed on it a feeling of calm. she seemed to have resigned charge of herself, to have given her conduct into another's keeping. she did not know what he would do; he had uttered no word of pleasure or pain, praise or blame; and that question at the last--about her husband--was ambiguous. did he ask it, fearing harry's arrival, or did he think the arrival of her husband would end an awkward position and set him free? really, she did not know. she had done what she could--and what she could not help. he must do what he liked--only, knowing him, she did not think that she had set an end to their acquaintance. and that for the moment was enough. "a woman, bessie," she heard a voice behind her saying, "may be anything from a cosmic force to a clothes-peg." "i don't know what a cosmic force is," said lady semingham. "a cosmic force? why----" "but i don't want to know, alfred. why, maggie, that's a new shade of brown on your shoes. where do you get them?" mrs. dennison gave her bootmaker's address, and lady semingham told her husband to remember it. she never remembered that he always forgot such things. the arrival of the seminghams seemed to break the spell which had held mrs. dennison apart from the group over against her. adela strolled across, followed by marjory, and the baron on marjory's arm. the whole party gathered in a cluster; but marjory hung loosely on the outskirts of the circle, and seemed scarcely to belong to it. the baron seated himself in the place willie ruston had left empty. the rest stood talking for a minute or two, then semingham put his hand in his pocket and drew out a folded sheet of tracing-paper. "we're all omofagites here, aren't we?" he said; "even you, baron, now. here's a plan carlin has just sent me. it shows our territory." everybody crowded round to look as he unfolded it. mrs. dennison was first in undisguised eagerness; and marjory came closer, slipping her arm through adela ferrars'. "what does the blue mean?" asked adela. "native settlements." "oh! and all that brown?--it's mostly brown." "brown," answered semingham, with a slight smile, "means unexplored country." "i should have made it all brown," said adela, and the baron gave an appreciative chuckle. "and what are these little red crosses?" asked mrs. dennison, laying the tip of her finger on one. "eh? what, those? oh, let me see. here, just hold it while i look at carlin's letter. he explains it all," and lord semingham began to fumble in his breast-pocket. "dear me," said bessie semingham, in a tone of delicate pleasure, "they look like tombstones." "hush, hush, my dear lady," cried the old baron; "what a bad omen!" "tombstones," echoed maggie dennison thoughtfully. "so they do--just like tombstones." a pause fell on the group. adela broke it. "well, director, have you found your directions?" she asked briskly. "it was a momentary lapse of memory," said semingham with dignity. "those--er--little----" "no, not tombstones," interrupted the baron earnestly. "little--er--signposts are, of course, the forts belonging to the company. what else should they be?" "oh, _forts_," murmured everybody. "they are," continued lord semingham apologetically, "in the nature of a prophecy at present, as i understand." "a very bad prophecy, according to bessie," said mrs. dennison. "i hope," said the baron, shaking his head, "that the official name is more correct than lady semingham's." "so do i," said marjory; and added, before she could think not to add, and with unlucky haste, "my brother's going out, you know." mrs. dennison looked at her. then she crossed over to her, saying to adela, "you never let me have a word with my own guest, except at breakfast and bedtime. come and walk up and down with me, marjory." marjory obeyed; the group began to scatter. "but didn't they look like tombstones, baron?" said bessie semingham again, as she sat down and made room for the old man beside her. when she had an idea she liked it very much. he began to be voluble in his reproof of her gloomy fancies; but she merely laughed in glee at her ingenuity. adela, by a gesture, brought semingham to her side and walked a few paces off with him. "will you go with me to the post-office?" she said abruptly. "by all means," he answered, feeling for his glass. "oh, you needn't get your glass to spy at me with." "dear, dear, you use one yourself!" "i'll tell you myself why i'm going. you're going to send a telegram." "am i?" "yes; to invite someone to stay with you. lord semingham, when you find a woman relies on a man--on one man only--in trouble, what do you think?" she asked the question in a level voice, looking straight before her. "that she's fond of him." "and does he--the man--think the same?" "generally. i think most men would. they're seldom backward to think it, you know." "then," she said steadily, "you must think, and he must think, what you like. i can't help it. i want you to wire and ask a man to come and stay with you." he turned to her in surprise. "tom loring," she said, and the moment the name left her lips semingham hastily turned his glance away. "awkward--with the other fellow here," he ventured to suggest. "mr. ruston doesn't choose your guests." "but mrs.----" "oh, fancy talking of awkwardness now! he used to influence her once, you know. perhaps he might still. do let us try," and her voice trembled in earnestness. "we'll try. will he come? he's very angry with her." and adela answered, still looking straight in front of her, "i'm going to send him a wire, too." "i'm very glad to hear it," said lord semingham. chapter xvi. the last barriers. willie ruston rested his elbows on the jetty-wall and gazed across the harbour entrance. he had come there to think; and deliberate thinking was a rare thing for him to set his head to. his brain dealt generally--even with great matters, as all brains deal with small--in rapid half-unconscious beats; the process coalescing so closely with the decision as to be merged before it could be recognised. but about this matter he meant to think; and the first result of his determination was (as it often is in such a case) that nothing at all relevant would stay by him. there was a man fishing near, and he watched the float; he looked long at the big hotel at puys, which faced him a mile away, and idly wondered whether it were full; he followed the egress of a fishing boat with strict attention. then, in impatience, he turned round and sat down on the stone bench and let his eyes see nothing but the flags of the pavement. even then he hardly thought; but after a time he became vaguely occupied with maggie dennison, his mind playing to and fro over her voice, her tricks of manner, her very gait, and at last settling more or less resolutely on the strange revelation of herself which she had gradually made and had consummated that day. it changed his feelings towards her; but it did not change them to contempt. he had his ideas, but he did not make ideal figures out of humanity; and humanity could go very far wrong and sink very deep in its lower possibilities without shocking him. nor did he understand her, nor realise how great a struggle had brought what he saw to birth. it seemed to him a thing not unnatural, even in her, who was in much unlike most other women. there are dominions that are not to be resisted, and we do not think people weak simply because they are under our own influence. his surprise was reserved for the counter-influence which he felt, and strove not to acknowledge; his contempt for the disturbance into which he himself was thrown. at that he was half-displeased, puzzled, and alarmed; yet that, too, had its delight. "what rot it is!" he muttered, in the rude dialect of self-communion, which sums up a bewildering conflict in a word of slang. he was afraid of himself--and his exclamation betrayed the fear. men of strong will are not all will; the strong will has other strong things to fight, and the strong head has mighty rebels to hold down. that he felt; but his fear of himself had its limits. he was not the man--as he saw very well at this moment, and recognised with an odd mixture of pride and humiliation--to give up his life to a passion. had that been the issue clearly and definitely set before him he would not have sat doubtful on the jetty. he understood what of nobility lay in such a temperament, and his humiliation was because it made no part of him; but the pride overmastered, and at last he was glad to say to himself that there was no danger of his losing all for love. indeed, was he in love? in love in the grand sense people talked and wrote about so much? well, there were other senses, and there were many degrees. the question he weighed, or rather the struggle which he was undergoing, was between resisting or yielding before a temptation to take into his life something which should not absorb it, but yet in a measure alter it, which allured him all the more enticingly because, judging as he best could, he could see no price which must be paid for it--well, except one. and, as the one came into his mind, it made him pause, and he mused on it, looking at it in all lights. sometimes he put the price as an act of wrong which would stain him--for, apart from other, maybe greater, maybe more fanciful obstacles, harry dennison held him for a friend--sometimes as an act of weakness which would leave him vulnerable. and, after these attempted reasonings, he would fall again to thinking of maggie dennison, her voice, her manner, and the revelation of herself; and in these picturings the reasoning died away. there are a few deliberate sinners, a few by whom "evil, be thou my good" is calmly uttered as a dedication and a sacrament, but most men do not make up their minds to be sinners or determine in cool resolve to do acts of the sort that lurked behind willie ruston's picturings. they only fail to make up their minds not to do them. ruston, in a fury of impatience, swept all his musings from him--it led to nothing. it left him where he was. he was vexing himself needlessly; he told himself that he could not decide what he ought to do. in truth, he did not choose to decide what it was that he chose to do. and with the thoughts that he drove away went the depression they had carried with them. he was confident again in himself, his destiny, his career; and in its fancied greatness, the turmoil he had suffered sank to its small proportions. he returned to his old standpoint, and to the old medley of pride and shame it gave him; he might be of supreme importance to maggie dennison, but she was only of some importance to him. he could live without her. but, at present, he regarded her loss as a thing not necessary to undergo. it was late in the day that he met young sir walter, who ran to him, open-mouthed with news. walter was afraid that the news would be unpalatable, and could not understand such want of tact in semingham. to ask tom loring while ruston was there argued a bluntness of perception strange to young sir walter. but, be the news good or bad, he had only to report; and report it he did straightway to his chief. willie ruston smiled, and said that, if loring did not mind meeting him, he did not mind meeting loring; indeed, he would welcome the opportunity of proving to that unbeliever that there was water somewhere within a hundred miles of fort imperial (which tom in one of those articles had sturdily denied). then he flirted away a stone with his stick and asked if anyone had yet told mrs. dennison. and, sir walter thinking not, he said, "oh, well, i'm going there. i'll tell her." "she'll know why he's coming," said walter, nodding his head wisely. "will she? do you know?" asked ruston with a smile--young sir walter's wisdom was always sure of that tribute from him. "if you'd seen adela ferrars, you'd know too. she tries to make believe it's nothing, but she's--oh, she's----" "well?" "she's all of a flutter," laughed walter. "you've got to the bottom of that," said ruston in a tone of conviction. "still, i think it's inconsiderate of loring; he must know that mrs. dennison will find it rather awkward. but, of course, if a fellow's in love, he won't think of that." "i suppose not," said willie ruston, smiling again at this fine scorn. then, with a sudden impulse, struck perhaps with an envy of what he laughed at, he put his arm through his young friend's, and exclaimed, with a friendly confidential pressure of the hand, "i say, val, i wish the devil we were in omofaga, don't you?" "rather!" came full and rich from his companion's lips. "with a few thousand miles between us and everything--and everybody!" young sir walter's eyes sparkled. "off in three months now," he reminded his leader exultingly. it could not be. the fates will not help in such a fashion, it is not their business to cut the noose a man ties round his neck--happy is he if they do not draw it tight. with a sigh, willie ruston dropped his companion's arm, and left him with no other farewell than a careless nod. of tom loring's coming he thought little. it might be that sir walter had seen most of its meaning, and that semingham was acting as a benevolent match-maker--a character strange for him, and amusing to see played--but, no doubt, there was a little more. probably tom had some idea of turning him from his path, of combating his influence, of disputing his power. well, tom had tried that once, and had failed; he would fail again. maggie dennison had not hesitated to resent such interference; she had at once (ruston expressed it to himself) put tom in his right place. tom would be no more to her at dieppe than in london--nay, he would be less, for any power unbroken friendship and habit might have had then would be gone by now. thus, though he saw the other meaning, he made light of it, and it was as a bit of gossip concerning adela ferrars, not as tidings which might affect herself, that he told mrs. dennison of tom's impending arrival. on her the announcement had a very different effect. for her the whole significance lay in what ruston ignored, and none in what had caught his fancy. he was amazed to see the rush of colour to her cheeks. "tom loring coming here!" she cried in something like horror. again, and with a laugh, ruston pointed out the motive of his coming, as young sir walter had interpreted it; but he added, as though in concession, and with another laugh, "perhaps he wants to keep his eye on me, too. he doesn't trust me further than he can see me, you know." without looking at him or seeming to listen to his words, she asked, in low, indignant tones, "how dare he come?" willie ruston opened his eyes. he did not understand so much emotion spent on such a trifle. say it was bad taste in loring to come, or an impertinence! well, it was not a tragedy at all events. he was almost angry with her for giving importance to it; and the importance she gave set him wondering. but before he could translate his feeling into words, she turned to him, leaning across the table that stood between them, and clasping her hands. "i can't bear to have him here now," she murmured. "what harm will he do? you needn't see anything of him," rejoined ruston, more astonished at each new proof of disquietude in her. but tom loring was not to be so lightly dismissed from her mind; and she did not seem to heed when ruston added, with a laugh, "you got rid of him once, didn't you? i should think you could again." "ah, then! that was different." he looked at her curiously. she was agitated, but there seemed to be more than agitation. as he read it, it was fear; and discerning it, he spoke in growing surprise and rising irritation. "you look as if you were afraid of him." "afraid of him?" she broke out. "yes, i am afraid of him." "of loring?" he exclaimed in sheer wonder. "why, in heaven's name? loring's not----" he was going to say "your husband," but stopped himself. "i can't face him," she whispered. "oh, you know! why do you torment me? or don't you know? oh, how strange you are!" and now there was fear in her eyes when she looked at ruston. he sat still a moment, and then in slow tones he said, "i don't see what concern your affairs are of loring's, or mine either, by god!" at the last word his voice rose a little, and his lips shut tight as it left them. "oh, it's easy for you," she said, half in anger at him, half in scorn of herself. "you don't know what he is--what he was--to me." "what was loring to you?" he asked in sharp, imperious tones--tones that made her hurriedly cry, "no, no; not that, not that. how could you think that of me?" "what then?" came curt and crisp from him, her reproach falling unheeded. "oh, i wish--i wish you could understand just a little! do you think it's all nothing to me? do you think i don't mind?" "i don't know what it is to you," he said doggedly. "i know it's nothing to loring." "i don't believe," she went on, "that he's coming because of adela at all." and as she spoke, she met his eyes for a moment, and then shrank from them. "come, shall we speak plainly?" he asked with evident impatience. "ah, you will, i know," she wailed, with a smile and a despairing gesture. she loved and dreaded him for it. "not too plainly, willie!" his mouth relaxed. "why do you worry about the fellow?" he asked. "well, i'll speak plainly, too," she cried. "he's not a fool; and he's an honest man. that's why i don't want him here;" and enduring only till she had flung out the truth, she buried her face in her hands. "i've had enough of him," said willie ruston, frowning. "he's always got in my way; first about the company--and now----" he broke off, pushing his chair back, and rising to his feet. he walked to the window of the little sitting-room where they were; the sun was setting over the sea, and early dusk gathering. it was still, save for the sound of the waves. "is there nobody at home?" he asked, with his back towards her. "no. marjory and the children have gone down to the _rome_ to have tea with bessie semingham." he waited a moment longer, looking out, then he came back and stood facing her. she was leaning her head on her hand. at last she spoke in a low voice. "he's harry's friend," she said, "and he used to be mine; and he trusted me." willie ruston threw his head back with a little sharp jerk. "oh, well, i didn't come to talk about tom loring," he said. "if you value his opinion so very much, why, you must keep it; that's all," and he moved towards where his hat was lying. "but i'm afraid i can't share my friends with him." "oh, i know you won't share anything with anybody," said maggie dennison, her voice trembling between a sob and a laugh. he turned instantly. his face lighted up, and the sun, casting its last rays on her eyes, made them answer with borrowed brilliance. "i won't share you with loring, anyhow," he cried, walking close up to her, and resting his hand on the table. she laid hers gently on it. "don't go to omofaga, willie," she said. for a moment he sheerly stared at her; then he burst into a merry unrestrained peal of laughter. next he lifted her hand and kissed it. "you are the most wonderful woman in the world," said he, his mouth quivering with amusement. "oh!" she exclaimed, throwing her arms wide for a moment. "well, what's the matter? what have i done wrong now?" she rose and walked up and down the room. "i wish i'd never seen you," she said from the far end of it. "i wish i'd never seen--tom loring." "ah, that's the only thing!" she cried. "i may live or i may die, or i may--do anything you like; but i mustn't have another friend! i mustn't give a thought to what anybody else thinks of me!" "you mustn't balance me against tom loring," he answered between his teeth, all signs of his merriment gone now. for a moment--not long, but seeming very long--there was silence in the room; and, while the brief stillness reigned, she fought a last battle against him, calling loyalty and friendship to her aid, praying their alliance against the overbearing demand he made on her--against his roughness, his blindness to all she suffered for him. but the strife was short. lifting her hands above her head, and bringing them down through the air as with a blow, she cried, "my god, i balance nothing against you!" her reward--her only reward--seemed on the instant to be hers. willie ruston was transformed; his sullenness was gone; his eyes were alight with triumph; the smile she loved was on his lips, and he had forgotten those troubled, useless, mazy musings on the jetty. he took a quick step towards her, holding out both his hands. she clasped them. "nothing?" he asked in a low tone. "nothing, maggie?" she bowed her head for answer; it was the attitude of surrender, of helplessness, and of trust, and it appealed to the softer feeling in him which her resistance had smothered. he was strongly moved, and his face was pale as he drew her to him and kissed her lips; but all he said was, "then the deuce take tom loring!" it seemed to her enough. the light devil-may-care words surely covered a pledge from him to her--something in return from him to her. at last, surely he was hers, and her wishes his law. it was her moment; she would ask of him now the uttermost wish of her heart--the wish that had displaced all else--the passionate wish not to lose him--not, as it were, to be emptied of him. "and omofaga?" she whispered. his eyes looked past her, out into the dim twilight, into the broad world--the world that she seemed to ask him to give for her, as she was giving her world for him. he laughed again, but not as he had laughed before. there was a note of wonder in his laugh now--of wonder that the prayer seemed now not so utterly absurd--that he could imagine himself doing even that--spoiling his heart of its darling ambition--for her. yet, even in that moment of her strongest sway, as her arms were about him, he was swearing to himself that he would not. she did not press for an answer. a glance into his distant eyes gave her one, perhaps, for she sighed as though in pain. hearing her, he bent his look on her again. though he might deny that last boon, he had given her much. so she read; and, drawing herself to her full height, she released one of her hands from his, and held it out to him. for a moment he hesitated; then a slow smile breaking on his face, he bent and kissed it, and she whispered over his bent head, half in triumph, half in apology for bidding him bend his head even in love, "i like pretending to be queen--even with you, willie." her flattery, so sweet to him, because it was wrung from her all against her will, and was for him alone of men, thrilled through him and he was drawing her to him again when the merry chatter of a child struck on their ears from the garden. she shrank back. "hark!" she murmured. "they're coming." "yes," he said, with a frown. "i shall come to-morrow, maggie." "to-morrow? every day?" said she. "well, then, every day. but to-morrow all day." "ah, yes, all day to-morrow." "but i must go now." "no, no, don't go," she said quickly. "sit down; see, sit there. don't look as if you'd thought of going." he did as she bade him, trying to assume an indifferent air. she, too, sat down, her eyes fixed on the door. a strange look of pain and shame spread over her face. she must bend to deceive her children, to dread detection, to play little tricks and weave little devices against the eyes of those for whom she had been an earthly providence--the highest, most powerful, and best they knew. willie ruston did not follow the thought that stamped its mark on her face then, nor understand why, with a sudden gasp, she dashed her hand across her eyes and turned to him with trembling lips, crying, in low tones, "ah, but i have you, willie!" before he could answer her appeal, the voices were in the passage. her face grew calm, save for a slight frown on her brow. she shaped her lips into a smile to meet the incomers. she shot a rapid glance of caution and warning at him. the door was flung open, and the three children rushed in, madge at their head. madge, seeing willie ruston, stopped short, and her laughter died away. she turned and said, "marjory, here's mr. ruston." none could mistake her tone for one of welcome. marjory valentine came forward. she looked at neither of them, but sat down near the table. "well, madge," said mrs. dennison, "there's good news for you, isn't there? your friend's coming." madge, finding (as she thought) sympathy, came to her mother's knee. "yes, i'm glad," she said. "are you glad, mother?" "oh, i don't mind," answered mrs. dennison, kissing her; but she could not help one glance at willie ruston. bitterly she repented it, for she found marjory valentine following it with her open sorrowful eyes. she rose abruptly, and ruston rose also, and with brief good-nights--madge being kissed only on strong persuasion--took his leave. the children flocked away to take off their hats, and marjory was left alone with her hostess. the girl looked pale, weary, and sad. mrs. dennison was stirred to an impulse of compassion. walking up to where she sat, she bent down as though to kiss her. marjory looked up. there was a question--it seemed to be a question--in her face. mrs. dennison flushed red from neck to forehead, and then grew paler than the pallor she had pitied. the girl's unspoken question seemed to echo hauntingly from every corner of the little room, "are your lips--clean?" chapter xvii. a sound in the night. slow in forming, swift in acting; slow in the making, swift in the working; slow to the summit, swift down the other slope; it is the way of nature, and the way of the human mind. what seemed yesterday unborn and impossible, is to-day incipient and a great way off, to-morrow complete, present, and accomplished. after long labour a thing springs forth full grown; to deny it, or refuse it, or fight against it, seems now as vain as a few hours ago it was to hope for it, or to fear, or to imagine, or conceive it. in like manner, the slow, crawling, upward journey can be followed by every eye; its turns, its twists, its checks, its zigzags may be recorded on a chart. then is the brief pause--on the summit--and the tottering incline towards the declivity. but how describe what comes after? the dazzling rush that beats the eye, that in its fury of advance, its paroxysm of speed, is void of halts or turns, and, darting from point to point, covers and blurs the landscape till there seems nothing but the moving thing; and that again, while the watcher still tries vainly to catch its whirl, has sprung, and reached, and ceased; and, save that there it was and here it is, he would not know that its fierce stir had been. such a race runs passion to its goal, when the reins hang loose. hours may do what years have not done, and minutes sum more changes than long days could stretch to hold. the world narrows till there would seem to be nothing else existent in it--nothing of all that once held out the promise (sure as it then claimed to be) of escape, of help, or warning. the very promise is forgotten, the craving for its fulfilment dies away. "let me alone," is the only cry; and the appeal makes its own answer, the entreaty its own concession. some thirty hours had passed since the last recorded scene, and marjory valentine was still under mrs. dennison's roof. it had been hard to stay, but the girl would not give up her self-imposed hopeless task. helpless she had proved, and hopeless she had become. the day had passed with hardly a word spoken between her and her hostess. mrs. dennison had been out the greater part of the time, and, when out, she had been with ruston. she had come in to dinner at half-past seven, and at nine had gone to her room, pleading fatigue and a headache. marjory had sat up a little longer, with an unopened book on her knee. then she also went to bed, and tried vainly to sleep. she had left her bed now, and, wrapped in a dressing-gown, sat in a low arm-chair near the window. it was a dark and still night; a thick fog hung over the little garden; nothing was to be heard save the gentle roll of a quiet sea, and the occasional blast of a steam whistle. marjory's watch had stopped, but she guessed it to be somewhere in the small hours of the morning--one o'clock, perhaps, or nearing two. there was an infinite weary time, then, before the sun would shine again, and the oppression of the misty darkness be lifted off. she hated the night--this night--it savoured not of rest to her, but of death; for she was wrought to a nervous strain, and felt her imaginings taking half-bodily shapes about her, so that she was fearful of looking to the right hand or the left. sleep was impossible; to try to sleep like a surrender to the mysterious enemies round her. time seemed to stand still; she counted sixty once, to mark a minute's flight, and the counting took an eternity. the house was utterly noiseless, and she shivered at the silence. she would have given half her life, she felt, for a ray of the sun; but half a life stretched between her and the first break of morning. sitting there, she heaped terrors round her; the superstitions that hide their heads before daytime mockery reared them now in victory and made a prey of her. the struggle she had in her weakness entered on seemed less now with human frailty than against the strong and evil purpose of some devil; in face of which she was naught. how should she be? she had not, she told herself in morbid upbraiding, even a pure motive in the fight; her hatred of the sin had been less keen had she not once desired the love of him that caused it, and when she arrested maggie dennison's kiss, she shamed a rival in rebuking an unfaithful wife. then she cried rebelliously against her anguish. why had this come on her, darkening bright youth? why was she compassed about with trouble? and why--why--why did not the morning come? the mist was thick and grey against the window. a fog-horn roared, and the sea, regardless, repeated its even beat; behind the feeble interruptions there sounded infinite silence. she hid her face in her hands. then she leapt up and flung the window open wide. the damp fog-folds settled on her face, but she heard the sea more plainly, and there were sounds in the air about her. it was not so terribly quiet. she peered eagerly through the mist, but saw nothing save vague tremulous shapes, vacant of identity. still the world, the actual, earthly, healthy world, was there--a refuge from imagination. she stood looking; and, as she looked, one shape seemed to grow into a nearer likeness of something definite. it was motionless; it differed from the rest only in being darker and of rather sharper outline. it must be a tree, she thought, but remembered no tree there; the garden held only low-growing shrubs. a post? but the gate lay to the right, and this stood on her left hand, hard by the door of the house. what then? the terror came on her again, but she stood and looked, longing to find some explanation for it--some meaning on which her mind could rest, and, reassured, drive away its terrifying fancies. for the shape was large in the mist, and she could not tell what it might mean. was it human? on her superstitious mood the thought flashed bright with sudden relief, and she cried beseechingly, "who is it? who is there?" a human voice in answer would have been heaven to her, but no answer came. with a stifled cry, she shut the window down, and stood a moment, listening--eager, yet fearful, to hear. hark! yes, there was a sound! what was it? it was a footstep on the gravel--a slow, uncertain, wavering, intermittent step, as though of someone groping with hesitating feet and doubtful resolution through the mist. she must know what it was--who it was--what it meant. she started up again, laying both hands on the window-sash. but then terror conquered curiosity; gasping as if breath failed her and something still pursued, she ran across the room and flung open the door. she must find someone--maggie or someone. on the threshold she paused in amazement. the door of mrs. dennison's room was open, and maggie stood in the doorway, holding a candle, behind which her face gleamed pale and her eyes shone. she was muffled in a long white wrapper, and her dark hair fell over her shoulders. the candle shook in her hand, but, on sight of marjory, her lips smiled beneath her deep shining eyes. marjory ran to her crying, "is it you, maggie?" "who should it be?" asked mrs. dennison, still smiling, so well as her fast-beating breath allowed her. "why aren't you in bed?" the girl grasped her hand, and pushed her back into the room. "maggie, i----hark! there it is again! there's something outside--there, in the garden! if you open the window----" as she spoke, mrs. dennison darted quick on silent naked feet to the window, and stood by it; but she seemed rather to intercept approach to it than to think of opening it. indeed there was no need. the slow uncertain step sounded again; there were five or six seeming footfalls, and the women stood motionless, listening to them. then there was stillness outside, matching the hush within; till maggie dennison, tearing the wrapper loose from her throat, said in low tones, "i hear nothing outside;" and she put the candle on the table by her. "you can see nothing for the fog," she added as she gazed through the glass. her tone was strangely full of relief. "i opened the window," whispered marjory, "and i saw--i thought i saw--something. and then i heard--that. you heard it, maggie?" the girl was standing in the middle of the room, her eyes fixed on mrs. dennison, who leant against the window-sash with a strained, alert, watchful look on her face. "i heard you open the window and call out something," she said. "that's all i heard." "but just now--just now as we stood here?" mrs. dennison did not answer for a moment; her ear was almost against the panes, and her face was like a runner's as he waits for the starter's word. there was nothing but the gentle beat of the sea. mrs. dennison pushed her hair back over her shoulders and sighed; her tense frame relaxed, and the fixed smile on her lips seemed, in broadening, to lose something of its rigidity. "no, i didn't, you silly child," she said. "you're full of fancies, marjory." the curl of her lip and the shrug of her shoulders won no attention. "it went across the garden from the door--across towards the gate," said marjory, "towards the path down. i heard it. it came from near the door. i heard it." mrs. dennison shook her head. the girl sprang forward and again caught her by the arm. "you heard too?" she cried. "i know you heard!" and a challenge rang in her voice. "i didn't hear," she repeated impatiently, "but i daresay you did. perhaps it was a man--a thief, or somebody lost in the fog. would you like me to wake the footman? i can tell him to take a lantern and look if anyone's in the garden." marjory took no notice of the offer. "but if it was anyone, he'll have gone now," continued maggie dennison, "your opening the window will have frightened him. you made such a noise--you woke me up." "were you asleep?" came in quick question. "yes," answered mrs. dennison steadily, "i was asleep. couldn't you sleep?" "sleep? no, i couldn't sleep. i was afraid." "you're as bad as the children," said mrs. dennison, laughing gently. "come, go back to bed. shall i come and sit by you till it's light?" the girl seemed not to hear; she drew nearer, searching mrs. dennison's face with suspicious eyes. maggie could not face her; she dropped her glance to the floor and laughed nervously and fretfully. suddenly marjory threw herself on the floor at her friend's feet. "maggie, come away from here," she beseeched. "do come; do come away directly. maggie, dear, i love you so, and--and i was unkind last night. do come, darling! we'll go back together--back home," and she burst into sobbing. maggie dennison stood passive and motionless, her hands by her side. her lips quivered and she looked down at the girl kneeling at her feet. "won't you come?" moaned marjory. "oh, maggie, there's still time!" mrs. dennison knew what she meant. a strange smile came over her face. yes, there was time; in a sense there was time, for the uncertain footfalls had not reached their goal--arrested by that cry from the window, they had stopped--wavered--retreated--and were gone. because a girl had not slept, there was time. yet what difference did it make that there was still time--to-night? since to-morrow was coming and must come. "time!" she echoed in a whisper. "for god's sake, come, maggie! come to-morrow--you and the children. come back with them to england! maggie, i can't stay here!" mrs. dennison put out her hands and took marjory's. "get up," she said, almost roughly, and dragged the girl to her feet. "you can go, marjory; i--i suppose you're not happy here. you can go." "and you?" "i shan't go," said maggie dennison. marjory, standing now, shrank back from her. "you won't go?" she whispered. "why, what are you staying for?" "you forget," said mrs. dennison coldly. "i'm waiting for my husband." "oh!" moaned marjory, a world of misery and contempt in her voice. at the tone mrs. dennison's face grew rigid, and, if it could be, paler than before; she had been called "liar" to her face, and truly. it was lost to-night her madness mourned--hoped for to-morrow that held her in her place. the fog was lifting outside; the darkness grew less dense; a distant, dim, cold light began to reveal the day. "see, it's morning," said mrs. dennison. "you needn't be afraid any longer. won't you go back to your own room, marjory?" marjory nodded. she wore a helpless bewildered look, and she did not speak. she started to cross the room, when mrs. dennison asked her, "do you mean to go this morning? i suppose the seminghams will take you, if you like. we can make some excuse if you like." marjory stood still, then she sank on a chair near her, and began to sob quietly. mrs. dennison slowly walked to her, and stood by her. then, gently and timidly, she laid her hand on the girl's head. "don't cry," she said. "why should you cry?" marjory clutched her hand, crying, "maggie, maggie, don't, don't!" mrs. dennison's eyes filled with tears. she let her hand lie passive till the girl released it, and, looking up, said, "i'm not going, maggie. i shall stay. don't send me away! let me stay till mr. dennison comes." "what's the use? you're unhappy here." "can't i help you?" asked the girl, so low that it seemed as though she were afraid to hear her own voice. mrs. dennison's self-control suddenly gave way. "help!" she cried recklessly. "no, you can't help. nobody can help. it's too late for anyone to help now." the girl raised her head with a start. "too late! maggie, you mean----?" "no, no, no," cried mrs. dennison, and then her eager cry died swiftly away. why protest in horror? by no grace of hers was it that it was not too late. the girl's eyes were on her, and she stammered, "i mean nothing--nothing. yes, you must go. i hate--no, no! marjory, don't push me away! let me touch you! there's no reason i shouldn't touch you. i mean, i love you, but--i can't have you here." "why not?" came from the girl in slow, strong tones. a moment later, she sprang to her feet, her eyes full of new horror, as the vague suspicion grew to a strange undoubting certainty. "who was it in the garden? who was out there? maggie, if i hadn't----?" she could not end. on the last words her voice sank to a fearful whisper; when she had uttered them--with their unfinished, yet plain and naked, question--she hid her face in her hands, listening for the answer. a minute--two minutes--passed. there was no sound but maggie dennison's quick breathings; once she started forward with her lips parted as if to speak, and a look of defiance on her face; once too, entreaty, hope, tenderness dawned for a moment. in anger or in sorrow, the truth was hard on being uttered; but the impulse failed. she arrested the words on her lips, and with an angry jerk of her head, said petulantly, "oh, you're a silly girl, and you make me silly too. there's nothing the matter. i don't know who it was or what it was. very likely it was nothing. i heard nothing. it was all your imagination." her voice grew harder, colder, more restrained as she went on. "don't think about what i've said to-night--and don't chatter about it. you upset me with your fancies. marjory, it means nothing." the last words were imperative in their insistence, but all the answer marjory made was to raise her head and ask, "am i to go?" while her eyes added, too plainly for maggie dennison not to read them, "you know the meaning of that." under the entreaty and the challenge of her eyes, mrs. dennison could not give the answer which it was her purpose to give--the answer which would deny the mad hope that still filled her, the hope which still cried that, though to-night was gone, there was to-morrow. it was the answer she must make to all the world--which she must declare and study to confirm in all her acts and bearing. but there--alone with the girl--under the compelling influence of the reluctant confidence--that impossibility of open falsehood--which the time and occasion seemed strangely to build up between them--she could not give it plainly. she dared not bid the girl stay, with that hope at her heart; she dared not cast away the cloak by bidding her go. "you must do as you like," she said at last. "i can't help you about it." marjory caught at the narrow chance the answer left her; with returning tenderness she stretched out her hands towards her friend, saying, "maggie, do tell me! i shall believe what you tell me." mrs. dennison drew back from the contact of the outstretched hands. marjory rose, and for an instant they stood looking at one another. then marjory turned, and walked slowly to the door. to her own room she went, to fear and to hope, if hope she could. mrs. dennison was left alone. the night was far gone, the morning coming apace. her lips moved, as she gazed from the window. was it in thanksgiving for the escape of the night, or in joy that the morrow was already to-day? she could not tell; yes, she was glad--surely she was glad? yet, as at last she flung herself upon her bed, she murmured, "he'll come early to-day," and then she sobbed in shame. chapter xviii. on the matter of a railway. willie ruston was half-dressed when the chamber-maid knocked at his door. he opened it and took from her three or four letters. laying them on the table he finished his dressing--with him a quick process, devoid of the pleasant lounging by which many men cheat its daily tiresomeness. at last, when his coat was on, he walked two or three times up and down the room, frowning, smiling for an instant, frowning long again. then he jerked his head impatiently as though he had had too much of his thoughts, and, going to the table, looked at the addresses on his letters. with a sudden access of eagerness he seized on one and tore it open. it bore carlin's handwriting, and he groaned to see that the four sides were close-filled. old carlin was terribly verbose and roundabout in his communications, and a bored look settled on willie ruston's face as he read a wilderness of small details, skirmishes with unruly clerks, iniquities of office-boys, lamentations on the apathy of the public, and lastly, a conscientious account of the health of the writer's household. with a sigh he turned the second page. "by the way," wrote carlin, "i have had a letter from detchmore. he draws back about the railway, and says the government won't sanction it." willie ruston raced through the rest, muttering to himself as he read, "why the deuce didn't he wire? what an old fool it is!" and so forth. then he flung down the letter, put his hands deep in his pockets and stood motionless for a few moments. "i must go at once," he said aloud. he stood thinking, and a rare expression stole over his face. it showed a doubt, a hesitation, a faltering--the work and the mark of the day and the night that were gone. he walked about again; he went to the window and stared out, jangling the money in his pockets. for nearly five minutes that expression was on his face. for nearly five minutes--and it seemed no short time--he was torn by conflicting forces. for nearly five minutes he wavered in his allegiance, and omofaga had a rival that could dispute its throne. then his brow cleared and his lips shut tight again. he had made up his mind; great as the thing was that held him where he was, yet he must go, and the thing must wait. wheeling round, he took up the letter and, passing quickly through the door, went to young sir walter's room, with the face of a man who knows grief and vexation but has set wavering behind him. it was an hour later when adela ferrars and the seminghams sat down to their coffee. a fourth plate was laid at the table, and adela was in very good spirits. tom loring had arrived; they had greeted him, and he was upstairs making himself fit to be seen after a night-voyage; his boat had lain three hours outside the harbour waiting for the fog to lift. "i daresay," said tom, "you heard our horn bellowing." but he was here at last, and adela was merrier than she had been in all her stay at dieppe. semingham also was happy; it was a great relief to feel that there was someone to whom responsibility properly, or at least more properly, belonged, and an end, therefore, to all unjustifiable attempts to saddle mere onlookers with it. and lady semingham perceived that her companions were in more genial mood than lately had been their wont, and expanded in the warmer air. when tom came down nothing could exceed the _empressement_ of his welcome. the sun had scattered the last remnants of fog, and, on semingham's proposal, the party passed from the table to a seat in the hotel garden, whence they could look at the sea. here they became rather more silent; for adela began to feel that the hour of explanation was approaching, and grew surer and surer that to her would be left the task. she believed that tom was tactful enough to spare her most of it, but something she must say--and to say anything was terribly difficult. lord semingham was treating the visit as though there were nothing behind; and his wife had no inkling that there was anything behind. the wife's genius for not observing was matched by the husband's wonderful power of ignoring; and if adela had allowed herself to translate into words the exasperated promptings of her quick temper, she would have declared a desire to box the ears of both of them. it would have been vulgar, but entirely satisfactory. at last tom, with carefully-prepared nonchalance, asked, "oh, and how is mrs. dennison?" bessie semingham assumed the question to herself. "she's very well, thank you, mr. loring. dieppe has done her a world of good." adela pursed her lips together. semingham, catching her eye, smothered a nascent smile. tom frowned slightly, and, leaning forward, clasped his hands between his knees. he was guilty of wishing that bessie semingham had more pressing avocations that morning. "you see," she chirruped, "marjory's with her, and the children dote on marjory, and she's got mr. ruston and walter to wait on her--you know maggie always likes somebody in her train. well, alfred, why shouldn't i say that? i like to have someone myself." "i didn't speak," protested semingham. "no, but you looked funny. i always say about maggie, mr. loring, that----" all three were listening in some embarrassment; out of the mouths of babes come sometimes alarming things. "that without any apparent trouble she can make her clothes look better than anybody i know." lord semingham laughed; even adela and tom smiled. "what a blessed irrelevance you have, my dear," said semingham, stroking his wife's small hand. lady semingham smiled delightedly and blushed prettily. she enjoyed alfred's praise. he was so _difficile_ as a rule. the exact point of the word "irrelevance" she did not stay to consider; she had evidently said something that pleased him. a moment later she rose with a smile, crying, "why, mr. ruston, how good of you to come round so early!" willie ruston shook hands with her in hasty politeness. a nod to semingham, a lift of the hat to adela, left him face to face with tom loring, who got up slowly. "ah, loring, how are you?" said willie holding out his hand. "young val told me you were to arrive to-day. how did you get across? uncommon foggy, wasn't it?" by this time he had taken tom's hand and shaken it, tom being purely passive. "by the way, you're all wrong about the water, you know," he continued, in sudden remembrance. "there's enough water to supply manchester within ten miles of fort imperial. what? why, man, i'll show you the report when we get back to town; good water, too. i had it analysed, and--well, it's all right; but i haven't time to talk about it now. the fact is, semingham, i came round to tell you that i'm off." "off?" exclaimed semingham, desperately fumbling for his eyeglass. adela clasped her hands, and her eyes sparkled. tom scrutinised willie ruston with attentive eyes. "yes; to-day--in an hour; boat goes at 11:30. i've had a letter from old carlin. things aren't going well. that ass detch----by jove, though, i forgot you, loring! i don't want to give you materials for another of those articles." his rapidity, his bustle, his good humour were all amazing. tom glanced in bewilderment at adela. adela coloured deeply. she felt that she had no adequate reason to give for having summoned tom loring to dieppe, unless (she brightened as the thought struck her) tom had frightened ruston away. willie seized semingham's arm, and began to walk him (the activity seemed all on willie's part) quickly up and down the garden. he held carlin's letter in his hand, and he talked eagerly and fast, beating the letter with his fist now and again. bessie semingham sat down with an amiable smile. adela and tom were close together. adela lifted her eyes to tom's in question. "what?" he asked. "do you think it's true?" she whispered. "he's the finest actor alive if it isn't," said tom, watching the beats of ruston's fist. "then thank heaven! but i feel so foolish." "hush! here they come," said tom. there was no time for more. "tom, there's riches in it for you if we told you," laughed semingham; "but ruston's going to put it all right." tom gave a not very easy laugh. "fancy old carlin not wiring!" exclaimed willie ruston. "shall i sell?" asked adela, trying to be frivolous. "hold for your life, miss ferrars," said willie; and going up to bessie semingham he held out his hand. "what, are you really off? it's too bad of you, mr. ruston! not that i've seen much of you. maggie has quite monopolised you." adela and tom looked at the ground. semingham turned his back; his smile would not be smothered. "of course you're going to say good-bye to her?" pursued lady semingham. tom looked up, and adela followed his example. they were rewarded--if it were a reward--by seeing a slight frown--the first shadow since he had been with them--on ruston's brow. but he answered briskly, with a glance at his watch, "i can't manage it. i should miss the boat. i must write her a line." "oh, she'll never forgive you," cried lady semingham. "oh, yes, she will," he laughed. "it's for omofaga, you know. good-bye. good-bye. i'm awfully sorry to go. good-bye." he was gone. it was difficult to realise at first. his presence, the fact of him, had filled so large a space; it had been the feature of the place from the day he had joined them. it had been their interest and their incubus. for a moment the three stood staring at one another; then semingham, with a curious laugh, turned on his heel and went into the house. his wife unfolded yesterday's _morning post_ and began to read. "come for a stroll," said tom loring to adela. she accompanied him in silence, and they walked a hundred yards or more before she spoke. "what a blessing!" she said then. "i wonder if your coming sent him away?" "no, it was genuine," declared tom, with conviction. "then i was very wrong, or he's a most extraordinary man. i can't talk to you about it, mr. loring, but you told me i might send. and i did think it--desirable--when i wrote. i did, indeed. i hope you're not very much annoyed?" "annoyed! no; i was delighted to come. and i am still more delighted that it looks as if i wasn't wanted." "oh, you're wanted, anyhow," said adela. she was very happy in his coming, and could not help showing it a little. fortunately, it was tolerably certain (as she felt sometimes, intolerably certain) that tom loring would not notice anything. he never seemed to consider it possible that people might be particularly glad to see him. "and you can stay, can't you?" she added. "oh, yes; i can stay a bit. i should like to. what made you send?" "you know. i can't possibly describe it." "did semingham notice it too?" "yes, he did, mr. loring. i distrust that man--mr. ruston i mean--utterly. and maggie----" "she's wrapped up in him?" "terribly. i tried to think it was his wretched omofaga; but it's not; it's him." "well, he's disposed of." "yes, indeed," she sighed, in complacent ignorance. "i must go and see her, you know," said tom, wrinkling his brow. adela laughed. "what'll she say to me?" asked tom anxiously. "oh, she'll be very pleasant." "i shan't," said tom with sudden decision. adela looked at him curiously. "you mean to--to give her 'a bit of your mind?'" "well, yes," he answered, smiling. "i think so; don't you?" "i should like to, if i dared." "why, you dare anything!" exclaimed tom. "oh, no, i don't. i splash about a good deal, but i am a coward, really." they relapsed into silence. presently tom began, "it's been awfully dull in town; nobody to speak to, except mrs. cormack." "mrs. cormack!" cried adela. "i thought you hated her?" "well, i've thought a little better of her lately." "to think of your making friends with mrs. cormack!" "i haven't made friends with her. she's not such a bad woman as you'd think, though." "i think she's horrible," said adela. tom gave it up. "there was no one else," he pleaded. "well," retorted adela, "when there is anyone else, you never come near them." the grammar was confused, but adela could not improve it, without being landed in unbearable plainness of speech. "don't i?" he asked. "why, i come and see you." "oh, for twenty minutes once a month; just to keep the acquaintance open, i suppose. it's like shutting all the gates on ascension day (isn't it ascension day?), only the other way round, you know." "you so often quarrel with me," said tom. "what nonsense!" said adela. "anyhow, i won't quarrel here." tom glanced at her. she was looking bright and happy and young. he liked her even better here in dieppe than in a london drawing-room. her conversation was not so elaborate, but it was more spontaneous and, to his mind, pleasanter. moreover, the sea air had put colour in her cheeks and painted her complexion afresh. the thought strayed through tom's mind that she was looking quite handsome. it was the one good thing that he did not always think about her. he went on studying her till she suddenly turned and caught him. "well," she asked, with a laugh and a blush, "do i wear well?" "you always talk as if you were seventy," said tom reprovingly. adela laughed merrily. the going of ruston and the coming of tom were almost too much good-fortune for one day. and tom had come in a pleasant mood. "you don't really like mrs. cormack, do you?" she asked. "she hates me, you know." "oh, if i have to choose between you----" said tom, and stopped. "you stop at the critical moment." "well, mrs. cormack isn't here," said tom. "so i shall do to pass the time?" "yes," he laughed; and then they both laughed. but suddenly adela's laugh ceased, and she jumped up. "there's marjory valentine!" she exclaimed. "what! where?" asked tom, rising. "no, stay where you are, i want to speak to her. i'll come back," and, leaving tom, she sped after marjory, calling her name. marjory looked round and hastened to meet her. she was pale and her eyes heavy for trouble and want of sleep. "oh, adela, i'm so glad to find you! i was going to look for you at the hotel. i must talk to you." "you shall," said adela, taking her arm and smiling again. she did not notice marjory's looks; she was full of her own tidings. "i want to ask you whether you think lady semingham----" began marjory, growing red, and in great embarrassment. "oh, but hear my news first," cried adela; "marjory, he's gone!" "who?" "why, that man mr. ruston." "gone?" echoed marjory in amazement. to her it seemed incredible that he should be gone--strange perhaps to adela, but to her incredible. "yes, this morning. he got a letter--something about his company--and he was off on the spot. and tom--mr. loring (he's come, you know), thinks--that that really was his reason, you know." marjory listened with wide-open eyes. "oh, adela!" she said at last with a sort of shudder. she could have believed it of no other man; she could hardly believe it of one who now seemed to her hardly a man. "isn't it splendid? and he went off without seeing--without going up to the cliff at all. i never was so delighted in my life." marjory was silent. no delight showed on her face; the time for that was gone. she did not understand, and she was thinking of the night's experience and wondering if maggie dennison had known that he was going. no, she could not have known. "but what did you want with me, or with bessie?" asked adela. marjory hesitated. the departure of willie ruston made a difference. she prayed that it meant an utter difference. there was a chance; and while there was a chance her place was in the villa on the cliff. his going rekindled the spark of hope that almost had died in the last terrible night. "i think," she said slowly, "that i'll go straight back." "and tell maggie?" asked adela with excited eyes. "if she doesn't know." adela said nothing; the subject was too perilous. she even regretted having said so much; but she pressed her friend's arm approvingly. "it doesn't matter about lady semingham just now," said marjory in an absent sort of tone. "it will do later." "you're not looking well," remarked adela, who had at last looked at her. "i had a bad night." "and how's maggie?" the girl paused a moment. "i haven't seen her this morning. she sent word that she would breakfast in bed. i'll just run up now, adela." she walked off rapidly. adela watched her, feeling uneasy about her. there was a strange constraint about her manner--a hint of something suppressed--and it was easy to see that she was nervous and unhappy. but adela, making lighter of her old fears in her new-won comfort, saw only in marjory a grief that is very sad to bear, a sorrow that comes where love--or what is nearly love--meets with indifference. "she's still thinking about that creature!" said adela to herself in scorn and in pity. she had quite made up her mind about willie ruston now. "i'm awfully sorry for her." adela, in fact, felt very sympathetic. for the same thing might well happen with love that rested on a worthier object than "that creature, willie ruston!" meanwhile the creature--could he himself at the moment have quarrelled with the word?--was carried over the waves, till the cliff and the house on it dipped and died away. the excitement of the message and the start was over; the duty that had been strong enough to take him away could not yet be done. a space lay bare--exposed to the thoughts that fastened on it. who could have escaped their assault? not even willie ruston was proof; and his fellow-voyagers wondered at the man with the frowning brows and fretful restless eyes. it had not been easy to do, or pleasant to see done, this last sacrifice to the god of his life. yet it had been done, with hardly a hesitation. he paced the deck, saying to himself, "she'll understand." would any woman? if any, then, without doubt, she was the woman. "oh, she'll understand," he muttered petulantly, angry with himself because he would not be convinced. once, in despair, he tried to tell himself that this end to it was what people would call ordered for the best--that it was an escape for him--still more for her. but his strong, self-penetrating sense pushed the plea aside--in him it was hypocrisy, the merest conventionality. he had not even the half-stifled thanksgiving for respite from a doom still longed for, which had struggled for utterance in maggie's sobs. yet he had something that might pass for it--a feeling that made even him start in the knowledge of its degradation. by fate, or accident, or mischance--call it what he might--there was nothing irrevocable yet. he could draw back still. not thanksgiving for sin averted, but a shamefaced sense of an enforced safety made its way into his mind--till it was thrust aside by anger at the check that had baffled him, and by the longing that was still upon him. well, anyhow--for good or evil--willing or unwilling--he was away. and she was alone in the little house on the cliff. his face softened; he ceased to think of himself for a moment; he thought of her, as she would look when he did not come--when he was false to a tryst never made in words, but surely the strongest that had ever bound a man. he clenched his fists as he stood looking from the stern of the boat, muttering again his old plea, "she'll understand!" was there not the railway? chapter xix. past praying for. mrs. dennison needed not marjory to tell her. she had received willie ruston's note just as she was about to leave her bedroom. it was scribbled in pencil on half a sheet of notepaper. "am called back to england--something wrong about our railway. very sorry i can't come and say good-bye. i shall run back if i can, but i'm afraid i may be kept in england. will you write? "w. r. r." she read it, and stood as if changed to stone. "something wrong about our railway!" surely an all-sufficient reason; the writer had no doubt of that. he might be kept in england; that meant he would be, and the writer seemed to see nothing strange in the fact that he could be. she did not doubt the truth of what the note said. a man lying would have piled pelion on ossa, reason on reason, excuse on excuse, protestation on protestation. besides willie ruston did not lie. it was just the truth, the all-sufficient truth. there was something wrong with the railway, so he left her. he would lose a day if he missed the boat, so he left her without a word of farewell. the railway must not suffer for his taking holiday; her suffering was all his holiday should make. slowly she tore the note into the smallest of fragments, and the fragments fell at her feet. and his passionate words were still in her ears, his kisses still burnt on her cheek. this was the man whom to sway had been her darling ambition, whom to love was her great sin, whom to know, as in this moment she seemed to know him, her bitter punishment. in her heart she cried to heaven, "enough, enough!" the note was his--his to its last line, its last word, its last silence. the man stood there, self-epitomised, callous and careless, unmerciful, unbending, unturning; vowed to his quest, recking of naught else. but--she clung to this, the last plank in her shipwreck--great--one of the few for whom the general must make stepping-stones. she thought she had been one of the few; that torn note told her error. still, she had held out her hands to ruin for no common clay's sake. but it was too hard--too hard--too hard. "will you write?" was he tender there? her bitterness would not grant him even that. he did not want her to slip away. the smallest addition will make the greatest realm greater, and its loss sully the king's majesty. so she must write, as she must think and dream--and remember. perhaps he might choose to come again--some day--and she was to be ready! she went downstairs. in the hall she met her children, and they said something to her; they talked and chattered to her, and, with the surface of her mind, she understood; and she listened and answered and smiled. and all that they had said and she had said went away; and she found them gone, and herself alone. then she passed to the sitting-room, where was marjory valentine, breathless from mounting the path too quickly; and at sight of marjory's face, she said, "i've heard from mr. ruston. he has been called away," forestalling marjory's trembling words. then she sat down, and there was a long silence. she was conscious of marjory there, but the girl did not speak, and presently the impression of her, which was very faint, faded altogether away, and maggie dennison seemed to herself alone again--thinking, dreaming, and remembering, as she must now think, dream, and remember--remembering the day that was gone, thinking of what this day should have been. she sat for an hour, still and idle, looking out across the sea, and marjory sat motionless behind, gazing at her with despair in her eyes. at last the girl could bear it no longer. it was unnatural, unearthly, to sit there like that; it was as though, by an impossibility, a dead soul were clothed with a living breathing body. marjory rose and came close, and called, "maggie, maggie!" her voice was clear and louder than her ordinary tones; she spoke as if trying to force some one to hear. maggie dennison started, looked round, and passed her hand rapidly across her brow. "maggie, i--i've not done anything about going." "going?" echoed maggie dennison. but her mind was clearing now; her brain had been stunned, not killed, and her will drove it to wakefulness and work again. "going? oh, i hope not." "you know, last night----" began marjory, timidly, flushing, keeping behind mrs. dennison's chair. "last night we--we talked about it, but i thought perhaps now----" "oh," interrupted mrs. dennison, "never mind last night. for goodness' sake, forget last night. i think we were both mad last night." marjory made no answer; and mrs. dennison, her hand having swept her brow once again, turned to her with awakened and alert eyes. "you upset me--and then i upset you. and we both behaved like hysterical creatures. if i told you to go, i was silly; and if you said you wanted to go, you were silly too, marjory. of course, you must stop; and do forget that--nonsense--last night." her tone was eager and petulant, the colour was returning to her cheeks; she looked alive again. marjory leant an arm on the back of the chair, looking down into maggie dennison's face. "i will stay," she said softly, ignoring everything else, and then she swiftly stooped and kissed maggie's cheek. mrs. dennison shivered and smiled, and, detaining the girl's head, most graciously returned her caress. mrs. dennison was forgiving everything; by forgiveness it might be that she could buy of marjory forgetfulness. there was a ring at the door. marjory looked through the window. "it's mr. loring," she said in a whisper. maggie dennison smiled--graciously again. "it's very kind of him to come so soon," said she. "shall i go?" "go? no, child--unless you want to. you know him too. and we've no secrets, tom loring and i." tom loring had mounted the hill very slowly. the giving of that "piece of his mind" seemed not altogether easy. he might paint poor harry's forlorn state; mrs. dennison would be politely concerned and politely sceptical about it. he might tell her again--as he had told her before--that willie ruston was a knave and a villain, and she might laugh or be angry, as her mood was; but she would not believe. or he might upbraid her for folly or for worse; and this was what he wished to do. would she listen? probably--with a smile on her lips and mocking little compliments on his friendly zeal and fatherly anxiety. or she might flash out on him, and call his charge an insult, and drive him away; and a word from her would turn poor old harry into his enemy. decidedly his task was no easy one. it was a coward's joy that he felt when he found a third person there; but he felt it from the bottom of his heart. divine delay! gracious impossibility! how often men adore them! tom loring gave thanks, praying silently that marjory would not withdraw, shook hands as though his were the most ordinary morning call, and began to discuss the scenery of dieppe, and--as became a newcomer--the incidents of his voyage. "and while you were all peacefully in your beds, we were groping about outside in that abominable fog," said he. "how you must have envied us!" smiled mrs. dennison, and marjory found herself smiling in emulous hypocrisy. but her smile was very unsuccessful, and it was well that tom loring's eyes were on his hostess. then mrs. dennison began to talk about willie ruston and her own great interest in him, and in the omofaga company. she was very good-humoured to tom loring, but she did not fail to remind him how unreasonable he had been--was still, wasn't he? the perfection of her manner frightened marjory and repelled her. yet it would have seemed an effort of bravery, had it been done with visible struggling. but it betrayed no effort, and therefore made no show of bravery. "so now," said maggie dennison, "since i haven't got mr. ruston to exchange sympathy with, i must exchange hostilities with you. it will still be about omofaga--that's one thing." tom had definitely decided to put off his lecture. the old manner he had known and mocked and admired--the "these-are-the-orders" manner--was too strong for him. he believed he was still fond of her. he knew that he wondered at her still. could it be true what they told him--that she was as a child in the hands of willie ruston? he hated to think that, because it must mean that willie ruston was--well, not quite an ordinary person--a conclusion tom loathed to accept. "and you're going to stay some time with the seminghams? that'll be very pleasant. and adela will like to have you so much. oh, you can convert her! she's a shareholder. and you must have a talk to the old baron. you've heard of him? but then he believes in mr. ruston, as i do, so you'll quarrel with him." "perhaps i shall convert him," suggested tom. "oh, no, we thorough believers are past praying for; aren't we, marjory?" marjory started. "past praying for?" she echoed. her thoughts had strayed from the conversation--back to what she had been bidden to forget; and she spoke not as one who speaks a trivial phrase. for an instant a gleam of something--anger or fright--shot from maggie dennison's eyes. the next, she was playfully, distantly, delicately chaffing tom about the meaning of his sudden arrival. "of course _not_----" she began. and tom, interrupting, stopped the "adela." "and you stay here too?" he asked, to turn the conversation. "why, of course," smiled mrs. dennison. "after being here all this time, it would look rather funny if i ran away just when harry's coming. i think he really would have a right to be aggrieved then." she paused, and added more seriously, "oh, yes, i shall wait here for harry." then tom loring rose and took his leave. mrs. dennison entrusted him with an invitation to the whole of the seminghams' party to luncheon next day ("if they don't mind squeezing into our little room," she gaily added), and walked with him to the top of the path, waving her hand to him in friendly farewell as he began to descend. and, after he was gone, she stood for a while looking out to sea. then she turned. marjory was in the window and saw her face as she turned. in a moment maggie dennison saw her looking, and smiled brightly. but the one short instant had been enough. the feelings first numbed, then smothered, had in that second sprung to life, and marjory shrank back with a little inarticulate cry of pain and horror. almost as she uttered it, mrs. dennison was by her side. "we'll go out this afternoon," she said. "i think i shall lie down for an hour. we managed to rob ourselves of a good deal of sleep last night. you'd better do the same." she paused, and then she added, "you're a good child, marjory. you're very kind to me." there was a quiver in her voice, but it was only that, and it was marjory, not she, who burst into sobs. "hush, hush," whispered maggie dennison. "hush, dear. don't do that. why should you do that?" and she stroked the girl's hot cheek, wet with tears. "i'm very tired, marjory," she went on. "do you think you can dry your eyes--your silly eyes--and help me upstairs? i--i can hardly stand," and, as she spoke, she swayed and caught at the curtain by her, and held herself up by it. "no, i can go alone!" she exclaimed almost fiercely. "leave me alone, marjory, i can walk. i can walk perfectly;" and she walked steadily across the room, and marjory heard her unwavering step mounting the stairs to her bedroom. but marjory did not see her enter her room, stop for a moment over the scraps of torn paper, still lying on the floor, stoop and gather them one by one, then put them in an envelope, and the envelope in her purse, and then throw herself on the bed in an agony of dumb pain, with the look on her face that had come for a moment in the garden and came now, fearless of being driven away, lined strong and deep, as though graven with some sharp tool. chapter xx. the baron's contribution. it may be that the baron thought he had sucked the orange of life very dry--at least, when the cold winds and the fog had done their work, he accepted without passionate disinclination the hint that he must soon take his lips from the fruit. he went to bed and made a codicil to his will, having it executed and witnessed with every requisite formality. then he announced to lord semingham, who came to see him, that, according to his doctor's opinion and his own, he might manage to breathe a week longer; and semingham, looking upon him, fancied, without saying, that the opinion was a sanguine one. this happened five days before harry dennison's arrival at dieppe. "i am very fortunate," said the baron, "to have found such kind friends for the last stage;" and he looked from lady semingham's flowers to adela's grapes. "i could have bought them, of course," he added. "i've always been able to buy--everything." the old man smiled as he spoke, and semingham smiled also. "this," continued the baron, "is the third time i have been laid up like this." "there's luck in odd numbers," observed semingham. "but which would be luck?" asked the baron. "ah, there you gravel me," admitted semingham. "i came here against orders, because i must needs poke my old nose into this concern of yours----" "not of mine." "of yours and others. well, i poked it in--and the frost has caught the end of it." "i don't take any particular pleasure in the concern myself," said semingham, "and i wish you'd kept your nose out, and yourself in a more balmy climate." "my dear lord, the market is rising." "i know," smiled semingham. "tom loring can't make out who the fools are who are buying. he said so this morning." the baron began to laugh, but a cough choked his mirth. "he's an honest and an able man, your loring; but he doesn't see clear in everything. i've been buying, myself." "oh, you have?" "yes, and someone has been selling--selling largely--or the price would have been driven higher. it is you, perhaps, my friend?" "not a share. i have the vices of an aristocracy. i am stubborn." "who, then?" "it might be--dennison." the baron nodded. "but what did you want with 'em, baron? will they pay?" "oh, i doubt that. but i wanted them. why should dennison sell?" "i suppose he doubts, like you." "perhaps it is that." "perhaps," said semingham. in the course of the next three days they had many conversations; the talks did the baron no good nor, as his doctor significantly said, any harm; and when he could not talk, semingham sat by him and told stories. he spoke too, frequently, of willie ruston, and of the company--that interested the baron. and at last, on the third day, they began to speak of maggie dennison; but neither of them connected the two names in talk. indeed semingham, according to his custom, had rushed at the possibility of ignoring such connection. ruston's disappearance had shown him a way; and he embraced the happy chance. he was always ready to think that any "fuss" was a mistake; and, as he told the baron, mrs. dennison had been in great spirits lately, cheered up, it seemed, by the prospect of her husband's immediate arrival. the baron smiled to hear him; then he asked, "do you think she would come to see me?" semingham promised to ask her; and, although the baron was fit to see nobody the next day--for he had moved swiftly towards his journey's end in those twenty-four hours--yet mrs. dennison came and was admitted; and, at sight of the baron, who lay yellow and gasping, forgot both her acting and, for an instant, the reality which it hid. "oh!" she cried before she could stop herself, "how ill you look! let me make you comfortable!" the baron did not deny her. he had something to say to her. "when does your husband come?" he asked. "to-morrow," said she briefly. she did all she could for his comfort, and then sat down by his bedside. he had an interval of some freedom from oppression and his mind was clear and concentrated. "i want to tell you," he began, "something that i have done." he paused, and added a question, "ruston does not come back to dieppe, i suppose?" "i think not. he is detained on business," she answered, "and he will be more tied when my husband leaves." "your husband will not long be concerned in the omofaga," said he. she started; the baron told her what he had told semingham. "he will soon resign his place on the board, you will see," he ended. she sat silent. "he will have nothing more to do with it, you will see;" and, turning to her, he asked with a sudden spurt of vigour, "do you know why?" "how should i?" she answered steadily. "and i--i have done my part too. i have left him some money (she knew that the baron did not mean her husband) and all the shares i held." "you've done that?" she cried, with a sudden light in her eyes. "you do not want to know why?" "oh, i know you admired him. you told me so." "yes, that in part. i did admire him. he was what i have never been. i wish he was here now. i should like to look at that face of his before i die. but it was not for his sake that i left him the money. why, he could get it without me if he needed it! you don't ask me why?" in his excitement he had painfully pulled himself higher up on his pillows, and his head was on the level with hers now. he looked right into her eyes. she was very pale, but calm and self-controlled. "i don't know," she said. "why have you?" "it will make him independent of your husband," said the baron. mrs. dennison dropped her eyes and raised them again in a swift, questioning glance. "yes, and of you. he need not look to you now." he paused and added, slowly, punctuating every word, "you will not be necessary to him now." mrs. dennison met his gaze full and straight; the baron stretched out his hand. "ah, forgive me!" he exclaimed. "there is nothing to forgive," said she. "i saw; i knew; i have felt it. now he will go away; he will not lean on you now. i have set him where he can stand alone." a smile, half scornful and half sad, came on her face. "you hate me," said the baron. "but i am right." "i was--we were never necessary to him," said she. "ah, baron, this is no news you give me. i know him better than that." he raised himself higher still, panting as he rested on his elbow. his head craned forward towards her as he whispered, "i'm a dying man. you can tell me." "if you were a dead man----" she burst out passionately. then she suddenly recovered herself. "my dear baron," she went on, "i'm very glad you've done this for mr. ruston." he sank down on his pillows with a weary sigh. "let him alone, let him alone," he moaned. "you thought yourself strong." "i suppose you mean kindly," she said, speaking very coldly. "indeed, that you should think of me at all just now shows it. but, baron, you are disquieting yourself without cause." "i'm an old man, and a sick man," he pleaded, "and you, my dear----" "ah, suppose i have been--whatever you like--indiscreet? well----?" she paused, for he made a feebly impatient gesture. mrs. dennison kept silence for a moment; then in a low tone she said, "baron, why do you speak to a woman about such things, unless you want her to lie to you?" the baron, after a moment, gave his answer, that was no answer. "he is gone," he said. "yes, he is gone--to look after his railway." "it is finished then?" he half asked, half implored, and just caught her low-toned reply. "finished? who for?" then she suddenly raised her voice, crying, "what is it to you? why can't i be let alone? how dare you make me talk about it?" "i have done," said he, and, laying his thin yellow hand in hers, he went on, "if you meet him again--and i think you will--tell him that i longed to see him, as a man who is dying longs for his son. he would be a breath of life to me in this room, where everything seems dead. he is full of life--full as a tiger. and you can tell him----" he stopped a moment and smiled. "you can tell him why i was a buyer of omofagas. what will he say?" "what will he say?" she echoed, with wide-opened eyes, that watched the old man's slow-moving lips. "will he weep?" asked the baron. "in god's name, don't!" she stammered. "he will say, 'behold, the baron von geltschmidt was a good man--he was of use in the world--may he sleep in peace!' and now--how goes the railway?" the old man lay silent, with a grim smile on his face. the woman sat by, with lips set tight in an agony of repression. at last she spoke. "if i'd known you were going to tell me this, i wouldn't have come." "it's hard, hard, hard, but----" "oh, not that. but--i knew it." she rose to her feet. "good-bye," said the baron. "i shan't see you again. god make it light for you, my dear." she would not seem to hear him. she smoothed his pillows and his scanty straggling hair; then she kissed his forehead. "good-bye," she said. "i will tell willie when i see him. i shall see him soon." the old man moaned softly and miserably. "it would be better if you lay here," he said. "yes, i suppose so," she answered, almost listlessly. "good-bye." suddenly he detained her, catching her hand. "do you believe in people meeting again anywhere?" he asked. "oh, i suppose so. no, i don't know, i'm sure." "they've been telling me to have a priest. i call myself a catholic, you know. what can i say to a priest? i have done nothing but make money. if that is a sin, it's too simple to need confession, and i've done too much of it for absolution. how can i talk to a priest? i shall have no priest." she did not speak, but let him hold her hand. "if," he went on, with a little smile, "i'm asked anywhere what i've done, i must say, 'i've made money.' that's all i shall have to say." she stooped low over him and whispered, "you can say one more thing, baron--one little thing. you once tried to save a woman," and she kissed him again and was gone. outside the house, she found semingham waiting for her. "oh, i say, mrs. dennison," he cried, "harry's come. he got away a day earlier than he expected. i met him driving up towards your house." for just a moment she stood aghast. it came upon her with a shock; between a respite of a day and the actual terrible now, there had seemed a gulf. "is he there--at the house--now?" she asked. semingham nodded. "will you walk up with me?" she asked eagerly. "i must go directly, you know. he'll be so sorry not to find me there. do you mind coming? i'm tired." he offered his arm, and she almost clutched at it, but she walked with nervous quickness. "he's looking very well," said semingham. "a bit fagged, and so on, you know, of course, but he'll soon get all right here." "yes, yes, very soon," she replied absently, quickening her pace till he had to force his to match it. but, half-way up the hill, she stopped suddenly, breathing rapidly. "yes, take a rest, we've been bucketing," said he. "did he ask after me?" "yes; directly." "and you said----?" "oh, that you were all right, mrs. dennison." "thanks. has he seen mr. loring?" "no; but he knew he had come here. he told me so." "well, i needn't take you right up, need i?" semingham thought of some jest about not intruding on the sacred scene, but the jest did not come. somehow he shrank from it. mrs. dennison did not. "we shall want to fall on one another's necks," said she, smiling. "and you'd feel in the way. you hate honest emotions, you know." he nodded, lifted his hat, and turned. on his way down alone, he stopped once for a moment and exclaimed, "good heavens! and i believe she'd rather meet the devil himself. she is a woman!" mrs. dennison pursued her way at a gentler pace. before she came in sight, she heard her children's delighted chatterings, and, a moment later, harry's hearty tones. his voice brought to her, in fullest force, the thing that was always with her--with her as the cloak that a man hath upon him, and as the girdle that he is always girded withal. when the children saw her, they ran to her, seizing her hands and dragging her towards harry. a little way off stood marjory valentine, with a nervous smile on her lips. harry himself stood waiting, and mrs. dennison walked up to him and kissed him. not till that was done did she speak or look him in the face. he returned her kiss, and then, talking rapidly, she made him sit down, and sat herself, and took her little boy on her knee. and she called marjory, telling her jokingly that she was one of the family. harry began to talk of his journey, and they all joined in. then he grew silent, and the children chattered more about the delights of dieppe, and how all would be perfect now that father was come. and, under cover of their chatter, maggie dennison stole a long covert glance at her husband. "and tom's here, father," cried the little boy on her lap exultingly. "yes," chimed in madge, "and mr. ruston's gone." there was a momentary pause; then mrs. dennison, in her calmest voice, began to tell her husband of the sickness of the baron. and over harry dennison's face there rested a new look, and she felt it on her as she talked of the baron. she had seen him before unsatisfied, puzzled, and bewildered by her, but never before with this look on his face. it seemed to her half entreaty and half suspicion. it was plain for everyone to see. he kept his eyes on her, and she knew that marjory must be reading him as she read him. and under that look she went on talking about the baron. the look did not frighten her. she did not fear his suspicions, for she believed he would still take her word against all the world--ay, against the plainest proof. but she almost broke under the burden of it; it made her heart sick with pity for him. she longed to cry out, then and there, "it isn't true, harry, my poor dear, it isn't true." she could tell him that--it would not be all a lie. and when the children went away to prepare for lunch, she did much that very thing; for, with a laughing glance of apology at marjory, she sat on her husband's knee and kissed him twice on either check, whispering, "i'm so glad you've come, harry." and he caught her to him with sudden violence--unlike his usual manner, and looked into her eyes and kissed her. then they rose, and he turned towards the house. for a moment marjory and mrs. dennison were alone together. mrs. dennison spoke in a loud clear voice--a voice her husband must hear. "we're shamefully foolish, aren't we, marjory?" the girl made no answer, but, as she looked at maggie dennison, she burst into a sudden convulsive sob. "hush, hush," whispered maggie eagerly. "my god! if i can, you can!" so they went in and joined the children at their merry noisy meal. chapter xxi. a joint in his armour. willie ruston slept, on the night following his return to london, in the carlins' house at hampstead. the all-important question of the railway made a consultation necessary, and ruston's indisposition to face his solitary rooms caused him to accept gladly the proffered hospitality. the little cramped place was always a refuge and a rest; there he could best rejoice over a victory or forget a temporary defeat. there he fled now, in the turmoil of his mind. the question of the railway had hurried him from dieppe, but it could not carry away from him the memories of dieppe. yet that was the office he had already begun to ask of it--of it and of the quiet busy life at hampstead, where he lingered till a week stretched to two and to three, spending his days at work in the city, and his evenings, after his romp with the children, in earnest and eager talk and speculation. he regretted bitterly his going to dieppe. he had done what he condemned; he had raised up a perpetual reproach and a possible danger. he was not a man who could dismiss such a thing with a laugh or a sneer, with a pang of penitence and a swift reaction to the low levels of morality, with a regret for imprudence and a prayer against consequences. his nature was too deep, and the influence he had met too strong, for any of these to be enough. yet he had suffered the question of the railway to drag him away at a moment's notice; and he was persuaded that he must take his leaving as setting an end to all that had passed. all that must be put behind; forgetfulness in thought might be a relief impossible to attain, a relief that he would be ashamed of striving to attain; but forgetfulness in act seemed a duty to be done. in his undeviating reference of everything to his own work in life and his neglect of any other touchstone, he erected into an obligation what to another would have been a shameless matter of course; or, again, to yet another, a source of shame-faced relief. his sins were sin first against himself, in the second degree only against the participant in them; his preoccupation with their first quality went far to blind him to the second. yet he was very sorry for maggie dennison. nay, those words were ludicrously feeble for the meaning he wanted from them. acutely conscious of having done her a wrong, he was vaguely aware that he might underestimate the wrong, and remembered uneasily how she had told him that he did not understand, and despaired because he could not understand. he felt more for her now--much more, it seemed to him; but the consciousness of failure to put himself where she stood dogged him, making him afraid sometimes that he could not realise her sufferings, sometimes that he was imputing to her fictitious tortures and a sense of ignominy which was not her own. searching light, he began to talk to carlin in general terms, of course, and by way of chance discourse; and he ran up against a curious stratum of puritanism imbedded amongst the man's elastic principles. the narrowest and harshest judgment of an erring woman accompanied the supple trader and witnessed the surviving barbarian in mr. carlin; an accidental distant allusion displayed an equally relentless attitude in his meek hard-working little wife. willie ruston drew in his feelers, and, aghast at the evil these opinions stamped as the product of his acts, declared for a moment that his life must be the only and insufficient atonement. the moment was a brief one. he dismissed the opinions with a curse, their authors with a smile, and did not scorn to take for comfort even maggie dennison's own enthusiasm for his work. that had drawn them together; that must rule and limit the connection which it had created. an end--a bound--a peremptory stop (there was still time to stop) was the thing. she would see that, as he saw it. god knew (he said to himself) what a wrench it was--for she meant more to him than he had ever conceived a woman could mean; but the wrench must be undergone. he would rather die than wreck his work; and she, he knew, rather die than prove a wrecking siren to him. suddenly, across the desponding stubbornness of his resolves, flashed, with a bright white light, the news of the baron's legacy, accompanying, but, after a hasty regretful thought and a kindly regretful smile, obliterating the fact of the baron's death. half the steps upward, he felt, which he had set himself painfully and with impatient labour to cut, were hewn deep and smooth for his feet; he had now but to tread, and lift his foot and tread again. from a paid servant of his company, powerful only by a secret influence unbased on any substantial foundation, he leapt to the position of a shareholder with a larger stake than any man besides; no intrigue could shake him now, no sudden gust of petulant impatience at the tardiness of results displace him. he had never thought of this motive behind the baron's large purchases of omofaga shares; as he thought of it, he had not been himself had he not smiled. and his smile was of the same quality as had burst on his face when first maggie dennison dropped the veil and owned his sway. one day he did not go down to the city, but spent his time wandering on the heath, mapping out what he would do in the fast-approaching days in omofaga. the prospects were clearing; he had had two interviews with lord detchmore, and the minister had fallen back from his own objections on to the scruples of his colleagues. it was a promising sign, and willie was pressing his advantage. the fall in the shares had been checked; tom loring wrote no more; and mrs. carlin had forgotten to mourn the extinct coal business. he came home, with a buoyant step, at four o'clock, to find carlin awaiting him with dismayed face. there was the worst of news from queen street. mr. dennison had written announcing resignation of his place on the board. "it's a staggering blow," said carlin, thrusting his hands into his pockets. "can't you bring him round? why is he doing it?" "well, what does he say?" asked ruston, a frown on his brow. "oh, some nonsense--pressure of other business or something of that kind. can't you go and see him, willie? he's back in town. he writes from curzon street." "i don't know why he does it," said ruston slowly. "i knew he'd been selling out." "he hasn't made money at that." "no. i've made the profit there," said ruston, with a sudden smile. "the baron bought 'em, eh?" laughed carlin. "you generally come out right side up, willie. you'll go and see him, though, won't you?" yes. he would go. that was the resolution which in a moment he reached. if there were danger, he must face it, if there were calamity, he must know it. he would go and see harry dennison. as he was, on the stroke of half-past four, he jumped into a hansom-cab, and bade the man drive to curzon street. harry was not at home--nor mrs. dennison, added the servant. but both were expected soon. "i'll wait," said willie, and he was shown up into the drawing-room. as the servant opened the door, he said in his low respectful tones, "mrs. cormack is here, sir, waiting for mrs. dennison." a moment later willie ruston was overwhelmed in a shrilly enthusiastic greeting. mrs. cormack had been in despair from _ennui_; maggie's delay was endless, and mr. ruston was in verity a godsend. indeed there was every appearance of sincerity in the lady's welcome. she stood and looked at him with an expression of most wicked and mischievous pleasure. the remorse detected by tom loring was not visible now; pure delight reigned supreme, and gave free scope to her frivolous fearlessness. "_enfin!_" she said. "behold the villain of the piece!" he opened his eyes in questioning. "oh, you think to deceive me too? why, i have prophesied it." "you are," said willie, standing on the hearth-rug, and gazing at her nervous restless figure, so rich in half-expressed hints too subtle for language, "the most outrageous of women, mrs. cormack. fortunately you have a fling at everybody, and the saints come off as badly as the sinners." a shrug asserted her opinion of his pretences. he answered, "i really am so unfortunate as not to have the least idea what you're driving at." an inarticulate scornful little sound greeted this protest. "oh, well, i shall wait till you say something," remarked willie, with a laugh. "i can't deny villainies wholesale, and i can't argue against gallic ejaculations." "you still come here?" she asked, ignoring his rudeness, and coming to close quarters with native audacity. he looked at her for a moment, and then walked up to her chair, and stood over her. she leant back, gazing up at him with a smile. "look here! don't talk nonsense," he said brusquely; "even such talk as yours may do harm with fools." "fools!" she echoed. "you mean----?" "more than half the world," he interrupted. "including----?" she began again in mockery. "some of our acquaintance," he answered, with the glimmer of a smile. "ah, i thought you were angry!" she cried, pointing at the smile on his lips. "i shall be, if you don't hold your tongue." "you beg me to be silent, mr. ruston?" "i desire you not to chatter about me, mrs. cormack." "ah, what politeness! i shall say what i please," and she rose and stood facing him defiantly. "i wish," he said, "that i could tell you what they do to gossiping women in omofaga. it is so very disagreeable--and appropriate." "oh, i don't mind hearing." "i can believe it, but i mind saying." she flushed, and her breath came more quickly. "no doubt you will enforce the treatment--in your own interest," she said. "you won't be there," replied he, with affected regret. "well, here i shall say what i please." "and who will listen?" "one man, at least," she cried, in incautious anger. "ah, you'd like to beat me, wouldn't you?" "why suggest the impossible?" he asked, smiling. "i can't beat every----" he paused, and added with deliberateness, "every vulgar-minded woman in london;" and turning his back on her, he sat down and took up a newspaper that lay on the table. for full five or six minutes mrs. cormack sat silent. willie ruston glanced through the leading article, and turned the paper, folding it neatly. there was a letter from a correspondent on the subject of the watersheds of central south africa, and he was reading it with attention. he thought that he recognised tom loring's hand. the watersheds of omofaga were not given their due. ah, and here was that old falsehood about arid wastes round fort imperial! "by jove, it's too bad!" he exclaimed aloud. mrs. cormack, who had for the last few moments been watching him, first with a frown, then with a half-incredulous, half-amazed smile, burst out into laughter. "really, one might as well be offended with a grizzly bear!" she cried. he put down the paper, and met her gaze. "how in the world," she went on, "does she--there, i beg your pardon. how does anyone endure you, mr. ruston?" as she spoke, before he could answer, the door opened, and harry dennison came in. he entered with a hesitating step. after greeting mrs. cormack, he advanced towards ruston. the latter held out his hand, and harry took it. he did not look ruston in the eyes. "how are you?" said he. "you want to see me?" "well, for a moment, if you can spare the time--on business." "is it about my letter to carlin?" ruston nodded. mrs. cormack kept a close watch. "i--i can't alter that," said harry, in a confused way. "sir george is so crippled now, so much of the work falls on me; i have really no time." "you might have left us your name." "i couldn't do that, could i? suppose you came to grief?" and he laughed uncomfortably. willie ruston was afflicted by a sense of weakness--a vulnerability new in his experience--forbidding him to be urgent with the renegade. had carlin been present, he would have stood astounded at his chief's tonguetiedness. mrs. cormack smiled at it, and her smile, caught in a swift glance by ruston, spurred him to a voluble appeal, that sounded to himself hollow and ineffective. it had no effect on harry dennison, who said little, but shook his head with unfailing resolution. mrs. cormack could not resist the temptation to offer matters an opportunity of development. "but what does maggie say to your desertion?" she asked in an innocently playful way. harry seemed nonplussed at the question, and willie ruston interposed. "we needn't bring mrs. dennison into it," he said, smiling. "it's a matter of business, and if dennison has made up his mind----" he ended with a shrug, and took up his hat. "i--i think so, ruston," stumbled harry. "where is maggie?" asked mrs. cormack curiously. "they told me she would be in soon." "i don't know," said harry. "she went out driving. she's sometimes late in coming back." ruston was shaking hands with mrs. cormack, and, when he walked out, harry followed him. the two men went downstairs in silence. harry opened the front door. willie ruston held out his hand, but harry did not this time take it. holding the door-knob, he looked at his visitor with a puzzled entreaty in his eyes, and his visitor suddenly felt sorry for him. "i hope mrs. dennison is well?" said ruston, after a pause. "no," answered harry, with rough abruptness. "she's not well. i knew how it would be; i told you. you would go." "my dear fellow----" "you would talk to her about your miserable company--our company, if you like. i knew it would do her harm. i told you so." he was pouring out his incoherent charges and repetitions in a fretful petulance. "the doctor says her nerves are all wrong; she must be left alone. i see it. she's not herself." "then that," said ruston, "is the real reason why you're severing yourself from us?" "i don't want her to hear anything more about it; she got absorbed in it. i told you she would, but you wouldn't listen. tom loring thought just the same. but you would go." "is she ill?" "oh, i don't know that she's ill. she's--she's not herself. she's strange." the note of distress in his voice grew more acute as he went on. "i'm very sorry," said willie, baldly. "give her my best----" "if you want to see me again about it, i--you'll always know where to find me in the city, won't you?" he shuffled his feet nervously, and twisted the door-knob as he spoke. "you mean," asked ruston, slowly, "that i'd better not come here?" "well, yes--just now," mumbled harry; and he added apologetically, "she's seeing very few people just now, you know." "as you please, of course," said ruston, shortly. "i daresay you're right. i should like to say, dennison, that i did not intend----." he suddenly stopped short. there was no need to rush unbidden into more falseness. "good-bye," he said. harry took the offered hand in a limp grasp, but his eyes did not leave the ground. a moment later the door closed, and ruston was alone outside--knowing that he had been turned out--in however ineffective blundering manner, yet, in fact, turned out--and by harry dennison. that harry knew nothing, he hardly felt as a comfort; that perhaps he suspected hardly as a danger. he was angry and humiliated that such a thing should happen, and that he should be powerless to prevent, and without title to resent, the blow. looking up he caught sight dimly in the dim light of a lithe figure and a mocking face. mrs. cormack had regained her own house by means of the little gate, and stood leaning over the balcony smiling at him like some disguised fiend in a ballet or opera-bouffe. he heard a tinkling laugh. had she listened? she was capable of it, and if she had, it might well be that she had caught a word or two. but perhaps his air and attitude were enough to tell the tale. she craned her neck over the parapet, and called to him. "i hope we shall see you soon again. of course, you'll be coming to see maggie soon?" "oh, soon, i hope," he answered sturdily, and the low tinkle of laughter rang out again in answer. without more, he turned on his heel and walked down the street, a morose frown on his brow. he had been gone some half-hour when, just before eight o'clock, mrs. dennison's victoria drove quickly up to the door. the evening was chilly and she was wearing her furs. her face rose pale and rigid above them; and as she walked to the house, her steps dragged as though in weariness. she did not go upstairs, but knocked, almost timidly, at the door of her husband's study. entering in obedience to his call, she found him sitting in his deep leathern arm-chair by the fire. she leant her arm on the back and stared over his head into the fire. "anyone been, harry?" she asked. he lifted his eyes with a start. "is it you, maggie?" he cried, leaping up and seizing her hand. "why, how cold you are, dear! come and sit by the fire." she did as he bade her. "any visitors?" she asked again. "ruston," he answered, turning and poking the fire as he did so. "he came to see me about the company, you know." "is he long gone?" "yes, some time." "he was angry, was he?" "yes, maggie. but i stuck to it. i won't have anything more to do with the thing." his petulance betrayed itself again in his voice. she said nothing, and, after a moment, he asked anxiously, "do you mind much? you know the doctor----?" "oh, the doctor! no, harry, i don't mind. do as you like. he can get on without us." "if you really mind, i'll try----" "no, no, no," she burst out. "you're quite right. of course you're right. i don't want you to go on. i'm tired of it too." "are you?" he asked, with a face suddenly brightening. "are you really? then i'm glad i told ruston not to come bothering about it here." had he been listening, he could have heard the sharp indrawing of her breath. "what do you mean?" she asked. "why, i told him not to come and see you till--till you were stronger." she shot a terrified glance at him. his expression was merely anxious and, according to its wont when he was in a difficulty, apologetic. "and he won't be here much longer now," he added, comfortingly. "no, not much," she forced herself to murmur. "won't you go and dress for dinner?" he asked, after a moment. "it's ordered for a quarter-past, and it's more than that now." "is it? i'll come directly. you go, and i'll follow you. i shan't be long." he came near to where she sat. "are you feeling better?" he asked. "oh, harry, harry, i'm well, perfectly well! you and your doctor!" and she broke into an impatient laugh. "you'll persuade me into the grave before you've done." he looked at her for a moment, and then, shaping his lips to whistle, sounded a few dreary notes and stole out of the room. she heard the door close, and, sitting up, stretched her arms over her head. then she sighed for relief at his going. it was much to be alone. chapter xxii. a toast in champagne. "a month to-day!" said lady valentine, pausing in her writing (she had just set "octr. 10th" at the head of her paper) and gazing sorrowfully across the room at marjory. marjory knew well what she meant. the poor woman was counting the days that still lay between her and the departure of her son. "now don't, mother," protested marjory. "oh, i know i'm silly. i met mr. ruston at the seminghams' yesterday, and he told me that there wasn't the least danger, and that it was a glorious chance for walter--just what you said from the first, dear--and that walter could run over and see me in about eighteen months' time. oh, but, marjory, i know it's dangerous!" marjory rose and crossed over to where her mother sat. "you must be a spartan matron, dear," said she. "you can't keep walter in leading strings all his life." "no; but he might have stayed here, and got on, and gone into parliament, and so on." she paused and added, "like evan, you know." marjory coloured--more from self-reproach than embarrassment. she had gone in these last weeks terribly near to forgetting poor evan's existence. "evan came in while i was at the seminghams'. he looked so dull, poor fellow. i--i asked him to dinner, marjory. he hasn't been here for a long while. we haven't seen nearly as much of him since we knew mr. ruston. i don't think they like one another." "you know why he hasn't come here," said marjory softly. "he spent a week with me while you were at dieppe. he seemed to like to hear about you." a smile of sad patience appeared on marjory's face. "oh, my dear, you are such a bad hinter," she half laughed, half moaned. "poor evan! i'm very sorry for him; but i can't help it, can i?" "it would have been so nice." "and you used to be such a mercenary creature!" "ah, well, my dear, i want to keep one of my children with me. but, if it can't be, it can't." marjory bent down and whispered in her mother's ear, "i'm not going to omofaga, dear." "well, i used to be half afraid of it," admitted lady valentine (she forgot that she had half hoped it also); "but you never seem to be interested in him now. do you mind evan coming to dinner?" "oh, no," said marjory. since her return from dieppe she had seemed to "mind" nothing. relaxation of the strain under which her days passed there had left her numbed. she was conscious only of a passionate shrinking from the sight or company of the two people who had there filled her life. to meet them again forced her back in thought to that dreary mysterious night with its unsolved riddle, that she feared seeking to answer. her mother had called on maggie dennison, and came back with a flow of kindly lamentations over maggie's white cheeks and listless weary air. her brother was constantly with ruston, and tried to persuade her to join parties of which he was to be one. she fenced with both of them, escaping on one plea and another; and maggie's acquiescence in her absence, no less than ruston's failure to make a chance of meeting her, strengthened her resolve to remain aloof. young sir walter also came to dinner that night; he was very gay and chatty, full of omofaga and his fast-approaching expedition. he greeted evan haselden with a manner that claimed at least equality; nay, he lectured him a little on the ignorant interference of a stay-at-home house of commons with the work of the men on the spot, in south africa and elsewhere; people on this side would not give a man a free hand, he complained, and exhorted evan to take no part in such ill-advised meddling. hence he was led on to the topic he was never now far away from--willie ruston--and he reproached his mother and sister for their want of attention to the hero. this was the first gleam of light for poor evan haselden, for it told him that willie ruston was not, as he had feared, a successful rival. he rejoiced at lady valentine's hinted dislike of ruston, and anxiously studied marjory's face in hope of detecting a like disposition. but his vanity led him to return walter's lecture, and he added an innuendo concerning the unscrupulousness of adventurers who cloaked money-making under specious pretences. walter flared up in a moment, and the dinner ended in something like a dispute between the two young men. "well, dennison's found him out, anyhow," said evan bitterly. "he's cut the whole concern." "we can do without dennison," said young sir walter scornfully. when the meal was finished, young sir walter, treating his friend without ceremony, carelessly pleaded an engagement, and went out. lady valentine, interpreting evan's glances, and hoping against hope, seized the chance of leaving him alone with her daughter. marjory watched the manoeuvre without thwarting it. her heart was more dead to evan than it had ever been. her experiences at dieppe had aged her mind, and she found him less capable of stirring any feeling in her than even in the days when she had half made a hero out of willie ruston. she waited for his words in resignation; and he, acute enough to mark her moods, began as a man begins who rushes on anticipated defeat. what is unintelligible seems most irresistible, and he knew not at what point to attack her indifference. he saw the change in her; he could have dated its beginning. the cause he found somehow in ruston, but yet it was clear to him that she did not think of ruston as a suitor--almost clear that she heard his name and thought of him with repulsion--and that the attraction he had once exercised over her was gone. the weary talk wore to its close, ending with angry petulance on his side, and, at last, on hers with a grief that was half anger. he could not believe in her decision, unless there were one who had displaced him; and, seeing none save ruston, in spite of his own convictions, he broke at last into a demand to be told whether she thought of him. marjory started in horror, crying, "no, no," and, for all evan's preoccupation, her vehemence amazed him. "oh, you've found him out too, perhaps," he sneered. "you've found him out by now. all the same, it was his fault that you didn't care for me before." "evan," she implored, "do, pray, not talk like that. there's not a man in the whole world that i would not have for my husband rather than him." "now," he repeated; "but i'm speaking of before." half angry again at that he should allow himself such an insinuation, she yet liked him too well, and felt too unhappy to be insincere. "well," she said with a troubled smile, "if you like, i've found him out." "then, marjory," cried evan, in a spasm of reviving hope, "if that fellow's out of the way----" but she would not hear him, and he flung himself out of the house with a rudeness that his love pardoned. she heard him go, in aching sorrow that he, who felt few things deeply, should feel this one so deeply. then, following the calls of society, which are followed in spite of most troubles, she, pale-faced and sad, and her mother, almost weeping in motherly distress, dressed themselves to go to a party. lady semingham was at home that night. at the party all was gay and bright. lady semingham was chattering to mr. otto heather. semingham was trying to make mr. foster belford understand the story of the baron and willie ruston, lord detchmore, who had come in from a public dinner, was conspicuous in his blue riband, and was listening to adela ferrars with a smile on his face. marjory sat down in a corner, hoping to escape introductions, and, when an old friend carried her mother off to eat an ice, she kept her place. presently she heard cried, "mrs. dennison," and maggie came in with her usual grace. it seemed as though the last few months were blotted out, and they were all again at that first party at mrs. dennison's where willie ruston had made his _entrã©e_. the illusion was not to lack confirmation, for, a moment later, ruston himself was announced, and the sound of his name made adela turn her head for one swift moment from her distinguished companion. "ah!" said lord detchmore, "then i must go. if i talk to him any more i'm a lost man." "there's mr. loring in the corner--no, not that corner; that's marjory valentine. he will take your side." "why are they all in corners?" asked detchmore. "they don't want to be trodden on," said adela, with a grimace. "you'd better take one too." "there's mrs. dennison in a third corner. shall i take that one, or should i get trodden on there?" adela looked up swiftly. his remark hinted at gossip afloat. "take one for yourself," she began, with an uneasy laugh. but the laugh suddenly became genuine for the very absurdity of the thing. "we'll go and join mr. loring, shall we?" she proposed. lord detchmore acquiesced, and they walked over to where tom stood. on their way, to their consternation, they encountered willie ruston. "now we're in for it," breathed detchmore in low tones. but ruston, with a bow, passed on, going straight as an arrow towards where maggie dennison sat. lord detchmore raised his eyebrows, adela shut her fan with a click, tom loring, when they reached him, was frowning. away across the room sat marjory alone. "good heavens! he let me alone!" exclaimed lord detchmore. "perhaps i was your shield," said adela. "he doesn't like me." "nor you, loring, i expect?" presently lord detchmore moved away, leaving adela and tom together. they had been together a good deal lately, and their tones showed the intimacy of friendship. "that man," said adela quickly, "suspects something. he's a terrible old gossip, although he is a great statesman, of course. can't you prevent them talking there together?" "no," said tom composedly, "i can't; she'd send me away if i went." "then i shall go. why isn't harry here?" "he wouldn't come. i've been dining with him at the club." "he ought to have come." "i don't believe it would have made any difference." adela looked at him for a moment; then she walked swiftly across the room to maggie dennison, and held out her hand. "maggie, i haven't had a talk with you for ever so long. how do you do, mr. ruston?" ruston shook hands but did not move. he stood silently through two or three moments of adela's forced chatter. mrs. dennison was sitting on a small couch, which would just hold two people; but she sat in the middle of it, and did not offer to make room for adela. when adela paused for want of anything to say, there was silence. she looked from the one to the other. ruston smiled the smile that always exasperated her on his face--the smile of possession she called it in an attempt at definition. "look at marjory!" said mrs. dennison. "how solitary she looks! poor girl! do go and talk to her, adela." "i came to talk to you," said adela, in fiery temper. "well, i'll come and talk to you both directly," said maggie. "we're talking business," added willie ruston, still smiling. "oh, if you don't want me!" cried adela, and she turned away, declaring in her heart that she had made the last effort of friendship. with her going went ruston's smile. he bent his head, and said in a low voice, "you are the only woman whom i could have left like that, and the only one whom i could have found it hard to leave. was it very hard for you?" "it was just the truth for me," she answered. "of course you were angry and hurt. i was afraid you would be," he said. she looked at him with a curious smile. "but then," he continued, "you saw how i was placed. do you think i didn't suffer in going? i've never had such a wrench in my life. won't you forgive me, maggie?" "forgive! what's the use of talking like that? what's the use of my 'forgiving' you for being what you are?" "you talk as if you'd found me out in something." she turned to him, saying very low, "and haven't you found me out, too? we are face to face now, willie." he did not fully understand her. half in justification, half in apology, he said doggedly, "i simply had to go." "yes, you simply had to go. there was the railway. oh, what's the use of talking about it?" "i was afraid you meant to have nothing more to do with me." "or you wished it?" she asked quickly. he started. she had discerned the thoughts that came into his mind in his solitary walks. "don't be afraid. i've wished it," she added. there was a pause; then he, not denying her charge, whispered, "i can't wish it now--not when i'm with you." "to have nothing more to do with you! ah, willie, i have nothing to do with anything but you." a swift glance from him told her that her appeal touched him. "what else is left me? can i live as i am living?" "what are we to do?" he asked. "we shall see one another sometimes now. i can't come to your house, you know. but sometimes----" "at a party--here and there! and the rest of the time i must live at--at home! home!" he bent to her, whispering, "we must arrange----" "no, no," she replied, passionately. "don't you see?" "what?" he asked, puzzled. "oh, you don't understand! it's not that. it's not that i can't live without you." "i never said that," he interposed quickly. "and yet i suppose it is that. but it's something more. willie, i can't live with him." "does he suspect?" he asked in an eager whisper. "i don't know. i really don't know. it's worse if he doesn't. oh, if you knew what i feel when he looks at me and asks----" "asks what?" "nothing--nothing in words; but, willie, everything, everything. i shall go mad, if i stay. and then don't you see----?" she stopped, going on again a moment later. "i've borne it till i could see you. but i can't go on bearing it." he glanced at her. "we can't talk about it here," he said. "everybody will see how agitated you are." for answer she schooled her face to rigidity, and her hands to motionlessness. "you must talk about it--here and now," she said. "it's the only time i've seen you since--dieppe. what are you going to do, willie?" he looked round. then, with a smile, he offered his arm. "i must take you to have something," he said. "come, we must walk through the room." she rose and took his arm. bowing and smiling, she turned to greet her acquaintances. she stopped to speak to lord detchmore, and exchanged a word with her host. "yes. what are you going to do?" she asked again, aloud. they had reached the room where the _buffet_ stood. mrs. dennison, after a few words to lady valentine, who was still there, sat down on a chair a little remote from the crowd. ruston brought her a cup of coffee, and stood in front of her, with the half-conscious intention of shielding her from notice. she drank the coffee hastily; its heat brought a slight glow to her face. "you're going as you planned?" she asked. he answered in low, dry tones, emptied of all emotion. "yes," said he, "i'm going." she stretched out her hand towards him imploringly. "willie, you must take me with you," she said. he looked down with startled face. "my god, maggie!" he exclaimed. "i can't stay here. i can't stay with him." her lips quivered; he took her cup from her (he feared that she would let it fall), and set it on the table. behind them he heard merry voices; semingham's was loud among them. the voices were coming near them. "i must think," he whispered. "we can't talk now. i must see you again." "where?" she asked helplessly. "carlin's. come up to-morrow. i can arrange it. for heaven's sake, begin to talk about something." she looked up in his face. "i could stand here and tell it to the room," she said, "sooner than live as i live now." he had no time to answer. semingham's arm was on his shoulder. lord detchmore stood by his side. "i want," said semingham, "to introduce lord detchmore to you, mrs. dennison. it's not at all disinterested of me. you must persuade him--you know what about." "no, no," laughed the minister, "i mustn't be talked to; it's highly improper, and i distrust my virtue." "i'll be bound now that you were talking about omofaga this very minute," pursued semingham. "of course we were," said ruston. "you're a great enthusiast, mrs. dennison," smiled detchmore. "you ought to go out, you know. can't you persuade your husband to lend you to the expedition?" ruston could have killed the man for his _malapropos_ jesting. maggie dennison seemed unable to answer it. semingham broke in lightly, "it would be a fine chance for proving the quality--and the equality--of women," said he. "i always told mrs. dennison that she ought to be queen of omofaga." "and i hope," said detchmore, with a significant smile, "that there'll soon be a railway to take you there." even at that moment, the light of triumph came suddenly gleaming into ruston's eyes. he looked at detchmore, who laughed and nodded. "i think so. i think i shall be able to manage it," he said. "that's an end to all our troubles," said semingham. "come, we'll drink to it." he signed to a waiter, who brought champagne. lord detchmore gallantly pressed a glass on mrs. dennison. she shook her head, but took it. "long life to omofaga, and death to its enemies!" cried semingham in burlesque heroics, and, with a laugh--that was, as his laughs so often were, as much at himself as at the rest of the world--he made a mock obeisance to willie ruston, adding, "_moriamur pro rege nostro!_" and draining the glass. maggie dennison's eyes sparkled. behind the mockery in semingham's jest, behind the only half make-believe homage which detchmore's humorous glance at ruston showed, she saw the reality of deference, the acknowledgment of power in the man she loved. for a brief moment she tasted the troubled joy which she had paid so high to win. for a moment her eyes rested on willie ruston as a woman's eyes rest on a man who is the world's as well as hers, but also hers as he is not the world's. she sipped the champagne, echoing in her low rich voice, so that the men but just caught the words, "_moriamur pro rege nostro_" and gave the glass into ruston's hand. a sudden seriousness fell upon them. detchmore glanced at semingham, and thence, curiously, at willie ruston, whose face was pale and marked with a deep-lined frown. mrs. dennison had sunk back in her chair, and her heart rose and fell in agitated breathings. then willie ruston spoke in cool deliberate tones. "the king there was a queen," he said. "you've drunk to the wrong person, semingham. i'll drink it right," and, bowing to maggie dennison, he drained his glass. looking up, he found detchmore's eyes on him in overpowering wonder. "if i tell you a story, lord detchmore," said he, "you'll understand," and, yielding his place by maggie dennison, he took detchmore with him, and they walked away in talk. it was an hour later when lord detchmore took leave of his host. "well, did you hear the story?" asked semingham. "yes; i heard it," said detchmore, "about the telegram, wasn't it?" "yes, and of course, you see, it explains the toast." "that sounds like a question, semingham." "oh, no. the note of interrogation was--a printer's error." "it's a remarkable story." "it really is," said semingham. "and--is it the whole story?" "well, isn't it enough to justify the toast?" "it--and she--are enough," said detchmore. "but, semingham----" lord semingham, however, took him by the arm, walked him into the hall, got his hat and coat for him, helped him on with them, and wished him good-night. detchmore submitted without resistance. just at the last, however, as he fitted his hat on his head, he said, "you're unusually explicit, semingham. he goes to omofaga soon, don't he?" "yes, thank god," said semingham, almost cheerfully. chapter xxiii. the cutting of the knot. "you can manage it for me?" asked willie ruston. "i suppose i can," answered carlin; "but it's rather queer, isn't it, willie?" "i don't know whether it's queer or not; but i must talk to her for half-an-hour." "why not at curzon street?" ruston laughed a short little laugh. "do you really want the reason stated?" he inquired. carlin shook his head gloomily, but he attempted no remonstrance. he confined himself to saying, "i hope the deuce you're not getting yourself into a mess!" "she'll be here about five. you must be here, you know, and you must leave me with her. look here, carlin, i only want a word with her." "but my wife----" "send your wife somewhere--to the theatre with the children, or somewhere. mind you're here to receive her." he issued his orders and walked away. he hated making arrangements of this sort, but there was (he told himself) no help for it. anything was better than talking to maggie dennison before the world in a drawing-room. and it was for the last time. removed from her presence, he felt clear about that. the knot must be cut; the thing must be finished. his approaching departure made a natural and inevitable end to it; and her mad suggestion of coming with him shewed in its real enormity as he mused on it in his solitary thoughts. for a moment she had carried him away. the picture of her pale eloquent face, and the gleam of her eager eyes had almost led him to self-betrayal; the idea of her in such a mood beside him in his work and his triumphs had seemed for the moment irresistible. she could double his strength and make joy of his toil. but it could not be so; and for it to be so, if it could be, he must stand revealed as a traitor to his friend, and be banned for an outlaw by his acquaintance. he had been a traitor, of course, but he need not persist. they--she and he--must not stereotype a passing madness, nor refuse the rescue chance had given them. there was time to draw back, to set matters right again--at least, to trammel up the consequence of wrong. when she came, and carlin, frowning perplexedly, had, with awkward excuses, taken himself away, he said all this to her in stumbling speech. from the exaltation of the evening before they fell pitiably. they had soared then in vaulting imagination over the bristling barriers; to-day they could rise to no such height. reality pressed hard upon them, crushing their romance into crime, their passion to the vulgarity of an everyday intrigue. this secret backstairs meeting seemed to stamp all that passed at it with its own degrading sign; their high-wrought defiance of the world and the right dwindled before their eyes to a mean and sly evasiveness. so felt willie ruston; and maggie dennison sat silent while he painted for her what he felt. she did not interrupt him; now and again a shiver or a quick motion shewed that she heard him. at last he had said his say, and stood, leaning against the mantelpiece, looking down on her. then, without glancing up, she asked, "and what's to become of me, willie?" the sudden simple question revealed him to himself. put in plain english, his rigmarole meant, "go your way and i'll go mine." what he had said might be right--might be best--might be duty--might be religion--might be anything you would. but a man may forfeit the right to do right. "of you?" he stammered. "i can't live as i am," she said. he began to pace up and down the room. she sat almost listlessly in her chair. there was an air of helplessness about her. but she was slowly thinking over what he had said and realising its purport. "you mean we're never to meet again?" she asked. "not that!" he cried, with a sudden heat that amazed himself. "not that, maggie. why that?" "why that?" she repeated in wondering tones. "what else do you mean? you don't mean we should go on like this?" he did not dare to answer either way. the one was now impossible--had swiftly, as he looked at her, come to seem impossible; the other was to treat her as not even he could treat her. she was not of the stuff to live a life like that. there was silence while he waged with himself that strange preposterous struggle, where evil seemed good, and good a treachery not to be committed; wherein his brain seemed to invite to meanness, and his passion, for once, to point the better way. "i wish to god we had never----" he began; but her despairing eyes stifled the feeble useless sentence on his lips. at last he came near to her; the lines were deep on his forehead, and his mouth quivered under a forced smile. he laid his hand on her shoulder. she looked up questioningly. "you know what you're asking?" he said. she nodded her head. "then so be it," said he; and he went again and leant against the mantelpiece. he felt that he had paid a debt with his life, but knew not whether the payment were too high. it seemed to him long before she spoke--long enough for him to repeat again to himself what he had done--how that he, of all men, had made a burden that would break his shoulders, and had fettered his limbs for all his life's race--yet to be glad, too, that he had not shrunk from carrying what he had made, and had escaped coupling the craven with his other part. "what do you mean?" she asked at last; and there was surprise in her tone. "it shall be as you wish," he answered. "we'll go through with it together." though he was giving what she asked, she seemed hardly to understand. "i can't let you go," he said; "and i suppose you can't let me go." "but--but what'll happen?" "god knows," said he. "we shall be a long way off, anyhow." "in omofaga, willie?" "yes." after a pause she rose and moved a step towards him. "why are you doing it?" she asked, searching his eyes with hers. "is it just because i ask? because you're sorry for me?" she was standing near him, and he looked on her face. then he sprang forward, catching her hands. "it's because you're more to me than i ever thought any woman could be." she let her hands lie in his. "but you came here," she said, "meaning to send me away." "i was a fool," he said, grimly, between his teeth. she drew her hands away, and then whispered, "and, willie--harry?" again he had nothing to answer. she stood looking at him with a wistful longing for a word of comfort. he gave none. she passed her hand across her eyes, and burst into sudden sobs. "how miserable i am!" she sobbed. "i wish i was dead!" he made as though to take her hand again, but she shrank, and he fell back. with one hand over her eyes, she felt her way back to her chair. for five minutes or more she sat crying. ruston did not move. he had nothing wherewith to console her, and he dared not touch her. then she looked up. "if i were dead?" she said. "hush! hush! you'd break my heart," he answered in low tones. in the midst of her weeping, for an instant she smiled. "ah, willie, willie!" she said; and he knew that she read him through and through, so that he was ashamed to protest again. she did not believe in that from him. presently her sobs ceased, and she crushed her handkerchief into a ball in her hand. "well, maggie?" said he in hard even tones. she rose again to her feet and came to him. "kiss me, willie," she said; "i'm going back home." he took her in his arms and kissed her. she released herself, and gazed long in his face. "why?" he asked. "you can't bear it; you know you can't. come with me, maggie. i don't understand you." "no; i don't understand myself. i came here meaning to go with you. i came here thinking i could never bear to go back. ah, you don't know what it is to live there now. but i must go back. ah, how i hate it!" she laid her hand on his arm. "think--if i came with you! think, willie!" "yes," he said, as though it had been wrung from him, "i know. but come all the same, maggie," and with a sudden gust of passion he began to beseech her, declaring that he could not live without her. "no, no," she cried; "it's not true, willie, or you're not the man i loved. go on, dear; go on. i shall hear about you. i shall watch you." "but you'll be here--with him," he muttered in grim anger. "ah, willie, are you still--still jealous? even now?" a silence fell between them. "you shall come," he said at last. "what do i care for him or the rest of them? i care for nothing but you." "i will not come, willie. i dare not come. willie, in a week--in a day--willie, my dear, in an hour you will be glad that i would not come." as she spoke, her voice grew louder. the words sounded like a sentence on him. "is that why?" he asked, regarding her with moody eyes. she hesitated before she answered, in bewildered despair. "yes. i don't know. in part it is. and i daren't think of harry. let me think, willie, that it's a little bit because of harry and the children. i know i can't expect you to believe it, but it is a little, though it's more because of you." "of me?--for my sake, do you mean?" "no; not altogether for your sake; because of you." "and, maggie, if he suspects?" "he won't suspect," she said. "he would take my word against the world." "they suspect--some of them--that woman mrs. cormack. and--does marjory?" "it is nothing. he won't believe. marjory will not say a word." "you'll persuade him that there was nothing----?" "yes; i'll persuade him," she answered. she began to pull a glove on to her hand. "i must go," she said. "it's nearly an hour since i came." he took a step towards her. "you won't come, maggie?" he urged, and there was still eagerness in his voice. "not again, willie. i can't stand it again. good-bye. i've given you everything, willie. and you'll think of me now and then?" he was unmanned. he could not answer her, but turned towards the wall and covered his face with his hand. "i shan't think of you like that," she said, a note of wondering reproach in her voice. "i shall think of you conquering. i like the hard look that they blame you for. well, you'll have it soon again, willie." she moved towards the door. he did not turn. she waited an instant looking at him. a smile was on her lips, and a tear trickled down her cheeks. "it's like shutting the door on life, willie," she said. he sprang forward, but she raised her hand to stay him. "no. it is--settled," said she; and she opened the door of the room and walked out into the little entrance-hall. it was a wet evening, and the rain pattered on the roof of the projecting porch. they stood there a moment, till her cabman, who had taken refuge in the lee of the garden wall, brought his vehicle up to the door. they heard a step creak behind them in the hall, and then recede. carlin was treading on tip-toe away. maggie dennison put out her hand and met ruston's. she pressed his hand with strength more than her own, and she said, very low, "i am dying now--this way--for my king, willie," and she stepped out into the rain, and climbed into the cab. "back to where you brought me from," she called to the man, and leaning forward, where the cab lamps caught her face, so that it gleamed like the face of some marble statue, she looked on willie ruston. her lips moved, but he heard no word. the wheels turned and the lamps flashed, and she was carried away. willie started forward a step or two, then ran to the gate and, leaning on it, watched the red lights as they fled away; and long after they were gone, he stood there, bareheaded, in the drenching rain. he did not think; he still saw her, still heard her voice, and watched her broad low brow. she still stood before him, not the fairest of women, but the woman who was for him. and the rumble of retreating wheels sounded again in his ears. she was gone. how long he stood he did not know. presently he felt an arm passed through his, and he was led back to the house. old carlin took him through the hall into his own little study, where a bright fire blazed, and gave him brandy, which he drank, and helped him off with his wet coat, and put a cricketing jacket on him, and pushed him into an arm-chair, and hunted for a pair of slippers for him. all this while neither spoke; and at last carlin, his tasks done, stood and warmed himself at the fire, looking steadily in front of him, and never at his friend. "you dear old fool," said willie ruston. "ah, well, well, you mustn't take cold. if you were laid up now, what the deuce would become of omofaga?" his small, sharp, shrewd eyes blinked as he spoke, and he glanced at willie ruston as he named omofaga. willie sprang to his feet with an oath. "my god!" he cried, "why do you do this for me? who'll do anything for her?" carlin blinked again, keeping his gaze aloof. then he held out his hand, and willie seized it, saying, "i'm--i'm precious hard hit, old man." the other nodded and, as willie sank back in his chair, stole quietly out of the room, shutting the door close behind him. willie ruston drew his chair nearer the fire, and spread out his hands to the blaze. and as the heat warmed his frame, the stupor of his mind passed, and he saw some of what was true--a glimpse of his naked self thrown up against the light of the love that others found for him. and he turned away his eyes, for it seemed to him that he could not look long and endure to live. and he groaned that he had won love and made for himself so mighty an accuser of debts that it lay not in him to pay. for even then, while he cursed himself, and cursed the nature that would not be changed in him; even while the words of his love were in his ears, and her presence near with him; even while life seemed naught for the emptiness her going made, and himself nothing but longing for her; even then, behind regret, behind remorse, behind agony, behind self-contempt and self-disgust, lay hidden, and deeper hidden as he thrust it down, the knowledge that he was glad--glad that his life was his own again, to lead and make and shape; wherein to take and hold, to play and win, to fasten on what was his, and to beat down his enemies before his face. that no man could rob him of, and the woman who could would not. so, as maggie dennison had said, in the passing of an hour he was glad; and in the passing of a week he had learnt to look in the face of the gladness which he had and loathed. chapter xxiv. the return of a friend. about a week later, tom loring sat at work in his rooms. the table was strewn with books of blue and of less alarming colours. tom was smoking a short pipe, and when he paused for a fresh idea, the smoke welled out of his mouth, aye, and out of his nose, thick and fast. for a while he wrote busily; then a dash of his pen proclaimed a finished task, and he lay back in the luxury of accomplishment. presently he pushed back his chair, knocked out his pipe, refilled it, and stretched himself on the sofa. after the day's work came the day's dream; and the day's dream dwelt on the coming of the evening hour, when tom was to take tea with adela ferrars at half-past five. when he had an appointment like that, it coloured his whole day, and made his hard labour pass lightly. also it helped him to forget what there was in his own life and his friends' to trouble him; and he nursed with quiet patience a love that did not expect, that hardly hoped for, any issue. as he had been content to be harry dennison's secretary, so he seemed satisfied to be an undeclared lover; finding enough for his modesty in what most men would have felt only a spur to urge them to press further. he was roused by a step on the stair. a moment later, harry dennison burst into the room. tom had seen him a few days before, uneasy, troubled, apologetic, talking of maggie's strange indisposition--she was terribly out of sorts, he had said, and appeared to find all company and all talk irksome. he had spoken with a meek compassion that exasperated tom--an unconsciousness of any hardship laid on him. tom sat up, glad to console him for an hour; glad, perhaps, of any company that would trick an hour into the past. but to-day harry's step was light; there was a smile on his lips, a gleam of hope in his eyes; he rushed to tom, seized his hand, and, before he sat down or took off his hat, blurted out, "tom, old boy, she wants you to come back." tom started. "what?" he cried, "mrs. dennison wants----" "yes," harry went on, "she sent for me to-day, and told me that she saw how i missed you, and that she was sorry that she had--well--sorry for all the trouble, you know. then she said, 'i wonder if tom (she called you tom) bears malice. tell him omofaga is quite gone, and i want him to come back, and if he'll come here, i'll go on my knees to him.'" harry stopped, smiling joyfully at his wonderful news. tom wore a doubtful look. "i can't tell you," said harry, "what it means to me. it's not only your coming, old chap, though, heaven knows, i'm gladder of that than i've been of anything for months--but you see what it means, tom? it means--why, it means that we're to be as we were before that fellow came. tom, she spoke to me more as she used to-day." his voice faltered; he spoke as an innocent loyal man might of a pardon from some loved capricious sovereign. he had not understood the disfavour--he had dimly discerned inexplicable anger. now it was past, and the sun shone again. tom found himself saying, "i wish there were more fellows in the world like you, harry." harry's eyes opened in momentary astonishment at the irrelevance, but he was too full of his news and his request to stay for wonder. "you'll come, tom?" he asked. "you won't refuse her?" "could anyone refuse her anything?" was what his tone said. "we want you, tom," he went on. "hang it, i've had no one to speak to lately but that cormack woman. i hate that woman. she's always hinting something--some lie or other, you know." "don't be too hard on little mrs. cormack," said tom. he remembered certain words which had shown a soft spot in mrs. cormack's heart. harry did not know that she had grieved to hear him pacing up and down. "you'll come, tom? i know, of course, that you've a right to be angry, and to say you won't, and all that. but i know you won't do it. she's not well, tom; and i--i can't always understand her. you used to understand her, tom. she used to like your chaff, you know." tom would not enter on that. he pressed harry's hand, answering, "of course, i'll come." "bring all this with you," cried harry. "i shan't take up your time. you must stick to your own work as much as you like. when'll you come, tom?" "why, to-morrow," said tom loring. "not now?" "i might, if you like," smiled tom. "that's right, old chap. you can send round for your things. bring a bag, and come to-night. your room's there for you. i told them to keep it ready. damn it, tom, i thought things would come straight some day, and i kept it ready." had things come straight? tom did not know. "i say," pursued harry, "i met ruston to-day. he was very kind about my cutting the omofaga. i wonder if i've been unjust to him!" then tom smiled. "i shouldn't bother about that, if i were you," said he. "well, he's not a thin-skinned chap, is he?" asked harry, with relief. "i should fancy not," said tom. "you see, he's off in a fortnight, and i thought we ought to part friends. so i told him--well, i said, you know, that when he came back, we should be glad to see him." tom began to laugh. "you're getting quite a diplomatist, harry," he said. when harry bustled away, his high spirits raised higher still by tom's ready assent, tom put on the garb of society, and took a cab to adela ferrars'. "she'll be very pleased about this," thought tom, as he went along. "it's good news to take her." but whatever else tom loring knew, it is certain that he was not infallible on the subject of women and their feelings. he recognised the fact (having indeed suspected it many times before) when adela, on the telling of his tidings, flashed out in petulance, "she's sent for you back?" she asked; and tom nodded. "and you're going?" was the next quick question. "well, i could hardly refuse, could i?" "no; i suppose not--at least not if you're maggie dennison's dog, for her to drive away with a stick and whistle back at her pleasure." tom had been drinking tea. he set down the cup, and feebly stroked his thigh with his hand; and he glanced at adela (who was rattling the tea things) with deprecatory surprise. "i hadn't thought of it like that," he ventured to remark. "oh, of course, you hadn't. maggie sends you away--you go. maggie sends a footman (well, then, harry) for you--and back you go. and i suppose you'll say you're very sorry, won't you? and you'll promise you won't do it again, won't you?" "i don't think i shall be asked to do that," said tom, speaking seriously, but showing a slight offence in his manner. "but if she tells you to?" asked adela scornfully. "i didn't think you'd take it like this. why shouldn't i go back?" "oh, go back! go back and fetch and carry for maggie, and write harry's speeches till the end of the chapter. oh, yes, go back." tom was puzzled. "has anything upset you to-day?" he asked. "has anything upset me!" echoed adela, throwing her eyes up to the ceiling. tom finished his tea in a nervous gulp. "i don't see why i shouldn't go back," he said. "well, i'm telling you to go back," said adela. "go back till she's had enough of you again--and then be turned out again." tom's face grew crimson. "at least," he said slowly, "she has never spoken to me like that." adela had left the table and taken an arm-chair near the fire. her back was to the door and her face towards tom; she held a fire-screen between her and him, letting the blaze burn her face. but tom, being unobservant, paid no attention to the position of the fire-screen. with a look of pain on his face, he took up his hat and rose to his feet. the meeting had been very different from what he had hoped. "when do you go?" she asked brusquely. "to-night. i'm just going back to my rooms for a bag, and then i shall go. i'm sorry you should--i'm sorry you don't think i'm doing right." "it doesn't matter two straws what i think," said adela behind the screen. "aye, but it does to me," said tom. she made no answer, and he stood for a moment, looking uneasily at the intruding fire-screen. "well, good-bye," he said. "good-bye." "i shall see you soon, i hope." "if maggie will let you come." "i don't know," said tom, "what pleasure you find in that. it seems to me that as a gentleman--to say nothing of my being their friend--i must go back." she made no retort to this, and he moved a step towards the door. then he turned and glanced at her. she had dropped the screen and her eyes were fixed on the fire. he sighed, frowned, shrugged his shoulders, turned, and made for the door again. in another second he would have been gone, but adela cried softly, "mr. loring." "yes," he answered, coming to a halt. "stay where you are a minute. will you stay there a minute?" "an hour if you like," said tom. "i just want to say that--that--you're coming nearer!--i want you to stay just where you are." tom halted. he had, in fact, been coming slowly towards her. "i suppose," said adela, in quite an indifferent tone, "that you'll settle down with the dennisons again?" "i don't know. yes; i suppose so." "do you," said adela, sinking far into the recesses of the arm-chair, and holding up the screen again, "like being there better than anywhere else? i suppose maggie is very charming?" "you know just what she is." "i'm sure i don't. i'm a woman." there was a long pause. tom felt absurd, standing there in the middle of the room. suddenly adela leapt to her feet. "oh, go away! yes, you're right to go back. oh, yes, you're quite right. good-bye, mr. loring." for a moment longer tom stood still; then he moved, not towards the door, but towards adela. when he spoke to her it was in a husky voice. there were no sweet seducing tones in his voice. "there's only one place in the world i really care to be," he said. she did not speak. "harry and mrs. dennison are my friends," he said, "and as long as my time's my own, i'll give it to them. but you don't suppose i go there for happiness?" "i don't suppose you ever did anything for happiness," said adela, as though she were advancing a heinous charge. "really, nothing makes me so impatient as an unselfish man." tom smiled, but his smile was still a nervous one. nevertheless he felt less absurd. a distant presage of triumph stole into his mind. "don't you want me to go?" he asked. "you may go wherever you like," said she. tom came still nearer. adela held out her hand and said "good-bye." tom took the hand and held it. "you see," he said, "i didn't think i had anywhere else to go. i did know a charming lady who was very witty and--very rich----!" "i--i'll put some more in omofaga and lose it. oh, you are stupid, tom! i really thought i should have to ask you myself, tom. i'd have done it sooner than let you go." it was not, happily, in the end necessary, and adela said with a sigh, "i believe that i've something to thank mr. ruston for, after all." "what's that?" "why, he made me resolved to marry the man who of all the world was most unlike him." "then i've something to thank him for too." "tom," she said, "i don't know what i said to you. i--i was jealous of maggie dennison." it was later by an hour when tom loring took his way, not to his rooms for a bag, but straight to curzon street. adela had consented not to wait ("in one's eleventh season one does not want to wait," she said), and tom considered that it was now hardly worth while to move. so he broke into harry dennison's study with a radiant face, crying, "harry, i'm not coming to you after all, old fellow." harry started up in dismay, but a short explanation turned his sorrow into rejoicing. again and again he shook tom's hand, telling him that the man who won a good wife won the greatest treasure earth could offer--and (he added) "by jove, tom, i believe the best chance of heaven too," and tom gripped harry's hand and cleared his own throat. then they both felt very much ashamed, and, by way of forgetting this deplorable outburst of emotion (which tom felt was quite un-english, and smacked indeed of mrs. cormack), agreed to go upstairs and announce the news to maggie. "she'll be delighted," said harry. tom followed him upstairs to the drawing-room. mrs. dennison was sitting by the fire, doing nothing. but she sprang up when they came in, and advanced to meet tom. he also felt like an ill-used subject as she gave him her hand and said, "how forgiving you are, tom!" he looked in her face, and found her smiling under sad eyes. and he muttered some confused words about "all that" not mattering "tuppence." and indeed mrs. dennison seemed content to take the same view, for she smiled again and said, "ah, well, there's an end of it, anyhow." then harry, who had been wondering why tom delayed his tidings, burst out with them, and tom added lamely, "yes, it's true, mrs. dennison. so you see i can't come." she laughed. "i must accept your excuse," she said, and added a few kind words. "as for adela," she went on, "she's never been to see me lately, but for your sake i'll be humble and go and see her to-morrow." harry, as though suddenly remembering, exclaimed that he must tell the children; in fact, he had an idea that a man liked to talk about his engagement to a woman alone, and plumed himself on getting out of the room with some dexterity. so tom and maggie dennison were left for a little while together. at first they talked of adela, but it was on tom's mind to say something else, and at last he contrived to give it utterance. "i can't tell you," he said, looking away from her, "how glad i was to get your message. this--this trouble--has been horrible. i know i behaved like a sulky fool. i was quite wrong. it's awfully good of you to forget it." "don't talk like that," she said in a low, slow voice. "how do you think harry's looking?" "oh, better than i have seen him for a long time. but you're not looking very blooming, mrs. dennison." she leant forward. "do you think he's happy, or is he worrying? he talks to you, you know." "i think he's happier than he's been for months." she lay back with a sigh. "i hope so," she said. "and you?" he asked, timidly yet urgently. it seemed useless to pretend complete ignorance, yet impossible to assert any knowledge. "oh, why talk about me? talk about adela." "i love adela," he said gravely, "as i've never loved any other woman. but when i was a young man and came here, you were very kind to me. and i--no, i'll go on now--i looked up to you, and thought you the--the grandest woman i knew; and to us young men you were a sort of queen. well, i haven't changed, mrs. dennison. i still think all that, and, if you ever want a friend to help you, or--or a servant to serve you, why, you can call on me." she sat silent while he spoke, gazing at the ground in front of her. tom grew bolder. "there was one thing i came to dieppe to do, but i hadn't the courage there. i wanted to tell you that harry--that harry was worthy of your love. i thought--well, i've gone further than i thought i could. you know; you must forgive me. if there's one thing in all the world that makes me feel all i ever felt for you, and more, it's to see him happy again, and you here trying to make him. because i know that, in a way, it's difficult." "do you know?" she asked. "yes, i know. and, because i know, i tell you that you're a wife any man might thank god for." mrs. dennison laughed; and tom started at the jarring sound. yet it was not a sound of mirth. "you had temptations most of us haven't--yes, and a nature most of us haven't. and here you are. so,"--he rose from his chair and took her hand that drooped beside her, and bent his head and kissed it--"though i love adela with all my heart, still i kiss your hand as your true and grateful servant, as i used to be in old days." tom stopped; he had said his say, and his voice had grown tremulous in the saying. yet he had done it; he had told her what he felt; and he prayed that it might comfort her in the trouble that had lined her forehead and made her eyes sad. mrs. dennison did not glance at him. for a moment she sat quite silent. then she said, "thanks, tom," and pressed his hand. then she suddenly sat up in her chair and held her hand out before her, and whispered to him words that he hardly heard. "if you knew," she said, "you wouldn't kiss it; you'd spit on it." tom stood, silently, suddenly, wretchedly conscious that he did not know what he ought to do. then he blurted out, "you'll stay with him?" "yes, i shall stay with him," she said, glancing up; and tom seemed to see in her eyes the picture of the long future that her words meant. and he went away with his joy eclipsed. chapter xxv. the moving car. in the month of june two years later, lord semingham sat on the terrace outside the drawing-room windows of his country house. by him sat adela loring, and tom was to be seen a hundred yards away, smoking a pipe, and talking to harry dennison. suddenly semingham, who had been reading the newspaper, broke into a laugh. "listen to this," said he. "it is true that the vote for the omofaga railway was carried, but a majority of ten is not a glorious victory, and there can be little doubt that the prestige of the government will suffer considerably by such a narrow escape from defeat, and by lord detchmore's ill-advised championship of mr. ruston's speculative schemes. why is the british government to pull the chestnuts out of the fire for mr. ruston? that is what we ask." lord semingham paused and added, "they may well ask. i don't know. do you?" "yesterday," observed adela, "i received a communication from you in your official capacity. it was not a pleasant letter, lord semingham." "i daresay not, madam," said semingham. "you told me that the board regretted to say that, owing to unforeseen hindrances, the work in omofaga had not advanced as rapidly as had been hoped, and that for the present it was considered advisable to devote all profits to the development of the company's territory. you added however, that you had the utmost confidence in mr. ruston's zeal and ability, and in the ultimate success of the company." "yes; that was the circular," said semingham. "that is, in fact, for some time likely to be the circular." they both laughed; then both grew grave, and sat silent side by side. the drawing-room window was thrown open, and lady semingham looked out. she held a letter in her hand. "oh, fancy, adela!" she cried. "such a terrible thing has happened. i've had a letter from marjory valentine--she's in awful grief, poor child." "why, what about?" cried adela. "poor young walter valentine has died of fever in omofaga. he caught it at fort imperial, and he was dead in a week. poor lady valentine! isn't it sad?" adela and semingham looked at one another. a moment ago they had jested on the sacrifices demanded by omofaga; semingham had seen in the division on the vote for the railway a delightful extravagant burlesque on a larger stage of the fatefulness which he had whimsically read into willie ruston's darling scheme. adela had fallen into his mood, adducing the circular as her evidence. they were taken at their word in grim earnest. omofaga claimed real tears, as though in conscious malice it had set itself to outplay them at their sport. "you don't say anything, alfred," complained little lady semingham from the window. "what is there to say?" asked he, spreading out his hands. "the only son of his mother, and she is a widow," whispered adela, gazing away over the sunny meadows. bessie semingham looked at the pair for an instant, vaguely dissatisfied with their want of demonstrativeness. there seemed, as alfred said, very little to say; it was so sad that there ought to have been more to say. but she could think of nothing herself, so, in her pretty little lisp, she repeated, "how sad for poor lady valentine!" and slowly shut the window. "he was a bright boy, with the makings of a man in him," said semingham. adela nodded, and for a long while neither spoke again. then semingham, with the air of a man who seeks relief from sad thoughts which cannot alter sadder facts, asked, "where are the dennisons?" "she went for a walk by herself, but i think she's come back and gone a stroll with tom and harry." as she spoke, she looked up and caught a puzzled look in semingham's eye. "yes," she went on in quick understanding. "i don't quite understand her either." "but what do you think?" he asked, in his insatiable curiosity that no other feeling could altogether master. "i don't want to think about it," said adela. "but, yes, i'll tell you, if you like. she isn't happy." "no. i could tell you that," said he. "but harry is happy. lord semingham, when i see her with him--her sweetness and kindness to him--i wonder." this time it was semingham who nodded silent assent. "and," said adela, with a glance of what seemed like defiance, "i pray." "you're a good woman, adela," said he. "he sees no change in her, or he sees a change that makes him love her more. surely, surely, some day, lord semingham----?" she broke off, leaving her hope unexpressed, but a faint smile on her face told of it. "it may be--some day," he said, as though he hardly hoped. then, with one of his quick retreats, he took refuge in asking, "are you happy with your husband, adela? i hope to goodness you are." "perfectly," she answered, with a bright passing smile. "but you get no dividends," he suggested, raising his brows. "no; no dividends," said she. "no more do you." "no; but we shall." "i suppose we shall." "he'll pull us through." "i wish he'd never been born," cried adela. "perhaps. since he has, i shall keep my eye on him." from the shrubbery at the side of the lawn, maggie dennison came out. she was leaning on her husband's arm, and tom loring walked with them. a minute later they had heard from adela the news of the ending of young sir walter's life and hopes. "good god!" cried harry dennison in grief. they sat down and began to talk sadly of the lost boy. only maggie dennison said nothing. her eyes were fixed on the sky, and she seemed hardly to hear. yet adela, stealing a glance at her, saw her clenched hand quiver. "do you remember," asked semingham, "how at dieppe bessie would have it that the little red crosses were tombstones? she was quite pleased with the idea." "yes; and how horrified the old baron was," said adela. "both he and walter gone!" mused harry dennison. "well, the omen is fulfilled now," said tom loring. "ruston need not fear for himself." harry dennison turned a sudden uneasy glance upon his wife. she looked up and met it with a calm sad smile. "he was a brave boy," she said. "mr. ruston will be very sorry." she rose and laid her hand on her husband's arm. "come, harry," she said, "we'll walk again." he rose and gave her his arm. she paused, glancing from one to the other of the group. "you mustn't think he won't be sorry," she said pleadingly. then she pressed her husband's arm and walked away with him. they passed again into the fringing shrubbery and were lost to view. tom loring did not go with them this time, but sat down by his wife's side. for a while no one spoke. then adela said softly, "she knows him better than we do. i suppose he will be sorry. will he be sorry for marjory too?" "if he thinks of her," said semingham. "yes--if he thinks of her." semingham lit a cigarette and watched the smoke curl skywards. "some of us are bruised," said he, "and some of us are broken." "not beyond cure?" adela beseeched, touching his arm. "god knows," said he with a shrug. "not beyond cure?" she said again, insisting. "i hope not, my dear," said tom loring gently. "bruised or broken--bruised or broken!" mused semingham, watching his smoke-rings. "but the car moves on, eh, adela?" "yes, the car moves on," said she. "and i don't know," said tom loring, "that i'd care to be the god who sits in it." * * * * * while maggie dennison walked with harry in the shrubbery, and the group on the terrace talked of the god in the car, on the other side of the world a man sat looking out of a window under a new-risen sun. presently his eyes dropped, and they fell on a wooden cross that stood below the window. a cheap wreath of artificial flowers decked it--a wreath one of ruston's company had carried over seas from the grave of his dead wife, and had brought out of his treasures to honour young sir walter's grave; because he and they all had loved the boy. and, as maggie dennison had said, ruston also was sorry. his eyes dwelt on the cross, while he seemed to hear again walter's merry laugh and confident ringing tones, and to see his brave, lithe figure as he sprang on his horse and cantered ahead of the party, eager for the road, or the sport, aye, or the fight. for a moment willie ruston's head fell, then he got up--the cross had sent his thoughts back to the far-off land he had left. he walked across the little square room to an iron-bound box; unlocking it, he searched amid a pile of papers and found a woman's letter. he began to read it, but, when he had read but half, he laid it gently down again among the papers and closed and locked the box. his face was white and set, his eyes gleamed as if in anger. suddenly he muttered to himself, "i loved that boy. i never thought of it killing him." and on thought of the boy came another, and for an instant the stern mouth quivered, and he half-turned towards the box again. then he jerked his head, muttering again; yet his face was softer, till a heavy frown grew upon it, and he pressed his hand for the shortest moment to his eyes. it was over--over, though it was to come again. treading heavily on the floor--there was no lightness left in his step--he reached the door, and found a dozen mounted men waiting for him, and a horse held for him. he looked round on the men; they were fine fellows, tall and stalwart, ready for anything. slowly a smile broke on his face, an unmirthful smile, that lasted but till he had said, "well, boys, we must teach these fellows a little lesson to-day." his followers laughed and joked, but none joined him where he rode at their head. the chief was a man to follow, not to ride with, they said, half in liking, half in dislike, wholly in trust and deference. yet in old days he had been good to ride with too. the car was moving on. maybe tom loring was not very wrong, when he said that he would not care to be the man who sat in it. the end. transcriber notes: passages in italics were indicated by _underscores_. small caps were replaced with all caps. throughout the document, the oe ligature was replaced with "oe". throughout the dialogues, there were words used to mimic accents of the speakers. those words were retained as-is. errors in punctuations and inconsistent hyphenation were not corrected unless otherwise noted. on page 57, a period was added after "mr". on page 67, "omafaga" was replaced with "omofaga". on page 109, "thats" was replaced with "that's". on page 238, "wathc" was replaced with "watch". on page 244, a single quotation mark was replaced with a double quotation mark. team from images provided by the million book project war-time financial problems by hartley withers works by hartley withers the business of finance. 6s. net. second impression. "he treats of the subject mainly in its relation to industry, and smooths the path for those who find the way rather thorny. timely and instructive."--_financial times_. our money and the state. 3s. 64 net. second impression. "it should be read at once by every taxpayer. mr. withers' latest book can be most heartily commended,"--_morning post_. stocks and shares. 6s. net. fifth impression. "it is a good book, it is sure of its public."--_morning post_. the meaning of money. 6s. net. eighteenth impression. "will supersede all other introductions to monetary science; a safe and indispensable guide through the mazes of the money market."--_financial news_. money changing. 5s. net. second impression. "mr. withers makes the topic interesting in spite of its obvious and irrepressible technicality. occasionally he renders it really amusing."--_financial news_. poverty and waste. 6s. net. third impression. "views its subject from the advantageous position of an impartial observer, the respective cases for capital and labour, rich and poor, being brought to the reader's attention in a convincingly logical manner."--_financial times_. war and lombard street. 6s. net. fourth impression. "nothing could be clearer or more enlightening for the general reader."--_the times_. international finance. 6s. net. third impression. "we heartily commend a timely work dealt with in popular and simple style, a standard financial work."--_morning post_. lombard street, 6s. net. third impression. a description of the money market, by walter bagehot. edited with a new preface by hartley withers. "there is no city man, however ripe his experience, who could not add to his knowledge from its pages."--_financial news_. "blest paper credit! last and best supply! that lends corruption lighter wings to fly: gold imp'd by thee, can compass hardest things, can pocket states, can fetch or carry kings; a single leaf shall waft an army o'er, or ship off senates to a distant shore; a leaf, like sibyl's, scatter to and fro our fates and fortunes, as the winds shall blow; pregnant with thousands flits the scrap unseen, and silent sells a king, or buys a queen." pope, _moral essays_. preface at a time when finance is of greater importance than ever before, it is hoped that this small volume may be of interest and value to the public, and help the application of war's lessons to the problems that face us in peace. the contents, with the exception of the last article on "money or goods?" (which appeared in the trade supplement of the _times_ for december, 1918), have already been published in _sperling's journal_, from september, 1917, to march, 1919; they have been left as they were written, except for a few verbal corrections. i desire to express my thanks to the editors of _sperling's journal_ and of the _times_ for their kind permission to reprint the articles. h. withers. june, 1919. contents i the outlook for capital the creation of capital--the inducement--war and capital ii london's financial position london after the war--a german view--the rocks ahead--our relative position secure--faulty finance--the strength we have shown--the nature and limits of american competition--no other likely rivals iii war finance as it might have been--i financial conditions in august, 1914--no scheme prepared to meet the possibility of war--a short struggle expected--the importance of finance as a weapon--labour's example--the economic problem of war--the advantages of direct taxation--the government follows the path of least resistance--the effect of currency inflation iv war finance as it might have been--ii the changed spirit of the country--a great opportunely thrown away--what taxation might have done--the perils of inflation--drifting stupidly along the line of least resistance--it is we who pay, not "posterity" v a levy on capital the objects of the levy--its origin and history--how it would work in practice--the attitude of the chancellor--the effects of the scheme in discouraging thrift--its fallacies and injustices--the insuperable obstacles to its application--its influence on production--one of the tests of a tax--judged by this test the proposed levy is doomed vi our banking machinery the recent amalgamations--will the provinces suffer?--consolidation not a new movement--the figures of the past three decades--reduction of competion not yet a danger--the alleged neglect of local interests--shall we ultimately have one huge banking monopoly?--the suggested repeal of the bank act--sir e. holden's proposal vii the companies acts another government committee--the fallacy of imitating germany--prussianising british commerce--the inquiry into the companies acts--will labour influence dominate the report?--increased production the great need--will it be met by tightening up the companies acts?--the dangers of too much strictness--some reforms necessary--publicity, education, higher ideals the only lasting solution--the importance of foreign investments--industry cannot take all risks and no profits viii the year's balance-sheet the figures of the national budget--a large increase in revenue and a larger in expenditure--comparison with last year and with the estimates--the proportion borne by taxation still too low--the folly of our policy of incessant borrowing--its injustice to the fighting men ix comparative war finance the new budget--our own and germany's balance-sheets--the enemy's difficulties--mr bonar law's optimism--special advantages which peace will bring to germany--a comparison with american finance--how much have we raised from revenue?--the value of the pound to-day--the 1918 budget an improvement on its predecessors--but direct taxation still too low--deductions from the chancellor's estimates x international currency an inopportune proposal--what is currency?--the primitive system of barter--the advantages possessed by the precious metals--gold as a standard of value--its failure to remain constant--currency and prices--the complication of other instruments of credit--no substitute for gold in sight--its acceptability not shaken by the war--a fluctuating standard not wholly disadvantageous--an international currency fatal to the task of reconstruction--stability and certainty the great needs xi bonus shares a deluge of bonus shares--the effect on the market--a problem in financial psychology--the capitalisation of reserves--the stock exchange view--the issue of bonus-carrying shares--the case of the a.b.c.--a wiser variation from canada--bonus shares on flotation--an american device--midwife or doctor?--the good and bad points of both systems xii state monopoly in banking bank fusions and the state--their effects on the bank of england--mr sidney webb's forecast--his views of the benefits of a bank monopoly--the contrast between german experts and british amateurs--bankers' charges as affected by fusions--the effects of monopoly without the fact--the "disinterested management" fallacy--the proposal to split banking functions--a picture of the state in control xiii foreign capital the difference between aims and acts--should foreign capital be allowed in british industry?--the supremacy of london and national trade--no need to fear german capital--we shall need all we can get--foreign shares in british companies--can and should the disclosure of foreign ownership be forced?--the difficulties of the problem--aliens and british shipping--the position of "key" industries--freedom to import and export capital our best policy xiv national guilds the present economic structure--its weaknesses and injustices--were things ever better?--the aim of state socialism--a rival theory--the new movement of guild socialism--its doctrines and assumptions--payment "as human beings"--the "degradation" of earning wages--production irrespective of demand--is that the real meaning of freedom?--the old evils under a new name--a conceivably practical scheme for some other world xv post-war finance taxation after the war--mr. hoare's scheme described and analysed--the position of the rentier--estimates of the post-war debt--the compulsory loan proposal--what advantages has it over a levy on capital?--the argument from social justice--questions still to be answered--the choice between a levy and stiff taxation--are we still a creditor nation?--our debt not a hopeless problem--suggestions for solving it xvi the currency report currency policy during the war--its disastrous medievalism--the report of the cunliffe committee--a blast of common sense--the condemnation of our war finance--inflation and the rise in prices--the figures of the present position--the break in the old relation between legal tender and gold--how to restore it--stop borrowing and reduce the floating debt--return to the old system--the committee's sane conservatism--a sound currency vital to national recovery xvii meeting the war bill the total war debt--what are our loans to the allies worth?--other uncertain items--the prospects of making germany pay--the right way to regard the debt--our capital largely intact--a reform of the income tax--the debt to america--the levy on capital and other schemes--the only real aids to recovery xviii the regulation of the currency macaulay on depreciated currency--its evils to-day--the plight of the rentier--mr goodenough's suggestion--sir edward holden's criticisms of the currency committee--his scheme of reform--two departments or one in the bank of england?--not a vital question--the ratio of notes to gold--objections to a hard-and-fast ratio--the limit on note issues--the federal reserve act and american optimism--currency and commercial paper--a central gold reserve with central control xix tightening the fetters of finance the new meaning of licence--the question of capital issues--text of the treasury regulations--their scope and effect--the position of the stock exchange--wider issues at stake--should capital be set free?--the arguments for and against--perils of an excessive caution--the new committee and its terms of reference--the absurdity of prohibiting share-splitting--the storm in the house of commons--disappearance of the retrospective clause--a sample of bureaucratic stupidity xx money or goods? "boundless wealth"--money and the volume of trade--the quantity theory--the gold standard--how is the volume of paper to be regulated?--mr kitson's ideal index war-time financial problems i the outlook for capital _september_, 1917 the creation of capital--the inducement--war and capital one of the questions that are now most keenly agitating the minds of the investing public and of financiers who cater for its wants, and also of employers and organisers of industry who are trying to see their way into after-the-war conditions, is that of the supply of capital. on this subject there are two contradictory theories: one considers that owing to the destruction of capital during the war, capital will be for many years at a famine price; the other, that owing to the exhaustion of all the warring powers, that is, of the greater part of the civilised world, the spirit of enterprise will be almost dead, the demand for capital will be extremely limited, and consequently the supply of it on offer will go begging to find a user. it seems likely that, as usual, the truth lies somewhere between these two extreme views; but we shall best answer the question if we first get a clear idea of what we mean by capital. on the subject of the definition of capital, economists differ with all the consistency that they only show in differing. one of the earliest descriptions of capital was given by turgot, who thought that capital meant "valeurs accumulées." in this wide sense the word covers all goods which have value, that is, can be exchanged into other goods. from this point of view, the schoolboy who invests sixpence in marbles is a capitalist, because he has bought an asset which is not immediately consumed, but can, later on, if his fancy urges him, be exchanged into white mice or any other object of his desire. on the other hand, the schoolfellow who at the same time spends sixpence on cherries and eats them has put his money into immediate consumption, his asset is digested, and he has no capital in any sense of the word. later, the definition was narrowed by john stuart mill, for instance, into the sense of wealth set aside to increase production. from this point of view capital practically means the equipment and tools of industry in the widest sense of the word, including agriculture and transport. lately economists have shown a tendency to go back to the wider application of the word, and an american economist, dr anderson, who has just published a book on the value of money, goes so far therein as to state that a "dollar is capital." the language of the city generally uses the word in the narrow sense adopted by mill, and there is very much to be said for this view of the real meaning of capital. marbles to play with, houses to live in, motor-cars to go joy-riding in--all these are assets which can be disposed of, and so, in a sense, may be called capital. but the businesslike meaning of the word is the tools and equipment of industry, because it is only by their possession that the wealth of mankind not only increases man's present enjoyment, but enhances his future output of the goods necessary for his existence. if we take the word in this sense it becomes at once apparent that the theory is exaggerated which maintains that war is destroying capital, so that capital will long be at a famine price. the extent to which war is actually destroying the tools and equipment of industry is quite limited. on the actual battlefield that sort of destruction proceeds apace when factories are shelled into shapeless lumps of bricks, and when the surface of the earth, that man's skill had developed into great productive fertility, is torn into craters and covered with rubbish. there is also rapid destruction of a very important part of the equipment of industry owing to the submarine campaign, which is sinking so many fine ships that were meant to carry goods from one country to another. but, apart from this actual destruction on the battlefield and on the sea, the tools and equipment of industry over the greater part of the earth remain untouched. it is true that, owing to the preoccupations of the war, not so much work as usual is being put into the upkeep and repair of our railways, factories and other industrial tools. but at the same time an enormous amount of new machinery is being created for the manufacture of munitions and other stuff needed for the war, and a large part of this new machinery ought to be available as industrial capital when the war is over. those people who talk so glibly of the enormous destruction of capital by the war are surely making a mistake common to minds which look at economic questions through a financial telescope, mistaking money for capital. they see that an enormous amount of money is being spent on the war, and they jump to the conclusion that this money, if not spent upon the war, would have been put into capital investments and so have increased the tools and equipment of industry. in fact, a great deal of the money now spent upon the war would have been spent, if there had been no war, not upon increasing the equipment of production, but upon purely frivolous and extravagant consumption. there is no need to dwell on the effect of war in reducing many kinds of expenditure on which hundreds of millions must have gone in peace time, and this restriction of extravagant consumption has to be deducted before we even admit, not that all money spent upon the war is destroyed capital, but even that all the money spent upon the war is destroying what might otherwise have become capital. if, then, it is true that the war is not making a very terribly substantial inroad upon the mass of existing capital, how is it going to affect the supply of capital in the future? to answer this question we have to see how capital is created. the answer to this question is very simple, very obvious, and very dull. capital can only be created by saving. saving is such an entirely unpopular virtue that it seems at first sight a disastrous conclusion to arrive at, that if we want to increase the supply of capital it can only be done by stimulating this unattractive habit; and there is a further question to be asked--whether it will be necessary or desirable to have a great increase in the supply of capital. as was pointed out above, one theory of after-war needs maintains that the world will be so exhausted by this great struggle that it will have no enterprise and no energy left, and that capital will go begging. if this be so, we need not trouble to inquire as to whether the supply of capital can be made plentiful. but i venture to think that this view is very probably wrong, though it is very dangerous to prophesy concerning the purely psychological question of the state of mind in which the citizens of the warring powers will end the war. it is, however, at least probable that the prices which are then likely to rule will stimulate enterprise all over the world; that every one will see that there is a great work to be done in getting industry back on to a peace basis, and a great profit to be made by those who do this work most successfully, and that the demand for capital is likely, for some years at least, to clamour for all that can be produced. to go back, then, to the statement that only by saving can capital be created. the man who saves, instead of spending money on his own enjoyment, hands it over to some company or government to be spent on some industrial or national purpose. when it is put into industry it builds a factory or a ship or a railway or a canal, or clears a wilderness for cultivation, or does one of the innumerable other things which are necessary for the production and transport of the goods which mankind enjoys. and it is only by this process of handing over buying power, instead of using it for our own amusement and enjoyment, to others who will use it for furthering production that the tools and equipment of industry can be multiplied. something can be done by banks and financiers in supplying credit in the form of advances and acceptances; but this method is only like oiling the wheel of industry, the real driving power of which has to be saved capital. creating credits simply means that a certain amount of buying power is manufactured and handed over to those to whom the credit is given. it does not set free any labour or goods to be put into industry. that is only done by the man who abstains from consumption and saves money by restraining his desire to spend it on himself, and puts it at the disposal of industry. the man who saves money, who has always hitherto been rather despised by his companions and resented by a certain class of social reformer and many other uneducated people as a capitalist bloodsucker, is thus, in fact, the person who leaves the world richer than he found it, having put his money, the product of his own work, into increasing the world's output, instead of spending it on such forms of enjoyment as heavy lunches and cinema shows. the man who does this beneficent work, increasing mankind's output of goods, and providing employment as long as the factory or railway that he helps to build is running, is induced to do so, as a rule, by the purely selfish motive of providing for his old age or for those who come after him by earning the rate of interest that is paid to him for his capital. what is this rate of interest going to be, and how much effect does it have upon the creation of capital? some people argue that a low rate of interest makes people save more because it is necessary for them to save more in order to acquire independence. others maintain that a high rate of interest induces people to save because they can see the direct advantage of doing so. both these arguments are probably true in some cases. but, as a rule, people who have the instinct of saving will save, within certain limits, whatever the rate of interest may be. when the rate of interest is low they will certainly not reduce their saving because each hundred pounds that they put away brings them in comparatively little, and when the rate of interest is high the attraction of the high rate will also deter them from diminishing the amount that they put aside. moreover, we have to consider, not only the money payment involved by the rate of interest, but its buying power in goods. in 1896 trustee securities could only be bought to return a yield of 2-1/2 per cent. for the buyer; now the investor can get 5-1/4 per cent. and more from the british government. and yet the power that this 5-1/4 gives him over the goods and services that he wants for his comfort is probably not greater, and very likely rather less, than the power which he got in 1896 from his 2-1/2 per cent. one of the few facts which seem to stand out clearly from a study of the movement of the prices of securities, and consequently of the rate of interest to be derived from them, is that the rate of interest is high when the price of commodities is high, and vice versa. so that the answer to the question: what is the rate of interest likely to be after the war? may be given, in quaker fashion, by another question: what will happen to the index number of the prices of commodities? it seems fairly probable that both these questions may be answered, very tentatively and diffidently, by the expression of a hope that after a time, when peace conditions have settled down and all the merchant ships of the world have been restored to their peaceful occupations, the general level of the price of commodities will be materially lower than it is now, though probably considerably higher than it was before the war. if this be so, then it is fairly safe to expect that the rate of interest, as expressed in money, will follow the movement of prices of goods. but it must be remembered that by rate of interest i mean the pure rate of interest, that is to say, the rate earned on perpetual fixed-charge securities of the highest class. it may be that, owing to the very large amount of gilt-edged securities created in the course of the war by the various warring governments, the rate of profit to be earned by the man who takes the risks of industry from dividends on ordinary shares and stocks will have to be made relatively more attractive than it was before the war. if, then, capital can only be created by saving, how far will the war have helped towards its more plentiful production? here, again, we are faced with a psychological question which can only be answered by those who are bold enough to forecast the state of mind in which the majority of people will find themselves when the war is over. if there is a great reaction, and everybody's one desire is to throw this nightmare of war off their chests and go back to the times as they were before it happened, then all that the war has taught us about the production of capital will have been wasted. but i rather doubt whether this will be so. saving merely means the diversion of a certain proportion of the output of industry into the further equipment of industry. the war has taught us lessons which, if we use them aright, will help us to increase enormously the output of industry. so that if these lessons are used aright, and industry does not waste its time in squabbles over the sharing of its product, its output may be so great that a comparatively smaller amount of saving in relation to the total output may produce a larger amount of capital than was made available in days before the war. there is a further point, that the war has taught a great many people who never saved at all to save a good deal. it was estimated before the war that we in this country were saving about four hundred millions a year. this figure was necessarily a guess, and must be taken for what it is worth. there can be no doubt that the amount of real saving now in progress, voluntary, owing to the patriotic effort of people who think they ought to restrict their own consumption so that the needs of our fighters may be provided, and enforced through the action of the government in taking taxes and inflating the currency, is very much greater than it was before the war; probably at least twice as much when all allowance has been made for depreciation of the currency. some people think that this saving lesson will have been learned, will have become a habit, will continue and will grow. if so, if people save a larger proportion of their income than they did before, and if the total output of goods is increased, as it easily may be, it becomes at once evident that there is a possibility of a freer supply of capital for industry than has ever been seen. but in looking at this hopeful and optimistic picture, we must never forget that it can only be painted by those who are prepared to leave out of the canvas all the danger of industrial strife and dislocation, and all the danger of reaction to the old habits of luxurious spending which are so strong a possibility in the other direction. the war has shown us how we can, if we like, increase production, reduce consumption, and so have a larger margin than ever before to be put into providing capital for industry. whether we really have learned these lessons and will apply them remains to be seen. there is also a possibility that some people may recognise that saving money and applying it to the re-equipment of the world for peace industry is a patriotically praiseworthy object not less than saving in time of war for the equipment of the army. it may be that the benefit conferred by those who save, in increasing the output of mankind, will be more generally recognised, and that the supply of capital may, when the war is over, be increased on patriotic grounds, or on grounds even wider than mere patriotism--a desire to help a great stride forward in the material welfare of mankind. capital is a very tender plant, and it will be very easy, if mistakes are made, to frighten those who see the benefits of accumulation for themselves and others. labour troubles and industrial unrest are extremely likely to have the effect of destroying capital by preventing it coming into existence. if we remember that capital can only be created by being saved, it becomes evident that if those who save are threatened with too deep an inroad into their reward for so doing, on the part of labour, they will hesitate to save; and if the action of labour has this effect, labour will be sawing off the bough on which it sits. for it is new capital that sets new industry going, and it is only by a continual supply of new industry that a continual demand for fresh labour can be maintained. there is also at present much mischievous talk about a great tax on capital for the purpose of redeeming, or hastening the redemption of, war debt. it is clear at once that it is not possible to tax capital if we remember that capital consists of the tools and equipment of industry, or even, in the wider sense of the word, of accumulated assets which have not been consumed. unless the government is prepared to take payment in factory chimneys, railway sleepers, houses and fields, or the securities and mortgages that are claims on their product, it is not possible to tax capital. the only thing that the government can tax is the output, that is to say, the annual income of the people. in other words, a tax on capital is simply a form of income tax assessed, not according to a man's income, but according to the assets of which he is possessed. the effect of such a tax would be that he who has spent everything that he has earned on his own enjoyment would go scot free in the matter of the capital tax, and would be rewarded for his improvidence by being asked to make no sacrifice; while his thrifty brother who, out of a smaller income, has set aside a certain proportion during the last twenty or thirty years, would have to hand over a portion of his current income assessed upon the value of the assets into which he has put his savings. incidentally, it may be remarked that it would take years to make this necessary valuation, and that it would probably be done in a very inequitable manner by untrained and incompetent officials. but the important point is this, that if the government shows a tendency to take the possession of assets as a basis for taxation it will be directly encouraging those who spend their whole income in riotous living and frivolous amusement, and discouraging those who help to increase mankind's output by adding to the capital available. finally, it may be added that the shyness of the saver will be greatly diminished if he can feel that there is a trustworthy machinery of company promotion, so that he can rely on any savings that he puts into industry having at least a fair chance of yielding him a fair reward. this subject is too vast to enter into at present, but it is one to which those who are responsible for the management of our financial affairs cannot give too much attention. every time the real investor is swindled out of his money there is more than a chance that he will look upon all forms of saving as a folly to be left to the credulous. it is easy to say that it was his own fault, that he ought to have been more careful, or consulted a better broker; but he will, with equal ease, retort that if honest financiers knew their business better, they would have long ago made things easier for the ignorant investor to know whether he was putting his money into genuine enterprise or throwing it down a sink. like all other divagations on the subject of what may happen in the future, this attempt to forecast has necessarily consisted of "dim glimpses into the obvious," as the undergraduate said of jowett's sermon. all that we can be sure of is this: that if the great opportunities that will lie open to mankind at the end of the war are rightly used, if we use its lessons to increase our production, restrict our frivolous consumption, and put a larger proportion of our larger production into stimulating production still further, there ought to be a great increase in the amount of capital available to supply the great increase which may be expected in the amount of capital demanded. the fact that the chief nations of the world will have enormous debts on which to pay interest is not one that need necessarily terrify us from this point of view. the arranging and imposition of the taxation necessary for meeting the interest on these debts will involve very serious political and social questions; but the payment of this interest need not necessarily diminish production, and it may probably help in checking consumption. it will not impair the total wealth of the world as a whole; it will merely affect its distribution. and since it will mean that a considerable part of the world's output will, for this reason, be handed over to the holders of the various government debts, who, _ex hypothesi_, will be people who have saved money in the past, it is at least possible that they may devote a considerable amount of the spin so received to further saving or increasing the supply of capital available. ii london's financial position _october_, 1917 london after the war--a german view--the rocks ahead--our relative position secure--faulty finance--the strength we have shown--the nature and limits of american competition--no other likely rivals. will the prestige of the london money market be maintained when the war is over? this is a question of enormous importance, not only to every one who works in and about the city, but to all who are interested in the maintenance and increase of england's wealth. like all other questions about what is going to happen some day, the answer to it will depend to a very great extent on what happens between the present moment and the return of peace. to arrive at an answer we have first to consider on what london's financial prestige has been based in the past, and on this subject we are able to cite in evidence the opinion of an enemy. our own views about the reasons which gave us financial eminence may well be coloured by national and patriotic prejudice, but when we take the opinion of a german we may be pretty sure that it is not warped by any predisposition in favour of english character and achievement. a little book published this year by messrs. macmillan and co., entitled "england's financial supremacy," contains a translation of a series of articles from the _frankfurter zeitung_, and from this witness we are able to get some information which may be valuable, and is certainly interesting. the basis of england's financial supremacy is recapitulated as follows by this devil's advocate:-"the influence of history, a mighty empire, a cosmopolitan stock exchange, intimate business connections throughout the whole world, cheap money, a free gold market, steady exchanges, an almost unlimited market for capital and an excellent credit system, an elastic system of company legislation, a model insurance organisation and the help of germans, these are the factors that have created england's financial supremacy. perhaps we have omitted one other factor, the errors and omissions of other nations." coming closer to detail, our critic says, with regard to the international nature of the business done on the london stock exchange:-"in recent years london had almost lost its place as the busiest stock market in the world. new york, as a rule, berlin on many occasions, could show more dealings than london. but there was no denying the international character of its business. this was due to england's position of company promoter and money lender to the world; to the way in which new capital was issued there; to its stock exchange rules, so independent of legislative and treasury interference; to the international character of its stock exchange members, and to the cosmopolitan character of its clients," on the subject of our insurance business and the fair-mindedness and quickness of settlement with which it was conducted, we can cite the same witness as follows:-"insurance, again, represented by the well-known organisation of lloyds, which in form is something between a stock exchange and a co-operative partnership, is nowhere more elastic and adaptable than in london. it must be said, to the credit of lloyds, that anyone asking to be insured there was never hindered by bureaucratic restrictions, and always found his wishes met to the furthest possible extent. the agencies of lloyds abroad are also so arranged that both the insured and the insurer can have their claims settled quickly and equitably." but one of the most remarkable tributes to a quality with which englishmen are seldom credited, and one of the frankest confessions of a complete absence of this quality in our german rivals, is contained in the following passage:-"a further bad habit, harmful to our economic development, is narrow-mindedness. this, too, is very prevalent in germany--and elsewhere as well. and this is not surprising. even among the generation which is active to-day, the older members grew up at a time when possibilities of development were restricted and environment was narrow. with commendable foresight many of these older men have freed themselves from this petty spirit, and are second to none in enterprise and energy. germany can be as proud of its 'captains of industry' as america itself. but many commercial circles in germany are still unable to free themselves from these shackles. the relations between buyer and seller are still often disturbed by petty quibbling. in those industries where cartels and syndicates have not yet been formed, too great a rôle is played by dubious practices of many kinds, by infringements of payment stipulations, by unjustifiable deductions, etc., while, on the other hand, the cartels are often too ruthless in their action. in this field we have very much to learn from the english business man. long commercial tradition and international business experience have taught him long ago that broad-mindedness is the best business principle. look at the english form of contract, the methods of insurance companies, the settlement of business disputes! you will find no narrow-mindedness there. tolerance, another quality which the german lacks, has been of great practical advantage to the englishman. until recently the city has never resented the settlement of foreigners, who were soon able to win positions of importance there. can one imagine that in berlin an italian or a south american, with very little knowledge of the german language, would be not only entrusted with the management of leading banks and companies, but would be allowed in german clubs to lay down--in their faulty german--the law as to the way in which germany should be developed? impossible! yet this could be seen again and again in england, and the country gained greatly by it. if the english have now developed a hatred of the foreigner, it only means that the end of england's supremacy is all the nearer." according to our german critic the great fabric that has been built up on these characteristics and qualities is threatened with ruin by the war; and the heritage which we are supposed to be losing is to fall, by some process which is not made very clear, largely into the hands of berlin. in order that we may not be accused of taking the laudatory plums out of this german pudding and leaving out all criticisms and accusations, let us quote in full the passage in which he dances in anticipation on london's corpse:-"let us sum up. england's reputation for honest business dealing and for trustworthy administration has suffered. her insular inviolability has been put in question. the ravages of war have undermined the achievements of many generations. her free gold market has broken down. the flow of capital towards london will fall off, for those who cannot borrow there will no longer send deposits. the surplus shown in her balance-sheet will contract. foreign trade will also decrease. hand in hand with this fall, free trade, that mighty agent in the development of england's supremacy, will, in all probability, give place to protection. stock exchange business will grow less. rates of interest will be permanently higher." how much truth is there in all this? has our reputation for honest dealing and for trustworthy administration suffered? surely not in the eyes of any reasonable and unprejudiced observer. in the course of the greatest war in history, fought by germany with weapons which have involved the violation of the most sacred laws of humanity and civilisation, england has acted with a respect for the interests of neutrals which has been severely criticised by impatient observers at home. as for our "insular inviolability" having been put in question, it certainly has not, so far, suffered any serious damage. our fleet has defended us from invasion with complete success, and the damage done by marine and aerial raiders to our property on shore is negligible. our free gold market is said to have broken down. the proof of the pudding is in the eating. germany, when the war began, immediately relieved the reichsbank from any obligation of meeting its notes in gold, and frankly went on to a paper basis. england has already shipped well over 200 millions in gold to america to finance her purchases there and those of her allies. it may be true that capital will not flow to london if london is not in a position to lend, but we see no reason why london should not be able to resume her position as an international money lender, not perhaps immediately on the declaration of peace, but as soon as the aftermath of war has been cleared away and the first few months of difficulty and danger have been passed. the prophecy that foreign trade will decrease may also be true for a time owing to the destruction of merchant shipping that the war is causing. this possibility, however, may be remedied between now and the end of the war if the great programmes of merchant shipbuilding which have been undertaken by the british and american governments are duly carried out. in any case, even if foreign trade decreases, there is no reason whatever to expect that england's will decrease faster than that of other nations. in all these problems we have to look for the relative answer and to consider not whether england has suffered by the war, for it is most obvious that she has, but whether she will have been found to have suffered more than any competitor who may threaten her after-war position. "free trade," says our german jeremiah, "that mighty agent in the development of england's supremacy, will, in all probability, give place to protection." we venture to think that it will be recognised that the free trade policy of the past gave us a well-distributed wealth which was an invaluable weapon in time of war, and that any attempt to impose import duties when peace comes will be admitted, even by the most ardent tariff reformers, as untimely when there is likely to be a world-wide scramble for food and raw materials, and the one object of every nation will be to get them wherever they can and as cheaply as they can. if stock exchange business will be less, though this does not by any means follow, there is no reason why it should be relatively less here than in other centres. as to rates of interest being permanently higher, the same answer applies. it may be true, but there is no reason why they should be relatively higher in london than elsewhere; and, if they are high, it will be because there will be a great demand for capital, which will mean a great trade expansion; both in the provision of capital and in meeting the demands of trade expansion england will be doing what she has done with marked success in the past and can, if she works in the right way now and after the war, do again with equal and still greater success. there is, however, a danger that threatens our financial position after the war, on the subject of which our german critic is discreetly silent, because that danger threatens the position of germany very much more emphatically. it consists in the way in which our government is at present meeting the needs of war finance, not by compelling economy on the civilian population through taxation and borrowing direct from investors, but by manufacturing currency for the purposes of the war by means of the printing press and the banking machinery. the effect of this policy is seen in the enormous mass of treasury notes with which the country has been flooded. their total is now nearly 180 millions or perhaps 100 millions more than the gold which they were originally designed to replace. it is also to be seen in the great increase in banking deposits which has been a feature of our financial history since the war began. some people regard this feature as a phenomenal proof of the growth of our wealth during the war. i am afraid there is little foundation for this pleasant assumption, for these new deposits have been called into being by the banks subscribing to government securities, whether war loan, treasury bills, exchequer bonds or ways and means advances or lending their customers the wherewithal to do so. by this process the balance-sheets of the banks are swollen on both sides, by the government securities and advances to customers among the assets, against which the banks create new deposits, so giving the community as a whole the right to draw more cheques. every time the bank makes an advance it gives the borrower a credit in its books, that is to say, the right to draw cheques to that amount; the borrower draws on the credit and hands it to any one to whom he owes money; but as long as the advance is outstanding there will be a deposit out against it in the books of some bank or another. it is an easy way for the government to finance the war by getting the banks to manufacture money for it. nobody feels any poorer for the process, in fact, those who have new money in their pockets or in their bank balance feel richer, but the result of thus multiplying currency without any increase in the supply of goods and services to be bought inevitably helps the rise in prices which makes the war costly, puts the burden of it on to the wrong shoulders, and likewise cheapens the value of the english pound as measured in other currencies. this is why the evils involved by this process become so relevant to the question now at issue. if the government is allowed to go on financing the war by increasing the currency with the very reluctant help of the bankers, the difficulties of maintaining our gold standard and keeping the exchanges in favour of london will be very greatly magnified when the war is over and our gold reserves are no longer protected by the submarines and the high cost of shipping gold that they produce. it therefore follows that all who have the true interests of the city at heart should use all the influence they can to force the government to adopt a sounder financial policy before it is too late. it is true that our war finance has hitherto been sounder than that of any other warring power, but it has fallen very short if we apply the rough test of the proportion of the cost of war borne out of taxation and compare our performance with the results achieved by our ancestors in the napoleonic and crimean wars. if we have done better than france, italy, russia and germany in this respect, it must also be remembered that the financial prestige which these countries had to maintain was not nearly so great and well established as ours, with the possible exception of france; and france, being exposed to the ravages of a ruthless invader, was in a position which put special obstacles in the way of the canons of sound finance. if, then, there are certain dangers that threaten our financial position when the war is over, we must remember, on the other hand, that the war has already done a great deal to maintain our financial prestige and raise it to a height at which it never stood before. when the war began we were expected to finance the allies, to keep the seas clear and put a small expeditionary force to support the left flank of the french army, and to do these things during a contest which was expected by the consensus of expert opinion to last not more than a few months. all these things we accomplished, and we were the only power at war which did actually accomplish all that it was expected and asked to do. more than that, we also undertook a great task which was not in our programme; we created a great army on a continental scale, and, at the same time, continued to carry out the other tasks which had been assigned to us. all these things we did, and that we should have done them was evidence of economic strength and adaptability which have astonished the world. to have financed the allies and ourselves as long as we did would have been comparatively easy if our population could have been left at work to turn out the stuff and services, the provision of which are implied by financing; but for us to have been able to do it and at the same time to improvise an army which is now consistently and regularly beating the germans is an achievement which will inevitably raise the world's opinion of our economic strength, on which financial prestige is ultimately based. but, as it has been said, in discussing this question we have to look at it all the time from the relative point of view. how will our prestige be when the war is over, not as compared with what it was before the war, but as compared with what any other rival in any other part of the world can show? here we have to acknowledge at once, freely and frankly, that, as compared with new york, we shall have gone backward. america will have been enormously enriched by the war, which we shall certainly have not. america will have been opening up channels of international trade and international finance, and so new york will have been gaining at the expense of london. it is certain that when the war is over america's dependence upon london for credits against the shipments of goods to and from her shores will have been very greatly lessened, if not altogether a thing of the past. this change would have happened any way, war or no war, but it has been greatly quickened by the war. before the war america was already making arrangements, under her new banking system, to promote the machinery for acceptance and discount, in order that goods sent to her from foreign countries should be financed by bills drawn on american banks and houses in dollars instead of on english banks and houses in sterling. apart from this development, which would have happened in any case, it remains to be seen how far new york will be in a position to act as a rival of london as the world's financial centre. the internal resources and potentialities of america are so enormous, and there is such a vast amount of work to be done in developing them and bringing them to full fruition, that it does not at all follow that america will yet be inclined to take the position in international trade and finance which will one day surely be hers, when she has done all the work that is waiting to be done in her own back premises. america has a new banking and monetary system on trial which has met the difficult problems of the war with great success. these problems, however, are not nearly as complicated and various as those which are likely to arise in time of peace. when a nation is turning out an enormous amount of goods for which the rest of the world is prepared to pay any price, her finance is a comparatively simple business. even now, when america has assumed the duty of financing a large number of allies impoverished by three years of war which have been enriching her, she is still simplifying the problem by restricting her advances to the payment for goods bought in america. that new york will be greatly strengthened by the war, which has brought masses of american securities back to the country of origin and has put into the hands of american bankers and investors large blocks of european promises to pay, is as clear as noonday; but whether when the war is over new york will care to be bothered much with problems of international finance remains to be seen. in the first place, the claims of her own country upon her financial resources will be insatiable and imperative, in the second place, the business of international finance is carried out on very finely cut terms; and the americans being accustomed to the fat rates of profit which business at home has given them may not care to devote much attention to the international market, in which the risks are big, the turnover is enormous and the profits very finely cut. it has been remarked by a shrewd observer that the americans will never do business for a thirty-second. in the third place, it must be remembered that the geographical position of london is more favourable than that of new york as a world centre, as the world is at present constituted. england, anchored off the coast of europe, is clearly marked as the depôt for the entrepôt trade of the old and new worlds. new york is clearly marked as the centre for the trade of the western hemisphere, and it is likely enough that new york and london, acting together as the financial chiefs of the two hemispheres, may be gradually united into what is practically one market by the growing ties of mutual interest. with regard to the position of other possible rivals to london's position, it need only be said that they have certainly been weakened much more rapidly than has london during the course of the war. paris, threatened by the near approach of an invading foe, has inevitably suffered much more severely than london, and is likely to take longer in recovering the great position as a provider of capital which was given to her by the thrift of the average french citizen. every one expects with confidence to see, when the war is over, a miraculous recovery in france produced by the same spirit which worked miracles after the war of 1871, aided and abetted by the subsequent improvement in man's control over the forces of nature, and also by the deep and world-wide sympathy which all will feel for france as the champion of freedom who has suffered most severely in its cause during the war. but it is impossible to expect, after what france has suffered, that she will be, for some time, in a position seriously to challenge london as a financial rival. all englishmen will hope that the day when she will be in a position to challenge us again will come quickly. as to berlin, the only other possible rival to london in europe, very little need be said. the german authority quoted above has already shown some of the difficulties with which berlin has to struggle. he spoke of the narrow-mindedness of german finance, of the "petty quibbling" which often disturbs the relations between buyer and seller, of the "dubious practices of many kinds, infringements of payment stipulations, unjustifiable deductions," etc., and the "ruthless" action of the cartels. he acknowledges that though germany had a gold standard "too much anxiety used to be shown when the gold export point was reached," and that "it was also feared that to export gold would incur the wrath of the reichsbank." with these disadvantages to struggle against, quoted from the mouth of a german observer, germany has also succeeded by her ruthless policy during the war in earning the deep hostility of the greater part of mankind. sentiment probably enters into business relations a good deal more than most business men admit, and for any country to set out to gain the leadership in trade and finance by outraging the feelings of most of its possible customers is an extraordinary piece of stupidity. it seems, then, that apart from the relative weakening of london as compared with new york, there is very little need for us to fear any serious change in england's financial position after the war as long as the government's faulty finance is not allowed too seriously to endanger the position of our gold standard. it is true that we shall not benefit, as much as we undoubtedly have in the past, from the "help of germans" in developing our finance. but indirectly the germans will still be helping us by the great stimulus that the war will have given us towards efficiency and hard work. what we have to do in order to secure london's position after the war is to restore as soon as we can the system that had established it in the century before the war. we have to show the world that, far from any intention to abandon free trade, we mean to take a long step forward along the line of international activity which has been the source of our greatness in the past. we want, as soon as possible, to get back that freedom from government control which has given us such elasticity and adaptability to our money market, our stock exchange and our insurance business. a certain amount of government control will inevitably have to continue for a time after the war, but the sooner we rid ourselves of it the sooner we shall restore to the london money market those qualities which, after the reputation that it has for honesty, soundness and straight dealing, were most helpful in building up its eminence. above all, we have to work hard both in finance and industry and commerce. finance, which is the machinery for handling claims for goods and services, can only be active and effective if industry and commerce are active and effective behind it, turning out the goods and services to meet the claims that finance creates. a great industrial and commercial output, with severe restriction of unnecessary consumption so that a great margin may go into capital equipment, will soon repair the ravages of war, bring down the price of credit and of capital and make london once more the place in which these things are most cheaply and freely to be bought. finally, if we want to restore london as a place in which all the financial transactions of the world were centred, we must remember that we cannot do so if we restrict the facilities given to foreigners to come here and settle and do business. it is not possible to be an international centre with an insular sentiment. iii war finance as it might have been--i _november_, 1917 financial conditions in august, 1914--no scheme prepared to meet the possibility of war--a short struggle expected--the importance of finance as a weapon--labour's example--the economic problem of war--the advantages of direct taxation--the government follows the path of least resistance--the effect of currency inflation. a legend current in the city says that the imperial war committee, or whatever was the august body entrusted with the task of thinking out war problems beforehand, had done its work with regard to the army and navy, transport and provision, and everything else that we should want for the war, and were going on to the question of finance next week, when the war intervened. whatever may be the truth of this story, the events of the war confirm the opinion that if it was not true it ought to have been. we are continually accused of not having been ready for the war; but, in fact, we were quite ready to do everything that we had promised to do with regard to military and naval operations. our navy was ready in its place in the fighting line, and the dispatch with which our expeditionary force was collected from all parts of the kingdom, and shipped across to france, was a miracle of efficiency and practical organisation. it is true that we had not got an army on a continental scale, but it was no part of our contract that we should have one. the fighting on land was in those days expected to be done by our allies, assisted by a small british force on the left flank of the french army. that british force was duly there, and circumstances which were quite unforeseen made it necessary for us to undertake a task which was no part of our original programme and create an army on a continental scale, in addition to doing everything that we had promised beforehand to a much greater extent than was in the bargain. but in finance there was no evidence that any thought-out policy had been arrived at in order to make the best possible use of the nation's economic resources for the war when it came. the acute crisis in the city which occurred in august, 1914, was a minor matter which hardly affected the subsequent history of our war finance except by giving dangerous evidence of the ease by which financial problems can be apparently surmounted by the simple method of creating banking credits. that crisis merely arose from the fact that we were so strong financially, and had so great a hold upon the finance of other countries in the world, that when we decided, owing to stress of war, to leave off lending to foreigners and to call in loans that we had made by way of accepting and bill-discounting arrangements, the whole machinery of exchange broke down because from all over the world the market in exchange went one way. everybody wanted to buy bills on london, and there were no bills to be had. there was also the internal problem which arose because some of the public and some of the banks took to the evil practice of hoarding gold just at the wrong moment, and consequently there was no available supply of legal tender currency except in the shape of bank of england notes, the smallest denomination of which is £5. it is known that our bankers had long before pointed out to the treasury that if ever a banking crisis arose there would, or might be, this demand for a paper currency of smaller denominations than £5; this suggestion got into a pigeon-hole at the treasury and was deep under the dust of whitehall by the time experience proved how big a gap in our financial armour had been made by its neglect. if the £1 notes, with which we are now so familiar, had been ready when the war broke out, or, still better, if the bank of england had been empowered and instructed to have an issue of its own £1 notes ready, it may at least be contended that the moratorium, which was so bad a financial beginning of the war, might have been avoided. but this opening crisis was a short-lived matter, and was promptly dealt with, thanks to the energy and courage of mr lloyd george, who was then chancellor of the exchequer, and saw that things had to be done quickly, and took the advice of the city as to what had to be done. the measures then employed erred, if at all, on the side of doing too much, which was certainly a mistake in the right direction if in any. what is much more evident is the fact that not only had there been no attempt to provide against just such a jolt to our financial machine as took place when the war began, but that, quite apart from the financial machinery of the city, no reasoned and thought-out attention had been given to the great problems of governmental finance which war on such a scale brought with it. there is, of course, the excuse that nobody expected the war to be on this scale, or to last so long. the general view was that the struggle would be over in a few months, and must certainly be so if for no other reason because the economic strain would be so great that the nations of europe could not stand it for a long time. on the other hand, we must remember that lord kitchener, whom most men then regarded as representing all that was most trustworthy in military opinion, made arrangements from the beginning on the assumption that the war might last for three years. so, while some excuse may be made for our lack of financial foresight, it does seem to have been the duty of those whose business it is to manage our finances to have thought out a complete scheme to be adopted in case of war if at any time we should be involved in one on a european scale. instead of which, not only would it appear that no such endeavour had been made by our treasury experts before the war, but that no such endeavour has ever been made by them since the war began. all through the war's history many of the country's mistakes have been based on the encouraging conviction that the war would be over in the next six months. this conviction is still cherished to this day, and there can be no doubt that if those who cherish it hold on to it long enough they will come right some day. but if delusions of this kind may be fairly excused in the man in the street, they do not seem to be any excuse for those who are responsible for our finance for their total lack of a thought-out scheme at the beginning of the war, and their total failure to produce one as the war went on. we have financed the war by haphazard methods, limping along the line of least resistance. we are continuing to do so, and we may do so to the end, though there are now growing signs of an impatience both among the property-owning classes and others of the system by which we are financing the war by piling up debt and manufacturing banking credits. the objections to the policy on the part of the "haves" and the "have nots" are, of course, different, but as they both converge to the same point, namely, to the reform of our system of war finance, it is possible that they may in time have the effect of shaking even the confidence of our politicians and officials in the haphazard and slipshod methods which would long ago have produced financial disaster if it had not been for the great financial strength of the country. finance is an enormously important weapon in the hands of our rulers for gliding the economic activities of the people. this is so even in peace time to a certain extent, though the revenue then collected is so small an item in the total national income that it counts for much less than in war, when the power that the government can wield by its policy in taxation and borrowing might have been all-powerful in keeping the nation on the right lines in the matter of spending and keeping down the cost of the war, and in maintaining our financial staying power to a far greater extent than has actually been done. it is easy, as they say on the stock exchange, to job backwards, and it is also easy, and perhaps rather unprofitable, to hazard opinions about what would have happened if things had been otherwise. nevertheless, when we look back on the spirit of the country as it was in those early days of the war, when the violation of belgium had sent a chivalrous thrill through the hearts of all classes in the country, when we all recognised that we were faced with the greatest crisis in our history, that our country and the future of civilisation were about to be tested by the severest strain ever applied to them, that the life and fortune of the individual did not count, but that the war and victory were the only interests that any one had a right to consider--when one remembers all these things, and the use that a wise financial policy might have made of them, it is impossible to avoid the conclusion that the history of the war in this country and its social and political effects might have been something much finer, much cleaner and more noble if only the weapons of finance had been more boldly and wisely used. it is not a good thing to indulge in high-falutin' on this subject. it is absurd to suppose that the war suddenly turned us all into plaster saints at the beginning, and that we might have continued so to the end if the state had dealt with our money in a proper way. but without setting up any such idealistic arguments as these, looking back on those early days of the war, one can still remember the thrill of earnestness and of eagerness for self-sacrifice which has since then given way lamentably to war profiteering, war strikes, and a general struggle among many classes of the community to make as much as possible out of the war, merely because our financial leaders have never really put the country's financial problem properly before the country. we were not plaster saints, but we were either idealistic and perhaps foolish people who attached great importance to the freedom and security of small nations and all those items in the programme of idealistic radicalism, or else we were good, red-hot, true-blue jingoes with a hearty hatred for germany, and enjoyed the thought that the big fight which we had long foreseen between the two countries was at last going to be fought out. or, again, we were just commonplace people who did not much believe in idealistic radicalism or anti-german bitterness, but saw that the whole future of our country was at stake, and were prepared to do anything for it. a fine example was set us in those days by the trade union leaders. the industrial world was seething with discontent. the suffragettes in london and the carsonites in ireland had shown us how much could be done by appeals to physical force in a lazy-minded community; and hints of industrial revolution, with great organised strikes, which were going to tie up the transport industry of the country were in the air. and then, when the war came, the labour leaders said, "no strikes until the war is over. our country comes first." this was the lead given to the country by those down at the bottom, who had the least to lose, and whose patriotism during the course of the war has frequently been questioned. at the top the financial and property-owning classes, having been saved by mr lloyd george's able adroitness from a bad crisis in the city, were entirely tame, and would have suffered anything in the way of taxation or financial conscription if the need for it had been properly put before them. it is almost amusing to remember now that in those early days of the war the shareholders in home railway companies were thought lucky. the government were taking the railways over, and were guaranteeing that their proprietors should receive the same dividends as they had had before the war. such was the view in financial and property-owning circles of results of war that, so far from any expectation of the huge profits which war has put into the pockets of certain classes, they were only too thankful if they could be assured that their gross incomes were not going to be reduced. such was the spirit with which the government of that day had to deal. a spirit in all classes earnestly patriotic, and so thoroughly frightened of the economic consequences of the war that it would have been ready to face any sacrifices that the government had asked of it. how, then, would the government have dealt with this spirit if it had taken the trouble really to think out the problem of war finance on a long view instead of proceeding along a haphazard line, adjusting peace methods to war without any consideration as to their adequacy? if the problem had been really thought out beforehand the government must have seen clearly that the real economic problem in war-time is not merely a question of raising money, since that can at any time be done easily by means of a printing-press, but of diverting the industrial energy of the nation from peace to war purposes, that is to say, transferring from the enjoyment of the individual citizen the goods and services that used to contribute to his comfort and amusement, and turning them over to the provision of the things needed for the war. war's needs can only be met out of the current production of the world as it is at present. all the warring powers begin a war with certain accumulated war stores consisting of battleships, ammunition, guns and all other forms of war material. apart from these stores with which they begin, the whole work of providing the armies with the fighting materials that they require, and the food and clothes that they consume, has to be done during the course of the war, that is to say, out of the current production of the moment. therefore the real economic problem that any government has to face in war-time is that of inducing its citizens to reduce their purchase of goods and services, that is to say, to spend less, so that all the things required for the army and navy may be obtained by the government. it is true that some of the goods and services required for carrying on war can be obtained from foreign countries by any belligerent which is able to communicate with them freely. in that case the current production of the foreigner can be called in to help. but this can only be done if the warring country is able to ship goods to the foreigner in payment for what it buys, or if it is able to obtain a loan from the foreigner, or some other foreign country, in order to pay for its purchases abroad, or again, if, as in our case, it holds a large accumulation of securities which foreign countries are prepared to take in exchange for goods that they send for the purposes of the war. by these two last-named processes, raising money abroad, and selling securities to foreign nations, the warring country impoverishes itself for the future. when it borrows abroad it pledges itself to export goods and services in future to meet interest and sinking fund on the money so raised, so getting no goods and services in return. when it ships its accumulated wealth in the form of securities it gives up for the future any claim to goods and services from the debtor country which used to come to it to meet interest and redemption. it is only by shipping goods in return for goods imported for the war that a country can keep its financial staying-power on an even keel. thus the problem which a statesman who had thought out the economics of war beforehand would have recognised as the keystone of his policy, would have been that of diverting the activities of the country from providing itself with comforts and amusements to turning out goods required for war, and of doing so with the least possible friction, the least possible alteration in the economic equilibrium of the country, and, above all, with the least possible cost to the national finances. we arrive at the true aspect of this problem more easily if we leave out the question of money altogether and think of it in units of energy. when a nation goes to war it means to say that it has to apply so many units of energy to the business of fighting, and to provide the fighters with all that they need. if at the beginning of the war its utmost capacity of output was, to mention merely a fanciful figure, a thousand million units of energy, and if it was clear that the fighting forces of the country would need for their proper maintenance five hundred million units of energy, then it is clear that the nation's ordinary consumption of goods and services would have to be reduced to the extent of five hundred millions of units of energy, which would have to be applied to the war, that is, assuming that its possible output remained the same. in other words, the spending power of the citizens of the country had to be reduced so that the industrial energy that used to go into meeting their wants might be made available for the purposes of fighting forces. now what was the straightest, simplest and cleanest way of bringing about this reduction in buying power on the part of the ordinary citizen which has been shown to be necessary for the purposes of war finance? clearly the best way of doing it is by taxation equitably imposed. when the state taxes, it says in effect to the citizens, "your country needs certain goods and services, you therefore will have to go without those goods and services, and the simplest way to make you do this is to take away your money and so ration your buying power. whatever is needed for the army and navy will be taken away from you by taxation, and the result of this will be that, instead of your indulging in comforts and luxuries, to the extent of the war's needs the government will use your money for paying for what is needed for the army and navy." if such a policy had been carried out the cost of the war to the community would have been enormously cheapened. there need have been no general rise in prices because there would have been no increase in demand for goods and services. anything that the government spent would have been counter-balanced by decreased spending by the individual; any work that the government needed for the war would have been counter-balanced by a reduction in demand for work on the part of individual citizens. there would have been no multiplication of currency owing to enormous credits raised by the government; there would have been merely a transfer of buying power from individuals to the state. the process would have been gradual, there need have been no acute dislocation, but as the cost of the war increased, that is to say, as the government needed more and more goods and services for its prosecution, the community would gradually have shed one after another the extravagances on which it spent so many hundreds of millions in days before the war. as it shed these extravagances the labour and energy needed to produce them would have been automatically transferred to the service of the war, or to the production of necessaries of life. by this simple process of monetary rationing all the frantic appeals for economy, and most of the complicated, tangled problems raised by such matters as food control or national service would have been avoided. but, it may be contended, this is setting up an ideal so absurdly too high that you cannot expect any modern nation to rise up to it. perhaps this is true, though i am not at all sure that if we had had a really bold and far-sighted finance minister at the beginning of the war he might not have persuaded the nation to tackle its war problem on this exalted line. at least it can be claimed that our financial rulers might have looked into the history of the matter and seen what our ancestors had done in big wars in this matter of paying for war costs out of taxation, with the determination to do at least as well as they did, and perhaps rather better, owing to the overwhelming scale of modern financial problems. if they had done so they would have found that both in the napoleonic and the crimean wars we paid for nearly half the cost of the war out of revenue as they went on, whereas in the present war the proportion that we are paying by taxation, instead of being 47 per cent., as it was when our sturdy ancestors fought against napoleon, is less than 20 per cent.[1] why has this been so? partly, no doubt, owing to the slackness and cowardice of our politicians, and the apathy of the overworked officials, who have been too busy with the details of finance to think the problem out on a large scale. but it is chiefly, i think, because our system of taxation, though probably the best in the world, involves so many inequities that it cannot be applied on a really large scale without producing a discontent which might have had serious consequences on our conduct of the war. [footnote 1: see _economist_, august 4, 1917, p. 151.] it is not possible nowadays, now that the working classes are conscious of their strength, to apply taxation to ordinary articles of general consumption with anything like the ruthlessness which in former days produced such widespread misery. indirect taxation of this kind carries with it this inherent weakness that its burden falls most heavily on those who are least able to bear it, consequently it is bound to break in the hand of those who attempt to apply it with anything like vigour to a community which is prepared to stand up for fair treatment. a tax on bread or salt obviously hits the wage-earner at 30s. a week infinitely harder than it hits the millionaire, and so the country would not tolerate taxes on bread or salt. direct taxes, such as income tax and death duties, have this enormous advantage, that they can really be regulated so as to press with continually increasing severity upon those who are best able to bear them. unfortunately our income tax is still so unjustly imposed that it was clearly impossible to make full use of it without its being first reformed. that two men, each earning £1000 a year, should pay the same income tax, in spite of one having a wife and five children, while the other is a careless bachelor, is such a blot upon this otherwise excellent tax that it is generally agreed that the present rate of 5s. is as high as it can be made to go unless some reform is introduced into its incidence. the need for its reform is made the excuse for a sparing use of the tax, and we have been on several occasions assured that, as soon as the war is over, this reform will be set about. in the meantime the government falls back on funding about 80 per cent. of its requirements of the war on a system of borrowing. in so far as the money subscribed to its loans is money that is being genuinely saved by investors this process has exactly the same effect as taxation, that is to say, somebody goes without goods and services and hands over his power to buy them to the state to be used for the war. borrowing of this kind consequently does everything that is needed for the solution of the immediate war problem, and the only objection to it is that it leaves later on the difficulties involved by raising taxes when the war is over, and economic problems are much more complicated in times of peace than in war, for meeting the interest and redemption of debt. but, in fact, it is well known that by no means all that the government has borrowed for war purposes has been provided in this way. much of the money that the government has obtained for war purposes has been got not out of genuine savings of investors, but by arrangements of various kinds with the banking machinery of the country, or by the simple use of the printing-press, with the result that the government has provided itself with an enormous mass of new currency which has not been taken out of anybody else's pocket, but has been manufactured by or for the government. the consequence of the profligate use of this dishonest process is that general rise in prices, which is in effect an indirect tax on the necessaries of life, involving all the injustice and ill-feeling which arises from such a measure. it is inevitable that the working classes, finding themselves subjected to a rise in prices, the cause of which they do not understand, but the result of which they see to be a great decrease in the buying power of their wages, should believe that they are being exploited by profiteers, that the rich classes are growing richer at their expense out of the war, and that they and the country are being bled by a set of unpatriotic capitalist blood-suckers. it is also natural that the property-owning classes, who find themselves paying an income tax which they regard as extortionate, should consider that the working classes by their continuous demands for higher wages to meet higher cost of living, are trying to exploit the country in their own interests in a time of national crisis, and displaying a most unedifying spirit. the social result of this evil policy of inflation, in embittering class against class, is a matter which it is difficult to exaggerate. some people think that it was inevitable. this is too wide a question to be entered into now, but at least it must be contended that if it is inevitable the extent to which it is being practised might have been very greatly diminished. do we mean to go on to the end of the war with this muddling policy of bad finance? if we still insist on believing that the war cannot last another six months, and there is therefore no need to pull ourselves up short financially and put things in order, then we certainly shall do so. but we should surely recognise that there is at least a chance that the war may go on for years, that if so our present financial methods will leave us with a burden of debt which is appalling to consider, and that in any case, whether the war lasts another six months or another six years, a reform of our financial methods is long overdue, is inevitable some time, and will pay us better the sooner it is set about. iv war finance as it might have been--ii _december_, 1917 the changed spirit of the country--a great opportunity thrown away--what taxation might have done--the perils of inflation--drifting stupidly along the line of least resistance--it is we who pay, not "posterity." in the november number of _sperling's journal_ i dealt with the question of how our war finance might have been improved if a longer view had been taken from the beginning concerning the length of the war and the measures that would be necessary for raising the money. the subject was too big to be fully covered in the course of one article, and i have been given this opportunity of continuing its examination. before doing so i wish to remind my readers once more of the great difference in the spirit of the country with regard to financial self-sacrifice in the early days of the war and at the present time, after three years of high profits, public and private extravagance, and successful demands for higher wages have demoralised the public temper into a belief that war is a time for making big profits and earning big wages at the expense of the community. in the early days the spirit of the country was very different, and it might have remained so if it had been trained by the use made of public finance along the right line. in the early days the labour leaders announced that there were to be no strikes during the war, and the property-owning classes, with their hearts full of gratitude for the promptitude with which mr lloyd george had met the early war crisis, were ready to do anything that the country asked from them in the matter of monetary sacrifice. mr asquith's grandiloquent phrase, "no price is too high when honour is at stake," might then have been taken literally by all classes of the community as a call to them to do their financial duty. now it has been largely translated into a belief that no price is too high to exact from the government by those who have goods to sell to it, or work to place at its disposal. in considering what might have been in matters of finance we have to be very careful to remember this evil change which has taken place in the public spirit owing to the short-sighted financial measures which have been taken by our rulers. thus, when we consider how our war finance might have been improved, we imply all along that the improvements suggested should have been begun when the war was in its early stages, and when public opinion was still ready to do its duty in finance. the conclusion at which we arrived a month ago was that by taxation rather than by borrowing and inflation much more satisfactory results could have been got out of the country. if, instead of manufacturing currency for the prosecution of the war, the government had taken money from the citizens either by taxation or by loans raised exclusively out of real savings, the rise in prices which has made the war so terribly costly, and has raised so great a danger through the unrest and dissatisfaction of the working classes, might have been to a great extent avoided, and the higher the rate of taxation had been, and the less the amount provided by loans, the less would have been the seriousness of the problem that now awaits us when the war is over and we have to face the question of the redemption of the debt. in this matter of taxation we have certainly done much more than any of the countries who are fighting either with us or against us. germany set the example at the beginning of the war of raising no money at all by taxation, puffed up with the vain belief that the cost of the war, and a good deal more, was going to be handed over to her in the shape of indemnities by her vanquished enemies. this terrible miscalculation on her part led her to set a very bad example to the warring powers, and when protests are made in this country concerning the low proportion of the war's costs that is being met out of taxation it is easy for the official apologist to answer, "see how much more we are doing than germany." it is easy, but it is not a good answer. germany had no financial prestige to maintain; the money that germany is raising for financing the war is raised almost entirely at home, and she rejoices in a population so entirely tame under a dominant caste that it would very likely be quite easy for her, when, the war is over, to cancel a large part of the debt by some process of financial jugglery, and to induce her tame and deluded creditors to believe that they have been quite handsomely treated. here, however, in england, we have a financial prestige which is based upon financial leadership of more than a century. we have also raised a large part of the money we have used for the prosecution of the war by borrowing abroad, and so we have to be specially careful in husbanding that credit, which is so strong a weapon on the side of liberty and justice. and, further, we have a public which thinks for itself, and will be highly sceptical, and is already inclined to be sceptical, concerning the manner in which the government may treat the national creditors. its tendency to think for itself in matters of finance is accompanied by very gross ignorance, which very often induces it to think quite wrongly; and when we find it necessary for the chancellor of the exchequer to make it clear at a succession of public meetings that those who subscribe to war loans need have no fear that their property in them will be treated worse than any other kinds of property, we see what evil results the process of too much borrowing and too little taxation can have in a community which is acutely suspicious and distrustful of its government, and very liable to ignorant blundering on financial subjects. what, then, might have been done if, at the beginning of the war, a really courageous government, with some power of foreseeing the needs of finance for several years ahead if the war lasted, had made a right appeal to a people which was at that time ready to do all that was asked from it for the cause of justice against the common foe? the problem by which the government was faced was this, that it had to acquire for the war an enormous and growing amount of goods and services required by our fighting forces, some of which could only be got from abroad, and some could only be produced at home, while at the same time it had to maintain the civilian population with such a supply of the necessaries of life as would maintain them in efficiency for doing the work at home which was required to support the effort of our fighters at the front. with regard to the goods which came from abroad, either for war purposes or for the maintenance of the civilian population, the government obviously had no choice about the manner in which payment had to be made. it had no power to tax the suppliers in foreign countries of the goods and services that we needed during the war period. it consequently could only induce them to supply these goods and services by selling them either commodities produced by our own industry, or securities held by our capitalists, or its own promises to pay. with regard to the goods that we might have available for export, these were likely to be curtailed owing to the diversion of a large number of our industrial population into the ranks of the army and into munition factories. this curtailment, on the other hand, might to a certain extent be made good by a reduction in consumption on the part of the civilian population, so setting free a larger proportion of our manufacturing energy for the production of goods for export. otherwise the problem of paying for goods purchased from abroad could only be solved by the export of securities, and by borrowing from foreign countries, so that the shells and other war material that were required, for example, from america, might be paid for by american investors in consideration of receiving from us a promise to pay them back some day, and to pay them interest in the meantime. in other words, we could only pay for what we needed from abroad by shipping goods or securities. as is well known, we have financed the war by these methods to an enormous extent; the actual extent to which we have done so is not known, but it is believed that we have roughly balanced by this process the sums that we have lent to our allies and dominions, which now amount to well over 1300 millions. if this is so, we have, in fact, financed the whole of the real cost of the war to ourselves at home, and we have done so by taxation, by borrowing saved money, and by inflation--that is to say, by the manufacture of new currency, with the inevitable result of depreciating the buying power of our existing currency as a whole. how much better could the thing have been done? in other words, how much of the war's cost in so far as it was raised at home could have been raised by taxation? in theory the answer is very simple, for in theory the whole cost of the war, in so far as it is raised at home, could have been raised by taxation if it could have been raised at all. it is not possible to raise more by any other method than it is theoretically possible to raise by taxation. it is often said, "all this preaching about taxation is all very well, but you couldn't possibly get anything like the amount that is needed for the war by taxation, or even by borrowing of saved money. this inflation against which economic theorists are continually railing is inevitable in time of war because there isn't enough money in the country to provide all that is needed." this argument is simply the embodiment of the old delusion, so common among people who handle the machinery of finance, that you can really increase the supply of necessary goods by increasing the supply of money, which is nothing else than claims to goods expressed either in pieces of metal or pieces of paper. as we have seen, all that we have been able to raise abroad has been required for advances to our allies and dominions, consequently we have had to fall back upon our own home production for everything needed for our own war costs. either we have turned out the goods at home or we have turned out goods to sell to foreigners in exchange for goods that we require from them. but since we thus had to rely on home production for the whole of the war's needs as far as we were concerned, it is clear that the government could, if it had been gifted with ideal courage and devotion, and if it had a people behind it ready to do all that was needed for victory, have taken the whole of the home production, except what was wanted for maintaining the civilian population in efficiency, for the purposes of the war. it is a commonplace of political theory that the government has a right to take the whole of the property and the whole of the labour of its citizens. but it would not, of course, have been possible for the government immediately to inaugurate a policy of setting everybody to work on things required for the war and paying them all a maintenance wage. this might have been done in theory, but in practice it would have involved questions of industrial conscription, which would probably have raised a storm of difficulty. what the government might have done would have been by commandeering the buying power of the citizen to have set free the whole industrial energy of the community for supplying the war's needs and the necessaries of life. at present the national output, which is only another way of expressing the national income, is produced from certain channels of production in response to the expectation of demand from those whose possession of claims to goods, that is to say, money, gives them the right to say what kind of goods they will consume, and consequently the industrial part of the population will produce. had the government laid down that the whole cost of the war was to be borne by taxation, the effect of this measure would have been that everything which was needed for the war would have been placed at the disposal of the government by a reduction in spending on the part of those who have the spending power. in other words, the only process required would have been the readjustment of industrial output from the production of goods needed (or thought to be needed) for ordinary individuals to those required for war purposes. this readjustment would have gone on gradually as the war's cost increased. there would have been no competition between the government and private individuals for a limited amount of goods in a restricted market, which has had such a disastrous effect on prices during the course of the war; there would have been no manufacture of new currency, which means the creation of new buying power at a time when there are less goods to buy, which has had an equally fatal effect on prices; there would have had to be a very drastic reform in our system of taxation, by which the income tax, the only really equitable engine by which the government can get much money out of us, would have been reformed so as to have borne less hardly upon those with families to bring up. mr sidney webb and the fabians have advocated a system by which the basis of assessment for income tax should be the income divided by the number of members of a family, rather than the mere income without any consideration for the number of people that have to be provided for out of it. with some such scheme as this adopted there is no reason why the government should not have taken, for example, the whole of all incomes above £1000 a year for each individual, due allowance being made for obligations, such as rent, which involve long contracts. for any single individual to want to spend more than £1000 a year on himself or herself at such a crisis would have been recognised, in the early days of the war, as an absurdity; any surplus above that line might readily have been handed over to the government, half of it perhaps in taxation and the other half in the form of a forced loan. so sweeping a change would not have been necessary at first, perhaps not at all, because the war's cost would not have grown nearly so rapidly. all surplus income above a certain line would have been taken for the time being, but with the promise to repay half the amount taken, so that it should not be made a disadvantage to be rich, and no discouragement to accumulation would have been brought about. by this means the whole of the nation's buying power among the richer classes would have been concentrated upon the war, with the result that the private extravagance, which is still disgracing us in the fourth year of the war, would not have been allowed to produce its evil effects. with the rich thus drastically taxed, the working classes would have been much less restive under the application of income tax to their own wages. we should have a much more freely supplied labour market, and since the rise in prices would not have been nearly so severe, labour's claim to higher wages would have been much less equitable, and labour's power to enforce the claim would have been much less irresistible. what the government has actually done has been to do a little bit of taxation, much more than anybody else, but still a little bit when compared with the total cost of the war; a great deal of borrowing, and a great deal of inflation. by this last-named method it produces the result required, that of diverting to itself a large part of the industrial output of the country, by the very worst possible means. it still, by its failure to tax, leaves buying power in the hands of a large number of people who see no reason why they should not live very much as usual; that is to say, why they should not demand for their own purposes a proportion of the nation's energy which they have no real right to require at such a time of crisis. but in order to check their demands, and to provide its own needs, the government, by setting the bankers to work to provide it with book credits, gives itself an enormous amount of new buying power with which, by the process of competition, it secures for itself what is needed for the war. there is thus throughout the country this unwholesome process of competition between the government on one hand and unpatriotic spenders on the other, who, between them, put up prices against the government and against all those unfortunate, defenceless people who, being in possession of fixed salaries, or of fixed incomes, have no remedy against rising prices and rising taxation. all that could possibly have been spent on the war in this country was the total income of the people, less what was required for maintaining the people in health and efficiency. that total income government might, in theory, have taken. if it had done so it could and would have paid for the whole of the war out of taxation. all this, i shall be told, is much too theoretical and idealistic; these things could not have been done in practice. perhaps not, though it is by no means certain, when we look back on the very different temper that ruled in the country in the early months of the war. if anything of the kind could have been done it would certainly have been a practical proof of determination for the war which would have shown more clearly than anything else that "no price was too high when honour was at stake." it would also have been an extraordinary demonstration to the working classes of the sacrifices that property owners were ready to make, the result of which might have been that the fine spirit shown at the beginning of the war might have been maintained until the end, instead of degenerating into a series of demands for higher wages, each one of which, as conceded to one set of workmen, only stimulates another to demand the same. but even if we grant that it is only theoretically possible to have performed such a feat as is outlined above, there is surely no question that much more might have been done than has been done in the matter of paying for the war by taxation. if we are reminded once more that our ancestors paid nearly half the cost of the napoleonic war out of revenue, while we are paying about a fifth of the cost of the present war from the same source, it is easy to see that a much greater effort might have been made in view of the very much greater wealth of the country at the present time. i was going to have added, in view also of its greater economic enlightenment, but i feel that after the experience of the present war, and its financing by currency debasement, the less about economic enlightenment the better. what, then, stood in the way of measures of finance which would have obviously had results so much more desirable than those which will face us at the end of the war? as it is, the nation, with all classes embittered owing to suspicions of profiteering on the part of the employers and of unpatriotic strikes on the part of the workers, will have to face a load of debt, the service of which is already roughly equivalent to our total pre-war revenue; while there seems every prospect that the war may continue for many half-years yet, and every half-year, as it is at present financed, leaves us with a load of debt which will require the total yield of the income tax and the super-tax before the war to meet the charge upon it. why have we allowed our present finance to go so wrong? in the first place, perhaps, we may put the bad example of germany. then, surely, our rulers might have known better than to have been deluded by such an example. in the second place, it was the cowardice of the politicians, who had not the sense in the early days of the war to see how eager the spirit of the country was to do all that the war required of it, and consequently were afraid to tax at a time when higher taxation would have been submitted to most cheerfully by the country. there was also the absurd weakness of our finance ministers and our leading financial officials, which allowed our financial machinery to be so much weakened by the demands of the war office for enlistment that it has been said in the house of commons by several chancellors of the exchequer that it is quite impossible to consider any form of new taxation because the machinery could not undertake it. there has also been great short-sightedness on the part of the business men of the country, who have failed to give the government a lead in this important matter. like the government, they have taken short views, always hoping that the war might soon be over, and so have left the country with a problem that grows steadily more serious with each half-year as we drift stupidly along the line of least resistance. such war finance as i have outlined--drastic and impracticable as it seems--would have paid us. taxation in war-time, when industry's problem is simplified by the government's demand for its product, hurts much less than in peace, when industry has not only to turn out the stuff, but also find a buyer--often a more difficult and expensive problem. there is a general belief that by paying for war by loans we hand the business of paying for it on to posterity. in fact, we can no more make posterity pay us back our money than we can carry on war with goods that posterity will produce. whatever posterity produces it will consume. whatever it pays in interest and amortisation of our war debt, it will pay to itself. we cannot get a farthing out of posterity. all we can do, by leaving it a debt charge, is to affect the distribution of its wealth among its members. each loan that we raise makes us taxpayers collectively poorer now, to the extent of the capital value of the charge on our incomes that it involves. the less we thus charge our productive power, and the more we pay up in taxes as the war goes on, the readier we shall be to play a leading part in the great time of reconstruction. v a levy on capital _january_, 1918 the objects of the levy--its origin and history--how it would work in practice--the attitude of the chancellor--the effects of the scheme in discouraging thrift--its fallacies and injustices--the insuperable obstacles to its application--its influence on production--one of the tests of a tax--judged by this test the proposed levy is doomed. by some curious mental process the idea of a levy on capital has come into rapidly increasing prominence in the last few months, and seems to be gaining popularity in quarters where one would least expect it. on the other hand, it is naturally arousing intense opposition, both among those who would be most closely affected by its imposition, and also among those who view with grave concern the possible and probable economic effects of such a system of dealing with the national debt. i say "dealing with the national debt" because, as will be clear, as a system of raising money for the war the suggestion of the levy on capital has little or nothing to recommend it. but, as will also be made clear, the proposal has been put forward as a thing to be done immediately in order to increase the funds in the hands of the chancellor of the exchequer to be spent on war purposes. a levy on capital is, of course, merely a variation of the tax on property, which has long existed in the united states, and had been resorted to before now by governments, of which the german government is a leading example, in order to provide funds for a special emergency. this it can very easily do as long as the levy is not too high. if, for example, you tax a man to the extent of 1-1/2 per cent. to 2 per cent. of the value of his property, on which he may be earning an average of 5 to 6 per cent. in interest, then the levy on capital becomes merely a form of income tax, assessed not according to the income of the taxpayer but according to the alleged value of his property. it is thus, again, a variation of the system long adopted in this country of a special rate of income tax on what is called "unearned" income, i.e. income from invested property. but it is only when one begins to adopt the broadminded views lately fashionable of the possibilities of a levy on capital and to talk of taking, say, 20 per cent. of the value of a man's property from him in the course of a year, that it becomes evident that he cannot be expected to pay anything like this sum, in cash, unless either a market is somehow provided--which seems difficult if all property owners at once are to be mulcted of a larger amount than their incomes--or unless the government is prepared to accept part at least of the levy in the shape of property handed over at a valuation. before, however, we come to deal in detail with the difficulties and drawbacks of the suggestion, it may be interesting to trace the history of the movement in its favour, and to see some of the forms in which it has been put forward. it may be said that the ball was opened early last september when, in the _daily news_ of the 8th of that month, its able and always interesting editor dealt in one of his illuminating saturday articles with the question of "how to pay for the war." he began with the assumption that the capital of the individuals of the nation has increased during the war from 16,000 millions to 20,000 millions. a 10 per cent. levy on this, he proceeded, would realise 2000 millions. it would extinguish debt to that amount and reduce the interest on debt by 120 millions. the levy would be graduated--say, 5 per cent. on fortunes of £1000 to £20,000; 10 per cent. on £20,000 to £50,000; up to 30 per cent. on sums over £1,000,000; and the individual taxpayer was to pay the levy "in what form was convenient, in his stocks or his shares, his houses or his fields, in personalty or realty." just about the same time the _round table_, a quarterly magazine which is usually most illuminating on the subject of finance, chimed in with a more or less similar suggestion in an article on "finance after the war." it remarked that the difficulty of applying a levy on capital is "probably not so great as appears at first sight." the total capital wealth of the community it estimated at about 24,000 millions sterling. to pay off a war debt of 3000 millions would therefore require a levy of one-eighth. evidently this could not be raised in money, nor would it be necessary. holders of war loans would pay their proportion in a simple way by surrendering one-eighth of their scrip. holders of other forms of property would be assessed for one-eighth of its value and be called on to acquire and to surrender to the state the same amount of war loan scrip. to do this, they would be obliged to realise a part of their property or to mortgage it, "but," added the _round table_ cheerfully, "there is no insuperable difficulty about that." the first thing that strikes one when one examines these two schemes is the difference in their view concerning the amount of capital wealth available for taxation. mr gardiner made the comparatively modest estimate of 16,000 millions to 20,000 millions; the _round table_ plumps for 24,000 millions, and, incidentally, it may be remarked that some conservative estimates put it as low as 11,000 millions. thus we have a possible range for the fancy of the scheme builder of from 11,000 to 24,000 millions in the property on which taxation is proposed to be levied. but it is when we come to the details of these schemes that the difficulties begin to glare. mr gardiner tells us that millionaires would pay up to 30 per cent. of their property, and that they would pay in what form was convenient, in houses, fields, etc., etc. but he does not explain by what principle the government is to distribute among the holders of the debt, the repayment of whom is the object of the levy, the strange assortment of miscellaneous assets which it would thus collect from the property owners of the country. in commenting on this scheme the _economist_ of september 15th took the case of a man with a fortune of £100,000 invested before the war in a well-assorted list of securities, the whole of which he had, for patriotic reasons, converted during the war into war loans. he would have no difficulty about paying his capital levy, for he would obviously surrender something between 10 and 20 per cent. of his holding. but, "in exchange for nearly two-thirds of the rest, he might find himself landed with houses and bits of land all over the country, a batch of unsaleable mining shares, a collection of blue china, a pearl necklace, a chippendale sideboard, and a doubtful titian," the _round table's_ suggestion seems to be even more impracticable. according to it, holders of all other forms of property besides war loans would be assessed for one-eighth of its value--it does not explain how the value is to be arrived at, nor how long it would take to do it--and would then be called on to acquire and to surrender to the state the same amount of war loan scrip. to do this they would be obliged to realise a part of their property or to mortgage it, a process which would seem likely to produce a pretty state of affairs in the property market; and a very pleasant state of affairs indeed would arise for the holders of war loan scrip, since there would be a large crowd of compulsory buyers in the market from whom the holders would apparently be able to extort any price that they liked for their stock. the next stage in the proceedings was a deputation to the chancellor of the exchequer, concerning which more anon, of leaders of various groups of the labour party, to press upon mr bonar law the principle of what is called "the conscription of wealth," and the publication at or soon after that time, which was about the middle of november, of a pamphlet on the subject of the "conscription of riches," by the war emergency workers' national committee, 1, victoria street, s.w. among what this pamphlet describes as "the three practicable methods of conscripting wealth" no. 1 is as follows:-a capital tax, on the lines of the present death duties, which are graduated from nothing (on estates under £300, and legacies under £20) up to about 20 per cent. (on very large estates left as legacies to strangers). if a "death duty" at the existing rates were now levied simultaneously on every person in the kingdom possessing over £300 wealth (every person might be legally deemed to have died, and to be his own heir), it might yield to the chancellor of the exchequer about £900,000,000. it would be necessary to offer a discount for payment in cash; and in order to avoid simultaneous forced sales, to accept, in lieu of cash, securities at a valuation; and to take mortgages on land. here it will be seen that the emergency workers had improved on the _round table_, and agreed with mr gardiner, by providing that the government should take securities at a valuation and mortgages on land in lieu of cash in order to avoid simultaneous forced sales. but they do not seem to have perceived that, in so far as the government took securities or accepted mortgages on land, it would not be getting money to pay for the war, which was the object of the proposed conscription of wealth, but would only be obtaining property from which the government would in due course later on receive an income, probably averaging about one-twentieth of its value. perhaps, however, it would be more correct to say that those who put the scheme forward did not ignore this drawback to it, but rather liked it, for reasons quite irrelevant to the objects that they were apparently pursuing. a good deal of prominence was given about the same time to the question of a levy on capital in the _new statesman_ well known to be the organ of mr sidney webb and other members of the fabian society. these distinguished and very intellectual socialists would, of course, be quite pleased if, in an apparent endeavour to pay for the war, they actually succeeded in securing, by the government's acquisition of blocks of securities from property owners, that official control of industry and production which is the object of state socialists. it will be noted, however, in this scheme that no mention is made of any forms of property to be accepted by the government in lieu of cash except securities and mortgages on land. items such as furniture, books, pictures and jewellery are ignored, and in one of the articles in the _new statesman_, discussing the question of a capital levy, it was distinctly suggested that these commodities should be left out of the scheme so as to save the trouble involved by valuation. unfortunately, if we leave out these forms of property the natural result is to stimulate the tendency, lately shown by an unfortunately large number of patriotic taxpayers, of putting money into pearl necklaces and other such gewgaws in order to avoid income tax. if by buying fur coats, old masters and diamond tiaras it will be be possible in future to avoid paying, not only income tax, but also a capital levy, it is to be feared that appeals to people to save their money and invest it in war bonds are likely to be seriously interfered with. unfortunately, the _statesman_ was able to announce that the appeal for this system of taxation had been received with a good deal of sympathy by the chancellor of the exchequer, and the next stage in the history of the agitation was the publication on boxing day in several of the daily papers of what appeared to be an official summary, issued through the central news, of what the chancellor had said to the deputation of labour leaders introduced by mr sidney webb, which waited on him, as already described, in the middle of november. having pointed out that he had never seen any proposal which seemed to him to be practicable for getting money during the war by conscripting wealth, mr bonar law added that, though "perhaps he had not thought enough about it to justify him in saying so," his own feeling was that it would be better, both for the wealthy classes and the country, to have this levy on capital, and reduce the burden of the national debt when the war was over. it need not be said that this statement by the chancellor has been very far from helpful to the efforts of those who are trying to induce unthrifty citizens to save their money and put it into national war bonds for the finance of the war. "why," people argue, "should we go out of our way to save and take these securities if, when the war is over, a large slice of our savings is to be taken away from us by means of this levy on capital? if we had been doubting between the enjoyment of such comforts and luxuries as are possible in war-time and the austere duty of thrift, we shall naturally now choose the pleasanter path, spend our money on ourselves and on those who depend on us, instead of saving it up to be taken away again when the war is over, while those who have spent their money as they liked will be let off scot free." certainly, it is much to be regretted that the chancellor of the exchequer should have let such a statement go forth, especially as he himself admits that perhaps he has not thought enough about it to justify him in saying so. if the chancellor of the exchequer has not time to think about what he is going to say to a labour deputation which approaches him on an extremely important revolution in our fiscal system, it is surely high time that we should get one who has sufficient leisure to enable him to give his mind to problems of this sort when they are put before him. in the course of this review of the forms in which suggestions for a levy on capital have been put forward, some of the difficulties and injustices inherent in it have already been pointed out. its advocates seem as a rule to base the demand for it upon an assumption which involves a complete fallacy. this is that, since the conscription of life has been applied during the war, it is necessary that conscription of wealth should also be brought to bear in order to make the war sacrifice of all classes equal. for instance, the emergency workers' pamphlet, quoted above, states that, "in view of the fact that the government has not shrunk from compulsory conscription of men," the committee demands that "for all the future money required to carry on the war, the government ought, in common fairness, to accompany the conscription of men by the conscription of wealth." this contention seems to imply that the conscription of men and the conscription of wealth apply to two different classes; in other words, that the owners of wealth have been able to avoid the conscription of men. this, of course, is absolutely untrue. the wealthiest and the poorest have to serve the country in the front line alike, if they are fit. the proportion of those who are fit is probably higher among the wealthy classes, and, consequently, the conscription of men applies to them more severely. again, the officers are largely drawn from the comparatively wealthy classes, and it is pretty certain that the proportion of casualties among officers has been higher during the war than among the rank and file. thus, as far as the conscription of men is concerned, the sacrifice imposed upon all classes in the community is alike, or, if anything, presses rather more heavily upon those who own wealth. conscription of wealth as well as conscription of life thus involves a double sacrifice to the owners of property. this double sacrifice, in fact, the owners of property have, as is quite right, borne throughout the war by the much more rapid increase in direct taxation than in indirect. it is right that the owners of property should bear the heavier monetary burden of the war because they, having more to lose and therefore more to gain by a successful end of the war, should certainly pay a larger proportion of its cost. it was also inevitable that they should do so because, when money is wanted for the war or any other purpose, it can only be taken in large amounts from those who have a surplus over what is needed to provide them with the necessaries and decencies of life. but the argument which puts forward a capital levy on the ground that the rich have been escaping war sacrifice is fallacious in itself, and is a wicked misrepresentation likely to embitter still further the bad feeling between classes. nevertheless, mr bonar law thinks that, since the cost of the war must inevitably fall chiefly upon the owners of property, and since it therefore becomes a question of expediency with them whether they should pay at once in the form of a capital levy or over a long series of years in increased taxation, he is inclined to think that the former method is one which would be most convenient to them and best for the country. this contention cannot be set aside lightly, and there can be no doubt that if, by making a dead lift, the wealthy classes of the country could throw off their shoulders a large part of the burden of the war debt, such a scheme is well worth considering as long as it does not carry with it serious drawbacks. it seems to me, however, that the drawbacks are very considerable. in the first place, i have not seen any really practicable scheme of redeeming debt by means of a levy on capital in so far as the levy is paid in the form of surrendered war loans, it is simple enough. in so far as it is paid in other securities or mortgages on land or other forms of property, it is difficult to see how the assets acquired by the state through the levy could be distributed among the debt holders whom it is proposed to pay off. would they be forced to take securities, mortgages on land, furniture, etc., as the government chose to distribute them, or would the government have to nurse an enormous holding of various forms of property and gradually realise them and so pay off debt? again, a great injustice would surely be involved by laying the whole burden of this oppressive levy upon owners of accumulated property, so penalising those who save capital for the community and letting off those who squander their incomes. a characteristic argument on this point was provided by the _new statesman_ in a recent issue. it argued that, because ordinary income tax would still be exacted, the contrast between the successful barrister with an income of £20,000 a year and no savings, who would consequently escape the capital levy, and the poor clergyman who had saved £1000 and would consequently be liable to it, fell to the ground. in other words, because both lawyer and parson paid income tax, it was fair that the former should escape the capital levy while the latter should have to pay it! but needs must when the devil drives, and in a crisis of this kind it is not always possible to look too closely into questions of equity in raising money. it is necessary, however, to look very closely into the probable economic effects of any suggested form of taxation, and, if we find that it is likely to diminish the future wealth production of the nation, to reject it, however attractive it may seem to be at first sight. a levy on capital which would certainly check the incentive to save, by the fear that, if such a thing were once successfully put through, it might very likely be repeated, would dry up the springs of that supply of capital which is absolutely essential to the increase of the nation's productive power. moreover, business men who suddenly found themselves shorn of 10 to 20 per cent. of their available capital would find their ability to enter into fresh enterprise seriously diminished just at the very time when it is essential that all the organisers of production and commerce in this country should be most actively engaged in every possible form of enterprise, in order to make good the ravages of war. vi our banking machinery _february_, 1918 the recent amalgamations--will the provinces suffer?--consolidation not a new movement--the figures of the past three decades--reduction of competition not yet a danger--the alleged neglect of local interests--shall we ultimately have one huge banking monopoly?--the suggested repeal of the bank act--sir e. holden's proposal. banking problems have lately loomed large in the financial landscape. it will be remembered that about a year and a half ago a committee was appointed to consider the creation of a new institution specially adapted for financing overseas trade and for the encouragement of industrial and other ventures through their years of infancy, and that the charter which was finally granted to the british trade corporation, as this institution was ultimately called, roused a great deal of opposition both on the part of banks and of traders who thought that a government institution with a monopoly character was going to cut into their business with the help of a government subsidy. in fact, there was no subsidy at all in question, and the fears of the trading world of competition on the part of the new chartered institution only arose owing to its unfortunate name, which was given to it in order to allay the apprehensions of the banks which had been provoked by the title originally designed for it, namely, the british trade bank. there seems no reason why this company should not do good work for british trade without treading on the toes of anybody. although naturally its activities cannot be developed on any substantial scale until the war is over, its chairman assured the shareholders at the end of january that its preliminary spadework was being carefully attended to. after this small storm in a teacup had died down those interested in our banking efficiency were again excited by the rapid progress made by the process of amalgamation among our great banks, which began to show acute activity again in the last months of 1917. the suddenly announced amalgamation of the london and south-western and london and provincial banks led to a whole host of rumours as to other amalgamations which were to follow; and though most of these proved to be untrue a fresh sensation was aroused when the union was announced of the national provincial bank of england and the union of london and smith's bank. all the old arguments were heard again on the subject of the objections, from the point of view of industry in the provinces, to the formation of great banking institutions, with enormous figures on both sides of the balance-sheet, working from london, often, it was alleged, with no consideration for the needs of the provincial users of credit. these latest amalgamations, which have united banks which already had head offices in london, gave less cause than usual for these provincial apprehensions, which had far more solid reason behind them when purely provincial banks were amalgamated with institutions whose head office was in london. nevertheless, the argument was heard that the great size and scale on which these amalgamated banks were bound to work would necessarily make them more monopolistic and bureaucratic in their outlook, and less elastic and adaptable in their dealings with their local customers. it seems to me that there is so far very little solid ground for any apprehension on the part of the business community that the recent development of banking evolution will tend to any damage to their interests. the banks have grown in size with the growth of industry. as industry has tended more and more to be worked by big battalions, it became necessary to have banking institutions with sufficiently large resources at their command to meet the great requirements of the huge industrial organisations that they had to serve. nevertheless, the tendency towards fewer banks and bigger figures has grown with extraordinary celerity, as the following table shows:-movement of english joint-stock bank deposits, etc., since 1886. december no. of number of capital deposit and total 31st banks branches paid up current liabilities accounts 1886 109 1,547 £38,468,000 £299,195,000 £376,808,000 1891 106 2,245 43,406,000 391,842,000 486,632,000 1896 94 3,051 45,203,000 495,233,000 599,518,000 1901 74 3,935 46,631,000 584,841,000 698,150,000 1906 55 4,840 48,122,000 647,889,000 782,353,000 1911 44 5,417 47,265,000 748,641,000 885,069,000 1916 35 5,993 48,237,000 1,154,877,000 1,316,220,000 this table is taken from the annual banking numbers of the _economist_. it will be noticed that in 1886 there were in england 109 joint-stock banks with 1547 offices, whose accounts were tabulated in the _economist's_ annual review. their total paid-up capital was 38-1/2 millions, their deposit and current accounts were just under 300 millions, and their total liabilities were 377 millions. in the course of thirty years the 109 banks had shrunk by the process of amalgamation and absorption to thirty-five, that is to say, they had been divided by three; the number of their offices, however, had been multiplied by nearly four, while their deposit accounts had grown from 300 millions to 1155, and their total liabilities from 377 to 1316 millions. by the amalgamations announced at the end of 1917, and that of the county of westminster with parr's announced on february 1st, the number of joint stock banks will be reduced to 32. the picture would be still more striking if the figures of the private banks were included, since their number has been reduced, since 1891, from 37 to 6. these figures are eloquent of the manner in which the number of individual banks has been reduced, while the extent of the banking accommodation given to the community has enormously grown, so that the power wielded by each individual bank has increased by the force of both these processes. the consequent reduction in competition which is causing some concern among the trading community has not, as it seems to me, gone far enough yet to be a serious danger. the idea that the big banks with offices in london give scant consideration to the needs of their local customers seems to be so contrary to the interests of the banks that they would be extraordinarily bad men of business if those who were responsible for their management allowed it to be the fact. it is probably nearer the truth that banking competition in the provinces is still so keen that the london management is very careful not to allow anything like bureaucratic stiffness to get into the methods by which their business is managed. by the appointment of local committees they are careful to do all they can to see that the local interests get all the credit that is good for them. that local interests get as much credit as they want is probably very seldom the case, because it is a natural instinct on the part of an eager business man to want rather more credit than he ought to have, from a banking point of view. business interests, as long as they exist in private hands, will always want rather more credit than there is available, and it will always be the duty of the banker to ensure that the country's industry is kept on a sound basis by checking the tendency of the eager business man to undertake rather more than is good for him. from the sentimental point of view it is certainly a pity to have seen many of the picturesque old private banks extinguished, the partners in which were in close personal touch with their customers, and entered into the lives of the local communities in a manner which their modern counterpart is perhaps unable to do. nevertheless, it is difficult to get away from the fact that if these institutions had been as efficient and as well managed as their admirers depict them to have been they would hardly have been driven out of existence by the stress of modern developments and competition. whatever we may think of modern competition, in certain of its aspects, we may at least be sure of this--that it does not destroy an institution which is really wanted by the business community. and if the complaint of local interests is true, that they are swamped by the cosmopolitan aspirations of the great london offices, they always have it in their power to create an institution of the kind that they want, and by giving it their business to ensure for it a prosperous career. as long as no such tendency is visible in the banking world we may be pretty sure that the views expressed concerning the neglect of local interests by the enormous banks which have grown up with london centres in the last thirty years is to a great extent a myth. it has now announced, however, that the whole problem involved by the amalgamation process is to be sifted by a committee to be appointed for this purpose. another apprehension has arisen in the minds of those who view with critical vigilance the present tendencies of business and the present development of economic opinion among a great section of the community. if, it is urged, the banks continue to swallow one another up by the process of amalgamation, how will this tendency end except in the creation of one huge bank working a gigantic money monopoly which the socialistic tendencies of the present day will, with some reason, insist ought to be taken over by the state for the profit of the taxpayer? this view is frankly put forward by those advocates of a socialistic organisation of society, who say that the modern tendency of industry towards combinations, rings and trusts is rapidly bringing the socialistic millennium within their reach without any effort on the part of socialistic preachers. they consider that the trust movement is doing the work of socialism, much faster than socialism could do it for itself; that, in short, as has been argued above in regard to banking, the tendency towards centralisation and the elimination of competition can only end in the assumption by the state of the functions of industry and finance. if this should be so, the future is dark for those of us who believe that individual effort is the soul of industrial and financial progress, and that industry carried on by government departments, however efficient and economical it might be, would be such a deadly dull and unenterprising business that all the adaptability and tendency to variation in accordance with the needs of the moment, which are so strongly shown by individual enterprise, would be lost, to the great detriment of the material progress of mankind. as things are at present, there is little need to fear that socialistic organisation of industry could stand up against competent individual effort. anybody who has ever had any business dealings with a government department will inevitably shudder when he tries to imagine how many forms would have to be filled up, how many divisions of the department the inevitable mass of papers would have to go through, and how much delay and tedium would be involved before the simplest business proposition could be carried out. but, of course, it is argued by socialists that government departments are only slow and tied up with red tape because they have so long been encouraged to do as little as possible, and that as soon as they are really urged to do things instead of pursuing a policy of masterly inactivity, there is no reason why they should not develop a promptitude and elasticity quite as great as that hitherto shown by the business community. that such a development as this might take place in the course of generations nobody can deny; at present it must be admitted that with the great majority of men the money-making incentive is required to get the best out of them. if the process of education produces so great a change in the human spirit that men will work as well for the small salary of the civil service, with a k.c.b. thrown in, as they will now in order to gain the prizes of industry and finance, then perhaps, from the purely economic point of view, the socialisation of banking may be justified. but we are a long way yet from any such achievement, and if it is the case that the rapid centralisation of banking power in comparatively few hands carries with it the danger of an attempt to nationalise a business which requires, above all, extreme adaptability and sensitiveness to the needs of the moment as they arise, this is certainly a danger which has to be carefully considered by those who are responsible for the development of these amalgamation processes. and now another great stone has been thrown into the middle of the banking pond, causing an ever-widening circle of ripples and provoking the beginning of a discussion which is likely to be with us for some time to come. sir edward holden, at the meeting of the london city and midland bank shareholders on january 29th, made an urgent demand for the immediate repeal of the bank act of 1844. this act was passed, as all men know, in order to restrict the creation of credit in the united kingdom. in the early part of the last century the most important part of a bank's business consisted of the issue of notes, and banking had been carried on in a manner which the country considered unsatisfactory because banks had not paid sufficient attention to the proportion of cash that they ought to hold in their tills to meet notes if they were presented. parliament in its wisdom consequently ordained that the amount of notes which the banks should be allowed to issue, except against actual metal in their vaults, should be fixed at the amount of their issue at that time. above the limit so laid down any notes issued by the banks were to be backed by metal. in the case of the bank of england the limit then established was £14,000,000, and it was enacted that if any note-issuing bank gave up its right to a note issue the bank of england should be empowered to increase its power to issue notes against securities to the extent of two-thirds of the power enjoyed by the bank which was giving up its privilege. by this process the bank of england's right to issue notes against securities, what is usually called its fiduciary issue, has risen to £18,450,000; above that limit every note issued by it has to be backed by bullion, and is actually backed by gold, though under the act one-fifth might be in silver. it was thus anticipated by the framers of the act that in future any credit required by industry could only be granted by an increase in the gold held by the issuing banks. if the act had fulfilled the anticipations of the parliament which passed it, if english trade had grown to anything like the extent which it has done since, it could only have done so by the amassing of a mountain of gold, which would have lain in the vaults of the bank of england. fortunately, however, the banking community had at its disposal a weapon of which it was already making considerable use, namely, the system of issuing credit by means of banking deposits operated on by cheques. eight years before peel's act was passed two joint stock banks had been founded in london, although the bank of england note-issuing monopoly still made it impossible for any joint stock bank to issue notes in the london district. it is thus evident that deposit banking was already well founded as a profitable business when peel, and parliament behind him, thought that they could sufficiently regulate the country's banking system so long as they controlled the issue of notes by the bank of england and other note-issuing banks. it is perhaps fortunate that parliament made this mistake, and so enabled our banking machinery to develop by means of deposit banking, and so to ignore the hard-and-fast regulations laid upon it by peel's act. this, at least, is what has happened; only in times of acute crisis have the strict regulations of peel's act caused any inconvenience, and when that inconvenience arose the act has been suspended by the granting of a letter of indemnity from the treasury to the governor of the bank. under peel's act the present rather anomalous form of the bank of england's weekly return was also laid down. it shows, as all men know, two separate statements; one of the issue department and the other of the banking department. the issue department's statement shows the notes issued as a liability, and on the assets side government debt and other securities (which are, in fact, also government securities), amounting to £18,450,000 as allowed by the act, and a balance of gold. the banking department's statement shows capital, "rest" or reserve fund, and deposits, public and other, among the liabilities, and on the other side of the account government and other securities, all the notes issued by the issue department which are not in circulation, and a small amount of gold and silver which the banking department holds as till money. sir edward holden's proposal is that the act should be repealed practically in accordance with the system which has been adopted by the german reichsbank. the principles which he enumerates, as those on which other national banks of issue work, are as follows:-1. one bank of issue, and not divided into departments. 2. notes are created and issued on the security of bills of exchange and on the cash balance, so that a relation is established between the notes issued and the discounts. 3. the notes issued are controlled by a fixed ratio of gold to notes or of the cash balance to notes. 4. this fixed ratio may be lowered on payment of a tax. 5. the notes should not exceed three times the gold or cash balance. by this revolution sir edward would abolish all legal restriction on the issue of notes by the bank of england. it would hold a certain amount of gold or a certain amount of cash balance against its notes, but in the "cash balance" sir edward apparently would include 11 millions odd of government debt, or of treasury notes. as long as its notes were only three times the amount of the gold or of the "cash balance," and were backed as to the other two-thirds by bills of exchange, the situation would be regarded as normal, but if, owing to abnormal circumstances, the bank desired to increase the amount of notes issued against bills of exchange only and to reduce the ratio of its gold or its cash balance to its notes, it would, at any time, be enabled to do so by the payment of a tax, without going through the humiliating necessity for an appeal to the treasury to allow it to exceed the legal limit. at the same time, by the abolition of peel's act the cumbrous methods of stating the bank's position, as published week by week in the bank return, would be abolished. the two accounts would be put together, with the result that the bank's position would be apparently stronger than it appears to be under the present system, which makes the banking department's return weak at the expense of the great strength that it gives to the appearance of the issue department. this will be shown from the following statement given by sir edward holden of the return as issued on january 16th, and as amended according to his ideas:-bank statement, january 16, 1918. issue department notes issued .. £76,076,000 gold .................. £57,626,000 government debt ....... 11,015,000 other securities ...... 7,435,000 ---------- ---------- £76,076,000 £76,076,000 ratio of gold to notes issued = 75.7 per cent. banking department. capital ....... £14,553,000 government securities ...... £56,768,000 rest .......... 3,363,000 other securities ........... 92,278,000 deposits- notes .......... £30,750,000 public £41,416,000 gold and silver 1,143,000 other 121,589,000 ----------163,005,000 ------------ 31,893,000 other liabilities ... 18,000 ---------- ---------- £180,939,000 £180,939,000 ratio of cash balance to liabilities = 19.6 per cent. reconstructed balance-sheet of the bank, january 16, 1918. capital £14,553,000 rest 3,363,000 notes issued (circulation) 45,325,000 deposits 163,005,000 other liabilities 18,000 ___________ £226,264,000 gold £58,768,000 currency notes 11,015,000 ___________ £69,783,000 government securities 56,768,000 other securities 7,435,000 _________ 64,203,000 other securities 92,278,000 ___________ £226,264,000 ratio of gold to notes =129.7 per cent. " " cash balance to liabilities = 33.5 " it need not be said that these proposals have aroused the liveliest interest. at the bank meetings held since then several chairmen have been asked by their shareholders to express their views on sir edward's proposed revolution. sir felix schuster pronounced cautiously in favour of the revision of the bank act, and said that he had advocated it seventeen years ago. lord inchcape, at the national provincial meeting, thought that the matter required careful consideration. most of us will agree with this view. there is certainly much to be said for a reform of the weekly statement of the bank of england, giving, it may be added, a good deal more detail than sir edward's revised balance-sheet affords. but concerning his proposal to reconstruct our system of note issue on a foreign model, there is certain to be much difference of opinion. in the first place, owing to the development of our system of banking by deposit and cheque rather than by issue and circulation of notes, the note issue is not nearly so important a business in normal times in this country as it is in germany and france. moreover, the check imposed upon our banking community by the need for an appeal to the treasury before it can extend its note issue beyond a certain point often acts with, a salutary effect, and the view has even been expressed that if that check were taken away from our system it might be difficult, if not impossible, to maintain the gold standard which has been of such enormous value in building up the prestige of london as a financial centre. i do not think there is much weight in this argument, since, under sir edward's plan, the note issue could only be increased against discounts, and the bank, by the charge that it made for discounts, would still be able to control the situation. from the practical point of view of the present moment, a strong objection to the scheme is that it would open the door to fresh inflation by unrestricted credit-making just when the dangers of this process are beginning to dawn even on the minds of our rulers. vii the companies acts _march_, 1918 another government committee--the fallacy of imitating germany--prussianising british commerce--the inquiry into the companies acts--will labour influence dominate the report?--increased production the great need--will it be met by tightening up the companies acts?--the dangers of too much strictness--some reforms necessary--publicity, education, higher ideals the only lasting solution--the importance of foreign investments--industry cannot take all risks and no profits. every week--almost every day--brings with it the announcement of some new committee considering some question that may, or may not, arise now or when the war is over. especially in the realm of finance has the government's output of committees been notably prolific of late. we have had a committee on currency, a committee on banking amalgamations, and a committee appointed, humorously enough, by the ministry of reconstruction to consider what measures, if any, should be taken to protect the public interest in connection with the policy of industrial combinations--a policy which the board of trade has been sedulously fostering. now comes a committee to inquire "what amendments are expedient in the companies acts, 1908-1917, principally having regard to the circumstances arising out of the war, and to the developments likely to arise on its conclusion, and to report to the board of trade and to the ministry of reconstruction." it is composed of the right hon. lord wrenbury (chairman), mr a.s. comyns carr, sir f. crisp, mr g.w. currie, m.p., mr f. gaspard farrer, mr frank gore-browne, k.c., mr james martin, the hon. algernon h. mills, mr r.d. muir, mr c.t. needham, m.p., mr h.a. payne, sir owen philipps, m.p., sir william plender, mr o.c. quekett, and mr a.w. tait. the secretary is mr w.w. coombs, 55, whitehall, s.w. 1. there are some good names on the committee. mr. gaspard farrer represents a great issuing house; sir frank crisp, company lawyers; sir william plender, the accountants; mr o.c. quekett, the stock exchange; and sir owen philipps, the shipping interest. nevertheless, one cannot help shuddering when one considers the dangers that threaten british finance and industry from ill-considered measures which might possibly be recommended by a committee influenced by the atmosphere of the present outlook on financial and commercial affairs. one of the interesting features of the present war atmosphere is the fact that, now when we are fighting as hard as we can to defeat all that is meant by prussianism a great many of our rulers and public men are doing their best to impose prussianising methods upon this unfortunate country, merely because it is generally assumed that prussian methods have been shown, during the course of the war, to carry with them a certain amount of efficiency. it is certainly true that prussian methods do very well as applied to the prussians and submitted to by other races of germans. on the other hand, it is at least open to argument that the british method of freedom, individual initiative, elasticity and adaptability have produced results, during the present war, which have so far been paralleled by no other country engaged in the contest. working on interior lines with the assistance of docile and entirely submissive allies, germany has certainly done wonderful things in the war, but it by no means follows that the verdict of posterity will not give the palm of achievement to england, who has not only carried out everything that she promised to do before the war, but has incidentally and in the course of it created and equipped an army on a continental scale, and otherwise done very much more for the assistance of her allies than was contemplated before the war began. it is untrue to say that we were unprepared for the war. we were more than prepared to do all that we promised to do. what we were unprepared for was finding ourselves required to turn ourselves into, not only the greatest naval power in the world, but one of the greatest military powers also. this demand was sprang upon us, and we have met it with extraordinary success. the whole idea that germany's achievement has been such as to warrant any attempt on our part to model our institutions on her pattern seems to me to fall to pieces as soon as one looks calmly at the actual results produced by the different systems. moreover, even if we were to admit that germany's achievement in the war has been immeasurably greater than ours, it still would not follow that we could improve matters here by following the german system. it ought not to be necessary to observe that a system which is good for one nation or individual is not necessarily good for another. in the simple matter of diet, for instance, a most scientifically planned diet given to a child who does not happen to like it will not do that child any good. these things ought to be obvious, but unfortunately in these times, which call for eminently practical thought and effort, there is a curious doctrinaire spirit abroad, and the theorist is continually encouraged to imagine how much better things would be if everything were quite different, whereas what we want is the application of practical common sense to practical facts as they are. in the realm of finance the freedom and individual initiative and elasticity of our english system have long been the envy of the world. our banking system, as was shown, on an earlier page, has always worked with much less restriction on the part of legislative and official interference than any other, and, with the help of this freedom from official control, english bankers and finance houses had made london the financial centre of the world before the war. the attempt of parliament to control banking by peel's act of 1844 was quietly set aside by the banking machinery through the development of the use of cheques, which made the regulations imposed on the note issue a matter of quite minor importance, except in times of severe crisis, when these regulations could always be set aside by an appeal to the chancellor of the exchequer. there was no government interference in the matter of new issues of securities on the london stock exchange or of the quotations granted to new securities by the committee of the stock exchange. now the companies acts are to be revised in view of what may be necessary after the war, and there is only too much reason to fear that mistakes may occur through the imposition of drastic restrictions, which look so easy to work on paper, but are more than likely to have the actual effect of doing much more harm than good. "circumstances arising out of the war and developments likely to arise on its conclusion" give this committee a roving commission to consider all kinds of things, which may or may not happen, in the light of wisdom which may be put before it by interested witnesses, and, worse still, in the light of semi-official pressure to produce a report which will go down well with the house of commons. our politicians are at present in a state of extreme servility before the enterprising gentlemen who are now at the head of what is called the labour party. every one will sympathise with the aspirations of this party in so far as they aim at bettering the lot of those who do the hard and uninteresting work of the world, and giving them a larger share of the productions that they help to turn out; but that is not the same thing as giving obsequious attention to the views which their representatives may have concerning the management of financial affairs, on the subject of which their knowledge is necessarily limited and their outlook is likely to be, to a certain extent, prejudiced. a recent manifesto put forward by the leaders of the new labour party includes in its programme the acquisition by the nation of the means of production--in other words, the expropriation of private capitalists. the labour people very probably think that by this simple method they will be able to save the labourer the cost of providing capital and the interest which is paid for its use; and people who are actuated by this fallacy, which implies that the rate paid to capital is thinly disguised robbery, inevitably have warped views concerning the machinery of finance and the earnings of financiers. these views, expressed in practical legislation, might have the most serious effects not only upon england's financial supremacy but also on the industrial activity which that financial supremacy does so much to maintain and foster. what, after the war, will be the most important need, from the material point of view, for the inhabitants of this country? however the war may end, and whatever may happen between now and the end of it, there can be only one answer to this question, and that answer is greatly increased production. the war has already diminished our capital resources to the extent of the whole amount that we have raised by borrowing abroad, that is to say, by pledging the production of our existing capital, and by selling to foreign countries the foreign securities in which our capitalists had invested during the previous century. no one knows the extent to which our capital resources have been impaired by these two processes, but it may be guessed at as somewhere in the neighbourhood of 1500 millions; that is to say, about 10 per cent. of a liberal estimate of the total accumulated property of the country at the beginning of the war. to this direct diminution in our capital resources we have to add the impossibility, which has existed during the war, of maintaining our factories and industrial equipment in first-class working order by expenditure on account of depreciation of plant. on the other side of the balance-sheet we can put a large amount of new machinery introduced, which may or may not be useful for industrial purposes after the war; greatly improved methods of organisation, the effect of which may or may not be spoilt when the war is over by uncomfortable relations between capital and labour; and our loans to allies and dominions, some of which may have to be written off, and most of which will return us no interest for some time to come, or will at first pay us interest if we lend our debtors the money to pay it with. what the country will need, above all, on the material side, is an abundant revenue, which can only be produced by vigorous and steady effort in industry, which, again, can only be forthcoming if the machinery of credit and finance is given the fullest possible freedom to provide every one who wants to engage in industry and increase the output of the country with the financial facilities, without which nothing can be done. is it, then, wise at such a time to impose restrictions by a drastic tightening up of the companies act, upon those who wish by financial activity, to further the efforts of industries and producers? on the contrary, it would seem to be a time to give the greatest possible freedom to the financial machine so that there shall be the least possible delay and difficulty in providing enterprise with the resources that it needs. we can only make good the ravages of war by activity in production and strict economy in consumption. what we want to do is to stimulate the people of this country to work as hard as they can, to produce as much as possible, to consume as little as possible on unnecessary enjoyment and luxury, and, so, by procuring a big balance of production over consumption, to have the largest possible volume of available goods for sale to the rest of the world, in order to rebuild our position as a creditor country, which the war's demands upon us have to some extent impaired. it is a commonplace that if it had not been for the great mass of foreign securities, which this country held at the beginning of the war, we could not nearly so easily have financed the enormous amount of food and munitions which we have had to provide for our population, for our armies, and for the population and armies of our allies. if, instead of holding a mass of easily marketable securities, we had had to rely, in order to pay for our purchases of foreign goods, on the productions of our own mines and factories, and on our power to borrow abroad, then we should have had to restrict very greatly the number of men we have put into the firing-line so as to keep them at home for productive work, or, by the enormous amount of our borrowings, we should have cheapened the value of british credit abroad to a much greater extent than has been the case. our position as a great creditor country was an enormously valuable asset, not only during the war but also before it, both from a financial and industrial point of view. it gave us control of the foreign exchanges by enabling us, at any time, to turn the balance of trade in our favour by ceasing for a time to lend money abroad, and calling upon foreign countries to pay us the interest due from them. the financial connections which it implied were of the greatest possible assistance to us in enhancing british prestige, and so helping our industry and commerce to push the wares that they produced and handled. reform of the companies acts has often before the war been a more or less burning question. whenever the public thought that it had been swindled by the company promoting machinery, it used to write letters to the newspapers and point out that it was a scandal that the sharks of the city should be allowed to prey upon the ignorant public, and that something ought to be done by parliament to insure that investments offered to the public should somehow or other be made absolutely watertight and safe, while by some unexplained method the public would still be somehow able to derive large benefits from fortunate speculations in enterprises which turned out right. every one must admit there have been some black pages in the history of british company promoting, and that many swindles have been perpetrated by which the public has lost its money and dishonest and third-rate promoters have retired with the spoil. the question is, however, what is the remedy for this admitted and glaring evil? is it to be found by making the companies laws so strict that no respectable citizen would venture to become a director owing to the fear of penal servitude if the company on whose board he sat did not happen to pay a dividend, and that no prospectus could be issued except in the case of a concern which had already stood so severe a test that its earning capacity was placed beyond doubt? it would certainly be possible by legislative enactment to make any security that was offered as safe as consols, and less subject to fluctuation in value. but when this had been done the effect would be very much like the effect upon rabbits of the recent fixing of their price. no more securities would be offered. it is certainly extremely important for the future financial and industrial development of this country that the machinery of finance and company promotion should be made as clean as possible. what we want to do is to make everybody see that a great increase in output is required, that this great increase in output can only be brought about if there is a great increase in the available amount of capital, that capital can only be brought into being by being saved, and that it is therefore everybody's business, both for his own sake and that of the country, to earn as much as he can and save as much as he can so that the country's capital fund can be increased; so that industry, which will have many difficult problems to face when the war is over, shall be as far as possible relieved from any difficulty of finding all the capital that it needs. to produce these results it is highly necessary to increase the confidence of the public in the machinery of the stock exchange, in company promotion and all financial issues. any one who sincerely believes that these results can be produced by tightening up the companies acts is not only entitled but bound to press as hard as he can for the securing of this object. but is this the right way to do it? there is much to be said at first sight for making more strict the regulations under which prospectuses have to be issued under the companies acts, demanding a franker statement of the profits in the past, a fuller statement concerning the prices paid to vendors, and the prices paid by vendors to sub-vendors, and so forth. any one who sits down with a pre-war industrial prospectus in his hand can find many openings for the hand of the reformer. the accounts published by public companies might also be made fuller and more informing with advantage. but even if these obviously beneficial reforms were carried out, there would always be danger of their evasion. they might tend to the placing of securities by hole-and-corner methods without the issue of prospectuses at all, and to all the endless devices for dodging the law which are so readily provided as soon as any attempt is made by legislation to go too far ahead of public education and public feeling. this is the real solution of this problem--publicity, the education of the public, and a higher ideal among financiers. as long as the public likes to speculate and is greedy and ignorant enough to be taken in by the wiles of the fraudulent promoter, attempts by legislation to check this gentleman's enterprise will be defeated by his ingenuity and the public's eagerness to be gulled. the ignorance of the public on the subject of its investments is abysmal, as anybody knows who is brought into practical touch with it. just as the cure for the production of rotten and fraudulent patent medicines thrust down the public's throat by assiduous advertising is the education of the public concerning the things of its stomach, so the real cure for financial swindles is the education of the public concerning money matters, and its recognition of the fact that it is impossible to make a fortune in the city without running risks which involve the possible, not to say probable, loss of all the money with which the speculator starts. when once the public has learnt to distinguish between a speculation and an investment, and has also learnt honesty enough to be able to know whether it wants to speculate or invest, it will have gone much further towards checking the activity of the fraudulent promoter than any measure that can be recommended by the most respectable and industrious of committees. at the same time, it must be recognised by those responsible for our finance, that it is their business, and their interest, to keep the city's back premises clean; because insanitary conditions in the back yard raise a stink which fouls the whole city. in the meantime, if gossip is to be believed, some of the members of the government have the most disquieting intentions concerning the kind of regulations which they wish to impose on the activities of the city, especially in its financial branch. it is believed that some of the bright young gentlemen who now rule us are in favour of government control over the investment of money placed at home, and the prohibition of the issue of foreign securities; and it is even whispered that a fantastic scheme for controlling the profits of all industrial companies, by which anything earned above a certain level is to be seized for the benefit of the nation, is now a fashionable project in influential parliamentary circles. every one must, of course, admit that a certain amount of control will be necessary for some time after the war. it may not be possible at once to throw open the london money market to all borrowers, leaving them and it to decide between them who is to be first favoured with a supply of the capital for which there will be so large a demand when the war is over. certain industries, those especially on which our export trade depends, will have to be first served in the matter of the provision of capital. if it is a choice between the engineering or shipbuilding trades and a company that wants to start an aeroplane service between london and brighton for the idle rich, it would not be reasonable, during the first few months after the war, that the unproductive project should be able, by bidding a high price for capital, to forestall the demand of the more useful producer. and with regard to the issue of foreign securities, there is this to be said, that foreign securities placed in london have the same effect upon foreign exchange as the import into england of goods shipped from any country; that is to say, for the time being they turn the exchange against us. on the other hand, it is a well-known commonplace that imports of securities have to be balanced by exports of goods or services; and as the times when our export trade is most active are those when most foreign securities are being placed in london, it follows that any restrictions placed upon the issue of foreign securities in london will hinder rather than help that recovery in our export trade which is so essential to the restoration of our position as a creditor country. moreover, our rulers must remember this, that in war-time, when all the letters sent abroad are subject to the eye of the censor, it is possible to control the export of british funds abroad; but that in peace time (unless the censorship is to continue), it will not be possible to check foreign investment by restricting the issuing of foreign securities in london. if people see better rates to be earned abroad and more favourable prospects offered by the price of securities on foreign stock exchanges, they will invest abroad, whether securities are issued in london or not. as for the curious suggestion that the profits of industrial companies are henceforward to be limited and the whole balance above a statutory rate to be taken over by the state for the public good, this would be, in effect, the continuance on stricter lines of the excess profits duty. as a war measure the excess profits duty has much to be said for it at a time when the government, by its inflationary policy, is putting large windfalls of profit into the hands of most people who have to hold a stock of goods and have only to hold them to see them rise in value. the argument that the state should take back a large proportion of this artificially produced profit is sound enough; but, if it is really to be the case that industry is to be asked for the future to take all the risk of enterprise and handover all the profit above a certain level to the government, the reply of industry to such a proposition would inevitably be short, emphatic, unprintable, and by no means productive of revenue to the state. viii the year's balance-sheet _april_, 1918 the figures of the national budget--a large increase in revenue and a larger in expenditure--comparisons with last year and with the estimates--the proportions borne by taxation still too low--the folly of our policy of incessant borrowing--its injustice to the fighting men. at first sight the figures of revenue and expenditure for the year ending march 31st are extremely satisfactory, at any rate on the revenue side. the chancellor anticipated a year ago a revenue from taxation and state services of £638 millions, and the receipts into the exchequer on these accounts actually amount to £707 millions. on the expenditure side, however, the increase over the budget estimate was very much greater. the estimate was £2290 millions, and the actual amount expended was £2696 millions. instead, therefore, of a deficit of £1652 millions having to be met by borrowing, there was an actual gap, to be filled by this method, of, roughly, £1990 millions. to take the revenue side of the matter first, this being by far the most cheering and satisfactory, we find that the details of the revenue, as compared with last year's, were as follows:- year ending year ending mar. 31, 1918. mar. 31, 1917. increase. decrease. £ £ £ £ customs 71,261,000 70,561,000 700,000 --excise 38,772,000 56,380,000 -- 17,608,000 estate, etc., duties 31,674,000 31,232,000 442,000 --stamps 8,300,000 7,878,000 422,000 --land tax 665,000 640,000 25,000 --house duty 1,960,000 1,940,000 20,000 --income tax and super tax 239,509,000 205,033,000 34,476,000 --excess profits duties, etc. 220,214,000 139,920,000 80,294,000 --land value duties 685,000 521,000 164,000 --postal service 35,300,000 34,100,000 1,200,000 --crown lands 690,000 650,000 40,000 --sundry loans, etc. 6,056,250 8,055,817 -- 1,999,567 miscellaneous 52,148,315 16,516,765 35,631,550 -- ---------- ---------- ---------- ---------- 707,234,565 573,427,582 153,414,550 19,607,567 | | +-----------+----------+ £133,806,983 net increase. a more interesting comparison perhaps is to take the actual receipts during the past financial year and compare them, not with the former year, but with the estimates of the expected yield of the various items. in this case we get the following comparisons:-[transcriber's note: corrected a typo in the table: "sundry loans" line should have a minus(-) instead of a plus(+) as printed.] actual. estimated. difference. £ £ £ customs 71,261,000 70,750,000 + 511,000 excise 38,772,000 34,950,000 + 3,822,000 estate duties 31,674,000 29,000,000 + 2,674,000 stamps 8,300,000 8,000,000 + 300,000 land tax and house duty 2,625,000 2,600,000 + 25,000 income tax and super tax 239,509,000 224,000,000 + 15,509,000 excess profits tax 220,214,000 200,000,000 + 20,214,000 land value duties 685,000 400,000 + 285,000 postal services 35,300,000 33,700,000 + 1,600,000 crown lands 690,000 600,000 + 90,000 sundry loans, etc. 6,056,000 7,500,000 1,444,000 miscellaneous 52,148,000 27,100,000 + 25,048,000 certainly, the country is entitled to congratulate itself on this tremendous evidence of elasticity of revenue, and to a certain extent on the effort that it has made in providing this enormous sum of money from the proceeds of taxation and state services. but when this much has been admitted we have to hasten to add that the figures are not nearly so big as they look, and that there is much less "to write home about," as the schoolboy said, than there appears to be at first sight. those champions of the government methods of war finance who maintain that we have, during the past year, multiplied the pre-war revenue, of roughly, £200 millions by more than 3-1/2, so arriving at the present revenue of over £700 millions, are not comparing like with like. the statement is perfectly true on paper, and expressed in pounds sterling, but then the pound sterling of to-day is an entirely different article from the pre-war pound sterling. owing to the system of finance pursued by our government, and by every other government now engaged in the war, of providing for a large part of the country's goods by the mere manufacture of new currency and credit, the buying power of the pound sterling has been greatly depreciated. by multiplying the amount of legal tender currency in the shape of treasury notes, of token currency in the shape of silver and bronze coinage, and of banking currency through the bank deposits which are swollen by the banks' investments in government securities, the government has increased the amount of currency passing from hand to hand in the community while, at the same time, the volume of goods to be purchased has not been increased with anything like the same rapidity, and may, in fact, have been, actually decreased. the inevitable result has been a great flood of new money with a greatly depreciated value. index numbers show a rise of over 100 per cent. in the average prices of commodities during the war. it is, however, perhaps unfair to assume that the buying power of the pound has actually been reduced by a half, but it is certainly safe to say that it has been reduced by a third. therefore, the revenue raised by the government during the past year has to be reduced by at least a third before we are justified in comparing our war achievements with the government's pre-war revenue. if we take one-third off £707 millions it reduces the total raised during the past year by revenue to about £470 millions, less than two and a half times the pre-war revenue. from another point of view our satisfaction with the tremendous figures of the past year's revenue has to be to some extent qualified. the great elasticity shown by the big increase of actual achievement over the budget estimate has been almost entirely in revenue items which cannot be expected to continue to serve us when the war is over. the total increase in the receipts over estimate amounts to £69 millions, and of this £20 millions was provided by the excess profits duty, a fiscal weapon which was invented during the war, and for the purpose of the war. it has always been assumed that it would be discontinued as soon as the war was over, and if it should not be discontinued its after-war effect is likely to be very unfortunate at a time when our industrial effort requires all the encouragement that it can get. another £25 millions was provided by miscellaneous revenue, and this windfall again must be largely due to operations connected with the war. finally, the £15-1/2 millions by which the income tax exceeded the estimate must again be largely due to inflation and extravagance on the part of the government, which, by manufacturing money, and then spending it recklessly, puts big profits and big incomes into the hands of those who have stocks of goods to sell or who are in a position to produce them. if, therefore, the satisfaction with which we regard the big total of the government's revenue receipts has to be considerably modified in the cold light of close observation, the enormous increase on the expenditure side gives us very little comfort and calls for the most determined and continued criticism if our reckless government is to be made to turn over a new leaf. in the early days of the war there was much excuse for wasting money. we had to improvise a great army, and a great organisation for equipping it; there was no time then to look too closely into the way the money was being spent, but this excuse is long obsolete. it is not possible to waste money without also wasting the energy and working power of the nation; on this energy and working power the staying power of the country depends in its struggle to avert the greatest disaster that can be imagined for civilisation, that is, the victory of the german military power. seeing that for many months past we have no longer been obliged to finance russia, and to provide russia with the mass of materials and the equipment that she required, the way in which our expenditure has mounted up during the course of the year is a very serious blot on the year's balance-sheet. we spent during the year ending march 31st, £2696 millions against £2198 millions in the previous year, an increase of close upon £500 millions; £63 millions of this increase were due to interest on war debt, the rest of it was due to increased cost of the war, and few business men will deny that very many of these extra millions might have been saved if our rulers and our bureaucratic tyrants had been imbued with any real sense of the need for conserving the energy of the nation. much has been done by the committee on national expenditure to bring home to the government opportunities for economy, and methods by which it can be secured. can we be equally confident that much has been done by the government to carry out the advice that has been given by this committee? the treasury is frequently blamed for its inability to check the rapacity and extravagance of the spending departments. it is very likely that the treasury might have done more if it had not been led by its own desire for a short-sighted economy into economising on its own staff, the activity and efficiency of which was so absolutely essential to the proper spending of the nation's money. but when this has been admitted, the fact remains that the treasury cannot, or can only with great difficulty, be stronger on the side of economy than the chancellor of the exchequer, and that the task of the chancellor of the exchequer of imposing economy on a spendthrift war cabinet is one of extreme difficulty. i hope it is not necessary to say that i do not urge economy from any sordid desire to save the nation's money if, by its spending, victory could be secured or brought a day nearer. i only urge it because i believe that the conservation of our resources is absolutely necessary to maintain our staying power, and that these resources are at present being scandalously wasted by the government. inter-departmental competition is still complained of in the latest report of the national committee on expenditure, and there seems to be still very little evidence that the government departments have yet possessed themselves of the simple fact that it is only out of these resources that victory can be secured, and that any waste of them is therefore a crime against the cause of liberty and progress. it is possible that before these lines are in print the chancellor will have brought in his new budget, and therefore any attempt to forecast the measures by which he will meet next year's revenue would be even more futile than most other endeavours at prophecy. but from the figures of last year as they are before us we see once more that the proportion of expenditure raised by revenue still leaves very much to be desired; £707 millions out of, roughly, £2700 millions is not nearly enough. it is true that on the expenditure side large sums have been put into assets which may some day or other be recoverable, and it is therefore impossible to assume with any approach to accuracy what the actual cost of the war has been for us during the past year. we have made, for instance, very large advances to our allies and dominions, and it need not be said that our advances to our own dominions may be regarded as quite as good as if they were still in our own pockets; but in the case of our allies, our loans to russia are a somewhat questionable asset, and our loans to our other brothers-in-arms cannot be regarded as likely to be recoverable for some time to come, owing to the severity with which the war's pressure has been laid upon them. with regard to the other assets in which the government has invested our money, such as factories, machinery, ships, supplies and food, etc., it is at least possible that considerable loss may be involved in the realisation of some of them. it is, however, possible that the actual cost of the war to us during the year that is past may turn out some day to have been in the neighbourhood of £2000 millions. if, on the other hand, we deduct from the £700 millions raised by revenue the £200 millions which represent the normal pre-war cost of government to this country we find that the proportion of war's cost raised out of revenue is slightly over 25 per cent. this proportion must be taken with all reserve for the reasons given above, but in any case it is very far below the 47 per cent. of the war's cost raised out of revenue by our ancestors in the course of the napoleonic wars. it seems to me that this policy of raising so large a proportion of the war's cost by borrowing is one that commends itself to short-sighted politicians, but is by no means in the interests of the country as a whole, or of the taxpayers who now and hereafter have to find the money for paying for the war. in so far as the war's needs have to be met abroad, borrowing abroad is to some extent inevitable if the borrowing nation has not the necessary resources and labour available to turn out goods for export to exchange against those which have to be purchased abroad, but in so far as the war's needs are financed at home, the policy of borrowing is one that should only be used within the narrowest possible limits. by its means the government, instead of making the citizens pay by taxation for the war as it goes on, hires a certain number of them to pay for it by promising them a rate of interest, and their money back some day. the interest and the sinking fund for redemption have to be found by taxation, and so the borrowing process merely postpones taxation from the war period to the peace period. during the war period taxation can be raised comparatively easily owing to the patriotic stimulus and the simplification of the industrial problem which is provided by the government's insatiable demand for commodities. when the days of peace return, however, there will be very grave disturbance and dislocation in industry, and it will have once more to face the problem of providing goods, not for a government which will take all that it can get, but for a public, the demands of which will be uncertain, and whose buying power will be unevenly distributed, and difficult to calculate. the process, therefore, which postpones taxation during the war period to the peace period seems to be extraordinarily short-sighted from the point of view of the nation's economic progress. recovery after the war may be astonishingly rapid if all goes well, but this can only happen if every opportunity is given to industry to get back to peace work with the least possible friction, and a heavy burden of after-war taxation, such as we shall inevitably have to face if our chancellors of the exchequer continue to pile up the debt charge as they have done in the past, will be anything but helpful to those whose business it will be to set the machinery of industry going under peace conditions. as things are, if we continue to add anything like £2000 millions a year to the national debt, it will not be possible to balance the after-war budget without taxation on a heavier scale than is now imposed, or without retaining the excess profit duty, and so stifling industry at a time when it will need all the fresh air that it can get. apart from this expedient, which would seem to be disastrous from the point of view of its effect upon fresh industry, the most widely advertised alternative is the capital levy, the objections to which are patent to all business men. it would involve an enormously costly and tedious process of valuation, its yield would be problematical, and it might easily deal a blow at the incentive to save on which the supply of capital after the war entirely depends. a much higher rate of income tax, especially on large incomes, is another solution of the problem, and it also might obviously have most unfortunate effects upon the elasticity of industry. a tax on retail purchases has much to be said in its favour, but against it is the inequity inseparable from the impossibility of graduating it according to the ability of the taxpayer to bear the burden; and a general tariff on imported goods, though it would be welcomed by the many protectionists in our midst, can hardly be considered as a practical fiscal weapon at a time when the need for food, raw material, and all the equipment of industry will make it necessary to import as rapidly and as cheaply as possible in order to promote our after-war recovery. apart from these purely economic arguments against the high proportion of the war's costs that we are meeting by borrowing, there is the much more important fact of its bad effect on the minds of our soldiers, and of those members of the civilian population who draw mistaken inferences from its effects. from the point of view of our soldiers, who have to go and fight for their country at a time when those who are left at home are earning high wages and making big profits, it is evidently highly unfair that the war should be financed by a method which postpones taxation. the civilian population left at home, earning high profits and high wages, should clearly pay as much as possible during the war by immediate taxation, so that the burden of taxation may be relieved for our soldiers when they return to civil life. in view of the hardships and dangers which our soldiers have to face, and the heroism with which they are facing them, this argument should be of overwhelming strength in the eyes of every citizen who has imagination enough to conceive what our fighting men are doing for us and how supreme is our duty to do everything to relieve them from any other burden except those which the war compels them to face. there is also the fact that many members of our uninstructed industrial population believe that the richer classes are growing richer owing to the war, and battening on the proceeds of the loans. i do not think that this is true; on the contrary, i believe that the war has brought a considerable shifting of buying power from the well-to-do classes to the manual workers. nevertheless, in these times misconceptions are awkwardly active for evil. the well-to-do classes as a whole are not really benefited by having their future incomes pledged in order to meet the future debt charge, and if, at the same time, they are believed to be acquiring the right to wealth, which wealth they will have themselves to provide, the fatuity of the borrowing policy becomes more manifest. for these reasons it is sincerely to be hoped that our next fiscal year will be marked by a much higher revenue from taxation, a considerable decrease in expenditure, and a consequently great improvement in the proportion of war's cost met out of revenue, on what has been done in the past year. at our present rate of taxation we are not nearly meeting, out of permanent taxes, the sum which will be needed when the war is over for peace expenditure on the inevitably higher scale, pensions, and interest and sinking fund on war debt. ix comparative war finance _may_, 1918 the new budget--our own and germany's balance-sheets--the enemy's difficulties--mr bonar law's optimism--special advantages which peace will bring to germany--a comparison with american finance--how much have we raised from revenue?--the value of the pound to-day--the 1918 budget an improvement on its predecessors--but direct taxation still too low--deductions from the chancellor's estimates. one of the most interesting passages in a budget speech of unusual interest was that in which the chancellor of the exchequer compared the financial methods of germany and of this country, as shown by their systems of war finance. he began by admitting that it is difficult to make any accurate calculation on this subject, owing to the very thick mist of obscurity which envelops germany's actual performance in the matter of finance since the war began. as the chancellor says, our figures throughout have been presented with the object of showing quite clearly what is our financial position. most of the people who are obliged to study the figures of government finance would feel inclined to reply that, if this is really so, the chancellor and the treasury seem to have curiously narrow limitations in their capacity for clearness. very few accountants, i imagine, consider the official figures, as periodically published, as models of lucidity. nevertheless, we can at least claim that in this respect the figures furnished to us by the government during the war have been quite as lucid as those which used to be presented in time of peace, and it is greatly to the credit of the treasury that, in spite of the enormous figures now involved by government expenditure, the financial statements have been published week by week, quarter by quarter, and year by year, with the same promptitude and punctuality that marked their appearance in peace-time. in germany, the chancellor says, it has not been the object of german financial statements to show the financial position quite clearly. it is, therefore, difficult to make an exact statement, but he was able to provide the house with a series of very interesting figures, taken from the statements of the german finance ministers themselves. his first point is with regard to the increase of expenditure. the alarming rate with which our expenditure has so steadily grown appears to be paralleled also in germany. up to june, 1916, germany's monthly expenditure was £100 millions. it has now risen to over £187 millions. that means to say that their expenditure per diem is £6-1/4 millions, almost the same as ours, although our expenditure includes items such as separation allowances and other matters of that kind, borne by the states and municipalities in germany, and so not appearing in the german imperial figures. as to the precise extent of the german war debt, there is no certainty, but the chancellor was able to tell the house that the last german vote of credit, which was estimated to carry them on to june or july, brings the total amount of all their votes of credit to £6200 millions, and that it is at least certain that that amount has been added to their war debt, because their taxation during the war has not covered peace expenditure plus debt charge. up to 1916 they imposed no new taxation. in 1916 they imposed a war increment tax, something in the nature of a capital levy, which is stated to have brought in £275 millions. they added also that year £25 millions nominally to their permanent revenue. in 1917 they added in addition £40 millions to their permanent revenue, "assuming, therefore, that their estimates were realised, the total amount of new taxation levied by them since the beginning of the war comes to £365 millions, as against our £1044 millions. this £365 millions is not enough to pay the interest upon the war debt which had been accumulated up to the end of the year." mr bonar law then proceeded to give an estimate of what the german balance-sheet will be a year hence on the same basis on which he had calculated ours. with regard to our position, he had calculated that on the present basis of taxation we shall have a margin of four millions at the end of the present year if peace should then break out. as will be shown later, this estimate of his is somewhat optimistic, but at any rate our position, compared with that of germany, may be described as on velvet. a year hence the german war debt will be not less than £8000 millions. the interest on that will be at least £400 millions, a sinking fund at 1/2 per cent. will be £40 millions. their pension engagements, which will be much higher than ours owing to their far heavier casualties, have been estimated at amounts ranging as high as £200 millions. the chancellor was sure that he was within the mark in saying that it will be at least £150 millions. their normal pre-war expenditure was £130 millions, so that they will have to face a total expenditure at the end of the war of £720 millions. on the other side of the account their pre-war revenue was £150 millions. they have announced their intention of this year raising additional permanent imperial revenue amounting to £120 millions. from the nature of the taxes the chancellor considers it very difficult to believe that this amount will be realised, but, assuming that it is, it will make their total additional revenue £185 millions. that, added to the pre-war revenue, gives a total of £335 millions, showing "a deficit at the end of this year, comparing the revenue with the expenditure, of £385 millions at least." the chancellor added that if that were our position he would certainly think that bankruptcy was not far from the british government. another point that the chancellor was able to make effectively, in comparing our war revenue with germany's, was the fact that, with the exception of the war increment tax, scarcely any of the additional revenue has been obtained from the wealthier classes in germany. taxation has been indirect and on commodities which are paid for by the masses of the people. "the lesson to be drawn from these facts is not difficult to see. the rulers of germany, in spite of their hopes of indemnity, must realise that financial stability is one of the elements of national strength. they have not added to their financial stability." the reason for this failure the chancellor considers to be largely psychological. it is, in the first place, because they do not care to add to discontent by increased taxation all over the country, but "it is still more due to this, that in germany the classes which have any influence on or control of the government are the wealthier classes, and the government have been absolutely afraid to force taxation upon them." it is certainly very pleasant to be able to contemplate the financial blunders by which germany is so greatly increasing the difficulties that it will have to face before the war is over. on the other hand, we have to recognise that the chancellor, with that incorrigible optimism of his, has committed the common but serious error of over-stating his case by leaving out factors which are in germany's favour, as, for instance, that germany's debt is to a larger extent than ours held at home. since the war began we have raised over £1000 millions by borrowing abroad. our public accounts show that the item of "other debt," which is generally believed to refer to debt raised abroad, now amounts to £958 millions, while one of our loans in america, which is separately stated in the account because it was raised under a special act, amounted to £51-1/2 millions. it is also quite possible that fair amounts of our treasury bills, perhaps also of our temporary advances and of our other war securities, have been taken up by foreigners; but quite apart from that the two items already referred to now amount to more than £1000 millions, though at the end of march last their amount was only £988 millions. it is also well known that we have during the course of the war realised abroad the cream of our foreign investments, american railroad bonds, municipal and government holdings in scandinavia, argentina, and elsewhere, to an amount concerning which no accurate estimate can be made, except by those who have access to the arcana of the treasury. it may, however, be taken as roughly true that so far the extent of our total borrowings and realisation of securities abroad has been balanced by our loans to our allies and dominions, which amounted at the end of march last to £1526 millions. we have thus entered into an enormous liability on foreign debts and sold a batch of very excellent securities on which we used to receive interest from abroad in the shape of goods and services, against which we now hold claims upon our allies and dominions, in respect to the greater part of which it would be absurd to pretend that we can rely on receiving interest for some years after the war, in view of the much greater economic strain imposed by the war upon our allies. germany, of course, has been doing these things also. germany has parted with her foreign securities. she was selling them in blocks for some weeks before the war, and germany, of course, has done everything that she could in order to induce neutrals, during the course of the war, to buy securities from her and to subscribe to her war loans. nevertheless, it cannot have been possible for germany to carry out these operations to anything like the extent that we have, partly because her credit has not been nearly so good, partly because her ruthless and brutal conduct of the war has turned the sentiment of the world against her, and partly because the measures that we have taken to check remittances and transfers of money have not been altogether ineffective. on this side of the problem germany has therefore an advantage over us, that her war finance, pitiful a$ it has been, has, not owing to any virtue of hers, but owing to force of circumstances, raised her a problem which is to a great extent internal, and will not have altered her relation to the finance of other countries so much as has been the case with regard to ourselves. we also have to remember that the process of demobilisation will be far simpler, quicker, and cheaper for germany than for us. even if the war ended to-morrow the german army would not have far to go in order to get home, and we hope that by the time the war ends the german army will all have been driven back into its own country and so will be on its own soil, only requiring to be redistributed to its peace occupations. our army will have to be fetched home, firstly, over continental railways, probably battered into a condition of much inefficiency, and then in ships, of which the supply will be very short. the process will be very slow and very costly. our overseas army will have to be sent back to distant dominions, and the army of our american allies will have to be ferried back over the atlantic. consequently if germany is able to obtain anything like the supply of raw material that she requires she will be able to get back to peace business much more quickly than any of her anglo-saxon enemies, and this is an advantage on her side which it would be unwise to ignore in considering the bad effects on her after-war activities of the very questionable methods by which she has financed and is financing the war. since we are indulging in these comparisons, it may be interesting to consider how our american allies are showing in this matter of war finance. the _times_, in its "city notes" of april 15th, observed, in connection with the unexpectedly small amount of the third liberty loan, that the reason why the smaller figure was adopted for the issue was that it seems quite certain now that the original estimate for the expenditure in the fiscal year ending june 30th next was much too high. this estimate was 18,775 million dollars. the _times_ stated that the realised amount is likely to be hardly more than 12,000 million dollars, of which about 4500 million dollars will represent loans to allies, and that the estimate for the year's largely increased tax revenue was 3886 million dollars, which now seems likely to be exceeded by the receipts. if this be so, out of a total expenditure of £2400 millions, of which £900 millions will be lent to the allies, the americans are apparently raising nearly £800 millions out of revenue. therefore if we deduct from both sides of the account the pre-war expenditure of about £215 millions and deduct also the loans to allies from the expenditure, it leaves the cost of the war to america £1285 millions for this year and the war revenue £562 millions. if these figures are correct it would thus appear that america is raising nearly half its actual war cost out of revenue as the war goes on. on the other hand, in the new york _commercial chronicle_ of april 6th the total estimated disbursements for the year are still stated at over 16,000 million dollars, that is to say, £3200 millions roughly, so that there seems to be considerable uncertainty as to what the actual amount of the expenditure of the united states will be during the year ending on june 30th. in any case, there can be no question that if the very high proportion of war cost paid out of revenue shown by the _times_ figures proves to be correct, it will be largely owing to accident or misfortune; if america's war expenditure has not proceeded nearly as fast as was expected, it will be, no doubt, owing not to economies but to shortcomings in the matter of delivery of war goods which the government had expected to pay for in the course of the fiscal year. it certainly would have been expected that the americans would in this matter of war finance be in a position to set a very much higher standard than any of the european belligerents owing to the enormous wealth that the country has acquired during the two and a half years in which it, in the position of a neutral, was able to sell its produce at highly satisfactory prices to the warring powers without itself having to incur any of the expenses of war. on the other hand, its great distance from the actual seat of operations will naturally make it difficult for the american government to impose taxation as freely as might have been done in the case of peoples which are actually on the scene of warfare; so that it is hardly safe to count on american example to improve the standard of war finance which has been so lamentably low in europe in the course of the present war. according to their original estimates the proportion of war cost borne out of taxation seems to have been on very much the same level as ours, and this has all through the war been very much lower than the results achieved by our ancestors at the time of the napoleonic and crimean wars. on this point the proportion of our expenditure, which has been borne out of revenue, the chancellor stated that up to the end of last financial year, march 31, 1918, the proportion of total expenditure borne out of revenue was 26.3 per cent. on the estimates which he submitted to the house in his budget speech on april 22nd, the proportion of total expenditure met out of revenue during the current financial year will be 28.3 per cent., and the proportion calculated over the whole period to the end of the current year will be 26.9 per cent. these proportions, however, are between total revenue and total expenditure during the war period. the proportion, of course, is not so high when we try to calculate actual war revenue and war expenditure by deducting on each side at a rate of £200 millions a year as representing normal expenditure and revenue and leaving out advances to allies and dominions. on this basis the proportion of war expenditure met out of war revenue up to march 31, 1918, was, the chancellor stated, 21.7 per cent. for the year 1917-18 it was 25.3 per cent., for the current year it will be 26.5 per cent., and for the whole period up to the end of the current year 23.3 per cent. the corresponding figures for the napoleonic and crimean wars are given by sir bernard mallet in his book on british budgets as 47 per cent. and 47.4 per cent. so that it will be seen that, judged by this test, our war finance, though very much better than germany's, is not on so high a standard as that set by previous wars. it is true, of course, that the rate of expenditure during the present war has been on a scale which altogether dwarfs the outgoing in any previous struggle. the napoleonic war is calculated to have cost some £800 millions, having lasted some twenty-three years. last year we spent £2696 millions, of which near £2000 millions may be taken as war cost, after deducting normal expenditure and loans to allies. nevertheless, this argument of the enormous cost of the present war does not seem to me to be a good reason why the war should be financed badly, but rather a reason for making every possible effort to finance it well are we doing so? at first sight it is a great achievement to have increased our total revenue from £200 millions before the war to £842 millions, the amount which we are expected to receive during the current year on the basis of the proposed additions to taxation, without taking into account any revenue from the suggested luxury tax. but, as i have already pointed out, the comparison of war pounds with pre-war pounds is in itself deceptive. the pounds that we are paying to-day in taxation are by no means the pounds that we paid before the war; their value in effective buying power has been diminished by something like one half. so that even with the proposed additions to taxation we shall not have much more than doubled the revenue of the country from taxation and state services as calculated in effective buying power. when we consider how much is at stake, that the very existence, not only of the country but of civilisation, is endangered by german aggression, it cannot be said that in the matter of taxation the country is doing anything like what it ought to have done or anything like what it would have done, willingly and readily, if a proper example had been set by the leading men among us, and if the right kind of financial lead had been given to the country by its rulers. when we look at the details of the budget, it will be seen that the chancellor has made a considerable advance upon his achievement of a year ago, when he imposed fresh taxation amounting to £26 millions, twenty of which came from excess profits duty, and could therefore not be counted upon as permanent, in his budget for a year which was expected to add over £1600 millions to the country's debt, and actually added nearly £2000 millions. for the present year he anticipates an expenditure of £2972 millions, and he is imposing fresh taxation which will realise £68 millions in the current year and £114-1/2 millions in a full year. on the basis of taxation at which it stood last year he estimates for an increase of £67 millions, income tax and super-tax on the old basis being expected to bring in £28 millions more, and excess profits duty £80 millions more, against which decreases were estimated at £3-1/2 millions in excise and £37 millions in miscellaneous. he thus expects to get a total increase on the last year's figures of £135 millions, making for the current year a total revenue of £842 millions, and leaving a total deficit of £2130 millions to be provided by borrowing. increases in taxation on spirits, beer, tobacco, and sugar bring in a total of nearly £41 millions. an increase of a penny in the stamp duty on cheques is estimated to bring in £750,000 this year and a million in a full year, and the increases in the income tax and the super-tax will bring in £23 millions in the present year and £61 millions in a full year. increases in postal charges will bring in £3-1/2 millions this year and £4 millions in a full year. there has been little serious criticism of these changes in taxation except that many people, who seem to regard the penny post as a kind of fetish, have expressed regret that the postal rate of the letter should be raised to 1-1/2 d. this addition seems to me to be merely an inadequate recognition of the depreciation of the buying power of the penny and to be fully warranted by the country's circumstances. either it will bring in revenue or it will save the post office labour, and whichever of these objects is achieved will increase the country's power to continue the war. the extra penny stamp on cheques has been rather absurdly objected to as being likely to increase inflation. since the effect of it is likely to be that people will draw a smaller number of small cheques, and will make a larger number of their purchases by means of treasury notes, the tax will merely result in the substitution of one form of currency for another, and it is difficult to see how this process will in any way increase inflation. other arguments might be adduced, which make it undesirable to increase the outstanding amounts of treasury notes, but in the matter of inflation through addition to paper currency, it seems to me that the proposed tax is entirely blameless. the increase of a shilling in income tax and super-tax produced a feeling of relief in the city, being considerably lower than had been anticipated. it is hardly the business of the chancellor of the exchequer in this most serious crisis to produce feelings of relief among the taxpayers, and it seems to me a great pity that he did not make much freer use of these most equitable forms of taxation, having first made arrangements (which could easily have been done) by which their very severe pressure would have been relieved upon those who have families to bring up. death duties, again, he altogether omitted as a source of extra revenue. his proposed luxury tax he has left to be evolved by the wisdom of a house of commons committee, and has thereby given plenty of time to extravagantly minded people to lay in a store of stuff before the tax is brought into being. space will not allow me to deal fully with the chancellor's very interesting analysis of our position as he expects it to be at the end of the financial year on the supposition that the war was then over. he expects a revenue then of £540 millions on the present basis, making, with the yield of the new taxes in a full year, £654 millions in all, without including the excess profits duty, and he expects an after-war expenditure of £650 millions, including £50 millions for pensions and £380 millions for debt charge. it seems to me that his expectation of after-war revenue is too high, and of after-war expenditure is too low. he says that the estimates have been carefully made, but that they include "a recovery from the absence of war conditions," but surely the absence of war conditions is much more likely to produce a diminution than a recovery in taxation. under the present circumstances, with prices continually rising, the profits of those who grow or hold stocks of goods of any kind automatically swell the rise in prices has only to cease, to say nothing of its being turned into a fall, to produce at once a big check in those profits, and when we consider the enormous dislocation likely to be produced by the beginning of the peace period expectations of an elastic revenue when the war is over seem to be almost criminally optimistic. the chancellor arrived at his after-war debt charge of £380 millions by estimating for a gross debt on march 31, 1919, of £7980 millions, which he reduces to a net debt of £6856 millions by deducting half the expected face value of loans to allies, £816 millions, and £308 millions for loans to dominions and india's obligation. but is he, in fact, entitled to count on receiving any interest at all from our allies for some years to come after the war? if not, then on that portion of our debt which is represented by loans to allies we shall have to meet interest for ourselves. he also gave an imposing list of assets in the shape of balances in hand, foodstuffs, land, securities, building ships, stores in munitions department, and arrears of taxation, amounting in all to nearly £1200 millions. it is certainly very pleasant to consider that we shall have all these valuable assets in hand; but against them we have to allow, which the chancellor altogether omitted to do, for the big arrears of expenditure and the huge cost of demobilisation, which is at least likely to absorb the whole of them. on the whole, therefore, although we can claim that our war finance is very much better than that of our enemies, it is difficult to avoid the conclusion that it might have been very much better than it is, and that it is not nearly as good as it is represented to be by the optimistic fancy of the chancellor of the exchequer. x international currency _june_, 1918 an inopportune proposal--what is currency?--the primitive system of barter--the advantages possessed by the precious metals--gold as a standard of value--its failure to remain constant--currency and prices--the complication of other instruments of credit--no substitute for gold in sight--its acceptability not shaken by the war--a fluctuating standard not wholly disadvantageous--an international currency fatal to the task of reconstruction--stability and certainty the great needs. as if mankind had not enough on its hands at the present moment, a number of well-meaning people seem to think that this is an opportune time for raising obscure questions of currency, and trying to make the public take an interest in schemes for bettering man's lot by improving the arrangements under which international payments are carried out. nobody can deny that some improvement is possible in this respect, but it may very well be doubted whether, at the present moment, when very serious problems of rebuilding have inevitably to be faced and solved, it is advisable to complicate them by introducing this difficult question which, whenever it is raised, will require the most careful and earnest consideration. since, however, the question is in the air, it may be as well to consider what is wrong with our present methods, and what sort of improvements are suggested by the reformers. at present, as every one knows, international payments are in normal times ultimately settled by shipments from one country to another of gold. gold has achieved this position for reasons which have been described in all the currency text-books. mankind proceeded from a state of barter to a condition in which one particular commodity was used as the chief means of payment simply because this process was found to be much more convenient. under a system of barter an exchange could only be effected between two people who happened to be possessed each of them of the thing which the other one wanted, and also at the same time to want the thing which the other one possessed, and the extent of their mutual wants had to lit so exactly that they were able to carry out the desired exchange. it must obviously have been rare that things happened so fortunately that mutually advantageous exchanges were possible, and the text-books invariably call attention to the difficulties of the baker who wanted a hat, but was unable to supply his need because the hatter did not want bread but fish or some other commodity. it thus happened that we find in primitive communities one particular commodity of general use being selected for the purpose of what is now called currency. it is very likely that this process arose quite unconsciously; the hatter who did not want bread may very likely have observed that the baker had something, such as a hit of leather, which was more durable than bread, and which the hatter could be quite certain that either he himself would want at some time, or that somebody else would want, and he would therefore always be able to exchange it for something that he wanted. all that is needed for currency in a primitive or any other kind of people is that it should be, in the first place, durable, in the second place in universal demand, and, in the third place, more or less portable. if it also possessed the quality of being easily able to be sub-divided without impairing its value, and was such that the various pieces into which it was sub-divided could be relied on not to vary in desirability, then it came near to perfection from the point of view of currency. all these qualities were possessed in an eminent degree by the precious metals. it is an amusing commentary on the commonly assumed material outlook of the average man that the article which has won its way to supremacy as currency by its universal desirability, should be the precious metals which are practically useless except for purposes of ornamentation. for inlaying armour and so adorning the person of a semi-barbarous chief, for making into ornaments for his wives, and for the embellishment of the temples of his gods, the precious metals had eminent advantages, so eminent that the practical common sense of mankind discovered that they could always be relied upon as being acceptable on the part of anybody who had anything to sell. in the matter of durability, their power to resist wear and tear was obviously much greater than that of the hides and tobacco and other commodities then fulfilling the functions of currency in primitive communities. they could also be carried about much more conveniently than the cattle which have been believed to have fulfilled the functions of currency in certain places, and they were capable of sub-division without any impairing of their value, that is to say, of their acceptability. merely as currency, precious metals thus have advantages over any other commodity that can be thought of for this purpose. so far, however, we have only considered the needs of man for currency; that is to say, for a medium of exchange for the time being. it is obvious, however, that any commodity which fulfils this function, that is to say, is normally taken in payment in the exchange of commodities and services, also necessarily acquires a still more important duty, that is, it becomes a standard of value, and it is on the alleged failure of gold to meet the requirements of the standard of value that the present attack upon it is based. on this point the defenders of the gold standard will find a good deal of difficulty in discovering anything but a negative defence. the ideal standard of value is one which does not vary, and it cannot be contended that gold from this point of view has shown any approach to perfection in fulfilling this function. it could only do so if the supply of it available as currency could by some miracle be kept in constant relation with, the supply of all other commodities and services that are being produced by mankind. that it should be constant with each one of them is, of course, obviously impossible, since the rate at which, for example, wheat and pig-iron are being produced necessarily varies from time to time as compared with one another. variations in the price of wheat and pig-iron are thus inevitable, but it can at least be claimed by idealists in currency matters that some form of currency might possibly be devised, the amount of which might always be in agreement with the amount of the total output of saleable goods, in the widest sense of the word, that is being created for man's use. it need not be said that this desirability of a constant agreement between the volume of currency and the volume of goods coming forward for exchange is based on what is called the quantitative theory of money. this theory is still occasionally called in question, but is on the whole accepted by most economists of to-day, and seems to me to be a mere arithmetical truism if we only make the meaning of the word "currency" wide enough; that is to say, if we define it as including all kinds of commodities, including pieces of paper and credit instruments, which are normally accepted in payment for goods and services. this addition of credit instruments, however, is a complication which has considerably confused the problem of gold as the best means of ultimate payment. taken simply by itself the quantitative theory of money merely says that if money of all kinds is increased more rapidly than goods, then the buying power of money will decline, and the prices of goods will go up and vice versa. this seems to be an obvious truism if we make due allowance for what is called the velocity of circulation. if more money is being produced, but the larger amount is not turned over as rapidly as the currency which was in existence before, then the effect of the increase will inevitably be diminished, and perhaps altogether nullified. but other things being equal, more money will mean higher prices, and less money will mean lower prices. but, as has been said, the question is very greatly complicated by the addition of credit instruments to the volume of money, and this complication has been made still more complicated by the fact that many economists have refused to regard as money anything except actual metal, or at least such credit instruments as are legal tender, that is to say, have to be taken in payment for commodities, whether the seller wishes to do so or not. for example, many people who are interested in currency questions would regard at the present moment in this country gold, bank of england notes, treasury notes, and silver and copper up to their legal limits as money, but would deny this title to cheques. it seems to me, however, that the fact that the cheque is not and cannot be legal tender does not in practice affect or in any way impair the effectiveness of its use as money. as a matter of fact cheques drawn by a good customer of a good bank are received all over the country day by day in payment for an enormous volume of goods. in so far as they are so received, their effect upon prices is exactly the same as that of legal tender currency. this fact is now so generally recognised that the committee on national expenditure has called attention to the financing of the war by bank credits as one of the reasons for the inflation of prices which has done so much to raise the cost of the war. it is, in fact, being generally recognised that the power of the bankers to give their customers credits enabling them to draw cheques amounts in fact to an increase in the currency just as much as the power of the bank of england to print legal tender notes, and the power of the government to print treasury notes. thus it has happened that by the evolution of the banking system the use of the precious metals as currency has been reinforced and expanded by the printing of an enormous mass of pieces of paper, whether in the form of notes, or in the form of cheques, which economise the use of gold, but have hitherto always been based on the fact that they are convertible into gold on demand, and in fact have only been accepted because of this important proviso. gold as currency was so convenient and perfect that its perfection has been improved upon by this ingenious device, which prevented its actually passing from hand to hand as currency, and substituted for it an enormous mass of pieces of paper which were promises to pay it, if ever the holders of the paper chose to exercise their power to demand it. by this method gold has been enabled to circulate in the form of paper substitutes to an extent which its actual amount would have made altogether impossible if it had had to do its circulation, so to speak, in its own person. from the application of this great economy to gold two consequences have followed; the first is that the effectiveness of gold as a standard of value has been weakened because this power that banks have given to it of circulating by substitute has obviously depreciated its value by enormously multiplying the effective supply of it. depreciation in the buying power of money, and a consequent rise in prices, has consequently been a factor which has been almost constantly at work for centuries with occasional reactions, during which the process went the other way. another consequence has been that people, seeing the ease with which pieces of paper can be multiplied, representing a right to gold which is only in exceptional cases exercised, have proceeded to ask whether there is really any necessity to have gold behind the paper at all, and whether it would not be possible to evolve some ideal form of super-paper which could take the place of gold as the basis of the ordinary paper which is created by the machinery of credit, which would be made exchangeable into it on demand instead of into gold. it is difficult to say how far the events of the war have contributed to the agitation for the substitution for gold of some other form of international currency. it would seem at first sight that the position of gold at the centre of the credit system has been shaken owing to the fact that in sweden and some other neutral countries the obligation to receive gold in payment for goods has been for the time being abrogated. the critics of the gold standard are thus enabled to say, "see what has happened to your theory of the universal acceptability of gold. here are countries which refuse to accept any more gold in payment for goods. they say, 'we do not want your gold any more. we want something that we can eat or make into clothes to put on our backs.'" this is certainly an extremely curious development that is one of the by-products of war's economic lessons. but i do not feel quite sure that it has really taught us anything new. all that has ever been claimed for gold is that it is universally acceptable when men are buying and selling together under more or less normal circumstances. it has always been recognised that a shipwrecked crew on a desert island would be unlikely to exchange the coco-nuts or fish or any other commodities likely to sustain life which they could find, for any gold which happened to be in the possession of any of them, except with a view to their being possibly picked up by a passing ship, and returning to conditions under which gold would reassume its old privilege of acceptability. during the war the shipping conditions have been such that many countries have been hard put to it, especially if they were contiguous to nations with which the entente is at present at war, to get the commodities which they needed for their subsistence. the entente, with its command of the sea, has found it necessary to ration them so that they should have no available surplus to hand on to the enemy. they have very naturally endeavoured to resist these measures, and in order to do so have made use of the power that they exercise by their being in possession of commodities which the entente desires. they have shown a tendency to say that they would not part with these commodities unless the entente allowed them to have a larger proportion of things needed for subsistence than the entente thought necessary for them, and it was as part of this battle for larger imports of necessaries that gold has been to some extent looked upon askance as means of payment, the preference being given to things to eat and wear rather than to the metal. these wholly abnormal circumstances, however, do not seem to me to be any proof that gold will after the war be any less acceptable as a means of payment than before. the germans are usually credited with considerable sagacity in money matters, with rather more, in fact, i am inclined to think, than they actually possess; they, at any rate, show a very eager desire to collect together and hold on to the largest possible store of gold, obviously with a view to making use of it when the war is over in payment for raw materials, and other commodities of which they are likely to find themselves extremely short. america also has shown a strong tendency to maintain as far as possible within its borders the enormous amount of gold which the early years of the war poured into its hands. while such is the conduct of the chief foreign nations, it is also interesting to note that one comes across a good many people who, in spite of all the admonitions of the government to all good citizens to pay their gold into the banks, still hold on to a small store of sovereigns in the fear of some chain of circumstances arising in which only gold would be taken in payment for commodities. on the whole, i am inclined to think that the power of gold as a desirable commodity merely because it is believed to be always acceptable has not been appreciably shaken by the events of the war. this does not alter the fact that, as has been shown above, gold, complicated by the paper which has been based upon it, cannot claim to have risen to full perfection as a standard of value. in primitive times the question of the standard of value hardly arises. transactions are for the most part carried out and concluded at once, and any seller who takes a piece of metal in payment for his goods does so with the rough knowledge of what that piece of metal will buy for him at the moment, and that is the only point which concerns him. the standard of value only becomes important when under settled conditions of society long-term contracts bulk large in economic transactions. a man who makes an investment which entitles him to 5 per cent. interest, and repayment in 30 years' time, begins to be very seriously interested in the question of what command over commodities his annual income of 5 per cent. will give him, and whether the repayment of his money at the end of 30 years will represent the repayment of anything like the same amount of buying power as his money now possesses. it is here, of course, that gold has failed because, as we have seen, the process has been a fairly steady one of depreciation in the buying power of the alleged standard and a rise in the prices of other commodities. this means to say that the investor who has accepted repayment at the end of 30 years of the amount that he lent, be it £100 or £10,000, has found that the money repaid to him had by no means the same buying power as the money which he originally invested. within limits this tendency of the standard of value towards depreciation has possessed considerable advantages, probably much greater advantages than would have followed from the contrary process if it had been the other way round. if we can imagine that the currency history of the world had been such that a constantly diminished quantity of currency in relation to the output of other commodities had caused a steady fall in prices, it is obvious that there might have been a very considerable check to the enthusiasm of industry. it has indeed been contended that the scarcity of precious metals which, with the absence of an organised credit system, produced this result during the later roman empire was a very important cause of the decay into which that empire fell. i do not feel at all convinced that this effect would necessarily have followed the cause. it seems to me that the ingenuity of enterprising man is such that the producer might, and probably would, have found means for facing the probability of depreciation in price. but it is always an empty pastime to try to imagine what would have happened "if things had been otherwise." what we do know is that a period of rising prices, especially if the rise does not go too fast, stimulates the enterprise of producers, and sets business going actively, and consequently it may at least be claimed that the failure of the gold standard to maintain that steadiness of value which is an obvious attribute of the ideal standard has at least been a failure on the right side, by tending to depreciation of the value of currency, and so to a rise of the prices of other commodities. obviously, people will tuck up their sleeves more readily to the business of production and manufacture if the course of the market in the product which they hope to sell some day is likely to be in their favour rather than against them. and when all is admitted concerning the failure of the existing standard of value, the question is, what substitute can we find which will carry with it all the advantages that gold has been shown to possess, and at the same time maintain that steadiness of value which gold has certainly lacked? we hear airy talk of an international currency based on the credit of the nations leagued together to promote economic peace. it is certainly very obvious that the diplomatic relations of the world require complete reform, and the system by which the nations at present settle disputes between themselves has been found by the experience of the last four years to be so disgusting, so barbarous and so ridiculous that all the most civilised nations of the world are determined to go on with it until it is stopped for ever. nevertheless, obvious as it is that some kind of a league of nations is essential as a form of international police if civilisation is to be rescued from destruction, it is very doubtful whether such an organisation could, at least during the first half-century or so of its existence, be called upon to tackle so difficult a question as that of the creation of an international currency based on international credit. in the first place, what will be required more than anything else after the war in economic matters will be the elimination of all possible reasons for uncertainty; so much uncertainty and difficulty will be inevitable that it seems to me to be almost criminal to add to those uncertainties by an outburst of eloquence on the part of currency reformers if there were any danger of their recommendations being accepted. it will be difficult enough to know where the producers of the world are to get raw material, find efficient labour, and then find a market for their products, without at the same time upsetting their minds with doubts concerning some kind of new-fangled currency that is to be created, and in which they are to be made to accept payment, with the possibilities of changes in the system which may have to be effected owing to some quite unforeseen results happening from its adoption. the gold standard, with all its failures, we do know; we also know that something may be done some day to remedy them if mankind can produce a set of rulers capable of approaching the question with all the knowledge and experience required; but to substitute this system at a time of great uncertainty for one which might or might not work would seem to be tempting providence in an entirely unnecessary manner at a time when it is above all necessary to get the economic ship as far as possible on an even keel. if the proposed substitute is to succeed it will have to be at least as acceptable as gold, and at the same time its quantity must be so regulated as to be at all times constant in relation to the output of commodities. can we pretend that the economic enlightenment of mankind has yet reached a point at which such a currency could be produced and regulated by the governments of the world and be accepted by their citizens? xi bonus shares _july_, 1918 a deluge of bonus shares--the effect on the market--a problem in financial psychology--the capitalisation of reserves--the stock exchange view--the issue of bonus-carrying shares--the case of the a.b.c.--a wiser variation from canada--bonus shares on flotation--an american device--midwife or doctor?--the good and bad points of both systems. of the many kinds of bonus shares, the one which has lately been most prominent in the public eye is that which is produced by the capitalisation of a reserve fund. there has lately been a perfect epidemic of this kind of bonus share, which is almost as plentiful as the caterpillars in the oak trees and the green fly on the allotments. the reason for this outburst is apparently the anxiety which the directors of many prosperous industrial companies feel lest the high dividends which good management and sound finance in the past have enabled them to pay should lay them open to misunderstanding and attack by well-meaning people who think that it is a crime for a company to earn more than a certain percentage on its capital. this explanation was very frankly given by the directors of brunner, mond and company, when they lately capitalised part of their reserves. the company, they stated, has for many years paid a dividend on its ordinary shares of 27-1/2 per cent., and "the directors feel that there is a widespread impression that this is the rate of profit earned on the total of the capital invested, and consequently that the company is making an unfair profit out of its customers and the labour it employs. this is by no means the case." it is a lamentable proof of the backward state of the economic education of this country that it should be necessary for well-financed and prosperous concerns to take steps to make it quite clear to the public that they are not earning more than they appear to be. in a well-educated community it would be perceived at once that it is the well-financed and prosperous companies which improve production in the interests of their shareholders, their workmen, and the public; that the price which the public pays for a commodity is ultimately the price at which the worst financed and worst managed companies can just manage to keep alive; that the higher profits earned by the better companies are not wrung out of the pockets of the community, or their workmen, but are the result of good management and good finance; and that the more the good companies are encouraged to go ahead and drive the bad ones out of existence, the better will the community be served, and the better will be the chance of the workmen to get good wages. these platitudes are of course, only true in a state of free competition. if there is anything like monopoly the public and the workers are fully justified in being suspicious and examining the source from which high dividends are produced. such being the reason why this outburst of capitalisation of reserves first began--since in these days all capitalists and those who have to manage capital feel that they are working under criticism, which is not only jealous and suspicious (as it should be), but is also too often both ignorant and prejudiced--it is interesting to note that the movement which was so started has been stimulated by its very exhilarating effect on the market in the shares of the companies concerned. why this should be so it is difficult at first sight to say. what happens is merely this--that a company, let us suppose, for the sake of simplicity, with a capital consisting wholly of 3,000,000 ordinary shares, has accumulated out of past profits, or out of premiums on new issues of shares, a reserve fund of £1,000,000. its net profit has lately averaged £400,000, and it has, year by year, distributed £300,000 in the shape of a 10 per cent. dividend to its shareholders, and put £100,000 into its reserve fund, which is represented on the other side of the balance-sheet by buildings and plant and a certain amount of first-class investments. if the directors now decide to capitalise that £1,000,000 of reserve fund, the only effect is that each shareholder will be given one new share for every three which he holds in the existing capital, the reserve fund will be wiped out, and the ordinary capital will be increased from £3,000,000 to £4,000,000. none of the shareholders will be in actual fact better off to the extent of one halfpenny, because all will be in the same position with regard to one another; their relative shares in the enterprise will not have been altered. if we imagine, by way of simplifying the problem, that all the ordinary shares were in one hand, that one holder would have had in his ordinary shares a claim to the total assets of the company, that is to say, to its earning power as long as it is a going concern, and to whatever its assets realise if it went into liquidation; the fact that £1,000,000 worth of the assets had been bought out of past profits or premiums paid on new issues of shares would have already added to the value of the claim that he had on the property of the company, and no addition would be made to that value by turning the reserve fund into shares. in other words, the reserve fund is already the property of the shareholders, and to convert it from reserve fund into capital, making them a present of new shares, which merely represent their claim to the assets held against the reserve fund, is as empty a gift as presenting a man with a piece of paper informing him that he is the owner of his own hat. all this remains equally true if, besides the ordinary capital, there is a considerable amount outstanding of preference shares and debenture debt. in any case, the ordinary shareholders possess a claim to the earning power of the company when prior charges have been satisfied, and to whatever surplus may remain on liquidation after first charges have been paid off in full. whether that interest of theirs is represented by a larger or smaller number of shares, or by shares of a larger or smaller denomination, or by a reserve fund upon which they have a claim when all other claims have been settled makes no difference whatever as a matter of academic fact. apart from the sentiment of the matter, there is no reason why ordinary capital should have any nominal value. as to the earning power of the company, that, of course, is not affected one whit by the process. the earning power of the company is all in the assets--the plant, machinery and other property--plus the elusive qualities which are bound up in the word "goodwill," representing the selling power, organisation, and the expectation of future profits. the capitalisation of the reserve simply affects the manner in which the liabilities of the company are arranged, and the existence of a reserve fund merely means that the ordinary shareholders have a claim to a larger amount than their nominal holding in case of liquidation. it does not matter in the least whether this larger claim is handed to them in the shape of a certificate, since the nominal amount of their claim has nothing whatever to do with the amount that their claim realises to them annually in the shape of dividends, or in the event of liquidation, from the realisation of the company's assets. in fact, the capitalisation of reserves is sometimes criticised by economic purists as a retrograde step because it seems likely to encourage the directors to be extravagant in the matter of dividends. in the example which we supposed above of the company with a capital of three millions and reserve fund of one million, if the reserve fund is turned into ordinary shares and the earning power of the company remains the same there may obviously be a temptation to the directors to modify the prudent policy under which they had hitherto placed one hundred thousand a year to reserve, because if they continued it the shareholders would discover they were really no better off and that they simply got a lower rate of dividend on the larger amount of shares, and that their actual receipts from the company were exactly the same as before. and if the earning power of the company remained the same and the directors left off placing the one hundred thousand a year to reserve, and paid away the whole of the net profit in dividend, it is clear that the progressive expansion of the company's business would be to that extent checked. on the other hand, there is a contrary argument that as long as the company has a large reserve fund there is a possibility that dissatisfied shareholders may agitate for a realisation of sufficient assets to enable that reserve fund to be distributed, especially if it has been wholly acquired out of past profits. in this case the capitalisation of the reserve fund puts this temptation out of their reach since, when once the reserve fund has been capitalised, it can only be got at by greedy shareholders through the process of liquidation. since, however, the shareholder in these times is not quite so short-sighted as he used to be, there is not perhaps really very much advantage in this point. but since, as has been shown, capitalisation of reserves has no effect upon the earning power and assets of the company, it is interesting to try and discover why the rumour and announcement of such an intention on the part of the board of directors is nearly always accompanied by a rise in the shares of the company affected. if the shareholder is merely to be given a larger nominal claim, which does not in the least affect the value of the assets which that claim concerns, and if the relative amount of his claim is exactly the same with regard to the other shareholders, it is clear that the rise in the value of the shares is based entirely either on a psychological mistake on the part of the public and its financial advisers, or on the fact that the transaction called attention to the value of the shares which have hitherto been undervalued in the market. probably the movement arises from both these causes. a large number of people think they are better off if they have a larger nominal share, without considering that all the other shareholders are at the same time having their claim increased, that the assets to which they all have a claim are not being increased, and that, consequently, if a sharing-out process were to take place they would all be exactly as they would have been if no such capitalisation of reserves had been carried out. and if a sufficient number of people think that a share or any other commodity is more valuable, it thereby becomes more valuable, because value is nothing else than the amount, whether in money or other commodities, at which a commodity can be disposed of. but it is also true that there are, at all times, a very large number of securities, especially in the industrial market, which would stand higher if their earning power and position were more closely scrutinised. this is very clearly seen to be the case from the apparently extravagant prices at which insurance companies, for example, sometimes buy the businesses of one another. they give a price which is considerably above the market value of the concern as represented by the price of its shares. critics say that the terms are extravagant, and yet the deal is found to be highly profitable to the buying company. the profit of the deal, of course, may be increased by the advantages of amalgamation, but quite apart from that it is clear that the market price of securities very often undervalues, as it also, perhaps, still oftener overvalues, the real position of the companies on whose earning powers they represent claims. in any case, there is the fact that these capitalisations of reserve funds, which make no real difference to the actual position of the company, are universally regarded, in the language of the stock exchange, as "bull points." it is assumed, of course, that the directors would not carry out such an operation unless they saw their way to a higher earning power in the future as a justification for the larger capital. in this expectation the directors might be right or wrong, and, even if they are right, that prospect of higher earning power, if market prices could be relied upon to express the true position of a company, would have been "in the price." there is another kind of bonus share, which is not exactly a bonus share, but carries a bonus with it. this comes into being when the directors of a company sell new shares to existing shareholders at a price below the terms which they might have obtained if they made a new issue to the general public. the classical example of this system is the aerated bread company, that concern to which city clerks and journalists and others owe so much as pioneers of cheap and simple catering. it will be remembered that in the palmy days of this company, before it had been severely cut into by competition, its £1 shares used to stand in the neighbourhood of £15. the directors used then to make issues of new shares to existing shareholders at their face value, that is to say, at £1 per share, although it was obvious that if they had made a public issue inviting all and sundry to subscribe they could have sold their new issues at or above £14 per share. this system put an enormous bonus in the pockets of the existing shareholders at the expense of the company and its future prospects. the directors practically gave to the existing shareholders a present of £130,000 if they sold them 10,000 new shares for £10,000, which they and the public would have readily subscribed for at £140,000. there was nothing wicked about the process, but it was extremely short-sighted. if the company had retained the monopoly which its pioneer work as a cheap caterer for a long time secured it, it might have kept its prosperity unimpaired even by this short-sighted finance. as it was, attracted several competitors, some of which were extremely well managed and financed, and although it still does a most useful work for the community, its earning power has suffered considerably. but this is only an extreme example of a system which is reasonable enough if it is not carried too far. the canadian pacific railway, for instance, has for many years adopted a very moderate use of this system, making new issues to its shareholders on terms rather cheaper than it could have obtained by a public issue, but not giving away enough to impair its future seriously in order to make presents to the existing stockholders by this means. by the continued making of small presents to their constituents the directors of the company have obtained the support of a very loyal body of stockholders, who feel that they are being well treated but not pampered. this system of granting a small bonus to existing shareholders on occasions when the company has to issue new capital is one which is quite unobjectionable as long as it is not abused. if, owing to the use of it, the directors are encouraged to finance themselves badly, that is to say, to pay out of new capital for improvements and extensions which a more prudent policy would have financed out of earnings, just because they find that these issues carrying a small bonus makes them popular with the stockholders, then the system is being abused. otherwise there seems no reason to object to a measure which keeps the shareholders happy and does not do any harm to the concern so long as it is worked in moderation. finally, there is a bonus share or stock which does not represent accumulation out of vast profits or issues of new shares at a premium, and does not involve a bonus by the sale to existing shareholders at a price below the terms which could be got in the market, but is at first sight pure water, representing merely possibilities, perhapses, and potentialities. this kind of bonus share is chiefly known on the other side of the atlantic, and is usually damned with bell, book and candle by purists among english financial critics. we say on this side of the water that every pound of an english well-financed company represents a pound which has actually been spent and put into tangible assets which help the company to earn profits. this boast is by no means true, since nearly all industrial companies come into being with something paid for in the shape of goodwill, which is of enormous importance, but can hardly be called a tangible asset; and even in the case of our railway companies, many millions of original capital went into parliamentary and legal expenses, which have been, in one sense, dead capital ever since, though without this expenditure the railways could never have got to work. the american system of common shares, representing what appears to be water, is only a modification of what every company has to do, in one form or another, on this side or anywhere in the world. wherever an existing business is bought out something has to be given over and above the old iron value of the concern for the value of the connection and other intangible assets. wherever an entirely new industry is started it has to meet certain initial expenses. it has to placate, to use the unpleasant american word, various interests in order to get to work, or it has to lay out money, in building up a concern by advertising or otherwise. it is impossible that every penny which is put into it will go into actual buildings, plant, machinery, and stock-in-trade. in america the system has been preferred by which the actual tangible assets of a new concern are financed wholly or largely by issues of bonds or preferred stock, and the common stock is given away to those interested in the promotion, for them either to hold or to use in order to secure the co-operation of those who may be useful, or modify the opposition of those who may be dangerous. the net result of it is that the common stock is represented in fact by goodwill or the power to get to work. if the company prospers, then it is the business of those who hold these common shares to see that assets are accumulated out of profits, to be held against their common stock, so squeezing the water out of it and making it good. the system thus possesses this very considerable advantage, that those who promote a company are interested in its future welfare, and watch over it and guide it through its subsequent existence, putting energy and good management at its disposal in order that the paper which they hold may be represented, not by water, but by real assets, and so may bring them a tangible reward. it has thus in some ways a great advantage over the english system, by which the company promoter is too often concerned merely in the immediate success of the promotion. he is, as one of the greatest of them described himself, a mere midwife, who brings the interesting infant into the world, pats its little head, says good-bye to it, and leaves it to take care of itself throughout its troubled existence. by the american system the promoter is not a midwife but a doctor who assists at the birth of the infant, and also watches over its youth and makes every effort to guide its toddling footsteps in such a way that it may grow into lusty manhood. it is not until he has done so that he is enabled, by the sale of the shares which were given to him at the beginning, to realise the full profit which he expected. the profits realised by this method are in many cases enormous. on the other hand, the amount of work that is put in to secure them is infinitely greater than happens in the case of the english midwife promoter; and if the enterprise is a failure, then the promoter goes without his profits. the system, like everything else, is liable to abuse, if a rascally board of directors, in a hurry to unload their holding of common stock on an unsuspecting public, makes the position and prospects of the company look better than they are by unscrupulous bookkeeping and extravagant distribution of profits, earned or unearned. these things happen in a world in which the ignorance of the public about money matters is a constant invitation to those who are skilled in them to relieve the public of money which it would probably mis-spend; but, if well and honestly worked, the system is by no means inherently unsound, as some english critics too often assume, and it has been shown that it carries with it a very great and substantial advantage in the hands of honest people who wish to conduct the business of company promotion on progressive lines. xii state monopoly in banking _august_, 1918 bank fusions and the state--their effects on the bank of england--mr sidney webb's forecast--his views of the benefits of a bank monopoly--the contrast between german experts and british amateurs--bankers' charges as affected by fusions--the effects of monopoly without the fact--the "disinterested management" fallacy--the proposal to split banking functions--a picture of the state in control. a few months ago, writing in this journal on the subject of banking amalgamations, i referred to one of the objections against them, that they tended towards the creation of monopoly, and so encouraged hope on the part of those who would like to see all forms of industry managed by the state, that the banking business might sooner or later be taken over and worked as a state monopoly. at that time this danger of monopoly seemed to be still fairly remote, but since then the progress of amalgamations has brought it appreciably nearer, and so has vigorously stimulated both the hopes and fears of those who consider that it tends to bring nearer the seizure of banking business by the state. the fear is expressed by sir charles addis, manager of the hongkong bank and director of the bank of england, in the july number of the _edinburgh review_ in a very interesting article on the "problems of british banking." sir charles observes that: "it may even be questioned whether the gigantic size they have already attained does not constitute a menace to the predominant position which the bank of england has hitherto enjoyed as the bankers' bank. how will the bank of england be able to maintain its supremacy and control the money market, surrounded by banks individually greater and more powerful than itself, especially when the object in view is by raising the rate of interest to prevent an internal or external drain upon our gold reserve? it is even conceivable that the finance of the state may be threatened, and it is probably for this reason that in germany the prussian minister is said to be considering a state monopoly of banking. nor can the psychological effect of these great aggrandisements of capital in the hands of a few banks be ignored. they are virtually government-guaranteed institutions. the insolvency of one of the great banks would involve such widespread disaster that no government could stand aside. they would be compelled to make use of the national resources in order to guarantee the solvency of private banks. from government guarantee to government control is but a step, and but one step more to nationalisation. we are playing into the hands of mr sidney webb and the socialists." as it happens, in the july number of the _contemporary review_, mr sidney webb was developing the same theme, namely, the inevitability of banking monopoly and the necessity, as he conceives it, of defeating private monopoly for the sake of profit, by state monopoly to be worked, as he hopes, in the public interest. his article is headed by the rather misleading title, "how to prevent banking monopoly," for, as has been said, mr webb very much wants monopoly, says that it cannot be helped, and sees the fulfilment of some of his pet socialistic dreams in the direction of it by the bureaucrat whom he regards as the heaven-sent saviour of society. his very interesting argument is most easily followed by means of a series of quotations. "we are, it is said, within a measurable distance of there being--save for unimportant exceptions--only one bank, under one general manager, probably a scotsman, whose power over the nation's industry would be incalculable. even in the crisis of the war the matter is receiving the attention of the government. "in the opinion of the present writer, the amalgamation of banks in this country, which has been going on continuously for a century, though at varying rates, and is being paralleled in other countries, notably in germany, and latterly in the canadian dominion, is an economically inevitable development at a certain stage of capitalist enterprise, and one which cannot effectively be prevented." mr webb considers that there is no economic limit to this policy of amalgamation, and that the gains it carries with it are obvious. he dilates upon these as follows:- "it may be worth pointing out: "(a) that apart from the obvious economies in the cost of administration, common to all business on a large scale, there is, in british banking practice, a special advantage in a bank being as extensive and all-pervasive as possible. where distinct banks co-exist, there can be no assurance that the periodical shifting of business, the perpetual transformations in industrial organisation, the rise and fall of industries, localities or firms, the changes of fashion and the ebb and flow of demand, and even a relative diminution of reputation may not lead to a shrinking of the deposits and current account balances of any one bank, or even of each bank in turn. accordingly, every bank has to maintain an uninvested, or, at least, a specially liquid, reserve to meet such a possible withdrawal. the smaller, the more numerous, the more specialised by locality or industry are the competing banks, the larger must be this reserve. on the other hand, if all the deposit and current accounts of the nation were kept at one bank, even if it has innumerable branches, as the experience of the post office savings bank shows, no such shifting of business would affect it; no mere transfers from firm to firm or from trade to trade would involve any shrinking of its aggregate balances; and it would need only to have in hand, somewhere, sufficient currency to replenish temporarily a local drain on its 'till money.' the nearer the banks can approach to this condition of monopoly, not only the lower will be their percentage of working expenses, but also the greater will be the financial stability, and the smaller the amount that they will need to keep uninvested in order to meet possible withdrawals. "(b) that the process of amalgamation has involved an ever-increasing elimination, from the british banking business, of the typical profit-maker, first as partner in a private bank, then as a director in a joint stock bank, representing a large personal holding of shares; and the gradual transfer of practically the whole conduct of the business to what may be called 'disinterested management'--that is to say, management by trained, professional officers serving for salaries, whose remuneration bears no relation to the profit made on each piece of business transacted. the part played in the business by the directors themselves seems to be, with every increase in the magnitude and scope of the concern, steadily diminishing; and these directors, moreover, come to be chosen, more and more, not because of their large holdings of shares, or because of their ancestral or personal connection with banking, but because of their reputation or influence, commercial, social or political. the result is that, along with the process of amalgamation, there has been going on a transfer of the whole management of banking to the hierarchy of salaried officials; whilst the supreme decisions on financial policy are in the hands, in practice, of a very small group of salaried general managers, only partially in consultation with an equally small group of chairmen of boards of directors, themselves usually drawing not inconsiderable salaries." it seems to me that mr webb exaggerates in rather a dangerous degree the reduction, through amalgamation, of the necessity which obliges a bank to keep a considerable reserve of cash. it is quite true that under normal circumstances cash withdrawn from one bank finds its way in due course to another, and that with regard to these mere "till money" transfers there might be a considerable reduction in the amount of cash required if all the banking of the country were in the hands of one business, so that what was withdrawn from one branch would be paid into another. but this fact would not alter the need which compels a bank to keep considerable reserves in cash in order to provide against the possibility of a run. a state bank, if the public takes it into its head that it prefers to have a larger proportion of currency in its own pocket rather than in its bank, may find itself pulled at for cash just as vigorously as a bank managed by private enterprise. this was shown in august, 1914, when very large sums were withdrawn from the post office savings bank during the crisis which then impelled many members of the public to hoard money, or compelled them to take it out of their banks because they did not find that the ordinary system of payment by cheques was working with its usual ease. moreover, mr webb's point about what he calls disinterested management--that is to say, the management of banks by officers whose remuneration bears no relation to the profit made on each piece of business transacted--is one of the matters in which english banking seems likely at least to be modified. sir charles addis, in the article already referred to, calls attention in a very striking passage to the efficiency of the administration of german and english banks, and makes a comparison between the remuneration given to the banking boards of the two countries. the passage is as follows:- "scarcely second in importance to the financial strength of a bank is the efficiency of its administration. the german board of direction is composed, to an extent unknown in england, of men possessed of professional and technical knowledge. no one who has been present at a meeting of german bank directors in berlin, when some foreign enterprise has been under consideration, can have failed to be impressed by the animation with which it was discussed, and by the expert and comparative knowledge displayed by individual directors of the enterprise itself and of the conditions prevailing in the foreign country in which it was proposed to undertake it. he may have been led to reflect ruefully upon the different reception his project met with in his own country. he will recall the meeting of the london board; the difficulty of withdrawing its members even temporarily from their country pursuits and their obvious anxiety to lose no time in returning to them; most of them old men, many of them long retired from business; some of them ex-government officials and the like, who have never been in business; a few ornamental titled persons; only one or two here and there who have no train to catch and are willing to discuss the matter in hand with attention, and, it may be, with understanding. "it would be idle to pretend that a board of this kind constitutes anything like the nexus between industry and finance which obtains in germany, and which is very much to be desired in this country. it may be that we do not pay our men enough. a london director has to be content with an honorific position, a fee of a few hundred pounds a year, and, it must be added, a very exiguous degree of responsibility. that is not enough to attract men in the prime of life with expert or technical knowledge of industry and finance, who would have to submit to a reduction in the large incomes they are earning by the exercise of their special abilities if they were to accept a seat on the board of a bank. there are two things which a good man, in the business sense of the term, will not do without--pay and responsibility. give him sufficient of the former, and you may saddle him with as much of the latter as you like. you may not always get good men by offering them good pay, but you will certainly not get them without doing so. apparently shareholders are content so long as their profits are not reduced by more than nominal directors' fees. at a recent meeting of a bank with deposits of over £200,000,000 the proposal to increase the directors' fees to £1000 a year was met by the rejoinder from one of the shareholders present that he did not know what the directors would do with such a sum. "they manage these things differently in germany. in the three banks to which we have already referred, after payment by the deutsche bank of 5 per cent. of the net profits to reserve, and of the ordinary dividend of 6 per cent., and by the disconto-gesellschaft and the dresdner bank of 4 per cent., the directors receive respectively 7 per cent., 7-1/2 per cent., and 4 per cent. (the disconto's personally liable partners receive 16 per cent.) out of the remainder. the directors are bound by law to supervise all the details of the bank's business, and to keep themselves well informed as to its general policy and methods of management. they are bound by law to exercise the caution of a careful business man, and are liable to be sued for damages arising out of the crime or negligence of their employees. if cases of this kind are seldom brought to public notice, it is not because they do not occur, but because the directors, as a rule, prefer to pay up for the laches of their employees, as they can well afford to do out of their profits, rather than be haled before the court." when mr webb comes to the question of the dangers resulting from monopoly, he finds that they lie chiefly in a restriction of facilities, and in raising the price exacted for them, and that in both respects the danger appears to be great. there is, he says, every reason to expect that the banker, as the nearest approach to the "economic man," will take the opportunity of raising his charges either by increasing the frequency and the rate of the commission exacted for the keeping of a small account, or by reducing the rate of interest allowed on balances, or adopting the common london practice of refusing it altogether. "the banker, who is not in business for his health, may be expected, on this side of his enterprise, to pursue the policy of 'charging all that the traffic will bear.' it would probably pay the banker actually to refuse small accounts, and to penalise the employment of cheques for small sums. this would be a social loss." with regard to the other side of his business, lending to the borrowers, mr webb thinks it need not be assumed that the monopolist banker will actually lend less, because he will seek at all times to employ all the capital or credit that he can safely dispose of, but mr webb thinks that he is likely, as the result of being relieved of the fear of competition; to feel free to be more arbitrary in his choice of borrowers, and therefore able to indulge in discrimination against persons or kinds of business that he may dislike; that he will raise his charges generally for all accommodation, again, theoretically to "all that the traffic will bear"; and, finally, that in times of stress with regard to all applicants, and at all times with regard to any applicant who was "in a tight place," that he will extort as the price of indispensable help a theoretically unlimited ransom. such are the effects which mr webb fears from the process which has already put the control of the greater part of the banking facilities of england into the hands of five huge banks. he thinks that these things may happen long before it is a question of an absolute monopoly in one hand. a monopoly, he says, may be more or less complete, and the economic effects of monopoly may be produced to a greater or less degree at a point far below a complete monopolisation in a single hand. there is much truth in this contention of his. amalgamation has now come to such a point that every new one not only brings absolute monopoly more closely in sight, but increases the ease with which agreements among the huge banks might suffice to produce the effects of monopoly without further amalgamations. mr webb goes on to argue that it is impossible to stop by legislative prohibition or restriction the progress towards economic monopoly where such progress is financially advantageous to those concerned, and that the only remedy ultimately by which the community can be protected from the dangers which he sees threatening it is for the community to take the monopoly into its own hands, and so to get rid, not of the monopoly, which, from the standpoint of national organisation, he thinks is advantageous, but of the motives leading to extortion. if, he says, "no shareholders are in control with their perpetual and insatiable desire for profit, there is no inducement to take advantage of the needs or helplessness of the customers by restricting service or raising prices." in this sentence, of course, he begs the whole question between the advantage of private enterprise and of socialistic organisation. private enterprise works for profit, and therefore makes as much profit as it can out of its customers. it is, therefore, according to mr webb's argument, probable that if private enterprise in banking is able to establish monopoly it will squeeze the public to the point of restricting banking facilities and making them dearer. no one can deny that there is some truth in this contention, but, on the other hand, it may very fairly be argued that modern business has perceived the great advantages of a big turnover and small profits on each transaction. the experience of the great insurance companies, and of great catering companies, and of enormous private organisations such as the imperial tobacco company, has shown the enormous advantage of providing cheap facilities to the largest possible number of customers; so that fears of natural restriction of banking facilities, through monopoly, if they cannot be set altogether aside, are not by any means a certain consequence even of the establishment of monopoly in private enterprise. still weaker is mr webb's assumption that if the interests of the shareholders with "their perpetual and insatiable desire for profit" were eliminated, cheap and plentiful banking facilities would inevitably result from bureaucratic management. the contrary has been shown to be the case in the examples of the post office, of the telephone service, and the london water supply. in the case of the telegraph and the telephones, the government took over prosperous businesses, and has managed them at a loss. in the matter of the post office it is not possible to compare the government with individual enterprise, but it will generally be admitted that the telephone service has by no means been improved since the government took it over. mr webb points out that nationalisation, whether of banks or of other forms of enterprise, does not necessarily mean government under a minister by a branch of the civil service. but it is impossible to ignore the fact that as soon as nationalisation takes place those who are responsible for the management of the enterprise are practically certain to develop the qualities and idiosyncrasies of civil servants, which are so unlikely to tend to elasticity, rapidity and efficiency in business management. in fact, mr webb practically grants this point by the very interesting development he suggests by which the two chief functions of banking should be differentiated, and one of them should be nationalised and the other should remain in the hands of private enterprise. he develops this truly ingenious suggestion as follows:- "just as we have (except for some obsolescent survivals) separated the function of issuing paper money from that of keeping current accounts, so we shall separate the function of keeping current accounts from that of money-lending. the habit of the british banker of combining in one and the same concern (_a_) the essentially routine business of keeping current accounts or receiving deposits; and (_b_) the much more difficult and hazardous business of lending capital to private traders, is not a necessary characteristic of banking organisation; and, whilst possibly the most profitable to the profit-seeking banker, this combination may not be the most advantageous from the standpoint of the community. "it may accordingly be suggested that the business of banking, as understood in this country, is destined to be further divided into two parts, one of which is ripe for immediate nationalisation, and need no longer be carried on for private profit, whilst the other should be the sphere of a number of separate and diversely specialised organisations catering for particular needs. the whole of the deposit and current account side of banking--with its services in the way of keeping securities, collecting dividends, meeting calls, making regular payments, and carrying through the purchase and sale of securities--ought to be united with the post office and trustee savings banks and the money order and other postal remittance business, and run as a national service for the receipt and custody of cash, for the utmost possible development of the cheque system, and for the cheapest possible organisation of remittances. there is no longer any reason why this important branch of social organisation should be abandoned to the profit-maker, should be made the instrument of levying an unnecessarily heavy toll on the customers for the benefit of shareholders, and should now be exposed to the imminent danger of monopoly. "if the receipt and custody of deposits and the keeping of current accounts were made a public service the government might invest the funds thus placed at its disposal in a variety of ways. a certain proportion, perhaps corresponding to what is now held as savings, would be invested, as at present, in government securities--not consols, but such as are repayable at par at fixed dates, including treasury bills and terminable annuities; and any increase in this amount would, in effect, release so much capital for other uses, by paying off part of the national debt. but the bulk of the amount, corresponding with the proportion of their resources that the bankers now lend for business purposes, might be advanced, for terms of varying duration, partly to government departments and local authorities for all their great and rapidly extending enterprises, formerly abandoned to the profit-maker; and partly to a series of financial concerns, whose business it should be to discount the bills and satisfy the requests for loans of those profit-makers who now appeal to the bankers. but these financial concerns should be organised, it is suggested, very largely by trades and industries, specialising in particular lines, and devoted, so far as possible, to meeting the business needs of the different occupations. whether they should be financial concerns, owned and directed by shareholders, and ran for their profit; or whether they might not, in some cases, be owned and directed by the great industrial associations and combinations that the government is now promoting in the various industries, and be run for the advantage of the industries as wholes, may be a matter for consideration and possible experiment. in either case, the concerns to which the government would lend its capital would, of course, have to be of undoubted financial stability to be secured, it may be, by large uncalled capital, or by the joint and several guarantees of a numerous membership; coupled, possibly, with a charge on the assets." at first sight this proposal to differentiate the functions of banking is somewhat startling, and one wonders whether it could possibly work. on consideration, however, there seems to be nothing actually impracticable about the scheme. the government would presumably take over all the offices and branches of the banks of the country, and would therein accept money on deposit and current account, making itself liable to pay the money out on demand or at notice, as the case may be, just as is done by the existing banks; it would hold the necessary cash reserve, and it would apparently itself invest a certain proportion of the money in government securities, as the banks do at present. the more difficult part of the banking business, the advancing of money to borrowing customers, it would hand over to financial institutions, created for this purpose presumably out of the ashes of the nationalised banking business. these institutions would make themselves responsible for the lending side of banking, and would obviously, and naturally, be allowed to make a profit on this side of the business. in this differentiation mr webb's ingenuity is seen at its very best. he reserves for the state that part of banking which is purely a matter of routine, and he leaves to private enterprise that part of it which requiries the elasticity and judgment and quickness in which the average bureaucrat is most likely to fail. a certain amount of friction may easily arise from this differentiation. the interest that the state would be enabled to allow to depositors would clearly depend to a great extent on the interest which it would be able to receive from the financial institutions engaged in lending the money. these institutions could naturally pay the state interest according to the rate which they were able to charge their borrowing customers, leaving themselves a margin for profit and for protection against the risk that their business would involve. it is obvious that there might at times be considerable difficulty in adjusting these two different points of view, and anybody who knows anything about the length of time and argument involved in inducing officials to make up their minds can only fear that occasional jarring in this connecting link between the two sides of banking might sometimes produce effects which would be awkward for the industry of the country. but apart from this obvious difficulty, can we contemplate with equanimity the prospect of the state monopoly of the ordinary banking facilities as they present themselves to the man in the street, namely, the provision of bank branches, the use of the cheque book, the custody of securities and any other articles that the customer wishes to leave with his bank? at present the ease and quickness with which these routine matters of banking are carried out in england are developed to a point which is the envy of foreign visitors. how would it be if every cashier of every bank were converted by the process of nationalisation from the kindly, businesslike human being as we know him into the kind of person who ministers to our wants behind the counters of the post office? as it is, we go into our bank, to present a cheque in order to provide ourselves with cash for the daily purposes of life; the cashier looks at the signature, recognises the customer, hands him over the money. if that cashier became a government official how long would it take him to verify the signature, to see whether the customer really had a balance to his credit, and finally furnish him with what he wanted? it is obvious that the change suggested by mr webb, though it might work, could only work to the detriment of the convenience of the public, and his hopeful view that the elimination of the profits of the shareholders would mean that these profits would go into the pockets of the community in the form of cheapened facilities for banking customers is an ideal largely based on the assumption, that has so often been proved to be incorrect, that the state can do business as well and as cheaply as private enterprise. it is much more likely that after a few years' time the public would find the business of paying in and getting out its money a very much more tedious and irritating process than it is at present, and that the expenses of the matter would have grown to such an extent that the taxpayer might be called upon annually to make good a considerable loss. xiii foreign capital _september_, 1918 the difference between aims and acts--should foreign capital be allowed in british industry?--the supremacy of london and national trade--no need to fear german capital--we shall need all we can get--foreign shares in british companies--can and should the disclosure of foreign ownership be forced?--the difficulties of the problem--aliens and british shipping--the position of "key" industries--freedom to import and export capital our best policy. many things that are now happening must be tickling the sardonic humour of the muse of history. the majority of the civilised powers are banded together to overthrow a menace to civilisation, carrying on a war which, it is hoped, is to produce a state of things in which mankind, purged of the evil spirits of militarism and aggression, is to start on a new order of co-operation. at the same time, while we are engaged in fighting under banners with these noble ideals inscribed on them, a large number of citizens of this country are airing proposals aimed at restrictions upon our intercourse with other nations, especially in the economic sphere. in last month's issue of this journal a very interesting article, signed "veritas," discussed the question as to how far it was in the power of the allies to make use of the economic weapon against their enemies after the war. that such a question should even be mooted as an end to a war undertaken with these objects, shows what a number of queer cross-currents are at work in the minds of many of us to-day. but some people go much further than that, and are advocating policies by which we should even restrict our commercial and economic intercourse with our brothers-in-arms. if the clamour for imperial preference is to have any practical result, it can only tend to cultivate trade within the british empire, protected by an economic ring-fence at the expense of the trade which, before the war, we carried on with our present allies. and a large number of people who, under the cover of imperial preference, are agitating also for protection for this country, would endeavour to make the british isles as far as possible self-sufficient at the expense of their trade, not only with all their present allies, but even with their brethren overseas. it is fortunately probable that the very muddle-headed reasoning which is producing such curious results as these, at a time when the world is preparing to enter on a period of closer co-operation and improved and extended relations between one country and another, is confined, in fact, to a few noisy people who possess in a high degree the faculty of successful self-advertisement. i do not believe that the country as a whole is prepared to relinquish the economic policy which gave it such an enormous increase in material resources during the past century, and has enabled it to stand forward as the industrial and financial champion of the allied cause during the difficult early years of the war. our rulers seem to be sitting very carefully on the top of the fence, waiting to see which way the cat is going to jump. they have made brave statements about abrogating all treaties involving the most-favoured nation clause and about adopting the principle of imperial preference; but when their eager followers press them to do something besides talking about what they are going to do, they then have a tendency to return to the domain of common-sense and to point out that it is above all desirable that our economic policy should be in unison with that of the united states. whatever may happen in the realm of trade and commercial policy, it would seem to be self-evident that with regard to capital it would be still more difficult and undesirable to impose restrictions than with regard to the entry of goods; and above all, it seems to be obvious that at any rate the free entry of capital into this country is a matter which should be specially encouraged when the war is over. at that difficult period we have to secure, if possible, that british industry shall be entirely unhampered in its endeavours to carry out the very puzzling operations involved by transferring its energies from war activities to peace production. however well the thing may be managed, it will be an exceedingly difficult and complicated operation. in certain industries, especially in shipbuilding and engineering, the building trade and all the allied enterprises, those who are responsible for their efficient management ought to be able to count upon a keen and widely-spread demand for their products. but in many industries there will necessarily be a good deal of doubt as to the kind of article which the consuming public at home and abroad is likely to want. there will be the great difficulty of sorting out the right kind of labour, of obtaining the necessary raw materials, and of getting the necessary credit and capital. that this huge problem can be solved, and solved so well that the country can go ahead to a great period of increased productivity and prosperity, i fully believe; but this can only be done if it is able to command the most efficient co-operation of all the various factors in production--if employers put their best brains and if workers put their best energy into the business, and if everything is done to make the whole machinery work with the utmost possible smoothness. one element in the machinery, and a highly important one, is the question of capital. during the war the citizens of this country have been trained to save and to put their money at the disposal of the government with a success which could hardly have been expected when the war began. whether they will continue to exercise the same self-denial when the war is over is a very open question. at any rate, there can be no doubt that there will be a tendency among a very large number of people who have answered the appeal to save money for the war to listen with considerable indifference to any appeals that may be made to them to save money in order to provide industry with capital. all the capital that industry can get, it will certainly want. if, besides what it can get at home, it can also get a considerable amount from foreign countries, then its ability to resume work on a prosperous and profitable basis when the war is over will be very greatly helped. this would seem to be so obvious that one might have thought that even a government which is believed to be flirting with what is called tariff reform would think twice before it imposed any restrictions on the free flow of foreign capital into british industry. in so far as foreigners lend to us we shall be able to import raw materials, to be worked up to the profit of british industry, in return for promises to pay--very timely convenience at a critical moment. nevertheless, it would appear that obviousness of the desirability of foreign capital, from whatever source it comes, is by no means evident to those who are now in charge of the nation's destinies. at any rate, the company law amendment committee, which was appointed last february "to inquire what amendments are expedient in the companies acts, 1908 to 1917, particularly having regard to circumstances arising out of the war and of the developments likely to arise on its conclusion," seems to have thought it necessary to provide the government with schemes by which alien capital could, if the government thought necessary, be kept out of the country. it was a powerful and representative committee, and it is very satisfactory to note that its own view concerning the policy to be pursued was strongly in favour of freedom. it points out in its report that the question which lay in the forefront of its investigations was that of the employment of foreign capital in british industries. on the preliminary question of whether it was desirable that foreign capital should be freely attracted to this country, there was little, if any, difference of opinion. for this very sensible conclusion the committee gives rather a curious reason. it states that the maintenance of london as the financial centre of the world is of the first importance for the well-being of the empire, and that anything which could impede or restrict the free flow of capital to the united kingdom would, in itself, be prejudicial to imperial interests. now, of course, if is entirely true that the maintenance of london as a financial centre is very important, but i venture to think that those who are most jealous concerning the prestige of london and the importance of its financial operations would say that it ranks only second to the industrial efficiency of the country as a whole and cannot, in fact, be long maintained unless there is that industrial efficiency behind it, providing a surplus out of which london may be able to finance the world and so, incidentally, and as a side issue, be to a great extent helped by foreign capital to do so. it is surely evident that a financial supremacy which was based merely on a jobbing business, gathering in capital from one nation and lending it to another, would be an extremely precarious and artificial structure, the continuance of which could not be relied on for many decades. finance can only flourish healthily and wholesomely in a country which produces a considerable surplus of goods and services which it is prepared to place at the disposal of the world. owing to the possession of this surplus it becomes a market in capital, and so gets a considerable jobbing business, but the backbone and foundation of its position must be, in the end, industrial activity in the widest sense of the word. it therefore seems that the committee's argument that the free flow of capital is essential to the maintenance of london's finance might have been reinforced by the very much stronger one that it is essential to the recuperative power of british industry, which will need every assistance it can get in order to re-establish itself after the war. the committee points out that "any legislation which would tend to impede or restrict the free flow of capital here by imposing restrictions or creating impediments ought to be jealously watched, lest in the endeavour to prevent what has come to be called 'peaceful penetration' the normal course of commercial development should be arrested," and it goes on to observe that at the end of the war, "if it should be concluded upon such terms as we hope and anticipate," it is not likely that our present enemies will be in possession of capital looking for employment abroad. this is certainly very true. by the time the germans have made the reparations, which will involve so much rebuilding in belgium and in the parts of france that they have overrun and swept clean of industrial plant, and have in other respects made good the damage which their ruthless and uncivilised methods of warfare have inflicted, not only on their enemies, but on neutrals, it does not seem likely that they will have much to spare for capital expansion in foreign countries, especially when we consider how many problems of reconstruction they will themselves have to face at home. "to impose restrictions upon the influx of capital," the report continues, "aimed at our present enemies, with the result of deterring the flow of capital from (say) america, would be a policy highly injurious to the economic recovery and renewed prosperity of this country after the war. for these reasons we are of opinion that in all amendments of the law falling within the scope of our reference, the expediency of the attraction of foreign capital should be steadily borne in mind." the committee thus seems to have thought it necessary to administer comfort to anybody who might fear that the unrestricted flow of capital from abroad might involve this country in the terrible danger of being assisted in its industrial recovery by capital from germany. if there were, in fact, any possibility of this assistance being given, it would seem to be extremely short-sighted not to allow british industry to make use of it. in the matter of "peaceful penetration," we have ourselves in the past done perhaps as much as all the rest of the countries of the world put together, with the result that we have greatly stimulated the development of economic prosperity all over the world; in fact, it may be argued that the great progress made in the last century in man's power over the forces of nature has been to a great extent due to the freedom with which we invested capital abroad and opened a free market to the products of all other countries. at a time when, owing to exceptional circumstances, we ourselves happen to be in need of capital, it would appear to be an extremely short-sighted policy to refuse to admit it, wherever it came from. we have excellent reason to known that, when capital is once invested in a foreign country, it is largely in the power of the inhabitants and government of that country to control its working. any foreigner, even an enemy, who set up a factory in england after the war would be doing just the very thing which we most of all want to be done, namely, setting the wheels of industry going, relieving the labour market from a possible glut after demobilisation, and helping that difficult stage of transition from war work to peace work. the committee, however, considers that "at the root of the whole matter lies a question which is not one of company law amendment at all, but one of high political and economic policy." it does not fall within its province "to inquire whether the traditional policy of this country to admit and welcome all who seek our shores and submit themselves loyally to our laws ought, in the case of some and what aliens, to be revised"; or whether discrimination ought to be made between an alien of one nationality and an alien of another. "as regards aliens who are now our enemies, it may be that the british empire may adopt the policy that a special stigma ought to be attached to the german, and that neither as an individual nor as a firm, nor as a corporation, ought he, for a time at any rate, to be admitted to commercial fellowship or to any fellowship with the civilised nations of the world." it need not be said that any attempt to apply this stigma in practice would be extremely difficult to carry out, would involve all kinds of difficulties and complications in trade and in finance, and that the threat of it is more likely than anything else to stiffen the resistance of the germans and to force them to rely on their militarist leaders as their only hope of salvation. however, the committee points out that recent legislation shows a desire to ascertain and record the extent to which aliens are active in commerce here, and thinks it necessary to make provision to meet the requirements of the government in case our rulers should decide to impose the restrictions which its own common-sense shows it are so undesirable. if, it says, foreign capital is to be attracted here, it must be represented either by shares or by debentures. "the question, therefore, is whether restrictions ought to be imposed upon the extent to which the control of the company shall be allowed to reside in aliens, either by reason of their holding a majority of the shares, or of the debentures, or by reason of their obtaining a majority upon the board of directors; and, if so, how disclosure of their alien character is to be enforced." it goes on to point out the great difficulties which present themselves in the way of securing disclosure of nationality and ensuring that aliens shall not command the control. "the law of trusts," it says, "is firmly established in this country. if a, be the registered holder of a share, he is not necessarily the beneficial owner. he may be a trustee for b. to enact that the registered holder must be a british subject effects nothing, for b. may be an alien and an enemy. suppose, however, that you enact that a., when his share is allotted or transferred to him, shall make a declaration that he holds in his own right, or that he holds in trust for b., and that both a. and b. are british subjects. there is nothing to prevent the creation of a new trust the next day, under which c., an alien enemy, will be the person beneficially entitled. further, at the earlier date (the date of allotment or transfer) the facts may be that a. (a british subject) is trustee for b. (a british subject), but that b. (unknown to a.) is a trustee for c., an alien enemy. the fact that b. is trustee for c. would be purposely withheld from a., and a.'s declaration that he was simply trustee for b. would be perfectly true. to require that a. should make a declaration at short intervals (say once a month), or that a., b., c., and so on, should all make declarations would be, of course, so harassing and so detrimental as to be, as a matter of business, impossible. the only effectual way of dealing with the matter would be by a provision that the share might be forfeited, or might be sold and the proceeds paid to the owner, if an alien should be, or become beneficially entitled to or interested in the share. such a provision does not in the general case commend itself to us as practical or desirable." any endeavour to control the nationality of the board of directors produces similar difficulties. it is easy to ensure that they shall be all, or a majority of them, british subjects, but there is no means of ensuring that their actions shall not be controlled by aliens whose nationality is not disclosed. having pointed out these difficulties, which seem in effect to reduce the whole question to the domain of farce, the committee goes on to inquire whether it is desirable to legislate in the direction of forbidding the employment of foreign capital here in joint stock companies, unless:- (1) there is disclosure of the alien character of the foreign owner; (2) not more than a certain proportion of the company's shares are held by aliens; (3) the board, or a certain proportion of the board, shall not be alien; and, further, whether it is desirable to discriminate between one alien and another, and to legislate in that direction in the case of certain aliens and not of others. in answering these questions, the committee decided that it was necessary to discriminate between certain classes of companies--class a being companies in general, class b being companies owning british shipping, and class c companies engaged in "key" industries. with regard to companies in class a, they recommend that no restrictions at all be imposed, but, nevertheless, they elaborate a scheme of enforcing disclosure of alien ownership if that policy seems to the legislature to be right. this scheme, the committee admits, is necessarily detailed and laborious; it puts difficulties in the way of investment in english securities, whether by british subject or alien. it would supply, no doubt, to the board of trade useful information as to the extent of foreign investment in english industries, but the price paid for this advantage would, in the committee's opinion, be too great. if adopted, the scheme could be evaded. and, with regard to companies in general, the committee's recommendations go the length of allowing complete freedom as to the nationality both of the corporators and of the board. they would allow, for instance, american capitalists to come here and establish themselves as a british corporation in which all the corporators and all the directors were american, and so with every other nationality. they would make no discrimination between aliens of different nationality, for, if there is to be such discrimination, there must be the machinery of disclosure, involving a deterrent effect and acting prejudicially in the case of all investors. but, if any such discrimination were adopted, the committee thinks that at any rate it should be limited to some short period, say, three or five years after the end of the war. if, however, the legislature should decide upon the necessity of disclosure of alien ownership, the committee draws up the following scheme for securing it in paragraph 15 of its report: 15. for reasons already given, it is not possible efficiently to ensure full disclosure, but the following suggestions would, in the absence of deliberate and intentional evasion (which would be quite possible), meet the point and in the large majority of cases would disclose the extent of alien interests and control:- (a) every allottee of shares upon allotment and every transferee upon transfer should be required to make a declaration disclosing his nationality and whether he is the beneficial owner of the shares, and, if not, for whom he is trustee, and what is the nationality of the beneficial owner, and should undertake within a limited time, after any change in the beneficial ownership, to communicate the new facts to the company. in default of compliance with the above, the shares should, at the option of the company, either (1) be liable to sale by the company and the holder be entitled only to the proceeds; or (2) be liable to forfeiture and the holder be entitled to receive payment from the company of 10 per cent. less than the market value of the share, or if there be no market value, then 10 per cent. less than the value at which the share would be taken for _ad valorem_ stamp duty if it were the subject of transfer. in case the company made default in exercising its power, the board of trade should be authorised to require the above sale to be made. (b) every director, upon coming into office, should be required to make a declaration disclosing his nationality and stating whether in his office he is wholly free from the control or influence of any alien, and if he is not so free, stating by whose directions or under whose control or influence he is to act and what is the nationality of that person, and should undertake within a limited time after any change in that state of things to communicate the facts to the board and procure a statement of the facts to be entered in the board minutes. any breach of these obligations to be visited with a penalty which should be severe. (c) the company should be required to enter in the register of members, against the name of every registered member, his nationality as disclosed by the declaration. in the case where the registered member is not the beneficial owner, the company should be required to record, not in the register, but in another book, the nationality of the beneficial owner as disclosed by the declaration, and, as regards the latter book, to record the nationality of any new beneficial owner when and as disclosed by the registered member. these particulars should be required to be included in the annual list under section 26 of the act of 1908. that list would thus become not a list of members only, but a list of members with the addition of beneficial owners. the company should, further, be required to add to the annual list a summary of the result as regards nationality showing (1) as regards registered members, how many are british subjects and how many shares they hold, and how many are aliens and how many shares they hold, subdividing the number of the aliens and their holdings under their respective nationalities; and (2) as regards the registered members who are british subjects; (a) how many of them are the beneficial owners and how many shares they hold, and (b) as regards the rest, what are the nationalities and holdings of the beneficial owners. with regard to companies owning british shipping, the committee is satisfied that the total exclusion of aliens from ownership of british ships is not essential for national safety and is not expedient. it therefore considers that in these companies it will be sufficient to ensure that not more than 20 per cent. of the power of control should be in alien hands. it thinks that there should be this, limit of 20 per cent., that not more than 20 per cent. of the share capital should be held by aliens, and that those shares should carry no more than 20 per cent. of the voting power. alternatively, it considers that the alien holdings should carry no vote at all, but that is a point of detail deserving further consideration. it follows that in this class there must, in the opinion of the committee, be disclosure of nationality, which should be enforced in the manner detailed above, which, on its own admission, is not proof against deliberate evasion. with regard to companies carrying on "key" industries, a very complicated system is recommended. in the first place, the question whether a company is one to carry on a "key" industry would seldom or never arise at the time of its registration. the modern memorandum of association includes so many things that a "key" industry might be within the powers of almost any company. the question would thus arise when the company has got to work. and so the committee thinks that the board of trade should be empowered at any time to make an inquiry whether any company is carrying on a "key" industry and, if it finds that it is, then the company shall, at the direction of the board of trade, require every registered member to make a declaration such as, under the disclosure procedure already described, he would have had to make if he were at the date of the notice about to receive an allotment or become a transferee. further, the holders of share warrants to bearer would be required to surrender their warrants for cancellation and have their names entered in the register, and all subsequent allottees and transferees would be subject to the obligation of disclosure, as already described, and the limits of 20 per cent. recommended in the case of merchant shipping would then be made applicable. under the system of disclosure it follows that bearer shares are impossible, but, if disclosure be negatived, the opinion of the committee is in favour of the maintenance of the bearer share. it should be mentioned that one member of the committee produced a reservation strongly combating even the very moderate views expressed by the committee on the subject of british shipping and "key" industries. it should be noted, however, that he attended very few meetings of the committee. he points out that, with regard to the registration of ships as british when they are owned by a company which has alien shareholders, "it is not usually a question of permitting a ship which would in any case be british to be under the control of aliens; the question is whether, if a number of persons, some or all of whom are aliens, own a ship, they should be permitted to register it as a british ship by forming themselves into a british company and establishing an office in the british dominions. if," he observes, "they were not allowed to do so they would still own the ship, but register it as a foreign ship in some other country. it appears that a number of ships were registered here before the war by companies with alien shareholders (some even with enemy shareholders). they were managed in this country; the profits earned by them were subject to our taxation; they were obliged to conform to the regulations of our merchant shipping acts; they carried officers and men who were members of the royal naval reserve; on the outbreak of war our government was able to requisition the ships owing to their british registration and without regard to the nationality of the shareholders in the companies owning them." it appears to this recalcitrant member--and there is much to be said for his view--that all these consequences have been highly advantageous to this country. on the subject of "key" industries he is equally unconvinced. it appears to him that "the important thing is to get the industries established in this country, and that the question of their ownership is of secondary consequence." it is very satisfactory to note, in view of wild talk that has lately been current with regard to restrictions on our power to export capital, that the committee has not a word to say for any continuance, after the war, of the supervision now exercised over new issues. the restrictions which it did recommend, while admitting their futility, on imports of capital into our shipping and "key" industries were evidently based on fears of possible war in future. the moral is that this war has to be brought to such an end that war and its barbarisms shall be "spurlos versenkt," and that humanity shall be able to go about its business unimpeded by all the stupid bothers and complications that arise from its possibility. xiv national guilds _october_, 1918 the present economic structure--its weaknesses and injustices--were things ever better?--the aim of state socialism--a rival theory--the new movement of guild socialism--its doctrines and assumptions--payment "as human beings"--the "degradation" of earning wages--production irrespective of demand--is that the real meaning of freedom?--the old evils under a new name--a conceivably practical scheme for some other world. most people will admit that there are many glaring faults in the present economic structure of society. wealth has been increased at an exhilarating pace during the last century, and yet the war has shown us that we had not nearly realised how great is the productive power of a nation when it is in earnest, and that the pace at which wealth has been multiplied may, if we make the right use of our plant and experience, be very greatly quickened in the next. the great increase in wealth that has taken place has been certainly accompanied by some improvement in its distribution; but it must be admitted that in this respect we are very far from satisfactory results, and that a system which produces bloated luxury plus extreme boredom at one end of the scale and destitution and despair at the other, can hardly be called the last word, or even the first, in civilisation. the career has been opened, more or less, to talent. but the handicap is so uneven and capricious that only exceptional talent or exceptional luck can fight its way from the bottom to the top, the process by which it does so is not always altogether edifying, and the result, when the thing has been done, is not always entirely satisfactory either to the victorious individual or to the community at whose expense he has won his spoils. the prize of victory is wealth and buying power, and the means to victory is, in the main, providing an ignorant and gullible public with some article or service that it wants or can be persuaded to believe that it wants. the kind of person that is most successful in winning this kind of victory is not always one who is likely to make the best possible use of the enormous power that wealth now puts into the hands of its owner. those who are fond of amusing themselves by looking back, through rose-coloured spectacles, at more or less imaginary pictures of the good old mediaeval times, can make out a fair case for the argument that in those days the spoils were won by a better kind of conqueror, who was likely to make a better use of his victory. in times when man was chiefly a predatory animal and the way to success in life was by military prowess, readiness in attack and a downright stroke in defence, it is easy to fancy that the folk who came to the top of the world, or maintained a position there, were necessarily possessed of courage and bodily vigour and of all the rough virtues associated with the ideal of chivalry. perhaps it was so in some cases, and there is certainly something more romantic about the career of a man who fought his way to success than about that of the fortunate speculator in production or trade, to say nothing of the lucky gambler who can in these times found a fortune on market tips in the kaffir circus or the industrial "penny bazaar," nevertheless, it is likely enough that even in the best of the mediaeval days success was not only to the strong and brave, but also went often to the cunning, fawning schemer who pulled the brawny leg of the burly fighting-man. however that may be, there can be no doubt that now the prizes of fortune often go to those who cannot be trusted to make good use of them or even to enjoy them, that mr wells's great satire on our financial upstarts--"tono-bungay"--has plenty of truth in it, and that our present system, by its shocking waste of millions of good brains that never get a chance of development, is an economic blunder as well as an injustice that calls for remedy. this being so, it is the business of all who want to see things made better to examine with most respectful attention any schemes that are put forward for the reconstruction of society, however strongly we may feel that real improvement is only to be got, not by reconstructing society but by improving the bodily and mental health and efficiency of its members. the advocates of socialism have had a patient and interested hearing for many decades, except among those to whom anything new is necessarily anathema. there was something attractive in the notion that if all men worked for the good of the community and not for their own individual profit, the work of the world might be done much better, because all the waste of competition and advertisement would be cut out, machinery would be given its full chance because it would be making work easier instead of causing unemployment, and a greater output, more evenly distributed, would enable the nation to breed a race, each generation of which would come nearer to perfection. so splendid if true; but one always felt misgivings as to whether the general standard of work might not deteriorate instead of improve if the stimulus of individual gain were withdrawn; and that the net result might probably be a diminished output consumed by a discontented people, less happy under a possibly stupid and short-sighted bureaucracy, than it is now when the chances of life at least give it the glorious uncertainty of cricket. since the war our experiences of official control, even when working on a nation trained in individual initiative, have increased those misgivings manifold; and hundreds of people who were socialistically inclined in 1914 will now say that any system which handed over the regulation of production and distribution to the state could end only in disaster, unless we could first build up a new machinery of state and a new people for it to work on. partly, perhaps, owing to this discredit into which the doctrines of state socialism have lately fallen, increasing attention has been given to a body of theory that was already active before the war and advocates a system of what it calls guild socialism, under which industry is to be worked by national guilds, embracing all the workers, both by brain and by hand, in the various kinds of production. its advocates are, as far as i have been able to study their pronouncements, decidedly hostile to state socialism and needlessly rode to some of its most prominent preachers, such as mr and mrs webb, who at least merit the respect due to those who have given lives of work to supporting a cause which they believe to be sound and in the best interests of mankind. but in spite of their chronic and sometimes ill-mannered facetiousness at the expense of state socialism and its advocates, the guild socialists, as we shall see, have to rely on state control for very important wheels in their machinery and leave gaps in it which, as far as disinterested observers can see, can only be filled by still further help from the discredited state. it is no disparagement of the efforts of these writers and thinkers to say that their sketch of the system that they hope to see built up is somewhat hazy. that is inevitable. they are groping towards a new social and economic order which, in their hope and belief, would be an improvement. to expect them to work it out in every detail would be to ask them to commit an absurdity. the thing would have to grow as it developed, and we can only ask them to show us a main outline. this has been done in many publications, among which i have studied, with as much care as these distracting times allow, "self-government in industry," by g.d.h. cole, "national guilds," by a.r. orage (so described on the back of the book, but the title-page says that it is by s.g. hobson, edited by a.r. orage), and "the meaning of national guilds," by c.e. bechhofer and m.b. reckitt. these authorities seem to agree in thinking (1) that the capitalist is a thief, (2) that the manual worker is a wage slave, (3) that freedom (in the sense of being able to work as he likes) is every man's rightful birthright, and (4) that this freedom is to be achieved through the establishment of national guilds. as to (1) messrs bechhofer and reckitt speak on page 99 of their book of the "felony of capitalism" as a matter that need not be argued about. mr cole makes the same assumption by observing on page 235 of the work already mentioned that "to do good work for a capitalist employer is merely, if we view the situation rationally, to help a thief to steal more successfully." well, this view of capital and the capitalist may be true. mr cole is a highly educated and gifted gentleman, and a fellow of magdalen. he may have expounded and proved this point in some work that i have not been fortunate enough to read. but as the abolition of the capitalist is one of the chief aims put forward by these writers it seems a pity that they should thus first assert that he is a thief to be stamped out, instead of explaining the matter to old-fashioned folk who believe that capitalists are, in the main, the people (or representatives of the people) who have equipped industry, and enormously multiplied its efficiency and output, and so have enabled the greater part of the existing population of this country (and most others) to come into being. but to the guild socialists the identity of robbery with capitalism seems to be so self-evident that it needs no proof. next, as to the wage system. they seem to think that to earn a wage is slavery and degradation, but to receive pay is freedom. with the best will in the world i have tried to see where this immense difference between the use of two words, which seem to me to mean much the same thing, comes in in their view, but i have not succeeded. perhaps you will be able to if i give you mr cole's own words. on page 154 of the book cited, he says that the wage system is "the root of the whole tyranny of capitalism," and then continues: "there are four distinguishing marks of the wage system upon which national guildsmen are accustomed to fix their attention. let me set them out clearly in the simplest terms, "1. the wage system abstracts 'labour' from the labourer, so that the one can be bought and sold apart from the other. "2. consequently, wages are paid to the wage worker only when it is profitable to the capitalist to employ his labour. "3. the wage worker, in return for his wage, surrenders all control over the organisation of production. "4. the wage worker, in return for his wage, surrenders all claim upon the product of his labour. "if the wage system is to be abolished, all these four marks of degraded status must be removed. national guilds, then, must assure to the worker, at least, the following things:-"1. recognition and payment as a human being, and not merely as a mortal tenement of so much labour power for which an efficient demand exists. "2. consequently, payment in employment and in unemployment, in sickness and in health alike. "3. control of the organisation of production in co-operation with his fellows. "4. a claim upon the product of his work, also exercised in co-operation with his fellows." now, looking with a most dispassionate eye and an eager desire to find out what it is that labour and its spokesmen are grouping after, can one find in these "marks of degraded status" any serious evil, or anything that is capable of remedy under any conceivable economic system? in all of them the wage-earner is on exactly the same footing as the salary-earner or the professional piece-worker. the labour of the manager of the works can also be abstracted from the manager, and can be bought and sold apart from him. one would have thought that this fact is rather in favour of the manager and of the wage-earner--or would mr. cole prefer that the latter should be bought and sold himself? the salary-earner and the professional are only employed when somebody wants them. the manager's term of employment is longer, but the professional pieceworker, such as i am when i write this article, has usually no contracted term, and is only paid for actual work done. i also have no control over the organisation of the production of _sperling's journal_ or any other paper for which i do piecework. i am very glad that it is so, for organising production is a very difficult and complicated and risky business, and from all the risks of it the wage-earner is saved. the salary-earner or the professional, when once his product is turned out and paid for, also surrenders all claim upon the product. what else could any reasonable wage-earner or professional expect or desire? the brickmaker or the doctor cannot, after being paid for making bricks or mending a broken leg, expect still to have the bricks or the leg for his very own. and how much use would they be to him if he could? unless he were to be allowed to sell them again to somebody else, which, after being once paid for them, would merely be absurd. but when we come to the remedies that mr. cole suggests for these "marks of degraded status," we find in the forefront of them that the worker must be secured "payment as a human being, and not merely as a mortal tenement of so much labour power for which an efficient demand exists." this, especially to an incurably lazy person like myself, is an extremely attractive programme. to be paid, and paid well, merely in return for having "taken the trouble to be born," is an ideal towards which my happiest dreams have ever struggled in vain. but would it work as a practical scheme? speaking for myself, i can guarantee that under such circumstances i should potter about with many activities that would amuse my delicious leisure, but i doubt whether any of them would be regarded by society as a fit return for the pleasant livelihood that it gave me. and human society can only be supplied with the things that it needs if its members turn out, not what it amuses them to make or produce, but what other people want. and it is here that the national guildsmen's idea of freedom seems, in my humble judgment, to be entirely unsocial as things are, nobody can make money unless he produces what somebody wants and will pay for. even the capitalist, if he puts his capital into producing an article for which there is no demand, will get no return on it. in other words, we can only earn economic freedom by doing something that our fellows want us to do, and so co-operating in the work of supplying man's need. (that many of man's needs are stupid and vulgar is most true, but the only way to cure that is to teach him to want something better.) the guildsmen seem to think that this necessity to make or do something that is wanted implies slavery, and ought to be abolished. they are fond of quoting rousseau's remark that "man is born free and is everywhere in chains." but is man born free to work as and on what he likes? in a state of nature man is born--in most climates--under the sternest necessity to work hard to catch or grow his food, to make himself clothes and build himself shelter. and if he ignores this necessity the penalty is death. the notion that man is born with a "right to live" is totally belied by the facts of natural existence. it is encouraged by humanitarian sentiment which, rightly makes society responsible for the subsistence of all those born under its wing; but it is not part of the scheme of the universe. such are a few of the weaknesses involved by the theoretical basis on which guild socialism is built. when we come to its practical application we find the creed still more unsatisfactory. even if we grant--an enormous and quite unjustified assumption--that the guildsman, if he is to be paid merely for being alive, will work hard enough to pay the community for paying him, we have then to ask how and whether he will achieve greater freedom under the guilds than he has now. now, freedom is only to be got by work of a kind that somebody wants, and wants enough to pay for it. and so the consumer ultimately decides what work shall be done. the guildsman says that the producer ought to decide what he shall produce and what is to be done with it when he has produced it. "under guild socialism," says mr cole,[1] "as under syndicalism, the state stands apart from production, and the worker is placed in control." very well, but what one wants to know is what will happen if the guilds choose to produce things that nobody wants. will they and their members be paid all the same? presumably, since they are to be paid "as human beings" and not because there is a demand for their work. but if so, what will happen to the guildsman as consumer? there will be no freedom about his choice of things that he would like to enjoy. and what about admission to membership of a guild, the price at which the guilds will exchange products one with another, and the provision of capital? the nearest approach to an answer to these questions is given by messrs bechhofer and reckitt in chapter viii, of the "meaning of national guilds." this chapter describes "national guilds in being." it tells us that "each man will be free to choose his guild," which sounds very pleasant, but is completely spoilt by the end of the sentence, which says "and actual entrance will depend on the demand for labour." it sounds just like a capitalistic factory. and then--"labour in dirty industries, sewaging, etc.--will probably be in the main of a temporary character, and will be undertaken by those who are for the time unable to obtain an entry elsewhere." most sensible, but where is the freedom? the guildsman will not be able to do the work that he wants to do unless there is a demand for that kind of labour, and in the meantime, just like the unemployed in the days of darkness, he will be set to cleaning the streets and flushing the drains. messrs. bechhofer and reckitt are, in fact, so sensible and practical that they abandon altogether the freedom of the producer to produce what he likes. "indeed," they write, "a query often brought to confound national guildsmen is this: what would happen to a national guild that began to work wholly according to its own pleasure without regard to the other guilds and the rest of the community? we may reply, first, that this spirit would be as unnatural among the guilds as it is natural nowadays with the present anti-communal, capitalist system of industry" (but under the present system any one who worked without regard to the rest of the community would very soon be in the hands of a receiver); "secondly, if it did arise in any guild, this contempt for the rest of the community would be met by the concerted action of the other guilds. the dependence of any individual guild upon the others would be necessarily so great that a recalcitrant guild would find itself at once in a most difficult position, and a guild that pressed forward demands that were generally felt by the rest of the community to be impossible or unreasonable would soon be brought back into line again." [footnote 1: "the meaning of industrial freedom," page 39.] of course; but if so, where is the guildsman's alleged freedom? every guild and every guildsman would have to adapt himself to the wants of the community, just as all of us who work for our living have to do now. he would be no more free than i am, and i am no more free than the person who is sometimes described as a "wage slave." the guildsman might be happier in the feeling that he worked for a guild rather than a capitalist employer, but this is by no means certain. the writers just quoted show with much frankness and good sense that there would be plenty of opening for friction, suspicion, discontent and strikes. "a guild," they say, "that thought itself ill-used by its fellows would be able to signify its displeasure by the threat of a strike." the officials of the guild are to be chosen by the "men best qualified to judge" of their ability, whoever they may be, and every such choice would be ratified by the workers who are to be affected by it. "the guild would build up in this way a pyramid of officers, each chosen by the grade immediately below that which he is to occupy," did not the bolsheviks try something like this system, with results that were not conducive to efficient production? and to meet the danger that the officials as a whole might combine "in a huge conspiracy against the rank and file," messrs bechhofer and reckitt can only suggest vigilance committees within the guilds. in a word, guild socialism seems to be a system that might possibly be worked by a set of ideally perfect beings; but as folk are in this workaday world one can only doubt whether it would be conducive either to freedom, efficiency or a pleasant life for those who lived under it. xv post-war finance _november_, 1918 taxation after the war--mr. hoare's scheme described and analysed--the position of the rentier--estimates of the post-war debt--the compulsory loan proposal--what advantages has it over a levy on capital?--the argument from social justice--questions still to be answered--the choice between a levy and stiff taxation--are we still a creditor nation?--our debt not a hopeless problem--suggestions for solving it. under this heading two very interesting articles were contributed to the october issue of _sperling's journal_ by mr alfred hoare and an "ex-m.p.," and the subject is clearly one to which, now that the end of the war has been brought appreciably nearer by the feats of the allied armies, too much thought and discussion can hardly be given. how are we going to face the problem that has been built up for us by the bad finance of the war, the low proportion of its cost that has been paid for out of taxation, and the consequent huge debt with which--it is already over £7000 millions gross--the state will be saddled? mr. hoare answered the question by proposing a scheme of taxation of what he called rente, by which he meant all forms of "unearned income"--"rentals from freehold and leasehold property, interest upon loans whether public or private, and dividends on joint stock companies or sleeping partnerships." he added that in his opinion earned income above a certain figure might reasonably be added to this category on the ground that it has, in some instances, very much the same characteristics as unearned; the income of a "successful professional man or clown or jockey or opera star" being due to peculiar qualities; "and it would be no great hardship if earned income above, say, a thousand a year for a married couple, with an additional three hundred for every child under twenty-five years of age were regarded as unearned, and taxed accordingly." income was thus the basis of mr hoare's scheme. rente he regards as an agency regulating distribution, and requiring to be constantly checked. "it is," he says, "an elementary principle of social health, and economic prosperity that the share of the national wealth enjoyed by the rentier, by the owner, that is, of unearned income, should not be excessive," most people who can follow his admirable example and take a detached and unbiassed view of questions which affect their pocket so closely, will agree with him in this opinion. the rentier lives on the proceeds of work done in the past by him or by some other person; and it is not good for our economic health that he should grow too fat at the expense of those who are working now, lest the latter be discouraged and work with less spirit. at the same time we have to remember that the work done in the past by the rentier or those whom he represents, has given us the plant and equipment (in the widest sense of the phrase) with which we are now working. if, therefore, we penalise the rentier too severely we shall discourage his future creation; the present race of earners, if they see that those who are living on past savings are shorn too close will be deterred from saving, will put their surplus earnings into extravagant spending instead of into plant and equipment, and the economic future of the nation, and of the world, will be _pro tanto_ less hopeful. if once our fiscal system is going to propagate the view--already so rampant among the happy-go-lucky citizens of this unthrifty people--that the worst thing to do with money is to save it there will be bad times ahead for our industry and commerce, which can only get the capital that it needs if somebody saves it. mr hoare's elaborate calculations led him to conclusions involving a tax of 11s. 6d. in the pound on unearned income. this figure is, i hope, needlessly high. to arrive at it he assumed that peace might be concluded towards the end of 1919, and that when peace conditions are fully re-established--which will take, he thinks, three years, the national debt will amount to £10,000 millions, involving annual interest of £500 millions, which, added to the total rente of the country in 1913 (which he made out to be £520 millions), will make a total rente in 1923 of £1020 millions. his view is that the burden of the national debt should be thrown by means of the income tax upon the national rente, not taxing it out of existence, but by such a scale of taxation as would reduce the net rente of the country to approximately the level at which it stood before the war. there is good reason to hope that mr hoare's figures will not be reached. he took £10,000 millions merely as a round sum. mr bonar law, it will be remembered, worked out our net debt on march 31st next at £6856 millions, taking credit for half the estimated amount of loans to allies as a good asset. if we prefer as sounder bookkeeping to write off the whole of our loans to allies for the time being and to apply anything that we may hereafter receive on that account to sinking fund, the debt, on the chancellor's figures, will amount on march 31st (if the war goes on till that date) to £7672 millions. even if the war went on for six months more it ought not to bring the debt up to more than £9000 millions at the outside. it is quite true, as mr hoare says, that the return to peace conditions will be a gradual process, and that expenditure will not come back to a peace basis all at once. demobilisation and other matters which were left, by our cheery chancellor, out of the airy after-war balance-sheet that he so light-heartedly constructed, may cost £1000 millions or more before we have done with them. but against them we can set a string of recoverable assets which, in the chancellor's hands, footed up a total of £1172 millions--balances in agents' hands, due debts (apart from loans to allies), land, securities, ships, buildings, stores in munitions department, arrears of taxation, and so on. with his 11s. 6d. in the pound on unearned and 6s. in the pound on earned incomes, mr hoare expects a revenue of £620 millions, "or enough to provide for the interest of the debt with a 1 per cent. sinking fund, and leave £20 millions towards the supply services." but mr bonar law anticipated a total peace budget (if the war ended by march 31st next) of £650 millions. this was probably too low, but we may at least hope that mr hoare has gone rather further than was necessary to be on the safe side. in the other article on the subject of post-war debt contributed to the last number of this journal, an "ex-m.p." plumped for a somewhat novel variety of the levy on capital, in the shape of a compulsory loan, bearing no interest and repayable in 100 years. each individual citizen to be made to subscribe to the extent of 20 per cent. of his possessions. ten per cent. of the amount due to be paid on application, 10 per cent. six months after allotment, and 80 per cent. on january 1st of the following year. when desired, the government to advance at 5 per cent. the money necessary for the payment subsequent to allotment, full repayment of such advances to be made within eight years. a sinking fund to be established to redeem the loan at maturity. but is there any real advantage in this scheme over the levy on capital, from which it only differs by the receipt by the payer of a promise to repay in 100 years' time? the approximate value of £1000 nominal of the compulsory loan stock would be, according to "ex-m.p.'s" calculation, in the year of issue £7 12s., money being worth 5 per cent. and assuming that rate to be current during the remainder of the term. the claim that there is no confiscation, because "a perfectly good security is given for the money received," would seem rather futile to those who paid £1000 and received a security, the present value of which might be below £10. they might very likely think that outright confiscation (since confiscation originally means nothing but "putting into the treasury") is really a simpler way of dealing with the problem. "ex-m.p.," however, estimates that the immediate redemption of £2800 millions of debt (which he, rather modestly, expects to be the result of his 20 per cent. levy) would enable the balance of the war debt to be converted into 3-1/2 per cent. stock. this may be true, but if so it is equally true if a similar or larger amount of debt is cancelled by means of an outright levy on capital. the merits and demerits of a levy on capital have already been dealt with in the pages of this journal "ex-m.p.," however, brought forward a slightly novel form of argument in its favour. he pointed out that the money constituting the great increase in debt that has taken place during the war will have been, in the main, contributed by people who have worked at home under the protection of the army and navy, while the soldiers and sailors have been prevented by the duty which sent them out to risk their lives from subscribing a proportionate share to the national debt. hence "a class that deserves most of the state will find itself indebted to a class which--if it does not deserve least of the state--has, at any rate, turned a national emergency to personal profit." this is a strong argument, which, has been used frequently in the course of the war in the pages of the _economist_, against borrowing for war purposes to the large extent to which our timid rulers have adopted the policy. "to be really just," the writer continued, "the process of taxation ... must be applied with greatest force to those who have accumulated their money since the outbreak of war, and only to a less degree to those whose fortunes have not been built upon their country's necessity. the difficulty of separating these two classes of wealth is great, and must, in the writer's opinion, be effected by separate legislation--legislation which might justly be based upon the increase in post-1913 incomes, a record of which should now be in preparation at somerset house." everyone will agree that everything possible should be done to take the burden of the war debt off the shoulders of those who have fought for us; but it is equally clear that now that the mischief of this huge debt has been done, it will be exceedingly difficult to repair it by any ingenuities of this kind. for instance, if the kind of taxation--in the shape of a compulsory loan--proposed by "ex-m.p." were enforced, how can we be sure that it would not take a large slice off capital, the next heir to which is a soldier or a sailor? bad finance is so much easier to perpetrate than to remedy that one is almost certain to come across such objections as this to any scheme for making the war profiteers "cough up" some of their gains. moreover, we have to remember that by no means the whole of the war debt represents the gains of those who "have turned a national emergency to personal profit." some people whose incomes have been actually decreased by the war, especially when currency depreciation is taken into account, have, in response to the appeals of the war savings committee, saved more than they ever saved before by patriotically stinting themselves. and even the savers who have saved out of war profits were so far more patriotic than the war profiteers who did not save but squandered. in all the discussion concerning the levy on capital i have not seen any answer (even in mr pethick lawrence's very persuasive little book in its favour) to the three great objections to it (1) that it lets off the squanderer and penalises the saver; (2) that the difficulty, trouble and expense involved by the necessary valuation, and the iniquities and frauds that are almost certain to arise out of it, will be enormous; and (3) that its economic effect may be very serious in discouraging accumulation. "why should any one save," the unthrifty soul will most naturally ask, "if his savings are liable to have a slice cut out of them by a levy at any time?" the advocates of the levy, and "ex-m.p." in his advocacy of a compulsory loan for repayment of debt; assume that it can be done once and for all and never again. "take one-fifth of a man's savings away as an emergency measure not to be repeated, and he will at once endeavour to save it back again." but how will you persuade him that it is an emergency measure not to be repeated? how can you be sure that it is so? i have heard a very distinguished socialist, discussing in private the beauties of the levy on capital, point out that it is the sort of thing which, when once the ice has been broken, can be done again so easily. from the socialist point of view the levy on capital is, of course, a simple means of getting, by repetitions of it at regular intervals, all the means of production into the hands of the state; but would the state make a good use of them? another assumption about the levy on capital that seems to me to be the merest will o' the wisp is the delusion that the whole saving that it would entail by reducing the debt charge would necessarily and certainly go to the relief of income tax. on this assumption mr pethick lawrence bases his most persuasive appeal to the smaller income-tax payer, by showing that he would be better off after a levy on capital than before it, thanks to the reduction in income tax, which is assumed as axiomatically arising in its train. but is this certain or even likely? is it not much more probable that our government, finding its post-war budget greatly lightened by a levy on capital or a compulsory loan to redeem debt, will think itself free to indulge in extravagance, maintaining a considerable part of the war income tax and wasting it on rash experiments? all these weaknesses, which appear to be inherent alike in the levy on capital or in the scheme which gilds the pill by calling it a compulsory loan, seem to be ignored or neglected (perhaps because they are unanswerable) by their advocates. on the other hand, there are certain psychological arguments on the other side. if the well-to-do, who would have to pay the levy or subscribe to the compulsory loan, would prefer that system to a high income tax, there is no more to be said. a tax that is popular with the payer, as compared with other modes of shearing his fleece, needs no further recommendation. but, in view of the probability of the experiment, once tried, being shortly and frequently repeated, i very much doubt whether this is so; as far as i have been able by personal inquiry to test opinion on the point i have found it almost unanimously adverse among those whom the levy would most seriously affect. if, as is much more likely, the imposition of a levy created better feeling among the working classes and the returning soldiers and tended to more harmonious co-operation in after-war tasks of reconstruction, it might be worth while to face its evils and its dangers. but here again it is quite probable that if the burden of war debt were clearly and palpably put on the shoulders best able to bear it, that is, on those who are lifted by the gifts of fortune--either in inherited money or unusual brainpower or faculties--by an equitably graded income tax, the effect might be just as good on the minds of those who suspect that the rich have battened throughout the war on exploitation of the poor. this much at least seems to be agreed by most reasonable people about the debt charge--that it will have to be raised, either by a levy on capital or by income tax or some other form of direct taxation, from those who are blessed with a margin. we are not likely to repeat our ancestors' mistake, after the napoleonic war, of throwing the whole burden on to the general consumer by indirect taxation of necessaries and of articles of general consumption. even tariff "reformers" say little about the revenue that their fiscal schemes would bring in. and with good reason. for in so far as they secured protection they would bring in no revenue; we cannot at once keep out foreign goods and tax them; and any revenue that they brought in would be most expensively raised, because a large part of the extra price paid by the consumer would go not to the state but into the pockets of the home producer. nor is it likely that any of the many schemes--of which mr stilwell's "great plan, how to pay for the war," is a particularly bold example--for paying off debt by a huge issue of inconvertible currency, will achieve any practical result. not only would they defraud the debt-holder by paying him off in currency enormously depreciated by the multiplication of it that would be involved; but they would also, by that depreciation, throw the burden of the debt on the shoulders of the general consumer through a further disastrous rise in prices, and so would accentuate the bitterness and discontent already rife owing to the war-time dearness and all the suspicions of profiteering and exploitation that it has engendered. after all, this problem of the war debt, in so far as it is held at home, is not one that ought to terrify us if we look at it steadily. people talk and write as if when the war is over the business of paying for it will begin. that is not really so. the war has been paid for as it went on, and, except in so far as it has been financed by borrowing abroad, it has been paid for by us as a nation. whatever we have used for the war we have paid for as it went on, partly with the help of loans from america and from other countries--argentina, holland, switzerland, etc.--that have lent us money. these loans amount, as far as they can be traced from the official figures, to about £1300 millions. against them we can set our loans to our dominions, over £200 millions (a perfectly good asset), and our loans to our allies, perhaps £1500 millions, which the chancellor proposes to write down by 50 per cent., and might perhaps treat still more drastically. to meet this foreign debt we shall have to turn out so much stuff--goods and services of all kinds--for sale abroad to meet the interest and repayment. we have further impoverished ourselves by selling our foreign securities abroad no figure has been published giving any clue to the amount of these sales, and we may perhaps guess them at £1000 millions. if the pre-war estimates of our overseas investments at £4000 millions were anywhere near the mark. it thus appears that we shall end the war still a great creditor nation. in so far as the debt was raised at home, the war was paid for by those who bought the securities offered, and we have now to pay them interest and set about repaying them the capital. this process will not diminish the national wealth, but will only affect its distribution. it will not diminish the amount of available capital, but may even rather increase it by gathering into the hands of the debt-holders--who are ex-hypothesi folk with an inclination for saving--money that might, if left in the hands of those from whom it is collected, have been squandered. the payment of the debt charge merely means that those who came forward with their money when they were asked to subscribe to war loans, have, according to the extent of the effort that they then made, a set-off against the subsequent taxation involved by the war debt. it would have been a much simpler and more businesslike proceeding to have taken, instead of borrowing, a much larger proportion of the war's cost during the war; but it is too late now to rub in this platitude which is now pretty generally admitted. mr hoare showed in last month's journal that the creation of the war debt has caused a huge addition to what he has called rente--the gross income of the propertied classes; and there is much logic in his contention that this income is the source from which the debt charge should be met. at the same time both justice and economic expediency seem to demand that his wider interpretation of rente, to make it include the earnings of those whose special qualifications (or, we may add, special luck) put them in a position to earn more easily than the struggling majority, should be applied to taxation involved by the debt charge. how, then, shall we deal with the debt? in the first place we want a good sinking fund--1 per cent. at least--and all realisations of assets in the shape of loans repaid, ships, etc., sold, should be used for reduction of our foreign debt. for the home charge we want a special form of income tax that will fall as lightly and indirectly as possible on industry; that is, that it should be imposed on the individual taxpayer direct. so that what we want is an extended, reformed and better graduated form of the super-tax brought down so low that every one who is not merely rich but comfortable should pay his share, for example, any single man or woman with any excess over £500 a year of unearned income, or over £800 a year of earned income might well pay super-tax on that excess. the exemption limit might well be raised by 50 per cent. for married couples (if their joint incomes are still to be counted as one), and by £100 a year for each child between the age of five and twenty-five. but all these figures are mere suggestions, and the details of the scheme would have to be worked out by inland revenue officials, whose experience and knowledge of the practical working of such matters qualifies them for the task. the broad principle is a special tax for the debt charge to be raised direct from individual incomes with skilful differentiation, according to the circumstances of the taxpayer, in the matter of the number of his dependants, and also according to the source of the income, whether it is being earned by exertions which illness might terminate or received from invested funds, and therefore beyond the reach of the "slings and arrows of outrageous fortune." that portion of the tax that is required for sinking fund might be made payable, at the option of the taxpayer, in government securities at prices giving some advantage to the holder. this form of special debt-charge super-tax would enable the ordinary income tax to be reduced considerably at once. mr edward lees, secretary to the manchester and county bank, has put forward a scheme by which taxpayers can buy in advance immunity for so many years from so much annual income tax. if this suggestion could be worked it might provide a means of quickening the debt's repayment, though it looks rather like exchanging one form of debt for another. but, in any case, it is urgent that the long promised reform of income tax should be set in hand at once, so that it may be purged of its present inequities and anomalies and set to work in peace to redeem debt on a new and more scientific basis. xvi the currency report _december_, 1918 currency policy during the war--its disastrous mediaevalism--the report of the cunliffe committee--a blast of common sense--the condemnation of our war finance--inflation and the rise in prices--the figures of the present position--the break in the old relation between legal tender and gold--how to restore it--stop borrowing and reduce the floating debt--return to the old system--the committee's sane conservatism--a sound currency vital to national recovery. among the many features of the late war (how comfortable it is to talk about the "late war"!) that seem likely to astonish the historian of the future, perhaps the thing that will surprise him most is the behaviour of the warring governments in currency matters. it is surely, a most extraordinary thing after all that has been thought, said and written about monetary policy since money was invented that as soon as a great economic effort was necessary on the part of the leading civilised powers, they should all have fallen back on the old mediaeval dodge of depreciating the currency, varied to suit modern needs, in order to pay part of their war bill, and should have continued this policy throughout the course of the war, in spite of the obvious results that it was producing in the shape of unrest, suspicion and bitterness on the part of the working classes, who very naturally thought that the consequent rise in prices was due to the machinations of unscrupulous capitalists who were exploiting them. it is even possible that the historian of a century hence may ascribe to this cause the beginning of the end of our present economic system, based on the private ownership of capital, for it is very evident that we have not yet seen the end of the harvest that this bitterness and discontent are producing. a less important but still very objectionable consequence of the flood of currency and credit that the government has poured out to fill a gap in its war finance is the encouragement that it has given to a host of monetary quacks who believe that all the financial ills of the world can be saved if only you give it enough money to handle, oblivious of the effect on prices of mere multiplication of claims to goods without a corresponding increase in the volume of goods. these enthusiasts have seen that during war a government can produce money as fast as it likes, and since they think that producing money makes every one happy they propose to adopt this simple method for paying off war debt, restarting trade and generally creating a monetary millennium. how far their nostrums are likely to be adopted, no one can yet say, but some of the utterances of our rulers make one shudder. into this atmosphere of quackery and delusion the report of the committee on currency and foreign exchanges breathes a refreshing blast of sound common sense. everybody ought to read it. it costs but twopence; it is only a dozen pages long, and it is described (if you want to order it) as cd. 9182. in view of the many attacks that have been made on our banking system--especially the bank act of 1844--by chambers of commerce and others before the war, it is rather surprising that so little criticism should have been heard of this report, which practically advocates a return, as rapidly as possible, to the practice and principles imposed by that act. it may be that peace, and all the preoccupations that have followed it, have absorbed men's minds so entirely that questions of currency seem to be an untimely irrelevance; or possibly the very heavy weight of the committee's authority may have silenced the opposition to its recommendations. presided over by lord cunliffe, the late governor of the bank, and including sir john bradbury and professor pigou and an imposing list of notable bankers, it was a body whose opinion could only be challenged by critics gifted with the most serene self-confidence. one of the most interesting--especially to advocates of sound finance--points in its report is the implied condemnation that it pronounces on the methods by which the war has been financed by our rulers. it points out that "the need of the government for funds wherewith to finance the war in excess of the amounts raised by taxation or by loans from the public has made necessary the creation of credits in their favour with the bank of england.... the balances created by these operations passing by means of payments to contractors and others to the joint stock banks have formed the foundation of a great growth in their deposits, which have also been swelled by the creation of credits in connection with the subscriptions to the various war loans.... the greatly increased volume of bank deposits, representing a corresponding increase of purchasing power and, therefore, tending in conjunction with other causes to a great rise of prices, has brought about a corresponding demand for legal tender currency which could not have been satisfied under the stringent provisions of the act of 1844." here we have the story of bad war finance put as clearly as it can be. because the government was not able to raise all the money needed for the war on sound lines--that is, by taxation and loans to it of money saved by investors--it had recourse to credits raised for it by the bank of england and the other banks against treasury bills, ways and means advances, war loans, war bonds, and loans to customers who were taking up war loans, etc. thereby as these credits created fresh deposits there was a huge increase in the community's purchasing power; and since the supply of goods to be purchased was stationary or reduced, the only result was a great increase in prices which made the war, perhaps, nearly twice as costly as it need have been and produced all the suspicion and unrest that has already been referred to. considering that the committee included an ex-governor of the bank and the permanent secretary to the treasury it could hardly have been expected to use much plainer language concerning the failure of our rulers to get money out of us in the right way for the war and the vigour with which they made use of the demoralising weapon of inflation. it followed as a necessary consequence that the volume of legal tender currency had to be greatly increased. as prices rose wages rose with them, and so much more "cash" was needed in order to pay for a turnover of goods which, fairly constant in volume, demanded more currency because of their inflated prices. as the committee says in its report (page 5): "given the necessity for the creation of bank credits in favour of the government for the purpose of financing war expenditure, these issues could not be avoided. if they had not been made, the banks would have been unable to obtain legal tender with which to meet cheques drawn for cash on their customers' accounts. the unlimited issue of currency notes in exchange for credits at the bank of england is at once a consequence and an essential condition of the methods which the government have found necessary to adopt in order to meet their war expenditure." the effect of these causes upon the amount of legal tender currency (other than subsidiary coin) in the banks and in circulation is summarised by the committee in the following table:-"the amounts on june 30, 1914, may be estimated as follows:-"fiduciary issue of the bank of england £18,450,000 "bank of england notes issued against gold coin or bullion 38,476,000 "estimated amount of gold coin held by banks (excluding gold coin held in the issue department of the bank of england) and in public circulation 123,000,000 ___________ "grand total £179,926,000 ___________ "the corresponding figures on july 10, 1918, as nearly as they can be estimated, were:-"fiduciary issue of the bank of england 18,450,000 currency notes not covered by gold 230,412,000 ___________ "total fiduciary issues [1] £248,862,000 bank of england notes issued against coin and bullion 65,368,000 currency notes covered by gold 28,500,000 estimated amount of gold coin held by banks (excluding gold coin held by issue department of bank of england), say 40,000,000 ___________ "grand total £382,730,000 "[footnote 1: the notes issued by scottish and irish banks which have been made legal tender during the war have not been included in the foregoing figures. strictly the amount (about £5,000,000) by which these issues exceed the amount of gold and currency notes held by those banks should be added to the figures of the present fiduciary issues given above.] "there is also a certain amount of gold coin still in the hands of the public which ought to be added to the last-mentioned figure, but the amount is unknown." it will be noted that the gold held by the banks (other than the bank of england) and by the public has declined from £123 to £40 millions, according to the committee's estimate, while, on the other hand, the circulation of bank notes has risen by £27 millions and the issue of currency notes has taken place to the tune of £259 millions (at the date of the report; it is now nearly £300 millions), making a net addition to legal tender currency of over £200 millions. when we also remember that there has been a very heavy coinage of silver and copper, that the bank of england's deposits have risen by over £100 millions and the deposits of the other banks by nearly £700 millions, and all this at a time when most of the industrial activity of the country was going into the production of destructive weapons and the support of those who were using them, the behaviour of commodities of ordinary use in rising by nearly 100 per cent. seems to be an example of remarkable moderation. with all this new buying power in the hands of the community there is little wonder that some people should think that we have enormously increased our wealth during this most destructive and costly war, and should then feel hurt and disappointed when they find that this new buying power is robbed of all its beauty by the fact that its efficiency as buying power is seriously diminished by its mere quantity. such being the state of affairs--a great mass of new credit and currency based on securities--it is clear that our currency has been deprived for the time being of that direct relation with its gold basis that used in former time to regulate its volume according to world prices and our international trade position. as the committee says, "it is not possible to judge to what extent legal tender currency may in fact be depreciated in terms of bullion. but it is practically certain that there has been some depreciation, and to this extent therefore the gold standard has ceased to be effective." very well, then, what has to be done to get back to the old state of things under which there was a more or less automatic check on the creation of credit and the issue of currency? this check worked by a system which was elastic and simple. it was not entirely automatic, because its working had to be controlled by the bank of england, which, by the action of its discount rate, could, more or less, quicken or check the working of the machine. legal tender currency could only be increased by imports of gold; and exports of gold reduced the available amount of legal tender currency; and since a stock of legal tender currency was essential to meet the demands upon them that bankers made possible by creating credits, there was thus an indirect and variable connection between the country's gold stock and the extent to which bankers would think it prudent to multiply credits. if credits were multiplied too fast, our currency was depreciated in value as compared with those of other countries and the exchanges went against us and gold either was exported or began to look as if it might be exported. if it was exported the legal tender basis of credit was reduced and the creation of credit was checked. if the directors of the bank of england thought it inadvisable that gold should be exported they could, by raising the rate of discount and taking artificial measures to control the supply of credit, produce, without the actual loss of gold, the effects which that loss would have brought about. the keystone of the system was the rigid link between legal tender currency and gold. this was secured by the provisions of the bank act of 1844, which laid down that above a certain line--which was before the war roughly £18-1/2 millions--every bank of england note issued should have gold behind it, pound for pound. in other words, the bank of england note was, for practical purposes, a bullion certificate. the legal limit on the fiduciary issue (that is, the issue of £18-1/2 millions against securities, not gold) could only be exceeded by a breach of the law. the many critics of our banking system seized on this hard-and-fast restriction and accused it of making our system inelastic as compared with the german arrangement, under which the legal limit could at any time be exceeded on payment of a tax or fine on any excess perpetrated. these critics might have been right if legal tender currency had been the only, or even the predominant, means of payment in england. but, as every office boy knows, it was not. legal tender--gold and bank of england notes--was hardly ever seen in commercial and financial transactions on a serious scale. we paid, sometimes, our retail purchases of goods and services in gold; and bank notes were a popular mode of payment on racecourses and in other places where transactions took place between people who were not very certain of one another's standing or good faith. but the great bulk of payments was made in the cheque currency which our bankers had developed outside of the law and could create as fast as prudence--and an eye to the supply of legal tender which every holder of a cheque had a right to demand--allowed them to do so. while cheques provided the currency of commerce, another form of "money" was produced, again without any restriction by the act, by the pleasant convention which caused a credit in the bank of england's books to be regarded as "cash" for balance-sheet purposes by the banks. these advantages gave the english system a freedom and elasticity, in spite of the strictness of the law that regulated the issue of paper currency, that enabled it to work in a manner that, judged by the test of practical results, had one great advantage over that of any of the rival centres. it alone in days before the war fulfilled the functions of an international banker by being ready at all times and without question to pay out the gold that was, in the last resort, the final means of settling international balances. it is the object of lord cunliffe's committee to restore as quickly as possible the system which, has thus been tried by the test of experience, "after the war," they say in their report, "our gold holdings will no longer be protected by the submarine danger, and it will not be possible indefinitely to continue to support the exchanges with foreign countries by borrowing abroad. unless the machinery which long experience has shown to be the only effective remedy for an adverse balance of trade and an undue growth of credit is once more brought into play there will be very grave danger of a credit expansion in this country and a foreign drain of gold which might jeopardise the convertibility of our note issues and the international trade position of the country.... we are glad to find that there was no difference of opinion among the witnesses who appeared before us as to the vital importance of these matters." the first measure that they put forward as essential to this end is the cessation at the earliest possible moment of government borrowings. "a large part of the credit expansion arises, as we have shown, from the fact that the expenditure of the government during the war has exceeded the amounts which they have been able to raise by taxation or by loans from the actual savings of the people. they have been obliged therefore to obtain money through the creation of credits by the bank of england and the joint stock banks, with the result that the growth of purchasing power has exceeded that of purchasable goods and services." it is therefore essential that as soon as possible the state should not only live within its income but should begin to reduce indebtedness, especially the floating debt, which, being largely held by the banks, has been a cause of credit creation on a great scale. "the shortage of real capital must be made good by genuine savings. it cannot be met by the creation of fresh purchasing power in the form of bank advances to the government or to manufacturers under government guarantee or otherwise, and any resort to such expedients can only aggravate the evil and retard, possibly for generations, the recovery of the country from the losses sustained during the war." with these weighty words the committee brushes aside a host of schemes that have been urged for putting everything right by devising new machinery for the manufacture of new credit. that new credits will be needed for industry after war is obvious, but what else are our banks for, if not to provide it? they can only be set free to provide it on the scale required if, by the necessary reduction of the floating debt, they are relieved of the locking up of their funds in government securities, which has been one of the bad results of our bad war finance. it goes without saying that the committee does not recommend the continuance in peace of the differential rates for home and foreign money that were introduced as a war measure with a view to lowering a rate at which the government borrowed at home for war purposes. it would evidently be too severe a strain on human nature to attempt to work such a system, except in war-time, when the artificial conditions by which the market was surrounded made it both feasible and desirable to do so. with regard to the note issue, the committee proposes a return to the old system and a strictly drawn line for the amount of the fiduciary note issue, the whole note issue (with the exception of the few surviving private note issues) being put into the hands of the bank of england, all notes being payable in gold in london only and being made legal tender throughout the united kingdom. these suggestions are subject to any special arrangements that may be made with regard to scotland and ireland. an early resumption of the circulation of gold for internal purposes is not contemplated. the public has become used to paper money, which is in some ways more convenient and cheaper; and the luxury of a gold circulation is one that we can hardly afford at present. gold will be kept by the bank of england in a central reserve, and all the other banks should, it is suggested, transfer to it the whole of their present holdings of the metal. in order to give the bank of england a closer control of the bullion market the committee thinks it desirable that the export of gold coin or bullion should, in future, be subject to the condition that such coin or bullion had been obtained from the bank for the purpose. this measure would give the bank of england a very close control of the bullion market, so close that there is a danger that if this control were too rigorously exercised, gold that now comes to this country might be diverted, with a view to more advantageous sale, to other centres. the amount of the fiduciary issue is a matter that the committee leaves open to be determined after experience of post-war conditions. they "think that the stringent principles of the act (of 1844) have often had the effect of preventing dangerous developments, and the fact that they have had to be temporarily suspended on certain rare and exceptional occasions (and those limited to the earlier years of the act's operation, when experience of working the system was still immature) does not," in their opinion, invalidate this conclusion. so they propose that the separation of the issue or banking departments should be maintained, but that in future if an emergency arose requiring an increase in the amount of fiduciary currency, this should not involve a breach of the law, but should be made legal (as it is now under the currency and bank notes act of 1914), subject to the consent of the treasury. it is not proposed at present to secure the circulation of paper instead of gold by legislation. the committee considers that "informal action on the part of the banks may be expected to accomplish all that is required." if necessary, however, it points out that the circulation of gold could be prevented by making the notes convertible, at the discretion of the bank of england, into coin or bar gold. the amount which, in the opinion of the committee, should be aimed at for the central gold reserve is £150 millions (a sum which is already almost in sight on its figures quoted above); and "until this amount has been reached and maintained concurrently with a satisfactory foreign exchange position for a period of at least a year," it thinks that the policy of reducing the uncovered note issue "as and when opportunity offers" should be consistently followed. how this opportunity is going to "offer" is not made clear; but presumably a reflow of notes from circulation can only happen through a fall in prices or a reduction in bank deposits by the liquidation of advances made to the government, directly or indirectly, by the banks. concerning the difficult problem of replacing the bradbury notes by bank of england notes of £1 and 10s., an ingenious suggestion is made by the committee. it observes that there would be some awkwardness in transferring the issue to the bank of england before the future dimensions of the fiduciary issue have been arrived at; and it suggests that during the transitional period any expansion in treasury notes that may take place should be covered, not as now, by government securities, but by bank of england notes taken from the bank. by this means any demands for new currency would operate in the normal way to reduce the reserve of the banking department, "which would have to be restored by raising money rates and encouraging gold imports," and so a step would have been taken to getting back to a business basis in the currency system and away from the profligate printing-press policy of the war period. such are the suggestions made by this distinguished body for the restoration of our currency. little has been said against them in the way of serious criticism, but their conservative tendency and the fact that they practically recommend a return to the _status quo_ has caused some impatience among the financial hotspurs who proposed to begin to build a new world by turning everything upside down. in matters of finance this process is questionable, interesting as the result would undoubtedly be. to get to work on tried lines and then, when once industry and finance have recovered their old activity, to amend the machine whenever it is creaking seems to be a more sensible plan than to delay our start until we have fashioned a new heaven and earth, and then very probably find that they do not work. if the machine is to be set moving, it can only be done by close co-operation between the bank of england and the other banks which have grown by amalgamation into institutions the size of which seem likely to make the task of central control more difficult than ever. on this important point the committee is curiously silent. but it recommends the adoption of a suggestion made by a committee of bankers, who proposed that banks should in future be required "to publish a monthly statement showing the average of their weekly balance-sheets during the month." (will this requisition apply to the bank of england?) this is a welcome suggestion as far as it goes, but unless something is done by co-operative action to make the bank rate more automatic in its influence on the actions of the other banks, the difficulty of making it effective seems likely to be considerable. getting the currency right is a most important matter for the future of our financial position. another is the question of our debt to foreigners. most of this debt we owe to america, and we only owe it because we had to finance our allies. we surely ought to be able to arrange with america that anything that we have to do in giving our allies time before asking for repayment they also should do for us--within limits, say, up to thirty years. in view of all that they have made and we have lost by this war waged for the cause of all mankind, this would seem to be reasonable concession on america's part. xvii meeting the war bill _january_, 1919 the total war debt--what are our loans to the allies worth?--other uncertain items--the prospects of making germany pay--the right way to regard the debt--our capital largely intact--a reform of the income tax--the debt to america--the levy on capital and other schemes--the only real aids to recovery. a table published week by week by the _economist_ shows that from august 1, 1914, to november 9, 1918, the government paid out £8612 millions sterling. from this we have to deduct an estimate of the amount that the government would have spent if there had not been a war, so that we are at once landed in the realm of conjecture. the last pre-war financial year saw an expenditure of £198 millions, and it is safe to assume that this figure would have swollen by a few millions a year if peace had continued, so that we may take at least £860 millions from the above total as normal peace expenditure for the 4-1/2 years. this gives us £7752 millions as the gross cost of the war, as far as the period of actual fighting is concerned. from this figure, however, we are able to make some big deductions. there are loans to allies and dominions, and some other much more readily realisable assets than these. we do not know the actual figure of the loans to allies and dominions during the war period, because they are not included in the weekly financial statements. the amount that we borrow abroad is set out week by week--at least, that is believed to be the meaning of the cryptic item "other debt"--but the amount that we lend to allies and dominions is hidden away in the supply services or somewhere, and we only get occasional information about it from the chancellor in the course of his speeches on the budget or on votes of credit. in his last vote of credit speech, on november 12, 1918, mr bonar law gave the chief items of the loans to allies, and a very interesting list it was. the totals up to october 19, 1918, were £1465 millions to allies and £218-1/2 millions to dominions. the allies were indebted to us as follows:--russia, £568 millions; france, £425 millions; italy, £345 millions; smaller states, £127 millions.[1] [footnote 1: parliamentary debates, vol. 110, no. 114, p. 2560.] some of these debts may be written off at once, and that cheerfully, seeing that they have been lent brothers-in-arms who have been hit much harder than we have by the war, and had nothing like our financial strength. the question is, what figure ought we to put on this asset in deducting it from gross war expenditure in order to arrive at a guess at the real cost? we take our loans to dominions, of course, as good to the last penny. mr bonar law, in his budget speech last april, took our loans to allies at half their face value. strict bookkeeping would probably demand a lower figure than 50 per cent.; but let us follow the ex-chancellor's example and take loans to allies, which we will estimate at £1480 millions up to november 9th, as good for £740 millions, and loans to dominions at £220 millions up to the same date, a total of £960 millions, to be deducted from gross war cost. concerning £740 millions of this sum, however, there is a certain amount of doubt. no one questions for a moment the solvency of france and italy, but in view of the pressure that the war has exercised on their producing power, and, in the case of france, the complication added by the uncertainties of the position in russia, in which french investors are so deeply interested, one cannot feel sure that they will be able at once to make interest payments. much will depend on the sums that they are able to recover from germany against their bill of damages, on which more anon. but in any case it seems likely that a general scheme of interest funding, as between the allies, may have to be adopted for some years to come. as to the other assets that we have to set against our gross expenditure during the fighting period, they were enumerated by the chancellor in his budget speech last april in the following terms;- balances in agents' hands, debts due, foodstuffs, etc £375 millions. land, securities, buildings and ships 97 " stores in munitions department (cost price 325 millions) taken at 100 " additions this financial year 100 " arrears of taxation 500 " -- total[1] £1172 [footnote 1: parliamentary debates, vol. 105, no. 33, pp. 698-699.] it will be remembered that in his budget speech the chancellor was proceeding on the assumption that the war would last till march 31st next--the date at which our financial year ends--and would then be convenient enough to stop. happily for us, the valour of our soldiers and those of our allies, the splendid success of our fleet and our merchantmen in bringing over american troops and their food and equipment with astonishing speed, and the straightforward diplomacy of president wilson, combined to achieve victory nearly five months earlier than the most sanguine had dared to expect. with the very pleasant result--though it is a small matter when compared with the end of the killing of the best of our manhood--that the financial position is very greatly improved. with regard to the figures given above, it should be observed that the "debts" are advances to dominions, but on quite a different basis from our loans to them, being money owed by them against goods and services supplied.[1] they and the balances in the hands of agents are both as good as gold. concerning the others, one is entitled at first sight to feel a good deal of scepticism, since such articles as land, buildings, ships and stores, bought or built by government during a war, are likely to find an extremely sluggish demand when the war is over. however, mr bonar law assured the house that his valuation of these amounts had been arrived at on a conservative basis, and, what is better still, in his vote of credit speech on november 12th, he was able to state that revised estimates had shown that their value would be "far greater" than he had previously expected. so perhaps we are entitled to take them at £1300 millions. [footnote 1: parliamentary debates, vol. 105, no. 33, p. 698.] if so, we get the following results for the cost of the fighting period:- total government expenditure, august 1, 1914, to november 9, 1918 £8612 millions. less estimate of normal peace expenditure 860 " ---- 7752 " less loans to dominions 220 millions. less loans to allies (half face value) 740 " realisable assets 1300 " --- 2260 " --- net cost of period £5492 " if war cost would be good enough to cease with the fighting we should thus now be able to see, more or less, how we stand. during the fighting period the government raised by taxation the sum of £2120 millions,[1] from which we have again to deduct £860 millions as an estimate for normal peace taxation, if the war had not happened, leaving £1350 millions as the net war taxation, and £4142 millions as the net addition to debt from the war. [footnote 1: _economist_, nov. 16, 1918.] but, of course, there are still some large and uncertain sums to come in to both sides of the account. there is the cost of maintaining our army and navy during the armistice period, the cost of demobilisation, and the cost of putting an end to war munitions contracts running for many months ahead, holders of which will have to be compensated. who has enough assurance to venture on an estimate of the cost of these items? shall we guess them at something between £1000 and £1500 millions? and when we have made this guess are we at the end of the war's cost? ought we not to include pensions to be paid, and if so, at what figure? fifty millions a year for thirty years? if so, there is another £1500 millions. and interest on war debt, and for how long? on the other side of the balance-sheet, the only asset that has not yet been included in the calculation is the sum that we are going to receive from germany, some cheery optimists think that it is possible for us and for the allies to make germany pay the whole of our war cost. if so, we have halcyon days ahead, for not only shall we be able to repay the whole war debt but also to pay back to the taxpayer all the £1350 millions that he produced during the war, unless, as seems more likely, the government finds other uses, or abuses, for the money, and sets its motley horde of wasters to work again. but this problem, of course, is not going to arise. it would not be physically possible for germany to pay the whole of the allies' war cost, except in the course of many generations, and, moreover, the allies have bound themselves not to make any such demand by the rider that they added to president wilson's peace terms, in giving their assent to them as the basis on which they were prepared to make peace. early in november they stated that president wilson's reference to "restoration" of invaded countries should, in their view, be expanded into a claim for compensation "for all damage done to the civilian population of the allies and to their property by the aggression of germany by land, by sea, and from the air."[1] this is letting germany off lightly; but, after stating their readiness to make peace on the basis of the fourteen points, if amended as above (and also with regard to the freedom of the seas question) it is not possible for the european allies, as the prime minister's late manifesto says they propose to do[2] to expand this claim for civilian damage into a demand for the whole of their war cost up to the limit of the capacity of the central powers to pay, without a serious breach of faith. so that the question of how much we can get out of germany is complicated by the further uncertainty of the size of the bill for damages that we can present. it will be big enough. we know that the germans have sunk 8-1/2 million tons of british ships during the war. as to the price at which, for "restoration" purposes, we shall value those ships and their cargoes, and all the civilian property damaged by aircraft and bombardment, this is a matter which it would be obviously improper to discuss; but we may be sure that the bill will mount up to many hundreds of millions, and it remains to be seen whether, after belgium and france have presented their account, it will be possible for us to secure payment even for all the civilian damage that we have suffered. [footnote 1: _times_, november 7, 1918.] [footnote 2: _times_, december 6, 1918.] it thus appears that the net cost of the fighting period has been somewhere in the neighbourhood of £5500 millions, taking our loans to allies at half their face value; and that the armistice and demobilisation period is likely to cost another £1000 to £1500 millions more, to say nothing of pensions and debt charge that will go on for years (unless the supporters of levy on capital have their way and wipe the debt out), and that against this further expenditure we can set whatever sum is recovered from germany. seeing that our total pre-war debt was £710-1/2 millions, or, omitting what the government returns call the other capital liabilities, £653-1/2 millions, these figures of war debt and war cost are at first sight somewhat appalling. but there is no reason why they should terrify us, and there are several reasons why they are, when looked at with a discriminating eye, much less frightening than when we first set them out. in the first place, we have always to remember that these figures are in after-war pounds, and that the after-war pound is, thanks to the profligate use by our war governments of the printing-press and the banking machine, just about half the size, when measured in actual buying power, of the pre-war pound. any one who pays £100 in taxes to-day thereby surrenders claims to about the same amount of goods and service as he did if he paid £50 in taxes before the war. so that in making any comparison between the position now and the position then we have to divide the figures of to-day by two. in the second, we need not be misled by the jeremiahs who tell us that now that we have won the war we have before us the task of paying for it. this is not true, or true only to a small extent--to the extent, that is to say, to which we shall, when all these assets and liabilities have been settled up and balanced, be afflicted with a foreign debt. let us leave this question on one side for the time being, and consider what the position really is with regard to that part of the war's cost that has been raised at home. in so far as that has been done, the war cost has been raised by us while the war went on. in fact, all the war cost has to be raised by somebody while the war goes on, because the war is fought with stuff and services produced at the time and paid for at the time. but when americans lend us money to pay for some of the stuff that they send us, they pay at the time and we, or our posterity, have to pay them back later on; this is the only way in which we can make posterity pay for the war, and then it only means that our posterity pays america's. it is not possible to carry on war with wealth that is going to be produced some day. the effort of self-sacrifice that war demands has to be made by somebody during its progress--otherwise the war could not be fought. that effort of self-sacrifice we have already made in so far as we have paid for our war cost out of money raised at home. that money has been raised in three ways--by taxation, by borrowing saved money, and by inflation. when it is raised by taxation the sacrifice is obvious, and, in nearly all cases, inevitable: we pay our larger war taxes and so we have less to spend on ourselves, and so we go without things. a few people raise money to pay taxes during war by borrowing or drafts on capital, but they are probably so exceptional that their case need not be considered. we transfer our buying power to the government to be used for the fighters, and so we set free the labour and material that used to go in providing us with comforts and pleasures; our competition for goods is reduced, and so the government is able to get what it needs out of the nation's production, which is _pro tanto_ relieved of our demand. the same thing happens when the government gets money for the war by borrowing money that we save. we reduce expenditure, and transfer buying power to the state and diminish our demand on the nation's production, or that of its foreign supplies. if the whole war cost had been met by these two methods there need have been little or no increase in prices here, and the cost of the war would have been about half what it has been. of the two methods, taxation is obviously the cleaner, simpler and more honest. by borrowing, the state hires those who have a margin to put part of it at the disposal of the state at a time of national crisis, instead of taking it from them outright. as most of the taxation involved by the subsequent debt charge falls on those who have a margin (as it obviously should) the result is that the people who subscribed to the loans are afterwards taxed to pay themselves interest and to repay themselves their debt. this subsequent taxation falls on them all alike in proportion to their ability to pay, or would if the income tax was more equitably imposed; those who have subscribed their fair share to the loans have an offset, in the interest that they receive, against the taxation; those who subscribed less are properly penalised, those who subscribed more are properly benefited. if only the income tax did not make the position of fathers of families so unjust, the whole arrangement would look, at first sight, quite fair, though rather absurd and clumsy, involving all this subscribing and taxing and paying back instead of an outright tax and having done with it. but in fact a very grave inequity is involved by this business of borrowing for war, and laid upon just the people whom we ought, above all, to treat most fairly, namely, those who fight for us. the soldiers and sailors risk their lives for a pittance during the war, while their brothers and sisters and cousins and uncles and aunts, left at home in security and comfort, earn bloated profits and wages, and put them, or part of them, into war loans; then when the fighters come back, very likely with their business and connection ruined or lost, they are expected to contribute to the taxation that goes into the pockets of debt-holders. inflation, the third method of paying for war, again produces the same effect of a reduction of consumption by the civilian population, but in a roundabout manner, which works at first without being noticed, and so is particularly dear to the adroit politician. by it nobody transfers buying power to the government, but the government and the bankers, who are generally most reluctant accessories to the transaction, between them create new buying power, which, coming into a restricted market for goods in addition to all the existing buying power, simply forces everybody to consume less because the money in their pockets fetches less goods owing to the rise in prices. the evil attached to this system is obvious enough. it amounts to a tax on the general consumer in proportion to his consumption, and so it lays the sacrifice on the shoulders of those least able to bear it. no government would have the courage to impose such a tax openly and frankly. all the warring governments in varying degrees have used this roundabout device of imposing it, very likely being quite unaware of the fraud on the consumer that they were perpetrating. our own government, in fact, having first added by this process to a rise in the price of bread, then reduced it by a special subsidy--a pleasant touch of alice in wonderland finance. this mode of taxing by raising prices hits, of course, all those who live on fixed incomes and salaries and wages. those who can strike, or take more out of the consumer, can evade it, and so it falls on the weakest shoulders and incidentally produces friction, discontent and dangerous suspicion. but even it works at the time when it happens. each creation of new buying power gives the government, for the moment, control of so much in goods and services at the expense of the consumer; but when once the new buying power has been distributed by the state's payments it is in the hands of the nation as a whole. if the process ceased, the nation would still have control of the whole of its output, which is its income, though the injustice involved, to those who are not strong enough to resist the effects of higher prices, would continue. thus, whatever means--straightforward or devious--are used for financing war, it is paid for while it goes on by the warring country if the financing is done at home, or by its foreign creditors if the financing is done abroad. and it is, necessarily, almost entirely paid for out of income, that is, out of current production. it is curious to find that many people still seem to think that the whole cost of the war has come out of capital. luckily for us it could not be done, or only to a very small extent. our capital mostly consisted of railways, factories, ships, roads, agricultural land, machinery, houses and other things that could not be taken and shot out of a gun. these things we have still got, and though many of them are not in such good shape as they were, some of them are much better equipped and organised. we have drawn on our stocks of materials and goods--how far it is impossible to say; we have lost 8-1/2 million tons of shipping by war losses; in the meantime we have built, bought and captured 5-1/2 millions of new tonnage, and we have a claim against the germans for such tonnage. on capital account we have suffered by wear and tear in so far as our upkeep has been neglected owing to lack of labour during the war, and by depletion of materials and stocks, and also, of course, by the fact that if the war had not happened, we should, if pre-war calculations were correct, have put some £1700 millions into new investments at home and abroad during the 4-1/4 years of fighting and some more hundreds of millions during the after-war period of government borrowing and restriction on private investment. but a very large part of the money that went into victory would otherwise have gone not to capital account but into the pleasant frivolities, embellishments and vulgarities that made life an amusing absurdity in days before the war. if, then, the war sacrifice was made during the war, in so far as its cost was raised at home, how far is it true that we are now faced with the business of paying for it? if taxation were equitable it would only be to the extent that those who ought to have made the sacrifice and did not, will in future have to pay interest to those who did, or their representatives. so that the first thing we have to do is to make taxation equitable, that is, lay it on the taxpayer in proportion to his ability to pay. there will still remain the injustice to those who have fought for us, which might be cured, or amended, by special exemptions. with taxation on a really sound basis no further sacrifice would be involved by the debt charge, and no diminution of the nation's wealth or consuming power, which will depend, as always, on its output of goods and services; but only a transfer of consuming power from taxpayers to debt-holders in accordance with the sacrifice made by the latter during the war. what we produce as a nation we shall consume as a nation, subject to the extent that we financed the war during its course by operations abroad. these operations were twofold. we sold to foreigners part of our holdings of foreign securities, thereby and to this extent paying for war cost out of capital--out of the investments made by ourselves and our forbears in america and elsewhere. mr bonar law, in a recent interview in the _observer_, stated that we had sent back to the united states practically the whole of our holdings of american securities to be sold or pledged as collateral for loans, and that the value of them was three billion dollars--£600 millions sterling. any of them that have only been pledged can presumably be used to meet the loans raised as they fall due, and so will lighten our burden in the matter of repayment. these loans raised abroad are the second mode of foreign financing. by it we had raised up to november 9th nearly £1300 millions, as shown by the _economist's_ table, and to that extent we have pledged our future production and that of our posterity, to meet the annual service for interest and repayment. on the other hand, all this sum and more we have (as shown above) lent to our allies and dominions, so that the ex-chancellor was well justified in his boast that we had only borrowed to finance our allies, and that we had been self-sufficient for our own war cost.[1] [footnote 1: budget speech, parliamentary debates, vol. 105, no. 33.] in other words, all that we needed for the war we were able to produce ourselves, or to obtain in exchange for our produce and assets. on paper, therefore, our position as a creditor country is only impaired by our sales of securities. but that is only so on paper. in fact, the loans that we have raised abroad are good debts that have to be met to the last penny, and are a first charge on our future output, but the advances that we have made to our allies, much harder hit than we are by the war, are assets on which we cannot depend. they were taken in our balance-sheet above at half their face value, but there is much to be said for writing them off altogether and tearing up the i.o.u.'s of our foreign brothers-in-arms. their need is greater than ours, it would be little satisfaction to receive interest and repayment from them, and the payment due from them, involving difficult problems of taxation for them, would not help the good relations with them which, we hope, may be a lasting effect of the war. and such an act of renunciation on our part would do something towards a restoration of the spirit with which we entered on war, a spirit which has been seriously demoralised during its course, largely owing to the results of our faulty finance, which encouraged profiteering in all classes. in any case, there is our position. we have a big debt to meet at home and abroad, and we are weakened on capital account by foreign indebtedness, wear and tear of plant and dimunition of stocks and materials. wear and tear and depletion we can soon make good if we set to work and work hard, if our bureaucracy takes away the fetters of its restrictions and controls (instead of making further additions to the "black list" even after the armistice!), and if our ruling wiseacres will refrain from trying to stimulate industry by taxing raw and half-raw materials. for the debt charge many pleasant and simple fancy strokes are suggested. the levy on capital is popular, especially with those who do not own any, but its advocacy is by no means confined to them. mr pethick lawrence has published a persuasive little book about it, but i cannot see that he meets the objections to it. these are, the difficulty of valuation, the fact that in many cases it would have to be paid by instalments, and so would be merely another form of income tax, its sparing of the waster and penalising of the saver, and, consequently, the grave danger that it would check accumulation and so dry up the springs of capital. mr stilwell has produced a "great plan to pay for the war," by which all the belligerents and neutrals who have been involved in expense by the war would receive world bonds from an international congress for what they have spent owing to the war, and would then pay one another any international debts by exchanging these world bonds, and deal with the home debt by paying it off in new currency raised on the world bonds. but, surely, to pay off war debt with a huge addition to currency, making war's inflation many times worse, would be a disastrous beginning to that new era which is alleged to be dawning. by hard work, sparing consumption of luxuries, and a big industrial output, we can soon make the debt charge look smaller and smaller as compared with our aggregate income. our foreign debt we can only meet by shipping goods and rendering services. but since it was all raised to be lent to our allies and our lending of it was essential to a victory which has rid mankind of a terrible menace, it is surely reasonable that our creditors should not press for repayment in the first few difficult years, but should fund our short-dated debts into loans with twenty-five or thirty years to run. as to the home debt, we can only lighten its burden on the taxpayer by making taxation equitable. to this end reform of the income tax is an urgent need. we have to lighten its pressure much more effectively on those who are bringing up families, and by collecting it through employers make it an effective and just tax on those of the working class whose earnings and family liabilities make them fairly subject to it. xviii the regulation of the currency _february_, 1919 macaulay on depreciated currency--its evils to-day--the plight of the rentier--mr goodenough's suggestion--sir edward holden's criticisms of the currency committee--his scheme of reform--two departments or one in the bank of england?--not a vital question--the ratio of notes to gold--objections to a hard-and-fast ratio--the limit on note issues--the federal reserve act and american optimism--currency and commercial paper--a central gold reserve with central control. everyone has read, and most of us have forgotten, the great passage in macaulay's history which describes the evils of a disordered currency. "it may well be doubted," he says, "whether all the misery which had been inflicted on the english nation in a quarter of a century by bad kings, bad ministers, bad parliaments and bad judges was equal to the misery caused in a single year by bad crowns and bad shillings.... while the honour and independence of the state were sold to a foreign power, while chartered rights were invaded, while fundamental laws were violated, hundreds of thousands of quiet, honest and industrious families laboured and traded, ate their meals and lay down to rest in comfort and security. whether whigs or tories, protestants or jesuits were uppermost, the grazier drove his beasts to market, the grocer weighed out his currants, the draper measured out his broadcloth, the hum of buyers and sellers was as loud as ever in the towns, the harvest-time was celebrated as joyously as ever in the hamlets, the cream overflowed the pails of cheshire, the apple juice foamed in the presses of herefordshire, the piles of crockery glowed in the furnaces of the trent, and the barrows of coal rolled fast along the timber railways of the tyne. but when the great instrument of exchange became thoroughly deranged, all trade, all industry, were smitten as with a palsy.... nothing could be purchased without a dispute. over every counter there was wrangling from morning to night. the workman and his employer had a quarrel as regularly as the saturday came round. on a fair-day or a market-day the clamours, the reproaches, the taunts, the curses, were incessant; and it was well if no booth was overturned, and no head broken.... the price of the necessaries of life, of shoes, of ale, of oatmeal, rose fast. the labourer found that the bit of metal which, when he received it was called a shilling, would hardly, when he wanted to purchase a pot of beer or a loaf of rye bread, go as far as sixpence." from some of the evils thus dazzlingly described we are happily free in these times. we are not cursed with a currency composed of coins which are good, bad and indifferent, with the result that the public gets the bad and indifferent while the nimble bullion dealers absorb and export the good. there is nothing to choose between one piece of paper and another, and all that is wrong with them is that there are too many of them. but the general result as it affects the labourer who wants to purchase a pot of beer or anyone else who wants to buy anything is very much the same. a bit of metal that is called a shilling has about the value of a pre-war sixpence and a bit of paper that is called a bradbury fetches half as much as the pound of five years ago. compared with what other peoples are suffering from the same disease arising from the same surfeit of money in one form or another, this nuisance that we are enduring is not too terribly severe. it has entailed great hardship on a class that is small in number, namely, those who have to live on fixed incomes. the salary-earner and the rentier have borne the brunt, while the wage-earner and the profit-maker have been able to expand their earnings, in paper, at least to a point at which the depreciation of currency have left them no worse off. seeing that the wage-earners are those who do the dreariest and dirtiest jobs, and that the profit-makers are those who take the risks of industry and the enormous responsibility of organising enterprise, they are the classes whom it is clearly most desirable to encourage. the rentier in these days gets less than no sympathy, but we make a great mistake if we think that we can with impunity crush him between the upper and nether millstone of fixed income and rising prices. with his help we have equipped industry at home and abroad. we can, if we choose, by depreciating the currency still further, lessen still more the reward that we pay him for that benefit. he may kick, but he cannot abolish the equipment with which he has already provided industry. but if we make his life too hard he can strike like the rest of us, and by refusing to provide for any further expansion in industrial equipment, he can hold up production until we have devised some new method of laying up capital. currency depreciation is good for the debtor and bad for the creditor; if it goes too far it kills the creditor and reduces business to chaos. we are a very long way from the chaos to which many of our continental neighbours have already reduced their monetary systems; but there is fortunately a very general feeling that we are a country with a reputation and a prestige on this point; and the business world is growing restive concerning the delay on the part of those responsible in putting an end to a state of things which may have been justified by the war's exigencies (though there is much to be said for the view that in fact it only added to the war's difficulties) but is now clearly as out of date as the censorship, which, like it, nevertheless, continues to flourish. this state of things arises from the arrangement tinder which an unlimited supply of legal tender currency can be manufactured by the government, which encouraged to continue the system by the fact that each note issued is in effect a loan to itself without interest. at the meeting of barclays bank on january 27th, mr. goodenough demanded that the issue of currency notes by the government should be stopped forthwith, and that if it were necessary to provide more currency it would be better for the banks to be allowed to issue notes themselves. this suggestion involves, of course, a complete reversal of the principles on which our monetary system has grown up, since it has long been based on a note-issuing monopoly in the hands of the bank of england. but these are topsy-turvy days, in which greyheaded precedent is very justly at a heavy discount; and mr goodenough's suggestion very practically gets over a big difficulty that stands in the way of stopping the stream of bradburys. this difficulty lies in the fact that if the banks were pulled at by their customers for currency and could not supply them with bradbury notes, they would be forced to take notes from the bank of england, with a bad effect on the appearance of its reserve. if the business of issuing notes were put into the hands of the clearing banks, their power to do so would be limited by the extent of their assets, or of such of their assets as were thought fit to rank as backing for their notes. in other words, the note-issuing business would once more have to be regulated on banking principles and controlled by the price asked, for advances, instead of expressing the helplessness and improvidence of an impecunious and invertebrate government. in this manner the new departure might be a convenient halfway-house on the way from chaos back to sanity. but probably it is too revolutionary and goes too straight in the teeth of the bank of england's privilege to receive much practical consideration; and there is the question whether the public would take the new paper readily and whether it could be made legal tender. sir edward holden, in one of those masterly surveys of world finance with which he now instructs the shareholders of the london joint city and midland bank, assembled at their annual meeting, gave much of his attention to an attack on the report of lord cunliffe's committee on currency. this was only to be expected, since the committee had made recommendations on lines which were largely conservative and did not embody any of the reforms or changes which had been previously advocated by sir edward. being on this occasion chiefly critical, he did not make very clear in his latest speech the precise proposals that he favours. for them we have to go back to his speech of a year ago, as reported in the _economist_ of february 2, 1918, p. 171, where he stated that "if the bank (of england) had been working on the same principles as other national banks of issue, there would have been little ground for anxiety," and that these principles are:-1. one bank of issue and not divided into departments. 2. notes are created and issued on the security of bills of exchange and on the cash balance, so that a relation is established between the notes issued and the discounts. 3. the notes issued are controlled by a fixed ratio of gold to notes or of the cash balance to notes. 4. this fixed ratio may be lowered by the payment of a tax. 5. the notes should not exceed three times the gold or the cash balance. as will be remembered, the cunliffe committee recommended that the division of the bank of england into an issue department and a banking department, should be retained; that the old principle by which above a certain fixed limit all notes should be backed by gold, should also be retained, but that if at any time a breach of this rule should be found necessary it should be possible, with the consent of the treasury, and that bank rate "should be raised to a rate sufficiently high to secure the earliest possible retirement of the excess issue." since it was formerly only possible to exceed the limit on the fiduciary issue by a breach of the law, under the chancellor of the exchequer's promise to get an indemnity for it from parliament, and since treasury tradition insisted on a 10 per cent. bank rate whenever such a breach was permitted or contemplated, it will be seen that the cunliffe committee proposed some considerable modifications in our system and hardly justified sir edward's assertion that it "proposed that the bank should continue to work under the act of 1844 as heretofore." at first sight there seems to be a good deal of difference between sir edward's ideal and lord cunliffe's, but is not the difference to a great extent superficial? whether the bank be divided into two departments, each presenting a separate account, or its whole business be regarded as one and stated in one account, seems to be rather a trifling question. and the arguments put forward for their several views by the two champions are not strikingly convincing. sir edward wants only one account, because he thinks the consequence would be a stronger reserve and fewer changes in bank rate. but a mere change of bookkeeping such as the amalgamation of the two accounts would not make a half-pennyworth of difference to the extent of the bank's responsibilities and its ability to meet them, and it is on variations in these factors that movements in bank rate are in most cases decided. on the other hand, lord cunliffe and his colleagues argue that the main effect of putting the two departments into one would be to place deposits with the bank of england in the same position as regards convertibility into gold as is now held by the note. on this point sir edward's answer is telling: "in reply to this statement, i say that the depositors at the present time can always get gold by drawing out notes from the reserve and taking gold from the issue department. there seems to be little difference between the depositors attacking gold direct and attacking the gold through the notes in the reserve. if the bank cannot pay the notes when demanded the whole machinery stops." quite so. the notion that the holder of a bank of england note has now a stronger hold over the bank's gold than the depositor seems to be baseless. he can exercise his hold more quickly perhaps, though even this is doubtful. since banknotes are not legal tender at the bank of england, it is not quite clear that the depositor would even have to take the trouble to go first to the banking department for notes and then to the issue department for gold. he might be able to insist on gold in immediate payment of his deposit. still less convincing is the committee's argument that "the amalgamation of the two departments would inevitably lead in the end to state control of the creation of banking credit generally." their report might have explained why this should be so, for to the ordinary mind the chain of consequence is not apparent. on the whole it is hard to see much good or harm to be achieved by changing the form of the bank return. it might make the bank's position look stronger, but it could not make it really stronger. nor would it really impair the strength of the note-holder's position as against the depositor, because even now there is no essential difference. it would substitute a more businesslike and simple statement for a form of accounts which is cumbrous and stupid and early victorian--a relic of an age which produced the crinoline, the crystal palace and the albert memorial. on the other hand, to alter a statistical record merely for the sake of simplicity and symmetry is questionable. unless we are getting more and truer information, it is a pity to make comparisons between one year and another difficult by changing the form in which figures are given. a more essential difference between the two policies lies in sir edward's advocacy of a ratio--three to one--between notes and gold, and the committee's support of the old fixed line system. by the latter, if gold comes in, notes to the same extent can be created, and if gold goes out notes to the amount of the export have to be cancelled. under sir edward's policy the influx and efflux of gold would have an effect on the note issue which would be three times the amount of the gold that came in or went out. this at least is the logical effect of his statement that "the notes should not exceed three times the gold or the cash balance." this law does not seem to be quite consistent with his view that the fixed ratio of gold to notes may be lowered by the payment of a tax; but presumably the tax would come into operation before the three to one part was reached, and at three to one there would be a firm line drawn. on this assumption the committee's argument is a very strong one. "if," says its report (cd. 9182, p. 8), "the actual note issue is really controlled by the proportion, the arrangement is liable to bring about very violent disturbances. suppose, for example, that the proportion of gold to notes is actually fixed at one-third and is operative. then, if the withdrawal of gold for export reduces the proportion below the prescribed limit, it is necessary to withdraw notes in the ratio of three to one. any approach to the conditions under which the restriction would become actually operative would then be likely to cause even greater apprehension than the limitation of the act of 1844." certainly if, during a foreign drain, for every million of gold that went out, another two millions of credit, over and above, had to be cancelled, it is easy to imagine a very jumpy state of mind in lombard street and on the stock exchange. sir edward and the committee seem to be agreed as to a limit on the note issue, but of the two limiting systems the old one advocated by the committee, though apparently more severe, would seem to have much less alarming possibilities behind it. a point on which the commercial world does not seem to have made up its mind, however, is whether there should be a limit at all. under the old act there was a limit which could only be passed by a breach of the law. under the cunliffe proposal the limit could be passed with the consent of the treasury. sir edward has not told us of what machinery he proposes for the passing of the limit which he lays down; but in view of the great apprehension that an approach to the limit point would, as shown by the committee, produce, it is clear that there would have to be a way round. in germany there is no limit; you pay a tax on the excess issue and go on merrily. in america it would seem that the german system has been taken for a model. in his speech on january 29th sir edward quoted senator robert owen, who was the principal pioneer of the federal reserve bill through the senate, as follows:--"the central idea of the system is elastic currency issued against commercial paper and gold, expanding and contracting according to the needs of commerce.... it is of great importance that the volume of these notes should contract when the commerce of the country does not require the notes to be circulation, and the reserve board can require them to be returned by imposing a tax upon the issue.... under the reserve system a financial panic is impossible. people will not hoard currency nor hoard gold when they know that they can get currency or get gold when required.... america no longer believes a financial panic possible, and therefore the business men, being perfectly assured as to the stability of credits, do not hesitate to enter manufacturing and commercial enterprises from which they would be deterred under old conditions of unstable credit." well, let us hope the senator is right and that america is right in believing that a financial panic is no longer possible there. but one cannot help feeling that such a belief may be rather dangerous in the minds of people so ready to take rose-coloured views as our american cousins. the federal reserve system has worked beautifully in a period in which american finance has had nothing to do but rake in the enormous profits of american production at the expense of warring europe and lend part of them, to be spent in america, to the allied belligerents. it may work equally well if and when the problem to be faced is different, but it will be interesting to see--for those of us who live to see--what sort of a tax will be needed to "require" america, in one of its holiday moods, to return currency that it thinks it needs and the federal reserve board regards as redundant. another point on which sir edward lays great stress, in his attack on the bank act of 1844 and the committee which supports its main principles, is the beauty of the bill of exchange as backing for a note issue, as opposed to government securities. "there is," he says, "no automatic system for the redemption of currency notes as would be the case if they were issued against bills of exchange, which in due course would have to be paid off." again, "it seems to me that notes should not be issued against government securities which may or may not be paid off, but against bills of exchange which must be met at due date." this advantage about a bill of exchange is a very real one to the individual holder who can always put himself in funds by letting the contents of his portfolio "run off"; but is there much in it as a safeguard against excessive issue of currency in times of exuberance? in such times bills that fall due are pretty sure to be replaced by new ones drawn against fresh production--since over-production is a common symptom of commercial exuberance--or against a resale of the goods on which the original bills were based. as long as anyone who can show produce can be certain to get credit and currency, the notion that the maturing of bills of exchange can be relied to restrict currency expansion within safe limits is surely a dangerous assumption. the principle of a fixed limit, to be broken in case of real need, but only after some ceremony has been gone through giving notice of the fact that a crisis has been reached, seems rather to be required by the psychology of speculative mankind. but even if sir edward's preference for bills of exchange as backing for notes has all the merits that he claims that is no reason for urging the repeal of the bank act to secure their use. because the bank act does not forbid it: it merely says, "there shall be transferred, appropriated and set apart by the said governor and company to the issue department of the bank of england securities to the value of," etc. it is the practice of the bank to put government securities into the issue department, but the terms of the act do not compel them to do so, and if an excess issue were needed they would seem to be empowered to put any bills that they discounted into the assets held against the note issue. on the whole the terms of the act leaving them freedom in the matter, except with regard to the "government debt" of £11 millions, which is specially mentioned as to be transferred to the issue department, seem to be preferable to a special stipulation in favour of bills of exchange. but the most important difference between sir edward holden and the cunliffe committee seems to be in their attitude towards the gold reserve and the relation between the bank of england and the rest of the items that compose the london money market. the committee, working to restore the conditions which made our market the centre of the world's finance, endeavoured to give back the control of the central gold reserve to the bank of england by suggesting, among other things, that the other banks should hand over their gold to it. they omitted to discuss the serious question of the greater difficulty that the bank is likely to find in future in controlling the price of money in the market, owing to the huge size that the chief clearing banks have now reached. but a central gold reserve under central control was evidently the object at which they aimed. sir edward will have none of this. he says that if this were done the position of the joint stock banks would be weakened, though he does not explain why, since they would obviously hold notes in place of their gold and so would be able to meet their customers' demands, now that the latter are accustomed to the use of notes for pocket money. he points out that "the gold which was held by the joint stock banks before the war proved most useful.... at the beginning of the war the banks paid out gold, satisfied the demands of their customers for small currency, and thus eased the situation until currency notes became available." he seems to have forgotten that the banks, or most of them, refused to part with their gold, paid their customers in bank of england notes which, being for £5 at the smallest, were of little use for pocket money, and so drove them to the bank to get gold; and we had to have a prolonged bank holiday and a moratorium. sir edward is in favour of three gold reserves, one to be held by the government, one by the clearing banks, and one by the bank of england. if there were differences between the three controllers of the reserve at a time of crisis the consequence might be disastrous. in view of the admiration expressed by sir edward for the new american system which is so clearly based on central control it is rather illogical that he should be so strongly in favour of independence on this side of the water. his opinion is that "the policy of the joint stock banks ought to be to make themselves independent of the bank of england by maintaining large reserves in their vaults." independence and individualism are a great source of strength in most fields of financial activity, but in view of the great problems that our money market has to face there seems to be much to be said for co-operation and central control, at least until we have got back to a normal state of affairs with regard to the foreign exchanges. xix tightening the fetters of finance _march_, 1919 the new meaning of licence--the question of capital issues--text of the treasury regulations--their scope and effect--the position of the stock exchange--wider issues at stake--should capital be set free?--the arguments for and against--perils of an excessive caution--the new committee and its terms of reference--the absurdity of prohibiting share-splitting--the storm in the house of commons--disappearance of the retrospective clause--a sample of bureaucratic stupidity. a contrast between liberty and licence is a pleasant alliterative commonplace beloved by political writers, especially those with a reactionary bias. in the light of recent events it seems to be going to take a new meaning. licence will soon be understood, not as the abuse of liberty, to which democracies are prone, but as a new weapon by which our bureaucracy will do away with liberty by tightening the shackles on our economic and other activities. for imports and exports the licence system is already familiar; if the mines and railways are to be nationalised we may have to be licensed before we can burn coal or go away for a week-end; if the eugenists have their way a licence will be necessary before we can propagate the species; and before we can get a licence to do anything we shall have to go through an exasperating process of filling in forms innumerable, inconsistent, overlapping and incomprehensible. finance is the latest victim of this melancholy tendency. under the guise of an attempt to give greater freedom to it a system has been introduced which makes a treasury licence necessary, with penalties under the defence of the realm act, for doing many things which have hitherto been possible for those who were prepared to forgo the privilege of a stock exchange quotation. let the story be told in official language, as uttered through the press bureau, on february 24th, in "serial no. c. 10917." "in view of the changed conditions resulting from the conclusion of the armistice, the treasury has had under consideration the arrangements which have been in force during the war for the control of new issues of capital. "the work of scrutinising proposals for new capital issues has been performed during the war by the capital issues committee, the object being to refuse sanction for all projects not immediately connected with the successful prosecution of the war. the decisions of the treasury, taken upon the advice of this committee, have, however, not had any binding force, beyond what is derived from the emergency regulations of the stock exchange, which forbids dealings in any new issues which have not received treasury consent. "while it is not possible under existing financial conditions to dispense altogether with the control of capital issues, it has clearly become necessary to reconsider the principles upon which sanction has been given or refused in order that no avoidable obstacles may be placed in the way of providing the capital necessary for the speedy restoration of commerce and industry, and the development of public utility services. "in view of the numbers of the proposals for fresh issues of capital which are to be expected, it is necessary to provide further machinery for dealing with them and for making the decisions upon them effective. "a regulation under the defence of the realm act has accordingly been made prohibiting all capital issues except under licence from the treasury, and the capital issues committee has been reconstituted with new terms of reference, which are as follows:-"'to consider and advise upon applications received by the treasury for licences under defence of the regulation (30 f) for fresh issues of capital, with a view to preserving capital during the reconstruction period for essential undertakings in the united kingdom, and to preventing any avoidable drain upon foreign exchanges by the export of capital, except where it is shown to the satisfaction of the treasury that special circumstances exist.' "it will be an instruction to the committee that, in order that applications may be dealt with expeditiously and to enable oral evidence to be given in support of them when desired by the applicant, that the committee should sit by panels consisting of three members, the decision of the panels to be subject to confirmation by the full committee. "all applications for licences most be made, in the first instance, in writing on a form which can be obtained from the secretary of the capital issues committee, treasury, s.w. 1. "before any application is refused the committee will give the applicant an opportunity of giving oral evidence in support of his case." the notice then proceeded to recite the terms of d.o.r.a. 30 f, of which more anon. next day came a supplementary announcement, "serial no. c 10938," as follows:-"with reference to the recent announcement in the press that all applications for treasury licences must be made in writing on a form obtainable from the secretary of the capital issues committee, treasury, s.w. 1, delay will be avoided if intending applicants will state which of the following forms they require:- "form no. 1. issue by a proposed new company to start a fresh business. "form no. 2. issue by an existing company (other than for the purpose of capitalising profits). "form no. 3. issue by an existing company for the purpose of capitalising profits. "form no. 4. conversion of a firm into a limited company which does not involve the introduction of fresh capital. "form no. 5. conversion of a firm into a limited company which does involve the introduction of fresh capital. "if none of the above forms appears to be applicable (as, e.g., in amalgamations, sub-divisions of shares, etc.), a statement of the facts should be submitted in writing." before we go on to consider the new regulation, 30 f, let us try to see what is the real effect of the document above quoted. it was evidently intended to be a relaxation of the control of finance. this is shown by the sentence which says that the matter was to be reconsidered "in order that no avoidable obstacle may be placed in the way of providing the capital necessary for the speedy restoration of commerce and industry, and the development of public utility services." and yet it was thought necessary to give legal force and attach penalties to regulations that have worked during the war quite sufficiently well to secure a much stricter control than is now required. the explanation of this apparent inconsistency is probably to be found in the desire of the government to meet a grievance of the stock exchange. hitherto the only penalty that befell those who made a new issue without getting treasury sanction was that the securities issued could not be dealt in on the stock exchange. the practical effect of this was that those who acted without treasury sanction could only issue securities subject to this serious drawback, and so an effective but not altogether prohibitive bar was put on the process. if this bar was not strong enough in war-time it ought clearly to have been strengthened long ago; if it was strong enough, then why should it be strengthened now? from the stock exchange point of view it is easy to make out a good case for working through licence and penalty rather than through the banning, of the securities effected, from sanction for dealings. by thus being used as an official weapon the stock exchange penalised itself and its members. by saying "no security not sanctioned by the treasury shall be dealt in here," its committee restricted business in the house and drove it outside. this grievance was obvious and was plentifully commented on during the war. if the committee had pressed the point vigorously it could probably have forced the government long ago to abolish the grievance by making all dealings in new issues that appeared without treasury sanction illegal and liable to penalty. a patriotic readiness to fall in with the government's desires was probably the reason why the stock exchange refrained from embarrassing it, during the war, by too active protests against a grievance that was then more or less real; though it should be noted that even if the grievance had been amended, the stock exchange would not necessarily have got any more business, but would only have succeeded in stopping a very moderate amount of business that was being done by outsiders. but when all is said that can be said for the justice of the case that can be made by the stock exchange, the question still arises whether it was advisable, at a time when relaxation of restrictions was desirable in the interests of the revival of industry, to draw tighter bonds which had been found tight enough to do their work. that the stock exchange should suffer from limitations from which outside dealers were exempt was certainly a hardship. on the other hand, since the armistice there has been a considerable expansion in stock exchange business. oil shares, mexican securities, industrial shares, insurance shares, and others in which capitalisation of reserves and bonus issues have been used as an effective lever for speculation, have enjoyed spells of considerable activity. with this revival in progress, in spite of many obvious bear points, such as industrial unrest at home, bolshevism abroad, the continuance of heavy expenditure by the government, and the hardly slackened growth of the national debt, it seems to have been scarcely necessary in the interests of the house to have made regulations which, though perhaps demanded by abstract justice, imposed new ties on enterprise at a time when complete freedom, as far as it was consistent with the best interests of the country, was most of all desirable. how far, we have next to ask, is it necessary for the best interests of the country to restrict the freedom of capital issues? if we look back at the terms of reference under which the reconstituted committee is to work, we see that the officially expressed objects are (1) preserving capital for essential undertakings in the united kingdom, and (2) preventing any avoidable drain upon foreign exchanges by the export of capital. there is certainly much to be said for both these objects. when we lend money to foreigners we give them the right to draw on us now in return for their promises to pay some day; in other words, we make an invisible import of foreign securities, and in the present state of our trade balance all imports, whether visible or invisible, need careful watching. it is also very evident that at a time when capital is scarce there is much to be said for keeping it for essential industries, especially those which produce necessaries and goods for export, and not allowing it to be swept up by borrowers who are going to devote it to making expensive fripperies on which big profits are probable. there remains a very big other side to both these questions. all over the world there is a demand for goods which have not been produced, or only in greatly reduced quantities, during the war. this demand is only effective in so far as willing buyers can pay; some of them have the needful cash in hand or waiting in london or elsewhere to be drawn on, but a great number of would-be buyers want to be financed, and will have to be financed by somebody if the needs that they feel are to be translated into actual purchases. in other words, in order that the wheels of industry are to be set turning as fast as they might, if they had a full chance, somebody has to lend freely. now, it is surely most of all important in the national interest that those wheels should begin spinning as fast as possible, and the question is whether we are more likely to serve that interest best by keeping a meticulous eye on the course of exchange and buttoning up our pockets to foreign borrowers or by leaving capital free to seek its market, knowing that every time we give the foreigner the right to draw on us we stimulate our export trade, because his drawing must finally mean a demand on us for something--goods, securities or gold--and goods are what people are in these times most anxious to take. if we are going to leave all the financing to be done by america and fear to import promises to pay lest they should be followed by demands on our gold, shall we not be rather in the position of barry lyndon, who was given a gold piece by his mother when he went out into the world, with strict injunctions always to keep it in his pocket and never to change it? regard for our gold standard is most necessary, but the gold standard is not an end in itself, but merely an important part of a machine which only exists to serve our industry. if we are so careful of the machine, which is a mere subsidiary, that we check the industry which it is there to serve, we shall be like the dandy who got wet through because he had not the heart to unfurl his beautifully rolled-tip umbrella. again, it looks very sound and sensible to keep capital for purposes that are essential, but, on the other hand, it is so enormously important to set industry going as fast as possible that almost any one who will do anything in that direction is entitled to be given a chance. in war-time, when labour and materials were so scarce that they could not turn out all the munitions that were necessary, such a restriction was clearly inevitable. now, when labour and materials are becoming more plentiful, and the scarce commodity is the pluck and enterprise that will take the risks involved by getting to work on a peace basis, it may be argued that any one who will take those risks, whatever be the stuff or services that he proposes to produce, should be encouraged rather than checked. it is again a question of the balance of advantage. if we are going to be so careful in seeing that capital is not put to a wrong use that we take all the heart out of those who want to make use of it, we shall do more harm than good. if by leaving capital free to go into any enterprise that it fancies we can give a start to industry and promote a spirit of courage and enterprise among its captains, it will be well worth while to do so at the expense of seeing a certain amount of capital going into the production of articles that the community might, if it made a more reasonable use of its purchasing power, very well do without. the same question arises when we consider the desire of the government, not expressed in the above statement, but very freely admitted by mr bonar law, in discussing it in the house of commons, to keep capital to be lent to it rather than expended in, perhaps unnecessary, industry. here, again, it is clearly in the interest of the taxpayer that government loans should be raised on the most favourable terms possible. but if, in order to do so, we starve industry of capital that it needs, and so check the production on which all of us, government and citizens alike, ultimately have to live, we shall be scoring an immediate advantage at the expense of future progress--spoiling a possibly brilliant break by putting down the white ball for a couple of points. there is thus a good deal to be said for setting capital free, before we have even arrived at the most serious objection to regulating it under treasury licence. this objection is the exasperation, delay and uncertainty involved by this control. even if we had an ideally wise and expeditious body to decide about capital issues it might not be the best thing to set it to work. but when we remember that in order to see that the wrong sort of issue is not made, all issues will have to pass through the terribly slow-working process of official selection before the necessary licence is finally granted, it begins to look still more likely that we should do well to run the risk of letting a few goats through the gate, rather than keep all the sheep waiting outside for months, with the probable result that many of them may lose altogether their chance of final salvation. it will be noted from the official statement that the arbitrary methods of the old committee are to be modified. it has long been a by-word among those who had dealings with it; they abused it in quite sulphurous language and were wont to quote it as an example of all that bureaucratic tyranny is and should not be, thereby doing some injustice to our bureaucrats, seeing that the committee was manned not by officials but by business men, clothed _pro hac vice_ in the thunder of whitehall. the new committee is to sit by panels of three, so as to expedite matters, and so as to allow applicants the privilege of giving oral evidence. this is an innovation that will save some exasperation, but it will hardly accelerate matters, especially as the decision of the panels will be subject to confirmation by the full committee, so that all the work will have to be done twice over. there is thus much reason to fear that delay, so fatal in business matters, will be an inevitable offspring of the efforts of the new committee, and the list of different forms on which applications are to be made, given above, shows that all the paraphernalia of red tape will dominate the proceedings. now for the terms of the new regulation under the defence of the realm act. "1. the following regulation shall be inserted after regulation 30 ee:- "30 f. the following provisions shall have effect in respect of new capital issues and to dealings in securities issued for the purpose of raising capital: "(1) no person shall, except under and in pursuance of a licence granted by the treasury- "(a) issue, whether for cash or otherwise, any stock, shares or securities; or "(b) pay or receive any money on loan on the terms express or implied that the money is to be or may be applied at some future date in payment of any stock, shares or securities to be issued at whatever date to the person making the loan; or "(c) sub-divide any shares or debentures into shares or debentures of a smaller denomination, or consolidate any shares or debentures of a larger denomination; or "(d) renew or extend the period of maturity of any securities; or "(e) purchase, sell or otherwise transfer any stock, shares or securities or any interest therein, or the benefit of any agreement conferring a right to receive any stock, shares or securities, if the stock, shares or securities were issued, sub-divided or consolidated, or renewed or the period of maturity thereof extended, or the agreement was made, as the case may be, at any time between the 18th day of january, 1915, and the 24th day of february, 1919, and the permission of the treasury was not obtained to the issue, sub-division, consolidation, renewal or extension or the making of the agreement, as the case may be. "(2) no person shall except under and in pursuance of a licence granted by the treasury- "(a) buy or sell any stock, shares or other securities except for cash or when the purchase or sale takes place in any recognised stock exchange, subject to the rules or regulations of such exchange. "(b) buy or sell any stock, shares or other securities which have not remained in physical possession in the united kingdom since the 30th september, 1914. "(3) a licence granted under this regulation may be granted subject to any terms and conditions specified therein. "(4) if any person acts in contravention of this regulation, or if any person to whom a licence has been granted under this regulation subject to any terms or conditions fails to comply with these terms or conditions, he shall be guilty of a summary offence against these regulations. "(5) in this regulation the expression 'securities' includes bonds, debentures, debenture stock, and marketable securities." it will be seen at once that the terms of this document, on any interpretation of them, go far beyond the intentions expressed in what may be called the official preamble and in the new committee's terms of reference. one of the clauses seems, with all deference to its august composers, to be merely silly. this is (1)(c) forbidding sub-division of securities. if a £10 share is split into ten _£1_ shares this operation cannot make the smallest difference to the supply of capital for essential industries or cause any drain on the foreign exchanges. i am assured by those who have delved into the official intention that the reason for the objection of the old committee to splitting schemes, on which this new prohibition is based, was that splitting made shares more marketable and popular and so more likely to compete with war bonds. but a mere sale of shares, split small and so popularised, does not absorb any capital. that only happens when, money is put into some new form of industry. if a, who holds ten £20 shares, is enabled to dispose of them to b because they are split into 200 £1 shares, then, a instead of b has got the money and has to invest it in something. the amount of capital available for investment is not diminished by a halfpenny. this regulation is just a piece of short-sighted tyranny which exasperates without doing the smallest good to anybody. more serious, however, was clause (1)(e) under which any securities that have been issued, split, consolidated or renewed without treasury sanction since january, 1915, were not to be dealt in, in future, without a licence. the result of this clause, if it had stood, would have been that all loans under which such securities had been pledged would have had to be called in because the collateral became unsaleable, except after all the ceremonies had been gone through and a licence had been got. it was also possible to argue that the prohibition to renew or extend the maturity of any security meant that no loans of any kind could be renewed, and that no commercial bills could be renewed, without a licence. it is true that no. 5 paragraph says what the expression "securities" includes, but it does not state definitely that bonds, debentures, debenture stock and marketable securities are the only things included. it was a pretty piece of drafting, and raised a pretty storm in the house of commons on february 27th, when a somewhat lurid picture of its effects was drawn by sir h. dalziel and mr macquisten. mr chamberlain not being then legally a member of the house, it fell to the lot of mr bonar law to explain that the government had really meant to give greater freedom, in making new issues, that the evils anticipated had not been intended, that he hoped the house would not judge the government too harshly for not making unsanctioned issues illegal from the beginning, and that a new order would be issued removing the retrospective effect of the new regulation. and so amendment was promised of a measure which would have had very awkward and unjust effects. it may be argued that it would only have affected people who had done, during the war, what they were asked not to do, namely, make issues without treasury sanction. if the old committee had been a reasonable and expeditious body this argument would have had great weight. but, in view of its caprices and dilatoriness, there was a good deal of excuse for those who decided to do without treasury sanction and take the consequence of being unable to market their securities on the stock exchange. to propose to add a new penalty and cause the cancelling of all the financial arrangements made in connexion with such issues during four years was simply piling blunder on blunder. luckily, the protests of the government's own supporters sufficed to undo the worst of the mischief; but the whole affair is only another argument in favour of the earliest possible ridding of finance and industry from control that is so clumsily exercised. xx money or goods?[1] _december_, 1918 [footnote 1: this was the latter of two articles contributed to the _times trade supplement_ in answer to a series in which mr arthur kitson had attacked our banking and currency system suggested an inconvertible paper currency.] "boundless wealth"--money and the volume of trade--the quantity theory--the gold standard--how is the volume of paper to be regulated?--mr kitson's ideal. in the november _trade supplement_ an endeavour was made to answer mr kitson's rather vague and general insinuations and charges against our bankers concerning the manner in which they do their business. now let us examine the larger and more interesting problem raised by his criticism of our currency system. in his article in the june _supplement_ he told us that "if the british public had any grasp of the fundamental truths of economic science they would know that a future of boundless wealth and prosperity is theirs." this is a cheery and encouraging view and, let us hope, a true one. but, that boundless wealth can only be got if we work for it in the right way. can mr kitson show it to us, and what are these "fundamental truths of economic science"? it is easier to talk about them than to find any two economists who would give an exactly--or even nearly--similar list of them. mr kitson glances "at a few elementary truths." "wealth," he says, "is the product of two prime factors, man and nature, generally termed labour and land. with an unlimited, or practically unlimited, supply of these two factors, how is it that wealth is and has been hitherto so comparatively scarce?" but is the supply of "man" unlimited in the sense of man able, willing, and properly trained to work? and is the supply of "nature" unlimited in the sense of land, mines, and factories fully equipped with the right machinery and served and supplied by adequate means of transport? surely the failure in production on which mr kitson so rightly lays stress is due, at least partly, to lack of good workers, good organisers, good machinery, and good transport facilities. workers who restrict output, employers who despise science and cling to antiquated methods, the opposition of both classes to new and efficient equipment, and large tracts, even of our own land, still without reasonable transport facilities, have something to do with it. and lack of capital--this answer to the question mr kitson flouts because, he says, "since capital is wealth," to say that "wealth is scarce because capital is scarce is the same as saying that wealth is scarce because it is scarce." but is it not a "fundamental truth of economic science" that capital is wealth applied to production? wealth and capital are by no means identical. when a well-known shipbuilding magnate laid waste several surrey farms to make himself a deer-park, the ground that he thus abused was still wealth, but it is no longer capital because it has ceased to produce good food and is merely a pleasant lounging-place for his lordship. may not the failure of production be partly due to the fact that, owing to the extravagant and stupid expenditure of so many of the rich, too much work is put into providing luxuries--of which the above-mentioned deer-park is an example--and too little into the equipment of industry with the plant that it needs for its due expansion? mr kitson's answer is much easier. according to him, instead of working better, organising better, and putting more of our output into plant and equipment and less into self-indulgence and vulgarity all that we have to do to work the necessary reform is to provide more money and credit. since, he says, under the industrial era-"all goods were made primarily for exchange or rather for sale ... it followed, therefore, that production could only continue so long as sales could be effected; and since sales were limited by the amount of money or credit offered, it followed that production was necessarily limited by the quantity of money or credit available for commercial purposes." but is this so? if goods are produced more rapidly than money, it does not follow that they could not be sold, but only that they would have been sold for less money. the producer would have made a smaller profit, but on the other hand the cheapening of the product would have improved the position of the consumer, the cheapening of materials would have benefited the manufacturer, and it is just possible that production, instead of being limited, might have been stimulated by cheapness due to scarcity of currency and credit, or, at least, might have gone on just as well on a lower all-round level of prices. on the whole, it is perhaps more probable that a steady rise in prices caused by a gradual increase in the volume of currency and credit would have the more beneficial effect in stimulating the energies of producers. but mr kitson's argument that the volume of currency and credit imposes an absolute limit on the volume of production is surely much too clean-cut an assumption. this absolute limit may be true, if currency cannot be increased, with regard to the aggregate value in money of the goods produced. but money value and volume are two quite different things. if our credit system had not been developed as it has, and we had had to rely on actual gold and silver for carrying on all production and trade, it does not by any means follow that trade and production might not have been on something like their present scale in the matter of volume and turnover; but the money value would have been much smaller because prices would have been all round at a much, lower level. this contention is based on what is called the "quantity theory of money." this theory mr kitson wholeheartedly believes, so that this is not a point that has to be argued with him. "the value of money," he says, "as every student of economics knows, is determined by the quantity of money in use and its velocity of circulation." quite so. if you increase the amount of money faster than that of goods, more money has to be given for less goods; the value, or buying power, of money is depreciated and prices go up. the present war has given an excellent example of this process at work. all the warring governments have printed acres of paper money, and have worked the credit system with profligate energy; and so we have a huge increase in currency and credit, along with little or no increase (probably a decrease) in consumable goods, and prices have soared like rockets all over the world. in neutral countries the rise has been as bad as anywhere, because the neutrals have been choked with the gold that the warring powers exported, putting paper in its place. so we see that the volume of money, on the theory so emphatically expounded by mr kitson and endorsed by common-sense--as long as we are careful to include all forms of money that are taken in exchange for goods in the definition--reflects itself at once in prices. if money does not increase in quantity and goods do, then prices go down, and after the necessary adjustments are made in rates of wages and salaries, a larger trade can be done with the same amount of money at a lower level of values. the volume of money thus limits the aggregate value of trade, but not its aggregate volume. periods of falling prices are not encouraging to producers, and they put too much advantage into the hands of the _rentier_--the man who lives on fixed interest; on the other hand, they are generally believed to be in favour of the working classes, since reductions in wages generally lag behind the fall in prices, which means increased buying power to the wage-earner. mr kitson's view that the volume of trade is limited by the quantity of currency and credit is thus based on confusion between volume and value. moreover, it follows also from the "quantity theory of money," which he holds, that if he applies his remedy and multiplies currency and credit as fast as he appears to want to, the result will be a still further depreciation in the buying power of money, and a further rise in prices and an increase in all the bitterness, discontent, suspicion, and strikes that the rise in prices has already caused during the war. is this a prospect to pray for? surely if we want to enjoy "boundless wealth and prosperity" the way to do so is to turn out goods--things to eat and wear and enjoy--and not to multiply money, thereby merely depreciating its value, on mr kitson's own admission. he thinks that "nothing but an abundant supply of currency in the shape of legal tender notes and bank credit, could have enabled us to undertake successfully such unprecedented burdens" as we have borne during the war. but it may equally well be argued that we have borne these burdens because we worked harder than ever before to turn out the needed stuff, organised better, used our machinery to its full power, and spent less of our product on luxuries; and that the abundant currency, by forcing up prices, immensely increased the cost of the war and produced industrial friction which several times brought us unpleasantly close to disaster. mr kitson, however, uses the "quantity theory of money"--the doctrine that the value or buying power of money varies according to its quantity in relation to that of the goods that it buys--chiefly as a stick wherewith to beat the gold standard. he shows, very easily and truly, that it is absurd to suppose that the value of the monetary gold standard is invariable. thereby he is only beating a dead horse, for no such argument is nowadays put forward. the variability of the gold standard of value is acknowledged, whenever a fluctuation in the general level of commodity prices is recorded. but gold is the basis of our credit system, and of those of all the economically civilised countries of the world, not because its value is believed to be invariable, but because it is the commodity which is universally accepted, in such countries and in normal times, in payment of debts. this quality of acceptability it has got largely by custom and convention. mr kitson speaks of the "selection of gold by the world's bankers as the basis for money and credit." but it was selected as currency by common custom long before bankers were heard of. and it was selected because of its permanence, ductility and other qualities, especially its beauty as ornament, which made man, eager to adorn himself, his women-kind, and the temples of his gods, always ready to accept it in payment, knowing also that, because of this acceptability, he would always be able to exchange it into any goods that he wanted. any other commodity that earned this quality of universal acceptability could do the work of gold just as well. but until one has been found, gold, as long as it keeps that quality, holds the field. and bankers use it as the basis for money and credit, not because, as mr kitson says, they selected it owing to its scarcity, but because this quality of universal acceptability made it the thing in which all debts, both at home and abroad, could be paid. "given," says mr kitson, "a self-contained trading community with a certain quantity of legal tender, just sufficient for its commercial needs, and it makes no difference either to the value or efficiency of the money or to the trade affected whether it be made of metal or paper." quite so, but trading communities are not self-contained. their currency has to be convertible into something acceptable abroad, and that something is, at present, gold. it is possible that the world may some day evolve an international paper currency that will be everywhere acceptable. but such an ideal requires a growth of honesty and mutual confidence among the nations that puts it a long way off. and how is its volume to be regulated? this question is all-important, whether the currency be national or international. mr kitson speaks of a currency "just sufficient" for the community's commercial needs. who is to decide when the currency is just sufficient? the government? a sweet world we should live in, if among other party questions, parliament had to consider multiplying or contracting the currency every year or every month, with all the interests that would be affected by the consequent rise or fall in prices, lobbying, speech-making, and pulling strings to work the oracle to suit their pockets. and, according to mr kitson's view, that the volume of trade is limited by the supply of currency, this volume would then depend on the whims of the house of commons, half the members of which would probably be innocent of a glimmering of understanding of the enormously important question that they were deciding. the gold standard, which makes the course of prices depend, more or less, on the chances of digging up a capricious metal from the bowels of the earth, has its obvious drawbacks; but it is a clean and sensible business compared with making them depend on the caprices of parliament, complicated by the political corruption that would be only too likely to follow the putting of such a question into the hands of our elected and hereditary representatives and rulers. such, however, seems to be the promised land to which mr kitson wants to lead us. thus he propounds his remedy. "the remedy is surely obvious. divorce our legal tender from its alliance with gold entirely, so that the supply of money and credit for our home trade is no longer dependent upon our foreign trade rivals. base our currency upon the national credit ... treat gold as a commodity only, for the settlement of foreign trade balances." this passage in his article in the september _supplement_ tells us what to do. keep gold, out of deference for foreign prejudice, for the settlement of foreign trade balances, but make as much paper money as you like for home use. as our legal tender money is to be "divorced entirely from its alliance with gold" it clearly cannot be convertible into gold. so that apparently we shall have a paper pound and a gold pound (the latter for foreign use) with no connection between them. this stage of economic barbarism has been left behind now even by some of the south american republics. the paper pound, based on the national credit, can be multiplied as fast as our legislators think fit. if they do not multiply it fast enough, mr kitson will tell them that they are strangling trade, because the volume of production is limited by the amount of money available. at the same time bank credits will be multiplied indefinitely because, as was shown in the november _supplement_, mr kitson supports a view that the average business man holds (according to him) that he ought to have a legal right to as much credit as he wants. with the government printing paper to please its supporters, with the banks obliged by law to give credit to every one who asks for it, and with prices soaring on every addition to currency and credit, what a country this will be to live in, and what a life will be led by those who have to compile and work out the index numbers of the prices of commodities! some of us, perhaps, will prefer the jog-trot conservatism of lord cunliffe's currency committee, who in their recently issued report[1] (which every one ought to read) recommend that gold should not be used for circulation at present, but that endeavours should be made towards the cautious reduction of our swollen paper currency, and that its convertibility into gold should be maintained. [footnote 1: cd. 9182, _2d_.] index addis, sir charles, on banking, aërated bread co., and bonus issues, allies, loans to, america, effect of war on, war finance of, bank act: its purpose, its suggested repeal, its working, bank amalgamations, progress of, bechhofer, mr, on guild socialism, bills of exchange, as basis of issue, bonar law, mr, on after-war position, on capital levy, on sale of securities, british trade corporation, formation of, brunner, mond, and bonus shares, budget, in 1918, canadian pacific, and bonus issues, capital, foreign, levy on, meaning of, supply of, war's destruction of, capital issues, committee on, licence required for, need to restrict, stock exchange and, cole, mr, on guild socialism, cunliffe committee, report of currency: inflation of, international, metals as, origin of, quantity theory of, report on, _daily news_, on capital levy, expenditure, committee on, france, after-war position of, free trade and british supremacy, germany, after-war position of, our claims against, war finance of, gold standard: affected by war, faults of, reasons for, goodenough, mr, on note issue, hoare, mr alfred, on taxation, holden, sir edward, and the bank act, inflation, working of, interest, rate of, kitson, mr, on currency, labour, example set by, lawrence, mr pethick, on capital levy, lees, mr edward, on debt redemption, lloyds, elasticity of, london, prestige of, macaulay, lord, on bad money, _new statesman_, on capital levy, owen, senator, on american system, "quantity theory," of currency, reserves, capitalising, _round table_, on capital levy, socialism, and bank amalgamations, in light of war, guild, stilwell, mr, on paying for war, taxation, as war weapon, increase of, in war, "war emergency workers," on capital levy, webb, mr, on state banking, transcriber's note: minor typographical errors have been corrected without note. irregularities and inconsistencies in the text have been retained as printed. words printed in italics are noted with underscores: _italics_. my adventures with your money by george graham rice richard g. badger the gorham press boston copyright, 1911, by the ridgway company copyright, 1913, by richard g. badger all rights reserved the gorham press, boston, mass., u.s.a. to the american damphool speculator, surnamed the american sucker, otherwise described herein as the thinker who thinks he knows but doesn't--_greetings_! this book is for you! read as you run, and may you run as you read. g. g. r. new york, march 15, 1913. contents page i the rise and fall of maxim & gay 11 _the birth of an idea to coin money._ _the higher mathematics of the operation._ _how "the one best bet" was coined._ _real inside turf information._ _the public asks to be mystified._ _prestige restored by a clerk's ruse._ _a boastful race player gives aid._ _fortune changes her mood and smiles again._ _the kentucky colonel falls in line._ _betting the public's money at great profit._ _$130,000 is lost and won in a day._ _a disastrous newspaper wind-up._ ii mining finance at goldfield 46 _a partnership of pure nerve._ _bucking the tiger on the desert._ _bidding $3,000,000 when broke._ _millions in the vista held no charms._ _"human interest" versus technical mining._ _beginning the advertising business._ _some advertising that paid._ _building gold mines with publicity._ _hair-raising stories for distant readers._ _the mercury of speculation._ _the birth of bullfrog._ _enter, charles m. schwab._ _why the bottom fell out._ _how about the public's chances?_ _jumping jack manhattan._ iii the brewing of a saturnalia of speculation 89 _trying it on the stray dog._ _advertising for thinkers._ _yes, "business is business."_ _fortunes that were missed._ _the tale of bullfrog rush._ _prize fights and mining promotion._ _the year of big figures._ _the story of goldfield consolidated._ _at the height of the frenzy._ iv the greenwater fiasco 133 _getting into the game._ _all the copper in the world._ _the collapse of greenwater._ _the shame and the blame._ v on the eve of the great goldfield smash 144 _the rise of wingfield and nipon._ _the winnings of a tenderfoot._ _i am landed high and dry._ _the beginning of the raid._ _some pertinent personalities._ _the time when money talks._ _clouds in the western sky._ _from credit to crash._ _down with the sullivan trust company._ _some hindsight that came too late._ vi nipissing and goldfield con 179 _an orgy in market manipulation._ _the guggenheims enter nipissing._ _nipissing on the toboggan._ _who got the $75,000,000?_ _the wonder mining-camp stampede._ _teague attacks senator nixon._ "_calling for a show-down._" _manipulating goldfield con._ _enter, nat. c. goodwin & co._ _the story of the goldfield labor "riots."_ _the death of governor sparks._ vii rawhide 219 _real gold at rawhide._ _the rawhide coalition mines company._ _a race of gamblers._ viii the press agent and the public's money 227 _publicity via elinor glyn._ _"al" miller's siege._ _the funeral oration for riley grannan._ _among the "big fellows."_ _the reverse english._ _the power of the public print._ _rawhide again._ ix the wall street game 264 _good big fish vs. bad little fish._ _righteous wall street and the "sucker" public._ _the marketing of mining stock._ _i buck the wall street game._ _the "double-crossing" of rawhide coalition._ _"inside" market support._ x enter, b. h. scheftels and company 288 _more truth on the "mining financial news."_ _the scheftels principles._ _the scheftels company against margin trading._ xi a fight to the death 308 _the firing of the first guns._ _the story of ely central._ _the assault on ely central._ _the clash of battle._ _a bombshell in the enemy's camp._ _a government raid is rumored._ _the raid on b. h. scheftels and co._ _a tool's confession._ _the guggenheims._ xii the lesson of it all 362 foreword you are a member of a race of gamblers. the instinct to speculate dominates you. you feel that you simply must take a chance. you can't win, yet you are going to speculate and to continue to speculate--and to lose. lotteries, faro, roulette, and horse-race betting being illegal, you play the stock game. in the stock game the cards (quotations or market fluctuations) are shuffled and riffled and stacked behind your back, after the dealer (the manipulator) knows on what side you have placed your bet, and you haven't got a chance. when you and your brother gamblers are long of stocks in thinly margined accounts with brokers, the market is manipulated down, and when you are short of them, the prices are manipulated up. you are on guard against the get-rich-quick man, and you flatter yourself that you can detect his wiles at a glance. you can--one kind of get-rich-quick operator. but not the dangerous kind. modern get-rich-quick finance is insidious and unfrenzied. it is practised by the highest, and you are probably one of its easy victims. one class of get-rich-quick operator uses crude methods, has little standing in the community, operates with comparatively small capital, and caters to those who do not think and have only small resources. he is not particularly dangerous. the other uses scientific methods--so scientific, indeed, that only men "on the inside" readily recognize them; occupies a pedestal in the community; is generally a man of excellent financial standing, a member of a stock exchange; employs large capital; appeals to thinkers or those who flatter themselves that they know the difference between a gold bar and a gold brick, and seeks to separate from their money all classes and conditions of men and women with accumulations large or small. the united states government during the past few years, at the behest of the big fellow, who seeks a monopoly of the game, has been raiding the little fellow--the crude operator whose power to injure is as nothing compared to the ravages that have been wrought by the activities of his really formidable prototype. i have a message to communicate to every investor and speculator, a story to tell of my experience through the great goldfield, bullfrog, manhattan and greenwater mining booms in nevada of 1905-1908, in which the public lost upwards of $200,000,000, and of a series of great mining-stock promotions in wall street and other american financial centers, in which the public sank $350,000,000 in 1910. the narration of the facts demonstrates that the government's get-rich-quick crusade has made it less easy for some of the small offenders to thrive, but that the transcendentally greater culprits are at this very moment plucking the public to a fare-you-well, and that the government has not lifted a finger against them. no man, except a common thief, ever started out to promote a mining company or any other company that he was convinced at the outset had no merit; and the work of common thieves is quickly recognized and the offenders are easily apprehended. the more dangerous malefactors are the men in high places who take a good property, overcapitalize it, appraise its value at many times what it is worth, use artful publicity and market methods to beguile the thinking public into believing the stock is worth par or more, and foist it on investors at a figure which robs them of great sums of money. there are more than a million victims of this practice in the united states. after years of experience behind the scenes, the conclusion is forced upon me that the instinct to speculate is so strong in american men and women that they choose to "take a chance" regardless of the fact that at the outset they already half-realize they eventually must lose. myself, in boyhood, a victim of the instinct to speculate, i, years afterward, at the age of 30, learned to cater to the insatiable desire in others. i spent fortunes for advertising and wrote my own advertisements. i constructed on big lines powerful dollar-making machinery that succeeded in getting the money for my enterprises, and i was generally my own manager. ten years of hard work in a field in which i labored day and night has disclosed to me that the instinct to gamble is all-conquering among women as well as men--the rich and the poor, the young and the old, the wise and the foolish, the successful and the unsuccessful. worse, if you have lost some of your hard-earned money in speculation, your case is undoubtedly incurable, because you have a fresh incentive, namely, to "get even." experience, therefore, will teach you nothing. the professional gambler's aphorism, "you can't kill a sucker," had its genesis in a recognition of this fact, and now stock promoters and manipulators of the multi-millionaire class subscribe to its truth and on it predicate their operations. nearly everybody speculates (gambles); few win. where does the money go that is lost? who gets it? are you aware that in catering to your instinct to "invest," methods to get you to part with your money are so artfully and deftly applied by the highest that they deceive you completely? could you imagine it to be a fact that in nearly all cases when you find you are ready to embark on a given speculation, ways and means that are almost scientific in their insidiousness have been used upon you? what are these impalpable yet cunningly devised tricks that are calculated to fool the wisest and which landed you? i narrate them herein. what are your chances of winning in any speculation where you play another man's game? have you any chance at all? in playing the horse races in years past you had only one chance if you persisted--you could lose. in margin-trading on the new york stock exchange, new york curb, boston stock exchange, boston curb, chicago board of trade, chicago stock exchange, new york cotton exchange and kindred institutions, experience among stock-brokers proves that if you stick to the game you have only one chance--you can lose. in railroad, industrial and mining-stock speculation, where you buy the shares outright and hold them for stock market profits, you have two chances; if you are of the average and your operations are for a period continuous--you can break even if you are very lucky, or lose if you are not; and in justice to myself i must be allowed to explain that i had a much better opinion of the public's chances ten years ago than i have now, and that experience on the inside has taught me this. the moral to the investor and speculator is "never again!" and yet you will speculate again. experience teaches that so long as the chance of speculative gain exists in any enterprise, so long will the american public continue in its efforts to appease its speculative appetite. g. g. r. my adventures with your money chapter i the rise and fall of maxim & gay the place was new york. the time, march, 1901. my age was thirty. my cash capital, tightly placed in my pocket, was $7.30, and i had no other external resources. i was a rover and out of a job. since august of the year before i had been loafing. my last position, seven months before, was that of a reporter for the new orleans _times-democrat_. my last newspaper assignment was the great galveston cyclonic hurricane in which 15,000 lives were lost and $100,000,000 in property was destroyed. i covered that catastrophe for the new york _herald_ and other journals as well as for the new orleans newspaper. it was a "beat" and i netted a big sum for a few days' hard work, but the money had all been spent for subsistence. at the corner of fortieth street and broadway i met an old-time racetrack friend, dave campbell. his face wore a hardy, healthful hue, but he bore unmistakable evidence of being down on his luck. "buy me a drink," he said. "i've got thirty cents in change and i must have a cigar," i answered, "and you know i like good ones." "well, i'll take a beer," he said, "and you can buy yourself a perfecto." no sooner said than done. the cigar and the drink were forthcoming. we sat down. it was a café with the regulation news-ticker near the lunch counter. "do you still bet on the horses?" asked campbell. "no, i haven't had a bet down in more than a year," i answered. "well, here's a letter i just received from frank mead at new orleans, and it ought to make you some money," he said. "there's a 'pig' down here named silver coin," the letter said, "that has been raced for work recently. i think he's fit and ready and that within the next few days they will place him in a race that he can win, and he will bring home the coonskins at odds of 10 to 1." i had seen letters like that before, but my interest was aroused. i picked up a copy of the new york _morning telegraph_ from the table. turning the pages, i noticed a number of tipsters' advertisements, all claiming they were continually giving the public winners on the races. the birth of an idea to coin money "do these people make money?" i asked campbell. "yes, they must," he answered, "because the ads have been running every day for months and months." "well, if poorly written ads like these can make money, what would well-written ads accomplish, and particularly from an information bureau which might give real information?" i queried. a moment later the ticker began its click, click, click. "here come the entries," said campbell. he went to the tape and ejaculated, "by jiminy! here's silver coin entered for to-morrow." the coincidence stirred me. "i've got an idea for an advertisement," i said. "get me a sheet of paper." it was supplied. i wrote: +---------------------------+ | bet your last dollar on | | silver coin | | to-day | | at new orleans | | he will win at 10 to 1 | +---------------------------+ and then i faltered. "i must have a name for the signature," i said. i picked up the newspaper again and turned to the page containing the entries for that day at the new orleans races. a sire's name was given as st. maxim. "maxim!" i said. "that's a good name. i'll use it. now for one that will make euphony." "gay!" said campbell. "how's that? it's sporty." thereupon i created the trade-mark of maxim & gay. in a postscript to this advertisement i stated that the usual terms for this information were $5 per day and $25 per week, and that the day after next maxim & gay would have another selection, which would not be given away free. "maxim & gay" were without an address. half a block away on broadway, at a real estate office, we were informed that upstairs they had some rooms to let. i engaged one of these for $15 a month--no pay for a week. two tin signs were ordered painted, bearing the inscription, "maxim & gay." one was placed at the entrance of the building and the other on the door upstairs. the sign-painter extended credit. before bidding me adieu, campbell exclaimed of a sudden: "by golly! i can't understand that scheme. how can you make any money giving out that silver coin tip for nothing?" "watch and see!" i said. around to the _morning telegraph_ office, then on forty-second street, i went. "insert this ad and give me $7 worth of space," i said, as i shelled out my last cent. when the advertisement appeared the next morning, its aspect was disappointing. the space occupied was only fifty-six agate lines, or four inches, single-column measure. it looked puny. would people notice it? that afternoon campbell and i took possession of the new office of maxim & gay. luckily, a former tenant had left a desk and a chair behind, in lieu of a settlement for rent. in walked a tall texan. "hey there!" he cried. "here's $5. it's yours. keep it. answer my question, and no matter what way you answer it, it don't make any difference. the $5 is yours." i looked up in amazement. "give me the source of your information on silver coin," he said. "i bet big money. if your dope is on the level, i'll bet a 'gob.' if it ain't, your confession will be cheap at $5, which will be all the money i'll lose." i showed him the letter from frank mead. "that's good enough for me," he said, turning on his heel. silver coin won easily at 10 to 1. the betting was so heavy in the new york pool-rooms that, at post time, when 10 to 1 was readily obtainable at the race-track, 6 to 1 was the best price that could be obtained in new york. it is history that the new york city pool-rooms at that time controlled by "jimmy" mahoney were literally "burned up" with winning wagers. pool-room habitués argued it thus: "if the tip is not 'a good thing,' what object in the world would these people have for publishing the ad? if the horse loses, the cost of the advertisement is certainly lost. the only way they can win is for the horse to win." it was good logic--as far as it went. the higher mathematics of the operation but it was really sophistry. if the horse lost, the inserter of the maxim & gay advertisement would be out exactly $7. if the $7 was used to bet on the horse, the most that maxim & gay could win would be $70. i was taking the same losing risk as the bettor, with a greater chance for gain. by investing $7 in the advertisement, it was possible for me to win much more money from the public by obtaining their patronage for the projected tipping bureau. i recall that the experimental features of the advertisement appealed to me strongly and struck me as being a splendid test of the possibilities of the business. if the horse won and there were few responses to the advertisement it would be convincing on the point that there was no money in the tipster branch of the horse-racing game. i argued that if the racing public would not believe that an information bureau was what it cracked itself up to be, in the face of a positive demonstration, how could it be expected to believe the lurid claims of the fakers whose advertisements crowded the sporting papers daily and in which they claimed _after_ the races were run that they named in advance the winners at all sorts of big odds? the next morning about ten o'clock, campbell called at my home and said that he had received another "good thing" by telegraph from mead and that the name of the horse was annie lauretta, with probable odds of 40 to 1. "jiminy!" he exclaimed. "if we only get a few customers to-day and this one wins, what will happen?" leisurely we walked to the office. "if we get ten subscribers to-day to start with, we'll make a fine beginning," i said. as we approached the hotel marlborough, which is opposite the building on broadway in which the maxim & gay company had its modest little office, our attention turned abruptly to a crowd of people who were being lined up by half a dozen policemen. "what theater has a sale of seats to-day?" campbell asked. "don't know," i answered. as we approached the office, we found that the line extended into our own office building. as we ambled up the rickety stairs, we passed the crowd in line, one by one, until we discovered, to our great astonishment, that the line ended at our door. we turned the key, walked in, locked the door, and stood aghast. holding up both hands, i gasped, "in heaven's name, what have we done?" i was appalled. "give 'em annie lauretta," cried campbell. "but suppose annie don't win," i expostulated. "smokes!" exclaimed campbell. "are you going to turn down all those $5 bills?" "let's see that telegram," i faltered. i perused it over and over again. "mead's judgment on silver coin is good enough reason to warrant advising people to put a wager on another one of his choices," campbell argued. i agreed. how to convey the information in merchantable form was the next question. a typist in the hotel marlborough, across the way, was sent for and asked to strike off the name "annie lauretta" 500 or 1,000 times on slips of paper. envelopes were bought and a typed slip was placed in each. the line increased until it was a block and a half long. when all was ready, the door was opened. campbell passed the envelopes out as each man handed me $5. i stuffed the money in the right-hand drawer of the desk, and when that became choked, i stuffed it in the left-hand drawer. finally, the money came so thick and fast that i picked up the waste-paper basket from the floor, lifted it to the top of the desk and asked the buyers to throw their money into the receptacle. when a man wanted change, i let him help himself. for two and a half hours, or until within fifteen minutes of the calling of the first race at new orleans, the crowd thronged in and out of our office. when the last man passed out we counted the money and found the day's proceeds to be $2,755. "what will we do next?" asked campbell. "what's my job, and what do i get?" "how much do you want?" i asked. "ten dollars a day," he said. thereupon he got possession of the $10 and he admitted it was more money than he had seen in a month. "what will we do next?" he repeated. "let us take a walk," i said. "lock the office until after the fourth race, when we see what annie lauretta does." we hied ourselves to a nearby resort and stood by the news ticker to see what would happen to annie. it was half an hour since the third race had been reported. "fourth race--tick--tick--tick," it came. "a--al----," "we've lost!" i cried. "a--al--alpena first." there was grim silence. "tick--tick----," "here she is!" yelled campbell. "a-n-n-i-e lauretta second--40--20--10" (meaning that the odds were 40 to 1, first, 20 to 1, second, and 10 to 1, third, and that those who had played "across the board" had won second and third money at great odds). i boarded a broadway car, rode down to the stewart building and rented one of the finest suites of offices in its sacred purlieus. i ordered a leading furniture dealer to furnish it sumptuously. at night i walked over to the _morning telegraph_ office, laid $250 on the counter, ordered inserted a flaring full-page ad. announcing that maxim & gay had given annie lauretta at 40, 20 and 10, second, and previously silver coin at 10 to 1, won, and were ready for more business. a telegram was sent to frank mead, instructing him to spend money in every direction with a view to getting the very best information that could be obtained from handicappers, clockers, trainers and every other source he could reach. mead continued to wire daily the name of one horse, which we promptly labeled and thereafter advertised daily as "the one best bet." soon "one best bet" became a term to conjure with. the success of this enterprise was phenomenal. in the course of two years it earned in excess of $1,500,000. there were some weeks when the business netted over $20,000 profits. at the height of its career, in the summer of 1902, at the saratoga race meeting, when the pool-rooms in new york were open, our net profits for the meeting of a little less than three weeks were in excess of $50,000. we established an office in saratoga and our average daily sales on race days were 300 envelopes at $5 each. in new york the average was just as large, and, in addition, we had a large clientele in distant cities to whom we sent the information by telegraph. the wire business, in fact, increased to such an extent that it became necessary to call upon the western union and postal telegraph companies to furnish our office in the stewart building with direct loops. i spent the money as fast as i made it. i believed in our own information and made the fatal error of plunging on it. my error, as i afterwards concluded, was in not risking the same amount on every selection. had i done this, i would not have suffered serious losses. the trouble was that every time a horse on which i wagered won, i was encouraged to bet several times as much on the next one, and by doubling and trebling my bets, i played an unequal game. the expense of gathering this information within a few weeks increased to upwards of $1,000 a week, and it was not only our boast, but an actuality, that the bureau did really give more than value received. undoubtedly, the evil of the venture was the gambling it incited; but the effort to secure reliable information was honest, and what young man of my age and of my experiences, having indulged in a lark of the silver coin variety, could withstand the temptation of seeing the thing through? among the leading patrons of the maxim & gay company were soon numbered important horse owners on the turf, leading bookmakers and many leaders of both sexes in the smart set. maxim & gay made it a rule to sell no information of any kind to minors and often excluded young men from the offices for this reason. how "the one best bet" was coined our methods of advertising were unique. we used full pages whenever possible, and it was a maxim in the establishment that small type was never intended for commercial uses. we used in our big display advertisements a nomenclature of the turf that had never before been heard except in the vicinity of the stables, and we coined words and phrases to suit almost every occasion. the word "clocker," meaning a man who holds a watch on horses in their exercise gallops, was original with us, and has since come into common use, as has the phrase, "the one best bet," which we also coined. it was our aim, in using the language of horsemen, to be technical rather than vulgar, the theory being that, if we could convince professional horsemen that we knew what we were talking about, the general public would quickly fall in line. one morning we were alarmed to see in the _morning telegraph_, on the page opposite our own daily effort, the advertisement of a new tipster who called himself "dan smith." dan went maxim & gay "one better" in the use of race-track terminology. he evidently employed a number of negro clockers, for the horse lingo which he used in his advertisements smelled of soiled hay and the manure pile. it was awful! but it made a hit with race-goers, and before a week had passed we recognized "smith" as a dangerous competitor. we were loth to believe that the use of this horsy language was entirely responsible for smith's success, for we knew that his tips were not so good as ours. we investigated. his trick was this: in the sheet that he sent out to his customers, he would name for every race at least five horses as having a chance to win. he advised his clients, in varying terms, to bet on every one of them, and if any one of them won, he would print next morning what he had said on the preceding day regarding the winner alone, leading the public to believe that the only horse he had fancied was the actual winner. i decided to organize another bureau to knock out dan smith. the intention was "to go" our competitor "a few better" in the use of vulgar horse-racing colloquialisms and exaggerated claims, and thus nauseate the betting public and "put the kibosh" on dan. we created a fictitious advertiser whom we named "two spot," and the next morning there appeared at our instigation in the _morning telegraph_ a large display advertisement, headed substantially as follows: +-----------------------------+ | two spot | | turf info. merchant | | terms, $2 daily; $10 weekly | +-----------------------------+ following the style which dan smith had adopted in his racing sheets, "two spot" mentioned in his first advertisement, as a sample of his line of "dope," four or five horses to win each race, each one in more grandiloquent terms than the other, but these were selected because they, in reality, appeared to be the most likely losers of all the entries. a woman was sent over to the newly-organized office of "two spot" to take charge of the salesroom. i was completely taken off my feet the next day when she informed me that the receipts, as a result of the first advertisement, were in excess of $300, and that the public not only did not read between the lines, but had actually fallen for the hoax. to cap the climax, on the second day one of the "outsiders" which "two spot" named derisively as the one best bet "walked in" at 40 to 1! next day "two spot" did a land-office business, and within a few days we figured that the "two spot" venture would net $1,000 a week if continued. "two spot" then went after the game hammer and tongs and endeavored to gage the full credulity of the public. the distinctive difference between "two spot" and maxim & gay was this: maxim & gay, except in one instance, which is chronicled herein, never pretended to have selected a winner when it had not, while "two spot" enjoying the same source of information as maxim & gay, worded his daily advices to clients so artfully as to be able to claim the next morning in his advertisements à la dan smith, the credit of having said something good about every winner. the profits of dan smith's venture, i was informed, exceeded a quarter of a million dollars the first year, and the profits of "two spot," whose career was cut short within a month by a realization on our part that we could not afford to be identified with such an enterprise, was divided among the employees of the "two spot" office. "two spot" had been brought into being for the purpose of killing opposition and not for profit-making. the scheme failed of its purpose. to give an idea of the character of some of the raw kind of advertising put out by "two spot," and for which the public fell, i recall this excerpt from one of his tipping sheets: i am my own clocker. i have slept under horse-blankets for thirty years. i understand the lingo of horses. last night, when i was taking my forty winks in the barn of commando, i heard him whinny to butterfly and tell her to keep out of his way to-day because he was going to "tin-can" it from start to finish, and if butterfly tried to beat him, he would "savage" her. that makes it a cinch for commando. bet the works on him to win. real inside turf information maxim & gay repeated the "silver coin" method of advertising only once during the entire career of the company. this happened in the spring of 1902, when john rogers, trainer for william c. whitney, sent to the post a mare named smoke. our information was that the mare would win, and our selections for the day named her to win--and she did. two days later, she was again entered, against an inferior class of horses, and the handicap was entirely in her favor. notwithstanding this, we inserted an advertisement which appeared in the newspapers on the morning of the race, reading substantially as follows: "_don't bet on smoke to-day. she will be favorite, but she will not win. rockstorm will beat her._" sure enough, smoke opened up favorite in the betting. the betting commissioners of mr. whitney placed large wagers on the horse with the bookmakers. the bulk of the public's money, however, went on rockstorm, and before post time thousands of dollars of the "wise" money followed suit. rockstorm won the race. smoke led into the stretch, when up went her tail and she "blew up." immediately i was cross-questioned by messengers from the judges' stand. they asked our reason why we were so positive that smoke would lose. mr. whitney, i was informed, was actually suspicious that his mare had been "pulled." the reason for the reversal of form, as i explained at the time, was this: william dozier, our chief clocker at the race-track, who had witnessed the preparation which smoke received for the races, was of the opinion that her training had been rushed too fast, and that her first race, instead of putting her on edge, had caused a setback. her first race, in fact, had "soured" her. being a veteran horseman, he was positive that smoke would lose. i afterwards learned that the training of smoke had been left to an understrapper, and that mr. rogers himself was not responsible for her condition. the public asks to be mystified the judges were apparently satisfied, but the public could not readily understand the truth, and we didn't point it out in our advertisements, because our policy was always to appear as mysterious as possible as to the source of our information. mystery played an important rôle in our organization, and it would have been better had we never succeeded in the smoke coup. up to this time my personal identity had not been revealed at the race-track, and even the bookmakers did not know who was the guiding spirit of maxim & gay. "jimmy" rowe, trainer for james r. keene; peter wimmer, trainer for captain s. s. brown of pittsburg, and john rogers, trainer for william c. whitney, were at this early period at various times the rumored sponsors for maxim & gay. the bookmakers and "talent" generally conceived the idea that nobody but a very competent trainer in the confidence of horse owners could possibly be responsible for so much exact information regarding the horses. of course, the track officials who made it their business to know everything knew of my connection with the organization. no sooner, however, did their messengers ask an interview with me than the fact became public property around the race-track and the mask was off. the effect for a while was very bad, for our business fell off considerably. "bismarck" korn, the well-known german bookmaker, put it to me this way on the day of the smoke incident: "you are the first horse tipster i effer saw dat vore eyeclasses, sported a cane, und vore tailor-made cloding. you look like a musicianer--not like a horseman. you're a vonder!" gottfried walbaum, another old-time bookmaker, chimed in: "dat vas obdaining money under false bredenses. i gafe your gompany dwendy-fife dollars a veek for two months alreaty. you gif me my money pack! you are a cheater!" riley grannan, the plunger, said, "got to hand it to you, kid! any time you can put one over on the weisenheimers that have been making a living on race-tracks for twenty years you are entitled to medals!" the attitude of "bismarck" and of walbaum was amusing, that of grannan flattering. but it was poor business, because most of these professional race-track people ceased for a while to subscribe for the maxim & gay service. for months i had purposely kept myself in the background, fearing a dénouement of this very description. i recalled that in the late 80's, in a town of northern vermont, when john l. sullivan was advertised to appear in a sparring exhibition, his manager met him at the train, and, although it didn't rain and the sun didn't shine, an umbrella was raised to cover john l. while walking from the train to a waiting landau. no sooner did sullivan enter the vehicle than the blinds were drawn. when the carriage reached the hotel, it stopped before a side door. the manager alighted before sullivan, again quickly raised the umbrella and whisked the heavy-weight champion past the crowds and up to his room without exposing him to the view of anybody whatsoever. throughout the day sullivan was screened from public gaze. his face was not seen by a single citizen of the town until he appeared on the stage that night. i asked the manager why he was so very careful to shield sullivan from the popular view prior to his appearance before the footlights. i recall that he said: "if the public thought john l. was just an ordinary human being with black mustaches and a florid celtic face, they wouldn't go to see him. the public demand that they be mystified, and to have shown people off the stage that mr. sullivan is just a plain, ordinary mortal would disillusion them and keep money out of the house." that piece of showman's wisdom was fresh in mind during the early career of maxim & gay; and so long as maxim & gay kept race-track men guessing as to who was directing its destinies, the organization was a howling success. its good periods were mixed with bad periods after the mystery of sponsorship was cleared up to the satisfaction of the professionals by the inquiry of the race-track judges into the smoke affair. a few weeks after the smoke coup, our chief clocker informed us that the entries for a big stake race which would be run on the following saturday had revealed to him a "soft spot for a sure winner," as he expressed himself, and he said we could advertise the happening in advance with small chance of going wrong. this we proceeded to do. money poured in by telegraph from distant cities for the "good thing" on saturday. our advertisement on the thursday previous to the race read like this: +---------------------------------+ | the hog-killing of the year | | will come off at sheepshead bay | | on saturday, at 4 o'clock. | | be sure to have a bet down. | | telegraph us $5 for the | | information | +---------------------------------+ one of our constant patrons resided in louisville. he was among the first to whom we telegraphed the information on saturday morning. the race was run and the horse _lost_. about 4:30 p.m. we received a dispatch from our louisville customer, reading as follows: "the hog-killing came off on schedule time--here in louisville. i was the hog." another message from a pool-room habitué reached us, reading: "good game. have sent for more money." we were often in receipt of messages of similar character on occasions when our selections failed to win and our customers lost their money; but these communications were generally in good spirit. on one occasion we had what we believed to be first-hand information regarding a horse which was being prepared for a big betting coup by dave gideon, one of the cleverest horsemen in the country. following our customary method of using vividly glowing advertisements, with the blackest and heaviest gothic type in the print shop, we announced: +----------------------------------------+ | a gigantic hog-killing | | we have inside information of a long | | shot that should win to-morrow at | | 10 to 1 and put half of the bookmakers | | out of business. | | be sure to have a bet down on | | this one. terms $5. | +----------------------------------------+ the _argument_ of the advertisement, which appeared beneath these display lines, was couched in the most glowing terms, and made it very plain that our information came from a secret source, and, further, that we had spent legitimately a snug sum of money to secure the information. we also pointed out that the owner was one of the shrewdest betting men on the turf and seldom went astray when he put down a "plunge" bet on one of his own entries. next day the race was run. the horse did not finish "in the money." the following day we received many letters, as we always did when one of our heavily advertised "good things" lost. one of the most unique of these epistles contained a remonstrance from a philadelphia subscriber. he wrote in this vein: dear sir:--you have been advertising for some days that you would have a gigantic hog-killing to-day. i was tempted by your advertising bait and fell--and fell heavily with my entire bank roll. my bucolic training should have warned me that "hog-killings" are not customary in the early spring, but i fell anyway. permit me to state, having recovered my composure, that armour or swift need have no fear of you as a competitor in the pork-sticking line, for far from making a "hog-killing," you did not even crack an egg. pardon me. thanks. good-by. yours truly, ------prestige restored by a clerk's ruse in the summer of the second year of maxim & gay's great money-gathering career, the information bureau was "out of luck" and the patronage of the bureau fell away to almost nothing. at this period i was seriously ill and confined to my home. a man in my office decided to take advantage of my absence from the scene to improve business a bit on his own hook. it was the habit of our track salesmen, dressed in khaki, to appear at the office at noon every day and receive a bundle of envelopes containing the tips on the races, and then immediately to proceed to the race-track, stand outside of the gates and vend them at $5 per envelope. one day these men, without their knowledge, were supplied with envelopes containing blank sheets of paper instead of the mimeographed list of tips. when a handful of town customers reached the office, they were informed that the selections would be late that day and would be on sale at the track only. at about half-past one o'clock the 'phone bell rang, and word came from the track messengers that apparently a mistake had been made, as their envelopes contained blanks. they were being compelled to refund money. they asked what to do. "wait," they were told. "we will send a messenger immediately with the tips." the messenger never reached the track. there were no tips issued. on that day may j. won at odds of 200 to 1. the next morning, the newspapers contained full-page advertisements announcing that maxim & gay had tipped may j. at 200 to 1 as the day's "one best bet." it could not have been done without a "come-back" if any tips had been issued. a boastful race player gives aid i was not present, but i learned as soon as i became convalescent that on the afternoon of the day the advertisement appeared claiming credit for may j. at 200 to 1, the office was thronged with new customers who enrolled for weekly subscriptions at a rate that put new life into the business. a few of the customers expressed some doubt as to whether maxim & gay gave out the 200 to 1 shot or not. that afternoon there appeared on the scene a race player who, laying $5 down on the desk, said, "give me your good things. i played may j. yesterday at 200 to 1 and i am rolling in money." "where did you buy your information?" "from your man at the entrance to the track," he answered. "at what time?" he was asked. "a quarter to two," he replied. "say, young man, there were a lot of people who came in here this morning who said they were not sure we gave out that selection at all. would you make an affidavit that you bought the information from us?" "you bet i will!" he said; and thereupon a notary public was called in and the caller swore that he had bought the maxim & gay tips at the entrance to the race-track and that they contained may j. at 200 to 1. that affidavit was posted in the office during the remainder of the day. when the clerk who performed this stunt was asked for more information as to how he came to secure such an affidavit, he gave absolute assurance that he did not offer the customer the smallest kind of bribe to make it, and that nothing but an innate desire to call himself "on top" had influenced the man to perjure himself. but i could not tolerate the misleading advertising that had been done as a result of misplaced energy, and the man responsible for it did not remain with the company. fortune changes her mood and smiles again peculiarly enough, the may j. advertisement was followed by a series of brilliant successes for maxim & gay in the selection of winners at big odds, and, within a month our net earnings again reached $20,000 per week. horse owners, horse trainers and society people who frequented the club-house at the race-track were our steadiest patrons. the women particularly were most loyal to our bureau. the wife of a young multi-millionaire of international prominence was one of our most ardent followers. she would never think of putting down a bet without first consulting maxim & gay's selections. on a notable occasion, this lady arrived at the gate of the morris park race-track with her husband, in their automobile, and took the long stroll to the club-house. they were a trifle late for the first race; the horses were already going to the post up the eclipse chute. suddenly the lady discovered she had forgotten to purchase maxim & gay's selections. hastily calling her husband, she gave him a sharp berating for not reminding her to buy the selections. they had a short but earnest interview, which was suddenly terminated by the young man doing a sprint of a quarter of a mile down the asphalt walk from the club-house to the main entrance where the tips were sold by the uniformed employees of maxim & gay. those who witnessed the sprint of the young financier attested to the fact that he never showed as much swiftness of foot in his early college days; but even his unusual speed failed to get him back on time to acquaint his wife with the name of the horse selected by maxim & gay for the first race, the race having been run and the maxim & gay selection having won. the gentleman thereupon got a curtain lecture from his better half that astonished and amused the society patrons on the club-house balcony. thereafter, he never forgot to get the maxim & gay selections. in fact, he made assurance doubly sure by engaging the colored attendant in charge of the field-glasses to deliver the selections to him daily immediately upon his arrival at the course. our popularity with racehorse proprietors was mixed. among the horse owners with whom we transacted business was colonel james e. pepper, the late noted distiller and owner of a big breeding farm and a stable of runners. he was an ardent lover of horses, and maintained that his native kentucky knowledge of thoroughbreds afforded him an opportunity to pick probable winners of horse-races better than any of "them ---faking tipsters." he had great confidence in his judgment for a while. the kentucky colonel falls in line after separating himself from much cash, while one of his very intimate friends was "cleaning up" plenty of money on our selections, he finally strolled into our office one morning and sheepishly stated that one of his "fool friends" had asked him to step in and get our "fool selections" for him. we explained that it was against our rule to give out our choices before 12:30 p.m., whereat he grew exceedingly wroth. he finally agreed to our conditions, paid his money and was given an order to get the selections at the track-entrance from one of our messengers. nearly all of our choices won that day. colonel pepper came in the following morning and paid for another subscription, this time for a week's service. we were "in our stride," the majority of our selections winning from day to day, and colonel pepper had cause for exultation. on one of these days we divulged, on our racing sheet, the name of a "sleeper" that we were confident would win at 10 to 1, a big betting coup having been planned by that napoleon of the turf, john madden. the horse won at big odds, and colonel pepper made a "killing" on the information. for the next day, our clockers had spotted another horse that had been got ready by the light of the moon, and we spread it pretty strong in our advertisements that the horse we would name could just fall down, get up again and then "roll home alone." the horse did not fall down; but he won; he "rolled home alone" by about ten lengths. he belonged to colonel pepper. it was anticipated that about 20 to 1 would be laid against this fellow, but on account of our strong tip, he opened at 10 to 1 and was played down to 3 to 1. the bookmakers were badly crimped. the next day, as soon as the office opened, colonel pepper, hotter under the collar than even his name might indicate, stamped into the outer room. slamming his cane down on the big mahogany table, he demanded in stentorian tones: "what in the ---does this ---business mean? here i come and subscribe my good money to your ---fool tips, and you-all are so low-down mean as to give my hoss for the good thing yesterday! what does it mean, suh; what does it mean?" the use of considerable diplomacy was necessary to calm down the irate colonel, who had no compunctions in winning a big bet on mr. madden's "sleeper," but "---it, suh, it is outrageous to treat _me_ so." the colonel never got over that incident, and while he won a big bet on his own horse, he always claimed that maxim & gay had ruined the betting odds for him and that but for the vigilance of our clockers his winnings would have been twice as large. this was true, and time and again we ruined the price for many another owner who thought he was going to get away with something on the sly. bookmakers as a rule are very much self-satisfied about their knowledge of the mathematics of the game. in order to show them that they didn't know all about it, the maxim & gay company inserted an advertisement one day reading substantially as follows: +---------------------------------------+ | you pay us $5 | | | | we refund $6 | | | | if the horse we name as | | | | the one best bet | | | | to-day does not win, we will not | | only refund our $5 fee, which is | | paid us for the information, but will | | pay each client an extra dollar | | by way of forfeit. | | | | pay us $5 to-day for our one best | | bet, and if the horse does not win | | we will pay you $6 to-morrow. | | | | maxim & gay co. | +---------------------------------------+ our receipts that day were approximately $5,000. the horse did not win. we refunded $6,000 next day, and netted a considerable sum of money on the operation. it happened to be a two-horse race. our horse was at odds of 1 to 6 in the betting, that is to say, the bookmakers laid only one dollar against every six bet by the public. the other horse ruled at odds of 5 to 1, meaning that here the bookmakers laid five dollars against the public's one. the maxim & gay company sent to the track $1,000 out of the $5,000 paid in by its customers and wagered the $1,000 on the contending horse at odds of 5 to 1, drawing down $4,000 in winnings. from this money it paid its clients the thousand-dollar forfeit, netting $4,000 on the operation, after of course returning to them their own $5,000. had the 1 to 6 shot won, the clients who had received the winning tip would have been happy, while the maxim & gay company would not have been compelled to refund any money and would have been ahead $4,000 on the operation, the $1,000 wagered and in that event lost in the betting ring on the other horse being subtracted from the $5,000 paid in by its customers. no matter which horse won our gain was sure to be $4,000 and we had here the ideal of a "sure thing." it was a case of "taking candy from a baby"; and yet many of the wise bookmakers could not at first figure it out. nearly all of them subscribed for the information. as for the public, they did not seem to catch on at all. betting the public's money at great profit the eastern racing season was about to close and it was decided to remove the entire force of clerks to new orleans for the winter and there to depart from the usual practice of selling tips only, and to bet the money of the american public on the horses at the race-track in whatever sums they wished to send. the company employed sol lichtenstein, then the most noted bookmaker on the american turf, to bet the money, and made him part of the organization, giving him an interest in the profits. the maxim & gay company at this time had made close to $1,000,000, and recklessly and improvidently i had let it slip through my fingers. it was "easy come and easy go." as i review that period in my career, i recall that the whole enterprise appeared to me in the light of an experiment--just trying out an idea, and having a lot of fun doing it. because of its dazzling success i became so confident of my ability to make money at any time that i didn't take serious heed whether i accumulated or not. besides, i had never loved money for money's sake. all the pleasure was in the accomplishing. the races at new orleans were advertised to start on thanksgiving day. on the 15th of october i ordered $20,000 worth of display advertising to run in thirty leading newspapers in the united states four days a week, until thanksgiving. credit was extended for the bill by one of the oldest advertising agencies in america. the advertisements told the public to send their money to maxim & gay, canal street, new orleans. on my arrival there, two days before thanksgiving, i called at the post-office, and asked if there was any mail for maxim & gay. the post-office clerk appeared to be startled. he gazed at me as if he were watching a burglar in the act. his demeanor was almost uncanny. he didn't talk. he didn't even move. he just looked. finally i asked, "what is the matter?" "wait a minute," he muttered. he left the window. he did not return. instead, what appeared to me to be a united states deputy marshal ambled up to my side and said, "see here; the postmaster wants to see you." i was escorted into a secluded chamber in the post-office building, and a few minutes later a post-office official, along with three or four assistants, came into the room. "what's the trouble?" i asked. "you bring us a recommendation as to who you are and what you are and all about yourself before we will answer any of your questions as to how much mail there is here for you," the official said. i smiled. the advertising, then, was a success. having been employed as a newspaper man in new orleans a few years before, i knew one of the leading lawyers of the city and several bank officials. within thirty minutes i had lawyer and bank men before the postmaster, vouching for my identity. thereupon i was informed that there were 1,650 pieces of registered mail, evidently containing currency, and, in addition, twelve sacks of first-class mail matter, which contained many money-orders, checks and inquiries. the official said that in the money-order department they had notices of nearly 2,000 money-orders issued on new orleans for the maxim & gay company. i sent a wagon for the mail, and notwithstanding the fact that a force of four men under me opened the letters and stayed with the job for two days, the task was not completed when the first race was called on thanksgiving day. on adding up the receipts, we found a little over $220,000. the meeting continued 100 days, and our total receipts for the whole period were $1,300,000. maxim & gay's system of money-making at new orleans was as follows: we charged each client $10 per week for the information. we charged 5 per cent. of the net winnings in addition, and we further contracted to settle with customers only at the closing odds for bets placed, retaining for ourselves the difference between the opening odds and the closing odds. the profit averaged approximately $7,000 a day for 100 days--to us. as a guarantee of good faith, the maxim & gay company agreed with its clients that each day it would deposit in the post-office and mail to them a letter bearing a postmark prior to the hour of the running of the race, naming the horse their money was to be wagered on; and this was always done. an honest effort, too, was always made to pick a horse that was likely to win, for even a child can see that if we did not intend to bet the money and wanted to pick losers, all we would have had to do was to make book in the betting ring at the race-track and not spend thousands of dollars in advertising for money to lay against ourselves. did we invariably bet the money of our clients on the horse we named? yes, always--except once! $130,000 is lost and won in a day that incident is not easily forgotten by several. on this day the entry which we selected was one of durnell & hertz's string. the horse was known to be partial to a dry track. the "dope" said he could not win in heavy going. it was a beautiful sunshiny morning when we selected this horse to win, and at noon the envelopes containing the name of the horse were mailed in the post-office, as usual. something happened. half an hour before the race was run it began to rain in torrents and the track became a sea of mud. durnell & hertz, realizing that they were tempting fate to expect their horse to win under such conditions, appeared in the judges' stand and asked permission to scratch their entry. the judges refused. i asked sol lichtenstein, who had the wagering of our client's money in charge, what he proposed to do about betting on the horse under the changed conditions. he exclaimed, "bet? do you want to burn up the money?" "well, if he wins," i replied, "we will have to pay, because if he wins and you don't bet and we say we changed the selection on account of the rainstorm, they will not believe us and we will have trouble." "very well," he said. "you bet my book all the money, and we will, for the first time, book against our own choice. it's fair, because we must pay if we lose, and there is no way out of it. but don't burn up that money." i agreed. the opening odds against the horse were 2 to 1. had it been a dry track, he would have opened a hot favorite at 4 to 5 or so. slowly the odds lengthened to 10 to 1, which was the ruling price at the close. durnell & hertz bet on another horse to win. standing before sol lichtenstein's book, i said: "thirteen thousand on our selection, sol." "one hundred and thirty thousand to $13,000," he answered. "here's your ticket." sol and i repaired to the press-stand to see the race. durnell & hertz's entry got off in the lead. at the quarter he was in front by two lengths. at the half the gap of daylight was five lengths. at the turn into the stretch the horse was leading by nearly a sixteenth of a mile. then i heard a noise behind me as if a miniature dynamite bomb had exploded. sol's heavy field-glasses had dropped to the floor. sol did not wait to see the finish. the horse won in a gallop. at the office of maxim & gay accounts were figured and checks signed for the full amount of our obligations, and they were immediately mailed to all subscribers. at midnight i met sol in the lobby of the st. charles hotel. he looked worn. "i guess that will hold us!" he moaned. "hold us?" i answered. "nothing better ever happened. it'll make us!" "you poor nut!" he exclaimed. "lose $130,000 in a day and it will make you! stop your noise!" "listen!" i rejoined. "at an expense of $3,000 for tolls i have telegraphed a full-page ad to fifty leading city newspapers, telling the public that we tipped this horse to-day at 10 to 1 and that we mailed checks to our customers to-night for $130,000. the gain we will reap in prestige and fresh business will repay our loss on the horse." the next day the western union telegraph company found it necessary to assign three cashiers to the work of issuing checks to the maxim & gay company for money telegraphed by new customers. some individual remittances were as high as $2,000. the money telegraphed us amounted to about $150,000, and within ten days eighty per cent. of our own dividend checks were returned to us by our customers, indorsed back to us with instructions to double their bets, and within two weeks we were able to figure that in the neighborhood of $375,000 was sent us as a result. a disastrous newspaper windup during the progress of the new orleans meeting, i purchased a controlling interest in the new york _daily america_--a newspaper patterned after the _morning telegraph_--from a group of members of the metropolitan turf association, who had sunk about $75,000 in the enterprise. the _morning telegraph_ was in the hands of a receiver. i calculated that, by transferring the maxim & gay advertisements from the _morning telegraph_ to the _daily america_, i could make the _daily america_ pay and force the _morning telegraph_ out of the field. later, the late william c. whitney, who was a shining light on the turf as well as in finance, was induced to purchase the _morning telegraph_. then trouble began to brew for me. one morning i was summoned to the offices of august belmont on nassau street. "for the good of the turf, you must omit your maxim & gay advertisements from the _daily america_ and other newspapers hereafter," declared mr. belmont on my entering his room. "why?" asked i. "they flagrantly call attention to betting on the races," he replied. "but you allow betting at the tracks." "yes," he replied, "but public sentiment is beginning to be aroused against betting, and an attack is bound to result." it occurred to me that at that very time mr. whitney was engaged in disposing of his stock in various traction enterprises in new york to mr. belmont and his syndicate, and that in all probability mr. whitney had sought the assistance of mr. belmont to put the _daily america_ out of business in this way. it was apparent that the _daily america_ would lose money fast without the maxim & gay advertising. maxim & gay, too, would practically be compelled to close up shop if it could not advertise. i promised to consider. returning to the _daily america_ office, i decided to pay no attention to mr. belmont's request, having become convinced that it was conceived in the interest of the _morning telegraph_. a few days later i was again summoned over the 'phone to mr. belmont's office. when i was ushered into mr. belmont's presence he said: "if you don't quit advertising the maxim & gay company in the _daily america_, i will see william travers jerome, and he will stop you." mr. jerome was then district attorney, and the idea of doing anything that mr. jerome considered illegal appalled me. "if mr. jerome sends word to me that the maxim & gay advertising is illegal, i will discontinue it," i said. i did not hear from mr. jerome, and so went on with the advertising. within a few weeks the washington race meeting opened at bennings. when the maxim & gay staff reached there, we were all informed that the post-office department was about to begin an investigation into our business affairs, and all of our staff voluntarily appeared before the inspectors and underwent an examination. our books were also submitted. this investigation, coming on the heels of mr. belmont's threat, convinced me that the influence of mr. belmont and mr. whitney reached all the way to washington, and i concluded that if i did not discontinue the maxim & gay advertising in the _daily america_, and then, of course, discontinue the _daily america_, they would make serious trouble. so i hung out the white flag. i announced my retirement from the maxim & gay company and offered to sell my newspaper to mr. whitney. my exchequer was low. nearly every dollar i had made in the maxim & gay enterprise had been lost by me in plunging on the races myself. during the following week mr. whitney received me at his palatial home on fifth avenue just after his breakfast hour. he interviewed me for about an hour, obtained my price on the paper, which was what i had put into it, namely $60,000, and promised to cable to colonel harvey, then, as now, the distinguished editor of the harper publications, who was in paris, asking his advice, saying that colonel harvey advised him in all newspaper matters. i did not hear from mr. whitney again; but i did discover that my business manager was in close communication with mr. whitney and that the state of my financial condition every evening was being religiously reported to him. a few weeks later i was compelled to put the paper in the hands of a receiver, and a representative of mr. whitney bought it for $6,500, or about 10 cents on the dollar, and put it to sleep, leaving the field to the _morning telegraph_. from that moment the _morning telegraph_, which for a short period had been refusing all tipster advertising, resumed the acceptance of such business and has continued that policy up to this day. a year after i retired from maxim & gay, attorney-general knox decided that racehorse tipping is an offense against the old lottery law, and those who now advertise tips instruct that no money be sent by mail. having lost the _daily america_ and having "blown" the maxim & gay company, i was again broke. but my credit was good, particularly among race-track bookmakers. that summer, 1904, i became a race-track plunger, first on borrowed money and then on my winnings. by june i had accumulated $100,000. in july i was nearly broke again. in august i was flush once more, having recouped to the extent of about $50,000. early in september i went overboard; that is to say, i quit the track losing all the cash i had and owing about $8,000 to a friendly bookmaker. disgusted with myself, i longed for a change of atmosphere. i stayed around new york a few days, when the yearning to cut away from my moorings and to rid myself of the fever to gamble became overpowering. i bought a railroad ticket for california and, with $200 in my clothes, traveled to a ranch within fifty miles of san francisco, where i hoed potatoes, and did other manual labor calculated to cure race-trackitis. in less than six weeks i felt myself a new man, and decided to stick to the simple life forevermore--away from race-tracks and other forms of gambling. but i didn't. chapter ii mining finance at goldfield i had never visited san francisco. being close to the city of the golden gate--within fifty miles--i decided to "take a look." so one evening, in the late fall of 1904, i packed my grip and within two hours was comfortably housed in the old palace hotel. the first man i met on entering the lobby was w. j. arkell, formerly one of the owners of _frank leslie's weekly_ and of _judge_. "hello, bill!" i exclaimed. "what are you doing here?" "same as you," he answered. "morse trimmed me in american ice, and i'm broke. i am in hock to the hotel. they think i am worth $2,000,000. i haven't 20 cents." during the evening we consoled each other over a series of silver gin fizzes, several of which arkell paid for with the stub of a pencil. my companion promulgated a scheme for the quick putting on their feet of two eastern rovers adrift in the big coast city, and that night there was formed the w. j. arkell advertising agency. then the horse-tipping firm of "jack hornaday" was established. i declared that i preferred to have little to do with it except to show "willie" how it had been done in new york by maxim & gay. "i will do it for you, bill," i said; "but no more for me--i've had enough." "jack hornaday" advertisements appeared daily in all the san francisco papers. capable clockers and handicappers were hired and some excellent information was obtained. race-goers got a run for their money. but something happened. the race-track trust, which enjoyed a big pull in the san francisco _examiner_ office, soon realized that somebody outside of the inner circle was getting the public's money, and every day that "jack hornaday" tipped a loser the _examiner_ carried on its sporting page a notice to the effect that "jack hornaday's" tip had resulted very disastrously to his clients. a partnership of pure nerve "jack hornaday" discontinued business. i began to like san francisco and the coast. being thrown among arkell's associates in the palace hotel lobby, from time to time i naturally heard a great deal of talk about the new nevada mining camp of tonopah. "rice," said arkell one evening, "come with me up to tonopah and be my press agent. we will get hold of a mining property up there, promote a company and make a barrel of money." "what do you know about mines?" i asked. "well, i've lost enough in 'em to know a great deal," he answered. "i don't know a mine from a hole in the ground, and i know nothing about the stock-brokerage business; so i don't see how i can be of any assistance," i said. "don't let that bother you," he replied. "i'll show you how. you come with me." "i will go on one condition," i said. "i am in for half on anything you do." we shook hands and it was a bargain. we went to the depot. i had a trifle less than $150 in my pocket. arkell had $75. "suppose we get stranded out there, what will happen?" i propounded. "oh, forget it!" he answered. "how can a couple of easterners like us, wide awake and with phosphorus brains, get stranded in a place where they dig silver and gold out of the ground?" we journeyed to tonopah--a thirty-six-hour ride. the altitude is 6,000 feet, and it was cold, nasty, penetrating winter weather. during the last hundred miles of our journey across the mountainous desert we looked out of the car window and saw trainload after trainload of what was said to be ore coming from the opposite direction, and we decided that tonopah was a sure-enough mining camp and that some of the sensational stories about bonanza mines that we had heard were really true. bucking the tiger on the desert arriving in tonopah after dusk, we sought hotel accommodations. the best we could get was a bed in a forbidding looking one-story annex, walled with undressed pine and roofed with tarpaulin. it was located 100 feet to the rear of the hotel, which was already crowded with miners and soldiers of fortune drawn from all quarters of the world by the mining excitement. its aspect was so inhospitable that arkell and i decided not to retire for a little while. we gravitated out toward the barroom, where the click of the roulette wheel caught our ears. we sat down to watch the game. soon we were buying stacks of checks and ourselves bucking the tiger excitedly. in an hour the remnants of my $150 passed to the ownership of the man behind the game, and arkell had put his last two-bit piece on the black and lost. i looked at him. he looked at me. "umph!" he grunted. "better hit the feathers!" meekly i followed him to the annex. when we got under the soiled gray woolen blankets, i remarked: "i've got a cane and an umbrella and three suits of clothes. do you think we can sell them in the morning for enough to provide breakfast money?" "oh, come off!" exclaimed my partner. "wait till i present my card around this burg in the morning; then we will get all the breakfast we want." we awoke hungry, as all men have a habit of doing when they are broke. "i am going over to the montana-tonopah mining company's office," said arkell. "a mining engineer by the name of malcolm macdonald makes his headquarters over there and he wants to sell some mining properties at goldfield and in other parts of the state for about three million dollars." "three millions!" i exclaimed. "yes," said arkell. "i'll get the facts and wire them to my friend joe hoadley in new york." "say, bill," i remonstrated, "they have a privately-owned jerkline telegraph in this town, and if you send any 'phony' telegrams over the wire, they'll be on to you. so don't do any of that kind of business." "nothing of the kind!" replied he promptly. "any message i send to hoadley he'll answer." "i guess you have it fixed on the other end," i remarked. he laughed. we strolled over to the state bank and trust company building, across the street, and there met malcolm macdonald, a mining engineer from butte, montana, and his friend, mr. dunlap, who was at the time secretary of the montana-tonopah mining company. the conversation was not more than five minutes old when arkell suggested that he would like to eat breakfast, but "didn't want any restaurants in his," intimating that he would like to have some good, old-fashioned home cooking. mr. dunlap remarked modestly that the camp was too young to boast of much home cooking, but that if we would be his guests he would guarantee to make arrangements for some special cooking at the palace restaurant. bidding $3,000,000 when broke after breakfast, which consisted of mountain trout, the flavor of which was more delicious than anything i had tasted in many years--probably because of the artificial hunger which an empty purse had created--we returned to the office of the bank. there arkell explained to mr. macdonald that he wanted "a big mining proposition or nothing." he said he represented big eastern capital and that he was prepared to pay from one to three millions for the right kind of property. mr. macdonald named some mines and prospects which he said he was willing to sacrifice for $3,000,000. one of them was the simmerone, of goldfield, which mr. macdonald offered for $1,000,000. we afterward learned that he had paid $32,000 for it. at that time there was a six-foot hole in the ground, and the whole property contained less than five acres. a stockade had been built around the workings on account of the extreme richness of the ore that had been opened at grass-roots. mr. macdonald also offered for sale a lead property at reveille and a lead-silver property at tybo, both situated about 70 to 100 miles from a railroad. (later these properties, along with some others, were promoted by charles minzesheimer & company, a new york stock exchange house, as the nevada smelters & mines company and passed on to the public at a valuation of $5,000,000. the market value of the entire capitalization of this company is now less than $10,000.) these "mines" were to be put into the deal at $1,000,000 each. millions in the vista held no charms arkell wrote a dispatch to the east in the presence of our newly-made friends, describing the offering. then he and i held a consultation, and he vouchsafed the information that we would certainly get a free automobile ride to goldfield and have a chance to see there the new boom mining camp. i got "cold feet." arkell's talk of visionary millions in that bleak environment of snow-clad desert and wind-swept mountain didn't enthuse me at all. i protested against the proposed trip to goldfield, and insisted that i should be allowed to telegraph to relatives for money with which to return to the coast. but arkell persisted. he declared that the expense of the trip to goldfield and back to tonopah would be borne by the vendors of the mines and that our return trip to san francisco would be delayed only one day. i left my grip, umbrella and cane in tonopah, intending to return the same evening, and boarded the automobile for goldfield. arrived in goldfield, we were escorted to the simmerone. arkell appeared to be very much impressed, although he remarked to me a few minutes later that he would not give $34 for the whole layout. and therein he was wise. the simmerone was later capitalized for 1,000,000 shares, each share of a par value of $1, ballooned on the san francisco and goldfield stock exchanges to $1.65 a share, and then allowed to recede to nothing bid, one cent per share asked. the rich ore "petered out." there was an indefinable something in the atmosphere of goldfield--a new, budding mining camp, at an altitude of 5,000 feet and on the frontier--that stirred me, and i decided to stay awhile. arkell determined that he would go back to tonopah and get an option on the control of a mining company known as the tonopah home, which mr. dunlap had mentioned to him in the automobile en route to goldfield. he said he would then go to san francisco to promote it. the reason why he decided to handle the tonopah home, i afterward discovered, was that it was already incorporated and stock certificates had been printed, thereby eliminating the delay and expense incident to preparing something for the immediate consumption of the san francisco public. "how am i going to subsist here for a few days until i can begin to make a living?" i asked arkell. "how am i going to get back to tonopah and from there to san francisco?" arkell asked me. at that moment we stood in front of the goldfield bank and trust company's building--a tin bank literally as well as figuratively. it was constructed of corrugated iron and tin. a few months later, when the bank went up the flume, the cash balance found in the safe aggregated 80 cents. "you take me into this bank and introduce me and i will cash a check," he said. "a check on what?" i asked. "on my bank in canajoharie, new york," he said. "i was born and brought up there, and they wouldn't let one of my checks go to protest. besides, i can get back to 'frisco and protect it by telegraph, if necessary, before it reaches canajoharie." we entered the bank. i introduced myself to the cashier as an eastern newspaper man, and then introduced w. j. arkell as the former publisher of _leslie's weekly_, _judge_, and so on. after a brief parley, arkell exchanged his paper for real money to the amount of $50. on leaving the bank, i said: "now, bill, come across! i'm flat broke, on the desert." he handed me $15. i was satisfied, because he needed all of the $35 to get back to civilization. "human interest" versus technical mining after arkell's departure for tonopah i went to the office of the goldfield _news_ and asked for a job. i got it, at $10 a day. my first assignment was to interview an old miner named tom jaggers. i wrote what i considered a first-class human-interest story, and handed it to the owner and editor, "jimmy" o'brien. he thought it was fair writing, but not the sort of matter the goldfield _news_ wanted. it wanted technical mining stuff. of course i didn't know a winze from a windlass, nor a shaft from a stope, and some of the weird yarns i handed in about mine developments certainly did make mr. o'brien jump sideways at times. within a week i was discharged for incompetency. i was not at all appalled at losing my job on the goldfield _news_. i had begun to like the life and was convinced there were some real gold mines in the camp. i was a tenderfoot and knew little or nothing about the mining business, but the visible aspect of shipment upon shipment of high-grade ore leaving the camp by mule-team was convincing. what probably impressed me most was the evident sincerity of the trail-blazers who had been on the ground since the day the camp was born. these men had suffered all kinds of hardships to hold their ground and make a go of the camp which, when discovered, was situated 100 miles from a railroad station and at least 25 miles from a known water-supply. tradition said that men had died of thirst on the very spot where goldfield was now adding daily to the world's wealth. my environment became an inspiration. there were a few penny-mining-stock brokerage firms doing business with the outside world, and the idea of starting an advertising agency appealed to me strongly. here was an opportunity for the great american speculating public to take "a flyer" on something much more tangible and lasting than a horse-race, i determined. failing to locate a furniture store i ordered a long, rough, pine board table made by a carpenter, rented desk-room from the goldfield bank and trust company right in front of the cashier's counter, and secured the services of an expert male stenographer from cripple creek. the goldfield-tonopah advertising agency was born. beginning the advertising business the idea of applying to the american newspaper publishers' association for recognition did not occur to me. i did not know that such was the practise of agents. i did believe, however, from my ad-writing experience with the maxim & gay company, in new york, that i could write money-getting advertising copy. further, my experience in making contracts with advertising agents for the publication of maxim & gay's advertising in the newspapers throughout the land had, it seemed, conveyed to me sufficient information regarding that end of the business to fortify me in my new field. next morning i entered the office of the mims-sutro company, a newly established brokerage firm, and urged advertising. "we are already spending about $100 a month," said the manager. "one hundred dollars a month!" i exclaimed. "why, you ought to be spending that much every hour!" at first they thought me a fanatic on the subject, but within a fortnight i succeeded in inducing them to spend $1,000 in a single day for advertising. it was not, however, until after i had shown them how to follow up their correspondence successfully that they began to believe in me. i wired to nearly all of the important city newspapers throughout the country for rates. after obtaining their replies i decided to spend $500 in the chicago sunday _american_, and $500 in the san francisco _examiner_ in one issue. i forwarded the copy with the money, and it appeared promptly. the results were good--so good, indeed, that within two months the mims-sutro company was spending at the rate of from $5,000 to $10,000 a week for advertising, and my commissions amounted to thousands. my contracts with the advertisers required them to pay me one-time rates, and my contracts with the publishers permitted me to send in copy at long-time rates, and the profit was about 45 per cent. and inasmuch as i always sent cash with the order, my copy was in great demand. indeed, my agency was fairly inundated day after day with blank contracts from newspapers all over the country, the managers of which were clamoring for the goldfield business. in addition to the mims-sutro account, i soon had many others; in fact, i had all the others. within six months after my arrival in goldfield my agency netted me $65,000. some advertising that paid my second best customer was january jones, the noted welsh miner, and later, when the corporation of patrick, elliott & camp swung into business as promoter, i placed its advertising. i held it, too, until the death of c. h. eliott, when the control of that firm fell into other hands and it ultimately went out of business. in the course of three years my advertising agency inserted in the neighborhood of $1,000,000 worth of advertising in the newspapers of the united states, chiefly those of the big cities, and all of the advertising made money. it simply had to make money, because the brokers who did the advertising had little or nothing to begin operations with except the mines, and the mines were not their property. the most remarkable feature of that advertising campaign to me was that i had never been a stock-broker, had never been a mine-promoter, and had never been in a mining camp before; but still, despite my utter lack of knowledge, to begin with, of the technical end of the business, my advertisements pulled in the dollars. i was an enthusiast. i believed in the merits of the camp, and my enthusiasm undoubtedly carried itself to the readers of my advertisements. but the quality of the advertising copy did not entirely explain my success in bringing the money into goldfield. the stock offerings undoubtedly _struck a popular chord_. tens of thousands of people who for years had been imbibing the daily financial chronicles of the newspapers, but whose incomes were not sufficient to permit them to indulge in stock-market speculation in rails and industrials, found in cheap mining stocks the thing they were looking for--an opportunity for those with limited capital to give full play to their gambling, or speculative, instinct. time and again promotions were almost completely subscribed by telegraph in advance of mail responses reaching goldfield; and it frequently needed but the publication of a half-page advertisement in 40 or 50 big city newspapers, of a sunday, to bring to goldfield by wire before monday night sufficient reservations to guarantee oversubscription in a few days. it was easy to give full play to my penchant for experimenting, in the evolution of mining-stock promotion in goldfield. the old system, and the one which recently has enjoyed much vogue among financial advertisers, was the endeavor first to get names of investors rather than immediate results from the advertisements, and to follow them up by correspondence. in spending the first $1,000 appropriated for advertising from goldfield, i split the money between two newspapers on one day. i constructed large display advertisements and appealed for direct, quick replies. this succeeded. building gold mines with publicity a little later i organized a news bureau as an adjunct of the advertising agency. it is acknowledged that this news bureau accomplished much for nevada. as a matter of fact, it is generally conceded by goldfield pioneers and by mining-stock brokers throughout the country that the news bureau was directly responsible for bringing into the state of nevada tens of millions of dollars for investment, and was indirectly responsible for the opening up of the mohawk and other great gold mines of the goldfield camp and of the state. the prospectors who located goldfield were without means. george wingfield, the man who is now president of the merged goldfield consolidated, came into the mining camps with only $150. no funds of consequence were available from home sources. the money that later made goldfield the "greatest gold camp on earth" came from the outside, and the news bureau secured it by focusing the attention of the american public on the great speculative possibilities of investments in the mining securities and leases of the camp. one of the leases, known as the hayes-monnette, operated with chicago money, afterward opened up the great mohawk ore deposit at a period when there was no money in the treasury of the mohawk mining company to do its own development work. and there are scores of other instances which bear me out. i was head of the news bureau, and the news bureau was nevada's publicity agent. i have always considered my work in this direction in the light of an achievement. no one contributed a dollar to the news bureau except myself. hair-raising stories for distant readers that news bureau, with its headquarters on the desert, at a time when water was commanding $4 a barrel in goldfield and coal could not be obtained in the camp for love or money, was operated with as much calculating judgment as it could have been were it subsidized by the most powerful interests in america. human-interest stories that were written around the camp, its mines and its men, were turned out every day by competent newspaper men. these were forwarded to the daily newspapers in the big cities of the east and west for publication in the news columns. most of the stories were accepted and published. whenever hesitancy was observed, publishers were tempted by the news bureau with large advertising copy to continue to give the camp publicity. of such great assistance in arousing public interest did i find this work that noted magazinists like james hopper were imported to camp and pressed into service by the news bureau to write readable stories. at times, when public interest appeared to lag, the wires were used by the camp's newspaper correspondents to obtain publicity for all kinds of sensational happenings that were common on the desert. reports of gold discoveries, high play at gambling-tables, shooting affrays, gamblers' feuds, stampedes, hold-ups, narrow escapes, murders, and so forth, were used to rouse the public's attention to the fact that a mining camp called goldfield was on the horizon. i felt confident that the speculating public was going to make a great big "killing" in goldfield. tonopah, twenty-six miles to the north, was making good in a wonderful way. it had already enriched philadelphia investors to the extent of millions. i could see no reason why goldfield should not at least duplicate the history of tonopah. never in my life had i lived in an environment that inspirited me as this one. the visages of those around me were, as a rule, roughly hewn; the features of many were marked with all the blemishes that had been put upon them by time, by sleepless nights, by anxiety and by contact with the elements; but courage, sincerity and honesty of purpose were written in every line of their faces. i became imbued with the idea that investors who put their money into goldfield stocks were not only going to get an honest run for their money, in that the mines were going to be developed and many would make good, but that the opportunity for money-making, if embraced by the public at that time, would earn a great reputation for the man who educated the public to a full understanding of the situation. the mercury of speculation mining-stock speculators and investors at a distance who responded to the red-hot publicity campaign which marked those early days of goldfield rolled up enormous profits, and i made no mistake. terrific losses came eighteen months later, as a result of a madness of mining-stock speculation which followed on the heels of the great mohawk boom and the merger of various goldfield producers into a $36,000,000 corporation. this was taken advantage of by "wild-catters" in every big city of the country, and the public was fleeced to a finish. but of this more and a plenty later. in those early days my agency advertised goldfield laguna at 15 cents per share in order to finance the company for mine operations. within a year thereafter goldfield laguna sold at $2 a share on the san francisco stock exchange, and was absorbed by the goldfield consolidated at that figure. and there were many others which duplicated or exceeded the performance of laguna. at the time of which i tell, when laguna was promoted at 15 cents, goldfield was about a year old. a population of about 1,500 had gathered there from all sections of the country. there were mining experts from salt lake, san francisco and colorado, and miners from every part of the western mining empire; saloon-keepers from alaska and mexico; real-estate brokers from practically every western state and a scattering of "tin-horns." it was about as motley a gathering as one could find anywhere in the world, but compositely they were a sturdy lot. the camp was enjoying its maiden boom. in sixty days real-estate values had jumped from $25 for a lot on main street to $5,500. roughly constructed business houses banked the main thoroughfare for two or three blocks. the heavy traffic incident to hauling in supplies from tonopah had ground the dirt of the street into an impalpable mass of dust to the depth of fifteen inches, and the unchecked winds of the desert, sweeping from the sierra nevadas to the high uplifts east of goldfield, whipped the dust into blinding clouds that daily made life almost unendurable. practically the entire population was housed in tents that dotted the foothills. at night-time these presented the appearance of an army encampment. provisions were scarce and barely met the requirements. the principal eating-place was the mocha café, which consisted of a 14 by 18 tent with an earthen floor and a roughly constructed lunch-counter. here men stood in line for hours, waiting to pay a dollar for a dirty cup of coffee, a small piece of salty ham and two eggs that had long survived the hens that laid them. the popular rendezvous was the northern saloon and gambling house, owned and managed by "tex" rickard and associates. here fully seventy-five per cent. of the camp's male population gathered nightly and played faro, roulette and stud-poker, talked mines and mining, sold properties, and shielded themselves from the blasts that came with piercing intensity from the snow-capped peaks of the sierras. the brokers of the camp gathered every night in the northern and held informal sessions, frequently trading to the extent of 30,000 or 40,000 shares of the more active stocks. the mining stocks which were advertised through my agency in those early goldfield days were generally of the 10, 20 and 30-cent per share variety. the incorporators of the companies were enthusiastic on the point of their "prospect" making good, but i argued to myself that if the chances of any mining prospect of this character proving to be a mine were only about one in 25 or one in 50, and my agency advertised 25 or 50 companies of the average quality, and one of them made good in a handsome way, he who purchased an equal number of shares in each would at least "break even" with the profits from the one winner. later this principle was "knocked into a cocked hat" for conservatism by mohawk of goldfield advancing from 10 cents to $20 a share, proving that if mohawk had been one among 50 companies, the shares of which were purchased by an investor at 10 cents, he would have gained handsomely. early purchasers of mohawk gathered 200 to 1 for their money, many times more than could usually be won on a long shot at the horse-races, and not so very much less than was formerly won by lucky prize-winners in the louisiana lottery. and mohawk was only one of a dozen of the early ones which advanced in price on the exchanges and curb markets more than 1,000 per cent. at this early stage in goldfield, "wild-catting" was not indulged in from the camp, unless this long-shot gambling in shares of "prospects" can by a grave stretch of imagination be termed such, the promoter-brokers being able to offer stocks of close-in properties. among the prizes were red top, which advanced within two years thereafter from 8 cents to $5.50 per share; daisy, which sky-rocketed from 10 cents to $6; goldfield mining, which soared from 10 cents to $2; jumbo, which improved from 50 cents to $5; jumbo extension, which rose from 15 cents to above $3; great bend, which jumped from 20 cents to around $2.50; silver pick, which moved up from 10 cents to $2.65; atlanta, which was promoted at 10 and 15 cents and sold up to $1.25; kewanas, which was lifted from 25 cents to $2.25, and others. "wild-catting" in a small way was prosecuted in goldfield's fair name even in those days, with denver as the headquarters of the swindlers. _eighteen months later, when the mohawk mine of goldfield was in the midst of its greatest half-year of production, at the rate of $1,000,000 a month, and the consolidation of the important mining companies of the camp was in progress, "wild-catting" became general from office buildings in the large cities. there were more than 2000 companies incorporated during this last period, not one of which made good, and the public lost from $150,000,000 to $200,000,000 as the result of this operation alone. fully $150,000,000 more was lost by the ballooning to levels unwarranted by mine showings of listed goldfield stocks on the new york curb and the san francisco stock exchange, at the same time._ but i am ahead of my story. it was late in the spring of 1905. i had been at work in goldfield more than six months, and my campaign of publicity was beginning to gather momentum. the mines, however, were not at the moment keeping lively pace. the mohawk was yet undiscovered. the birth of bullfrog at this juncture the new mining camp of bullfrog, 65 miles south of goldfield, was born. my publicity facilities were sought by owners of properties in bullfrog "to put the camp on the map." c. h. elliott, a goldfield pioneer, put an automobile at the disposal of myself and my stenographer, and we departed for bullfrog. elliott and his associates had staked out a townsite which they called rhyolite. i was presented with seven corner lots on my arrival, to help along my enthusiasm. there, on the saloon floor of a gambling house, which was the chief place of resort in the camp, i met for the first time george wingfield, then the principal owner of the tonopah club at tonopah, a gambling house which had lifted him from the impecunious tin-horn gambler class to the millionaire division; united states senator george s. nixon,[1] his partner; t. l. oddie, later elected governor of nevada; sherwood aldrich, now one of the principal owners of the chino and ray consolidated mines, and worth millions, and others who have since accumulated great riches. [1] on the death of mr. nixon in washington, d.c., in june, 1912, mr. wingfield was appointed his successor as u.s. senator by governor oddie. mr. wingfield's goldfield newspaper felicitated its owner and pronounced the appointment to be logical and deserved. mr. wingfield, however, after hearing from washington as to the manner in which the news of his appointment was received by members of the senate, notified governor oddie three weeks later that he must decline the honor. he gave other reasons. they were on the ground and buying properties. mr. aldrich purchased the controlling interest in the tramps consolidated for about $150,000. it was incorporated for 2,000,000 shares of a par value of $1 each, a year later boomed to $3 a share on the new york curb, and is now selling at 3 cents, without ever having paid a dividend. mr. elliott had a large stock interest in the amethyst mine and the national bank mine, which were capitalized for 1,000,000 shares respectively, and he presented me with 10,000 shares of stock in each. he and his partner sold the control of the amethyst to malcolm macdonald of tonopah. later, when amethyst's neighbor, montgomery-shoshone, was selling at $20 per share, the market price of amethyst was pushed up to above $1 a share on the san francisco stock exchange, and i took my profit. the amethyst has since turned out to be a rank mining failure, as has practically every other property in the camp, not one ever having earned a dividend. the bullfrog national bank stock, representing another property that looked for a while as if it would make good, i disposed of on the san francisco stock exchange at 40 cents a share, and i sold the town lots at figures which netted me, in all, in excess of $20,000 for my one day's trip to bullfrog. during my stay in bullfrog i became very much impressed with the montgomery-shoshone mine. this property, in fact, was the powerful magnet which attracted everybody to the camp. i was escorted through a tunnel seventy feet long. on each side as i walked were walls of talc. i was told these assayed in places anywhere from $200 to $2,000 a ton. information was also forthcoming that the width of the ore-body was more than seventy feet. (it afterward turned out that the tunnel had been run along the ore-body and not across it, and that the ore-body was about 10 feet wide.) some specimen ore was given me to assay, and the returns were staggering, running all the way from $500 to $2,500 a ton. in my enthusiasm i wrote stories about the property for publication which must have induced the reader to believe that when all the riches of that great treasure-house were mined, gold would be demonetized. as a matter of fact, the stories from my news bureau, picturing the riches of that golconda, are said to have been indirectly responsible for the purchase of control of the property by charles m. schwab and his associates. the history of the montgomery-shoshone is mournful but highly instructive. for purposes of exposition of pitfalls in mining-stock speculation it possesses striking qualifications. here are the facts: malcolm macdonald, mining engineer, acquired a half interest in the mine from tom edwards, a tonopah merchant, for $100,000, on time payments. on the strength of the showing in the 70-foot tunnel an effort was made to sell the control to the tonopah mining company at a profit. it did not succeed. oscar adams turner, of new york and baltimore, the promoter of the highly successful tonopah mining company, which to date has paid back to the original stockholders $16 for every $1 invested, examined the montgomery-shoshone, and turned it down because the property did not show him any well-defined veins or other marks of permanency, and the ore-body appeared to him to be only a superficial deposit of no great extent. many a good "prospect" has been condemned by mining men of the highest standing, and has afterwards made good, particularly in nevada. mr. turner's turn-down did not daunt the owners. enter, charles m. schwab engineer macdonald incorporated a company for 1,250,000 shares of the par value of $1 each, to own and operate the mine. investors were permitted by him to subscribe for small blocks of treasury stock at $2 per share. shortly afterward mr. macdonald and the owner of the other half interest, bob montgomery, sold a controlling interest to mr. schwab and associates for a sum which has never been made public. mr. schwab at once reorganized the company, took in two adjoining properties that were undeveloped, and changed the capitalization to 500,000 shares of the par value of $5 each. he, in turn, permitted his friends and the public to subscribe for the new stock at $15 per share. later the shares advanced to $22 on the new york curb. undoubtedly mr. schwab thought well of the proposition, for he loaned the company $500,000 to build a reduction works on the ground. to date the mine has failed to pay for its equipment. work on the property has been abandoned and the mill has been advertised for sale. _the company still owes mr. schwab about $225,000, the net profits on the ore in six years being insufficient to repay his loan to the company. in fact, the enterprise has proved to be one of the sorriest failures in nevada. the mine in six years produced $2,000,000 gross, and although mine and mill were operated in an economical way, the net proceeds from the ores were insufficient to pay off the schwab debt. recently the shares have been nominally quoted at from 2 to 5 cents on the new york curb. the public's loss mounts into millions._ investigation proves to me that mr. schwab was merely a mining "come-on" and allowed his enthusiasm to run away with him, but the public suffered just as much as if mr. schwab had perpetrated a cold-blooded swindle. i have heard the question propounded by a stockholder, "what possible excuse could a man, with a good business head like that of mr. schwab, have for promoting the montgomery-shoshone at a valuation of $15 a share, or $7,500,000 for the property, afterward allowing the stock to be quoted up to $22 a share on the new york curb, or at a valuation of $11,000,000 for the property, when, as a result of six years of mine operations, the company is practically insolvent?" an excuse acceptable to mining men might be offered were the montgomery-shoshone property situated in a nest of other great mines, intrinsically worth many times the valuation placed on the montgomery-shoshone at the time of its promotion. "prospects" of this variety, according to approved mining experience, are sometimes entitled to appraisement of great prospective value when neighboring mines have demonstrated deep-seated enrichment. but there was no such excuse in this case, because the deepest hole in the ground in the entire camp was less than 200 feet at the time the montgomery-shoshone was promoted by mr. schwab, and there was not a proved mine in or near the camp. i was present in reno about three years ago when mr. schwab passed through the divorce city en route to california. at that time montgomery-shoshone had already cracked in price to around $3 a share, and stories were being published in nevada that mr. schwab had been snubbed by members of an exclusive pittsburg club for recommending montgomery-shoshone for investment. mr. schwab, in hurriedly discussing the matter at the railroad station, was quoted to the effect that the property had been grossly misrepresented to him. this statement was widely published in nevada. thereupon, don gillies, mr. schwab's engineer in nevada, who, with malcolm macdonald, was believed to be mr. schwab's mining adviser, telegraphed mr. schwab and asked point-blank whether he referred to him. mr. schwab answered that he did not. this denial was also given wide publicity. there was only one reasonable corollary, then, and that was that mr. schwab referred to mr. macdonald. in fine, it appears that mr. schwab may have actually purchased the montgomery-shoshone on the sole representations of the vendor, the interested party, and may have actually promoted the property on the strength of the unverified representations of the vendor. it might be that the vendor did not misrepresent at all; he may have been too enthusiastic only, and communicated his enthusiasm to mr. schwab. possibly mr. schwab relied on newspaper accounts, and promoted the property on the strength of them. a letter from mr. schwab, which appears farther on, lends some color to this idea. even before this time mr. schwab had been in the mining game at tonopah. his tonopah venture was the tonopah extension. the control of the tonopah extension mining company was bought by john mckane, later a member of the english house of commons, from thomas lockhart at 15 cents per share. the capitalization was 1,000,000 shares. john mckane interested robert c. hall, a member of the pittsburg stock exchange, in the proposition. he, in turn, made a deal with mr. schwab. the stock was then sky-rocketed to above $17 a share on the san francisco and pittsburg stock exchanges and the new york curb. afterward the price was allowed to recede to around 65 cents per share. during the past half-year it has maintained an average quotation of $2.00 per share. although the market price of the shares at the time mr. schwab was believed to own the control was allowed to be advanced to a valuation for the mine of $17,000,000, the company has since failed to pay as much as $1,000,000 in dividends, and a quite recent appraisement by henry krumb, a noted engineer, of the net value of the ore in sight in the mine did not place it at so much as $1,000,000. the accuracy of this report is disputed, on the ground that the ore-exposures at the time did not permit of fair sampling. this allows for a discrepancy, but hardly of $16,000,000. after tonopah extension declined from around $17 a share to below $1.00 a share, it was alleged by tonopah stockholders that mr. schwab and his associates had unloaded at the top. mr. schwab replied that he owned just as much stock after the market collapse as he did when he went into the enterprise. this was met with an allegation by some stockholders that while mr. schwab could probably prove that his interest was as large at the later period as it had been at the outset, it did not mean that mr. schwab and his _confrères_ had not unloaded at the top and bought back at the bottom. the following letter from mr. schwab to sam c. dunham, formerly u.s. census commissioner to alaska, afterward editor of the tonopah _miner_, and later mining editor of the _mining financial news_ of new york when i was managing editor, denies personal guilt, although it leaves the reader free to believe that if mr. schwab personally did not unload his stock at high prices, his associates might have done so. charles m. schwab 111 broadway new york november 1, 1907. mr. sam c. dunham, editor _the tonopah miner_, tonopah, nevada, my dear mr. dunham: my attention has been called to your issue of saturday, october 26, 1907. to such criticisms as that issue contained of me, i generally do not reply, as it is useless and only leads to further discussion. but your paper heretofore has been so uniformly kind to me, so fair in every respect, and as i have always regarded you as a friend, our relations having been so pleasant, it makes me feel that i would like to make a short reply to the criticisms mentioned, as showing the consistency of my position. the only thing i criticised about nevada was the inaccuracy of statements emanating from nevada. you seem to attack me because of this statement, and the strength of my position is fully confirmed by your article because little, if anything, stated therein is true or accurate. i will take up your statements one by one. you say i bought from john mckane $25,000 worth of stock of the tonopah extension mining company at 15 cents per share. this is absolutely untrue. you say i bought 100,000 shares of extension stock from robert c. hall at $6 per share, and paid for this stock with paper mill stock. no single part of that statement is correct. i never gave mr. hall any paper mill stock, nor did i buy 100,000 shares from him. the amount purchased from him was 60,000 shares. the price which you state i paid him for the stock is not correct, and, as i stated, i gave no paper mill stock in exchange. you say further that at the last annual meeting of tonopah extension stockholders, held in pittsburg last may, it developed that i had disposed of all the stock i purchased from mr. hall and over two-thirds of my original holdings of 166,000 shares. this is absolutely untrue. i am holding to-day exactly the amount i held after all purchases were made by me, and from the beginning, aggregating some 285,000 shares, and i think if you take the trouble to look up the records you will find my statement in this connection to be true. when i originally bought extension there was also some stock in my name belonging to others, which i subsequently transferred to them, leaving my own holdings of 285,000 shares where they now remain, intact, in my personal possession. going on down the article, you say that i purchased control of shoshone and polaris for less than $2 per share. this statement of yours is inaccurate. you say i sold a large block of shoshone stock at $20 per share. this is also without any truth whatever. the fact is that 3,000 shares were sold at this figure, $20, and these 3,000 shares came from the treasury of the company, all of which you will find a matter of record. it is true that i have loaned the company nearly $500,000 to build the new mill, and i shall be glad to have any other stockholder in the company assume his pro rata share of this amount. you wonder why i criticise statements from nevada. respectfully yours, (_signed_) c. m. schwab the general impression in nevada, as i have gathered it, is that mr. schwab's mining enterprises have been great disappointments to him, but that he did not lose any very large sum of money, and that the public did. his enemies go so far as to allege that he, his brother, and his brother-in-law, dr. m. r. ward, made millions out of the public. i have an opinion, and i may be allowed to express it. mr. schwab, at the time he became a promoter of nevada mines, was an expert steelmaker. he knew little or nothing about silver, gold and copper mines. the fact that friends in philadelphia, who knew as little about the game as he did, had made a fortune in tonopah (on the advice of a man who did know) should not have influenced him. because the mizpah mine at tonopah, promoted by oscar a. turner as the tonopah mining company, had made good in a phenomenal way, pennsylvania stockholders had rolled up fabulous profits in the venture. under this hypnotism mr. schwab "fell" for tonopah extension. later, when tonopah extension showed a market enhancement of more than $16,000,000, mr. schwab was in an ideal frame of mind to succumb to montgomery-shoshone. and when montgomery-shoshone in the bullfrog boom showed a market enhancement of $8,000,000, it did not take much argument to get him into greenwater, another "bloomer," which is described further on. market profits were evidently alluring to mr. schwab. he failed to realize that his own great name was in large measure responsible for the rise in price of his securities. sam c. dunham has informed me that mr. schwab told him he refunded to his personal friends in pittsburg, who subscribed for montgomery-shoshone stock on his recommendation, between $2,000,000 and $3,000,000. this ought to be convincing that mr. schwab was guiltless of any intent to profit at the expense of others. mr. schwab's lack of caution, however, is instructive to the losing speculator. it furnishes a startling example of the danger in banking alone on an honored name for the success of an enterprise, and it also drives home the truth of the adage, "every shoemaker should stick to his last." incidentally, mr. schwab's mining career points another moral. it is this: don't think, mr. speculator, because a promoter represents the chances of profit-making in a mining enterprise to be enormous, and you later find his expectations are not realized, that the promoter is _ipso facto_ a crook. big financiers are apt to make mistakes and so are little ones. undoubtedly grave misrepresentations are made every day, and insidious methods are used to beguile you into forming a higher opinion regarding the merit of various securities than is warranted by the facts. but mine promoters are only human, and honest ones not infrequently are carried away by their own enthusiasm and themselves lose their all in the same venture in which they induce you to participate. why the bottom fell out when montgomery-shoshone was enjoying its market hey-day the bullfrog gold bar mining company was promoted at around 15 cents a share on the usual million-share capitalization. a year later the price jumped to $2.65 on the san francisco stock exchange, and the stock was widely distributed among investors. recently the company was in the sheriff's hands. the biggest losers in this venture were alabama people, who had great confidence in the promoters. other bullfrog derelicts in which the public lost vast sums of money were gibraltar, bullfrog steinway, shoshone national bank, bullfrog homestake, bullfrog extension, denver rush extension, mayflower, four aces, golden scepter, montgomery mountain, original bullfrog, etc., etc. mining-stock brokers of the cities went into ecstasies over bullfrog during the height of the boom in that camp. philadelphia mining-stock brokers fed tramps consolidated of bullfrog to their clients. pittsburg brokers recommended montgomery-shoshone. butte brokers placed large blocks of amethyst. gold bar was distributed by brokers of the south. new york brokers were behind gibraltar, four aces, denver rush, montgomery mountain, eclipse, golden scepter, national bank and a score of others. practically every dollar of the millions invested in bullfrog stocks has been lost. the cause of the failure of the bullfrog district to make good was not the absence of gold-bearing rock, for there is much of it in the district, but it has been found that the per ton values are too low to make the mines a commercial success. bullfrog is situated on the desert and has no timber and but very little water. promoters and investors did not realize this until mills were constructed. then it was too late. if the camp were situated on the timbered shores of the hudson river, the stocks of many of the mines of the district would probably be in great demand at above par. probably the most remarkable fact regarding bullfrog is that its securities were more strongly recommended by eastern brokers than the goldfield issues and became more fashionable at this early period in goldfield's history. eastern brokers then had little confidence in goldfield; and at the very time when the stocks of goldfield representing inside properties, which later made good in an extraordinary way, were being offered, they advised their customers not to buy. the general cry then was that it was a fly-by-night offshoot of the first great tonopah boom, and the idea prevailed in the east, because of the ascending influence of george wingfield, then principal owner of tonopah's leading gambling hell, that goldfield was a haven for gambler's and wildcatters. it was during the early days of the bullfrog boom that my friend w. j. arkell's career as a mining promoter came to a sudden end. it will be remembered that when he left goldfield to go to tonopah to make the tonopah home deal his cash capital was $35. he closed the transaction for the option on the million shares of tonopah home's capitalization at a price around five cents a share. then our "partnership," of three days' duration, came to an end. arkell journeyed back to san francisco and there declared me out. arkell was a prominent figure for a while as a san francisco mining-stock promoter. he listed tonopah home on the san francisco stock exchange. then he started in to sky rocket the price. the rise continued until the stock sold at 38 cents, an advance of about 700 per cent, in a few months. then the psychological moment for arkell arrived. it leaked out that he had been financing his stock-market campaign by buying reams of his own stock on one-third margin and at the same time selling it, in like quantity, for all cash through other brokers. this was equivalent to borrowing 66 2-3 per cent. of the market value. the brokers and banks did the carrying. when arkell's tactics were discovered, indiscriminate short-selling by market sharp-shooters ensued. arkell's own hypothecated stock was used to make deliveries. in order to hold his ground and to get the floating supply of the stock off the market, arkell engineered a consolidation. the tonopah home consolidated was incorporated, and holders of tonopah home stock were invited to exchange their original certificates for shares in the consolidated company. just then somebody threw a brick. the names of united states senator george s. nixon and hon. t. l. oddie, later governor of nevada, had been published as directors of the new company, and when these gentlemen saw the half-page display advertisements in which their names were used, and were informed that arkell appeared to be on the ragged edge, they telegraphed to the san francisco stock exchange denying connection. tonopah home broke wildly on the announcement in the exchange to something like 3 cents a share. then it dropped to nothing. arkell's methods were too "raw," and i knew the smash had to come, sooner or later. 'twas late in october, 1905. bullfrog was still in its hey-day. goldfield's initial boom seemed to be flickering. work was going on day and night in the mines, but for want of fresh discoveries the camp was being deserted by some of the late-comers. out-of-town newspaper correspondents came upon the scene, and stories and pictures of the camp, labeled "a busted mining-camp boom," etc., soon appeared in the los angeles and san francisco newspapers. goldfield mine-owners were accused of beguiling the public. promoters were gibbeted as common bunco men. peculiarly enough, bullfrog, younger sister of goldfield, which has since proved to be such a graveyard of mining hopes, was immune. there men of substance were in control, the writers said, while goldfield was portrayed as a stamping ground for gamblers and "wild-catters." the stories had their effect even in goldfield. leading men of the camp began looking about for new fields to conquer. the majority of goldfield mine-owners had not "fallen" for bullfrog, but the success of the bullfrog stock company promotions in the east inspirited them. the great mining-camp boom of manhattan, 80 miles north of goldfield, which followed, owes much of its success to these fortuitous circumstances. i was one of the first to get the manhattan fever. w. f. ("billy") bond, a goldfield broker-promoter whose ear was always glued to the ground, showed me a specimen of ore literally plastered with free gold. he said it came from manhattan and that manhattan was another cripple creek. it was only the night before that i had lost a good many thousand dollars "bucking the tiger." faro was the pastime of practically everybody in goldfield in those days, and i played for want of some other means of recreation and lost heavily. i was as broke as the day i entered the camp. i bought blankets, a suit of canvas clothes lined with sheep-skin, and a folding iron cot, all on credit. i packed the outfit off to tonopah. there i climbed aboard an old, rickety stage-coach of the regulation far-western type, and started for manhattan. we rode over a snow-clad desert, up mountains and down canyons--a perilous journey that i would not care to duplicate. the $10 i had in my pocket, after paying my fare, was borrowed money. when i arrived that night at manhattan, situated in a canyon at an altitude of 7,000 feet, i set up my cot on the snow, wrapped myself in my blankets and slept in the open. there were only three huts and less than a score of tents in the camp. the next morning i strayed through the diggings. sacks of ore in which gold was visible to the naked eye were piled high on every side. the stray dog, the jumping jack and the dexter were the three principal producers. they honeycombed one another. i questioned some of the prospectors as to the names of the single claims adjoining the stray dog, jumping jack and dexter. they informed me that there was one group of claims adjoining that could be bought for $5,000. with $10 in my pocket i proceeded to purchase it. i gave a check for $100, signed a contract to pay the balance of $5,000 in 30 days or forfeit the $100, and immediately started back to goldfield to induce the president of the bank to honor my check on presentation. he did. when i returned to goldfield i carried with me many specimens of high-grade ore. they were placed on display in a jewelry store. there was great excitement, and before night a stampede from goldfield to manhattan ensued which in magnitude surpassed the first goldfield rush. a few days later i returned to manhattan and sold my option for $20,000 cash. while i was there i met c. h. elliott. mr. eliott had "cleaned up" in bullfrog. he told me that he had formed a corporation partnership in goldfield with l. l. patrick, one of the owners of the great combination mine--which was later sold to the goldfield consolidated for $4,000,000--and sol. camp, a mining engineer from colorado. the name of the concern was patrick, elliott & camp, inc. it was organized to promote mining companies. mr. patrick is now president of the first national bank of goldfield. mr. elliott asked me to stay in camp for another day until he could pick up a good property. he made a deal with some cowboys for a large acreage embracing the april fool group of claims, scene of the original gold discovery. twenty leases on this property were in operation, and the surface showings were promising. if the ore "went down," the mine would prove to be a bonanza. mr. elliott incorporated a company known as the seyler-humphrey to own and operate the ground. we returned to goldfield. my publicity bureau telegraphed the news of the manhattan discoveries to a long chain of newspapers east and west. then i put out a big line of "display" advertisements in the big cities, offering for sale stock of the seyler-humphrey. the entire issue of 1,000,000 shares of seyler-humphrey was oversubscribed at 25 cents a share within two weeks. this was the result of $15,000 worth of advertising, and the profits of the firm were $100,000. in quick succession mr. elliott promoted the manhattan combination and the manhattan buffalo. within six weeks the firm's promotion profits amounted to approximately $250,000. how about the public's chances? i asked mr. elliott one evening, shortly after patrick, elliott & camp earned their first $250,000 from their three manhattan promotions, whether he did not think the public was entitled to subscribe for this stock at a lower price and at a smaller profit to his corporation. i recall that he said: "the article we sell is something that somebody wants and is willing to pay for. what we have sold them is worth what we have charged. the fact that we are on the ground and have endured hardships entitles us to a good profit, provided the gold showings on the surface of the properties are not exaggerated. the sale of the stocks has been accelerated by your gift of presentation through advertisements. big department stores and advertising specialists in the cities pay from $15,000 to $30,000 a year for that kind of talent, and we on the desert also have a right to avail ourselves of it." "but suppose the properties don't make good?" i queried. he answered: "it is not a case of excessive optimism for one to expect that manhattan properties will make into mines, in the presence of such wonderful surface showings; and so long as we are not knowingly guilty of deception, no harm is done. if the manhattan stocks we have promoted make good, $5 will be a reasonable price for them, and if they don't make good, one cent will be too high for them. so why question the ethics of charging 25 cents per share for seyler-humphrey when we might have sold it for 15 cents and still have made money; or of charging 15 cents for manhattan buffalo when we could have sold it at a profit for 10 cents? the public knows it is gambling. if people want to buy stocks where they won't lose all of their investment under any circumstances, they know they can buy union pacific, pennsylvania railroad or new york central. the profits there, however, are limited, just like the losses. in the case of mining stocks, representing prospects under actual development, the public can lose or gain tremendously." mr. elliott, who confessed to me that he often played the horse-races when in san francisco, then wrote out a list of stocks and prices, representing what he said was a "book" on stocks, comparable to a gambler's book on the horse-races, reading substantially as follows: stock price odds union pacific $165.00 6 to 5 reading 155.00 8 to 5 missouri pacific 56.00 2 to 1 erie 28.00 3 to 1 seyler-humphrey .25 20 to 1 manhattan buffalo .15 30 to 1 manhattan combination .10 50 to 1 "there," said mr. elliott, "you have the different prices on railroad and mining securities with their chances of winning for the speculator marked against them. when a man goes to a horse-race and plays the favorite, he does exactly what the man does who gives his broker an order to buy union pacific for him at current quotations. it is about 6 to 5 against the investment making a profit over current quotations on any given day, although the investor will hardly gain 6 for his 5 if the stock enjoys its highest probable advance. it is about 20 to 1 against the man buying seyler-humphrey making money, but he will gain 20 for his one if the mine proves to be a bonanza. however, the rail is an investment and the mining a speculation." "do you mean to say that the odds against a man making money on union pacific on any given day are only 6 to 5 when he buys the stock _on margin_?" "not on your life!" he said. "a margin trader on the new york stock exchange, unless he has sufficient capital behind him to hold out against 'inside' manipulation, which has for its purpose the 'shaking out' of the speculator, has not got _any_ chance! he is bound to lose his money in the end. i am talking about people who buy stocks, pay for them in full and get possession of their certificates and 'sit tight' with them." mr. elliott was a plunger and lost large sums in the gambling-houses of goldfield and tonopah. he lost $20,000 in a night's play in the tonopah club, then owned by george wingfield and associates. when asked to settle he tendered a check for $5,000 and a certificate for 100,000 shares of goldfield laguna mining company stock, then selling at 15 cents. this was accepted. within a year laguna sold freely at $2 a share. this incident illustrates how the foundations were laid for some of the big fortunes which were amassed in the goldfield mining boom. when george wingfield came to tonopah in 1901 he brought with him $150, borrowed from george s. nixon, then president of a national bank at winnemucca, nevada, and later united states senator. mr. wingfield's fortune is now conservatively estimated at between $5,000,000 and $6,000,000. success having been won by the patrick elliott & camp promotions, i was considering whether or not much of the money-making that was being done by the promoters around goldfield was not due to my own peculiar ability to reach the public, and i even meditated on my fitness to become a promoter on my own account. the best properties in manhattan, by common consent, were the stray dog, the jumping jack and the dexter. these were sure-enough producers of the yellow metal. they were shippers and were held in high esteem by mining men. i found it impossible to purchase the dexter because the company was already promoted and the stock widely distributed at around $1 a share. george wingfield was then and is still interested in the dexter. the jumping jack was unincorporated. the stock of the stray dog was practically intact in the hands of the owners. the price asked for the jumping jack was $85,000. stray dog was held at $500,000. jumping jack manhattan i was again in funds as the result of my profits in the manhattan boom, and it was again my wont, for want of any other pastime, to play faro at night. i found myself gossiped about with men like january jones, zeb kendall, c. h. elliott, al. myers and others who rolled in money one day and were broke the next. the second largest gambling-house in goldfield was owned by "larry" sullivan and peter grant, both from portland, oregon. sullivan claimed that he was attracted to goldfield by the stories which appeared in the sunday magazine section of a coast newspaper, the copy for which had been carefully and methodically written in the back room of our goldfield news bureau. sullivan and grant were making money, and plenty of it. i patronized the sullivan house, of occasion, and sullivan usually presided over the games when i was there. one evening i cashed in $2,500 of winnings. the money was piled on the table in $20 gold-pieces by the dealer. as i was about to place it in a sack to store away in the safe of the house until the morrow, sullivan began to josh me like this: "say, young feller, why don't you cut me in on some of your mining deals? i'm game!" "are you? well, stack up $2,500 against that money, and i'll see if you are." he went to the safe and lugged to the table a big canvas sack containing $20 gold-pieces. stacking the money on the table in piles of $400 each, he matched my stake. "well?" said he. "put that money in a sack," said i, "and go and get that big coonskin coat of yours, take a night ride by automobile to tonopah, and in the morning go by stage to manhattan. when you get there look up the owner of the jumping jack mine. i have met him. he is a member of the ancient order of hibernians. an irishman can buy that property from him much cheaper than anybody else. you go and buy it." "what will i pay?" asked larry. "he wants $85,000, but get it as cheap as you can," i replied. "what? with this $5,000?" "yes," said i. "pay him the $5,000 down and sign a contract to pay the balance in 60 or 90 days; but fetch him back to goldfield, and have him bring the deeds." a few days later sullivan returned to goldfield, aglow with excitement. climbing out of the stage-coach, he pulled me into his private office. "say," he said, "i've got that guy with me and he's got the deeds. i bought the jumping jack for $45,000. he'll do anything you want him to do." "good!" i said. the owner was introduced to me, and i turned him over to my lawyer, the late senator pyne. mr. pyne drew up a paper by which the transferred title of the property to the jumping jack manhattan mining company, capitalized for 1,000,000 shares, 300,000 shares of which were placed in the treasury for mining purposes, and 700,000, representing ownership stock, put in escrow, to be delivered to sullivan and myself on the payment of 6-1/2 cents a share. a board of directors was selected. at this juncture sullivan, who knew as much about the mining promotion and mining-brokerage business as an ostrich knows about ocean tides, inquired what my next move would be. sullivan seemed to be bewildered, yet full of faith. my situation was this: i had conceived a rip-snorting promotion campaign for the best property that had yet been offered the public from manhattan, but i had no cash to present it. turning to sullivan i said: "do you know the goldfield manager of the western union telegraph company?" "yes, i know him well." "call him up by 'phone or send word to him that you will guarantee payment of any telegrams i file here to-night or during the next three days; i want to send some wires," said i. "i'll do it," said sullivan, and within a few minutes i was advised that sullivan's credit was unquestioned. i returned to the news bureau and there drafted a 300-word telegram, setting forth the merits of the jumping jack manhattan property and offering short-time options on big blocks of the stock. the message was sent to practically all of the well-known brokerage houses in the country which handled mining stocks. the bill for telegraph tolls was $1,200. when sullivan learned of its size he nearly collapsed. "how far do you intend to go?" he gasped. "well," said i, "how can you lose? your friend, frank golden, president of the nye & ormsby county bank, has accepted the presidency of the company at our request, and the other officers we have secured are all representative citizens of this community, and, besides, the nye & ormsby county bank has agreed to receive subscriptions. can you beat that for a layout? never in my experience in this camp, with all the promotions i have advertised, has the public had a dish quite so palatable offered to it--a producing mine, in the first place; a high-class directorate headed by a bank president, in the second place; and a real bank as selling agent, in the third and last place. and it will go like wildfire!" i labored all that night in my advertising agency on some strongly-worded advertising copy recommending to the public the purchase of stock in jumping jack manhattan. in the morning i induced sullivan to advance $10,000 to pay the advertising bills. the copy was dispatched by first mail to the important daily newspapers of the country, with instructions to publish on the day following receipt of copy. within six days all of the advertising had appeared. the effect was magical. the display advertisements assisted the brokers in the various cities, who had asked for reservations of the stock, to dispose of their allotments in a few days. within ten days after the initial offering of the promotion by telegraph to the eastern brokers, sullivan showed me telegraphic orders for 1,280,000 shares of jumping jack manhattan stock at 25 cents a share, an oversubscription of 280,000 shares. before the stock certificate books were printed and delivered from the local printing office, we were, in fact, oversold. that week and the next, sullivan gave me _carte blanche_ to speculate in local mining stocks with partnership money, and within a fortnight we had made another small fortune from manhattan securities. these were advancing in price on the san francisco stock exchange by leaps and bounds. i recall one overnight winning that we made, amounting to about $12,000, which came so easy i felt almost ashamed to take the money. manhattan seyler-humphrey stock, promoted by patrick, elliott & camp at 25 cents per share, was now listed on the goldfield and san francisco stock exchanges. it was in fair demand at 30 cents. a dispatch reached goldfield from new york, purporting to be signed by john w. gates, reading as follows: "at what price will you give me an option good 48 hours on 200,000 shares of manhattan seyler-humphrey? answer to hotel willard, washington, to-night." this was to patrick, elliott & camp. within half an hour a half-dozen similar messages reached other goldfield brokers. i happened to be in the office of patrick, elliott & camp when the first telegram was received, and i lost no time in going out on the street and annexing all the goldfield offerings of the stock at current quotations. at first lou bleakmore, manager for patrick, elliott & camp, "smelled a rat," but when he learned that i was buying the stock he became convinced that i believed john w. gates really wanted some seyler-humphrey, and he shot buying orders for his own firm into san francisco. personally i considered the message a snare. somebody in the east, i guessed, had bitten off a block of seyler-humphrey at around 25 cents when it was promoted a few weeks prior and had made up his mind that he would turn a trick. the goldfield brokers having received telegrams, i assumed that the same message had been sent to brokers in san francisco, where the stock was also listed. it seemed to me that an advance would certainly be recorded on the following day. sure enough, the next morning the stock advanced to 38 cents a share, and the market boiled. at this figure, and a little higher, i unloaded in the neighborhood of 100,000 shares in goldfield and san francisco. a good deal of this stock had been picked up by me the night before. but i recall that one block of 10,000 shares had been allotted to me weeks before at the brokers' price of 20 cents, and another block of 10,000 shares had been given me as a bonus for my publicity measures. after turning over to the treasury of the jumping jack manhattan mining company the amount netted from the sale of treasury stock, and paying off the amount still due on the original purchase price, sullivan and i, within three weeks of my little dare, had cleaned up a net profit of $250,000. "do you want a cut?" i asked sullivan when our joint profits reached the quarter-million mark. "no, i'm game. stay with it," he returned. next day the l. m. sullivan trust company, destined to make and lose millions in the great goldfield boom that followed and to mold for me an exciting career as a promoter, was formed with a paid-up capital of $250,000. sullivan was made president and i vice-president and general manager. chapter iii the brewing of a saturnalia of speculation mr. sullivan's gambling-house affiliation was not considered a drawback to the trust company. george wingfield, vice-president and heaviest stockholder of the leading bank in goldfield, was a gambler and mr. wingfield also owned extensive interests in the mines. his mines were making good, too. owners of the gambling places now stood as much for financial solidity in goldfield as did savings-bank directors in the east. as for myself, i was unafraid. i vowed i would henceforth prove an exception to the mining-camp rule and quit all forms of gambling. my new position demanded this. and i found it easy to obey the self-imposed inhibition. soon the stock-market operations of the trust company gave my speculative instinct all the vent it could possibly have craved under any circumstances. a few days later the sobering sense which impelled me to resolve that i must absent myself from gaming tables evolved into a stern ambition to accomplish big things for the trust company. i went about my business like a man who sees dazzling before him a golden scepter and who is imbued with the idea that if he exerts the power he can grasp the prize. it had been agreed that the trust company would specialize in the promotion of mining companies, and i determined that the trust company should conduct its business as a trust company ought. john douglas campbell, known on the desert as plain "jack" campbell, was engaged by the trust company as its mining adviser and mine manager. we agreed to pay him a salary of $20,000 a year, with a bonus of stock in every new mining company we promoted, a stipend which was later found to be equivalent to $50,000 a year. mr. campbell had been identified with tonopah and goldfield mining interests for three years, and was favorably known. for eight years before coming to tonopah he was employed as a mining superintendent in colorado by sam newhouse, the multi-millionaire mine operator of utah. in colorado mr. campbell's reputation had been good. on coming to tonopah he was employed by john mckane, then associated with charles m. schwab. later he was placed in charge of the kernick and fuller-mcdonald leases on the jumbo mine of goldfield from which, during a year's time, $1,000,000 in gold was taken out. after that mr. campbell took hold of the quartzite lease at diamondfield, near goldfield, and he produced $200,000 in a few months from that holding. he followed this up by a record production from the famous reilly lease on the florence mine of goldfield, amounting to $650,000 in two months. it was within thirty days of the date of expiry of the reilly lease that mr. campbell was induced to take charge of the mining department of the trust company. mr. campbell's advent as our mine manager was immediately reflected in the stock market by the advance of jumping jack manhattan mining company shares, which were now regularly listed on the san francisco stock & exchange board, to 40 cents per share, up 15 points from the promotion price. the sharp rise wrought an undoubted sensation in stock-market circles. brokers in the cities who had sold jumping jack to their customers clamored for a new sullivan promotion. any new mining venture for which the trust company would stand sponsor was assured of heavy subscription and a broad public market. trying it on the stray dog the stray dog manhattan mine was furnishing daily sensations in the way of frequent strikes of fabulously rich ore. i urged that, no matter how small the profit, the sullivan trust company should begin its corporate career with the promotion of a property as good as the stray dog. the stray dog was for sale--at a price. one interest, of 350,000 shares, owned by vermilyea, edmonds & stanley, the law firm of highest standing in goldfield, could be acquired at 45 cents a share, and another interest, of 350,000 shares, owned by prospectors who had located the ground, could be had at 20 cents a share, all or none. the remainder of the stock was in the treasury of the company. the total demanded for 700,000 shares of ownership stock was $227,500, all cash. a likely property adjoining the stray dog, known as the indian camp, could be purchased for $50,000 in its entirety. we knew that as soon as it should become known that we had bought the stray dog, the value of indian camp ground would double, and we therefore decided to annex the indian camp at the same time we took over the stray dog. the proposed outlay amounted to more money than we had, and i looked about for assistance. henry peery, a salt lake mining man of substance, had been negotiating for the stray dog in the interest of utah bankers. we agreed that mr. peery should be allowed to participate on the basis of a one-third interest for him, and a two-thirds interest for the trust company. besides supplying his quota of the cash needed to swing the deal, mr. peery agreed to furnish a president for the company, who, he said, interested himself very frequently in mining enterprises. this was henry mccornick, the salt lake banker, son of the head of the firm of mccornick & company, reputed to be the richest private bankers west of the mississippi river. the deal was made. we immediately proceeded to promote the stray dog manhattan mining company at 45 cents per share, the average cost to us of the stock being 32-1/2 cents. it was impossible for any huge profit to accrue in stray dog on any such margin as 12-1/2 cents per share between our cost price and the selling price, because the expense of promotion appeared bound almost to equal this. we figured that any promotion profits must come out of the indian camp. the indian camp was capitalized for 1,000,000 shares, 650,000 of which were paid over to the trust company and to mr. peery for the property. the remaining 350,000 shares were placed in the treasury of the company to be sold for purposes of mine development. the average per share cost to the trust company of its ownership stock was a fraction less than 8 cents. we decided that as soon as the stray dog was promoted we would offer indian camp shares on a basis of 20 cents per share net to the brokers and 25 cents to the public, and looked forward, if successful, to gaining about $75,000 net on both ventures. immediately on taking over the control of stray dog and indian camp the trust company purchased treasury stock in each of these companies, and put a large force of men to work to open up the properties. within thirty days of the incorporation of the trust company gold hill in manhattan, on which were located the stray dog, jumping jack and indian camp, swarmed with miners. the orders given to engineer "jack" campbell were to put a man to work wherever he could employ one, and to be unsparing in expense so long as he could obtain results. towering gallows-frames and 25-horse-power gasoline engines were installed and other necessary mining equipment ordered shipped to the properties. blacksmith shops, bunk-houses and storehouses were erected on the ground. day and night shifts of miners were employed. in order to guarantee the constant presence on the properties of the engineer in charge, the sullivan trust company built for the engineer's use a $6,000 dwelling house on indian camp ground. having convinced the natives that we were in dead earnest about our mine-making intentions, we busied ourselves offering stray dog stock for subscription at 45 cents per share. it was well known around the camp that we had paid 45 cents per share for one block of 350,000 shares, and mining-camp followers were among the first to subscribe for the stock. then an effort was made to dispose of quantities of it to the eastern public by advertising and through mining-stock brokers. that advertising campaign was approached with considerable caution. in the first place, the subscription price of stray dog, 45 cents, was 80 per cent. higher than that of any other advertised promotion which had yet been made from either the goldfield or manhattan camps; and in the second place, the conduct of a mining-stock promotion campaign by a trust company appeared to me to justify more than ordinary care. there were other factors that entered for the first time in goldfield, too. the initial successes of the big display advertising campaigns directed from goldfield appeared to have been due to the fact that the american public had greeted mining-stock speculation as filling a long-felt want, namely, a channel for speculation in which they could indulge their gambling spirit with comparatively limited resources--resources that were insufficient to give them a "look-in" on the big exchanges where the high-priced rails and industrials are traded in. advertising for thinkers having "tried on the dog" my methods of advertising for nearly two years, that is to say, having conducted an advertising agency for mine promoters, and learned the business with their money, i had passed through the experimental stage and now marshalled a cardinal principal or two that i decided must guide me in the operations in which i had become more directly interested. i resolved never to allow an advertisement to go out of the office that was unconvincing to a thinker. if my argument convinces the man of affairs, i determined, it will certainly win over the man of no affairs. dogmatically expressed, the idea was this: never appeal to the intelligence of fools, no matter how easily they may part with their money. turn your batteries on the thinking ones and convince them, and the unthinking will to follow. that principle was applied to the _argument_ of the advertisement. the headlines were constructed on an entirely different principle, namely, to be positive to an extreme. the bible was my exemplar. it says, "it is" or "it was," "thou shalt" or "thou shalt not," and the bible rarely explains or tells why. the strength of a headline lies in its positiveness. the logic which directed that the flaring headline of my big display advertising copy embrace a very positive statement, and that the _argument_ which followed in small type be convincing to the thinker, was based on a recognition of the fact, that, while boldness of statement invariably attracts attention, analysis is the final resort of the thinker before becoming convinced. more circumspection was used also in the process of selecting media for the advertising. newspapers that did not publish in their news-columns mining-stock quotations of issues traded in on the new york curb, the boston stock exchange, the boston curb, the salt lake stock exchange or the san francisco stock exchange were taboo, on the theory that by this time trading in mining stocks had grown sufficiently popular to command a regular following, and that it was easier to appeal to those who had some experience in mining-stock speculations than to those who had never before ventured. subsequent advertising campaigns were always conducted from this viewpoint. i did not set the ocean on fire with my stray dog promotion, the advertising campaign of which was conducted on these lines, but this was due to circumstances which i explain further on. later, when the sullivan trust company grew and prospered, and afterward when i reached the east and learned more and more of the inside mechanism of the big wall street promotion game in rails and industrials as well as mining stocks, i found that my publicity principles were comparable to those accepted by the street generally. _the mighty powers of wall street recognize the fact that it is not in the nature of things that fools should have much money, and thinkers, not fools, are the quarry of the successful modern-day promoter, high or low, honest or dishonest._ _a little knowledge is a dangerous thing, and the man who thinks he knows it all because he has accumulated much money in his own pet business enterprise is a typical personage on whom the successful modern-day multi-millionaire wall street financier trains his batteries._ _the honest promoter aims at both the thinker who thinks he knows but doesn't, and the thinker who really does know. he is compelled to appeal to both classes because the membership of the first outnumbers that of the second in the proportion of about 1,000 to 1._ _in fine, for every dollar of "wise" money which is thrown into the vortex of speculation_, $1,000 is "unwise," or considered so. the initial stray dog and indian camp promotion campaign was only half successful at the outset. about 650,000 shares of stray dog and 350,000 shares of indian camp had been disposed of when the manhattan boom began to lose its intensity. promotions had been made a little too rapidly for public digestion. there were more miners at work than ever in the manhattan camp, but the demand for securities was not keeping pace with the supply. manhattan's initial boom appeared to be flattening out just as goldfield's first boom had. we met with a setback from another direction. henry mccornick's banking connections in salt lake objected to the use of his name as president of the stray dog. at the very height of our advertising campaign mr. mccornick resigned. we elected our engineer, "jack" campbell, president, but damage was done. yes, "business is business" the offices of the trust company were furnished on an elaborate scale, resembling the interior of a banking institution of a large city. the offices became the headquarters of eastern mining-stock brokers whenever they arrived in camp. one morning j. c. weir, a new york mining-stock broker, whose firm held an option from the trust company on 100,000 shares of stray dog stock, was ensconced in one of the two luxuriously furnished rooms used as executive offices. mr. weir's firm was one of our selling agents in new york. he was the dean of mining-stock brokers in new york city. in those early days the telephone service of goldfield was not yet perfected, and it was only necessary for a person, in order to overhear any talk over the telephone in our offices, to lift the receiver from the nearest hook and listen. it was reported to me that mr. weir had been availing himself of this method of learning things at first hand. "say, rice," said mr. sullivan one morning, "weir hears your messages every time you are called on the 'phone. he takes advantage of you. i wish you would let me fix him." "all right; what do you want to do?" i answered. "say," said mr. sullivan, "campbell, our engineer, is in manhattan. i'll call him up from the public station and tell him to 'phone you some red-hot news about mine developments on stray dog, and i'll see to it that weir is in his office at the time you get the message. if weir don't steal the news and grab a big block of stray dog on the strength of it, i'm a poor guesser." all of our options to brokers were to expire on the 15th of march and this was the 13th. at four o'clock in the afternoon i was in my room. mr. weir was at the desk in the room opposite. the 'phone bell rang. "hello," i said, "who is this?" "campbell, at manhattan," was the response. "what's the news, jack?" i asked. "we've just struck six feet of $2,000 ore! it's a whale! never saw a mine as big as this one in my life! don't sell any more stray dog under $5 a share!" shouted mr. campbell. "bully, jack," i said, "but keep that information to yourself. don't tell your mother, and don't let any more miners go down the shaft. close it up until i am able to buy back some of the stock i sold so cheap." fifteen minutes later mr. sullivan and i met mr. weir leaving the room. "weir," said i, "your option on stray dog expires on the 15th at noon. so far, your new york office has ordered only 85,000 shares of the 100,000 that were allotted to you. we have decided to close subscriptions on the moment and wish you would wire your new york office not to sell any more." "you are wrong," said mr. weir; "why, when i left new york we had oversold our entire allotment! if the office has not notified you of this, it has been a slip. we will, in fact, need at least 25,000 shares more." "you can't have them," said i. "not in a thousand years!" put in mr. sullivan. mr. weir sent a bunch of code messages to new york. all the next day mr. sullivan spent with mr. weir. he allowed mr. weir to cajole him into letting him have the entire block of stock. finally, it was agreed between mr. weir and mr. sullivan that mr. sullivan would give him the additional stock whether i consented or not. surreptitiously, according to mr. weir's idea, mr. sullivan was yielding to him, without my knowledge and against my wishes. next day the sullivan trust company shipped to mr. weir's firm in new york 25,000 shares of stray dog attached to draft at 45 cents a share. the draft was paid. the avenging angel kept hot on mr. weir's trail, for right on the heels of the new york broker's stray dog purchase came a calamity which almost obliterated the market values of nevada mining stocks and particularly those of the shares of manhattan mining companies. san francisco was destroyed by earthquake and fire. not less than half of the capital invested in manhattan stocks had come out of the city of san francisco. the earthquake was fatal to manhattan. the san francisco stock exchange, which was the principal market for manhattan mining shares, was compelled to discontinue business for over two months. brokers and transfer companies lost their records, and the coast's property and money loss was so appalling that no more money was forthcoming from that direction for mining enterprises. every bank in nevada closed down, just as every california bank did, the governors of both states declaring a series of legal holidays to enable the financial institutions to gain time. nevada banks, as a rule, had cleared through san francisco banks, and practically all of nevada's cash was tied up by the catastrophe. the sullivan trust company faced a crisis. i had decided it was good business to lend support to jumping jack in the stock market when the manhattan boom began to relax from its first tension, and had accumulated several hundred thousand shares at an average of 35 cents. the trust company had only $8,000 in gold in its vaults on the day of the 'quake. moneys deposited in bank were not available. of the $8,000 in gold coin, $6,500 was paid two days after the earthquake to the wells-fargo express company for an automobile which was in transit at the time, and for which wells-fargo demanded the coin. it was impossible to hypothecate mining securities of any description in nevada or san francisco. with the sullivan trust company's funds tied up in closed-up banks, and with an unsalable line of securities in its vaults, it was "up against it." for a period it looked as if we must go to the wall. for two months we eked out a bare subsistence by the direct sale of manhattan securities at reduced prices to the eastern brokers. this purchasing power came largely from brokers who were "short" of stocks to the public on commitments made at a much higher range of prices and needed the actual certificates for deliveries. it took the nevada banks and the san francisco stock exchange more than sixty days to rehabilitate themselves. no sooner did the san francisco stock exchange open for business than it became possible for the sullivan trust company to borrow some much needed cash on manhattan securities, of which it had a plethora. through members of the san francisco stock exchange, it obtained in this way in the neighborhood of $100,000. goldfield banks supplied another $100,000 a little later by the same process. then the clouds rolled by. fortunes that were missed soon the mohawk of goldfield began to give unerring indications of being the wonderful treasure-house it has since proved to be. hayes and monnette, who owned a lease on a small section of the property, had struck high-grade ore and were producing at the rate of $3,000 per day. a few weeks later it was reported that the output had increased to $5,000 a day. the mohawk being situated only a stone's throw from the combination mine, the idea that the mohawk might turn out to be another combination was common in goldfield. hayes and monnette were startled--almost frightened--at their success. yielding for the moment to the warning of friends, who urged upon them the possibility of the ore soon pinching out, hayes and monnette called at the offices of the trust company and offered to sell their lease, which had six months to run, for $200,000 cash and $400,000 to be taken out of the net proceeds of the ore. my gambling instinct was aroused. "i will take it," i said. i sent over to the state bank & trust company, and had a check certified for the $200,000. i was about to close the deal when mr. sullivan and "jack" campbell protested. "i ought to have fifteen days to examine the mine," urged mr. campbell. "it is too big a chance to take," declared mr. sullivan. when appealed to, hayes and monnette said that to allow a fifteen-day examination would mean practically to shut down the property for that period and would result in a positive loss to them because of the limited period of their lease. the extent of the loss, if the deal fell through, was too large to contemplate, and they refused. day by day, as mr. campbell and mr. sullivan dilly-dallied, the output of the lease increased, and when, a fortnight later, all three of us were unanimously in favor of the proposition, hayes and monnette flatly refused to sell. within half a year that lease on the mohawk produced in the neighborhood of $6,000,000 worth of ore gross, and netted the leasers about $4,500,000. the sullivan trust company certainly "overlooked a bet" there. during this period i spent an evening with henry peery and w. h. ("daddy") clark. mr. clark, like mr. peery, hailed from salt lake. mr. clark had successfully promoted the bullfrog gibraltar. seated around a table in the palm restaurant, the conversation turned to new camps. "rice," said mr. clark, "i expect to be able to put you in on a townsite deal in a couple of weeks that will make you some money if you undertake to give the camp some publicity." "good," said i. "i am having some assays run," he said, "of some samples which were brought into camp last night by a couple of prospectors, and if they turn out to be what the prospectors claim, or anything near it, we'll need your services to put a new camp on the map." that night mr. peery learned from the assayer that the lowest assay of 16 samples was $86, and the highest $475, per ton. next morning mr. peery informed me that he had remained all night with mr. clark to learn where the ore came from. mr. peery said that mr. clark had told him, in the wee sma' hours, that the place was fairview peak, fifty miles east of fallon. "rice," said mr. peery, "let's beat him to it. he's going to trek it across the desert by mule team with a camp outfit to-morrow, and it will take him a week to get there." "billy" taylor, who was interested with mr. peery in a bullfrog enterprise, joined the party, and we each gave mr. peery a check for $500, forming a pool of $1,500 to send a man to fairview to buy properties there. mr. peery wired the bank of the republic at salt lake to pay ben luce $1,500, and instructed mr. luce by wire to take the money, go to fairview and do business. it was nearly two weeks before we heard of either mr. clark or mr. luce. mr. clark returned to camp and said he had purchased from a group of itinerant prospectors the nevada hills property, scene of the big find, for $5,000, and that it was a "world-beater." "did you meet any outsiders there?" queried mr. peery. "yes," said mr. clark, "i met a man named luce who almost got ahead of me. in fact, he did buy the property before i got there, but he had no money, and they would not take his check for $500, which was the deposit required. i had the gold with me, and that settled it." a few days afterward, mr. luce came to goldfield. "i didn't get the big one," he said, "but i bought the eagle's nest, near by, for $7,000, of which $500 was demanded to be paid down, and there is ore in it and it looks good to me. i had no money with me when i arrived in fairview. they refused my check for the nevada hills, but the eagle's nest boys took it for their first payment of $500." mr. luce was not at home when mr. peery's despatch was delivered in salt lake. when it reached him the bank was closed. in order to catch the first train he was compelled to leave the money behind. he arrived in fairview minus the $1,500, and thereby lost the nevada hills for mr. peery, mr. taylor and the sullivan trust company. mr. clark and his partners incorporated the nevada hills for 1,000,000 shares of the par value of $5 each and accepted subscriptions at $1 per share. within a few months the nevada hills paid $375,000 in dividends out of ore, and soon thereafter, at the height of the goldfield boom, it was reported that the owners of the control refused an offer of $6,000,000 for the property. the mine has turned out to be a bonanza. the stock of the company sold recently on the new york curb and san francisco stock exchange at a valuation for the mine of $3,000,000, and it is believed by well-posted mining men to be worth that figure. george wingfield, president of the goldfield consolidated who followed the sullivan trust company into fairview and bought the fairview eagle, which is sandwiched in between the nevada hills and the eagle's nest, is now president of the nevada hills. treasury stock of the fairview eagle was sold in goldfield at 40 cents per share. recently the nevada hills and fairview eagle companies were merged. "jack" campbell reported favorably on the eagle's nest, and we decided to organize and promote a company to own and develop the property. the sullivan trust company bought mr. taylor's interest in the eagle's nest for $8,000, mr. luce's for $8,000 (he had been awarded a quarter interest for his work), and mr. peery's for $30,000. it made the property the basis for the promotion of the eagle's nest fairview mining company, capitalized for 1,000,000 shares of the par value of $5 each. governor john sparks accepted our invitation to become president of the company. the entire capitalization was sold to the public through eastern and western stock brokers within thirty days at a subscription price of 35 cents per share. after paying for the property, our net profits were in the neighborhood of $150,000. the eagle's nest deal enabled the trust company to repay most of the money it had borrowed after the san francisco earthquake and put the company on easy street again. the tale of bullfrog rush following the eagle's nest promotion, the sullivan trust company became sponsor for bullfrog rush. i had met dr. j. grant lyman, owner of the property, on the lawn of one of the cottages of the united states hotel in saratoga a few years before, where he raced a string of horses and mixed with good people, and i knew of nothing that was to his discredit. dr. lyman bought the bullfrog rush property for $150,000. i was present when he paid $100,000 of this money in cash at john s. cook & company's bank in goldfield. the bullfrog rush property was of large acreage, enjoyed splendid surface showings, and was situated contiguous to the tramps consolidated, which was then selling around $3 a share. it looked like a fine prospect. dr. lyman incorporated the company for 1,000,000 shares of the par value of $1 each. the services of the sullivan trust company were employed to finance the enterprise for mine development. the trust company obtained an option on the treasury stock of the company at 35 cents per share, and proceeded to dispose of it through eastern brokers and direct to the public by advertising, at 45 cents per share to brokers and 50 cents per share to investors. we sold 200,000 shares, realizing $90,000 in less than thirty days, retained $20,000 for commission and expenses, and turned into the treasury of the bullfrog rush company $70,000, all of which was placed at the disposal of the company for mine development. half a dozen tunnels were run and several shafts were sunk. down to the 400-foot level the mine appeared to be of much promise. it was then learned that the shaft at the 400-foot point had encountered a bed of lime. it appeared that all the properties on bonanza mountain, where the bullfrog rush was situated, including the tramps consolidated, which was then selling in the market at a valuation of $3,000,000, were bound to turn out to be rank mining failures. the entire hill, according to our engineer, was a "slide," and below the 400-point ore could not possibly exist. we thereupon notified dr. lyman that we would discontinue the sale of the stock until such time as the property gave better indications of making a mine. a few weeks later dr. lyman entered my private office unannounced. at this period jumping jack, stray dog, indian camp, and eagle's nest were all selling on the san francisco stock exchange at an average of 35 per cent. above promotion prices. the l. m. sullivan trust company was "making good" to investors. bullfrog rush had not yet been listed, and we were afraid to give it a market quotation. "i have formed here in goldfield the union securities company," dr. lyman said, as he sat down close to my desk, "and i am going into the promotion business myself. i don't believe a word of the reports you have that the bullfrog rush is a failure. i am going on with the promotion." i protested. "we shall not permit it," i said. "governor sparks, who is the best friend the sullivan trust company has, accepted the presidency of the bullfrog rush on our assurance that the property was a good one. john s. cook, the leading banker of this town, accepted the treasurership on the same representations. mr. sullivan, president of this trust company, is vice-president of the rush. we are 'in bad' enough as the matter already stands. don't dare go on with the promotion at this time." dr. lyman left the office without uttering a word. two days later i received a dispatch from governor sparks saying that a full-page advertisement of the union securities company had appeared in the _nevada state journal_ at reno, offering bullfrog rush stock for subscription. the governor protested vigorously against the sale of the stock. we had previously informed him as to the new conditions which prevailed at the mine. i sent peter grant, one of mr. sullivan's partners in the palace, to dr. lyman to protest. the answer came back that the _nevada state journal_ advertisement was about to be reproduced in all the newspapers of big circulation throughout the east, and that the orders for the advertisements would not be canceled. half an hour later dr. lyman entered the office with mr. grant. mr. grant looked nettled. dr. lyman glowered. i bade dr. lyman take a chair. "if you move a finger to stop me," he said, as he sat himself down before me, "i'll expose every act of yours since you were born and show up who the boss of this trust company is!" dr. lyman was tall as a poplar and muscled like a samson. he was fresh from the east, red-cheeked and groomed like a chesterfield. i was cadaverous, desert-worn, office-fagged, and undersized by comparison. in a glove fight, dr. lyman could probably have finished me in half a round. but the disparity did not occur to me. the sense of injustice made me forget everything except dr. lyman's blackmailing threat. i jumped to my feet. dr. lyman backed up to the glass door. i aimed a blow at him. he backed away to dodge it. in a second he had collided with the big plate-glass pane, which fell with a crash. in another instant he recovered his feet, turned on his heel and ran. his face was covered with scratches, the result of his encounter with the broken plate glass. several clerks who followed him, thinking he had committed some violent act, reported that he didn't stop running until he reached the end of a street 600 feet away. "oh," he gasped, "i never want to see such a look in a man's eyes again. i thought i saw him reach for a gun." such an idea was farthest from my mind, although i was very angry. conscience had made a coward of the doctor. i was quick to decide upon a course of action. the position of the trust company was this: with the exception of bullfrog rush, we had a string of stock-market winners to our credit with the public. if we allowed dr. lyman to go ahead with his promotion of bullfrog rush, we should, unless we abandoned our rule to protect our stocks in the market, be compelled some day to buy back all of the stock he sold. the truth about the mine was bound to come out, and we stood before the public as its sponsors. i decided that the trust company should refund the money paid in by stockholders of bullfrog rush and prevent dr. lyman from selling more stock. to the brokers, through whom we had sold much of the stock to the public, we telegraphed that we would refund the exact amount paid us by the brokers on delivery back to us of the certificates. we also wired to governor sparks and asked his permission to insert an advertisement in the newspapers over his signature, announcing that the property had proved to be a mining failure and advising the public not to buy any more shares. this pleased the governor immensely, for he promptly wired back his o.k. with congratulations over the stand we took. that night a broadside warning to the public, bearing the signature of governor john sparks, and a separate advertisement of the sullivan trust company, offering to refund the money paid for bullfrog rush shares, were telegraphed to all the leading newspapers of the east. next day both of these announcements appeared side by side with the half-page and full-page advertisements of dr. lyman's union securities company of goldfield offering bullfrog rush for public subscription. the newspapers, peculiarly enough, performed this stunt without a quiver. the public didn't buy any more bullfrog shares. the bullfrog rush incident cost the sullivan trust company a little less than $90,000, which was refunded to stockholders, and the additional sum that was expended for advertising our denouncement of the enterprise. dr. lyman was stripped of his entire investment in the property. the newspapers lost many thousands of dollars, representing dr. lyman's unpaid advertising bills. a number of mining-stock brokers also forfeited some money; they were compelled to refund their commissions. j. c. weir, the new york mining-stock broker, who does business under the firm name of weir brothers & company, had sold in the neighborhood of 100,000 shares of bullfrog rush to his clients, and he took violent exception to our decision not to refund an amount in excess of the net price paid to us. he held that his firm ought not to be compelled to disgorge its profits. we stood pat and argued that he ought to be proud to share with us the glory of "making good" in such an unusual way to stockholders. it was the first time in the history of western mining promotions that a thing like this had ever been done, and we pointed out to mr. weir that it would gain reputation both for himself and the trust company. for a period mr. weir carried on an epistolary warfare with the trust company. for nearly two months he refused to yield. finally, we received a letter from mr. weir saying that since we refused to come to his terms he would accept ours, and that he had drawn on us for $4,500, with one lot of 10,000 shares of bullfrog rush stock attached. on receipt of the letter i gave instructions to the cashier promptly to honor the draft. an hour later the cashier reported that the draft had been presented and that an examination of the stock certificates showed that not a single one of them had been sold by the trust company through mr. weir's firm, and, in fact, had never been disposed of by the trust company to anybody. a hurried examination of the stock-certificate books of the bullfrog rush company, which were in the hands of the company's secretary in goldfield, a clerk of dr. lyman, revealed the fact that a large number of blank certificates had been torn out of the certificate books without any entry appearing on the stubs. the certificates returned to us by mr. weir bore dates of several months prior, and our immediate assumption was that dr. lyman, at the very moment when we were marketing the treasury stock under a binding contract which forbade him or any one else to dispose of any bullfrog rush stock under any circumstances, was clandestinely getting rid of these shares. mr. weir, it appeared, had neglected to segregate dr. lyman's certificates from those shipped him by the trust company. another hypothesis was that those certificates had never been sold at all, but had merely been received from dr. lyman to be reforwarded to us in order to claim a refund for what we had never been paid for. of course, we returned the draft unpaid. but that didn't end the incident. my partner, mr. sullivan, took it upon himself to wire his sentiments to weir brothers & company, as follows: "you are so crooked that if you swallowed a ten-penny nail and vomited, it would come out a corkscrew." that was "larry's" homely way of expressing his opinion. goldfield's year of wind and dust had brightened into the glow of summer. the still breath of august was diffused through the thin mild air of the high altitude. this thin air, which nearly two years before had prompted a camp wit to comment on the birth of my news bureau to the effect that "the high elevation was ideal for the concoction of the visionary stuff that dreams are made of," appeared unprophetic. there was plenty of concrete evidence of the yellow metal to be seen. production from the mines was increasing daily and money from speculators was pouring into the camp from every direction. a mining-stock boom of gigantic proportions was brewing. mohawk of goldfield, which was incorporated for 1,000,000 shares of the par value of $1 each, and which in the early days went begging at 10 cents a share, was now selling around $2 a share on the san francisco stock exchange, the goldfield stock exchange and the new york curb. other goldfields had advanced in proportion. combination fraction was up from 25 cents to $1.15. silver pick, which was promoted at 15 cents a share, was selling at 50 cents. jumbo extension advanced from 15 to 60. red top, which was offered in large blocks at 8 cents per share two years before, was selling at $1. jumbo advanced from 25 cents to $1.25. atlanta moved up from 12 to 40. fifty others, representing prospects, enjoyed proportionate advances. the sullivan stocks were right in the swim. jumping jack was in hot demand on the san francisco stock exchange and new york curb at 45 cents, stray dog at 70 cents, indian camp at 80 cents, and eagle's nest at 50 cents. subscribers to indian camp could cash in at a profit of more than 200 per cent. the country gave indications of going "goldfield crazy." my goldfield publicity bureau was working overtime. james hopper, the noted fiction writer and magazinist, ably assisted by harry hedrick and other competent mining reporters, was "on the job" and doing yeoman service. the news-columns of the daily papers of the country teemed with stories of the goldfield excitement. people began to flock into the camp in droves. the town was a scene of bustle and life. motley groups assembled at every corner and discussed the great production being made from the mohawk and the terrific market advances being chronicled by mining stocks representing all sorts and descriptions of goldfield properties. whenever hayes and monnette, owners of the mohawk lease, appeared on the streets, they were followed by a mixed throng of the riffraff of the camp, who hailed them, open-mouthed, as wonders. the madness of speculation in mining shares in the camp itself was beginning to exceed in its intensity the exciting play at the gaming tables. there was a contagion of excitement even in the open spaces of the street. at each meeting of the goldfield stock exchange the boardroom was crowded. the sessions were tempestuous. every step and every hallway leading to the room was jammed with men and women over whose faces all lights and shades of expression flitted. the bidding for mining issues was frantic. profits mounted high. everybody seemed to be buying and no one appeared to be willing to sell except at a substantial rise over the last quotations. castle-building and fumes of fancy usurped reason. bank deposits were increasing by leaps and bounds. the camp was rapidly becoming drunk with the joy of fortune-making. manhattan now shone mostly in the reflected glory of goldfield, but manhattan stocks were booming. this enabled the sullivan trust company to dispose of nearly all of its manhattan securities which had been carried over after the san francisco catastrophe and to pile up a great reserve of cash. a big demand was developing for shares in fairview companies. nevada hills of fairview was selling on the stock exchanges and curbs at $3 per share, or a valuation of $3,000,000 for the mine. only a few months before it had fallen into goldfield and salt lake hands for $5,000. fairview eagle's nest, for which subscriptions had been accepted at 35 cents per share by the sullivan trust company, was selling at 70 cents on the san francisco stock exchange. the sullivan trust company announced the offering of 1,000,000 shares, embracing the entire capitalization of the fairview hailstone mining company, at 25 cents. the stock was purchased by us at 8 cents. we sold out in a week. san francisco and salt lake were the principal buyers, and it was unnecessary even to insert an advertisement offering the stock. the brokers fell over one another to underwrite the offering by telegraph. prize fights and mining promotion for a fortnight there was a lull in news of sensatorial gold discoveries, but the approaching gans-nelson fight, which was arranged to be held in goldfield on labor day, september 3, furnished sufficient exciting reading matter for the newspapers throughout the land to keep the goldfield news pot boiling. the sullivan trust company had guaranteed the promoters of the fight against loss to the extent of $10,000, and other camp interests put up $50,000 more. gans, the fighter, was without funds to put up his forfeit and make the match, and the sullivan trust company had also advanced the money for that purpose. mr. sullivan became gans' manager. when gans arrived in town mr. sullivan interviewed him to this effect: "gans, if you lose this fight they'll kill you here in goldfield; they'll think you laid down. i and my friends are going to bet a ton of money on you, and you must win." gans promised he would do his best. "tex" rickard and his friends wagered on nelson. the cashier of the sullivan trust company was instructed to cover all the money that any one wanted to bet at odds of 10 to 8 and 10 to 7 on gans, we taking the long end. a sign was hung in the window reading: "a large sum of money has been placed with us to wager on gans. nelson money promptly covered inside." mr. sullivan was in his glory. prize-fighting suited his tastes better than high finance, and he was as busy as a one-armed paper-hanger with the itch. an argument arose about who should referee the fight. "tex" rickard nominated george siler, of chicago, and battling nelson promptly o.k.'d the selection. mr. sullivan openly objected. he thought it good strategy. he sent for the newspaper men and gave out an interview in which he declared that mr. siler was prejudiced against gans because he was a negro, and he did not believe mr. siler would give gans a square deal. "rice," whispered sullivan after the newspaper men left the office, "i am four-flushing about that race-prejudice yarn, but it won't do any harm. siler needs the job. he's broke and i'll make him eat out of my hand before i'll agree to let him referee the fight. they've already invited siler to come here, and i won't be able to get another referee, but i'll beat them at their own game. when siler gets here i'll thrash matters out with him and agree to his selection, but first i want him to know who's boss." mr. siler arrived. an hour later he was closeted with mr. sullivan in one of the back rooms of the trust company offices. the dialogue which ensued was substantially as follows: _mr. siler._ you've got me dead wrong, sullivan. i want to referee this fight, and i want you to withdraw your objections. _mr. sullivan._ well, i've heard from sources which i can't tell you anything about that you don't like gans, and i can't stand for you. _mr. siler._ i need this fight, and i've come all the way from chicago in the expectation of refereeing it. i couldn't give gans the worst of it if i wanted to. he is a clean fighter and i would not have an excuse. _mr. sullivan._ gans is a clean fighter, but nelson isn't; he uses dirty tactics and he is a fouler for fair. _mr. siler._ if he does any fouling in this fight i'll make him quit or declare him out. _mr. sullivan._ what guarantee have i got that you won't give gans the worst of it? _mr. siler._ well, i'll tell you, sullivan, if you withdraw your objections i'll guarantee you that i'll be this fair. if nelson uses foul tactics, or if he don't, i'll show my fairness to gans by giving him the benefit of every doubt. now, will that satisfy you? _mr. sullivan._ yes, it'll satisfy me, but, remember, if you don't keep your word you'll have just as much chance of getting out of this town alive as gans will have if he lays down! you understand? _mr. siler._ yes. on the afternoon of the fight the sullivan trust company cast accounts and found that it had wagered $45,000 on gans against a total of $32,500 put up by the followers of nelson. mr. sullivan, after talking it over with me, had accepted the honorary position of announcer at the ringside. though not of aristocratic mien, "larry" was of fine physique, with a bold, bluff countenance, and i felt confident that his cordial manner would appeal to that far western assemblage. just before the prize-fighters entered the ring, "larry" jumped into the arena. standing above the mass of moving heads and holding up both hands, he hailed the great crowd thus: "gentlemen, we are assembled in this grand _areno_ to witness a square fight. this fight is held under the auspices of 'tex' rickard, a man of great _accumulations_----" "larry" did not get much farther. the audience laughed, and then jeered and hooted until it became hoarse. his words were drowned in the tempest of derision. i was informed by friends who were close to the ringside that he went on in the same rambling way for a few minutes more, but i can't testify to that fact from my own knowledge because "acclumuations" and "areno" overcame me and i stopped up my ears. the fight progressed for twenty rounds or more, when i began to doubt the ability of gans to win. mr. sullivan had a commissioner at the ringside, who, up to this time, had been betting anybody and everybody all the 10 to 6 that was wanted against nelson. i hailed mr. sullivan at the ringside. "this doesn't look like the cinch for gans you said it would be," i whispered. "wait a minute," mr. sullivan replied, "i'll go to gans' corner as soon as this round is over and find out what's doing with him." mr. sullivan went over to gans' corner and came back. "gans says he can't win this fight, but he won't lose. he's a good ring-general and he'll pull us out. don't bet any more money. i'm going to stay close to the ringside. watch close." it was apparent during the next ten rounds that gans was availing himself of every opportunity to impress upon the audience that nelson was inclined to use dirty fighting tactics, and soon nelson was being hooted for foul fighting. gans, on the other hand, appeared to be fighting fair and like a gentleman. soon it was evident that gans had won the sympathy and favor of the audience. the fight had continued through the fortieth round, when mr. sullivan again repaired to gans' corner and held another animated whispered conversation with him. in the forty-second round gans of a sudden went down, rolled over and, holding his hand under his belt, let out a yell of anguish that indicated to the excited multitude that nelson had fouled him frightfully. in another instant mr. sullivan had clambered into the ring. confusion reigned. the audience was on its feet. pushing his fist into the referee's face, mr. sullivan cried: "now, siler, you saw that foul, didn't you? it's a foul, isn't it? gans wins, doesn't he?" all of this happened quick as a flash. mr. siler, pale as a ghost, whispered something inaudibly. mr. sullivan, turning to the assemblage and raising both arms to the skies, yelled: "gentlemen, the referee declares gans the winner on a foul!" the audience acclaimed his decision with salvos of applause. there did not appear to be a man in the crowd who doubted a foul had been committed, although nelson at once protested his innocence. next day mr. sullivan told me that in or near the twenty-fourth round gans had broken his wrist and knew he could not win the fight by a knockout. he also said that gans went down in the forty-second round in order to save the day. "_i_ won that fight," said mr. sullivan. "i told gans while he was in his corner after the fortieth round that if he lost he would be laying down on his friends, that he had the audience with him, and that it was time to take advantage of nelson's foul tactics." this was my first experience in prize-fighting, and my last. my sympathies were, however, with the winner. gans' tactics throughout up to the last round were gentlemanly and those of nelson unfair. even the partisans of nelson who had wagered on him agreed after the fight that the battle put up by the negro up to the forty-second round was a white man's fight and he was entitled to win. nelson had been guilty of foul tactics in almost every round, but the probabilities are that gans was not disabled by a foul blow in the forty-second round and that he took advantage of the sentiment in his favor, which had been created by his manly battle up to that time, to go down at a psychological moment. i saw mr. siler after the contest, and he appeared pleased that his decision was so well received, but he assured me that if he was invited to referee another bout in any mining camp he would decline the job. the sullivan trust company, of course, won a big bet on the result, but it lost a bigger one as an outcome of the battle on the very next day. the impression created by announcer sullivan's attempt to reach lofty flights of eloquence in his speech to the fight-audience was bad for the trust company, and it required the use of over $100,000 on the day following to meet the flood of selling orders in sullivan stocks which poured into the san francisco stock exchange. the year of big figures i soon recouped these stock-market losses. at about four o'clock one afternoon, a few days afterward, a miner who had been at work during the day on the loftus-sweeney lease of the combination fraction, called at the office of the trust company and asked me to buy 1,000 shares of combination fraction stock for him. he divulged to me that just as he was coming off shift he had learned that a prodigious strike of high-grade ore had been made at depth. combination fraction had closed that afternoon on the san francisco stock exchange with sales at $1.15. i went out on the street and proceeded to buy all the combination fraction in sight. in half an hour i had corralled about 60,000 shares at an average of $1.30. an hour later the owners of the lease obtained the information on which i was working, and by eight o'clock that night, when the goldfield stock exchange began its evening session, the price had jumped to $1.85. within a week thereafter the price sky-rocketed to $3.75, and at this figure i took profits of nearly $150,000. had i held on a little longer i could have doubled that profit, for combination fraction a few weeks later sold at higher than $6. the combination fraction strike was followed by a number of others, and the boom gathered force. by october, goldfield silver pick had advanced to $1 per share, up 600 per cent. goldfield red top was selling at $2, jumbo at $2, and mohawk at $5, showing profits of from 2,000 to 5,000 per cent. others had gained proportionately. in fact, there were over twenty goldfield securities listed on the exchange that showed the public a stock-market profit of anywhere from 100 per cent. to 5,000 per cent. mining machinery of every description was being shipped into camp, and for half a mile around the combination mine the landscape of assembled gallows-frames resembled a great producing oil field. there were signs of mining activity everywhere. for four miles east of the combination mine and six miles south every inch of ground had been located. claims situated miles away from the productive area were changing hands hourly at high figures. the sullivan stocks kept pace in the markets with the other booming securities, and it was plain that the trust company was riding on a tidal wave of success. our profits exceeded $1,500,000 at this period, and we were just eight months old. in a single fortnight the sullivan trust company promoted the lou dillon goldfield mining company at 25 cents per share, a valuation of $250,000 for the property, which cost $50,000; and the silver pick extension, which cost $25,000, at the same figure, netting several hundred thousand dollars' profit on these two transactions. options to purchase the lou dillon and silver pick extension, which were situated within 500 feet of the combination mine, had been in possession of the sullivan trust company for months, and had increased in value to such an extent that on the day the subscriptions were opened in goldfield for lou dillon at 25 cents per share, a prospector named phoenix, who had received $50,000 from the sullivan trust company for the entire property, subscribed for 100,000 shares, or a tenth interest in the enterprise, paying $25,000 therefor. it was the rule of the sullivan trust company to open subscriptions in goldfield on the day its advertising copy left the camp by mail for the east. newspaper publishers were always instructed to publish the advertisements, which were generally of the full-page variety, on the day following receipt. in the case of lou dillon it became necessary to telegraph all newspapers east of chicago not to publish the advertisement because of oversubscription before the copy reached them, and in the case of silver pick extension the orders to publish the advertisements were canceled by telegraph before the mail carrying the copy reached kansas city. san francisco, los angeles and salt lake subscribed for 50 per cent. of the entire offering of lou dillon and silver pick extension, and goldfield for 25 per cent. as a matter of fact, had we desired, we could have sold the entire offerings in goldfield, tonopah and reno without inserting any advertisements, so great was the excitement in the state itself. at this period the combined monthly payrolls of the mining companies promoted by the sullivan trust company totaled in excess of $50,000, and excellent progress was being made in opening up the properties. it was early autumn in goldfield, warm, dry and dusty, and never a cloud in the sky. i was at my desk eighteen hours a day, and liked my job. things were coming our way. the sullivan trust company was in politics. mr. sullivan was popular with the miners, and governor sparks was a large asset of the trust company because he had been allowing the use of his name as president of all the mining companies promoted by it. nevertheless, when the state election approached, the governor had no money for campaign expenses. he telegraphed the trust company from carson: "i will not stand for renomination." we replied: "you are certain to be elected, and you will be renominated by acclamation if you accept." "i won't run unless you guarantee my election," he telegraphed. we answered: "we guarantee." the governor was renominated by the democrats. the republicans placed in nomination j. f. mitchell, a mining engineer and mine owner, who was very popular among mine operators. there were thousands of miners domiciled in goldfield. the western federation of miners dominated. "sullivan," i said, "isn't it a certainty that the miners will vote the democratic ticket because mitchell has been put forward by the mine owners? is it necessary to spend any money with the western federation?" "not a dollar!" replied mr. sullivan. "there's a meeting of the executive committee to-morrow. i'm going to be around when they meet. without spending a cent i'll bring home the bacon. watch me!" sullivan reported to me the next day that he had succeeded in his mission. "i didn't attend the meeting," he said, "but i did see the main 'squeeze.' he told me that a contribution to the miner's hospital would be gratefully accepted, but that even that was not necessary, and that sparks would win in a walk." the only campaign money advanced by the sullivan trust company was given to mr. sullivan to go to reno. he asked for $1,000, and he used it in conducting open house on the first floor of the golden hotel, meeting people and greeting them. reno appeared to be a republican stronghold, and mr. sullivan, by baiting the catholics against the protestants, succeeded in holding down the republican majority to an extent that was wofully insufficient to overcome the democratic majority rolled up in goldfield with the aid of the miners. governor sparks was reëlected by a handsome majority. had the occasion demanded it, we would have "tapped a barrel." but it was not necessary. the story of goldfield consolidated rumors were rife in goldfield of a merger of mammoth proportions which was said to be on the tapis. great as were the gold discoveries in camp, they did not justify the terrific advances being chronicled in the stock-market, and it was apparent that something extraordinary must be hatching to justify the market's action. george wingfield, who had enjoyed a meteoric career, rising within five years from a faro dealer in tonopah to the ownership of control in the mohawk and many other mining companies and to part ownership of the leading goldfield bank, john s. cook & company, which was then credited with having $7,000,000 on deposit, was said to be engineering the deal. the names of the properties were not given, nor the figures. it occurred to me that in any merger that was made the jumbo and red top, because of their central location, must be included. i sought out charles d. taylor, who with his brother, h. l. taylor, and capt. j. b. menardi, owned the control of these properties. he asked $2.50 per share for his stock and that of his partners--all or none. mr. taylor had walked into the camp as a prospector. most of his nights were spent at the gaming tables, and he was reported to be an easy mark for the professionals. his losses were constant and heavy. i put mr. sullivan on his trail. mr. sullivan reported to me that mr. wingfield was hobnobbing with mr. taylor. "get an option on these properties from taylor and be quick," i told mr. sullivan. next morning i met mr. sullivan. he held in his hands 20,000 shares of jumbo, selling at $1.75 per share on the goldfield stock exchange. "i won it in a poker game last night with taylor and wingfield," he said. "i have an oral option on the property good for three days at $2.50, but if you leave it to me, i'll win these properties from him playing cards." i did not see mr. sullivan again for a week. next i heard of him he had "fallen off the water-wagon" and was reported to be celebrating the event in tonopah. while mr. sullivan was "kidding" himself about his poker-playing ability, mr. wingfield had come to terms with mr. taylor and had bought the control of jumbo and red top at an average price of $2.10 per share. that explained mr. sullivan's lapse. however, i blamed myself. mr. sullivan was no match for mr. wingfield. in any game from stud-poker to marketing mining stock mr. wingfield can outwit, outmaneuver and outgeneral a hundred like "larry." both companies had been capitalized for 1,000,000 shares. the sale required that a fortune be paid over. mr. wingfield paid a small sum down, and mr. taylor placed the stock of both of these companies in escrow in the john s. cook & company bank, the balance to be paid a month later. the purchase of control of the jumbo and red top by the firm of wingfield and nixon signalized the beginning of a stock-market campaign for higher prices that stands unprecedented for audacity and intensity in the history of mining-stock speculation in this country since the great boom of the comstock lode in 1871-1872. the market for all listed goldfield stocks was made to boil and sizzle day in and day out until jumbo and red top had been ballooned from $2 to $5 per share, laguna from 40 cents to $2, goldfield mining from 50 cents to $2, and mohawk from $5 to $20. within three weeks the advance in market price of the issued capitalization of this quintet alone represented the difference between $8,000,000 and $26,500,000. a few days before top prices were reached, it was officially announced that the merger of mohawk, red top, jumbo, goldfield mining and laguna into the goldfield consolidated mines company had been made on the basis of $20 for each outstanding share of mohawk, $5 for red top, $5 for jumbo, $2 for goldfield mining, and $2 for laguna. it was also given out that the promoters, wingfield and nixon, had allotted themselves $2,500,000 in stock of the merged companies as a promoters' fee. right on top of this came an announcement that the combination mine had been turned into the merger for $4,000,000 in cash and stock, and it was learned that go-betweens had made a profit of $1,000,000 on the deal by securing an option on the property for $3,000,000. in short, a merger was put through of properties and stocks, the issued capitalization of which was selling in already inflated markets on the day the merger was conceived for $11,000,000, at a valuation of $33,000,000, and in addition the promoters received a $2,500,000 bonus. had the properties been merged on the basis of their selling prices three weeks prior, the equivalent value of the 3,500,000 shares of merger stock would have been a fraction above $3. as it stood, under the ballooning process, the market value was $10, which was the par. at the time of the merger these were the conditions that ruled at the mines: the mohawk, appraised at $20,000,000, had produced under lease in the neighborhood of $8,000,000, of which less than $2,000,000 had found its way into the treasury of the mohawk mining company, the balance going to the leasers. the leasers had "high-graded" the property to a fare-you-well, and less than $1,000,000 worth of high-grade remained in sight, although it was conceded on every side that the leasers had not attempted, nor were they able during the period of their leasehold, to block out systematically and put into sight all of the ore in the mine. large, but indefinite, prospective value therefore attached to mohawk in addition to the tonnage in sight. the laguna, for which $2,000,000 had been paid in stock, did not have a pound of ore in sight, and had cost wingfield and nixon less than $100,000. goldfield mining, scene of a sensational production during the early days of the camp, appraised at $2,000,000 more, had fizzled out as a producer. jumbo, taken in for $5,000,000, for a year previous had produced little or no ore, most of the time being exhausted by the management in sinking a deep shaft, and it had less than $500,000 in sight. red top, valued at another $5,000,000, had in excess of $2,000,000 worth of medium grade ore blocked out. wingfield and nixon were also heavily interested in columbia mountain, sandstorm, blue bull, crackerjack, red hills, oro, booth, milltown, kendall, may queen, and other goldfield stocks. no sooner did the five stocks forming the merger begin to show such startling market advances than the ballooning tendency manifested itself in wingfield and nixon's miscellaneous list, and all of them showed phenomenal gains. soon the entire list of goldfield, tonopah, manhattan, bullfrog, and other nevada mining securities listed on the san francisco stock exchange and traded in on the exchanges and curbs of the country, felt the force of the terrific rises, and sympathetically they skyrocketed to unheard-of levels. to convey an idea as to how far the prices of these stocks were moved up beyond their intrinsic worth, as a result of the ballooning process of the merger, i give some comparisons. columbia mountain sold during the boom at above $1.50; it is now selling at 5 cents. blue bull, crackerjack, oro, booth, red hills, milltown, kendall, conqueror, hibernia, ethel, kewanas, sandstorm and may queen sold at an average of 75 cents during the boom; they are now selling at an average of less than 5 cents. a hundred other goldfield securities, which were in eager demand at the zenith of the spectacular movement at prices ranging from 50 cents to $2.50 can now be purchased at from 1 to 5 cents per share, while many others that were hopefully bought by an over-wrought public at all sorts of figures are now not quoted at all. at the height of the frenzy the difference between the market price of listed nevada stocks on november 15, 1906, and that of to-day is in excess of $200,000,000. a fair estimate of the public's real-money loss in the listed division is $150,000,000. nor was this all of the damage that was done. when excitement in goldfield's listed stocks reached a frenzy, wild-catters operating from the cities got into harness, and within three months in the neighborhood of 2,000 companies, owning in most instances properties situated miles from the proved zone in goldfield, or in unproved camps near goldfield, were foisted on the public for $150,000,000 more. the fact that mohawk, which in the early days of goldfield could have been purchased at 10 cents, had advanced to $20 and had shown purchasers a profit of 20,000 per cent.; that laguna had advanced in less than two years from 15 cents to $2; that jumbo and red top, selling at $5, could have been purchased a year or two before at around 10 cents; that goldfield mining, which had in the early days been peddled around the camp at 15 cents, had moved up to $2, etc., gave the wild-catters an argument that was convincing to gulls in every town and hamlet in the union. and the harvest was immense. not one of the 2,000 wild-cats has made good, and every dollar so invested has been lost. it will be noted from the reckoning as given that about as much money was lost in the listed stocks of the camps as in the unlisted "cats and dogs." as a matter of fact, veteran mining-stock buyers, in camp and out of the camp, lost as much hard cash as did the unsophisticated. san francisco, which owes its opulence of years gone by to successful mining endeavor, was probably hit as hard as any other city in the union. san francisco thought it knew the game, and it confined its operations to the stocks listed on the exchange where the comstocks are traded in. but san francisco did not know the inside of the merger deal as it is now known to every schoolboy in nevada. the operation on the inside was this. wingfield and nixon owned the john s. cook & company bank in goldfield, and they owned the control of nearly a score of mining companies which were of little account as well as having acquired the control of the biggest mine in camp. during the height of the boom, which they engineered to swing the merger, they disposed of millions of shares of an indiscriminate lot of companies, and used the many millions of proceeds to take over jumbo, red top and their outstanding contracts in mohawk and other integrals of the merger. they likewise were able during the ballooning process to dispose of much mohawk at from $15 to $20, much jumbo at from $4 to $5, much red top at from $4 to $5, that cost them very considerably less than this, and in this way were enabled to finance their deal to a finish. i have just pointed out that in order to accomplish the merger it was necessary that the market in all goldfield securities, in which the promoters were interested, be stimulated in order to enable unloading by the insiders before some of the very large payments became due. this being accomplished, and the payments having been made, the promoters sought to establish a market for merger shares at or around par. in order to accomplish this the goldfield bank, in which the promoters were heavily interested, stimulated speculation and managed to spread a feeling of security by announcing its willingness to loan from 60 to 80 per cent. par on merger shares. all goldfield fell for this, and the camp went broke as a result. within eighteen months thereafter goldfield consolidated sold down to $3.50 in the markets, and margin-traders and borrowers who had put up the stock as collateral to purchase more were butchered. loans were foreclosed by the bank as rapidly as margins were exhausted. the carnage was awful. it must be evident that wingfield and nixon, both of whom became multimillionaires as the result of their mining-stock operations in goldfield, were directly and indirectly important factors in the loss by the public of $300,000,000, as set forth above. it is admitted that less than $7,000,000 worth of ore had been developed as a reserve at the time $35,000,000 worth of stock in the merger was issued and a market manufactured to dispose of the stock at this fictitious price-level. it is not of particular interest that goldfield consolidated, by reason of sensationally rich mine developments at depth, has since given promise of returning to stockholders an amount almost equal to par for their shares, and that it now appears that those who were able to weather the intervening declines may in the end be out only the interest on their money. _this fact stands out: although goldfield consolidated owned at the outset a bonanza gold mine, stockholders had just two chances. they could break even or lose--break even on their investment if the mine made good in a sensational way, which was a big gamble at the time, or lose if the mine didn't. they could not win._ mr. nixon was a united states senator from nevada. he was also president of the nixon national bank of reno, nevada. he held both of these positions at the time the merger was made, and it was largely because of mr. nixon's political and financial position that the daring ballooning market operations, which were staged as a curtain-raiser for the merger, proved so successful. in the _nevada mining news_ of may 25, 1907, circulation 28,000, an interview appeared with united states senator nixon of nevada, vouched for as follows: the manuscript of the interview was submitted to, and approved by, the senator. unchanged by one jot or tittle, it is printed just as it came from his hands. even now the senator holds a carbon of the original manuscript and may brand us with it if we have broken the faith we pledged. i quote from the senator's interview, as it appeared in that issue of the _nevada mining news_: "what do you estimate the ultimate earnings of goldfield consolidated will be?" was asked. "consolidated will be a bigger producer, i should say, three or four years from now than it will be one year from now," senator nixon replied, "and i believe i am conservative when i say that the property will be eventually earning $1,000,000 net monthly." "_then, as an investment, the stock is easily a $20 stock?_" "_that is a minimum estimate of its future value, i should say_," _was the response._ as to that interview: mr. nixon said that within three or four years (the time limit is up), $20 would be a minimum price for the shares. they touched $10 only once since then, or one-half of his estimate. shortly after the interview was given they sold down as low as $3.50. recently the market quotation was $4. he said, further, that the mines would ultimately earn at the rate of $1,000,000 a month. this statement also has fallen far short of fulfillment. soon after george s. nixon, as president of the goldfield consolidated company, gave out this interview for public consumption he, according to his own later admissions, disposed of all of his holdings, and at an average price, it is believed, of less than $8 a share. this is only a superficial rendering of the big event in goldfield's history, but it is sufficient to furnish an example of the effect of get-rich-quick influences that radiate from high places and separate the public from millions upon millions, without being called to account. the dear american public has been falling for this kind of insidious brand of get-rich-quick dope for years. it is being gulled into losing millions through its fetish worship of promoters with millions, who are really the get-rich-quicks of the day that are very dangerous. greenwater, a rich man's camp, in which the public sank $30,000,000 during three months that marked the zenith of the goldfield boom, is another case in point where a confiding investing public followed a deceiving light and was led to ruthless slaughter. chapter iv the greenwater fiasco when the excitement was at fever-heat in goldfield over the stupendous rises in market value of goldfield securities which were being chronicled hourly, news came to town of the successful flotation in new york of the greenwater & death valley mining company. the capitalization was 3,000,000 shares of the par value of $1 each. the stock had been underwritten at $1 a share by new york and pittsburg stock exchange houses, had been listed on the new york curb, and had climbed to around $5.50, or a valuation for the property of $16,500,000. among the officers of this company were m. r. ward, brother-in-law of charles m. schwab; t. l. oddie, now governor of nevada, and malcolm macdonald, later president of the nevada first national bank of tonopah. greenwater is situated about 150 miles south of goldfield, across the state line in california. no one ever went to or fro without passing through goldfield. if there was a greenwater boom, how was it that we in goldfield, who were in touch with all nevada mining affairs, did not know about it? goldfield promoters soon began to give attention. shortly they caught the infection. a stampede from goldfield into greenwater ensued. in fact, people flocked to greenwater from every direction. a bunch of tonopah money-getters, headed by the indomitable malcolm macdonald, were grabbing the money on greenwaters in new york, and goldfield was not in the play. the reports that came from greenwater as a result of the first stampede from goldfield were of doubtful variety. greenwater & death valley was described as a raw prospect not worth over 10 cents per share. goldfield people shook their heads. there was no gainsaying the fact, however, that greenwater & death valley appeared to be a giant success in the eastern stock markets. charles m. schwab was reported to be behind the flotation of greenwater & death valley. montgomery-shoshone and tonopah extension, two other schwab enterprises, were selling at hundreds of per cent. profit in the stock markets. the fact that mr. schwab was interested in the camp was an argument that appealed with great force to nevada promoters, for the fraternity had learned to attach just as much significance to having a market as to having a mine before commencing promotion operations. the sullivan trust company not having had a failure of any kind on the market, i hesitated to commit the trust company to any issue in the new camp. not to be entirely out of it, however, i sent our engineer, "jack" campbell, into the district to report on all the properties. news came thick and fast from the new york market as to the success of the greenwaters in the east. furnace creek copper company, originally promoted by "patsy" clark of spokane at 25 cents per share, with a million-share capitalization, was reported to be getting the benefit of mr. clark's personal market handling on the new york curb, and the shares soon reached a high quotation of $5.50. john w. gates had been let in by "patsy" at around 50 cents and was reported to have unloaded 400,000 shares at all sorts of prices from $1 up to $5.50, and down again. on the heels of this advance came word of the successful promotion of the united greenwater company, with c. s. minzesheimer & company, members of the new york stock exchange, acting as fiscal agents for the company. the promoters were named as malcolm macdonald, donald b. gillies and charles m. schwab. j. c. weir, the new york mining-stock broker, who was conducting through the mails a nation-wide market-letter campaign in favor of greenwater, was reported to have sold 150,000 or 200,000 shares at the subscription price of $1. the offering was said to have been oversubscribed twice. the price then shot up to $2.50 on the new york curb. the market boiled. philadelphia was reported to be greenwater-mad. when united greenwater had reached $1.50 on its way up and greenwater & death valley had passed the $4 point, the schwab crowd announced the formation of the greenwater copper mines & smelters company to consolidate the greenwater & death valley and united greenwater companies. this new parent company was capitalized for $25,000,000, with 5,000,000 shares of the par value of $5 each, and the east was reported to be eating up the new stock "blood raw." the president of this company was charles r. miller, who was president of the tonopah & goldfield railroad company, and the vice-president was m. r. ward, the redoubtable brother-in-law of charles m. schwab. the directorate included mr. schwab; john w. brock, who represented philadelphia interests on the directorate of the very successful tonopah mining company; malcolm macdonald, the champion "lemon" peddler of nevada; frank keith, general manager of the tonopah mining company, and others. it was a "swell" directorate. it was learned that the stock of the new company had been underwritten by new york stock exchange houses, principally those with philadelphia and pittsburg branches where the schwab crowd was influential, at $1.80 per share, and that large blocks were being sold to the public at up to $3.25 on the new york curb, a valuation for the "properties" of more than $16,000,000. getting into the game the birth of the $25,000,000 merger, to take in two properties that had not yet matriculated even in the baby-mine class and were actually suspected at the outset by mining men in goldfield to be wildcats, was the signal for an outpouring in quick succession of greenwater promotions from all centers, of which the annals of the industry in this country chronicle no counterpart. at the height of the boom there was promoted out of los angeles and new york the furnace creek consolidated copper company, with a capitalization of $5,000,000. from butte, home of the copper-mining industry, the furnace creek extension copper mining company was promoted, with a capitalization of $5,000,000, and also the butte & greenwater, capitalized for $1,500,000. malcolm macdonald the "hero" of montgomery-shoshone at bullfrog, hailed from butte. he it was who interested the schwab crowd in greenwater, as he did in tonopah and bullfrog. "patsy" clark, the noted mine operator of spokane, having prospered marketwise with his furnace creek copper company, promptly headed a new one, the furnace valley copper company, with a capitalization of $6,250,000. these shares were listed on the spokane, butte and los angeles stock exchanges, but did not appear on the new york curb. a san francisco crowd of brokers and stock-market operators organized the greenwater bimetallic copper company. "they let her go gallagher" with a capitalization of $1,000,000. the c. m. sumner investment securities company of denver opened subscriptions for the greenwater-death valley copper company. (the title of this company was a play on the name of the greenwater & death valley copper company.) tonopah citizens, not to be outdone, sallied forth with the greenwater calumet incorporated for $1,500,000. hon. t. l. oddie, later governor of nevada, then of tonopah, and his brother, c. m. oddie, followed the lead and headed the greenwater arcturus copper mining company, with a capitalization of $3,000,000. the consolidated greenwater copper company was fed to the hungry public out of a pittsburg trough, with general offices in the keystone bank building, and with a high-class tonopah crowd on the directorate. eugene howell, cashier of the tonopah banking corporation, of which united states senator nixon was president, was treasurer. john a. kirby, of salt lake city, until recently associated with george wingfield in the ownership of nevada hills, was president. arthur kunze, who had sold the control of the greenwater & death valley copper company to malcolm macdonald, who in turn had interested the schwab coterie in the organization, put out a new one called the greenwater copper mining company, with a capitalization of $5,000,000. h. t. bragdon, formerly president of the goldfield mining company, which is one of the integrals of the goldfield consolidated, headed the greenwater black jack copper mining company, with a capitalization of $1,000,000. all the copper in the world united states senator george s. nixon of nevada lent his name, along with h. h. clark, william bayley and h. j. woollacott, as a director of the greenwater furnace creek copper company, with a capitalization of $1,500,000. the prospectus of this company announced that the ores were "melaconite, azurite, chalcocite, and occasionally chrysocolla, averaging 18 to 36 per cent. (copper) tenor." "taking the lowest percentage of ore reported by the company," says horace stevens in the _copper handbook_ of 1908, "and the company's own figures as to the size of its ore-bodies, the first 100 feet in depth on this wonderful property would carry upward of 20,000,000 tons of refined copper, worth, at 13 cents per pound, the comparatively trifling sum of five billion, two hundred million dollars." mr. stevens goes on: "the fact that a major is manager of this company, and a united states senator is vice-president, will prove a great consolation to the shareholders. it is indeed lamentable to note that this magnificent mine, which carries, according to the company's own statements, more copper than all the developed copper mines of the world, is idle, and present office address a mystery." donald mackenzie, of goldfield, promoter of the successful frances-mohawk mining & leasing company at goldfield, which netted over $1,500,000 from mohawk ores, and distributed all of 20 per cent. of this amount to stockholders in the shape of dividends, pushed out the greenwater red boy copper company and the greenwater saratoga copper company, with a capitalization of $1,000,000 each. thomas b. rickey, president of the state bank & trust company of goldfield, tonopah and carson city, was president of both of these companies, and j. l. ("god-bless-you") lindsey, cashier of the state bank & trust company, was treasurer. greenwater consolidated, greenwater copper, furnace creek oxide copper, greenwater black oxide copper, greenwater california copper, greenwater polaris copper, greenwater pay copper, pittsburg and greenwater copper, greenwater copper range, greenwater ely consolidated, greenwater sunset, new york & greenwater, greenwater etna, greenwater superior, greenwater victor, greenwater ibex, greenwater vindicator, greenwater prospectors', greenwater el captain, greenwater & death valley extension, greenwater copper queen, greenwater helmet, tonopah greenwater, furnace creek gold & copper, and greenwater willow creek were the names of a score of others with capitalizations ranging all the way from $1,000,000 to $5,000,000 each. among these the greenwater willow creek copper company boasted of the fanciest directorate. george a. bartlett, nevada's lone congressman, was president, and richard sutro, then head of the world-known new york banking house of sutro bros. & co., was advertised as first vice-president. henry e. epstine, the popular tonopah broker, was second vice-president, and alonzo tripp, general manager of the tonopah & goldfield railroad, was a director. did i fall for greenwater? yes, and at the eleventh hour. on the half-hearted recommendation of the trust company's engineer, "jack" campbell, the l. m. sullivan trust company paid $125,000 for a property in greenwater that boasted of two ten-foot holes. on two sides it adjoined the property of the furnace creek copper company, the original location in the camp. our engineer reported that if "patsy" clark's furnace creek copper company, shares of which were selling in the market at a valuation of $5,500,000 for the property, had any ore, we certainly could not miss it. no matter which way the veins trended, our ground must be as good as "patsy's," because the identical vein formation passed through both properties. the sullivan trust company thereupon incorporated the furnace creek south extension copper company to operate the property. the capitalization was 1,250,000 shares of the par value of $1, of which 500,000 shares were placed in the treasury of the company to be sold for purposes of mine development. new york stock exchange houses having the call as purveyors of this particular line of goods, the sullivan trust company tendered the selling agency of furnace creek south extension treasury stock to e. a. manice & company, members of the new york stock exchange, whose officers are located in the same building in new york as j. p. morgan & company. we offered for public subscription 100,000 shares of treasury stock at par, $1, through e. a. manice & company, and this firm advertised the offering in new york newspapers over their own signature. the sullivan trust company paid the bills. the collapse of greenwater the offering turned out to be a "bloomer," the first the sullivan trust company had met with. e. a. manice & company did not dispose of as many as 30,000 shares. neither did the stock offered later by the sullivan trust company through brokers in other cities sell freely. just at the moment when we announced our offering of furnace creek south extension the greenwater boom began to crack. oscar adams turner, who promoted the tonopah mining company of nevada, which has paid $8,000,000 in dividends on a capitalization of $1,000,000, is responsible for the early bursting of the bubble. mr. turner had invested in the greenwater camp on the reports of an engineer. he organized the greenwater central copper company. then he decided that it was advisable for him to take a look at the property for himself. he visited greenwater. two hours after arriving in camp he sent a telegram to philadelphia reading substantially as follows: stop offering greenwater central. make no more payments on the property. do not use my name any further. there is nothing here. the tenor of the message leaked out. indiscriminate selling ensued by a noted bank crowd in philadelphia who were loaded up with greenwaters. others followed suit. the market became sick. at the first sign of a market setback inquiries began to pour into nevada from all over the east, and noted copper experts from montana, arizona, california and other points came piling into the greenwater camp to examine the properties. soon a chorus of adverse opinion found its way into every financial center. market values crumbled as rapidly as they had risen. paper fortunes evaporated in thin air. i make a conservative statement when i say that the american public sank fully $30,000,000 in greenwater in less than four months. not all of the greenwater promotions were over-subscribed--not half, not a quarter--and the american public may well congratulate itself that the boom "busted" when only approximately $30,000,000 had passed into the pockets of the promoters. what of the camp? it exists no more. all mine development work ceased long ago. there are green-stained carbonates on the surface, but there are no copper ore-bodies. the "mines" have been dismantled of their machinery and other equipment, and not even a lone watchman remains to point out to the desert-wayfarer the spot on which was reared _the monumental mining-stock swindle of the century_. every dollar invested by the public is lost. the dry, hot winds of the sand-swept desert now chant the requiem. fix the responsibility here if you can. the job is not easy. let me attempt it. the buccaneers who took greenwater & death valley down to new york and allowed the public to subscribe for it with the name of charles m. schwab as a lure, at a valuation for the property of more than $3,000,000, and then ballooned the price on the curb until the shares sold at a valuation of $16,500,000 for the property, without an assured mining success in sight in the entire camp--these men, in my opinion, were criminally responsible. they have never been called to account. members of the new york stock exchange who aided and abetted them by lending their names to the transaction, and charles m. schwab, who permitted the use of his name and that of his brother-in-law, are morally responsible. not for an instant do i entertain the thought that the stock exchange crowd and mr. schwab realized that the mines of the company were absolutely valueless, but i do maintain that men of their standing and prestige have opportunities which men of smaller caliber do not enjoy and that their conduct for this reason was reprehensible to an extreme. the shame and the blame i cite the instance of the sullivan trust company "falling" for greenwater, after hesitating about embarking on the enterprise for weeks, and i am convinced that others fell the same way. the sullivan trust company did not touch a greenwater property until its clients and its clientele among the brokers throughout the union had burned up the wires with requests for a greenwater promotion, and when it did finally "fall" it lost its own money, the only other sufferers being a handful of investors who at the tail-end of the boom subscribed for a comparatively small block of treasury stock. not all of the promoters "fell" innocently, however. there were half-baked promoters and mining-stock brokers in almost every city in the union who had witnessed the enhancement in values during the goldfield boom, and whose palms had itched for the "long green" that for so long came the way of men on the ground. these, at the first signal that the greenwater boom was on, with charles m. schwab in the saddle, lost no time in annexing ground in the district with the single view of incorporating companies and retailing the stock to the public at thousands of per cent. profit. the greenwater mining-boom fiasco stands in a class by itself as an example of mining-stock pitfalls. the only greenwater stock which at this time has a market quotation is greenwater mines & smelters, which reflects the true state of the public mind regarding all greenwaters by actually selling at a valuation of less than the amount of money in the company's treasury--6 cents per share on an outstanding issue of 3,000,000 shares--there being $189,000 in the treasury along with an i.o.u. of c. s. minzesheimer & company, the "busted" new york stock exchange house, for $71,000, of which the company will realize 27 cents on the dollar through the receiver. chapter v on the eve of the great goldfield smash it was early in november, 1906. indian summer held goldfield in its soft embrace. nature wore that golden livery which one always associates with the idea of abundance. the mines of the district were being gutted of their treasures at the rate of $1,000,000 a month. under the high pressure of the short-term leasing system new high records of production were being made. the population was 15,000. bank deposits totaled $15,000,000. real estate on main street commanded $1,000 a front foot. the streets were full of people. every one had money. in years gone by men had died of thirst on that very spot. three years before there were no mines and the population numbered only a corporal's guard. the transformation was complete. within three years the dreams of the lusty trail-blazers, who had braved the perils of the desert to locate the district, had become a towering reality. the camp, which two years before was dubbed by financial writers of the press as a "raw prospect" and a "haven for wildcatters and gamblers," had developed bonanza proportions. the early boast of goldfield's press bureau, that goldfield would prove to be the greatest gold camp in the united states, was an accomplished fact. listed goldfield mining issues showed an enhancement in the markets of nearly $150,000,000. stocks of neighboring camps had increased in market value $50,000,000 more. the camp rode complacently on the crest of the big boom, than which history chronicles no greater since the famous old days of mackay, fair, flood and o'brien on the comstock. there was no premonition that a climax must be reached in climbing values at some period, and that a collapse might be near. goldfield consolidated shares were selling on the exchanges at above par, $10, or at a market valuation of more than $36,000,000 for the issued capitalization of the company. you could have bought all of the properties of this company for less than $150,000 when the camp was first located. a score of leases were operating the consolidated's properties. the leases were soon to expire. much market capital was made of the fact that the company would presently "come into its own." more than 175 stocks of goldfield and near-by camps were listed on the exchanges and curbs. all of these were selling at sensational prices and enjoyed a swimming market. the successful merging by wingfield and nixon of the principal producing properties of goldfield at a $36,000,000 valuation, more than four times the value of the known ore-reserves, stimulated the whole list. columbia mountain, promoted by the mergerers of goldfield consolidated, but excluded from the merger because not contiguous to the other integrals and because it had no ore, had been ballooned to $1.35 per share on a million-share capitalization, and stood firm in the market regardless of the fact that it was still only an unpromising "prospect." the issued stock of a dozen other companies in control of the promoters of the merger was selling at an aggregate value of many millions more. the most despised "pup" in this particular group was milltown, of not even prospective value; yet it easily commanded a per-share price that gave the "property" a market valuation of $400,000. silver pick, capitalized for 1,000,000 shares of the par value of $1 each, had scored an uninterrupted advance from 15 to $2.65 a share without a pound of ore being found on the property. the market price did not waver. kewanas, another million-share company, was in big demand at $2.25 per share, a valuation of $2,250,000 for the property and an advance of 2,250 per cent. over the promotion price. kewanas's gain was also made despite the fact that mine developments had failed to open up pay ore in commercial quantities. eight months earlier the entire acreage had been offered to me for $35,000 and i had refused to buy. goldfield daisy, promoted by frank horton, a faro dealer in george wingfield's tonopah gambling joint, had been ballooned from 15 cents to $6 a share on a capitalization of 1,500,000 shares. it had never earned a dollar for stockholders, but was actually selling in the open market at a valuation of $9,000,000. the price showed no sign of weakening. combination fraction, owning a few acres of ground, which was promoted at 20 cents a share on a capitalization of 1,000,000 shares, had risen rapidly, because of ore discoveries and contiguity to the mohawk, to $8.50 a share. stockholders gave no sign of a tendency to unload. great bend, situated in the diamondfield section of the goldfield district, four miles from the productive zone, had been carried up from 10 cents a share to $2.50 without a mine being opened up, establishing a market valuation for the property of $2,500,000. these are but a few of the more striking instances of price appreciations. all of these stocks, excepting goldfield consolidated, are now selling for a few pennies per share each, the average not being so much as ten cents. there were over a hundred other goldfield stocks that also enjoyed spectacular market careers, on which it is now impossible to get any quotation at all. the rise of wingfield and nixon any one in goldfield who was willing to admit that stocks were selling too high at the time was decried as a "knocker." you could borrow freely on all listed goldfield stocks at john s. cook & company's bank, owned by the promoters of the goldfield consolidated, and the men of the camp for that reason felt that there must be concrete value behind nearly all of them. brokers in eastern cities reported that few of their customers were willing to take profits even at the prices to which stocks had been skyrocketed. most mining-stock brokers of the cities had "knocked" the stocks of the camp in the early days before the advance. at this stage, when prices had reached undreamed-of levels, the brokers did not advise their customers that values had been worked up far beyond intrinsic worth. indeed, they actually waxed enthusiastic in their recommendations to buy. every one was a bull. sessions of the goldfield stock exchange reflected the extent of the craze. outside of the exchange the stridulous, whooping, screeching, detonating voices of the brokers that kept carrying the market up at each session could be heard half a block away. later, did you find your way into the crowded board-room, the half-crazed manner in which note-books, arms, fists, index fingers, hats and heads tossed and swayed approached in frenzy a scene of violence to which madness might at once be the consummation and the curse. george wingfield and his partner, george s. nixon, were the heroes of the hour. less than five years before, mr. wingfield had come into tonopah with a stake of $150, supplied by mr. nixon, whose home was in winnemucca, nevada. mr. wingfield had formerly been an impecunious cowboy gambler. born in the backwoods of arkansas, and later of oregon, he hailed from golconda, nevada. mr. nixon, at the time he staked mr. wingfield and until his election as a united states senator in 1904, was known as the "state agent" of the southern pacific company for nevada, having succeeded on the job the notorious "black" wallace, who for many years handled the "yellow-dog" fund for the huntington régime when franchises were hard to get and legislatures had to be bought. mr. nixon was also president of a bank in winnemucca, which was a way station on the southern pacific railroad. mr. wingfield had signalized his money-getting prowess by running mr. nixon's $150 into $1,000,000 as principal owner of the tonopah club, the biggest gambling house in tonopah, and later "parleying" the money for himself and partner into ownership of control of the merged $36,000,000 goldfield consolidated, which was their corporate creation. mr. wingfield was said to be behind the market. he was looked upon as boss of the mining partnership, and mr. nixon as a circumstance. mr. wingfield was a conspicuous figure at nearly all the sessions of the goldfield stock exchange, of which he was a member. in the early evenings, when informal sessions were held on the curb, he could also be seen in the thick of the tumult. he was on the job at all hours. at that time mr. wingfield was about thirty years old. of stinted, meager frame, his was the extreme pallor that denoted ill health, years of hardship, or vicious habits. his eyes were watery, his look vacillating. uncouth, cold of manner, and taciturn of disposition, he was the last man whom an observer would readily imagine to be the possessor of abilities of a superior order. in and around the camp he was noted for secretiveness. he was rated a cool, calculating, selfish, surething gambler-man-of-affairs--the kind who uses the backstairs, never trusts anybody, is willing to wait a long time to accomplish a set purpose, keeps his mouth closed, and does not allow trifling scruples to stand in the way of final encompassment. among stud-poker players who patronized gaming tables in tonopah, goldfield and bullfrog, he was famed for a half-cunning expression of countenance which deceived his opponents into believing he was bluffing when he wasn't. in card games he was usually a consistent winner. his partner, george s. nixon, looked the part of the dapper little winnemucca bank manager and confidential state agent of the southern pacific that he was before becoming senator. he was considerably below middle weight, and above middle girth at that part of his anatomy which a political enemy once described as seat of his thoughts and the tabernacle of his aspirations. his steel-gray eyes were absolutely without expression. newly-rich, his money and his southern pacific connections had gained him a toga, but he did not carry himself like a man upon whom the honors had been thrust. around goldfield he strutted with the pride and gravity of a spanish grandee. the pair were in control of the mine, bank and market situation. brokers, bank men and officers of mining companies waited upon them and did their bidding. at night, in the montezuma club, where leading citizens were wont to congregate, mr. wingfield would on occasion ostentatiously offer to wager that goldfield consolidated "would sell at $15 before $9," etc. men with money who had flocked to the camp from every direction listened in rapt attention. at a later hour they secretly wired the news to their friends in the east. next morning the market would reflect more public buying and still higher prices. goldfield itself was blindly following the lead of the twain. it was indeed easier for these men to mark prices up than to put them down. the winnings of a tenderfoot what about me? where did i stand and what was my position at this conjuncture? did i have foresight? did i realize that stocks were selling at much higher prices than were warranted by intrinsic worth and speculative value? was not the fact that the mergerers and waterers of goldfield consolidated were in command of the mine, market and bank situation sufficient to make me suspect that possibly the cards might be stacked and that maybe cards were being dealt from the bottom of the deck? was i, in fact, wise to the exact situation and did i realize a smash was bound to ensue? 'tis a pity hindsight were not foresight, for only in that event could i laurel-wreath myself. i had been on the ground for more than two years. in reality i was still a tenderfoot. my experiences had been unique--all on the constructive side. i had mastered the first rudiments of the game, but only the first. intrinsic value didn't figure as the only item in my conception of the worth of a goldfield mining issue. the millionaires of the camp were not miners by profession and their judgment of the value of any mining property would not have influenced a guggenheim, a ryan or a rothschild to extend so much as $4 on the development of any piece of likely mineral ground. goldfield was a poor man's camp. and it was making good despite the croakings of school-trained engineers who had turned the district down in the early days, as they did tonopah. at this period i was living frugally. i never touched a card. i worked at my desk on an average of sixteen hours a day, including sunday, and i never relaxed. although i had arrived in the camp broke, had i been offered $2,000,000 for my half interest in the l. m. sullivan trust company i think i should have refused it. i liked my job. the leaven of my environment appealed directly to my perceptions. i was saturated with the traditions of western "mining luck" and also with the optimism of my sturdy neighbors. these men had stood their ground in the early period of the camp's days of "trial and tribulation." they had triumphed like their forebears on the comstock, just as did the hardy pioneers of leadville and cripple creek and as their brethren of tonopah did. their influence over me was unbounded. i relished the work, anyhow. as a matter of fact, i had little use for money except for the purposes of business. _and never a suggestion came to me that it was time for a "clean up."_ the l. m. sullivan trust company, of which i was vice-president and general manager, was doing remarkably well. the stocks of the mining companies that were organized and promoted by the trust company were listed on the san francisco stock exchange and new york curb and showed a market appreciation of $3,000,000 above the promotion prices. indian camp, promoted at 25 cents, was selling freely at $1.30. jumping jack, for which subscriptions were originally accepted at 25 cents, was in hot demand at 62 cents. stray dog, sold to the public originally at 45 cents, was active around 85 cents. lou dillon, put out less than a month before at 25 cents, had worked its way up to 64 cents. silver pick extension, which was oversubscribed at 25 cents and commanded 35 cents two hours after we announced that subscriptions were closed, was selling on the exchanges and curbs of the country at 49 cents. eagle's nest fairview, which original subscribers got into at 35 cents, was very much wanted at 65 cents. fairview hailstone, floated at 25 cents, was in constant demand at 40 cents. governor john sparks was now president of all of these companies. you could have sold big blocks of the sullivan stocks at these profit-making prices on any of the mining exchanges and curb markets of the country without reducing the price a cent, so constant was the public demand and so broad was the market. with the exception of bullfrog rush, for which the sullivan trust company had refunded the money to subscribers when the mine under development proved to be a "lemon," every promotion of the trust company showed investors a handsome stock-market profit. in the aggregate the promotion price of the seven sullivan mining companies figured $2,000,000 for the entire capitalization. the market price of these was now $5,000,000, or an average gain of 150 per cent. it was a record to be proud of, and i _was_ proud of it, not alone because i was vice-president and general manager of the trust company, but also because a firm of expert accountants, recommended by the american national bank of san francisco to examine the books of the trust company, had reported that our assets were $3,000,000 in excess of liabilities, all of which had been gathered in about ten months' time. about $1,000,000 of this represented promotion profits. the remainder was earned by the appreciation in price of mining securities carried or accumulated through the boom. it was the common boast of the camp that george wingfield had "parleyed" or "pyramided" $1,000,000 which represented the profits of his gambling place in tonopah, into ownership of control along with his partner nixon, of the $36,000,000 goldfield consolidated. as heretofore related, i had experienced a lot of hard luck in missing by a hair's breadth, ownership of the hayes-monnette lease on the mohawk and the nevada hills mine, which would have increased our profits $8,000,000 more, but i felicitated myself that i had done very well by pyramiding $2,500 into a half interest in a flourishing $3,000,000 trust company. i was vain enough to believe that my achievement was as unique as that of mr. wingfield, because he had had the influence of a united states senator and the money deposited in a chain of newly established banks in goldfield, tonopah and other points to aid him in his operations. against this i had not only been compelled to rely on my own resources, but was actually required to combat the work of black-mailers who from time to time attempted to levy tribute. on my failure to "come through" (i never did) they rarely hesitated to take a malevolent smash in print at the sullivan trust company, because in years gone by its active head happened to have had a very youthful past, even though they knew that past was no longer his and he had passed it like milestones on the way. i am landed high and dry the nevada state election took place in november. the democratic ticket, headed by "honest" john sparks for governor and denver s. dickerson for lieutenant-governor, was victorious. the republican ticket, headed by j. f. mitchell, a mining promoter and engineer, backed by united states senator nixon, the republican political boss, suffered humiliating defeat. denver s. dickerson was the candidate of the labor unions. during a former labor war in cripple creek mr. dickerson had been confined in the "bull-pen" when the government intervened to quell the labor riots there. goldfield miners to a man very naturally voted for him. governor sparks had accepted the renomination at the urgent request of the l. m. sullivan trust company, and his victory, as well as the complexion of the ticket, was credited largely to the activities in politics of the trust company. the trust company, while not a banking institution in the sense that it accepted deposits of cash from citizens of the town, having confined its operations to the financing of mining enterprises, loomed large on the political and business horizon because of its increasing financial and political power. the trust company carried all of its moneys in banks that were not affiliated with the wingfield-nixon confederacy and worked at cross-purposes with it in this particular, too. the wingfield-nixon crowd had pyramided a gambling house in tonopah and a little one-horse bank in winnemucca into ownership of control of the $36,000,000 goldfield consolidated; into ownership of john s. cook & company's bank in goldfield, which was credited with deposits aggregating $8,000,000; into a new bank in tonopah, known as the tonopah banking corporation, and into a newly formed bank in reno, called the nixon national. in politics it had succeeded in seating mr. nixon in the united states senate, placing at his command the federal patronage which goes with that exalted office. the confederacy was reaching out. in goldfield it had overcome such strong banking opposition as the nye & ormsby county bank and the state bank & trust company, both of which were in business before john s. cook & company were dreamed of. it had accomplished this by loaning large sums of money to goldfield brokers and other citizens on mining stocks of the camp at a time when this class of securities was not so readily accepted by the other banks as good collateral. in tonopah the newly-established nixon bank, known as the tonopah banking corporation, was making gradual headway against both the nye & ormsby and the state bank & trust company, which still carried about 75 per cent. of the business of that camp. in reno the nixon national found it hard to compete with such old institutions as the bank of nevada, the washoe county bank and the farmers & merchants national, but rumors were already in the air that the nixon bank was soon to buy out and consolidate with the powerful bank of nevada. in goldfield the power of the confederacy was strongest in all lines except politics. there it already had its grasp on the throat of the mining and financial business of the camp, and through the out-of-town draft collection department of its bank held its finger on the pulse of the mining-share markets. its sore spot was politics. wingfield and nixon's market operations were clouded in mystery. no one knew exactly where they stood. brokers in goldfield and san francisco, who had compared notes, were convinced that the two had unloaded many millions of shares of the smaller companies not included in the merger, and had raked in not less than $10,000,000 during the boom as the result of this selling. the disposal of huge blocks of stock by wingfield and nixon, however, was not interpreted as meaning that stocks were selling too high. the general idea prevailed that the proceeds were used to enable the confederacy to finance its stock purchases in the integral companies that were turned over in the making of the merger and to finance its new chain of banks. about the middle of november the market for goldfield securities took a turn for the bad. prices gave indication of having reached a stopping place. goldfield promoters began to complain that they were compelled to lend strong support to the market because of selling from many quarters that could not be explained. there was much market pressure. in a few days the market became unsteady, then soft, then wobbly again. in camp wingfield and nixon were reported still bullish. the securities of the sullivan trust company were under attack in all markets. salt lake and san francisco were reported to be spilling stock. great blocks were being thrown over. i gave support in a jiffy. there was no surcease. _within ten days i was forced to throw all of a million dollars behind the market to hold it._ this didn't faze me. i was getting stock certificates for the money, and i believed they were worth the price. but i was puzzled to determine what it was all about. the beginning of the raid soon it was reported to me that senator nixon was advising people at all points who held sullivan stocks, or knew of anybody who held them, to unload. from san francisco came word that a clique of brokers was operating for the decline. on the following monday the market on the san francisco stock exchange opened strong and buoyant, and it looked for a moment as if the selling movement had collapsed. i felt relieved. my 'phone bell rang. a stock broker of tonopah called me on the long distance. "offer you 10,000 lou dillon at 48," he said. "do you want them?" lou dillon was a sullivan stock that had been promoted at 25; 48 was now a point under the market, however. "we'll take 'em," i said. "what's the matter?" "rumored up here that your books are under inspection by the post-office department. you have had five new men on your books for the past few weeks, and some one has spread a story here that nixon has sicked the government on to you." i denied it, of course. the five men in question were the experts who had been sent up from san francisco by the firm of accountants recommended to us by the american national bank, and they were there at our own behest. the story was a raw canard. throughout the day the sullivan trust company was called upon to stand behind the san francisco market and take in nearly all of the big blocks of sullivan stocks owned in the camps of tonopah and manhattan. before our denials could reach the sellers the damage had been done. and it took $250,000 a day for four days to hold the market against this fresh onslaught. color had been lent to the wild rumors about a postal investigation by the fact that an attack had been made on me in the columns of the _denver mining record_ a year before. rumor said the dose was going to be repeated. in the early days of the camp, when i was at the head of the goldfield-tonopah advertising agency, i had represented the _denver mining record_ in goldfield. as its agent i had secured advertising contracts for it which netted my agency in the neighborhood of $10,000 a year in commissions. the owners of the newspaper conceived the idea that i was making too much money on a commission basis and sent wing b. allen, formerly of salt lake, to the scene to take my place. mr. allen worked for smaller pay. he wanted me to divide my commission on standing business, and i refused. the publishers took mr. allen's part. as a result i withdrew all the advertising from the columns of the _denver mining record_ for which my agency had been responsible, and the _denver mining record_ was never able to regain the lost ground. a short time before the raid on our stocks began mr. allen had been arrested in goldfield on a warrant sworn out by l. m. sullivan, tried before judge bell on the charge of extortion and bound over to the grand jury. at the hearing before judge bell the sullivan trust company submitted evidence that mr. allen had threatened, if we did not give his paper a slice of the promotion advertising of the sullivan trust company, that the _denver mining record_ would commence to attack me personally in its columns, and, because of my early past, would do the trust company serious damage. at the hearing despatches were submitted which were filed at the goldfield office of the western union telegraph company by mr. allen, in which he had informed his paper that it had better proceed with the attack, because neither mr. sullivan nor myself gave indication of yielding. at the hearing, under oath and in a crowded courtroom, i openly denounced mr. allen and his newspaper as blackmailers of the very vilest type, and so did mr. sullivan. judge bell, on the submission by the western union of mr. allen's despatches to his paper, promptly held him for the grand jury. on the advice of former governor thomas, of colorado, to whom the sullivan trust company paid a retainer as counsel, and who later became chief counsel for the goldfield consolidated, i employed christopher c. clay of denver to commence suit against the owners of the _denver mining record_. as a result i secured from them a settlement by which they agreed not to mention my name again in their paper. i was harassed at the time, or i would not have compromised. the stuff printed by the _denver mining record_, which has been rehashed by every blackmailer who ever attempted to levy on me, was about two-tenths true and eight-tenths false. it was a literal copy of an anonymous publication put out by a set of blackmailers who had tried to circulate it years before in new york when i was head of the maxim & gay company. i had spent thousands of dollars to run down the authorship then, but without avail. the lawyers had succeeded in seizing thousands of copies of the publication, and had made an arrest, but they failed to prove authorship of the screed and ownership of the paper, and the culprits therefore were not punished. in denver when mr. clay applied for criminal warrants, he was asked first to furnish proof of authorship, which was impossible for us, the articles having been unsigned. some pertinent personalities the same stuff has recently appeared without signature in a goldfield paper which originally came into possession of george wingfield through foreclosure proceedings, and in a reno evening paper which is controlled by senator nixon, who owns a large slice of the paper's mortgage. it has also appeared in other papers "friendly" to wingfield and nixon. tens of thousands of copies of the goldfield publication containing the anonymous libel have been sent broadcast. other newspapers have reproduced the libelous stuff, some innocently and some for sordid reasons, but of this more later. my career is fraught with instances of recourse by enemies to blackmail and attempted blackmail. if i should undertake to tabulate the cases where men and interests, ranging from impecunious newspaper reporters to financial-newspaper publishers and mining-stock brokers and market operators who, from the background, publish market letters or furnish the capital for mining publications, have attempted to levy tribute or to club me into submission by the use of so vile a weapon, i should be compelled to write a big book on the subject. and right here i should like to place myself on record to the effect that seemingly the principal shortcoming that has marked my mining-financial career has been that i had a youthful past--a past which during the last decade has never been taken into serious consideration by men who have held close business relations with me, but which, of course, is a thorn in the sides of men and interests whose bidding i have failed to obey. i defy any man to cite a single instance where i was guilty of crookedness in a mining transaction or a business transaction of any kind in my entire career as a promoter. i have been fearless--too much so. i have been a rabid enthusiast. i have tried to build. i have given quarter, but have never taken any. i have been honest. were i really dishonest, i could have prevented every publication of an attack of consequence on me by lending myself in advance to the base purposes of my traducers, and i would have millions now for having compromised with them. it is heaven's own truth that in nine cases out of ten, when i have been attacked in print, the motive of the attacking party has been base and the facts have been so distorted or misrepresented that the fabric was a lie. nor has the cruelty of the operation stayed any one's hand. at the very moment in goldfield when i knew that the _denver mining record_ would not assault the sullivan trust company again because of the settlement of the libel suit by my lawyers out of court, fresh rumors were spread that the _denver mining record_ was getting ready for another attack and that tens of thousands of copies of that newspaper were to be circulated. but you can't stop a rumor by the declaration of the truth, and the sullivan trust company decided that it would be unwise to make a denial in print, for by so doing it would communicate to all stockholders the news that the sullivan stocks were actually under attack and thus cause more "frightened selling." sight drafts from brokers in new york, chicago, salt lake and san francisco, drawn on the sullivan trust company, with large bundles of sullivan stocks attached, were pouring into our office through the local banks for presentation. john s. cook & company made a specialty of this department of banking, and most of the drafts on us were cleared through the wingfield-nixon bank. it was reported to me that senator nixon was openly discussing the enormous volume of stocks coming in on us and was questioning our ability to stem the tide. as a strategic measure, the sullivan trust company decided to "cross" sales on the san francisco stock exchange so that it might ship out of the camp, through the banks, large blocks of stock with draft attached against san francisco brokers and thus convey to the minds of local bankers that we were selling large blocks of stock as well as buying them. the volume of the "cross" trades caused some talk in san francisco, and was magnified by brokers operating for the decline. the time when money talks some of our brokers in san francisco now demanded an independent bank guaranty that the drafts on us would be honored. we asked for a line of credit at the state bank & trust company. it was promptly given. as fast as the brokers asked for a guaranty, the state bank & trust company telegraphed them formally that it would honor our paper to the extent of $20,000 or $30,000 in every case. to protect the bank and in order to be able to borrow a large sum of money, should we need it in the event of another selling movement starting in, we deposited stocks of a market value of $1,500,000 with the state bank & trust company, which signed a paper that this collateral was to stand against loans for any amount which the state bank & trust company might make to us on open account. a few days later we borrowed from the bank $300,000 in cash, and it was agreed that should we need $300,000 more on the same collateral, it would be promptly placed at our disposal. we did not yet need the money, but i realized the desirability of assembling cash in an exigency such as that. nor was this an unusual proceeding. there was a time during the manhattan boom when the overdraft of the sullivan trust company in the nye & ormsby county bank was $695,000. the bank held against this overdraft sullivan stocks at the promotion price. nearly all of these stocks at that early period were as yet unlisted. the idea of withdrawing support and letting the market go to smash did not occur to me at all. as already stated, i believed the stocks were worth the money. but that was not the chief reason for my stubborn market position. i took great pride in the fact that every listed stock of the sullivan trust company showed a big profit to stockholders. i considered the greatest asset of the trust company to be, not its money, but its prestige, and i entertained big ideas as to a future i had mapped out for the corporation. i did not suspect that an organized campaign was on to destroy us and that the dominant interests of the camp were reaching out for everything in sight. nor did i have any use for money for hoarding purposes. the only thing that seriously nettled me was the fact that the sullivan trust company had been compelled to turn borrower. before the first selling movement started in, our assets were $3,000,000 more than our liabilities. but this $3,000,000 was not all cash. in fact, it was represented in part by stocks which we had purchased in the market with the idea that they were good stocks to own and would show the trust company a big profit, as they had. we could have cleaned up $3,000,000 in cash, but we had not done so. now, within a month, all of our available cash had been put into fresh lines of our own securities, we had been compelled to sell other lines out, and the corporation was a borrower. i was stubborn--too stubborn for a man who boasted of so little experience in such a big game. it was a pet belief of mine that obstacles create character. i was in the heat of a battle and fighting my way against tremendous odds. i rather liked the sensation. another dominant trait which, deep down, has in recent years been the keynote of my actions is the fact that my philosophy teaches me that you can't down the truth, that a lie can't live, and that _justice will be finally done_. had i always put the accent on the "finally" and mixed with my philosophy a little "dope" to the effect that while justice is always _finally_ triumphant, injustice is often victorious _for a while_, i might have fared better. in a previous chapter i stated that "wall street deals for suckers" and that "thinkers who think they know, but don't" are the suckers for which wall street casts its net. i also stated that wall street promoters realized that "a little knowledge is a dangerous thing" and that this "little knowledge" leads astray this particular kind of sucker. in "falling" in goldfield for the philosophy that "justice is always triumphant in the end," by swallowing it whole, and in making no allowance for the fact that justice is sometimes tardy, even though it does prevail in the end, i here decorate myself with a medal as a top-notcher in the _sucker_ class--in the academic sense--which i have described, and which is the usual sense in which i use the term "sucker." again the selling ceased, and it looked as if the sullivan trust company would be compelled to wait only for a general turn in the market to relieve itself of money-pressure by disposing of some of the large blocks of stock it had accumulated during the periods of heavy liquidation. clouds in the western sky a new black cloud showed itself on the horizon. a labor war was threatened in goldfield. it was very apparent, from the conduct of george wingfield, that he was baiting the miners, and it appeared to be the general opinion of the people of goldfield that he was trying to precipitate trouble. the miners had asked for higher wages. the sullivan trust company, which was operating seven properties with a monthly pay-roll of $50,000, was the first to express a willingness to grant the terms. wingfield and nixon refused. the miners asked for arbitration. it was refused. the mines were then shut down for a few days and the terms of the leases were extended. heavy selling in all goldfield stocks took place during the shut-down. rumors could now be heard on every side that wingfield and nixon were dumping overboard big blocks of stock. could it be possible that they themselves were scuttling the ship that had given them such glorious passage? again the sullivan trust company was called upon to stand behind the market. soon a cry of distress was heard in the camp from investors and stock brokers who had overloaded themselves with securities and who were in debt to the banks to the extent of millions, with stock of the camp put up as collateral. inquiry revealed the fact that all goldfield and tonopah banks were overloaded. this condition had been brought about by the liberal terms which had been granted by the wingfield-nixon banks during the "ballooning" of goldfield consolidated, when the confederacy, according to common belief, was unloading millions of dollars' worth of stocks in the small companies and was using the proceeds to finance their purchase of the stock of several of the integrals that formed the big merger. i began to get next to myself and to "smell a rat." i had never had so much as an argument with either mr. wingfield or mr. nixon, had never been engaged in any business transactions with them, and the campaign against the trust company, which i felt sure had been conceived at the outset in the interests of the republican political machine, i now suspected was part of a general scheme to get hold of anything and everything that was valuable in the camp. by smashing the sullivan trust company they could hurt the democratic party of the state, with which we were affiliated, and for which it was currently believed we were supplying the sinews of war. by smashing us they might also cripple the bank with which we were doing business, and which in both goldfield and tonopah, particularly tonopah, was a formidable competitor of their banking interests. and thus they might also facilitate a decline in the market which would shake out of their holdings borrowers at their banks. i figured it out this way: wingfield and nixon knew that we had foolishly attempted to support the market for our stocks, that other promoters in goldfield had done likewise, and that investors and brokers in goldfield had borrowed heavily from all of the banks. john s. cook & company were calling for more collateral from their customers, and real estate was being added to the pledges of mining securities. what more easy, even though diabolical, than to "bear" the market, shake out the stockholders in various important mines of the camp, take their stocks away from them by foreclosure, and get possession again, at bankrupt-sale prices, of the millions of dollars' worth of securities which they had unloaded during the boom? if this was the scheme of wingfield and nixon, what transpired could not have been patterned more perfectly. mr. wingfield walked the streets day and night, armed to the teeth, and openly dared any of the miners to "get him." he threatened another shut-down, a reduction of wages, the installation of change-rooms at the mines and other dire things, all seemingly calculated to rouse the ire of the mine-workers. the miners fell for the bait, became belligerent and nasty and did things with which the community was not in sympathy. day by day the situation became more critical. during one of the shut-downs which ensued, senator nixon revealed his hand by convening a meeting of the executive committees of the two goldfield stock exchanges. he insisted that the exchanges close, arguing that the prices of stocks should be allowed to recede in sympathy with the labor troubles. no thought was his for the men of the camp who were committed to the long side of the market at boom prices and who had worked day and night to create the boom which had thrown into the laps of wingfield and nixon riches far beyond the dreams of avarice. the brokers refused to close the exchanges. goldfielders were slow to grasp the real import of what was transpiring. things were very much unsettled. optimism would rule to-day on apparently inspired rumors that the differences between the mine owners and the miners were about to be patched up. the next day gloom would pervade the camp because of the unfavorable action by the union on the peace plans. nightly conferences were held. it was impossible to get an accurate line on the situation. crowds gathered about miners' union hall, where the meetings were held, and everyone sought something tangible on which to base his market operations. the officers of the union were in and out of the market, taking advantage of their official positions to anticipate every favorable or unfavorable development. it was a critically sensitive market situation. the drift, however, was unmistakably downward. values began to melt like snow in a spring thaw. through it all the sullivan trust company stood valiantly behind its securities in all markets where they were traded in--to the limit. i was bull-headed. i had never before been through a mining-camp boom of such proportions, and i failed to recognize that a reaction must ensue, whether it was forced by wingfield and nixon or not. tens of thousands of shares of sullivan stocks were thrown at our brokers on the san francisco stock exchange and new york curb from day to day, and we took them all in, refusing to allow the market to yield to the pressure. from credit to crash to convey an idea as to the standing of the l. m. sullivan trust company during this crucial period, i cite an instance. logan & bryan, members of the new york stock exchange, chicago stock exchange, chicago board of trade, new orleans cotton exchange and all other important exchanges, who conduct a leased-wire system from coast to coast at a cost of $300,000 per annum, and who have over 100 correspondents in nearly as many cities, all of high standing as stock brokers, made a tentative offer to the sullivan trust company early in december to connect their wire system with our office in goldfield and to give us the exclusive wire connection for nevada at an annual rental of $100,000. this offer would not have been made if the credit of the sullivan trust company had not been maintained at high notch, or if i, personally, had not convinced men of substance that i was strictly on the level, "past" or no "past." ben bryan, the active member of this firm, was in goldfield at the time. he asked as to our finances. there was present cashier j. l. lindsey of the state bank & trust company. "how much would your bank loan the sullivan trust company on its unindorsed paper and at a moment's notice?" i asked mr. lindsey. "a quarter of a million or more," answered mr. lindsey. this apparently satisfied mr. bryan. our rating in bradstreet's and dun's was "aa1." a private statement issued by bradstreet was to the effect that while our rating was only $1,000,000 and we claimed a capital and surplus of only $1,000,000 at the time the rating was given, it was believed in goldfield that we were worth much more, and that we had actually understated our resources because we considered it bad policy to divulge the great profits in the promotion business. by december 15 the condition of the sullivan trust company had become about as follows: our $3,000,000 surplus had been reduced to $2,000,000 and all of this $2,000,000, plus the loss, was represented by our own bought-back stocks. we had no money, except about $50,000, remaining of the $300,000 borrowed from the state bank & trust company. we were committed in excess of this $50,000 to brokers for stocks in transit, but by the "crossing" process we were able to maintain a chain that kept intact our reduced cash balance. we figured that a fresh loan of $300,000, additional to the $300,000 already obtained from the state bank & trust company, would enable us to take up all of our paper and to discontinue the "cross" trades. we promptly arranged for the loan, which cashier lindsey of the state bank & trust company informed us would be immediately credited to our account whenever we required the money. interest charges were at the rate of 1 per cent. a month in the camp at that time, and for that reason i did not ask that we be at once credited with the amount. i sent over to the state bank & trust company another big batch of stocks, to be held as collateral against the promised loan, and got a receipt for it stating that it was accepted as collateral on our "open loan" account. the market in sullivan stocks had now steadied itself and it appeared that it would be impossible for any further selling of consequence to take place. we had bought back in the open market fully 50 per cent. of all the stocks promoted by the trust company. distribution of the stocks of our early promotions had originally taken place in such a broad way that it now appeared as if selling must necessarily become scattered. we felt somewhat crippled, but in no danger, and were "still in the ring." down with the sullivan trust company by this time i was "all in" physically. i had a cyst, of fifteen years' growth, on the back of my head. it had become infected. i was threatened with blood-poisoning. i suffered much pain. i had been on the desert for nearly three years, without leaving it for a day. my associates insisted that i go to los angeles immediately for treatment and a rest. believing that the trust company was secure, i made preparations to go. before leaving i busied myself with the preparation of a dozen full-page reading-matter advertisements on sullivan properties, which the salt lake _tribune_ and salt lake _herald_ had contracted to publish in their new year's day editions. these are an annual feature of those newspapers. i decided to "make" salt lake on my return trip from los angeles and be there on new year's day with our mailing-list, to superintend the mailing of the papers to all stockholders in sullivan properties. on account of the great value which we attached to the mailing-list, i would not trust anybody but myself with the job. i spent christmas in los angeles and arrived in salt lake on new year's day, ready for work. i was busy in the salt lake _herald_ office next day when affable peter grant, a partner of mr. sullivan, with whom mr. sullivan had at the outset divided his interest in the sullivan trust company, walked in. i asked mr. grant, who had remained at the helm with mr. sullivan while i was away from goldfield, about business. he assured me that the loan from the state bank & trust company would not only be forthcoming, as needed, but that cashier lindsey had informed him that we could have $500,000 instead of $300,000 additional, if we actually had to have it, and that the bank would back us to the extent of a million in all, if necessary. on calling next morning at the office of james a. pollock & company, our salt lake correspondents, i was astounded to learn that rumors had been telegraphed to them from san francisco that our paper was being held up in goldfield. "that's nonsense!" said mr. grant. "why, lindsey has given me his word, and there can't be a question about it." "maybe he has 'laid down' on us," i said, "and that would be ----!" "nonsense!" said mr. grant. "i'll telegraph him that in addition to honoring our goldfield paper with the money we have borrowed from him, he must wire $150,000 to our credit in san francisco, and you and i can jump on the train to-day and go to san francisco and support the market right on the ground. if those rumors have spread around san francisco a lot of short-selling will take place and the market will need support." i agreed. so confident were mr. grant, james a. pollock & company, and i that everything was right with us that we gave and they accepted a big supporting order to be used on the san francisco stock exchange during the succeeding day while mr. grant and i should be on the train to the coast city. we arrived in san francisco late at night. a number of brokers met us and conveyed the news that the state bank & trust company had "laid down" on us. in the meantime despatches to us from the cashier of the sullivan trust company had piled up at the hotel. he explained the situation, which was this: all the trains carrying drafts in the mail to goldfield had been stalled by snowstorms two days before new year's. the next day was sunday. monday was new year's day, a legal holiday. thus five days' mail had accumulated, and on tuesday the delayed drafts were presented, all in a bunch. l. m. sullivan, president of the trust company, who was supposed to be on deck at goldfield, was in tonopah, where he was reported to be in imminent danger of arrest on the charge that during a new year's brawl he had nearly brained a chauffeur with a butt-end of a revolver. the bank people became alarmed. in requisitioning the $300,000 we had stated that we would call for it piecemeal, as had been our custom in the past. the five days' mail had piled up drafts totaling nearly the entire amount. i was absent from goldfield. mr. grant was away, and so was mr. sullivan. employees were running the business. cashier lindsey concluded that we were "overboard." on top of it all, donald mackenzie, the heaviest depositor of the state bank & trust company, had that very morning drawn out a large sum, said to aggregate $400,000, and had it transferred to san francisco. our wires from goldfield stated he had been frightened by rumors that the sullivan trust company was in trouble and that the state bank & trust company would be involved. that settled it. the enterprise that i had built up from such a meager beginning into a $3,000,000 trust company crumbled in a heap and left us stranded on the financial shoals of an over-boomed mining camp. some hindsight that came too late i attribute the destruction of the sullivan trust company to six factors, namely, (1) politics; (2) blackmail; (3) lack of wide distribution of our later promotions, we having sold most of these stocks in large blocks during the exciting boom days through brokers to speculators instead of disposing of them in small lots direct to investors; (4) my lack of knowledge of markets and inexperience in market manipulation; (5) my own stubborn pride and optimism, and (6) the failure of the state bank & trust company to keep its pledge of assistance. it is conceded in nevada by all honest men that, without exception, all of the properties promoted by the l. m. sullivan trust company had merit, and that money was lavishly provided for mine development as long as the trust company was in existence. the properties were selected with great care. they were very much higher in quality than the average. those at manhattan are yielding treasure to this very day, and may make good yet in a handsome way from a mining standpoint. those at fairview bid fair to duplicate the performance. had i kept out of politics, been a good market general, and taken cognizance of the fact that the law of supply and demand is as inexorable in mining-stock markets as in every other line of human endeavor, i could have saved myself and associates from financial ruin. it would have been the better part of valor to have emulated bob acres--back up and "live to fight another day." instead, i attempted the impossible in my endeavor to stem the tide of liquidation, and exhausted our resources to the last dollar in buying back the sullivan stocks at advanced figures over the promotion prices. i didn't know then, as i know now, that the accepted practice of the successful market operators is to go with the crowd--to help along an advance when the public is buying, and, with equal facility, to further a decline when everybody wants to sell. it was my first experience, and, like so many beginners, i was overconfident, lacking in judgment, and fatally ignorant of the finer points of the game. the complete collapse of the financial structure i had labored so hard to construct came as an overwhelming blow to the camp and marked the beginning of the end of the great goldfield mining-stock craze. our enemies had overshot the mark. public confidence was irreparably shattered by the smash of the trust company, and it would have been better for goldfield and nevada had wingfield and nixon possessed sufficient foresight to go to our rescue instead of facilitating our destruction. money that had poured into the camp without cessation month after month for mine development started to flow the other way. less than a year later, when wall street's financial cataclysm put a quietus on market activities of every sort, the great fortunes of wingfield and nixon themselves hung in the balance, and had it not been for a quick transaction by which the united states mint at san francisco forwarded by express to reno and goldfield $500,000 in gold, the failure of wingfield and nixon and their chain of banks might have happened as a fitting climax to the scheme of aggrandizement which they had fostered. it was rumored at the time that this money had either been obtained from the government as a deposit for the nixon national bank in reno or was obtained at great sacrifice from wall street bankers, and that only by virtue of mr. nixon's position as chairman of the committee on national banks of the united states senate was he able to get the sub-treasury in new york to instruct the mint at san francisco to supply the gold at this crucial period when fiat money was current in the east. whether it was a government deposit or not, senator nixon got it--and he needed it. even to this day wingfield and nixon are engaged in an effort to shift the responsibility to me for the destruction of the great mining camp of goldfield, which to-day marks the graveyard of a million blighted hopes. on the eve of the wall street panic of 1907, every bank in goldfield and tonopah that had existed through the mining boom with the exception of those of wingfield and nixon, went to the wall, and every goldfield broker, with one or two exceptions, went broke. the business interests of the camp suffered the same experience. wingfield and nixon succeeded in annexing the remnants of the goldfield banking business, along with the control of nearly all of the goldfield properties for which they had been seemingly gunning. wingfield and nixon are, in fact, to-day in control of the political as well as the banking and precious-metal mining industry of the state. they have triumphed, but goldfield, except for the big mine and one or two others of little consequence which they do not own, has been throttled and is dying the death. had wingfield and nixon played a broad gauged game, the camp would undoubtedly still be on the map and, instead of having only two or three mines, might now boast of thirty. as quickly as possible i convened a meeting of the creditors of the sullivan trust company, all of whom happened to be either western brokers or banks. the market had gone to smash and our liabilities were $1,200,000. the assets, calculated at the low market price of the securities that was reached after the embarrassment was publicly announced, were still in excess of the liabilities. the creditors agreed in jig time that if we would turn over all of the securities they would accept 80 per cent. of the net proceeds as full payment of our obligation and return the other 20 per cent. to the trust company. thomas b. rickey, president of the state bank & trust company, was appointed manager of the pool, and was also elected president of the sullivan trust company, which exists in moribund state to this day. mr. rickey had even a higher opinion of the value of the securities than we had, and he refused to sell any of them at the prices which then prevailed. he held on. during the bankers' panic of 1907 the state bank & trust company failed for about $3,000,000. the sullivan mines were compelled to shut down. mr. rickey still held on. manhattan, the mining camp, struck the toboggan. the boom in goldfield securities collapsed at the same moment. the sullivan stocks shriveled, like the rest of the list, to almost nothing. as far as i can learn, neither the bank or broker-creditors nor any of the members of the sullivan trust company have ever received a dollar as a result of the settlement. had the securities been disposed of immediately after the embarrassment, the trust company would have paid dollar for dollar. those of the public who did not sell their holdings in the sullivan companies when we were supporting the market to the extent of more than $3,000,000, lost most of their investment. those who did sell--most of them--made money. the market value of these securities, at the height of the boom, was in excess of $5,000,000. the price paid for them by the public, as already stated, was in the neighborhood of $2,000,000. after settling with the creditors of the sullivan trust company on the basis just outlined, i departed from goldfield as broke as when i arrived there three years before. the only money i or my partners had drawn from the business during the life of the trust company was about $5,000, just sufficient to pay living expenses. my expenses to new york, where i went to have my head operated on--are you surprised?--were supplied by the proceeds of the sale of my seat on one of the goldfield stock exchanges, from which i netted $400. i landed back in the big city with $200 in my pocket, the exact sum with which i had left town three years before. my reward for three years of untiring work on the desert was a big fund of experience. believe me, i thought it would hold me for a while! but it didn't. chapter vi nipissing and goldfield con the embarrassment of the l. m. sullivan trust company, was disastrous to goldfield, the decline and fall of the camp dated from that very hour. the _goldfield news_, of nation-wide circulation in those days and up to then unshackled, sought to stem the tide. it published a double-leaded editorial, in full-face type, setting forth that the sullivan trust company had gone down with its flag nailed to the masthead of a declining market and had lost its last dollar supporting its own stocks. the camp took courage. soon it became evident that the initial smash in stock-market values was not sufficient to convince the natives that the death-knell of the market for its long line of mining securities had been sounded. the population of goldfield was 15,000. its life could not be snuffed out in a day. great was the depreciation in the market price of goldfield mining issues, but not to an extent as yet that indicated the almost complete annihilation of values which followed. final destruction for the general list, with some scattering exceptions, came only after a "starving-out" siege on the part of investors, who refused to commit themselves farther and gradually resorted to liquidation. listed goldfield securities, nearly 200 in number, and valued in the markets at above $150,000,000 during the boom, had within two months shown a falling off of $60,000,000 in market value, but the list on the average was still quoted higher than the promotion prices. on january 18, 1907, fifteen days after the newspapers throughout the land carried front-page stories of the failure of the sullivan trust company, the stocks promoted by the trust company were still in demand in all mining-share markets of the country at an average price not below that at which original subscriptions were accepted from the public. jumping jack, promoted at 25 cents, was quoted at 30 cents bid. stray dog manhattan, promoted at 45 cents, was in demand at 49 cents. lou dillon, promoted at 25 cents, was still wanted at 26. indian camp, sold originally to the public at 25, was quoted at 85 bid. silver pick extension, promoted at 25, was 21 bid, a loss of 4 cents from the promotion price. eagle's nest fairview was quoted at 25, off 10 cents from the promotion figure. these prices represented terrific losses from the "highs" that had been reached during the height of the goldfield boom, yet the average market price was still above the subscription price of the shares at which the public was first allowed to participate. a remarkable part of this demonstration was that for twenty days no inside support had been lent to these stocks. the sullivan trust company being in trouble, the markets had been left to the mercy of short-sellers and market sharp-shooters generally. having settled the trust company's liabilities of $1,200,000 by tying up in trust all of its securities and the other assets, of which the creditors agreed to accept in full quittance 80 per cent. of the proceeds and to turn back to the trust company 20 per cent., i returned to new york during the last week in january. i was again out of a job--and broke. i visited the officers of mining-stock brokers in wall street and broad street. wherever i went a hearty handclasp was extended. not one of the eastern stock brokers was involved to the extent of a single dollar in the sullivan trust company failure. the brokers were convinced that the embarrassment was honest. the trust company's credit had always been good. had the failure been meditated, i could have involved eastern brokers for at least $1,000,000. because i didn't, new york brokers were not slow to express their good feeling. a number of them offered to extend a helping hand did i wish to embark on a new enterprise. peculiarly enough--or shall i say, naturally--after tossing off the trust company's millions, of which half were mine, in a vain endeavor to support the market for its stocks, i was as full of spirit as the month of may. i had been broke before, and the sensation was not new to me. withal, i had profited. a new fund of experience was mine. even though i had not gathered shekels as a result of my hard work in goldfield, i had learned something--i had acquired the rudiments of a great business. goldfield had been the mining emporium--the security factory. new york was the recognized market center. market handling had been my weak spot. i now had a chance to witness the performance of some past-masters in the art of market manipulation, and i tried to make the best of the opportunity. i watched intently the daily sessions of the new york curb. i was in and out of brokerage offices hourly. nothing that transpired escaped me. within a month i heard enough and saw enough to convince me that, daring as were the operations of the mergerers and waterers of goldfield consolidated, in that they ballooned the price of their security at its inception some $29,000,000 (400 per cent.) above the accepted intrinsic worth and were able to get the public in at top prices, their activities were but amateurish when compared with the stock-market campaign in nipissing, which was now transpiring on the new york curb. in the nipissing campaign tens of millions of the public's money went glimmering, several great promoters' fortunes were reared as by magic, some big names and big reputations were tarnished, and dollars in $1,000,000 blocks were juggled like glass balls under the touch of sleight-of-hand performers. an orgy in market manipulation this market melodrama was well staged. it had a sensational start-off, and action was at high tension every minute. the performance had covered a period of seven months when i arrived in new york, and was reaching its climax. it was a wild orgy in market-manipulation and money-fleecing that had no parallel in history from the early comstock days up to and including greenwater. as a mining-stock boom it was a dizzy, bewildering success--full of red fire and explosions to the last curtain climax. w. b. thompson, montana mine promoter and money-getter; captain joseph r. delamar, famed as a daring adventurer on land and sea, and recently a highly successful financier, mine-owner, stock-market operator and art collector; john hays hammond, mining engineer, promoter, politician and ambitious society leader; a. chester beatty, millionaire mining engineer, and the seven guggenheim brothers, were in the all-star cast. mr. thompson, by reason of the fact that he was market manager, was most under the spotlight, although at times he was obscured by the others. mr. thompson was a product of butte, montana. early in the game he had learned the wall street lesson that "stocks are made to sell." born and reared in butte without the aid of a silver spoon, he had never been "in the money" before coming east. the great pay-streak in the east apparently looked better to him than the pay-streaks that some of his butte neighbors had missed in their deep-mine operations. he was an ideal man for the nipissing job, as subsequent events in his career thoroughly confirm. of a school that believes money in hand to be worth more than mining certificates in the box, mr. thompson's route from montana to broad street was via boston, where he made his first visible stake by marketing stock in the shannon group of mines. when the cobalt excitement was in its infancy mr. thompson took a run up to the camp. the nipissing mine was about the best thing in sight. it was producing real silver. the company was owned by a little club consisting of e. p. earle, specialist in rare metals, captain delamar, millionaire soldier of fortune, e. c. converse, banker and steel magnate, ambrose monnell, r. m. thompson, joseph wharton, since deceased, of philadelphia, and duncan coulson, a rich canadian lawyer. considerable silver was being produced. the veins, however, were exceedingly narrow, not more than a few inches wide. it was impossible to block out ore to an extent that would warrant any opinion as to the real measure of the mine's riches. the gentlemen owners were not averse to giving mr. thompson an option on 100,000 shares of treasury stock of the 1,200,000 five-dollar shares ($6,000,000), at $2 a share, when he made the proposition, and another 100,000 shares at $2.50. later, they sold him a call on 50,000 or 100,000 shares around $7. all of this happened in the summer of 1906, six months before i reached new york and at a time when the country was giving indication of going mining-stock crazy, nevada stocks having advanced on the new york curb in the goldfield boom hundreds per cent. after the goldfield boom had gained terrific headway, during the fall of 1906, when mohawk was climbing from 10 cents per share toward the $20 mark, which it reached during the climax, the cobalt mining-stock excitement spread like wildfire. a sudden demand sprang up for nipissing shares. mr. thompson, about this time, connected himself with the old established and conservative banking house of c. shumacher & company on wall street. the affiliation was calculated to give the promoter of nipissing stock much standing. the move served well its purpose. the public grabbed at the shares. the price jumped to $4.50 in a jiffy. mr. thompson began to let go of stock after the $4 point was reached. he was making a killing, but fed out his optional stock very cautiously at the rate of about 5,000 shares daily, each day at an advance. by the time the price reached $7 mr. thompson got suspicious. there was something about the play he could not understand. he had not found it necessary to do much "laundry" work on the curb market. every time he offered stock it was lapped up silently and completely. every time his brokers opened their mouths to sell the certificates they were gobbled. mr. thompson stopped putting out any more stock and streaked it up to cobalt to see what was going on. he had a hard time laying hold of the inside facts, but learned enough to satisfy himself that rich ore had been encountered at depth. he discovered on his return to new york that captain delamar had been buying that cheap stock through s. h. p. pell & company and was even then the heaviest individual holder, a position contested only once during the whole campaign, and that by a rank outsider operating through eugene meyer, jr., whose name has never been publicly mentioned as having anything to do with the gamble. this "unknown" was a quiet, mild-spoken, college-bred gentleman. he pulled down $1,500,000 in nipissing--and kept it. upon the return of mr. thompson from cobalt the promoters warmed up to their job. the manipulation which had been begun in a comparatively modest way now showed the spirit of the gambler who plays "the ceiling for the limit." new market-boosting accessories were called into use. they did their work. the game waxed hotter and hotter. the guggenheims enter nipissing boom! boom! boom! went nipissing. by the time the price crossed $20 the gamblers and speculators of two continents were on fire with excitement. presently it became noised about that the guggenheim family had taken an option on 400,000 shares of nipissing stock at $25 a share, making the investment $10,000,000, and putting a valuation of $32,000,000 on the property. furthermore, it was announced that the deal had been made on the report and advice of john hays hammond, the international mining engineer, crony of cecil rhodes and famed as the head of the profession. as a part and parcel of the remarkable story, it was authoritatively stated that the guggenheims had paid $2,500,000 cash for the option. w. b. thompson was said to have negotiated the transaction. confirmation of the deal set the gamblers crazy. there could be no risk in following such leadership as the guggenheims', endorsed by the eminent hammond. the market boiled up to $30 and then majestically boomed to $33.25. transactions in this single issue totaled hundreds of thousands of shares a day. waiters, bar-keepers, tailors, seamstresses and tenderloin beauties competed with bankers, merchants, professionals on the regular exchanges, and even ministers of the gospel, for the privilege of buying nipissing shares on a valuation of more than $40,000,000 for the mine. on the way up the original bunch of insiders floated out of their holdings. most of them had cashed in under $20. some of them stayed out; others went back, and, like the moth, got burned. w. b. thompson, it is said, parted with the bulk of his 250,000 to 300,000 shares at from $24.50 up, cleaning up for personal account between $4,500,000 and $5,000,000, according to the estimates of close friends then in his confidence. never was there a cleaner case of "finding" money for mr. thompson. the manipulative campaign, of which he was made manager, was a giant success. the only ability or skill needed, after the guggenheim deal was made--brilliant deal from a market standpoint!--was the sense to hold on to his optioned stock until his associates, the guggenheim following, and the public made a rich, ripe and juicy market for it. mr. thompson subsequently participated in cumberland-ely, el reyo, inspiration, la rose, utah copper, mason valley, and other mining promotions, and is now rated at $10,000,000 to $12,000,000. he is generally prominent at the nutritious or selling end when a good market exists and is now head of a new york stock exchange brokerage and mining promotion firm which publishes its own newspaper. but what happened to nipissing? plenty, and then some, happened. as noted, the stock mounted by flying leaps to $33.25, stayed well above $30 for quite a while, and began slowly to recede. complacent in the consciousness that they had the biggest silver mine in the world, the guggenheims allowed all of their friends to share in their good fortune. of a sudden, stock from mysterious sources began to press on the market. it came in great quantity and without let-up. suspicion was aroused in the guggenheim camp. they despatched a. chester beatty, one of their very best expert engineers, and a former protege of john hays hammond, to cobalt to smell out the trouble. the text of his report was never printed. it didn't have to be. the facts beat it in. much of the showy mineral, on which glowing reports as to the fabulous value of the property had been based, contained little or no silver. it was _smaltite_, an ore of the metal cobalt, closely resembling many of the silver ores. the story was given out that mr. beatty had reported adversely on account of the unfavorable showing made by mine developments carried out subsequent to mr. hammond's report. the miners had run into non-productive calcite a few hundred feet down, it was said. as a matter of fact, because of the limited amount of all underground development in the interim, there could have been no condition observable in the property as a whole when mr. beatty made his examination that was not equally apparent when mr. hammond made his report. the talent jumped to the conclusion that the mine was a "deader." many millions in silver bullion have been taken from the property since then, and it is still a great producer, but this is another and more prosaic story. this deals with the stock-gambling feature of the record. scenes of the wildest disorder were witnessed on the curb in those days of 1907 soon after my return from goldfield. the guggenheims "laid down" on their option, getting out as best they could. according to published reports, they charged to profit and loss the $2,500,000 originally put up, besides paying the $1,500,000 to $2,000,000 in losses of personal friends for whose misfortune they felt personally responsible. be that as it may, the guggenheims emerged from the campaign with damage to their market reputation and standing from which they have never fully recovered. previous to their acquaintance with the cobalt bonanza, they had a blindly idolatrous following that would have invested hundreds of millions on a tip from them. they have never regained the position in this respect they then held. nipissing on the toboggan the price of nipissing tobogganed from $33 to under $6 with terrific speed. w. b. thompson and his associates, who had unloaded their holdings on the way up, were reported to have taken advantage of the beatty report and to have sold the market short on the way down, making another "clean-up" of millions. the stock hit a few hard spots on the descent, but when the wreckage was cleared away and the dead and wounded assembled, there wasn't hospital or morgue space to accommodate half of them. the final carnage and mutilation was shocking beyond description. _the public had once more been landed with the goods. it had eaten up nipissing stock on a $43,000,000 valuation which broke to $7,000,000 or $8,000,000 within the space of a few days. this $35,000,000 slaughter represents only a fraction of the actual losses, for fabulous amounts were sacrificed in marginal accounts. the daily aggregate of open accounts in nipissing during the months of keenest excitement probably averaged not less than five times the total capitalization. actual losses were therefore far larger than would appear from a merely superficial calculation. the public contributed $75,000,000 to $100,000,000 to its nipissing experience fund._ there has always been more or less mystery as to just what john hays hammond said orally to the guggenheims to lead them into the crowning humiliation of their business career. it did not appear in his written and published report, for in that document is to be found a neat little hedge to the effect that "if" conditions as revealed to him were maintained, the values would be, etc., etc. that little "if" was the hammond saving clause, although it did not save that $1,000,000-a-year job of his, about which some of his admirers have liked to talk in joyous chorus, nor did it save the public from massacre. another nipissing mystery is the sustained professional and personal cordiality still existing between the eminent john hays hammond and the scarcely less eminent a. chester beatty. for a little while after mr. beatty had to turn down his chief their relations appeared to have been strained. but this was not for long. mr. beatty also severed connections with the guggenheim pay-roll, and the two great engineers were soon again, and are now, on the best of terms. on rainy days when the tickers drone along and there is no exciting news, evil-minded derelicts of the memorable nipissing campaign are prone to figure how much a man might have made in the market with a foreknowledge of the two adverse reports and to figure on the sporting chances for a "double cross" that such a situation would hold. scandal mongers, too, who have watched closely the friendship which exists between w. b. thompson and john hays hammond often ask unkindly what has cemented the bond between the two. recently, when the rocky mountain club needed a new club-house, messrs. hammond and thompson subscribed an equal amount--a goodly sum it was--to build it. they are seen much together in public and seem to have many tastes in common. mr. thompson, whose strangely fortunate campaign in nipissing on the new york curb was helped to a triumphant promotion climax by the hammond report to the guggenheims, bears mr. hammond no ill-will for that--and who would blame him for the kindly feeling? who got the $75,000,000? but what of the public? it played $75,000,000 to $100,000,000 into the game, and has never yet learned who got it. who did get it? some of the details of the grand separation scheme have been set forth in the foregoing, but nothing like enough to satisfy the curiosity of the public who footed the bill, paid the freight, contributed sucker-toll for the whole prodigious sum. did the author of the report on the strength of which tens of millions were plunged on nipissing by an army of deluded investors and speculators ever suffer in fortune by the mischance or misshot, or whatever name you may give the "come-on" document? not that you could notice. true, he gave up his alleged $1,000,000 job with the guggenheims. but is he not a heavy contributor to the republican national campaign fund, a close personal friend of the administration, and did he not represent this great government as special ambassador at the coronation of england's king? was he not talked of as running mate for mr. taft, and did he not organize the national league of republican clubs two years ago? he is tremendously rich and round-shouldered under a mountain-high burden of honors. every mother's son of the old nipissing crowd is at this very hour up and at it in regions where the public's money flows. many of them still have a grip on the property. it was a good old cow to milk. e. p. earle, who was president of nipissing in 1906, headed the company four years later. captain delamar slipped down and away (he's now in on the extravagantly touted porcupine dome mines company), and so did e. c. converse, whose time is all taken up managing the stock exchange banknote engraving monopoly and a couple of banks and trust companies. w. b. thompson, who came into the nipissing directory in 1907, still sticks in spite of the awful experience of 1906-07. has an outraged government ever raised hue and cry against these eminent captains of industry? not yet, nor soon. what difference is there between the respectable multi-millionaire bankers putting across a losing promotion and the little fellow? both may be equally honest or equally crooked, yet in equity both are entitled to the same treatment and the same consideration. their operations differ only in degree. the aim of each is to get the public's money. and the big fellow is more dangerous by a hundred thousand degrees. where does real tangible evidence of a conspiracy to defraud in nipissing exist? does _any_ exist? now i venture to say that you could put on the scent any young man who is a graduate of the public schools, and within thirty days he would obtain enough evidence to prove to any jury in the land that the manipulators of that stock used improper measures to get the public's money. a scrutiny of the files of the newspapers during the progress of the malodorous nipissing campaign reveals many strange happenings. it shows, among other things, most remarkable willingness on the part of financial writers for the press of that day to say every possible good word for the manipulators and to feed the public appetite for sensational gossip concerning the gamble. how this was done is easily understood by those familiar with wall street publicity. it was an open secret on the street at that time that many writers for the press were subjected to strongest temptations to lend their hand to the game of publicity. the columns of the daily newspapers carry in themselves evidence to show that the attempts were not always in vain. one little story will illustrate the methods employed. the business manager of a widely known and reputable daily financial publication was stopped one day by a man active in nipissing and told he had been put into 500 shares of the nipissing stock at the market price when the stock was still selling under $10 and at the time when it was being groomed for the terrific rise which followed and which did not culminate until $33 had been passed. the newspaper man was not above making a turn in the street, but he objected to taking it that way. he politely turned down the proposition, saying that he did not wish any part of it. the tempter then went to him on another tack, agreeing to carry the stock for him, so that he would have no risk whatever, at the same time remarking that, in turn for the favor, generous recognition in the news columns of the publication, in support of the curb campaign, would be expected. again the newspaper man declined, this time with unmistakable emphasis. he intimated cannily that while he might be taken on he might not be told when to get off, adding that he might be discharged if he fell for anything of that sort. when the market price toppled from $33 back to around $6 this man's newspaper did not carry any front-page story denouncing the outrage upon the public. i do not know that the manipulators of nipissing "got to" his employers, but i do know of some newspapers in new york which pose before the public as embodying the very highest type of newspaper morality and which have at their head, either as part owners or as editors, men who were taken in hand by wall street magnates at a period when they were dependent for their daily livelihood on their weekly wage, and were lifted into the millionaire division by being put into "good things." do you suppose newspapers presided over by those men are going to say a word against the enterprises of their benefactors? conversely, if their benefactors happen to be bothered by any man whose business purposes run contrary to theirs, how far, do you think, these gentlemen of the press would go in their own news columns to poison the public mind against the enterprise of their patron's enemy? when i witnessed the climax of w. b. thompson's marvelously successful campaign in nipissing on the new york curb, i was fresh from goldfield. my recollection is that my chief thought at that time, with the goldfield consolidated swindle fresh in my mind, was simply that the western multi-millionaire highbinder promoter didn't class with his eastern prototype. indeed, the two appeared to be of different species, as different as the humble but noisy coyote from the abyssinian man-eating tiger. the late spring of 1907 found me back in nevada. i selected reno as a central point for residence and decided to locate there. eastern stock markets appeared to be beyond my ken. it seemed quite apparent that the western game, as compared with the eastern, was one of marbles as against millions. in new york's financial mart i felt like a minnow in a sea of bass. without millions for capital, nevada appealed to me as a more likely field of usefulness. i believed in nevada's mineral resources. having seen goldfield evolve from a tented station on the desert with a hundred people into a city of 15,000 inhabitants; from a district with a few gold "prospects" into a series of mines producing the yellow metal at the rate of nearly $1,000,000 a month, i was enthused with the idea that there were other goldfields yet unexplored in the battle-born state and that opportunity was bound to come to me if i pitched my tent on the ground. the wonder mining-camp stampede i was back in nevada just a week when a stampede into a new mining camp called wonder took place. i was quick to join in the rush. the philadelphia crowd who owned control of the big tonopah mine had annexed a property there which they named the nevada wonder. it boasted of a big tonnage of low-grade silver-gold ore. on arrival at wonder, i found my former goldfield partner, l. m. sullivan, on the ground. he entreated me to allow him to cut in on any deal i made. a bargain was struck. he agreed to advance all the money and i was to receive half of the profits for my work. the corporation of sullivan & rice was formed. we purchased the rich gulch group of claims, a likely piece of ground with a well defined ledge, and incorporated the rich gulch wonder mining company. a company with the usual million-share capitalization was formed to operate the property. a high-class directorate was secured. t. f. dunnaway, vice-president and general manager of the nevada, california & oregon railroad, accepted the presidency. hon. john sparks, governor of nevada, became first vice-president. u. s. webb, attorney general of california, accepted the second vice-presidency. d. b. boyd, for twenty-five years successively treasurer of washoe county, nevada, was made treasurer. the first advertised offering of treasury stock of the rich gulch wonder carried the names of forty leading mining-stock brokers, situated in various cities stretching from new york to honolulu, who had signified over their signatures their willingness to undertake the sale of treasury stock at 25 cents per share on a basis of 20 per cent. commission. the first thousand shares of treasury stock at 25 cents was sold to superintendent mcdaniel of the nevada wonder mine. this convinced us that we had a good "prospect." i had my doubts about the successful promotion of any nevada mining company at this period, because of the terrific slump which was transpiring in goldfield issues and also because of the smack in the face that mining-stock investors had just received in nipissing. it was my idea that if the rich gulch wonder made any money for us the cashing would have to be delayed until mills were erected and the property became a producer. i was willing to go ahead on that basis. the sale of treasury stock was slow, but sufficient was disposed of to warrant the expense for mine development of at least $2,000 a month for six months, and that appeared far enough to provide for in advance. pending the making good of this proposition in a financial way, i determined i would help finance a newspaper publication at reno which would give to mining-stock speculators an unbiased statement of mining and market conditions as they existed. in the mining camps it was considered tantamount to financial suicide for the home publication to reflect on the merits of any locally owned property. strictures were looked upon as "knocks," and "knockers" are taboo in mining camps. moreover, mining-camp papers could hardly make both ends meet at the time without support from inside interests, and unprejudiced statements of fact that were detrimental to a local property could hardly be expected. merrill a. teague was made editor of the new publication, which was called the _nevada mining news_. mr. teague had just blown into reno from goldfield where he had been connected with the nevada mines news bureau, a daily market sheet. before coming to nevada he had served in an editorial capacity on the _baltimore american_ and the _philadelphia north american_. mr. teague is the possessor of a facile pen. at $50 a week, which was his stipend at the beginning, i was convinced that the _nevada mining news_ had a cheap editor. when news was scarce he could write more about nothing than any man i ever met before. incidentally, he could go further without finding a stopping place in a crusade than any man i had ever bumped up against. that was his drawback. however, compared with the work of other newspaper men then employed in nevada, his stuff was in a class by itself and was commercially very valuable. teague attacks senator nixon mr. teague was on the job just a week when he cut loose with an attack on united states senator george s. nixon of nevada in a front-page story headed "goldfield in the grasp of wall street sharks." the article declared that senator nixon, needing $1,000,000 to conclude the merger plans of the goldfield consolidated, had got it through b. m. (berney) baruch of the new york stock exchange, factotum of thomas f. ryan, at terrible cost. the loan was made at a time when goldfield consolidated was selling around $10 per share. in consideration for the loan, senator nixon, acting for the company, gave mr. baruch an option on 1,000,000 shares of treasury stock of the goldfield consolidated at $7.75 per share. at the time mr. teague commenced his onslaught goldfield consolidated shares had slumped from $10 to $7.50. mr. teague alleged that the market on the stock was being juggled and speculators were being milked. mr. baruch, he asserted, had sold the stock down to $7.50 per share on the strength of his option, and was now tempted to break the market, sell the stock short and cover all at much lower prices. within two weeks after the publication of mr. teague's exposé of the terms of the outstanding option to mr. baruch, goldfield consolidated shares dropped to under $6. the story evidently had its effect. the issue of the paper which chronicled the break to $6 contained an editorial headed "nixon in the rôle of brutus." it demanded of senator nixon that he stand behind the stock and support the market, and also called upon him to declare the payment of dividends which he had promised to stockholders in his annual report dated two months prior. people in nevada began asking, "who is teague?" mr. teague caused the publisher of the _nevada mining news_, who was hugh montgomery, formerly business manager of the _chicago tribune_, to explain over his signature that mr. teague had been the political editor of the _baltimore american_, later an editorial writer for the _philadelphia north american_, and that while on the _philadelphia north american_ he had crusaded against get-rich-quick swindlers who had headquarters in philadelphia, with the result that the storey cotton company, the provident investment bureau, the haight & freese company and other bucketshop concerns were put out of business. on evidence furnished by him, it was stated, mr. teague secured the conviction by the united states government of stanley frances and frank c. marrin as chief conspirators in the $400,000 storey cotton swindle. finally, the article said, mr. teague was engaged by a far-famed magazine to expose bucketshop iniquities in the united states. this series of articles had appeared in 1906. the biographical sketch seemed to satisfy readers that they were getting their "dope" straight on goldfield consolidated. my name at this time did not appear in connection with the publication except as part of the aggregation of sullivan & rice who advertised therein, but i was openly accused by messrs. nixon and wingfield of dictating the policy of the paper. this was a half-truth. my sympathies were with the stockholders of goldfield consolidated--that's all. the story is told in nevada that when senator nixon received the check for $1,000,000 from berney baruch, after having executed notes of the goldfield consolidated, signed by himself as president and endorsed by him as an individual, he took luncheon at the waldorf-astoria in new york. when the waiter presented the bill the senator ostentatiously tendered the $1,000,000 check in payment. the waiter put it all over the senator by politely stating that if he wished to pay his dinner check out of the proceeds, proprietor boldt would undoubtedly attend to the matter for him. the senator was forced to tell the waiter he was "only joking." the _nevada mining news_ appeared to be catching on and was now printing 28,000 copies weekly. sample copies were sent in every direction with the idea of acquainting investors with its existence. a day after the issue appeared containing the editorial in which senator nixon was accused of playing the rôle of brutus, i was stopped on the street by the editor of the _reno gazette_, a newspaper which is loyally attached to the senator and his friends. "the senator wants to see you, rice. better go over to the bank right away. if you know what's good for you, you'll do it," the _gazette_ man said. "i will, like ----!" i replied. "my office is up in the clay peters building, and if the senator has anything to say to me he can give me a call. i am not one of his sycophants, and i am not going." i didn't go. an hour afterward the editor of the _gazette_ met me again. "senator nixon wants to see you at his office right away," he said bluntly. "about what?" i inquired. "about articles which have appeared in the _nevada mining news_," he answered. "very well," i replied, "i'll send the editor over." turning to mr. teague, i said, "i have no business with senator nixon, and if he has anything to communicate regarding the newspaper you, the editor, are the man for him to say it to." mr. teague went over to the nixon national bank and entered the directors' room. my stenographer accompanied him as far as the door and took a seat outside, in the banking room. as mr. teague entered, senator nixon jumped to his feet. he looked black as thunder. he quivered with rage. "why don't rice come over here himself, eh? he daren't! i've got his record from boyhood jacketed in these drawers. while i have not read it, i know the story, and i am going to have it published in a bunch of newspapers so the world can know who is holding me up to public scorn!" the senator spluttered. in relating what transpired mr. teague later informed me that the senator's wrathful indignation appealed to him as so grotesquely comic he felt like laughing, but he thought it a poor newspaper stunt to incense him further at a moment when it looked as if, by appeasing him, he could tempt him into volubility. soon mr. teague had the senator at ease, pouring forth a long interview, full of acrimony and affectation, which mr. teague promised to publish in the _nevada mining news_. mr. teague reported to me that the senator construed his pacifying attitude as meaning that i would undoubtedly "listen to reason" and that his threat would most certainly accomplish its purpose. "calling for a show-down" when mr. teague finished narrating to me what had transpired i was beside myself. presently i gave him these instructions: "write out the interview with the senator. have two carbon copies made. when finished, take the three copies over to the senator and have him read them and put his o.k. on them. after you have done that, give the senator one copy, give the printer a copy, and put the other copy in the safe. as soon as the copy of the interview is in the printer's hands, sit down and write an editorial. head it 'a united states senator with a blackmailing mind.' publish my record in full. tell of everything of any consequence i ever did, good or bad. parallel my record with the senator's record. tell the people of nevada all the facts about the senator's threat. say to them nobody can blackmail me, and ask them to choose between us." on may 25, 1907, the editorial, headed "nixon a senator with a blackmailing mind," appeared. it was a passionate denouncement, calculated to stir the blood. also there appeared senator nixon's interview in full. in the interview the senator had made an effort to disentangle himself from a seemingly inextricable network in which he was enmeshed, and the paper contained still another editorial lambasting him in amplitude for trying to practise on the credulity of the newspaper's readers. the editor accused him of equivocation, artful dodging, false coloring, exaggeration, suppression of truth, cupidity and knavery. the arraignment wrought an undoubted sensation. the effect on the nevada public was unmistakable. it reminded me more of the motionless and breathless attitude of an audience at the third-act climax of a four-act drama, than anything else. the senator was not seen on the streets of reno for two months afterwards. for a fortnight afterward he didn't even call at the offices of the bank. when he did finally resume his visits to the bank he came in his automobile. he was whisked to the door of the building, immediately secreted himself in the directors' room and was not get-at-able. leading citizens, including the directors of a number of banks in reno, made clandestine calls at my office, shook my hand, felicitated me over the stand i took, and went away. even george wingfield, the senator's partner, it was reported (and i afterward corroborated this from the lips of george wingfield himself), backed me up in the stand i had taken. the general sentiment in the state appeared to be that the threat was a lowdown trick, and that of the two i had the less to be ashamed of. when the senator read the article headed "nixon a senator with a blackmailing mind" it is said he telegraphed to former governor thomas of colorado, his counsel, and asked him to come to reno. "if i don't say something in answer to this awful attack, i'll choke!" cried the senator as he nervously walked the floor. "did you sign that interview which they published?" asked governor thomas. "yes," said the senator. "well, then, if you say anything at all now, _they'll_ choke _you_," answered governor thomas. during the course of our attacks on senator nixon in the _nevada mining news_ which followed at various intervals, the newspaper accused him of making promises of early dividends to goldfield consolidated stockholders which he knew he could not keep; of having been the state agent in nevada of the southern pacific company at $150 per month during the huntington régime when legislatures were bought; of having bilked the investing public out of millions in goldfield; of having carved his fortune, that made possible the acquisition by him and his partner of control of the goldfield consolidated, out of a gambling house in tonopah; of having gathered his first mining property and mining-stock interests in goldfield from prospectors who lost money and surrendered their mining claims and stock certificates to the gambling house in lieu of the cash; and of being generally a financial and political freebooter of the most despicable sort. and the senator never sued for libel nor proceeded in the courts in any way whatsoever to obtain a retraction. manipulating goldfield con about a week after the publication of the editorial headed "nixon a senator with a blackmailing mind," when goldfield consolidated stock had slumped to around $7, the _nevada mining news_ in big bold-faced type urged its readers to place their buying orders for goldfield consolidated at $4 a share, saying that new york mining-stock brokers advised their clients that the stock would almost certainly go down to that figure because of the senator's mistakes in the financial management of the company. that edition contained another editorial on senator nixon, headed "branding a bilker." it accused him of saying in his annual report a few months previous that payments of dividends on a regular basis would commence within a short time, and contrasted this statement with the signed interview published in the _nevada mining news_, in which he said dividends would be paid "whenever the trustees thought it wise to do so _and not before_." within a day thereafter the stock "busted" wide open to $5-1/8 bid, $5-1/4 asked, and the whole goldfield list smashed farther in sympathy. by june 8th goldfield consolidated had crashed to $4.50. on the dip from $7.50 to $4.50 an opportunity had been offered to berney baruch and his associates to buy back in the open market all of the stock they might have sold on the way down from $10 to $7.75, which was the option price. then the stock was promptly manipulated back to $7. on the way back to $7, the outstanding short interest (of other traders who had accompanied the decline with their selling orders) was forced to cover. to help along the covering by outsiders up to the $7 point a report was circulated by lieutenants of senator nixon in reno that a dividend would be declared before the end of june, and almost simultaneously the general manager of the mining company in goldfield put forth a similar tip. as the market began to recover toward the $7 point, senator nixon went to san francisco and was seen often at the sessions on the floor of the san francisco stock and exchange board. on the day before the bulge to $7 he was quoted in a san francisco newspaper as saying that goldfield consolidated was such a good thing he would not take $20 per share for his stock. when the stock hit $7 and the shorts were being squeezed the hardest, senator nixon was quoted as saying in still another interview that a dividend was not far away. this interview was carried over the telegraph wires to all market centers by the associated press. at the same time a story was printed in the new york _times_ saying that it was reported on the street that j. pierpont morgan, acting for the baruch-ryan crowd, had taken over the control of the goldfield consolidated. the shorts were successfully driven to cover. then the price eased off again in a day from $7 to $6-1/8. a month later mr. teague became editor in chief of the _nevada state journal_ and severed his connection with the _nevada mining news_. i succeeded mr. teague as editor and my name appeared at the head of the editorial columns. at about the same time the sullivan & rice enterprise was abandoned. i discovered that most of the money mr. sullivan had put into the corporation had been borrowed by him from a member of my own family with whom he had hypothecated most of his stock in the company. a rumpus ensued which ended in the shutting up of the $1-3/4shop. by august goldfield consolidated had been manipulated back to $8.37-1/2 a share. mr. baruch's option could certainly prove of little value to him unless the stock sold higher at periods than $7.50. but he now evidently found it a hard job to hold the stock above $7.50. by september it had receded again to $7.40. at this period it was reported in reno that george wingfield, sick of his partner's bad bargain, was beginning to assert himself and demanded that the baruch option be cancelled at whatever cost. the erratic price movement of the stock was causing the loss of public confidence. the manipulation appeared to be raw. without any important transpiration except the news of the baruch option and the varying statements put out by senator nixon from time to time regarding the plans of the company, which was now awaiting the erection of a huge mill before going on a regular producing basis, the stock had dropped from $10 to $4.50, recovered to $7 and eased off to $6-1/8, rallied to above $8, and was again tumbling. the option to mr. baruch was conceded to be practically a flat failure from a company standpoint, only 20,000 shares of stock having been purchased by mr. baruch from the treasury of the company in nine months. the impression prevailed that mr. baruch was milking the market and held the option principally as a club to accomplish his market designs. moreover, nearly every broker, investor and speculator residing in goldfield by this time had gone broke because of the vagaries of this stock in the market, and the losses in bad loans and unsecured overdrafts incurred by john s. cook & company's bank, controlled by messrs. nixon and wingfield, was said to total nearly $2,000,000 as a result of the almost general smash in market values. the entire goldfield list, with the exception of goldfield consolidated, was now selling at 25 cents on the dollar compared with boom prices of less than a year before, and it was a rather ordinary "piker" sort of broker or speculator in goldfield who at this time could not boast of being in "soak" to john s. cook & company's bank anywhere from $15,000 to $100,000. on september 23 the goldfield consolidated directorate met at goldfield. after the meeting it was officially announced that the option held by mr. baruch on 1,000,000 shares at $7.75 had been canceled and that mr. baruch had been given sufficient of the optional stock to liquidate the $1,000,000 obligation of the company, leaving the company free of debt and with a cash reserve of nearly $2,000,000. it was stated that mr. baruch had originally been given the option for services in securing the loan of $1,000,000 from j. kennedy todd & company of new york for 13 months with interest at the rate of 6 per cent., and that the price of $7.75 was an "average" one, indicating that mr. baruch held an option on stock at varying figures on a scale up from a considerably lower price than $7.75, which he might have exercised in whole or in part. it was also disclosed that a large block of goldfield consolidated stock had been put up as collateral for the note. because the officials of the company declared by resolution that the "unused certificates shall be canceled" it was generally believed that the entire 1,000,000 shares under option to mr. baruch had been put up as security. the official statement of the company said that the option had been turned back to the company "on a satisfactory basis." no figures were given out. dispatches from san francisco to the _nevada mining news_, which i promptly published, alleged that mr. baruch was given 200,000 or more shares of goldfield consolidated in settlement of the loan to the corporation of $1,000,000 and for the surrender of his option on 1,000,000 shares at an average price of $7.75. _the 200,000 shares of stock was taken out of the collateral at the rate of $5 per share on a day when goldfield consolidated was selling around $7.50, after the stock had been manipulated to a fare-ye-well and against a market price of $10 for the stock on the day the option was given._ no denial was ever published. my opinion, based on private investigation and on analysis of the company's reports, is that mr. baruch fared even better than as outlined above. the giving of the option had made it dangerous for anybody except mr. baruch to attempt to hold the stock above $7.75 per share after the option had been given, and the company in addition was now mulcted for the difference between the low price per share at which settlement was made with mr. baruch and the price at which the stock could have been sold had it been quietly disposed of on the market during the period of nine months which had preceded the date of cancellation. as a matter of fact, there was no necessity at all for settling the loan with stock, the company having in its treasury more than sufficient to repay the loan, and the money was not due. the real purpose, apparently, was to shroud in darkness the exact amount given to mr. baruch to release the company from the option and to keep messrs. nixon and wingfield's goldfield bank, which was the depositary of the mining company, in funds. instead of quieting the stockholders the surrender of the option again thrust into the limelight the entire transaction and proved to be an exacerbation. the immediate effect was that goldfield consolidated began to slump again, and in a few days sold down to $6.50. from this point it kept on tobogganing during a period of weeks down to the $3.50 point--a depreciation in market price for the capitalization of the company, within a year of its promotion at $10 a share, of $23,400,000--before rallying once. enter, nat. c. goodwin & co. a mining partnership between nat. c. goodwin, the actor, and dan edwards had been formed at reno a little before this time. dan edwards was a hustling young mining man who had engaged in the business of "turning" properties to promoters. in august, when goldfield consolidated was selling around $7.50, mr. edwards had asked me to give him a good market tip. i told him to sell goldfield consolidated short. when it hit $6.50 around october 1st he saluted me thus, "got to hand it to you. i have been trying to make my new firm stick, but it don't seem to work. i guess i don't know how to handle the situation in times like this. how would you like to join us?" "how much capital have you got?" i asked. "five thousand of nat's money," he answered. "get another man with $5,000," i said, "and i'll talk to you." a young easterner engaged in mining, named warren a. miller, was stopping at the riverside hotel. within an hour mr. edwards had him lined up. a week later nat. c. goodwin & company was incorporated with nat. c. goodwin president, mr. miller vice-president and general manager, and dan edwards secretary. the new corporation engaged to give me a salary for showing it how and an interest for other substantial considerations. within a fortnight the corporation of nat. c. goodwin & company was making money, not as promoters, however, but as demoters. instead of at first promoting a mining company and earning its profits on the constructive side of the market, it turned the tables and made money on the destructive side--of goldfield consolidated. during the first half of 1907 i had felt the country's speculative pulse from day to day with the promotion literature of the sullivan & rice corporation. although its new mining company, the rich gulch wonder, had boasted of a very high-class directorate and the property was conceded to have merit, the public refused to enthuse. instead of subscribing for large blocks, scattering purchases had been made, and money in dribs and drabs had been grudgingly paid over. the wonder mining camp boom had "died abornin'." investors seemed to have had enough of mining-stock speculation for a while. prices of listed nevada issues were crumpling like seersuckers in the rain. by this time the awful mess that had been made of goldfield affairs through the mistakes of messrs. nixon and wingfield had resulted in a depreciation in market value of more than $100,000,000 in listed nevada issues. this in itself was sufficient to kill a world of buying sentiment. you have to be a rainbow-chaser by nature to be a successful promoter, but even i, despite my chronic optimism, began to feel the influence of what was transpiring. i made a flip-flop and turned bear on the whole market. on october 17th the heinze failure occurred in new york. five days later the embarrassment of the knickerbocker trust company was announced. i glued my ears to the ground. nat. c. goodwin & company "shorted" the mining-stock market so far as its limited capital would permit. on the day mr. heinze went overboard the company was already short 2,000 shares of goldfield consolidated at around $6. on hearing that the knickerbocker trust company was in trouble it promptly shorted 2,000 shares more at a lower figure. on the afternoon when the news reached reno of the knickerbocker trust company's embarrassment i received a private telegram from chicago stating that the paper of the state bank & trust company of goldfield, tonopah and carson city had gone to protest in san francisco. this set my blood tingling. i knew that meant a general nevada "bust." next morning nat. c. goodwin & company shorted 2,000 shares more of goldfield consolidated at about $5-1/8. later in the day the failure of the state bank & trust company was announced. a run followed on the nye & ormsby county bank and its branches in reno, carson city, tonopah, goldfield, and manhattan, and in two hours that institution, too, closed its doors. goldfield consolidated promptly broke to $4 a share. around this point nat. c. goodwin & company covered its short sales, at discretion. all of the nixon banks in nevada experienced runs as a result of the failure of the two nevada banking institutions. so did the other banks. governor sparks was appealed to by nevada bank officials between two suns to come to the rescue. without hesitation he declared a series of legal holidays to enable the banks of the state which were still standing on their feet to catch their breath. these banks finally threw open their doors, but when they did, those of reno met depositors' withdrawals with asset money instead of legal tender. the only bank in reno which had refused to take advantage of the enforced legal holidays was the scheeline banking & trust company. and when asset money was finally resorted to as a makeshift, m. scheeline, the president, was made custodian of the bonds which were put up by the associated reno banks to secure payment. this restored confidence. it was believed in nevada at the time of the failure of the mining-camp banks, the state bank & trust company and the nye & ormsby county, that the nixon institution in goldfield would have found it hard to weather the storm but for the fact that the goldfield bank was believed to have upward of $2,000,000 of the goldfield consolidated mines company's money on deposit. when the state bank & trust company went to the wall senator nixon, in an interview published in his reno newspaper, charged the failure of the state bank & trust company to me. he alleged that the state bank & trust company lost $375,000 by the failure of the sullivan trust company ten months before, and that i had broken the bank. the liabilities of the bank were $3,000,000, and its sullivan trust company loss was only "a drop in the bucket." the senator didn't fool anybody, not even himself. his effort was an ill-concealed attempt to prepossess the public against me, and was received by nevada people as such. senator nixon indulged in some more "interview" with a view to stemming the tide of liquidation in goldfield consolidated. notwithstanding the fact that the company had only recently resorted to the sale of treasury stock for money-raising purposes, he asserted that a quarterly dividend, payable january 25th, would probably be declared. beyond a question this statement was made for market purposes at a time when the senator was sweating money-blood. the stock promptly tobogganed farther on the strength of the dividend forecast. the senator's interviews had now become a standing joke in the community. speculators and brokers had learned the wisdom of "coppering" anything the senator said. the story of the goldfield labor "riots" a large force of miners was discharged from the goldfield consolidated properties. the action of the company in laying off its men at such a distressful period was denounced. it was alleged that senator nixon's goldfield bank could not afford to pay out the money on deposit to the credit of the company because it was required for bank purposes. the money was apparently being hoarded during the money stringency to help the bank out of a tight place. after-events appeared fully to confirm this theory. right in the teeth of the panic, during the depressed and troublous days of the latter part of november;--when current finance was deeply affected; when goldfield consolidated was selling below the $4 point and the entire nevada share list had suffered an average depreciation of about 85 per cent. from the "highs" reached during the goldfield boom of the year before; when the state of nevada was racked from end to end by the serious losses incurred by citizens through the failure of the nye & ormsby county's and the state bank & trust company's chain of banks, totaling nearly $6,000,000, and it appeared that the credit of the state had already been shattered almost beyond repair--a fresh blow was administered. government troops were reported to be en route to goldfield from san francisco "to preserve the law." it had been represented to the president of the united states that goldfield was in a state of anarchy. goldfield wasn't. as a matter of fact, the situation in goldfield with the miners, from the standpoint of law and order, was never good, but it was as good then as it had been in eighteen months. true, there had been some lawlessness, but no riot, and the sheriff of the county had made no call whatsoever on the governor for any aid. during the first days of the panic nixon and wingfield's goldfield bank, john s. cook & company, had tendered the miners the bank's unsecured scrip in lieu of money for the payment of wages. the miners refused acceptance. they were willing to take time-checks of two, three or four months, bearing the mining company's signature, but balked at the idea of becoming creditors of the bank. it has been stated to me by a number of goldfield brokers who were present in the camp at the time that the miners had even decided to concede this point, when an outsider secured by intrigue and money sufficient voting power at a meeting of the executive committee of the miners' union to pass a resolution objecting to the bank's scrip. the refusal to accept the bank's scrip was at once made an excuse by the goldfield mine owners' association, which was dominated by george wingfield, to determine upon a lockout and simultaneously to demand federal intervention. if messrs. nixon and wingfield's bank needed money, as the tender of unsecured scrip indicated all too plainly, the complete shutdown which left with the bank as available resources approximately $2,000,000 in the account of the goldfield consolidated mines company, was a perfect stop-gap; and the need of the presence of troops was a fine coincidental excuse for the shutdown. incidentally, it would rid goldfield of the miners' union, which voted to a man against senator nixon's republican candidates for office, and would permit the importation of foreign labor, an expedient which was afterward successfully resorted to. senator nixon brought pressure to bear at washington. he invoked the good offices of uncle sam and urged that federal troops be sent to the state. he was assisted by congressman bartlett in laying the matter before the departments. the wires between goldfield, reno, carson city and washington were kept hot with an interchange of views. president roosevelt finally informed the senator he could not send the soldiers unless the governor of nevada wired that a state of anarchy actually existed which the state itself was powerless to put down. governor sparks, honest as the day was long and unsuspecting of any trickery or jobbery, listened to a goldfield committee and permitted a dispatch to be sent to washington over his signature representing that such conditions existed. thereupon brigadier-general funston, at the head of two thousand troops, was ordered to goldfield. the state being without any militia and the representations made by governor sparks in his dispatches being strong on the point that a state of anarchy actually existed in goldfield, the president finally succumbed. the maneuver was as swift as it was unexpected. nevada people at first could not understand what it was all about. dispatches from goldfield to reno said the town was quiet. the nearest approach to an overt act of recent occurrence that had been chronicled was the alleged theft a few days before of a box or two of dynamite, about 300 feet of fuse and a quantity of caps that were said to have been clandestinely removed from the booth mine in goldfield. the theft, if theft there was, was charged to the miners, but proof was lacking. on the arrival of the troops in goldfield the goldfield consolidated announced a new wage scale, reducing the miners' wages from $5 to $4 and in some cases from $5 to $3.50. this was a new move, calculated to rouse the ire of the wage workers and to prolong the lockout. messrs. nixon and wingfield's bank in goldfield announced at the same time that it would thereafter discharge all of the pay-rolls of the company in gold. but there were no pay-rolls of any consequence then, the mines being shut down. general funston on his arrival in goldfield interviewed mine operators, union miners and citizens generally with a view to determining the necessity for maintaining government troops there. he discovered that the administration had been buncoed. the general wired the president his opinion. president roosevelt quickly dispatched a commission to goldfield to conduct a public inquiry. this commission consisted of charles b. neal, labor commissioner; herbert knox smith, commissioner of corporations, and lawrence o. murray, assistant secretary of the department of commerce and labor. they heard testimony day and night for a week. they reported to president roosevelt that there was no occasion for the presence of troops in goldfield and that the statements telegraphed to president roosevelt by governor sparks, indicating the existence of a state of anarchy, were without justification. the report was given to the associated press and received wide publicity. the president also issued a broadside backing up the findings, which was telegraphed far and wide. eastern editorial writers poured out torrents of abuse on governor sparks. senator nixon went unscathed. the death of governor sparks feeling under a weight of obligation to governor sparks, who had headed nearly all of the sullivan trust company promotions as president, i tried editorially in the _nevada mining news_ to justify the governor's action. but it was a wee voice drowned in an ocean of adverse opinion and was entirely without echo. it didn't even soothe the governor. the governor, honest, simple old man, broken in purse, in health and in spirit, grieved over the president's denouncement, took to bed, and died of a broken heart. at his imposing funeral pageant in reno, which was attended by thousands of mourners, who had come from all parts of the state to pay homage to the grand old man and who followed the hearse to the cemetery, senator nixon and his partner, george wingfield, were conspicuous by their absence. even at the moment when the grave closed over his remains the troops were leaving goldfield. "it's the 'dead march,'" said one of the bereaved. the bringing of federal troops to goldfield accomplished its purpose. the miners' union was destroyed and sufficient time was gained to enable the financial atmosphere to clarify. by the time the troops departed, goldfield consolidated had rallied to $5 per share. the panic was over. money was comparatively easy again. i ask the reader's indulgence for having devoted so much space to the facts bearing on the appearance in nevada of united states troops at a time when there was no valid occasion for their presence. i feel that it is an important chapter of my experiences and is fraught with interest to the general reader, because it illustrates how easy it is to direct the powerful machinery of our great government so as to carry out the machinations of evil-minded men. you might think, after this demonstration of the lengths to which senator nixon went to accomplish a set purpose, and after witnessing the success which attended his efforts, that a poverty-stricken individual like myself, who had had the hardihood to conduct a newspaper campaign in the senator's own home town against his financial and political activities, would judge it the better part of valor to emigrate from the state. well, i didn't. i stayed right on the spot. that i would hear from washington later i had no doubt, but i stuck, just the same, until my business interests called me away. i wasn't wrong in my deductions. within a few months thereafter there came a visit to my office in reno by a postal inspector, who was apparently "sicked on to the job," and but for the quick intercession by telegraph of united states senator francis b. newlands of nevada with the postmaster general at washington, i am certain that potent influences even at that early day would successfully have "started something." but of this more at another time, i am ahead of my story. chapter vii rawhide because rawhide, the new nevada gold camp, was born during the financial crisis of 1907, i couldn't see any future ahead of it from the promoter's coign of vantage--not "through a pair of field-glasses." it requires capital to develop likely-looking gold "prospects" into dividend-paying mines, and i could not imagine where the money was going to come from. eastern securities markets were in the doldrums. time money commanded a big premium. prices for all descriptions of mining stocks had flattened out to almost nothing. investors were at their wits' end to protect commitments already made. financiers everywhere were depressed. a revulsion of sentiment toward speculation had set in, seemingly for keeps. only a hair-brained enthusiast of the wild-eyed order could hope at such a time possibly to succeed in the marketing of new mining issues. a financial panic has no terrors, however, for gold-seekers. the lure of gold is irresistible. money stringency serves only to strengthen the natural incentive. by the first week in january, 1908, fully 2,000 people were reported to be in rawhide. at the end of january the population had grown to 3,000. the camp easily held the center of the mining stage in nevada. many of the rawhide pioneers hailed from tonopah and goldfield. without exception the opinion of these veterans appeared to be that the surface showings of the new district excelled those of either of the older camps. never before in the history of mining in the west had there been discovered a quartz deposit so seemingly rich in the yellow metal at or near the surface which at the same time embraced so large an area of auriferous mineralization. goldfield, at the same early age, had been a mere collection of prospectors' tents, while rawhide was a thriving, bustling, populous camp with more than a hundred leasing outfits conducting systematic mining operations. news was brought to reno of a phenomenal strike made on grutt hill in rawhide. specimen rock taken from a seam of ore assayed $300,000 to the ton. the kearns lease on balloon hill reported 15 feet of shipping ore on the 65-foot level which assayed from $300 to $500 to the ton. there was full verification of this. also regular shipments were being made to the goldfield reduction works. samples of rock were received in town that were studded with free gold. i was thrilled. statements made by camp "boosters" that a part of balloon hill was "gold with a little rock in it," were not exaggerations, judging from the specimens that were placed in my possession. my apathy began to melt away. against my earlier judgment, i now began to change my attitude. the camp looked like "the real thing," panic or no panic. why should not the american public, even in these tough financial times, enthuse about a gold camp with possibilities for money-making such as are offered here, i asked myself. don't drowning men grasp at straws? is it not the habit of horse-race players when they lose five races in succession to make a plunge bet on the sixth with a view to getting out even? this panic had impoverished hundreds of thousands. what more natural than that those who were hit hard should now fall over one another to get in on the good things of rawhide? if the camp makes good, i reasoned, in the same measure that goldfield did, early investors will roll up millions in profits. i visited the camp. what i saw electrified me. soon i was under the magic spell. real gold at rawhide half a day's tramp over the hills seemed sufficient to convince anybody that the best of the practical miners of nevada had put the stamp of their approval on the district. most of the hundred or more operating leases of rawhide were owned by these hard-rock miners. more than half a dozen surface openings on grutt hill showed the presence of masses of gold-studded quartz. at the intersection of rawhide's two principal thoroughfares a round of shots in a bold quartz outcrop revealed gold-silver ore that assayed $2,700 a ton. a gold beribboned dyke of quartz-rhyolite struck boldly through grutt hill's towering peak. i walked along its strike and knocked off, with an ordinary prospector's pick, samples worth $2 to $5 a pound. across stingaree gulch to the south balloon hill's rugged hog-back formed a connection link between grutt and consolidated hills. the kearns nos. 1 and 2 leases on balloon hill were scenes of strikes of such extraordinary richness that they alone would have started a stampede in alaska. the murray lease on consolidated hill was rated as a veritable bonanza. there i saw quartz that was fully one-third gold. along the southern slope of hooligan hill several sets of leasers were mining ore so rich that guards were maintained through the night to prevent loss from theft. at the alexander lease on hooligan hill the miners were crushing the richer quartz from their shaft and washing out gold to the value of $20 a pan. these were the three principal centers of activity, but they by no means embraced the productive area of the district. tall, skeleton-like gallows-frames dotted the landscape for miles in every direction. the soughing of gasoline engines suggested the breathing of some spectral titan in the throes of herculean effort. i was forcefully impressed, too, with the class of miners at work. it seemed to me there was no longer any room for cavil as to the fortune-making possibilities of investors who put their money into the camp. less than a half year old, rawhide loomed up as the most active mining region i had ever seen at anything like the same age. it required nearly three years for goldfield to make as good a showing, i reasoned. during my earlier efforts at press-agenting southern nevada's mining camps i had to conjure in my mind's eye what the reality would be if half the hopes of camp enthusiasts were fulfilled. here was apparently a fulfillment rather than a promise. at the threshold of the first stage of its development era rawhide could boast of more actual producers and nearly as many operating properties as goldfield could claim at the age of three years. i recalled that cripple creek had been panic-born but had lived through the acute period of 1893-96 to take rank with the greatest gold camps of the world. i was more than convinced. effervescent enthusiasm succeeded my earlier skepticism. history is about to repeat the record of cripple creek, i concluded. the rawhide coalition mines company grutt hill, hooligan hill, a part of balloon hill, and the intervening ground, forming a compact group of eight claims, 160 acres, were owned by a partnership of eight prospectors. the area formed the heart and backbone of the whole mining district. i soon "tied up" this property for nat. c. goodwin & company of reno, with whom i was identified. a company, with 3,000,000 shares of the par value of $1 a share, was incorporated to take title. it was styled the rawhide coalition mines company. of its entire capitalization, 750,000 shares were turned into the treasury of the rawhide coalition mines company. nat c. goodwin & company became agents for the sale of treasury stock, and were given an option by the company on 250,000 shares, to net the treasury $57,500 for purposes of administration and mine development. the goodwin company also purchased 1,850,000 shares of the 2,250,000 shares of ownership stock, amounting to $443,500 more, or at the rate of 23.3 cents per share plus a commission of $12,500 to be paid to a go-between. the ownership stock that was retained by the original owners, and the residue of treasury stock, amounting in all to 900,000 shares, were placed in pool. when i made this deal the cash in bank of nat. c. goodwin & company amounted to about $15,000. it was up to me to finance the undertaking. i did. the contract i made called for only $10,000 in cash and the balance on time payments. nat c. goodwin & company didn't borrow money from any bank or individual, nor did anybody identified with the concern tax his personal resources to the extent of a single dollar to go through with the deal. the money was raised, first for the coalition's treasury and later for the vendors, by appealing directly to the speculative instinct of the american investing public. the public, too, paid the expense that was incurred in reaching them. it did this by paying nat c. goodwin & company an advance in price on coalition stock purchases, over and above the cost price. nat. c. goodwin & company had agreed to net a fraction more than 23 cents per share to both the treasury and the vendors without any deductions whatsoever. all of the advertising expense and other outlays of promotion, it was stipulated, must be borne by nat. c. goodwin & company and none by the mining corporation. what was the system? how was it done? a race of gamblers prior to the birth of rawhide i had for seven years catered to the speculative (gambling) instinct of the american public, chiefly in building mining camps and financing mining enterprises. i now realized that in order to make a success of the undertaking before me, namely, to put the new camp of rawhide on the investment map, i must again appeal loudly to the country's gambling instinct. maybe you think, dear reader, that a man who caters to the gambling instinct of his fellow men, be his intentions honest or dishonest, is a highly immoral person. is he? do you know that the gambling instinct is responsible for the wonderful growth of the mining industry in the united states? would you believe that without the gambling instinct the development of the great natural resources of this country would be almost impossible? with rare exceptions every successful mining enterprise in the united states has been financed in the past by appealing directly to the gambling instinct. in the decade antedating this year considerably more than a billion dollars was raised and invested in this way. conservative investors who are satisfied with from three to six per cent. on their money do not buy mines or mining stocks. speculators (gamblers) who are willing to risk part of their fortune in the hope of gaining fivefold or more in a year or a few years--these are the kind who invest in mines and mining stocks. there are legions of these. not less than 500,000 men and women in the united states, according to the best statistical information obtainable, are stockholders of mining companies. in fact, the gambling instinct finds employment in the mining industry long before a property has reached the stage where it can be classed as even a prospect worthy of exploration. the prospector who follows his burro into the mountain fastnesses or across the desert wastes often gambles his very life against the success of his search; those who grub-stake him gamble their money. the gambling instinct seems bound to continue to play an important rôle in the mining industry for all time, or until either the fortune-hunting instincts of man are eradicated or all the treasures of the world shall have been mined. now, if the practice of catering to the gambling instinct is baneful, i'm a malefactor. so, too, would then be such lofty-pinnacled financiers as messrs. rothschild, rockefeller, morgan, the guggenheims and others. my own thought is that it is _custom_ and the times which are responsible for the maintenance of the great game, and not individuals. the truth is, we are a race of gamblers and _we allow the captains of industry to deal the game for us_. next to money and political power, publicity is recognized by all "doers" as the most powerful lever to accomplish big things. not infrequently publicity will accomplish what neither money nor political power can. generally, publicity can be secured and controlled by either money or political power. when rawhide was born i had neither money nor political power. the camp needed publicity. i had nothing to secure publicity with but my wit. i promptly requisitioned what wit i had, and used all of it. there is an important difference between owning a series of excellent gold-mine prospects, which have tremendous speculative possibilities, and the public recognizing them to be such. it is one thing for a manufacturer to be himself assured that his article is a better product for the money than that of his competitor. it is another thing for the consumer to be convinced. therein lies the value of organized publicity. to focus the attention of the great american investing public on the camp of rawhide was the proposition before me. how was this to be accomplished? display advertising in the newspapers is costly and requires large capital; the purchase of reading notices in publications which accept that class of business, even more so. one major fact stood out from my early experience as a publicity agent in goldfield. few news editors have the heart to consign good copy to the waste-paper basket, particularly if it contains nothing which might cause a come-back. i resolved to "press-agent" the camp. chapter viii the press agent and the public's money probably the most scientifically press-agented camp in nevada had been bullfrog. bullfrog was born two years after goldfield. the goldfield publicity bureau by this time had greatly improved its art and its efficiency. when the bullfrog boom was still young the late united states senator stewart, an octogenarian and out of a job, traveled from washington, at the expiration of his term, to the bullfrog camp. there he hung out his shingle as a practising lawyer. immediately the press bureau secured a cabinet photo of the venerable lawmaker and composed a story about his fresh start in life on the desert. the yarn appealed so strongly to sunday editors of the great city dailies throughout the country that bullfrog secured for nothing scores of pages of priceless advertising in the news columns. the senator built a home, the story said, on a spot where, less than a year before, desert wayfarers had died of thirst and coyotes roamed. the interior of the house on the desert was minutely described. olive-colored chintz curtains protected the bearded patriarch, while at work in his study, from the burning rays of the sun. old florentine cabinets, costly byzantine vases, and matchless specimens of sèvres, filled his living-rooms. silk persian rugs an inch thick decked the floors. venetian-framed miniature paintings of former presidents of the united states and champions of liberty of bygone days graced the walls. costly bronzes and marble statuettes were strewn about in profusion. visitors could not help deducing that the senator thought nothing too good for his desert habitat. _the name of bullfrog exuded from every paragraph of the story; also the name of a mine at the approach to which this desert mansion was reared and in the exploitation of which the press-agent had a selfish interest._ the remarkable part of this tale, which was printed with pictures of the senator in one metropolitan newspaper of great circulation and prestige to the extent of a full page on a sunday and was syndicated by it to a score of others, was that the only truth contained in it happened to be the fact that the senator had decided to make bullfrog his home with a view to working up a law practise. but it was a good story from the bullfrog press-agent's standpoint and from that of the sunday editor, and even the senator did not blink at it. he recognized it as camp "publicity" of the highest efficiency, as did other residents of bullfrog. during the manhattan boom, which followed that of bullfrog, the publicity bureau became more ambitious. it made a drive at the news columns of the metropolitan press on week days, and succeeded. at that time the sullivan trust company of goldfield was promoting the jumping jack-manhattan mining company. james hopper, the gifted magazinist, wrote a story in which the names "jumping jack" and "sullivan trust company" appeared in almost every other line. it was forwarded by mail to a great daily newspaper of new york and promptly published as news. the yarn told how the man in charge of the gasoline engine at the mouth of the jumping jack shaft had gone stark mad while at work and how but for the quick intervention of the president of the sullivan trust company, who happened to be on the ground, a tragedy might well have been the result. the miner, the story said, stepped into the bucket at the head of the shaft and asked the man in the engine-house to lower him to a depth of 300 feet. quick as a flash the bucket was let down. when the 200-foot point was reached there was a sudden stop. with a rattle and a roar the bucket was jerked back to within 50 feet of the surface. thereupon it was again lowered and quickly raised again, and the operation constantly repeated until the poor miner became unconscious and fell in a jangled mass to the bottom of the bucket. hearing the miner's early cries, mr. sullivan had gone to the rescue. he knocked senseless the man in the engine-house and pinioned him. then he brought up the bucket containing the almost inanimate form of the miner. turning to the demon in charge of the engine, who had now recovered consciousness, mr. sullivan cried, "how dare you do a thing like this?" the man responded, "his name is jack, ain't it?" "well, what of it?" roared mr. sullivan. "oh, i was just _jumping the jack_!" chuckled the "madman." this nursery tale was conspicuously printed in a high-class new york newspaper's columns as real news. undoubtedly the reason why the editors allowed it to pass was that it was believed to be true, but above all was cleverly written. i was too busy during the early part of the rawhide boom to do any writing of consequence or even to suggest particular subjects for stories. it seemed to me that the exciting events of every-day occurrence during the progress of the mad rush would furnish the correspondents with enough matter to keep the news-pot constantly boiling. i assembled around me the shining lights of the reno newspaper fraternity and put them on the pay-roll. for weeks an average of at least one column of exciting rawhide stampede news was published on the front pages of the big coast dailies. the publicity campaign went merrily on. i kept close watch on the character of the news that was being sent out and was pleased in contemplating the fact that very little false coloring, if any, was resorted to. a boisterous mining-camp stampede, second only in intensity to the klondike excitement of eleven years before, was in progress, and there was plenty of live news to chronicle almost every day. after returning from one of my trips to rawhide i became alarmed on reading on the front page of the leading san francisco newspapers a harrowing two-column story about the manner in which ed. hoffman, mine superintendent of the rawhide coalition, had been waylaid the day before on a dark desert road and robbed of $10,000 in gold which he was carrying to the mines for the purpose of discharging the pay-roll. i had just left mr. hoffman in rawhide and he had not been waylaid. i sent for the man who was responsible for the story. "say, jim," i said, "you're crazy. there is a come-back to that yarn that will cost you your job as correspondent for your san francisco paper. it is rough work. cut it out!" "gee whillikins!" he replied. "how can i? here's an order for a two-column follow-up and i have already filed it." "what did you say in your second story?" i inquired. "well, i told how a posse, armed to the teeth, were chasing the robbers and explained that they're within three miles of walker lake in hot pursuit." "you're a madman!" i protested. "kill those robbers and be quick; do it to-night so that you choke off the demand for more copy, or you're a goner!" next day the correspondent wired to his string of newspapers that the posse had chased the robbers into walker lake, where they were drowned. at the point in walker lake where the correspondent said the robbers had found a watery grave it was known to some reno people that for three miles in both directions the lake was shallow and that the deepest water in that vicinity was less than four feet. this caused some snickering in reno. still there was no come-back. the newspapers never learned of the deception. the correspondent had been canny enough in sending the story to keep the local correspondents of all other out-of-town newspapers thoroughly informed. they had sent out practically the same story, and therefore did not give the snap away. in the early days of the rawhide boom a rumor reached the camp that death valley "scotty," the illustrious personage who had been press-agented from one end of the land to the other as the owner of a secret golconda, was about to start a stampede into some new diggings. the news bureau decided to kill off opposition. newspapers of the land were queried as follows: "scotty's lair discovered in death valley. it is a cache containing a number of empty wells-fargo money-chests. scotty has apparently been looting the loot of old-time stage robbers. how many words?" the newspapers just ate this one up. column upon column was telegraphed from nevada. the source of scotty's wealth being cleared up to the satisfaction of readers of the "yellow," scotty's value as a mine promoter became seriously impaired. when i chided the reno correspondent for sending out the fake story regarding the robbery of rawhide coalition's mine manager, i recall that he argued he had made a blunder in one direction only. he said he should have seen to it that the mine manager was actually robbed! that, he said, would have eliminated the danger of a come-back. years ago in new york the public was startled by reading of an actress taking her bath in pure milk. a few weeks later newspaper readers were convulsed by stories of another star in the theatrical firmament performing her morning ablutions in a tub of champagne. "if you don't believe it," said the lady press-agent to a lady newspaper reporter who was sent to cover the story, "i will give you a chance to see the lady in the act." this was done and, of course, the newspapers were convinced that it was no idle press-agent's dream. of course, neither of these women had been in the habit of bathing in milk or in champagne. a tub of milk costs less than $10 and a tub of champagne less than $200, but you could not have bought this kind of publicity for these performers at anything like such absurdly low figures if you used the display advertising columns of the newspapers. nor would the advertising have been nearly so effective. the absurd milk story scored a "knockout" with newspaper readers and earned a great fortune for the actress. publicity via elinor glyn at this early stage in rawhide's history the reigning literary sensation of two continents was "three weeks." nothing, reasoned the correspondents, would attract more attention to the camp than having mrs. elinor glyn at rawhide, particularly if she would conduct herself while there in a manner that might challenge the criticism of church members. sam newhouse, the multimillionaire mining operator of utah, famous on two continents as a charming host, especially when celebrities are his guests, was stopping at the fairmont hotel in san francisco. mrs. glyn was in san francisco at the same time. mr. newhouse and ray baker, a reno beau brummel, clubman, chum of m. h. de young, owner and editor of the san francisco _chronicle_, and scion of a house that represents the aristocracy of nevada, were showing coast hospitality to the distinguished authoress. a message was sent to mr. baker reading substantially as follows: "please suggest to mr. newhouse and mrs. glyn the advisability of visiting rawhide. the lady can get much local color for a new book. if you bag the game, you will be a hero." ray was on to his job. within three days mrs. glyn, under escort of messrs. newhouse and baker, arrived in rawhide after a thirty-eight-hour journey by railroad and auto from san francisco. the party having arrived in camp at dusk, it was suggested that they go to a gambling-house and see a real game of stud poker as played on the desert. they entered a room. six players were seated around a table. the men were coatless and grimy. their unshaven mugs, rough as nutmeg-graters, were twisted into strange grimaces. all of them appeared the worse for liquor. before each man was piled a mound of ivory chips of various hues, and alongside rested a six-shooter. from the rear trousers' pocket of every player another gun protruded. each man wore a belt filled with cartridges. although an impromptu sort of game, it was well staged. a man with bloodshot eyes shuffled and riffled the cards. then he dealt a hand to each. "bet you $10,000," loudly declared the first player. "call that and go you $15,000 better," shouted the second as he pushed a stack of yellows toward the center. "raise you!" cried two others, almost in unison. before the jack-pot was played out $300,000 (in chips) had found its way to the center of the table and four men were standing up in their seats in a frenzy of bravado with the muzzles of their guns viciously pointed at one another. there was enough of the lurking devil in the eyes of the belligerents to give the onlookers a nervous shiver. when the gun-play started, mrs. glyn and messrs. newhouse and baker took to the "tall and uncut." as the door closed and the vanishing forms of the visitors could be seen disappearing around the opposite street corner, all of the men in the room pointed their guns heavenward and shot at the ceiling, which was of canvas. the sharp report of the revolver-shots rang through the air. this was followed by hollow groans, calculated to freeze the blood of the retreating party, and by a scraping and scuffling sound that conveyed to the imagination a violent struggle between several persons. fifteen minutes later two stretchers, carrying the "dead," were taken to the undertaker's shop. mrs. glyn and mr. newhouse, with drooped chins, stood by and witnessed the dismal spectacle. of course, the "murder" of these two gamblers, during the progress of a card-game for sensationally high stakes and in the presence of the authoress of "three weeks," made fine front-page newspaper copy. rawhide suggested itself in every paragraph of the stories as a mining-center that was large enough to attract the attention of a multimillionaire mine magnate of the caliber of sam newhouse and of an authoress of such world-wide repute as elinor glyn. the camp got yards of free publicity that was calculated to convince the public it was no flash in the pan, which was exactly what was wanted. the next night elinor glyn, having recovered from the shock of the exciting poker-game, was escorted through stingaree gulch. the lane was lined on both sides with dance-halls and brothels for a distance of two thousand feet. mrs. glyn "sight-saw" all of these. rawhide scribes saw a chance here for some fine writing: the wasted cheeks and wasted forms of frail humanity, as seen last night in the jaundiced light that was reflected by the crimson-shaded lamps and curtains of stingaree gulch, visibly affected the gifted english authoress. they carried to mrs. glyn an affirmative answer to the question, so often propounded recently, whether it is against public morality to make a heroine in "three weeks" of a pleasure-palled victim of the upper set. it was made plain to mrs. glyn that her heroine differed from the stingaree gulch kind only in that her cheeks were less faded than her character. that's the kind of laura jean libby comment on mrs. glyn's tour of stingaree gulch that one of the rawhide correspondents wired to a "yellow," with a view to pleasing the editor and to insuring positive acceptance of his copy. later in the night a fire-alarm was rung in. the local fire-department responded in wild-western fashion. the conflagration, which was started for mrs. glyn's sole benefit, advanced with the rapidity of a tidal wave. it brought to the scene a mixed throng of the riffraff of the camp. the tumult of voices rose loud and clear. the fire embraced all of the deserted shacks and waste lumber at the foothills of one of the mines. the liberal use of kerosene and a favoring wind caused a fierce blaze. it spouted showers of sparks into the darkness and gleamed like a beacon to desert wayfarers. the fierce yells of the firemen rang far and wide. of a sudden a wild-haired individual thrust himself out of the crowd and sprang through the door of a blazing shack. he disappeared within the flames. three feet past the door was a secret passage leading to shelter in the tunnel of an adjoining mine. mrs. glyn, of course, did not know this. she acclaimed the act as one of daring heroism. water in the camp was scarce, so there was a resort to barreled beer and dynamite. soon the flames of the devouring fire were extinguished. again the newspapers throughout the land contained stories, which were telegraphed from the spot, regarding the remarkable experiences of the much-discussed authoress of "three weeks" in the new, great, gold camp of rawhide. the press agent was in his glory. "al" miller's siege elinor glyn's experiences in rawhide were by no means the most interesting that newspaper readers of the united states were privileged to read during the course of the press-agenting of the camp. "al" miller was one of the first experienced mining operators to get into rawhide. he landed in camp in the early part of 1907. after a thorough inspection of the mine showings throughout the district, he hit upon the hooligan hill section of the rawhide coalition property as a likely-looking spot to develop pay ore. mr. miller had been mining for a great many years and had been identified with some important mining projects in colorado. when he applied for a lease on that section of the coalition property embracing a good part of hooligan hill it was granted to him without parley. mr. miller financed his project right in the camp of rawhide. he interested five other mining men. a syndicate was formed. each of these six took an equal interest. all agreed to subscribe to a treasury fund to meet the expense of development. a shaft was started on a very rich stringer of gold ore. when it had reached a depth of about 40 feet the miller lease was regarded as one of the big "comers" of the camp. in fact, a good grade of ore was exposed on all sides and in the bottom of a 4-1/2×7-1/2 foot shaft. specimens assayed as high as $2,000 a ton. at this stage of the enterprise an operating company was formed. those who had formed the original syndicate divided the ownership stock among themselves. mr. miller was given full charge and allowed a salary for his services. day after day you could see him on the job, sharpening steel, turning a windlass to hoist the muck from the bottom of the shaft after each round of shots had been fired, and making a full hand as mine-manager, blacksmith, mucker and shift-boss. one day i was sitting in my office at reno when i received a telephone message that there was a big fight on over the control of the miller lease. mr. miller and a big swede who was working for him had barricaded themselves at the mine. they threatened death to any one who approached. we had, for a day or two, been hungering and thirsting for some live news of the camp. my journalistic instinct got busy. i queried our rawhide correspondent. he advised that the situation really looked serious and that a genuine scrap threatened. mr. miller had installed a good-sized arsenal at the mine and laid in about three days' provisions. he declared that he was prepared to hold out for an indefinite period. i wired our correspondent at rawhide instructions to file a story up to 1,000 or 1,500 words. naturally excitement ran high in the camp. soon hundreds of people gathered at points of vantage along the crest of hooligan hill and surrounding uplifts. every one was expectantly awaiting interesting developments. to the casual onlooker it seemed as though possibly a score or more who stood ready to storm the mine might become involved. in fact, no one could tell how soon hostilities would break loose. using the telegrams i had received from camp, one of my men dictated a story containing the facts and sent it over to the reno correspondent of the associated press. it was put on the wire without a moment's hesitation. mr. miller had formed a rampart about the collar of the shaft. sacked ore was piled up to a height of about five feet. the gold-laden stuff surrounded the shaft on all sides but one, the exception being to the northwest. there hooligan hill slanted upward at an angle of less than twenty degrees from vertical. it was from this approach that mr. miller was forced to guard constantly against attack. he found it necessary, according to our dispatches, to keep a constant vigil in order to preclude the possibility of a surprise. he and his swede companion alternated in keeping the lookout. occasionally the fitful soughing of the gasoline engine exhausts from the mining plants on balloon hill and grutt hill were interspersed by the sharp report of a six-shooter as the besieged parties either actually or mythically observed a threatened approach of the enemy. although the principals cast in this little mimic war were limited to perhaps less than a score, every incident or detail was provided to make up a very threatening and keenly interesting situation, with several lives hanging in the balance. there is no doubt that mr. miller at least, and perhaps his swede companion, would have resisted any attempt to take "fort miller," as we styled it, even to sacrificing his life, for he was known as a man of action who had been in numerous critical situations without showing the slightest exercise of the primal instinct. the fact that rawhide was saved from an episode that might have measured up to the tragic importance of a pitched battle and caused the loss of a number of lives was undoubtedly due to the patient willingness of mr. miller's partners and their supporters to satisfy themselves with a siege and to starve out the two men in possession of the mine rather than undertake to rout them. the story went like wildfire and we were besieged for others and for a follow-up on the original story. for three days we kept the yarn alive and the wires burdened with details of the siege and unsuccessful storming of camp miller, hooligan hill, nevada. i venture to say that mr. hearst, with his well-known facility for serving up hot stuff to a sensation-loving following, never surpassed in this particular the stories that were scattered broadcast over the united states foundered upon this interesting episode in the mining development of rawhide. the story promised to be good for at least a week when we were somewhat surprised to hear that mr. miller had capitulated. it seems that in storing his fort with provender he had supplied only one gallon of whisky and when this ran low, on the second or third day, he attempted, single-handed, a foraging expedition in search of a further supply of john barleycorn. during his absence his swede companion hoisted a flag of truce, and when miller returned to the scene of action he found his mine in the possession of his enemies. charles g. gates, son of john w. gates, the noted stock-market plunger, visited rawhide twice. he spent his time by day inspecting the numerous mine workings, of which there were not less than seventy-five in full blast. at night he was a frequent winner at the gaming-tables. his advent in rawhide was telegraphed far and wide and contributed to excite the general interest. a young woman of dazzling beauty and fine presence was discovered in camp unchaperoned. she had been attracted to the scene by stories of fortunes made in a night. under a grilling process of questioning by a few leading citizens she divulged the fact that she had run away from her home in utah to seek single-handed her fortune on the desert. in roguish manner she expressed the opinion that if allowed to go her own way she would soon succeed in her mission. but she would not divulge the manner in which she proposed to operate. she confessed she had no money. there was a serene but settled expression of melancholy in her eyes that captivated everybody who saw her. many roving adventurers of the better class in the district who had listened to the call of the wild yet would have felt as much at home in the salon of a fifth avenue millionaire as in the boom-camp, pronounced her beauty to be in a class by itself. there was no law in the camp which would warrant the girl's deportation, yet action appeared warranted. within a few moments $500 was subscribed as a purse to furnish the girl a passage out of camp and for a fresh start in life. the late riley grannan, race-track plunger, nat. c. goodwin, the noted player, and three others subscribed $100 each. she refused to accept the present. next day she disappeared. there was a corking human interest story here. newspapers far and wide published the tale. two years later this girl's photograph was sent without her knowledge to the judges of a famous beauty contest in a far western state. the judges were on the point of voting her the prize without question when investigation of her antecedents revealed her rawhide escapade. the award was given to another. when the camp was four months old and water still commanded from $3 to $4 a barrel, the standard price for a bath being $5, a banquet costing $50 a plate was served to one hundred soldiers of fortune who had been drawn to the spot from nearly every clime. the banqueters to a man played a good knife and fork. the spirit of _camaraderie_ permeated the feast. there was much libation, much postprandial speechifying, much unbridled joyousness. _bon mots_ flew from lip to lip. song and jest were exchanged. the air rang with hilarity. nat. c. goodwin warmed up to a witty, odd, racy vein of across-the-table conversation. then he made a felicitous speech. others followed him in similar vein. luxuriant and unrestrained imagination and slashiness of wit marked most of the talks. the festivities ended in a revel. the correspondents burned up the wires on the subject of that banquet. in the memory of the most ancient prospector no scene like this had ever been enacted in a desert mining camp when it was so young and at a time when the country was just emerging from a panic that seemed for a while to warp its whole financial fabric. the funeral oration for riley grannan in april, 1908, riley grannan, the noted race-track plunger, died of pneumonia in rawhide, where he was conducting a gambling house. he was ill only a few days and his life went out like the snuff of a candle. when all the gold in rawhide's towering hills shall have been reduced to bullion and not even a post is left to guide the desert-wayfarer to the spot where was witnessed the greatest stampede in western mining history, posterity will remember rawhide for the funeral oration that was pronounced over the bier of mr. grannan by h. w. knickerbocker, wearer of the cloth and mine-promoter. the oration delivered by mr. knickerbocker on this occasion was a remarkable example of sustained eloquence. pouring out utterances of exquisite thought and brilliant language in utter disregard of the length of his sentences and without using so much as a pencil memorandum, mr. knickerbocker with a delicacy of expression pure as poetry urged upon his auditors that the deceased "dead game sport" had not lived his life in vain. soon the crowd, who listened with rapt attention, was in the melting mood. as mr. knickerbocker progressed with his discourse his periods were punctuated with convulsive bursts of sorrow. rawhide correspondents reorganized the full value of the occasion from the press-agent's standpoint. mr. grannan had been a world-famous plunger on the turf, and the correspondents burned the midnight oil in an effort to do their subject justice. some other lights and shadows of rawhide press-agenting are contained in the following dispatch, which appeared in a san francisco newspaper in the early period of the boom: goldfield, february 19.--w. h. scott of the goldfield brokerage house of scott & amann, who returned from rawhide this morning, expresses the opinion that within a year that camp will be the largest gold-producer in the state. "when a man is broke in rawhide," said mr. scott, "he can always eat. all he has to do is to go to some lease and pan out breakfast money. there is rich ore on every dump, and every man is made welcome." h. w. knickerbocker sent this one to a reno newspaper: gold, gold, gold! the wise men of old sought an alchemy whereby they could transmute the base metals into gold. it was a fruitless quest then; it is a needless quest now. rawhide has been discovered! no flowers bloom upon her rock-ribbed bosom. no dimpling streams kiss her soil into verdure, to flash in laminated silver 'neath the sunbeam's touch. no flowers nor food, no beauty nor utility on the surface; but from her desert-covered heart rawhide is pouring a stream of yellow gold out upon the world which is translatable, not simply into food and houses and comfort, but also into pictures and poetry and music and all those things that minister in an objective way to the development of a full-orbed manhood. joseph s. jordan, the well-known nevada mining editor, filed this dispatch to the newspapers of his string on the coast: right through what is now the main street of rawhide, in the days of '49, the makers of california passed on their way to the new eldorado. they had many hardships through which to pass before reaching the gold which was their lure, and thousands that went through the hills of rawhide never reached their goal. they were massacred by the indians, or fell victims to the thirst and heat of the desert, and for many years the way across the plains was marked by the whitening bones of the pathfinders. and here all the while lay the treasures of captain kidd, the ransoms of crowns. harry hedrick, the veteran journalist of far western mining camps, sent his newspaper this: to stand on twenty different claims in one day, as i have done; to take the virgin rock from the ledge, to reduce it to pulp and then to watch a string of the saint-seducing dross encircle the pan; to peer over the shoulder of the assayer while he takes the precious button from the crucible--these are the convincing things about this newest and greatest of gold camps. it is not a novelty to have assays run into the thousands. in fact, it is commonplace. to report strikes of a few hundred dollars to the ton seems like an anticlimax. there were scores of actual happenings in rawhide that make it possible for me to say in reviewing the vigorous publicity campaign which marked its first year's phenomenal growth, that ninety per cent. of the correspondence, including the special dispatches sent from the camp and from reno, which was published in newspapers of the united states, was not only based on fact but was literally true in so far as any newspaper reporter can be depended upon accurately to describe events. ask any high-class newspaper owner or editor to express his sentiments regarding the "faking" which formed about ten per cent. of the rawhide press work described herein and he will tell you that such work is a reproach to journalism. maybe it is, but we are living in times when such work on the part of press-agents is the rule and not the exception. the publicity-agent who can successfully perform this way is generally able to command an annual stipend as big as that of the president of the united states. there was nothing criminal about the performance in rawhide, because there was no intentional misrepresentation regarding the character or quality of any mine in the rawhide camp. correspondents were repeatedly warned to be extremely careful not to overstep the bounds in this regard. confessedly there are grades of "faking" which no press-agent would care to stoop to. somewhere in de quincey's "confessions of an opium eater" he describes one of his pipe-dreams as perfect moonshine, and, like the sculptured imagery of the pendulous lamp in "christabel," _all carved from the carver's brain_. rawhide and reno correspondents were guilty of very little work which de quincey's description would exactly fit. there was a basis for nearly everything they wrote about, even the alleged discovery of death valley scotty's secret storehouse of wealth, that story having been in circulation in nevada, although not theretofore published, for upward of eighteen months. unsubstantial, baseless, ungrounded fiction had been resorted to, it is true, during the manhattan boom, in a single story about the madman in charge of the hoist on the jumping jack, but this was an exception to the rule and the story was harmless. among the "big fellows" if you don't think the character of the press-agent's work during the rawhide boom was comparatively high class and harmless, dear reader, you really have another "think" coming. at a time when goldfield consolidated was wobbling in price on the new york curb and the market needed support, just prior to the smash in the market price of the stock from $7 to around $3.50, the new york _times_ printed in a conspicuous position on its financial page a news story to the effect that j. p. morgan & company were about to take over the control of that company. that's an example of a _harmful_ "fake," the coarse kind that wall street occasionally uses to catch suckers. here is another: thompson, towle & company, members of the new york stock exchange, issue a weekly newspaper called the _news letter_. much of its space is given over to a review of the copper situation, at the mines and in the share markets. w. b. thompson, head of the firm, he of nipissing market manipulation fame, is interested to the extent of millions in inspiration, utah copper, nevada consolidated, mason valley and other copper-mining companies. on january 25, 1911, when both the copper metal and copper share markets were sick, and both the price of the metal and the shares were on the eve of a decline, which temporarily ensued, the _news letter_, in an article headed "copper," said: every outcrop in the country has been examined and it is not known where one can look for new properties. the readers of the _news letter_ were asked to believe that no more copper mines would be discovered in this country and that, because of this and other conditions which it mentioned, the supply of the metal must soon be exhausted and the price of the metal and of copper securities must advance. the statement in the _news letter_ that every outcrop in the country has been examined and that it is not known where one can look for new properties--well, if the whole population of north america agreed in a body to accept the job of prospecting the rocky mountains and sierra nevada mountains alone they could hardly perform the job in a lifetime. the use of the automobile has undoubtedly been responsible in the past few years for an impetus to the discovery of mines which is calculated to double the mineral product of this country in the next two decades, and who shall say what the flying-machine will accomplish in this regard? further, new smelting processes and improved reduction facilities generally are daily reducing the cost of treatment of ores and are making commercially valuable low-grade ore-bodies heretofore passed up as worthless. the best opinion of mining men in this country is that our mineral resources have not yet been "skimmed" and that the mining ground of the western country has not yet been well "scratched." therefore, the statement made in a newspaper which is supposedly devoted to the interests of investors, that it need not be expected that more copper mines are going to be discovered, is a snare calculated to trap the unwary. the foregoing is an example of a very harmful but comparatively crude fake, employed by some promoters in wall street of the multimillionaire class when their stocks need market support. here is a specimen of the _insidious_ brand of get-rich-quick fake. on march 7, 1911, the new york _sun_ printed in the second column of its front page the following dispatch: tacoma, wash., march 6.--f. augustus heinze has struck it rich again; this time it's a fortune in the porcupine gold fields in canada. charles e. herron, a nome mining man, who has just returned from the new gold fields, is authority for the statement that heinze is "inside the big money." he has bought the foster group of claims, adjoining the celebrated dome mine, from which it is estimated that $25,000,000 will be gleaned this year and for the development of which a railroad is now under construction. the porcupine gold field, according to herron, is one of the wonders of the age. one prospector has stripped the vein for a distance of fifty feet and polished it in places, so that gold is visible all along. his trench is three feet deep and he asks $200,000 cash for it as it stands. a party of alaskans offered the owner of this claim $50,000 a shot for all the ore that could be blown out with two sticks of dynamite, but he refused. press-work like the foregoing is more than likely to separate the public wrongfully from its money. the item serves as an excellent example of one of "the impalpable and cunningly devised tricks that fool the wisest and which landed you" that i promised, at the beginning of "my adventures with your money," to lay bare. i said in my foreword: are you aware that in catering to your instinct to gamble, methods to get you to part with your money are so artfully and deftly applied by the highest powers that they deceive you completely? could you imagine it to be a fact that in nearly all cases where you find you are ready to embark on a given speculation, ways and means that are almost scientific in their insidiousness have been used upon you? the new york _sun_ article says it is estimated that $25,000,000 will be gleaned this year from the dome mine in porcupine. the truth is, no engineer has ever appraised the ore in sight in the entire mine, according to any statements yet issued, at anything like half of that amount gross, and the mine itself can not possibly produce so much as $100,000 this year. a mill of 240 tons per diem capacity has been ordered by the management and it is expected will be in operation by october first, but no sooner.[2] the ore, according to h. p. davis's _porcupine hand book_, an accepted authority, "has been stated to average from $10 to $12 a ton." the lowest estimated cost of mining and milling is $6. a fair estimate of profits would, therefore, be $5 per ton, not allowing for any expenses of mine-exploration in other directions on the property or other incidental outlay, which will undoubtedly amount to $1 per ton on the production. the production of 240 tons of ore per day at $4 per ton net profit would mean net returns of $28,800 per month. if the mill runs throughout october, november and december of this the company will "glean" $86,400 during 1911, and not $25,000,000, as the new york _sun_ article suggests.[3] [2] the fire of july will delay installation until a later date. [3] in arriving at these figures i am more than fair. recent estimates of the average value of the ores is $8, and i know of some estimates by very competent mining men that are as low as $4. some engineers say justification is lacking for even a $4 estimate. the dome is by no means a proved commercial success as yet from the mine standpoint, although the possessor of much ore, because of the uncertain average values. how great an exaggeration the new york _sun's_ $25,000,000 estimate is may be gathered from the statement that to glean $25,000,000 in one year from any mine where the ore assays $11 on an average, and the cost of mining, milling and new development is $7, the gross value of the tonnage in the mine that is milled during the one year must be at least $53,571,000. further, to reduce such a quantity of that quality of ore to bullion in a single year would require the erection of mills of 17,260 tons per day capacity. as mentioned, the actual per diem capacity of the mill now under construction is 240 tons.[4] [4] it has been destroyed by the july fire and must be replaced. undoubtedly the dome mining company flotation will soon be made and the public will be "allowed" to subscribe for the shares or buy them on the new york curb at a figure agreeable to the promoters. this seems certain, for otherwise why this raw press-work?[5] [5] the foregoing comment on the porcupine situation has been more than justified by developments after the date of this writing. the first battery of forty stamps in the first stamp mill was not in operation till april, 1912, more than a year from the date of the prediction that $25,000,000 would be gleaned in 1911. the article says that a number of alaskans offered money at the rate of $50,000 a shot for all the ore that could be blown out with two sticks of dynamite, but were refused. there never was a statement made by any wild-catter now behind prison bars in any literature i ever saw that could approach this one in flagrant misrepresentation of facts. all the ore that could be displaced in one shot with two sticks of dynamite would not exceed four tons. in order to repay the investor it would be necessary, therefore, that this ore average better than $12,500 per ton. the new york _sun's_ story says that notwithstanding this offer the owner was willing to sell the whole property for $200,000. imagine this: there are four tons of rock on the property worth $12,500 per ton, for a distance of 50 feet the gold shimmers on the surface, and there are hundreds of thousands of tons of rock in the same kind of formation on the same property, but still the owner is willing to dispose of all of it for $200,000! the statement is preposterous and outrageous. it is the kind described by de quincey as "all carved from the carver's brain." the reverse english now, about the "reverse english" in this line of press-work. similar ways and means, dear reader, that are just as scientific in their insidiousness have been used upon you to poison your mind _against_ the value of mining investments of competing promoters, when it has been found to the interest of powerful men to bring this about. when the offices of b. h. scheftels & company, with which i was identified, were raided in seven cities by special agent scarborough (since permitted to resign) of the department of justice of the united states government, in september, 1910, two of the men who had been active in bringing about the raid assembled in the parlor of the astor house the newspaper men assigned to cover the story by new york and brooklyn newspapers. there they gave out the information that ely central, which i had advised the purchase of at from 50 cents per share up to $4 and down again, was actually under option to me and my associates in large blocks at 5 cents. as a matter of fact, the average price paid over for this option stock in real hard money by my people was in excess of 90 cents per share, without adding a penny to the cost for expenses of mining engineers, publicity or anything else. my people had also partly paid for a block bought at private sale at the rate of $3 a share, besides buying tens of thousands of shares in the open market at $4 and higher. the new york _times_ and the new york _sun_, two newspapers which make capital of the rectitude of both their news and advertising columns, published this statement, along with forty others that were just as false, if not more so. so did the new york _american_ and the other hearst newspapers of the united states. the new york _times_ story related how i had personally cleaned up in fifteen months not less than $3,000,000 as the result of my market operations. as a matter of fact, i and my associates had impoverished ourselves trying to support the stock in the open market against the concerted attacks of rival promoters and other powerful interests on whose financial corns we had tread. every well-informed person in wall street knows this. the new york _times_ stated that every man connected with b. h. scheftels & company had tried to obtain membership on the new york curb and that all of the requests were turned down. no application was ever made for membership because, first, the rules of the curb forbade corporation memberships, and, second, the scheftels company already employed several members on regular salary and more than a dozen members on a commission basis. it was also stated that b. h. scheftels & company applied to the boston curb for membership and that their application was rejected. this was also a lie made out of whole cloth. in three months, the new york _times_ said, no less than 400,000 letters had been received in reply to circulars sent out by b. h. scheftels & company. this is an average of over 5,000 letters for each business day during the period of three months. the exaggeration here was about 5,000 per cent. all of the properties promoted by the scheftels company were stated in the new york _times_ article to be "practically worthless." this was utter rubbish and so misleading that had i been accused of pocketpicking the effect could not have been more harmful. rawhide coalition had produced upward of $400,000 in gold bullion, had probably been "high graded" to the extent of nearly as much more, according to the judgment of well-posted men on the ground, and not less than five miles of underground development work had been done on the property. development work and production had never ceased for a day. besides, when the rawhide camp was still in its swaddling-clothes, i had originally purchased the controlling interest for nat. c. goodwin & company at a valuation of $700,000 for the mine. the control of ely central had been taken over by b. h. scheftels & company and paid for at a valuation well in excess of a million dollars for the property, and upward of $200,000 had been spent in mine development during the fourteen months of the scheftels quasi-control. jumbo extension was a famous producer of goldfield. subsequent to the raid one-twentieth of its acreage was sold to the goldfield consolidated for $195,000. on july 15th of the current year the company disbursed to stockholders $95,000 in dividends, being 10 per cent. on the par of the issued capitalization. bovard consolidated, which was promoted at 10 cents a share as a speculation, had turned out to be a "lemon" after a period of active mine development, the values in the ore pinching out at depth, but b. h. scheftels & company had immediately informed stockholders to this effect. the new york _times_ stated that b. h. scheftels & company sold ely central stock to the amount of five or six millions in cash and made a profit of $3,000,000 on the transactions. the books of the scheftels company show that the company not only made no money on the sale of ely central but actually lost vast sums. the new york _times_ said that it had been advertised that a carload of ore had been shipped from the ely central mine as a sample, but that the government had not been able to find out to whom this carload of ore was consigned. the truth was that the consignment had been made to the best-known smelter company in the united states, that the ore averaged seven per cent. copper, and that it could not have been shipped out of camp except over a single railroad which has the monopoly--an easy transaction to trace. b. h. scheftels & company were accused by the new york _times_ of clearing up nearly $600,000 in three months on the promotion of the south quincy copper company. the facts were that, after receiving $30,000 in subscriptions and returning every subscription on demand because of the slump in metallic copper, the scheftels company abandoned the promotion and never even applied for listing of the stock in any market. a large sum was lost by the scheftels company here. even in stating the penalty for misuse of the mails, which was the crime charged by the government agent who afterwards resigned as a consequence of conduct objectionable to the government, the new york _times_ stated that the punishment was five years in prison, which was more hop-skip-and-go-merry mistaking. the crime is a misdemeanor and the maximum penalty for an offense is eighteen months. i have counted not less than five hundred unfounded and misleading statements of this kind regarding myself and associates that have been made in the past year by newspapers and press associations. the shadow has been taken for the substance. now, the scheftels raid, i shall prove in due time, was the culmination of as bitterly waged a campaign of misrepresentation and financial brigandage as has ever been recorded. chronologically an introduction of the subject is out of place here. the effect, however, of the press-agenting which formed a part of the campaign of destruction is pertinent to the topic under consideration. the immediate result was that thousands of stockholders in the various mining companies that had been sponsored by the scheftels company were robbed of an aggregate sum amounting into millions, which represented the ensuing decline in market value of the stocks. the newspaper campaign of misrepresentation and villification was essential to the plans and purposes of the men who sicked the government on to me. the final destruction of public confidence in the securities with which i was identified became necessary to justify the whole proceeding in the public mind. on the surface of the play it was made to appear that the government of the united states had reached out righteously for the suppression of a dangerous band of criminals. the story in the new york _times_ and other newspapers on the day after the raid was justification made to this end. the fact that tens of thousands of innocent stockholders might lose their all, as a result of the foul use of powerful maladroit publicity-machinery, did not stop the conspirators for a moment. i had a youthful past and, therefore, the newspapers took little chance in publishing anything without investigation and proof that might be offered. and they went the limit, particularly those newspapers that are in the habit of permitting the use of their news columns from time to time to help along the publicity measures of powerful interests. contrasted with the comparatively harmless "faking" that characterized rawhide's press-agenting, the raw work of the newspapers just described is as different as angel-cake from antimony. if you are not yet convinced, hearken to this: the power of the public print in the _saturday evening post_ of december 31, 1910, there appeared an article headed, "launching a corporation. how the pirates and merchantmen of commerce set sail. by edward hungerford," from which i quote, without the omission or change of so much as a comma. referring, in my opinion to ely central, promoted by myself and associates, mr. hungerford says: here is a typical case--a mining property recently exploited on the curb market, the shipyard of many of these pirate craft: a prospect located not far from one of the bonanza mines of the west was capitalized by a number of men who, after they had convinced themselves that it would not pay, dropped it and gave little thought to the company they had organized. one day they received through a lawyer an offer of four thousand dollars for the even million shares of stock they had prepared to issue at a face value of five dollars a share. they were told that a wealthy young man was willing to take a four-thousand-dollar flier on the property, on the outside chance that it might develop ore. the deal was made. soon after a well-known man was named as a part owner of the mine, which "promised" to enrich all those interested in it. that was not the first time that the marketable value of a name that is known had been used to exploit a corporation. any man of standing has many such offers. the shares of stock that had been purchased for four cents each were peddled on the curb at fifty cents. then they were advanced to sixty cents. soon a "market"--so called--was made and the stock found a ready sale. point by point it was advanced until it actually was eagerly sought by investors, who were not only willing but eager to pay four dollars a share for it. mr. hungerford states in the foregoing: "this mine was capitalized by a number of men who dropped out after they convinced themselves that it would not pay." the statement is false if it refers to ely central, as i believe it does. the chief owners and organizers attempted to promote it through a new york stock exchange house on the new york curb at above $7 per share, or at a valuation of more than $8,000,000 for the mine, but the bankers' panic of 1907-8 intervened, and for _that reason_ they quit. the stock sold in 1906 at above $7.50 a share on the new york curb, two years before i became identified with it. mr. hungerford says that one day these men _received through a lawyer an offer of $4,000 for a million shares of stock, and they sold_. how cruelly false this statement is nobody can feel more than myself. the average price paid by my associates in hard money for the controlling interest in the 1,600,000 shares of capitalization, as already mentioned, was above 90 cents, or considerably more than one million dollars in all. an additional $600,000 or more was used to protect the market for the stock, making our cost, without adding a cent for promotion expenses, about $1.50 per share instead of four cents--more than $2,000,000 for the property and not $5,000. line by line and word for word i could analyze the statement of mr. hungerford and show that 95 per cent. of it is false both in premise and deduction. but this would be only cumulative on the one point. my excuse for mentioning the item is to give a striking example of the startling force and power which attaches to insidious newspaper publicity of the kind quoted from the new york _times_. mr. hungerford "fell" for it, and innocently lent himself to the purposes of the men who sponsored the story by himself passing it on to the readers of the _saturday evening post_. the purpose here has been to show the imposition on the american public which is being practiced every day in the news columns of daily newspapers and other publications, but i have been able to convey to the reader only the barest kind of suggestion as to the depths to which this perception is practiced. limitations of space prohibit further encroachment, or i would fain extend my list of examples indefinitely. we hear much these days about the abuses of journalism. much of the criticism is leveled at publishers who lend the use of their columns for "boosting" that is calculated to help their advertisers. but little attention is paid to that other evil namely, the use of the news columns for the purpose of destroying business rivals, political rivals and enemies generally of men who wield sufficient influence to employ the method. this ramification of the subject appeals to me as of at least as much consequence to citizens as is the one of inspired puffery. i believe the public is going to hear much more of this feature of newspaper abuse in the future than it has in the past. the community is waking up and is manifesting a desire to learn more about the heinous practice. rawhide again to return to rawhide. as a result of the "scientific" press-agenting which the camp received, a frenzied stampede ensued. the rush was of such magnitude that it stands unparalleled in western mining history. not less than 60,000 people journeyed across the desolate, wind-swept reaches of nevada's mountainous desert during the excitement. not less than 12,000 of these remained on the ground for a period of several months. mining-camp records were broken. the maximum population of goldfield during the height of its boom was approximately 15,000, but it had taken more than three years and the discovery of the world's highest grade gold mine to attract this number of people. cripple creek for two years after its discovery was little more than a hamlet. leadville during its first year was hardly heard of. the scenes enacted in rawhide when the boom was at its height beggar description. real estate advanced in value in half a year in as great degree as goldfield's did in three years. corner lots on the main street sold as high as $17,000. ground rent for plots 25×100 feet commanded $300 a month. during the day as well as at night the gaming-tables of the pleasure-palaces were banked with players, and the adventuresome were compelled literally to fight their way through the serried ranks of onlookers to take a hand in the play. the miners were flush. many assay offices, accessories of "high-graders," were turning out bullion from extraordinarily rich ore easily hypothecated by a certain element among the men working underground. the opening of "tex" rickard's gambling-resort in rawhide was celebrated by an orgy that cut a new notch for functions of this kind in southern nevada. the bar receipts aggregated over $2,000. the games were reported to have won for mr. rickard $25,000 on the first day. champagne was the common beverage. day was merged into night and night into day. rouged courtesans of stingaree gulch provided the dash of ¯ on the densely crowded streets fashionably tailored easterners, digging-booted prospectors, grimy miners, hustling brokers, promoters, mine operators and mercantile men, with here and there a scattering of "tin horns," jostled one another and formed an ever shifting kaleidoscopic maelstrom of humanity. in the environing hills could be heard the creak of the windlass, the clank of the chain, and the buzz and chug of the gasoline hoist, punctuated at frequent intervals by sharp detonations of exploding dynamite. outgoing ore-laden freighters, hauled by ten-span mule teams, made almost impassable the roads connecting the camp with near-by points of ingress. coming from the opposite direction, heavily laden wagons carrying lumber and supplies, and automobiles crowded to the guards with human freight, blocked the roadways. rawhide's publicity campaign from a press-agent's standpoint was a howling success. from the standpoint of the promoter, however, results were mixed. nat. c. goodwin & company were enabled to make more than a financial stand-off of their promotion of the rawhide coalition mines company, but they did not profit to the extent they might have, had the times been propitious. i was not long in discovering that my first deductions, made at the inception of the rawhide boom, namely, that the country was in no financial mood to consider favorably the claims to recognition of a new mining camp, were right, and that it would have been better had the birth of rawhide been delayed for a period or until the country could catch its financial breath again. crowds came to rawhide, but few with money. flattering as was the extent of the inrush, it was easy to see that if the publicity campaign had been suppressed for a while, the result in harvest would have been immeasurably greater. had financial conditions been right, the effort to give the camp "scientific" publicity would undoubtedly have been crowded with results for "the inside" of a character that would have meant much larger sums of money in the bank. nat. c. goodwin & company recognized, too, that they had been working at a great disadvantage by attempting to finance a great mining enterprise at so great a distance from eastern financial centers as reno. we were hardly a match for the eastern promoter who, because of the handy location of his offices, was enabled to keep in close personal contact with his following. the usual happening in mining took place at rawhide. the extraordinary rich surface deposits opened up into vast bodies of medium and low-grade ore at depth. rawhide's one requirement appeared to be a railroad, and a milling plant of 500 or 600 tons a day capacity. it was decided that i should come east and attempt to finance the company for deep mine development, mill and railroad construction, and also to go through with the deal made with the vendors of the controlling interest. the time period for payments had been extended for nat. c. goodwin & company, and the option to purchase was now valued by the goodwin company at a fortune. in new york, over the signature of nat. c. goodwin the firm for a while, under my direction, conducted a display advertisement newspaper campaign in favor of the issue, which was now listed on the new york curb. hayden, stone & company, bankers, of boston and new york, who have since successfully financed the ray consolidated and chino copper companies, undertook to send their engineer to rawhide to make an examination of the property with a view to financing the company for railroad and milling equipment amounting to upward of a million dollars. under the impetus of this news and the nat. c. goodwin advertising campaign the market price of the shares shot up to $1.46, or a valuation in excess of four million dollars for the property. a few weeks later a sharp market break occurred. some one got the news before nat. c. goodwin & company did that the million-dollar financing proposition had been acted upon adversely by the engineer. the company had done no systematic underground development work. an enormous amount of work had been done, but it was accomplished under the leasing system. the leasers, who, because of lack of milling facilities, were unable to dispose of a profit of ore that assayed less than $40 per ton, had bent all of their efforts toward bringing to the surface high-grade shipping ore and had made no effort at all to block out and put into sight the known great tonnages of medium and low-grade. engineers take nothing for granted and this one reported that the proposition of spending a million dollars should be turned down because a commensurate tonnage had not been blocked out and put in sight. to this day the camp has struggled along without adequate milling facilities, but has been practically self-sustaining. from a physical standpoint the mines to-day are conceded to be of great promise. the company is honestly and efficiently managed. the president, from the day of incorporation to this hour, has been e. w. king, formerly president of the montana society of mining engineers, a director of a number of montana banks, and recognized as one of the ablest gold-mine managers of the west. m. scheeline, president of the scheeline banking & trust company of reno, who ranks as the oldest and most conservative banker in the state of nevada, has been treasurer from the outset. the history of rawhide is still in the making and its final chapter has not yet been written by any manner of means. nor is it within the pale of possibility that such latent productive potentialities as have been established at rawhide can long remain in great part dormant. in wall street nat. c. goodwin & company's deal with the venders of the control of rawhide coalition was later financed to a successful finish. it was done by appealing to the speculative instinct of that class of investors who habitually gamble in mining shares. the effort to finance the mining company itself, to a point where it might take rank with the great dividend-paying gold mines of the west, was not so successful. chapter ix the wall street game a man who thinks he knows what happened to me in wall street, and _why it happened_, suggests that the new york section of "my adventures with your money" be prefaced with the following: this is the story of an energetic, self-confident, aggressive, optimistic, enthusiastic, nervy, fearless, imprudent, uncompromising, presumptuous _fool_. maybe he was worthy of a following in that he would cast his own fortunes with those whom he asked to follow him, but withal he was a dangerous leader because he could not see the rents in his own armor and lacked caution, prudence and discretion. he could see a goal ahead and would lead the rush, but always failed to take into his reckoning one circumstance in his youth that left a blot on his escutcheon and placed in the hands of unfair opponents an envenomed weapon ready for use. he failed to see the necessity of making friends of his competitors and of placating his critics as he progressed. indeed, he reckoned these elements not at all. he made many enemies and few allies. he never compromised. naturally, he met with disastrous defeat for himself and the loyal ones who placed their faith in him. i disagree. i was not a fool. i refused to be a knave, and i am not sorry. i have in mind a man of parts who as a stockholder has been doing the dirty work of unscrupulous multimillionaire wall street mining promoters for years. dishonest in his expressed opinions and a sycophant in his every action, the interest of the wall street man of power is always his as against that of the unprotected investor. i look upon this man as a vile person. i could not do as he does if my very existence depended upon such conduct. i would rather be out of business and broke for the rest of my life than be he. for me to serve the base purposes of high-class crooks just because they have money and power, would be for me to barter away my soul and lose my peace of mind. i would not sell either for all the money in the world. honesty is the best policy. the type of man i have described can not thrive for long. he must evidently suffer total eclipse. the business of this world is founded and builded upon individual integrity. the business man who allows himself to be used to carry out the base purposes of men in high places forfeits the respect of those whom he serves, is forever afterwards mistrusted by them, and loses caste in the very set he tries to gain favor with. i charge that powerful, dishonest interests on wall street found it necessary for selfish reasons that i be put out of business. i declare that they bided their time until newspaper clamor against so-called get-rich-quick promoters had been fostered, aroused and stimulated to a point where citizens became imbued with the idea that all promoters who use the advertising columns of newspapers are crooks. and i aver that when the government used upon me and my associates its rare power of seizure, search and confiscation, it was with no evidence that any government statute had been violated. in this and the concluding chapter of "my adventures with your money" i state the facts which i believe prove these statements to the last syllable. good big fish vs. bad little fish ask the casual newspaper reader to define offhand the compound adjective get-rich-quick and he will tell you it is applied solely to professional promoters who employ flamboyant advertising methods, promise great speculative profits, use other devices which are calculated to separate the public from its money, and are in every instance dishonest. that is the idea which powerful "interests" have inculcated in the public mind by subtle, insistent press-agenting. time and again during the progress of "my adventures with your money" i have endeavored to show that the really dangerous get-rich-quick forces are the men in high places who, by the artful and insidious use of the news columns of "friendly" publications and others which copy from them, divorce the public from millions upon millions. i said in my foreword the following: the more dangerous malefactors are the men in high places who take a good property, overcapitalize it, appraise its value at many times what it is worth, use artful methods to beguile the thinking public into believing the stock is worth par or more, and foist it on investors at a figure which robs them of great sums of money. there are more than a million victims of this practice in the united states. no man has right to assume that a promoter who sells stock by means of display advertising in the newspapers is _per se_ a get-rich-quick operator. there are honest professional promoters of the display advertising variety and there are dishonest ones, just as there are honest promoters of the multimillionaire kind and dishonest ones. the _on-the-level_, trumpet-tongued mining promoter, who believes in newspaper advertising and successfully finances companies by appealing uproariously to the speculative investing public, performs an actual service and is entitled to a place among honorable men. indeed, he is the hero of the prospector and "poor" mine owner of the west. he alone stands between these men and grasping monopoly. mine men, stockholders, and financiers the country over understand this, although the eastern newspaper-reading public has been taught to believe that this type of promoter must be a get-rich-quick operator. a broker in wall street who speculates in the securities of the new york stock exchange for his own account is considered unsafe. e. h. gary, chairman of the executive board of the steel trust, stated under oath at washington in june that j. p. morgan never speculates. ask the average member of the new york stock exchange what chances the stock-gambler has. if he is frank, he will shrug his shoulders and reply something like this: "if the game could be beaten, do you think i would be a broker? wouldn't i be a player?" the aggregate market value of seats on the new york stock exchange is nearly $100,000,000. it costs more than a hundred million dollars more every year to gather and transact through offices and branch offices the speculative business which forms the bulk of the transactions of the members. the "kitty," or "rake-off," is enormous. who pays it? you hear of the stockbroker going to europe in his yacht every summer. how many of his trading customers travel that way? who pays the freight? can a game be beaten where so many multimillionaires are created among those who are on the "inside" and where so large a percentage of the speculator's money must come out every year to pay the enormous cost of maintaining a vast system of stock-brokerage offices, stock exchanges, telegraph and telephone wires, newspapers, publicity bureaus, yachts, fifth avenue palaces, huge contributions to national and state political campaigns, etc.? you hear a hue and a cry against bucketshops. there is no federal embargo against bucketshopping. yet somehow or other the machinery of the government's department of justice is used to crush out this sort of gambling institution. now, what is the difference in principle between gambling on margin on fluctuations of stocks in a bucketshop and doing the same through a new york stock exchange house? this is the unimportant difference: the bucketshop-keeper takes the other end of the play, pays you out of his pocket when the market goes your way and keeps your money when it goes against you. he never delivers any stocks. the new york stock exchange member is expected to buy your stocks for you and _carry_ them--some of them do and most of them don't, as is shown farther on--but in this case also no stocks are delivered to you. the transaction is the same in principle as the one in the bucketshop, so far as the gambling feature is concerned. the only real difference is that when you gamble on market fluctuations through the bucketshops no contribution is made to the new york stock exchange "kitty." righteous wall street and the "sucker" public the new york stock exchange member will tell you that the evil of bucketshopping is that the bucketshopper is tempted when the public is long on stocks to depress the market by heavy short sales. on the other hand, the bucketshopper urges upon you that his business is gambling against fluctuations which he has no hand in making and that the financial powers of wall street resort to the same trick that he is occasionally accused of. the "interests" know at every hour in the day approximately how many shares of stocks have been borrowed for delivery against "short" sales or are being carried on margin for the long account. they know what the public's short interest or long interest is, and they, too, have it in their power to shake out the public at any moment they choose. worse, it is common knowledge that this practice is continually resorted to. stocks are put up and held up on bad news and marked down and held down on good news or no news at all. news is withheld and is manufactured to suit occasions. for years the market has been thimble-rigged to a frazzle. margin-trading "suckers" have been milked to a finish. george e. crater, jr., writes: margin trading on the new york stock exchange is the most dangerous and destructive form of gambling known, because, being "legal" and therefore "respectable," it allures hundreds of thousands of people who would never think of risking their money at "faro," "rouge-et-noir," "roulette," or any of the other games of chance. statistics show that more people are ruined physically, morally and financially by stock gambling than by all the other forms of ordinary gambling combined. monte carlo is a christian philanthropy compared with "wall street." you have quite as good, if not a better chance to win a fortune at monte carlo than you have by putting up "margins" against stock exchange bulling and bearing, and if you ruin yourself at monte carlo the proprietor will at least refund enough of your money to pay your way home. the man who "goes broke" on "margins" finds no relief at his service on the stock exchange or among the brokers. there would not be so many millionaires in this country if there were not so many fools ready to throw their money away on margins. a howl of condemnation is raised against horse-racing. newspapers, periodicals, politicians, enthusiasts, crusaders, and charlatans in every walk of life, are encouraged to make a big noise. horse-racing, like bucketshopping, is an avenue for speculation--gambling--and it keeps much money out of wall street. fakirs, who are the tools of wall street, collect from wall street for their services and at the same time make moral or political capital of their zealousness in crusading against such wall street gambling competition. the small fry mining promoter, who is not a member of the stock exchange, pays no toll to the big game, is beyond the discipline and control of the governing body of the new york stock exchange and is not a part of the machinery, sets up a competitive business which caters to the gambling instinct in the way of fluctuating mining stocks. the speculating public gets action, likes it, and invests money that might have been used in margin-trading on the new york stock exchange or for "investment" in the constantly fluctuating low-priced industrials or higher-priced mining stocks that are sponsored by big interests with new york stock exchange affiliations. promptly the machinery of wall street is used to crush him. column upon column is printed in the magazines and newspapers about get-rich-quicks. a conviction for crime is obtained of a real get-rich-quick offender--a little fellow who is guilty, but no more so than his "licensed" brother higher up, who is doing infinitely greater damage. the _one_ that a coterie of high-class wall street thimbleriggers are really "after," because he thwarted them in their swindling operations by exposing them in his newspaper, but against whom they can not make a case, has a skeleton in his closet. they bring it forth, dangle it in the air, make the public think he, too, must be a scoundrel, and he is raided by a government agent during the uproar; and they "get away" with it. the "righteous" crusade against "get-rich-quicks" is press-agented to the limit. the public "falls" for the "dope." at last the government has acted to protect investors! wouldn't it wilt you? were p. t. barnum to be reincarnated and his hum-bugging mind by some miracle expanded a million times, it would still be impossible for him to conceive such a gigantic faking of the american public as it has been put to in the last few years. and the public isn't "on." shrewd schemers on wall street keep pulling the wool over the eyes of the "sucker-public," and not only see no reason why they should discontinue the practice but find it very lucrative to continue doing it. the marketing of mining stock as a rule, it takes much money to make a paying mine out of a promising prospect. later on in the mine's progress, through the constructive period, other very large sums are generally required to pay for the blocking out of an ore reserve and to supply milling facilities for the reduction of the ores. the peripatetic mining prospector of our western mining empire--the dauntless finder of mines who laughs at hardship and ridicules the thought of danger, who makes companions of gila monsters and the desert rattler, whose only relief from the everlasting silence of the untrodden reaches of arid wastes is the sex-call of the coyote--has the choice of just two markets for the sale of his "find." he may either accept a comparatively small sum from the agent of a powerful mining syndicate for his prospect or he may receive a fair speculative price from the professional promoter. the great mine financiers of this country rarely compete with one another for the purchase of any mining property. this is particularly true if one of the others happens to be operating in the district where the small mine owner's property lies. as a rule, the original owner, whose entire fortune is perhaps tied up in the property, then finds himself in the position where he must either accept the first offer, however small, which is made to him by one of these dominant interests, or find that market closed to him. his alternative, as mentioned, is a sale to the independent mine promoter of comparatively small means, who incorporates a company to own and develop the property and finances the operation from start to finish by selling stock in the enterprise to the general public. the method of this class of professional promoter--the hope of the small mine owner--in marketing stock, usually involves the liberal use of the advertising columns of newspapers. he lacks "pull" or power sufficient to get his stock and mine talked of favorably in financial literature of the day to a degree that will excite public interest, and so he must construct his own publicity forces. advertising costs money and the public foots the toll. but if the promoter is honest, this item of cost is not in itself an argument in favor of stock offerings of the multi-millionaire mine capitalist who does not patronize the display advertising columns of the newspapers. nor does it establish a case against the wares of the promoter who does. the promotion expenses incurred by the advertising promoter do not nearly approach in their totality the difference between cost price and the price at which the magnate promoter usually invites the public to participate in similar enterprises. for example: a few years ago a certain man bought a certain mine for $1,000,000 on time payments. he has been making a market for the stock of that mine on the new york curb at an average of above $8 per share, or more than $8,000,000 for the property. his firm, members of the new york stock exchange, have been advising people in their widely circulated market literature to buy the stock at this figure. and yet the property is without a reduction works, will need $2,500,000 to $3,000,000 in excess of money now in the company's treasury to erect one, which money must yet be raised somewhere and somehow, and the producing era of the company can not possibly begin for two years yet at the very earliest. i could cite many such instances. when nat. c. goodwin & company of reno purchased the control of rawhide coalition, during the exciting rawhide camp boom early in 1908, the valuation agreed upon for the property was $700,000. this was considerably more than the original owners could obtain for it at that time from any big interest. it, too, needed milling facilities. as a matter of fact, but for the success of mine promoters of the nat. c. goodwin & company and b. h. scheftels & company class, the great comstock lode, which produced over $600,000,000 in gold and silver bullion, would have likely remained undeveloped. the big public demand in the early 70's for comstock mining shares of all descriptions was created by a series of flamboyant flotations and aggressive stock-market campaigns. if the con. virginia mine had not opened up into a bonanza ore-body at a depth of 1,400 feet, the frenzy of speculation in comstock shares might have gone down in history as another south sea bubble. the "brass-band" promoter, be it understood, is therefore not without honor in the far west. deprive the mine prospector of the services of this style of enterprise projector, with his operating machinery, namely, facilities for appealing to the speculating-investing public, and you hit the small western mine man a solar-plexus blow. conversely, every obstacle placed in the way of the mine promoter of loud methods and moderate means is an added cause for rejoicing on the part of the wall street multi-millionaire mine capitalist. when b. h. scheftels & company, with whom i was identified, were raided by the united states government in september, 1910, a wail went up from the western mine operator to his representative in congress. the best sentiment of the far west, as i was able to gather it, favored the idea that the last hope of the small western mine owner had been shattered. during the short period of b. h. scheftels & company's activity in new york it raised directly nearly $2,000,000 for western mining properties and indirectly influenced in that direction at least $10,000,000 more. the raid was a body-blow to the small western mine owner who needs capital to develop his properties and has no affiliations with capitalists. since the raid i do not know of a mine owner of any of the great far western states who has successfully financed a mining proposition in the east except by delivering his property in its entirety into the hands of some big interest, which has taken it over for a sum insignificant by comparison with what the public may ultimately be expected to pay for it when the stock is finally marketed on the curbs and exchanges. i buck the wall street game after i had conducted the big camp publicity campaign of rawhide, which i had done with a view to centering the attention of the american investing public on the speculative possibilities of the stock of the rawhide coalition mines company, and in that way endeavored to finance the proposition--after i had failed by this method, in the teeth of the bankers' panic of 1907-8, to dispose of enough stock to finance the company for deep mine development, mill equipment and the payment to the original owners of the price for the control agreed upon, i came to new york, late in october, 1908, bent on trying to succeed in the encompassment of my original purpose both by direct appeal to the public through display advertisements in the newspapers and by making a deal for part of the enterprise with the "big" fellows. i found rawhide coalition stock listed on the curb, and the market quiescent. public interest in the east had been aroused to some degree, but the market was not absorbing stock. an effort to induce leading stock brokers to mention the issue favorably in their market letters failed. those who were willing to give the stock some publicity exacted either a "call" on stock at a low price or an out-and-out reduction below the market quotation for such stock as they disposed of. such concessions were not to be thought of. it was the intention of nat. c. goodwin & company to support a rising market for rawhide coalition. my goldfield experience with mining-stock brokers convinced me that few might be expected to protect the shareholders' interest in such an enterprise. commission mining-stock brokers of that period, who put their customers into a stock at, say, 30, were tempted to advise profit-taking when the price advanced to, say, 50, because by the operation they made another commission and often earned an additional, or third, commission by getting their customers out of the stock at a profit and into another one, levying a commission on each transaction. nat. c. goodwin & company decided to "try it on" direct with mining-stock speculators by appealing to them through the advertising columns of the newspapers, asking them to purchase the stock on the new york curb through their own brokers. also, hayden, stone & company, the boston and new york banking firm, were induced to agree to raise $1,000,000 for the company for railroad and mill purposes, if their engineer would report favorably. provided with money with which to buy advertising space and furnished with stock certificates to supply the market, nat. c. goodwin & company inaugurated an active campaign on the new york curb. what happened will be found instructive to the reader in several particulars; among them these: (1) the free-lance mining promoter does not always "get the money" when he succeeds in creating a buoyant market for his stock. (2) some stock brokers of seemingly high standing would just as soon "skin" a mining promoter of this order as they would an ordinary speculator. they play no favorites. (3) be a mine promoter ever so honest, without new york stock exchange affiliations his motives are bound to be misconstrued if he makes an error. the "big" fellows will sick on to him the newspapers or newspaper men whom they control or influence. dust will be thrown into the eyes of the public so they'll buy the big fellow's wares, principally for sale on the new york stock exchange, and may forever be prejudiced against the little fellow's. the campaign in rawhide coalition made good progress. it was early in november, 1908. for six weeks i had been supporting the market for the stock on the new york curb for nat. c. goodwin & company of reno. my office was an apartment in a fifth avenue hotel; our brokers were members of the new york stock exchange. for a month we had used, every day, display advertisements in the financial columns of new york city daily newspapers, signed by nat. c. goodwin, to boom the stock. about 600,000 shares of the stock were in the hands of the public. the market, which was on the new york curb, was "real." speculative buying had carried the price from 40 cents up to $1 a share. mine reports were rosy. wide distribution of the stock was taking place. the public evinced deep interest. the nat. c. goodwin advertisements set forth that $2 ought to look reasonable for the stock by christmas day. there were reasons. several very promising mines had been opened up. an engineer of high rank was examining the property. if his report should be favorable, a deal was practically assured that would involve the expenditure of $1,000,000 for deep mine development, a railroad, and adequate milling facilities. this, in turn, would mean early dividends for stockholders. experienced, conservative mining men had expressed the opinion that the property bore the unmistakable earmarks of a big producer. the stock became the feature of the curb market. it easily occupied the center of the stage. not less than 20 brokers could be counted in the crowd executing orders at almost any hour during the daily session. the fact that a new york stock exchange house was executing the supporting orders from the "inside" impressed the "talent." public buying through other new york stock exchange houses further convinced curb veterans that the stock was "the goods." up went the price under the impulse of public buying. curb brokers themselves caught the infection. by december 7th the price soared to $1.40 per share. this was an advance of 500 per cent. over the "low" for the stock of half a year prior. the "double-crossing" of rawhide coalition at the close of the day's business on december 7th, our brokers, a single firm, members of the new york stock exchange, reported the purchase of 17,100 shares in the open market at an average price of about $1.39, and the sale of 1,800 shares at a little above this average. for the first time in the campaign there appeared to be selling pressure. we had quit "long" 15,300 shares. the sum of $21,000 in cash was required to pay for the "long" stock. on december 8th, the day following, the same firm of brokers reported that they had purchased 17,800 shares at an average price of $1.37-1/2, and the sale of 12,800 shares at an average price of $1.40--"long" on the day 5,000 shares. on december 9th our purchases through this firm aggregated 16,800 shares at an average price of $1.40, while our sales totalled only 6,400 shares at a slight advance. nat. c. goodwin & company were now "long" on the three days' transactions 30,700 shares and had been called upon to throw $43,000 behind the market to hold it. this was a comparatively small load to carry and did not alarm us. we considered the stock worth the money. we were curious, however, to learn the reason for the selling. nat. c. goodwin & company had placed most of the outstanding stock direct from reno with the investing public at from 25 cents to $1 per share, and early buyers were reaping a harvest. but this did not appear to be the explanation for all of the selling. interest in the stock was now widespread. there was free public buying and for every actual profit-taker there appeared to be a new purchaser. apparently, somebody was selling the stock "short." late that night a member of our brokerage firm which had been executing our supporting orders, called on me at my apartment. i inquired of him what protective orders he thought the stock would need the next morning to guard against professional attack. he replied: "i think if you will give us a buying order for 5,000 shares at $1.35 there will be no difficulty." my understanding was that he wanted to handle the market for me the next morning and that he would, of course, give me quick notice if further supporting orders were needed. the order was given. it was a very ordinary precaution, for there is hardly a stock on the list that would not be raided by professionals if supporting orders were not known to be in the market. as saturday is only a short two hours' session, i really fell in with the idea. retiring late that night, i left a call for 11 a.m. next morning at about 10:45 i was awakened by my valet. he said nat. c. goodwin wanted me on the long distance. mr. goodwin was in cincinnati, where he was playing a week's engagement. "hello," said mr. goodwin. "did they get you? shall i wire the knickerbocker trust company to pay you $25,000 to support the market? reported here they have you in a hole." "what's up?" i inquired. "why, brokers here say the stock broke to 60 cents on the curb soon after the opening," he said. this was news to me. "i do not need more money," i answered. "i have been asleep. our brokers have been on the job. i will see what is doing and let you know in a little while. don't worry." and i rang off. i 'phoned our brokers and they reported that they had bought 5,000 shares of stock at $1.35 at the opening and had withdrawn support. "too much stock was pressing for sale," they said. "this is hell. you should not have permitted the market to break that way. support the stock!" i said. "buy 7,500 shares at the market!" in a few moments this firm of brokers reported that they had rallied the market to $1.16. the recovery was only temporary, however. another drive broke the stock to 60 cents. our brokers had bought 7,000 shares at from $1 to $1.16 and then stopped. the member of their firm who had been handling our orders throughout this campaign said the purchase of this fresh block of stock exhausted our cash balance on deposit with his firm. they had a number of drafts out for collection, attached to stocks sold to western brokers, that had not yet been credited to us. there was also a big block of coalition stock due us from them. this was the stock they had bought on our supporting orders. they refused, however, to consider either the drafts or the stocks as a credit. we had cash on deposit and credit with a number of other brokers. i promptly telephoned several of them to buy large blocks of the stock at a limit of 95 cents. this was 35 points above the quotation that was given me. not a single share was reported bought on these orders. i jumped into a taxi and rode to the office of the brokers who had been handling our orders. the situation was critical. i realized fully that a sharp break of this character in the market price of a stock that had been so widely exploited must prove shocking to investors. i feared that public confidence would be shattered completely. "this is an outrage!" i protested. "buy 5,000 shares at 95!" i tendered five $1,000-bills as payment in advance. it was five minutes to twelve when i gave the order. at noon they reported that they had purchased 2,000 shares, for which i gave them the money. the market closed 95 bid for a "wagon load." on the face of things it appeared that the market had rallied from 60 to 95 on the purchase of 2,000 shares. this was another convincer that there must somewhere be much that was rotten about the play. investigation satisfied me that i had been "double crossed." the one firm of brokers, members of the new york stock exchange, who had been handling our orders, had acted as our clearing-house, holding our stocks and our money. they had an advantage, which stock brokers understand well. having executed most of our supporting orders, their agents on the curb were also in a position accurately to judge the professional and lay speculation pulse. it was easy for somebody to "put one over" on us. shortly after noon i learned that hayden, stone & company's engineer had turned down the proposition of advancing $1,000,000 for railroad and mill construction. a sufficient tonnage of ore had not been blocked out in the mine. beyond a question this information was in the possession of brokers early in the day. while i slept damage had been done to the market that was irreparable. by the time the price hit $1 on the way down trading had reached huge proportions. one clique of curb brokers were reported to have been persistent sellers throughout. their identity made it very plain that the double-crossing process had been employed to a fare-you-well. i accused our broker of not protecting our interests--the interests of stockholders. i raised a howl. he telegraphed another member of his firm who was away on a hunting-trip, to come back to town. next night both of these men, nat. c. goodwin and myself met in my apartments behind closed doors. their firm agreed to charge to their own account 3,000 of the 5,000 shares reported purchased for us at $1.35. some other minor concessions were made. on the day after the "break" new york newspapers reeked with sensational flubdub about the causes of the smash in the price of the stock. in the preceding few months not less than a dozen other securities had "busted" wide open at various times on the new york curb and new york stock exchange, but stock exchange houses were sponsors for these and the newspaper kept mum. never on these occasions was there a hint in the newspapers that possibly somebody had separated the public from its money. nat. c. goodwin and i were wrongfully accused of willfully smashing the market to shake the public out. the new york _sun_ printed an account of the "break" on the front page, top of last column. it began in a strain that indicated to confiding readers that chorus girls had lost their savings through the recommendations of mr. goodwin. the _sun_ printed the list of officers of the rawhide coalition mines company and emphasized the fact that i "of sullivan trust company fame" was second vice-president. the _sun_ made no mention of the "double cross." nor did any of the other newspapers, with the exception of one. the new york _tribune_ said: a stock exchange house which has been putting out orders in the stock was charged with leading the attack on it yesterday, but members of the firm said that they had been acting merely as brokers for customers in the regular order of business. following the newspaper "roasts," which helped further to destroy public confidence, two brokers on logan & bryan's continental wire system resorted to tactics of a kind to force lower prices. this wire has over one hundred out-of-town broker connections. a report was sent over the wire that nat. c. goodwin & company had failed. another followed it that the rawhide coalition mines company was about to go into the hands of a receiver. the _nevada mining news_ accused nat. boas of san francisco and j. c. weir of new york of exchanging messages to this effect over the logan & bryan wire systems, so that all correspondents on the wire would have the false reports. both boas and weir were believed to be "short" of the stock. both were openly operating for a further decline. these and similar tactics resulted in a further easing off in price to 40 cents bid on december 24th, which was the "low" on the movement. two weeks after christmas the stock rallied to 58 bid, 59 asked, and the market was firm again. on january 14 the price bulged to 70. at this point the stock again became the center of attack. by january 20 the price had eased back to 50. thus far the net result of nat. c. goodwin & company's various campaigns on rawhide coalition was the distribution of some 600,000 shares of stock. the issue had been well exploited. it had a big following and a broad market. some excellent judges of mine values had become stockholders. the company, however, was still unfinanced for a long period of systematic mine development and mill construction. we realized very clearly that some arrangement would have to be perfected to avoid a repetition of the trouble which the new york stock exchange brokerage firm had made us. "inside" market support the removal to new york of b. h. scheftels & company, chicago stock brokers, representatives there of nat c. goodwin & company of reno, and a merging of brokerage and promotion interests of the two firms took place. there was precedent for the move. there are a thousand other corporation interests in this country that are closely affiliated with stock exchange and other brokerage houses, through one or more of their directors or owners being partners in the business. as a matter of fact, it would be difficult to lay your finger on a single big interest of this kind that has not such a representation. these houses, of course, make it a rule to recommend the purchase of stocks in which their principals are interested. affiliations of this kind are found essential to successful financing of enterprises. a number of new york stock exchange houses which are headed or controlled by men who are heavily interested in mining ventures that require financing are exponents of this method in the mining field. most of these have succeeded in promoting projects in which they or their associates are heavily interested, with the aid of the banking and brokerage facilities thus afforded. principally by the use of the market literature and accompanying market manipulation, these houses have placed with their customers the securities of their firm members and associates. they have encompassed this by maintaining a brokerage, banking and promotion business without parading before the public, although never denying, the mixed nature of their business. for the reader to comprehend the necessity for transacting the business this way, he should understand the underlying principle of financing an enterprise by the route of the listed stock market. there are two ways of financing any enterprise with other people's money. one is by the primitive method of appealing directly to the public for subscriptions in huckster fashion, taking the money and then refraining from listing the stock or establishing an open market for it. you can't finance an enterprise of consequence these days by any such procedure. it is practically impossible to borrow from banks or from loan-brokers on any security that has no fixed market value. a market must be established, for without a market on which to sell, intelligent investors won't buy. the method, therefore, in common use, and the only one which has been found effective by financiers, is to create a demand for the security, encourage speculation, establish an active market, and dispose of stock on the market as necessity demands whenever financing is required. this implies and necessitates that the inside interests must support the security in the open market. therefore, it becomes necessary for the successful marketing of the stock by the promoters, once a demand is created and public buying is under way, that stockholders shall be kept in full touch with the latest transpirations on the property and in the market--be furnished with news concerning their interests so that they may judge the value of their stockholdings. this process is particularly essential during the financing period of the company and the security-digesting period of the public. in fine, the ultimate purpose in this regard of all the promotion machinery of wall street--the machinery that has been putting out billions of dollars' worth of securities to investors--is to place stock where it will "stay put," that is, not come out on the open market again to embarrass the interests that are behind the enterprise, and who for a long period are compelled to support the market. on the question of the ethics of market support by "the inside," a whole tome could be written. i will not attempt to discuss the subject at length here. suffice it to say that in my opinion "inside" support of a listed security is not base when it is done with a view to creating a broad market, to stimulate public interest, and to increase the price to a point within the bounds of intrinsic plus reasonable speculative worth. support of the market to the point of stimulation is moral obliquity, however, when dishonestly performed for the sole benefit of the "inside" and to the hurt of the stockholder. this sort of market support is only a shade less reprehensible than manipulation that has for its purpose the reduction of the market price of a security to beneath its real value, which, in my opinion, is nearly always infamous. i might place myself on record right here to the effect that only once did i ever "bear" a stock from "the inside," and on that occasion it was a temporary affair, caused by a desire to secure at a reduced price a big block of stock that was pressing for sale from a quarter that i was under no obligation to. even in that instance i gave the investor much of the benefit my associates secured by letting him have stock at the same figure at which "the inside" secured it. nor have i ever tried to push the price of a stock to a higher level than that which i considered warranted by the reasonable speculative and demonstrated intrinsic value behind the security. chapter x enter, b. h. scheftels & company b. h. scheftels & company, incorporated, mining-stock brokers, successors to b. h. scheftels & company, for many years stock brokers in chicago, opened its doors on broad street, new york, on january 18, 1909. for a long period b. h. scheftels & company of chicago had been advertised as the eastern representatives of the corporation of nat. c. goodwin & company of reno, of which mr. goodwin had been president. it was now announced that nat. c. goodwin had become vice-president of the new corporation of b. h. scheftels & company. because mr. goodwin was by profession an actor and not a stock broker and because of the personal abuse he suffered in unfair newspaper criticism which followed the "break" in the market price of rawhide coalition a month before, he was quite willing to serve as vice-president instead of president. besides, he could not spare the time from his profession to attend closely to the business. the new corporation of b. h. scheftels & company made its bow to the public by at once featuring in its market literature advice to purchase stock of the rawhide coalition mines company. i became publicity manager for the scheftels corporation, manager of its promotion enterprises, and was placed in charge of the protection of the corporation's interests in all markets where its stocks were traded in. soon i was conducting a fresh campaign with investors that became so hot, so exciting and so big that for nineteen months i labored on an average sixteen hours a day, including sundays, without being able to complete in a single day a day's accumulated business. the business grew until b. h. scheftels & company were actually spending more than $1,000,000 annually for office and publicity expenses. in the nineteen months of its existence it bought, sold and delivered approximately 15,000,000 shares of mining stock. the scheftels corporation broke every record in this regard that was ever made by a mining-stock brokerage and promotion house in the history of wall street. throughout its career it was viciously attacked from many directions, but it held its own. through its hold on the mining-stock speculating public, who were getting fairer treatment than ever before, it survived the concerted onslaughts of a number of important interests which it had competed with and antagonized, until one day in september, 1910, on a warrant sworn to singly by one george scarborough, since permitted to resign, clothed with the office and power of a special agent of the department of justice, its offices were raided, its books and papers seized, its property confiscated, and its officers and employees arrested. the annual expense of b. h. scheftels & company was $1,000,000 or more. follows a tabulated statement of the expense item. the figures are approximated. the books of the corporation, which are now in the possession of the department of justice of the united states government, will probably show that the annual expense was larger. the books not being readily available, an attempt is made here to be ultra-conservative in setting down figures: annual expense of b. h. scheftels & company establishment of main office and six branch offices (furniture, fixtures, etc.) $ 40,000 office rentals 35,000 private wire system connecting branch offices in six cities with new york 25,000 telephones 5,000 telegraph tolls 100,000 salaries (all offices) 200,000 daily and weekly market letter (printing and postage) 100,000 general office expense, etc. 100,000 miscellaneous postage 25,000 miscellaneous printing and stationery 25,000 advertising, publicity, etc. 200,000 expert accountants 15,000 commissions and salaries to curb brokers 50,000 mining examinations, engineers' fees, legal fees, etc. 50,000 interest charges 30,000 ---------- total $1,000,000 before the scheftels corporation was in business a month it became plain that it was "filling a long-felt want." in almost every branch it was performing some function in a manner more satisfactory to mining-stock speculators and investors than were its competitors. its market letter news service, usually 16 pages, was the prime article. it soon gained a circulation of 34,000 among the highest class and best informed stockholders of mining companies in the country. it was also regularly sent to more than 2,500 stock brokers, including members of the new york stock exchange, new york cotton exchange, boston stock exchange, new york produce exchange, etc. before the scheftels corporation was five months old the work of its market letter was supplemented by the _mining financial news_, a weekly newspaper which had been published for a long period at reno as the _nevada mining news_, latterly as the _mining financial news_, and which removed to new york when the scheftels company found the mining-stock public was hungry for real live news and the truth regarding the mining propositions of other states as well as those of nevada. the _mining financial news_ and the scheftels market letter, which were published three days apart, were supplied with news from practically the same sources. the newspaper was mailed to all readers of the market letter. the ablest and most reliable mining correspondents obtainable for money in tonopah, goldfield, ely, rawhide, cobalt, butte, globe and other mining camps, and the most experienced market news-gatherers in the mining-stock-market centers of salt lake, san francisco, boston, philadelphia, toronto and new york, were placed on the pay-roll. brokers in these and other cities, including duluth, seattle and butte, supplied more news. wherever there was mining or market activity, representation of the very highest character was sought. news was always wired, no matter what the cost, whenever it was important to traders in mining shares. expense was never spared when the information was considered of value to the speculator or investor. in the new york offices of the scheftels corporation and the _mining financial news_, which adjoined each other, a staff of newspaper men with a mining financial experience of years was gathered. little that transpired in the mines or the markets ever got away from them. days before the mining newspapers of the west reached the east the scheftels market letter or the _mining financial news_ communicated the news regarding mine developments. they also contained a daily and weekly stock-market diagnosis and prognosis. these were based on the news, as gathered by trained forces and aided from time to time by secret information which filtered into the offices. this service soon obtained an accuracy theretofore unknown on the street. there is probably not one stock broker in five hundred that would know a mine underground if he saw one. on the pay-rolls of b. h. scheftels & company and the _mining financial news_ there were thirty men who had been literally brought up in the mines and who, when they put their pen to paper, knew what they were writing about. the scheftels company and the newspaper furnished mine and market information of quality to investors who had before been inundated with misinformation, guesses and twaddle. it sought to guide mining-stock speculators right. it was really a delicate job to handle the _mining financial news_ in a manner which would not lead stupid people to believe that it was an entirely independent paper. it was desirable that its independence be maintained to a degree, so that the full value of the _mining financial news_, as a property, might grow. the intention was some day, when the _mining financial news_ found itself on a paying basis, to sever the scheftels alliance. the _mining financial news_ had always been an entity. it had up to then been assisted financially at periods by mining promotion concerns with which i had been identified and was always a quasi house-organ for this reason. but it invariably preserved a certain independence in its news columns and at least such partial independence of ownership as enabled it to stand on its own bottom. more truth on the "mining financial news" when the _mining financial news_ removed to new york mr. scheftels used much persuasion to get the owners to transfer title to the scheftels company. admittedly, if the scheftels company could boast ownership of the newspaper at the head of its editorial page, it would be a great feather in the scheftels cap and might lead investors to think that an organization which could own and publish a first-class, metropolitan newspaper of the _mining financial news_ variety must for that reason alone be worthy of financial credit. thompson, towle & company, members of the new york stock exchange, print a small sized pattern of such a newspaper, called the _news letter_. hayden, stone & company, and paine, webber & company, of boston and new york, are said to have much influence with the _boston news bureau_, a newspaper which features news of mines and mining share markets. the _boston news bureau_ at times has printed no display advertisements and at other times has. it is considered by boston mining-stock brokers who handle the michigan and arizona copper securities as a necessary complement to their market literature. _walker's copper letter_ and the _boston commercial_ are other examples. _walker's copper letter_, which carries no advertising, for years has said the very nicest things about copper securities promoted and fathered by important boston and new york interests. needless to state, what _walker's copper letter_, the _boston commercial_ and the _boston news bureau_ say about the mining propositions of their friends is as a rule based on fact. the point is that promoters find it necessary that news happenings regarding the markets, the securities and the mines in which they are interested be given broad publicity. it was the idea of the owners of the _mining financial news_, of which b. h. scheftels, president and 25 per cent. owner of the capital stock of b. h. scheftels & company, was not one, that anybody who would supply the sinews while the paper was getting on its feet and was establishing itself, was entitled to all the publicity which the paper could consistently and honestly give it. with this understanding the scheftels company assumed to take all of the income of the _mining financial news_ and pay all of the running expenses until such period as the newspaper might become self-sustaining. in doing so it performed a stupendous service to the entire mining industry in that the space devoted to the scheftels enterprises therein did not average more than one-eighth of the whole, and it spent dollars to supply the news of all stocks where other mining financial publications in its field spent pennies. to make sure that the public understood the _mining financial news_ was the quasi house-organ of the scheftels company many precautions were taken. no application was made for admission to the mails as second-class matter, and the paper was mailed under one and two-cent postage. the name of harry hedrick was lifted to the top of the page as vice-president of the corporation owning the _mining financial news_, mr. hedrick being openly employed by the scheftels company as head of its correspondence department. my own name was later placed at the head of the editorial page as editor, the scheftels company making no bones about my position as absolute head of its publicity department, its promotion enterprises, and of all markets for the scheftels promotion stocks. the connection had before been established even closer than this. i had formerly been advertised as vice-president of nat. c. goodwin & company of reno and vice-president of the rawhide coalition mines company; and the scheftels company had advertised that nat. c. goodwin was its own vice-president. further, the scheftels company announced in its market literature that it had selfish interests in protecting the market for the stock because of the nat. c. goodwin affiliation. occasionally market articles under the signature of b. h. scheftels were published on the front page of the _mining financial news_. whenever anybody made a request for the scheftels market letter a copy of the _mining financial_ news was quite regularly mailed to him without cost. articles under the signature of other officers and employees, formerly of nat. c. goodwin & company of reno and later of b. h. scheftels & company of new york, were very frequently printed in the _mining financial news_. probably the most important reason why the scheftels company made this sort of arrangement with the _mining financial news_ was that it could do so with only a very small additional outlay. the scheftels company found it necessary to employ correspondents in all mining and market centers, and the same correspondents could work for both enterprises. another economic argument was that an enormous saving could be made in telegraph tolls, all dispatches addressed to the newspaper being sent at press rates. these dispatches were always available to the scheftels corporation and its clientele. it was the idea of the scheftels organization that the mining-stock investing public sorely needed right direction and that any brokerage house which led it right would soon be unable to transact all the business that would be offered to it. and that is just what happened. before the scheftels company was six months old the fifteen men in its accounting department were compelled to work day and night--time and again throughout the night until 6 a.m.--to catch up with their work. if the scheftels news service was as nearly perfect as money and brains could make it, its facilities for the execution of orders on the new york curb, the boston curb, san francisco stock exchange, salt lake stock exchange, toronto stock exchange, and other mining markets were unsurpassed. its new york and boston offices were connected with branch offices in philadelphia, chicago, detroit, milwaukee and providence by exclusive private wires, and the service to out-of-town offices was almost instantaneous. the new york offices were located right in front of the curb market on broad street on the ground floor of the big _wall street journal_ building, 50 feet by 200 feet deep--occupying about 10,000 square feet of floor space. the boston office, occupying two floors, was located within 100 feet of the curb market in that city. the public wires of the telegraph companies gave quick service between san francisco, salt lake and toronto, where business was transacted through members of the mining-stock exchanges of those cities. the private wires of the scheftels company were constantly flooded with rapid quotations and market, mine and company news during every trading hour. in new york the curb brokers in the scheftels employ, some on salary and some on commission, rarely numbered less than ten and at one period exceeded twenty. the correspondence department was presided over for a long period by two of the best posted mining-market men that could be employed for money. from this department were usually graduated the managers of out-of-town offices. in the cashier's cage six men were engaged at an average salary of above $100 a week, registering stocks, receiving stocks, paying money and drawing checks. the payroll of the mailing department, which was operated in conjunction with the _mining financial news_, was comparatively small. money-saving machinery for the handling of the large output of market letters and newspapers gave excellent and economic service. about ten stenographers were regularly employed in the correspondence department. occasionally, when a special effort was being made to interest the public in some security in which the corporation was particularly concerned, a force of forty additional typists was pressed into service for short periods. the scheftels principles when the corporation of b. h. scheftels & company opened its doors in new york it had no affiliations with any other wall street interests. it had no axes to grind except its own. it was practically a free-lance. it cracked up its own wares, careful always to keep within the facts, and never minced words about the quality of the goods of its contemporaries. the principle of both the scheftels corporation and the _mining financial news_ was to be always _right_ in their market forecasts. the general order to mine and market news-gatherers and market prognosticators was to give the facts. the law laid down was this: if the news is bad and is likely to injure the interests of our best friends, tell it in the interests of the investor. if it is good and the backers of the stock affected happen to be our worst enemies, tell it. no matter on what side of the market you think b. h. scheftels & company is committed in any of its own speculations, give the customer all the news. put the cause of the mining-stock trader in front of you as the one to further always. never exaggerate. eventually, this policy must redound to our credit and profit. _eventually, this policy resulted in our ruin. our truth-telling policy was directly responsible for the loss of millions to competing promoters, and they banded together to destroy us._ the publicity, promotion and brokerage activities of the corporation were of such magnitude, and withal so simple, that they at once challenged the attention of the street. before the scheftels corporation was half a year old veterans of the financial game began to opine that some big interest was behind the concern. its dashing market methods, its mighty publicity measures and its unbridled assurance attracted much notice. from every quarter expert views reached the scheftels company that its manner of doing things was convincing on the point that it knew the business. but the general opinion of the talent seemed to be that the new corporation was spending too much money and that it could not win out unless a big boom in mining shares ensued. the market tactics adopted by the scheftels company in its promotion enterprises were as old as the hills. on the new york stock exchange they had been employed in a thousand instances before. the method will probably survive all time. the corporation sought to distribute the stocks of which it became sponsor in turn--first rawhide coalition, then ely central, later bovard consolidated and finally jumbo extension--by the approved wall street system of establishing public interest and inquiry and causing an active market. the aim was to establish higher prices for the securities, always within the bounds of intrinsic and reasonable speculative value. all efforts were directed this way. plans like this are, however, sometimes thwarted. markets get sick. more stock presses for sale than the "inside" has money to pay for. stocks break in price. then the promoter can't make any money and might lose a lot of it. since money-making is his primary object, and stock distribution secondary, he has got to do some close figuring when markets are subject to the price-breaking habit. that's where b. h. scheftels & company, through its brokerage business, found, after a short period, that it held within its grasp the power to insure itself against declining markets. without promotion stocks on hand--obtained by wholesale at lower figures than values warranted--in which it could profit to the extent of hundreds of thousands of dollars on a rising market, the million-dollar annual expense of the scheftels company would not have been justified. once the market sought lower levels and no profit could be made on the promotions, it meant a discontinuance of the business on the large scale. the corporation's insurance was the open market in stocks on the general list and its brokerage business. from time to time it openly shorted tens of thousands of shares of stocks in which it had no promoter's interest whatever, by going out in the open market and selling them to all bidders against future delivery, by borrowing them from brokers and selling them for immediate delivery, and by short sales generally. speculators play the market and so did the scheftels company, but never against its own stocks. speculators, however, buy mining shares outright or on margin because they want to gamble. the scheftels company played the market for just the opposite reason. it didn't want to carry its eggs in one basket and wanted insurance against market declines to cover promotion losses that must ensue if a general market slump occurred. and the scheftels company did not inaugurate any fake bookkeeping system or otherwise hide behind any bushes in doing this. moreover, the corporation didn't take advantage of anybody. the cards were not marked. the deck was not stacked. there was no dealing from the bottom. market opinion for which the corporation was directly or indirectly responsible was genuine to the last utterance. no news was suppressed on any stock. the corporation divulged to its customers and to the general public every piece of important outside or inside information regarding any stock on the general list that was in its possession. at the very moment when it was going short of stocks in greatest volume its market prognostications were winning for it a reputation for accuracy never before recorded. if the stocks which the corporation went short of--stocks on the general list and amounting to probably 15 per cent., of the volume of its entire business, the remainder of the transactions being all in "house" stocks (these "house" stocks it could not be short of because of its promoter's options on hundreds of thousands of shares)--if the stocks on the general list thus "shorted" went up in price and the corporation was compelled to go into the market later and "cover" at a great loss, it was always in the corporation's heart to sing a pæan of thanksgiving, for it could well afford to pay the losses sustained by it in the general list out of the greater profits which would be made in the "house" stocks, which must, forsooth, share in the general upswing. collateral securities put up by customers as margin for the purchase of other stocks were credited to the customers' accounts and mixed with the company's own securities. in every case proper endorsement of certificates, put up for collateral margin, was required. every certificate of stock bears on the reverse side a power of attorney, in blank. the signature thereto of the person to whom the certificate was issued makes it negotiable by the broker. it was the rule of the house always to inform those who brought collateral to the offices for margin that the stocks would be used and that they would not receive the identical certificates back again. in a number of cases objection was made. acceptance of the stock as collateral margin was then promptly refused. if there were any scattering exceptions to this rule, it was contrary to instructions and due to neglect or ignorance. whenever a customer closed his account and demanded the return of his collateral, stocks of the same description and denomination were recalled and delivery made. the same rule applied to stocks pledged with the corporation for loans, it being specifically set forth in the promissory note which the borrower signed that the privilege of using the stock was granted to the lender. this practice is so common and the rule so generally understood by mining-stock traders that objection was rarely made by customers. to test the general custom, a friend at my suggestion not long ago sent certificates of stock to 17 stockbrokers now doing business on wall street. three of these were members of the new york stock exchange and 14 were members of the new york curb, boston curb, or of a mining exchange. a letter substantially as follows was sent to each of the 17: enclosed please find ...... shares of ...... stock to be used as collateral margin for the purchase of an additional block of ...... shares. please buy at the market and report promptly. the 17 orders were executed by the 17 individual houses. a month later when the stock ordered purchased had advanced in the market, the following letter was sent to each of the 17: please sell the ...... shares of ...... stock which you purchased for me a month ago at the market and return to me the certificate of stock which i sent you as collateral with check for my profits. it took nearly two months for all of the 17 to make delivery. when they did, not one of them returned the same certificate that had been put up as collateral. don't be shocked, dear reader, at this disclosure. it is the _custom_. and don't, please, think mining-stock brokers are alone given to the general practice. if you order the purchase of a block of stock on cash margin from any new york stock exchange house or send a certificate of stock as collateral in lieu of cash to one of them for the purchase of more stock, you will receive a confirmation slip of the trade which will generally read something like this: we reserve the right to mix this stock in our general loans, etc. that is, the right is reserved, and actually exercised, of immediately transferring ownership of the certificates to the broker. unless a certificate stands in a customer's name and is unendorsed by him, he has no control over it. according to law, a broker has a right to hypothecate or loan securities or commodities pledged with him, for the purpose of raising the moneys necessary to make up the purchase price, and such stocks have no earmarks. in other words, the customer is not entitled to specific shares of stock, so that stocks bought with one customer's money may be delivered to another customer. as for the scheftels company laying itself open to the charge of bucketshopping in "shorting" stocks, such a possibility was never dreamed of. the penal law of the state of new york, sections 390 to 394, inclusive, is the only criminal statute covering market operations commonly known as bucketing and bucketshops. in each section and subdivision it is provided that where both parties intend that there shall be no actual purchase or sale, but that settlement shall be made on quotations, a crime has been committed, the language of the statute being, "wherein _both parties_ thereto intend, etc.," or "where _both parties_ do not intend, etc." the scheftels company was never a party to any such arrangement. and it always made it a practice to make delivery of stocks ordered purchased within a reasonable period after the customer had paid the amount due in full. now, neither myself nor the scheftels corporation is responsible for brokerage conditions as they exist, nor for the laws as written. custom and practice are responsible. the purpose here is to communicate the exact nature of the business methods of the street as i found them and to lay particular stress on those that are open to criticism. the scheftels company against margin trading the scheftels company did not encourage margin trading by its customers. in fact, it railed against the practice. time and again the _mining financial news_, editorially, denounced the business of margin trading. the weekly market letter of the corporation sounded the same note. on several occasions, in large display advertisements published in the newspapers, the scheftels company decried the practice and urged the public to discontinue trading of this character. there were selfish reasons for this. in the marketing of its promotions the scheftels company found that not more than 20 per cent. of the public's orders for these stocks given to other brokers were being executed, or, if executed, that the stocks were at once sold back on the market, the brokers or their allies "standing" on the trade. had the scheftels company been able to destroy the practice by its campaign of publicity, it would undoubtedly have been able, during the nineteen months of its existence, successfully to promote three or four times as many mining companies as it did, and its profits would have been fourfold. it, however, appealed to the public in vain. loud, frequent calls to margin traders to pay up their debit balances and demand delivery of their certificates, which would compel every broker to go out in the market and buy the stocks he was short to customers, failed miserably. the lesson of this experience was that the speculating public did not "give a rap" whether their brokers were short of stocks to them or not. all they wanted, apparently, was to be assured that when they were ready to close their accounts, their stocks, their profits or their credit balances would be forthcoming. what is the evil of short selling of the kind described herein? the only evil that i could ever discover was that the market is denied the support which the actual carrying of the stock is calculated to afford. this hardship weighs heaviest on the promoter. there appears to be no cure. even if a broker does buy the stock and does not himself sell it out again, there is no law that denies him the right to borrow on it or loan it to somebody else. and it is to the interest of the broker, because he gets the use of the money, to loan the stock always. stocks are rarely borrowed by anybody except to make deliveries on short sales. what about the broker who doesn't execute his order at all but "stands" on the trade from the beginning and sells the stock "short" to his own customer, delaying actual purchase until delivery is demanded? this practice is even less damaging to the customer than the one of actually executing the buying order for the customer at the time the order is given and then selling the stock right back on the market again for the account of the broker or his pal--the usual practice when the object of going short is sought. when a broker buys stocks in the market he must bid for them, and actual purchase generally means a higher cost price to the customer than that at standing quotations. the rule of the street is to charge the customer interest on all debit balances. when a broker lends to a "short" seller a stock which he is carrying for his customer, he is paid the full market value, as security for its return. in that case the broker ceases to incur interest charges for the customer, and is actually able, in addition, to lend out at interest the cash marginal deposit put up by the customer. maybe you think, dear reader, that a broker who charges his customer interest at the rate of six per cent. per annum on money which he has ceased to advance is crooked. very well. if that be so, then all members of the new york stock exchange must be labelled "crooks." here is how it works, even among the highest class and most conservative members of that great securities emporium: john jones orders the purchase by his broker of 1,000 shares of steel on margin. he pays down 10 per cent. of the purchase price. mr. jones receives a statement at the end of the month charging him with interest at the rate of six per cent. per annum, or more if the call-money market is higher, on the 90 per cent. of the purchase price advanced by the house. on the same day that the order of john jones is received, william smith orders the same house to sell short 1,000 shares of steel at the market. this order is also promptly filled. thereupon the broker uses the 1,000 shares of steel, which he bought for the account of john jones to make delivery through the clearing house for the account of william smith. sometimes a fictitious william smith is created, known as "account no. 1," "a. & s. account," "e. account," etc. this is usually done when a broker wants to hide from his bookkeepers that he or an associate is taking the other end of the customer's trade. the broker is out no money, yet he charges mr. jones the regular rate of interest on his debit balance. as a matter of fact, too, the stock bought for mr. jones is never even delivered to his broker. the clearing house, because of the "short" sale, steps in and delivers it to the broker to whom it is due "on balance." custom and practice cover a multitude of remarkable transactions--don't they? you have the framework of the scheftels structure and of its wall street environment outlined in this chapter. some of the narrative is undoubtedly "dry-as-dust," but its recital has appeared to be necessary to enable the lay reader properly to interpret the chronology of stirring events which forms the concluding installment. in the foregoing i have endeavored to lay bare many practices that are common to wall street. wherever i have laid them at the door of b. h. scheftels & company, i have given that corporation much the worst of it, because in the recital i have omitted to mention a multitude of happenings that were creditable to an extreme to the scheftels company. most of these had to do with the experiences of the scheftels company as publicity agents and promoters. its wide-open publicity and promotion policy called forth the ire of influential wall street pirates and caused the "pressure" at washington which resulted in the federal raid of the scheftels offices. i have reserved this dramatic series of events for my last chapter. chapter xi a fight to the death in professional quarters the scheftels corporation was regarded as an interloper from the day it set foot in the financial district. its first offense was to reduce its commission rates. this move set the whole curb against the enterprise. but as the play progressed it proved to have been unimportant in comparison to the unspeakable crime of telling the truth about other people's mining propositions that were candidates for public money. the scheftels corporation had laid it down as a set rule that an established reputation for accuracy of statement was a great asset for any promoter or broker to have. to gain such prestige the principle was followed in the nation-wide publicity which emanated from the house that, no matter whom the truth hurt or favored, it must be told always, when publishing information regarding the value of any listed or unlisted security. space in the scheftels market letter or the news columns of the _mining financial news_ was unpurchasable. the enforcement of this rule was a wide departure from prevailing methods. but that didn't make us hesitate. having felt the speculative pulse for years, i knew its throb. the public, after losing billions of dollars, were becoming "educated." the rank and file of mining promoters--high and low--in wall street still believed that "one is born every minute and none dies." but i and my associates didn't. an uneducated public had been unmercifully "trimmed" in scores of enterprises backed by great and respected names. speculators were ravenous for the truth. we decided to give it to them. we gave it to them straight. this publicity system brought about the ruin of the scheftels corporation through the powerful enemies it made. the policy was right all the same. persisted in, nothing was or is better calculated to strengthen the demand for all descriptions of meritorious securities. the scheftels corporation was the pioneer in the exploitation of this principle as a fundamental and underlying basis of brokerage and promotion. in pioneering this policy, however, the scheftels company was sacrificed to the prejudices and wrath of the old school of promoters. the firing of the first guns before the scheftels corporation was on the street three months it almost came a cropper. on the strength of excellent mine news it purchased nearly 300,000 shares of rawhide coalition in the open market, up to 71 cents per share. a determined drive was made against the stock by mining-stock brokerage firms which had sold it short. bales of borrowed stock were thrown on the market by the crowd operating for the decline. the scheftels company took it all in. letters and telegrams were sent broadcast by market enemies urging stockholders to sell. a powerful clique had been losing big sums on the rise. the scheftels company published advertisements calling upon margin traders to demand delivery of their certificates. this expedient proved of small utility. the brokers continued to hold off deliveries to customers and sold and delivered to us all the stocks that they could borrow or lay hands on. the continued selling finally made inroads on the scheftels corporation's cash-reserve to a point that forced it one day to stand aside and leave the market to the sharpshooters. that day, in a few hours, approximately half a million shares of rawhide coalition changed hands out of a capitalization of 3,000,000 shares. the corporation's loans were called. this forced it to throw large blocks of stock on the market. a sharp break ensued. that was just what was wanted by the interests which were gunning for us. they covered their short sales at great profit. in the midst of the mêlée the scheftels company tendered a stock exchange house of great prominence, which had loaned it for the account of a salt lake firm of brokers $12,500 on 50,000 shares of rawhide coalition, the money to take up the loan. a representative of the stock exchange house sheepishly stated that his firm had loaned part of the pledged stock to out-of-town brokers. he asked for time. under threat of dire consequences the stock exchange firm bought stock back from us in the open market that afternoon to supply the deficiency, and then made delivery of this stock back to us in lieu of that which they had parted with. it had been specifically stipulated by the scheftels company when the loan was made that the certificates must be held intact and that the stock must not be loaned out or sold while the money loan was in force. this experience was repeated frequently during the scheftels career on the curb. it cost b. h. scheftels & company more than one million dollars, during the nineteen months of its existence, in giving loyal market support, in times of "professional" attack, to the stocks it had fathered or promoted and felt moral responsibility for. time and again the scheftels company found among stocks delivered to it, against purchases made in the open market, the identical certificates it had pledged with loan-brokers as collateral for loans, and which had been hypothecated by it with the specific proviso that the certificates were not to be used. it opened our eyes to one of the most commonplace practices, not only on the curb, but also on the stock exchange. hardly a failure occurs on any of the exchanges or on the curb that does not reveal customers' certificates, which were originally pledged with the understanding that they were not to be "used," in the strong-boxes of others. the first grievous offense of the publicity forces of the scheftels corporation against wall street's "oh-let-us-alone" promotion combine was a wallop in april and may, 1909, through the scheftels market literature, at nevada-utah. the combination which owned control took with bad grace the strictures on the property. we heard an awful underground roar. at that time the price of nevada-utah stock was around $3. the scheftels market letter said that there was probably not 30 cents of share value behind the property. the price immediately began to crumble. it has been tobogganing ever since. the stock at the beginning of september of this year was quoted at 37-1/2 to 50 cents. such a thing as printing facts which would enlighten stockholders and the public as to the actual value and condition had not before been heard of when such enlightenment ran contrary to the plans of strongly entrenched promoters on the street. the campaign against nevada-utah, therefore, directed widespread attention to b. h. scheftels & company and the _mining financial news_. following the nevada-utah disclosure, the daily market letter and the weekly market letter of the scheftels corporation and the _mining financial news_ took a good, strong, husky "fall" out of the la rose mines company, capitalized for $7,500,000. the la rose owns one of the greatest producing mines in the cobalt silver camp. a market scheme was in progress, with la rose as the medium, and w. b. thompson, of nipissing fame, as a chief manipulator. we called a halt to the game when the price reached a "high" of $8.50, and saved the public a huge sum of money. under our campaigning the stock declined to $4, a decrease of $6,750,000 in the market value of the capitalization. this made w. b. thompson and his associates the implacable enemies of the scheftels company and myself. we didn't worry much. we were catering to the public. indeed, we were pleased with our work. following this incident, the scheftels market letter and the _mining financial news_ took a smash at a mining-stock deal in which w. b. thompson and the guggenheims were jointly interested. it was the now notorious cumberland-ely-nevada consolidated merger. later the merger was enlarged and took in the utah copper company, or rather the utah copper company took in the others, and the scheftels propaganda found another opportunity to do a great service for the stockholders of nevada consolidated. our attack hurt the guggenheim reputation among investors all over the country and contributed to reduce their influence over the large stockholding body--more than 6,000 men and women--of nevada consolidated. though finally successful, the guggenheims were sore from the lashing and exposures to which they had been subjected. as for the scheftels company and the _mining financial news_, they had still further established the honesty and value of their publicity service. a market scheme to balloon the price of ray central copper company shares to several times their value was a precious enterprise against which we trained our publicity guns and fired several effective broadsides. the effort of the promoters to connect with the public purse here would not have been half so sensational if men of lesser prominence were identified with the operation. in our "bear" publicity on this one we minced no words. in doing so we again hit another powerful interest--the lewisohns. later the exposure by the _mining financial news_ and the scheftels market letter of market manipulations of the lewisohn-controlled kerr lake still further "endeared" the members of these two organizations to that powerful faction, and more closely cemented the ties of fellowship between the ruling powers. keystone copper, another lewisohn "baby," was put through its courses on the curb while kerr lake was being played in a stellar rôle. the deal in keystone was an unobtrusive little thing, but awful good as far as it went from the one-sided point of view. i turned the searchlight of publicity on keystone. the scheftels market letter and _mining financial news_ disclosures in the interests of speculators and investors regarding nevada-utah, la rose, cumberland-ely, nevada consolidated, utah copper, ray central, and kerr lake were sensational enough, but they by no means included all of the work in this line. during 1909 this publicity literature took in practically every important mining company whose shares were traded in on the new york curb. the unpleasant truths these forces were obliged to tell from time to time touched the delicate sensibilities of many leading lights on the street. these had grown accustomed to an unvarying diet of sweets. it would seem that their appetite for saccharine provender would have become cloyed and that a change would be a grateful relief. it was not. the truth was distasteful. it interfered with the noble industry of mining the public and it cut down the profits of that end of the game. in keeping up the record of day-by-day market and mine developments these publicity agents punctured many a rainbow-tinted balloon. very frequently they gave to the public its first definite and intelligent idea of real value behind promotions and in properties. where market prices represented an overplus of hopes and expectations the truth was told. the aim was to take mining speculation out of the clouds and plant its feet firmly on earth. in this laudable effort we ran counter to the plans of the mighty. we also violated the vulgar unwritten rule of some of the wall street fraternity--"never educate a sucker." our publicity work caused a readjustment of judgment and market values, besides those already mentioned, on such stocks as first national, butte & new york, trinity copper, micmac, ohio copper, united copper, davis-daly, montgomery-shoshone, goldfield consolidated, combination fraction, british columbia, granby, cobalt central, chicago subway, and sixty to eighty others. the live wires of our publicity service blistered the flesh of the guggenheims, the thompsons and the lewisohns, and perturbed their widely diffused affiliations, connections and allies, including john hays hammond, j. parke channing, and e. p. earle; also charles m. schwab, e. c. converse, b. m. baruch, united states senator george s. nixon, george wingfield, hooley, learned & company, many other new york stock exchange houses, a group of powerful corporation law firms, a noted crowd of influential politicians, curb stockbrokers who had grown fat executing manipulative orders for the "inside," bankers who carried on deposit the cash balances of the mining companies, and even j. p. morgan & company, who were partners of the guggenheims in their alaska ventures and were for a time said to be meditating a merger of the copper companies of the country with those controlled by the guggenheims as a nucleus. the story of ely central by keeping speculators out of stocks that were selling at inflated prices, the scheftels corporation and the _mining financial news_ became endeared to a great popular moneyed element. the public was saved huge sums of money. this, however, only carried out the negative end of a grand idea. the affirmative demanded that the scheftels corporation must put its followers into a stock or stocks where they could actually make money. the scheftels corporation was on the eager lookout for a genuinely high-classed copper-mining proposition. it found what it was looking for in ely central, a property that is sandwiched in between the very best ground of the nevada consolidated, is bordered by the giroux and occupies a strategic position in the great nevada copper camp of ely, birthplace of what is probably the greatest lowest-cost porphyry copper mine of america. by invading the ely territory as promoter and annexing ely central, the scheftels corporation committed what was probably, to the interests among whom our publicity work had wrought greatest havoc, an unpardonable crime. we butted into the very heart of the game, and became a disturbing factor in their mining operations. the ely central property consists of more than 490 acres. years before, in the early days of the camp, it had been passed over by the geologists and promoters who selected the ground for the nevada consolidated, giroux and cumberland-ely, because it was covered by a non-mineralized formation called rhyolite. as development work progressed and the enormous value of the surrounding mines was disclosed, it dawned on their owners that they might have made a mistake and that it would be just as well to obtain possession of the ely central property. the ground was especially valuable to the nevada consolidated, if for no other reason, as mere acreage to connect up and make compact the properties owned by them. the second demonstration of their bad judgment was the fact that, having planned to mine the copper flat ore-body by the steam-shovel method, they overlooked the value of the ely central property as affording them the only practical means of access to the lower levels of that pit for operation by the steam shovels. investigation had disclosed to me that the evidence which had been adduced by mine developments on neighboring properties was all in favor of copper ore underlying the ely central area. the rhyolite, which covered ely central, was a "flow," covering the ore, and not a "dyke," coming up from below and cutting it off. why was the property idle? inquiry revealed that the ely central copper company was $89,000 in debt, and that a pre-panic effort to finance the corporation for deep mine development had failed. the panic of 1907-8 had crimped the promoters and they could not go ahead. the scheftels corporation entered into negotiations with the pheby brothers and o. a. turner, who held the control, for all the stock of the ely central company that was owned by them. during the progress of negotiations, early in july, 1909, i heard that the guggenheims and w. b. thompson were very much put out to learn that the scheftels company was about to finance the company. they had belittled the value of the property, as would-be buyers are prone to do the world over. before i entered upon the scene the pheby brothers had found themselves objects of persistent and mysterious attacks. their credit was assailed in every quarter and they found themselves ambushed and bushwhacked in every move they made. they were forced into a position where it was believed they would accept anything that might be offered them for their interest in ely central. as fate would have it, the scheftels company entered the race at this psychological moment. summed up, the scheftels company actually contracted for 1,280,571 shares out of 1,600,000, which represented the increased capitalization for a total sum of $1,158,916, or at an average price of 90-1/2 cents per share. the time allowed for the payment of all the money was nine months, stipulated payments being agreed upon at regular intervals in between. the immediate effect of the arrangement was this: a dormant property, in debt and lying fallow, was metamorphosed into a going concern with good prospects of soon becoming a proved great copper mine, with an assured income to defray the expenses of deep mine development on a large scale, and a market career ahead of it that might be expected to match any that had preceded it in the ely district from the standpoint of public interest. during the progress of the negotiations the stock sold up to $1 per share. the selling for philadelphia account of a large block of stock in the open market dropped the price back, of a sudden, to 50 cents. the scheftels company bought stock on this break and urged its customers to do likewise. on the day the deal was concluded the market had rallied to 75 cents. fully six weeks before the deal was arranged the scheftels market letter and the _mining financial news_ had begun to urge the purchase of the stock. the scheftels organization was not hoggish. the establishment was willing that the public should get in on the cellar floor. there were nearly 300,000 shares outstanding, which the scheftels corporation had not corralled in its contract. readers of the market letter and the _mining financial news_ fell over one another to get in on the good thing. therein they were wise. by early september the price had advanced in the market to $1. the scheftels publicity was strong in favor of the stock. but it had not yet put on full steam. it was waiting for an engineer's report to make doubly sure it was right. col. wm. a. farish, a mining engineer of many years' experience and a man with a high reputation throughout the whole of the western mining country, had been sent by the scheftels company to make a report on the ely central. years before colonel farish had reported on the nevada consolidated properties and outlined the very methods now being used for recovering its ores. but colonel farish had been ahead of his time, and the capitalists in whose interest he was acting were not prepared for such a radical step in advance of the then-existing methods, nor to believe that copper ores of such low grade could be mined at a profit, especially 140 miles from the nearest railroad. times and conditions changed, and the 140 miles were spanned by a well-equipped rail connection. colonel farish's opinion verified our fondest expectations. the report set forth that the mine possibilities of ely central were nearly as great as those of the nevada consolidated itself. on the basis of this report, which was made in september, the project acquired a new significance. development operations were undertaken to prove up the ground in an endeavor to demonstrate the existence of the 33,000,000 tons of commercial porphyry ore which colonel farish indicated in his report would likely be found within the boundaries of the southern part of the ely central property. the prospect fairly took the scheftels organization off its feet. we were dazzled. we saw ourselves at the head of a mine worth $25,000,000 to $40,000,000. no time was lost in organizing a campaign to finance the whole deal. having no syndicated multi-millionaires to back it up, the scheftels corporation went to the public for the money, the same as hundreds of other notable and successful promoters had done. the ensuing publicity campaign to raise capital has been described in hundreds of columns of newspaper space as one of the most spectacular ever attempted in wall street. i had absolute faith in the great merits of ely central, a faith that has not been dimmed in the slightest degree by the vicissitudes through which the company, the scheftels corporation, and myself personally have passed. within thirteen months the scheftels corporation caused to be spent for mine development more than $150,000, and on mine and company administration an additional $75,000. when the scheftels company was raided by the government on september 29, 1910, and a stop put to further work the expenses at the mine had averaged for the nine months of that year above $15,000 a month. work was going on night and day. every possible effort was being made to prove-up the property in short order. core-drills sent down from the surface had already revealed the presence of ore at depth, and i am sublimely certain that another month or two would have put the underground air-drills into contact with a vast ore-body identical in quality and value with that lying on either side in nevada consolidated acreage. ely central was the new york curb sensation in 1909-1910. i used the publicity forces which had been so successful in protecting the public against the rapacity of multi-millionaire mining-wolves to educate them up to the speculative possibilities of ely central. up went the price. between the first of september and the middle of october the market advanced to $2 3-8. on october 13th advices reached us that 30 per cent. copper ore had been struck in the monarch shaft. the monarch is an independent working, far removed from the area that is sandwiched in between the main ore-bodies of the nevada consolidated. we were highly elated. the prospect looked exceedingly bright to us, and there was no longer any hesitation in strongly advising our following to take advantage of an unusually attractive speculative opening. the market boomed along in a most satisfactory way. by october 26th the price reached $3; on november 3d it was $4 a share, and three days thereafter $4-1/4 was paid. the expenses of the scheftels company on publicity work at this time amounted to about $1,000 a day. money for mine development on ely central was being spent as fast as it could be employed. we were trying to sell enough stock at a profit over the option price to defray the publicity expenses, keep the mine financed, and meet our payments on the option, but no more. we were not making any effort to liquidate on a large scale, a fact which was reflected in the advancing quotations. when the price of ely central hit $4 in the market, the scheftels company rated itself as worth from $3,000,000 to $4,000,000. i had visions of leading the guggenheims and lewisohns and thompsons up the great white way with rings in their noses. nat. c. goodwin, who had a 25 per cent. interest in the scheftels enterprise, enjoyed similar visions, only his fancy ran to building new theaters for all-star casts. while ely central stock was going skyward and all the speculating world was making money in it, our publicity forces were busily driving the bald facts home regarding la rose, cumberland-ely, nevada-utah and other pets of the mighty. our batteries never let up for a moment. these various attacked interests were getting ready to strike back. if their movements had been directed by an individual general they could not have worked with more community of interest. one day the sky fell in on us. the plans had been beautifully laid for our complete ruin. that we escaped utter annihilation was almost a miracle. on wednesday, november 3d, the result of our market operations on the new york curb was that we quit long on the day nearly 8,000 shares of ely central at an average price of $4. on the same day our customers ordered the purchase of nearly twice as much stock as they ordered sold. this indicated to us that the curb selling was professional. there was nothing very remarkable about this performance because brokers doing business on the curb very frequently play the market for a fall. on thursday, the day following, the scheftels company was again compelled to purchase stock on the curb in excess of sales to the extent of 7,600 shares, while on the same day the buy orders of house customers exceeded their orders to sell at least three to one. the professional selling was now accompanied by rumors on the curb which spread like the smell of fire that trouble of some dire sort was pending for the scheftels company. most of this emanated from an embittered brokerage quarter and we paid little attention to it. on the succeeding day, friday, november 5th, the professional selling was quieted to a point that compelled the scheftels company to go long of only 6,600 shares on the day in its curb market operations. the purchase of so small a block of stock excited no suspicion in the scheftels camp, although it should have, because scheftels' customers on this day purchased more than four times as much stock as they ordered sold, pointing conclusively to a great public demand and much shorting by professionals. then came the _coup de main_. the assault on ely central the 6th day of november fell on a saturday. the new york _sun_ of that morning published under a scare head a vicious attack on the ely central promotion. the attack was based on an article which was credited in advance to the _engineering & mining journal_ and appeared in the _sun_ ahead of its publication in that weekly. the _sun_ had been furnished with advance proofs. the ely central project was stamped as a rank swindle. everybody identified with it was raked over and i, particularly, was pictured as an unprincipled and dangerous character, entirely unworthy of confidence and at the moment engaged in plucking the public of hundreds of thousands. it was stated that the ely central property had been explored in the early days of the ely camp and found of no value whatsoever from a mining standpoint. the scheftels corporation was accused of setting out in a cold-blooded way to swindle investors on a bunco proposition. i was in my apartment at the hotel marie antoinette at 9 a.m. when i read the _sun's_ story. the scheftels company had thrown $85,000 behind the market during the three preceding market days to hold it against the attack of professionals. i called the scheftels office on the 'phone and gave instructions that a certified check for $40,000 be sent to wasserman brothers, members of the new york stock exchange, with orders to purchase 10,000 shares of ely central at $4-1/8, which was the quotation at the close on the afternoon before. orders to buy 15,000 shares more at the same figure were distributed among other brokers. the single order was given to wasserman brothers because i thought it good strategy. they are a house of undoubted great responsibility and it seemed to me that their presence in the market on the buying side would have an excellent tonic effect. during the two hours' session i held the 'phone, receiving five minute reports from the scene of action. mr. goodwin was at my side. at ten minutes to twelve the brokers had reported the purchase, on balance, of 24,225 shares. had they purchased 675 shares more they would have completed the orders that were outstanding and it would have been up to me to decide whether to lend further support or not. by that time my figures showed that the scheftels corporation had thrown behind the market $200,000 in four days to hold it and i was beginning to have "that funny feeling." during the last few minutes of the saturday curb session the selling ceased and it seemed that possibly my fears were unfounded. on sunday, the 7th, my hopes went a-glimmering. all the new york papers featured scathing articles, using as authority the _engineering & mining journal's_ attack, which had appeared on the previous afternoon. dispatches indicated, too, that the papers of boston, chicago, los angeles and san francisco had played it up on the front page as the most shocking mining-stock scandal of the century. by monday, the whole country had been plastered with the sensation. of course my early past, all of which was a family affair and had transpired fourteen years prior, long before i essayed to enter the mining promotion field, was dragged out of the skeleton-closet. it lent verisimilitude to the stories. after reading the sunday newspapers, i grasped the meaning of the move and marshalled our forces. it was plain that we had been marked for the sacrifice. it looked as though we hadn't a chance in a million of weathering the onslaught if we lent the market further support. there were about 500,000 shares of ely central in the public's hands, and, without close to $2,000,000 in ready cash to throw behind the market, we could not be certain of staying the tide. we didn't have anything like that sum. personally i did not give up the fight, but the outlook was mighty blue. all day sunday trusted clerks of the scheftels company worked on the books, making a statement of the "stop-loss" orders and "good-till-cancelled" orders of customers. on monday morning the newspapers contained aftermath stories of the _engineering & mining journal's_ arraignment. the air was surcharged with the impending calamity. the clash of battle with a line of defense carefully outlined, i approached the fray. first, the scheftels corporation placed with reliable brokers written orders to sell at the opening the stocks that were specified in the stop-loss and good-till-cancelled orders of customers. not an order to sell a share of inside stock was given. it was also decided not to place any supporting orders until after the market opened and it could be determined with some degree of accuracy what the volume of stock amounted to that was pressing for sale. just before the market opened i could see from my office window a dense crowd of brokers assembled around the ely central specialists. although ominously silent, they were struggling for position and were tensely nervous. it was plain that the over-sunday anti-scheftels newspaper publicity had racked ely central stockholders and created a panicky movement to liquidate, which was about to find vent in violent explosion. it was evident that the scheftels corporation would have to conserve every resource if the day was to be saved. the market opened. instantly there was terrific action. hundreds of hands were waving wildly in the air. everybody wanted to sell and nobody wanted to buy. the chorus was deafening. screams rent the air. the tumult was heard blocks away. every newspaper had a man on the spot. brokers from the new york stock exchange left their posts and came to see the big show; the stock exchange was half emptied. the spectacle had been advertised widely and everybody was keenly awake and wrought up to a high pitch of excitement over what had been scheduled to occur. had the scheftels brokers been supplied with orders to buy one-quarter of a million shares of stock at the closing market price of the saturday before, $4 1-8, it was very apparent that they would have been unable to hold the market. the opening sale was at $4. downward to the $3 point the stock traveled, breaking from 25 to 50 cents between sales. through $3 and on down to the $2 point the price crashed. blocks of 10,000 shares were madly thrown into the vortex of trading. the curb was a struggling, screaming, maddened throng of brokers. every trader appeared to be determined to crush the market structure. at $2 a share there was a temporary check in the decline, but the bears renewed their onslaught, gaining confidence by the outpour of selling orders. within less than an hour after the opening the stock hit $1 1-2 a share. at this juncture the scheftels broker in ely central reported that he had executed all the stop-loss and good-till-cancelled orders entrusted to him with the exception of 19,000 shares. "the scheftels company will take the lot at $1 1-2," i said. in lending succor at $1 1-2 per share i was really stretching a point, although at this figure the net market shrinkage of the ely central capitalization was in excess of $3,000,000. this melting of market value was awful to contemplate. on the other hand the newspaper agitation was unmitigated in its violence, stockholders were convulsed, a break of serious proportions was certain, and it was up to me to conserve every dollar. the moment the scheftels bid of $1.50 a share made its appearance on the curb and the selling from the same source for the account of customers was discontinued, it was seen that the force of the drive had spent itself, at least for the time being. support now came from the "shorts." they started to cash their profits on their short sales of the days previous. crazed selling was transformed to frantic buying. the scene at this juncture was dramatic. it was the momentary culmination of a cumulative, convulsive cataclysm. in refraining from selling for its own account the scheftels corporation violated one of the sacred rules and privileges not only of the new york curb but of the new york stock exchange. in both of these markets it is the custom, where brokers have advance information of an impending calamity, to beat the public to the market and get out their own lines first, leaving customers to take care of themselves. by deftly feeding stock to bargain hunters and to the "shorts" at intervals and buying stock when it pressed for sale from frightened holders at other periods the scheftels company was able to support the market that afternoon to a close with sales recorded at $2 a share. the cash loss of the scheftels company on its curb transaction in ely central that day was $60,000. this fresh sacrifice was needed to steady the market. tuesday, the following day, the daily newspapers belched forth further tirades of abuse and calumny. the market crash in ely central was held up to the public as proof positive that the project was a daring swindle. the raid on the stock in the market was renewed. a johnstown flood of liquidation ensued. fluctuations were violent. opening at $2, the price was forced down to $1. it afterward rebounded to $2, but the waters would not subside, the stock was hammered again and it closed at $1 per share. to meet the oncoming emergencies the scheftels corporation was obliged to fortify its cash reserve in the only one way that offered. it was compelled to convert a large part of its reserves of securities into cash and it had to sell on a declining market. many accounts were withdrawn by timid customers, and the scheftels company was further called upon to give stability to rawhide coalition and bovard consolidated, other stocks which it had been sponsoring in the markets. loans were called by brokers with whom the scheftels company was carrying stocks, deliveries were frantically tendered to the scheftels company of stocks it had purchased at previous high levels, and a financial onslaught made generally that would undoubtedly have sunk the scheftels' ship but for the fact that we had backed-up in the nick of time, had measured our distance, had gone just so far and not too far, and had kept on the firing-line. an exceedingly gratifying feature of the sensational day was the way in which our friends stood by us. the venom and selfishness of the overwhelming assaults that had been made upon us convinced many of the public that we were being made the victims of a special attack, and with the natural impulse that governs honorable men they gave testimony to their confidence in us. on wednesday the campaign terminated. ely central weakened an eighth from the $1 point, the closing of the day before, recovered to sales at $1-3/4 and closed at $1-1/2 bid; $1-5/8 asked. all day long our offices were thronged with newspaper reporters and with pale-faced and agitated customers. our clients felt their helplessness in such a tumult of warring forces. the only thing they could do was to stand by and watch developments as the battle waged. it was a proud moment for me when, at the end of the day's market, i mounted the platform in the scheftels customers' trading-room, gave voice to a shrill cheer of triumph and wrote on the blackboard the following: "we have not closed out a single margin account! we are carrying everybody!" the scene which followed warmed the cockles of my heart. i was literally mobbed, but it was a friendly mob. we all joined in a season of noisy rejoicing. that we should have been able to survive the three-days' siege with minimum losses to customers and without sacrificing a single margin account was a signal achievement. i doubt if there are many cases like it in the history of wall street. scores of telegrams were received from out-of-town customers to whom the margin respite was wired. one of these read: you may look for a tidal wave of business. your princely action warrants 21 guns for the house of scheftels. another one was to this effect: the whole situation was greased for your descent. it was a shoot-the-chutes and a bump-the-bumps proposition. congratulations on your survival. hundreds of letters of a similar tenor poured in upon us. many of these came from the camp of ely itself, where large blocks of the stock were held by mining men on the ground. thursday the stock closed at $l-3/4; friday it advanced to sales at $1-7/8 and hung there. the scheftels organization now drew its first long breath. friends and enemies alike marveled how the corporation had managed to survive. we had held the fort, but at murderous cost. i got busy with the publicity forces at my command. through the scheftels market letter and the _mining financial news_ the story was told of the whole dastardly campaign. the weekly market letter of the scheftels company on november 13, 1909, devoted 24 columns to the story of the raid. that the guggenheim-managed nevada consolidated was well pleased with the publication of the _engineering & mining journal's_ attack seemed clear to me. the reason was this: in its attack the _engineering & mining journal_ stated that two drillholes put down by the nevada consolidated in the immediate vicinity of ely central had failed to show better than nine-tenths of one per cent. copper ore which, the article said, was below commercial grade. (at this late date, october, 1911, they are mining ore in the steam-shovel pit of the nevada consolidated that will not average more than eight-tenths of one per cent. copper transporting it to the concentrator, more than twenty miles away, and treating it at a profit. but this is not the point.) an engineer of international prominence telegraphed the scheftels company from ely as follows: two drill holes mentioned in _engineering & mining journal_ article were completed only last week. results must have been telegraphed to new york. these holes gave great trouble on account of caving ground. i heard drill runners say they were stopped on that account and were in ore in bottom. in any case, it is not conclusive of unpayable ore in vicinity. this condition often occurs. i could write a book in reply to the _engineering & mining journal's_ tirade, showing the utter flimsiness of the statements it made. limited space forbids anything more than an outline. charles s. herzig was employed to report confidentially on the property. mr. herzig's report was later checked up by dr. walter harvey weed, a great copper geologist of known high standing who was formerly one of the principal experts of the united states geological survey and was himself a frequent contributor to the _engineering & mining journal_. dr. walter harvey weed wired to the c. l. constant company, the metallurgists and mining engineers, from ely, as follows: after making a most thorough examination my opinion is southern part ely central property is covered by rhyolite capping. geological evidence demonstrates that the porphyry extends eastward (through ely central) from steam-shovel pit and with excellent chance of containing commercial ore beneath a leached zone. a well defined strong fault separates steam-shovel ore from rhyolite area and this fault plane may carry copper glance (very rich copper ore) of recent origin, due to descending solutions. the iron-stained jasperoid croppings in the limestone areas give promise of making ore in depth on ely central property as they do in giroux. the _engineering & mining journal_ said in its article that the northern portion of ely central showed the arcturus limestone of the district. it stated that in this limestone at various places there is a little mineralization but never during the history of the district were any profitable results obtained. as against this, engineers farish, herzig and weed reported that the limestone areas on ely central would likely show the presence of mines. as a matter of fact, giroux, neighbor of ely central, had sunk through this limestone and opened one of the richest bodies of copper ore ever disclosed. the _engineering & mining journal_ said that in representing that pay ore is likely to exist in the area of ely central sandwiched in between the two big mines of nevada consolidated, the scheftels company was practicing deception. not only did messrs. farish, herzig and weed report in favor of the likelihood, but it is now a commonly accepted fact that, unless all known geological indications are deceptive, ely central has the ore in this stretch of territory. a report made as late as september, 1911, by engineer richard t. pierce, for the reorganization committee of ely central, expresses the opinion that an area 1,300 feet by 1,900 feet at the south-east end of the eureka workings "will be found to contain mineralized porphyry, with reasonable assurance that commercial ore will be had in it." mr. herzig's first telegram from ely after examining the ely central property was to this effect: there is no question that the rhyolite was deposited in ely central after the enrichment of the porphyry. the fault that limits the rhyolite in the nevada consolidated pit is indicated by several feet thickness of crushed mineralized porphyry-rhyolite ore, which is a positive evidence that the porphyry was enriched before the faulting. the limestone and contact areas owned by the company, in my opinion, have great potential value. the indications are in every way similar to bisbee. rich carbonate ore has been encountered on the clipper and monarch claims of ely central and i look forward to seeing big ore bodies opened up at these places. reports of both these engineers, many thousand words in length, made later, confirm these messages. what probably convinced me more than anything else of the inaccuracy of the statement regarding the ely central property by the _engineering & mining journal_ was the attitude of charles s. herzig. he is my brother. up to within thirty days of the appearance of the attack in the _engineering & mining journal_ i had not set eyes on him in fifteen years. a graduate of the columbia school of mines, he had in the interim examined mining properties in south africa, egypt, australia, the east indies, siberia, every european country, canada, mexico, central america, south america and the united states in the interests of some of the world's greatest financiers. these expert examinations had covered deposits of gold, silver, copper, lead, zinc, coal and other minerals. in the engineering profession he is known as an expert who has his first failure yet to record. his standing is unquestioned as an engineer and a mine-valuer. i had heard some criticism of the farish report, made by engineers of the modern school, in which it was pointed out that colonel farish had failed to give scientific reasons for all of his deductions. i asked captain w. murdoch wiley, then a member of the c. l. constant company, assayers, metallurgists and mining engineers, whether he could induce my brother to make an examination. i did not approach charles myself, because we had been estranged. so it was that when he returned from europe after an absence of many years, he had not even looked me up. captain wiley arranged for a meeting at the engineers' club. i went there, and was formally introduced by captain wiley to my brother across a table. "what will you take to make a report on ely central?" i asked in the same matter-of-fact way i would have addressed a stranger. "what's the purpose of the report?" "the scheftels company wants confidential, expert information such as you are qualified to give as to the value and prospects of the property," i answered. "i'll take $5,000," he said, "but only on one condition. i am going to the ely and ray districts to report for english capitalists, and i can take your property in at the same time. my report is not to be published and i reserve the right to make a verbal instead of a written one. if you really want to know what i think of the property, i am quite willing to give it a careful examination and let you know. because of the stock-market campaign you are making, i would not accept your offer if, did i report favorably, your idea would be to make use of the report in the market." the bargain was struck. a few days later mr. herzig received $2,500 from the scheftels company, on account, and a check for traveling expenses. he left for ely. on the saturday morning when the new york _sun_ article appeared containing the excerpts from the _engineering & mining journal's_ onslaught, i wired my brother substantially as follows: savage attack in _engineering & mining journal_ on ely central. if your report on property is favorable, i beg you to let us have it by wire and allow the use of it to counteract. an hour later i followed it up with another message telling him not to wire any report. i set forth that because he was my brother, it might prove of little avail, now that the publication had been made, and that it might only tend to do him personal damage in the profession because of the unqualified manner in which the _engineering & mining journal_ had taken a stand against the property. in reply he wired captain w. murdoch wiley the short but decisive report already quoted herein, regarding the geological reasons why ely central should have the ore, which afterward was fully verified by dr. walter harvey weed in the message also reproduced in the foregoing. in a letter from ely to captain wiley confirming the message, the original of which is in my possession, mr. herzig said: i have formed a very favorable opinion of the property. i feel that it has the making of a big mine, and under the circumstances i am willing to stand a little racket for a time. the same day he wired captain wiley to buy for his account 2,500 shares of ely central at the market price, which order was executed through the scheftels company. editor ingalls of the _engineering & mining journal_ and my brother had been friends for years. my brother had been employed early in his career by the lewisohns, guggenheims and the anaconda copper company, and later in europe, australia and india by mine operators of even higher class. up to the time when the _engineering & mining journal's_ attack appeared he had not committed himself on ely central. when he did commit himself it was with the foreknowledge that in doing the unselfish and courageous thing his name would be besmirched if under development ely central turned out to be what the _engineering & mining journal_ had declared probable. in that event his relationship with me would be held up as positive proof of duplicity and it would look bad for him. the fact that under all these circumstances he jumped into the breach satisfied me that the attack of the _engineering & mining journal_ was unjustified. a bombshell in the enemy's camp as soon as the scheftels corporation was able to obtain a copy of the corroborative report of dr. walter harvey weed, which the great copper geologist made to the c. l. constant company, it filed a libel suit against the _engineering & mining journal_ for $750,000 damages. simultaneously mr. scheftels filed another suit for an additional $100,000 in his own behalf. the filing of the scheftels libel suits against the _engineering & mining journal_ was a bombshell. it was formal notice to the forces arrayed against us that we did not propose to be made victims of an unholy hostility and that we were determined to proceed along old lines and not abate in the slightest our wide-open publicity measures. it was also noticed that we proposed to go through with the ely central deal. after it became evident that we intended to keep on fighting, the scheftels offices were openly visited and inspected in detail one day by the late police inspector mccafferty. in a bullying manner this police official let it be known that we were in official disfavor with him. his manner could hardly have been more offensive if he had been invading a den of counterfeiters. mr. mccafferty did not specify just what he was after or just what he expected to find, but he made it plain to us that we were marked and that he had it in for us. he stalked scowlingly through the entire establishment and made vague threats of what was in store for us. late that night i learned that the inspector had invaded the living-rooms of my associate, nat. c. goodwin, where he delivered himself somewhat as follows: "what are you fellows trying to do, anyway? what are you trying to put across on us? do you think we are going to stand for any such newspaper notoriety as you are getting and watch it with our arms folded? do you think we are fools or crazy, or what? i want you to understand that you fellows have got your nerve with you. get busy or the police will be on your backs to-morrow!" i told mr. goodwin that our enemies had evidently sicked the inspector on to us, but that i didn't think any action would be taken. we were victims and not culprits, and unless, indeed, the united states was russia, nothing untoward could happen. i promised mr. goodwin, however, that i would attend to the matter without delay. i laid all of the facts regarding the newspaper attack before a prominent citizen who promised forthwith to convey the information in person to the inspector or one of his superiors. he did so. that was the last we heard of the matter. the _engineering & mining journal's_ lawyers addressed themselves to customers of the scheftels company, who had lost money in the market break in ely central from $4 to $1.50. by letter they urged them to send on a full statement of facts and suggested that they might be of service, and without charge. letters of this character were sent to large numbers of our customers, many of whom simply sent them to us. in some cases, however, customers who had read the attack in the _engineering & mining journal_ or quotations from it in widely circulated daily newspapers, needed but the letter from the lawyers to induce them to come forward with a complaint. on the whole, this fishing expedition must have been something of a water-haul and a disappointment, for the attorneys of the _engineering & mining journal_. the post-office department at new york, in january and february, sent letters broadcast to readers of the scheftels weekly market letter, asking whether the business carried on was satisfactory--the usual form that is used where a firm is under investigation. scores of these letters were forwarded to us by customers with remarks to the effect that evidently "somebody was after us." an inquiry of this sort is calculated to do terrible damage to the reputation and standing of any house that does a quasi-banking business. our attorneys complained to inspector mayer of the new york division of the post-office that an injustice was being done. no more letters of the character described were sent out, because the early replies that were received by the inspector to his circular letter brought forth no serious complaints. however, it was afterward disclosed that the investigation did not cease here and that the post-office department continued to conduct a searching inquiry only finally to abandon its enterprise. enters upon the scene an associate of the _engineering & mining journal's_ lawyers defending that publication against our suit for libel. he called at the scheftels offices and demanded from mr. scheftels information with regard to the account of c. h. slack of chicago. he got it. it showed that mr. slack had purchased 50,000 shares of bovard consolidated at 10 cents per share, for which he had paid cash, and that mr. slack had purchased an additional 100,000 shares at 14-1/4 and 14-3/4 cents per share; and that mr. slack had refused, after the market declined to below the purchase price, to pay the balance due, because of delayed delivery. the delay in delivery was accidental. the scheftels company actually had in its possession two million shares of the stock or more, and the delivery would have been tendered earlier but for the fact that the raid on ely central had piled up so much work for the clerical force that everything was set back. we knew of no legitimate excuse for mr. slack, because he could have ordered the stock sold at any time, delivery or no delivery. the slack transaction receives amplification here, because later, when the scheftels corporation was raided by a special agent of the department of justice, it figured as one of the cases cited by the agent in the warrant sworn to by him against b. h. scheftels & company as proving the commission of crime. another case about which mr. scheftels was asked to give full information was that of d. j. szymanski, a corn doctor at 25 broad street. mr. scheftels had urged the doctor to buy ely central when it was selling at 75 cents before the rise. later, when the advance was well under way, above the $3 point, the doctor bought some stock through the scheftels corporation. when the price hit $4 he was urged to take profits. he refused to do so. when the attack began and the price broke badly the doctor saw a big loss ahead. he called at the scheftels' office and begged for the return of the money he had lost in his ely central speculation. the investigation was heralded among the brokers and caused much market pressure on the stocks fathered by the scheftels company. we were not dismayed. to strengthen our position and to give added token of our good faith we increased our development operations at the mines. our expenses in that quarter were swelled to the limit of working capacity on our underground explorations, as i realized that our salvation might depend on making good in quick order with ely central from a mining standpoint. we knew the ore was there and that it was up to us to get it before our enemies got us. a government raid is rumored out of a blue sky late in the month of june came news to the scheftels office that a newspaper reporter on the new york _american_ had stated that he had seen a memorandum in the city editor's assignment-book to watch out for a scheftels raid by the united states government. the information was reliable and it gave us a shock. yet the thought that the powers of a great government like the united states could be used to crush us without giving us a hearing seemed unbelievable. to be on the safe side mr. scheftels, accompanied by an attorney of high standing, visited washington. they went direct to the department of justice, where attorney-general wickersham's private secretary, after a friendly conversation, referred them to the chief clerk. he reported, after a search of twenty-five minutes' duration, that there was no charge against b. h. scheftels & company. he even volunteered the information that he did not know that such a firm was in existence. it afterward developed that at the very time mr. scheftels and the attorney were at the department of justice a special rubber-shoe investigation was on under the dual direction of a young washington lawyer on attorney-general wickersham's personal staff, and a special agent of the department of justice. the latter had been given extraordinary powers as a special agent of the department of justice, ostensibly to "clean out wall street." satisfied they were in the wrong place, mr. scheftels and the counsellor departed from the attorney-general's office for the post-office department. they were referred to chief inspector sharp. the lawyer requested that the scheftels corporation be given a hearing before any action was taken on any complaints that might reach the department. mr. sharp agreed to this on condition that the attorney would agree for the scheftels company that an inspection of the books of the corporation would be permitted on demand at any time. there was a ready assent. a memorandum to this effect was left with inspector sharp. mr. scheftels left the department with positive assurance that no snap judgment would be taken. edmund r. dodge of nevada, personal counsel of b. h. scheftels & company, then addressed a letter to u.s. senator newlands with the request that he take the matter up direct with the postmaster-general. senator newlands, under date of july 2, wrote mr. dodge that he had addressed a letter to the postmaster-general with the request that notice be given to mr. dodge in case any complaint or information was lodged against the scheftels corporation. a few days later senator newlands sent mr. dodge a letter from theodore ingalls, acting chief inspector of the post-office department, in which mr. ingalls said it was the practice of the department in case of alleged use of the mails for fraudulent purposes to give individuals against whom complaint has been made full opportunity to be heard either through person or counsel, should adverse action be contemplated as a result of the investigation of such allegation. feeling that our house had been securely safeguarded against surprise parties, i at this junction took a trip to nevada, where urgent business matters required my attention. while i was in the west telegrams were sent me that the premier mail-order mining-stock bucket-shop firm on broad street was flooding the mail and burdening the telegraph wires with urgent appeals to stockholders of rawhide coalition, one of our specialties, to sell out their holdings, as a severe break in the price of the shares was impending. forewarned of this attack, i telegraphed instructions from reno to meet the onslaught with a notice in the _mining financial news_ addressed to investors, telling them to be on their guard. my trip to the west made a pocketful of money for investors by my purchase of the control in the jumbo extension company on a monthly payment plan. the price of the stock tripled in the market. my re-entrance into the goldfield camp was especially distasteful to the nixon-wingfield interests. before i left goldfield i was actually warned that the vengeance wreaked on the sullivan trust company would be visited on the scheftels company for daring to reinvade the goldfield district. late in august the scheftels company endured what was probably the most severe strain it had been put to since its incorporation. we had been making heroic efforts to rally the price of our specialties on the new york curb market. we were meeting with unusual resistance from professional sources. at the period of which i narrate, ely central had registered a low quotation of 62-1/2 cents and we had successfully strengthened it to around $1. all the way up we met with heavy sales. one day deliveries crowded in so fast that three cashiers working in the "cage" were unable to keep up with the transactions. the business of the corporation had been heavy in the general list as well as in the house specialties. there was more than sufficient money on hand to finance all the transactions that day, but not, however, unless deposits were made in bank as rapidly as our own deliveries were made and collected for by our messengers. about 2 o'clock in the afternoon a report reached the curb that the bank checks of b. h. scheftels & company were not being promptly certified. as this rumor gained currency the excitement on the curb increased. the curb concluded that we were at last "busted." motley throngs began to assemble in front of the offices. the fierce yells of brokers could be heard bidding for and offering scheftels checks below their face value. a throng of the riffraff of the street swarmed in front of the building. one or two individuals, implacable enemies who had repeatedly led the market onslaught against the scheftels stocks, offered scheftels checks for small sums at as low as 50 cents on the dollar. these were licked up by our friends who had been assured that we were financially all right and that some mistake must have been made at the bank. investigation showed that dilatory message service was responsible for the bank's delay in certifying. our deposits did not reach the bank as promptly as they should have. as a special favor to us that afternoon, while the tumult in front of our doors was greatest, the bank continued to certify checks until 3:30 o'clock, extending the closing time 30 minutes. then they reported that a comfortable cash balance was still on hand. the next morning the newspapers started a jamboree. first-page, last-column, double-leaded, scare-head stories greeted every new yorker for breakfast, telling him about the panic among curb brokers to sell the scheftels checks the afternoon before. needless to say it was the kind of notoriety that was likely to do greatest injury to the house of scheftels. if anything half as bad had been printed about the strongest bank in new york, that bank would have been forced to close its doors before the day was half over. nor did i for a moment underrate the danger of our position. between two suns i managed to assemble $50,000 in addition to our cash reserves, with promises of as much more as was needed. we easily held the fort. at the end of the day's business i created a diversion by appearing in the scheftels board-room, flourishing a handful of $1,000 bills before the newspaper men. the scribes found the scheftels corporation meeting all demands, and, at the end of the session, with a small bale of undeposited money in its possession. the strain, however, was great. confidence was again impaired. many accounts were withdrawn by customers. we were compelled to ease our load by selling accumulated stocks at a loss. the price of ely central and other scheftels promotions dropped. the decline was assisted by general weakness in other curb stocks. peculiarly enough, at the time when the market for ely central shares was lowest, during the latter part of september, fourteen months after the scheftels company had taken hold of the proposition, mine reports were most favorable. underground development work and churn drilling had set at rest for all time the question of whether or not mineralized porphyry underlies the rhyolite cap or flow extending eastward through ely central ground from the steam-shovel pit of the nevada consolidated. upward of $240,000 had been paid out for administration, mine equipment and for miners' wages to make this demonstration. the scheftels company was now informed that the nevada consolidated was actually meditating a trespass on the juniper claim of the ely central company, in order to secure an outlet from the lower levels of its giant steam-shovel pit. warning in writing had already been served on the nevada consolidated officials against such a course. on september 25th attorneys of the ely central copper company secured from a nevada court an order restraining the nevada consolidated from proceeding with this trespass and citing it to show cause why it should not cease to trespass on other ely central ground. the attorney telegraphed to new york that a bond was required before the injunction could be made operative. on september 27th and 28th telegrams were exchanged between the ely central offices in new york and the nevada attorneys of the company at reno as to providing sureties for the bond. the sureties never qualified. a catastrophe befell us and brought to an earthquake finish the house of b. h. scheftels & company and all its ambitious plans. the constant turmoil in which the house of scheftels had found itself, from the day the _engineering & mining journal's_ attack appeared, had made it impossible for the scheftels company to hold the markets for ely central and rawhide coalition. impairment of credit, money stringency and a general declining market were partly responsible. but there was another important factor. because of the time-limit of its options, the scheftels company was forced, from time to time, to throw stock on the market at prices which showed an actual loss. it had one market winner which showed customers and the corporation itself a large profit, namely, jumbo extension. i held an option on approximately 450,000 shares of this stock at an average price of 35 cents, which i had turned over to the corporation. the market advanced to 70. following the tactics employed in ely central at the outset of that deal, the scheftels corporation had urged all its customers to buy jumbo extension at the very moment when i was negotiating for the option in goldfield, with the result that purchases were made in the open market by readers of our market literature at from 25 cents up, with accompanying profit-making. as the price soared, a short interest of 150,000 shares of jumbo extension had developed among brokers in san francisco and new york, and it was very apparent from the demands of stock for borrowing purposes that it would be impossible for the short interests to cover excepting upon our terms. the scheftels company was making ready for a "squeeze" of the shorts such as had not been administered before in the history of the curb. at the very moment of victory, however, when we were making ready to execute a magnificent market coup in jumbo extension in the markets of san francisco and new york, we were plunged without warning to complete ruin. the raid on b. h. scheftels & co. the destruction of the scheftels structure was consummated on the 29th day of september, 1910. i was standing on the front stoop of the scheftels offices, watching the markets for the scheftels specialties. a broker with san francisco connections made me a bid of 68 cents for 10,000 shares of jumbo extension. i promptly refused. at that very moment my attention was called to the violent slamming of a door behind me. turning to a scheftels employee who was standing by my side, i learned that a number of strangers had filed into the customers' room without attracting any particular attention. i tried to get in. the door was locked. undoubtedly something serious was transpiring. i walked a full block through the hallway to the new street entrance of the building where the offices of the _mining financial news_ adjoined those of the scheftels corporation. i tried the door there with similar result. it was locked against me. that settled it. i concluded that the ax had fallen. the shock of realization that our offices were being raided by the government did not for a moment throw me off my balance or put fear in my heart, nor did the sense of the outrage affect me at the moment. there was but one sickening thought--the ruin of the edifice i and my associates had labored day and night for so many months to build and the fate of our customers who had invested their money in the companies we had promoted. in three seconds i was on my way to the place where i thought succor could be found--the offices of the scheftels attorneys. i walked across the street to the new street entrance of a building that extends from broadway to new street, ambled across to the broadway side, jumped on a surface car, rode three blocks to broadway and cedar street, jumped into an elevator, and in a few minutes entered the offices of house, grossman & vorhaus. "go over to the scheftels offices," i said, "and be quick! i think we are being raided." in a moment two members of the law firm were on their way. within ten minutes after the raiders had entered the offices the lawyers were on the spot. they were denied admittance and had to content themselves with waiting outside the door until the prisoners were taken out. the moment the lawyers left their offices i began to use the 'phones to provide for the release on bail of the men arrested. i found it necessary to go in person and so i left the lawyers' offices and walked down broadway. my attention was attracted by the clanging of the bell of the police-patrol wagon. as it wheeled past me on the run i could see my associates huddled together in the black maria on their way to the bastile. for the moment, i lost full sense of the gravity of what was transpiring and was overcome by a feeling of joy that i had been spared that ignominy. that self-felicitating slant of an intensely serious situation passed. my associates were in trouble and it was up to me to help them. i was at large and i knew that i could do more for my friends and myself by not immediately surrendering. i returned to the lawyer's office, where i remained. all this time the thought never entered my mind that we were in any sense guilty of any intent to defraud anybody, or that we had committed any offense against law or the rules of fair conduct. the one consuming and controlling idea in my mind was that somebody had put one over on us and that it was up to me to organize for defense against the abominable outrage. what transpired behind the closed doors while the scheftels lawyers were attempting to gain an entrance for the instruction of the corporation, its officers and employees as to their rights, beggars description. gentle reader, you would not conceive the reality to be possible. armed with a warrant which conferred upon him the right to arrest, seize, search and confiscate, the special agent of the department of justice had secured from the local police headquarters a detail of fifteen heavily armed plain-clothes men. once inside the scheftels establishment, the doors were locked and egress barred. the main body of invaders then took possession of the front offices, while others searched through the back rooms and boisterously commanded everybody to remain where they were until given permission to depart. the establishment was under seizure, every foot of it, and every person found within its doors was held prisoner. the special agent took pains to impress upon everybody within hearing that he was in supreme command. leaving police guards in the front room, he stalked into the telegraph-cage where two or three operators were sitting at tables. pressing the muzzle of a revolver into the face of chief operator walter campbell--a quiet and inoffensive man--the special agent commanded: "cut off that connection!" mr. campbell didn't at first see the gun because it was pointed at his blind eye. when he got his first peep he concluded that a maniac had invaded his sanctum and he almost expired with apoplexy on the spot. returning to the front office, the agent entered the cashier's cage and took possession of the company's pouch containing its securities. he gave no receipt to any responsible employee of the scheftels company for anything. when mr. stone, one of the cashiers, suggested to him that he was there to safeguard the securities, he thundered, "come out of there!" "what authority have you for this?" demanded mr. stone. the agent thereupon showed his badge. a moment later one of the deputies pried open the cash-drawer. the special agent was at his elbow. "oh, look what's here!" cried the deputy. thereupon the agent of the department of justice impounded the contents of the cash-drawer, without counting the cash, checks, money-orders, etc., or giving any member of our firm a receipt for them. turning to the scheftels officers and employees who had been placed under arrest, he ordered them removed from the room. it was about as raw a performance as was ever witnessed in a peaceful brokerage firm's banking-room. bookkeepers were ordered to close up books. united states mail in the office was impounded, including mail that had been received in the office for delivery to others. the scheftels employees were commanded to stand in their places with arms folded. the desperadoes among them--those for whom a warrant had been issued and who had been jerked out and huddled together in the outer room--were then searched for deadly weapons. one penknife and the stub of a lead-pencil were found on their persons. the deadly knife was hardly sharp enough to serve the purpose of nail-manicuring. not one of the men under arrest would have known how to use a revolver if it had been placed in his hands. the men taken into custody were: mr. scheftels, aged 54, quiet and inoffensive, rounding out an honorable business career without a blemish of any kind on his character or standing; charles f. belser, one of the cashiers of the corporation and a 32d degree mason, who never before in his life had been so much as charged with the violation of the spirit of a minor ordinance; charles b. stone, aged 60, another cashier whose sons and sons-in-law had served their country in the army and who, himself, was as peaceful as a class leader in a sunday-school; john delaney, clarence mccormick, william t. seagraves and george sullivan, clerks of the establishment, who were as likely to offer resistance that would require gun-play to combat as were a quartette of psalm-singing children. mr. scheftels protested in a dignified and self-respecting way against the brutal demonstration. he asked to see the authority for the raid. this was refused until after he and the other desperate characters were collected in another room. his demand to see the officers' warrant was met by a vulgar exclamation from the special agent, to the effect that, "if you don't shut up, we will put the irons on you! if you are looking for any trouble, you ------stiff, you will get what you are looking for!" the absurdity of the armed invasion appealed to everybody but the ringleader of the raiders. it was a ludicrous situation from a service viewpoint. there had been no time up to the moment of the raid when a single man armed with proper authority could not have accomplished with decency and in good order everything and more than was done by the "rough house" and brutal invasion of the armed band. private papers were grabbed and bundles of certificates of stock, packages of money, checks, receipts and everything that came in sight were carried away. no complete record was made at the time of the raid of the documents and other valuables seized. the temporary receiver for b. h. scheftels & company, before his discharge later on, was able to gather together and take an accounting of part of the seized assets of the corporation, but i have no doubt that many thousands of dollars worth of securities and money were hopelessly lost. when the wreck was complete the prisoners were driven like malefactors out of the front entrance, down the steps and loaded into the black maria. five thousand people witnessed the act. the prisoners pleaded in vain to be allowed to pay for taxicabs to convey them before the united states commissioner. they urged that as yet they had had no hearing and were innocent in the eyes of the law, and until convicted of some offense they were entitled to decent treatment. this request was refused. the delay in the start to the federal building was just long enough to give the dense crowd that had filled the block time to insult the victims of the atrocity to the fullest extent. friends of the arrested men boiled over with indignation and several fights occurred. men were knocked down, trampled upon and the clothing torn from their backs in the desperate mêlée. the scene was disgraceful. an army of newspaper reporters, attended by a camera brigade, were on the spot and snapshotted the prisoners as they entered the black maria. with bells clanging and whips lashing, a start was made up broad street to wall. then the vehicle turned up broadway and ding-donged on to the federal building. there the men were arraigned. bail aggregating $55,000 was demanded. later several of the men taken into custody in this brutal manner were not even indicted. called upon to identify the prisoners, the special agent of the department of justice was unable to point out any of them except mr. scheftels. a stenographer in the employ of the corporation was forced to single them out. the warrant proved to have been sworn to by the special agent and had been granted on his affidavit that the corporation had committed crimes against some few of its customers. two of them have already been mentioned in this article as slack and szymanski, whose statements had been furnished to the attorneys of the _engineer & mining journal_. from the court house to the tombs, the scheftels desperadoes, in shackles, were escorted up broadway. later in the day when bail was ready and the prisoners were sent for, they were handcuffed again and marched in parade up streets and down avenues of the densest section of new york city. i had worked all afternoon in the lawyers' offices with one object in view, namely, the securing of bail for the imprisoned men. i succeeded. i now got busy with my own bail, the court having fixed it in advance at $15,000. in the morning i walked from my lawyers' offices to the post-office building and surrendered myself, being immediately released on surety which was waiting in the office of the united states commissioner. as i left the building i recognized scores of scheftels customers. several grasped my hand. my indignation grew as the circumstances came up under review and i had time to connect and collate the facts. gradually the whole truth revealed itself. i can relate only part of it. the full, detailed story would extend itself into a volume, and the space here at my command is limited. i learned that from the moment the special agent had been put on the scent with permission to put us out of business he had never slackened his effort to turn the trick. his efforts attracted the attention of sundry newspaper editors with wall street affiliations and also enemies generally who hastened to coöperate with him. his office as a special agent of the department of justice gave to his statements weight which would not have been given to them had he as an individual sponsored the charges. his official position imparted exaggerated importance to his statements in the eyes of newspaper men, and, after the raid, to the public. a person whom we shall characterize as the tool now appears on the scene with alleged information which he placed at the service of the special agent to back him up before the assistant united states attorneys in new york with testimony since recanted over the signature of the false witness. in the preceding chapter i called attention to some of the atrociously false statements that were published on the day following the raid. i gave only an inkling. the newspapers declared that ely central had cost the scheftels company 5 cents per share, that the capital stock was over-issued, and that the property was worthless. jumbo extension, which has since distributed $95,000 in dividends to its stockholders, has still a treasury reserve of $100,000 and is selling to-day in the markets at a share valuation of about one-quarter of a million dollars for the property, was also described as a "fake stock." rawhide coalition, which has produced upward of $400,000 in bullion, and which is to-day recognized as one of the substantial gold mines of the far west, was labeled plain junk. bovard, which represented an investment of nearly $100,000 for property account and mine development and which had been promoted at 10 cents per share on representations that it was a "prospect," was stated to be a raw steal. the scheftels corporation was said to have got away with millions of dollars by selling "fake mining stocks." it was also stated that i had profited to the extent of millions for my personal account. the scheftels mailing-list was described as a regulation "sucker list," notwithstanding the fact that the principal names that were on it were stockholders in guggenheim companies. the ringleaders were pictured as myself--"a man with an awful past"--and the "notorious character," "red letter" sullivan. mr. sullivan was styled as the facile letter-writer who had addressed the "suckers" and hypnotized them, principally widows and orphans, to withdraw their money from the savings-banks and send it to the scheftels sharks. "red letter" sullivan was also referred to as a man with a "past." the true facts regarding mr. sullivan's connection with the scheftels company were these: a few months before, he had applied for a position. he was then employed as manager of a boston stock-brokerage office. he was awarded the job of time-clerk in the stenographers' department. his job, while employed with the scheftels company, was to see that the stenographers reported on time, did their work properly and were not paid for any services they did not render. he had little or nothing whatever to do with the correspondence department. he never dictated any answers to letters received by the scheftels company. never was he employed in an executive capacity by the scheftels company. we knew little or nothing of the "red letter" title with which he had been decorated. the first we learned of it was in the newspapers after the raid. investigation revealed that ten years before, while a broker in chicago, he had issued a weekly market letter which was printed on red paper. i have thus far not given space to one of the greatest wrongs connected with this disgraceful proceeding--the wrong and damage inflicted upon a multitude of helpless stockholders. while the special agent of the department of justice and his armed followers were wrecking the scheftels offices and terrorizing the place, the scheftels group of mining stocks was being savagely raided on the curb and enormous losses were inflicted on the public. thousands of margin accounts were wiped out in less time than it takes to tell of the massacre. declines in ely central, jumbo extension, rawhide coalition and bovard consolidated exceeded $2,000,000. this loss was distributed among approximately fourteen thousand shareholders of record and as many more not of record. this large army of innocent shareholders was helpless. from such species of confiscation the law affords no relief or recourse, except actual acquittal of the arrested persons, in whom lies the confiding investor's only chance for the market rehabilitation of his securities. a tool's confession the signed confession of the tool of the special agent, who appeared before assistant attorneys dorr and smith at the united states attorney's office in new york, which says he gave false testimony, and the voluntary statement of john j. roach, a stock broker who was employed by the now defunct firm of frederick simmonds, regarding the relations between the special agent and that firm, while special agent of the government, reveal the weak foundations of the government's charges. the tool, prior to the raid, had been in the scheftels employ. for a few months he had been a traveling business-getter for the firm. then he was discharged. he associated himself with frederick simmonds, a member of the consolidated stock exchange. mr. simmonds was badly in debt. the tool had no money. the agent, when he was trying to get the united states attorney's office in new york to agree that the information collected was sufficient to warrant a raid, prevailed upon the tool to appear before the assistant attorneys and give testimony. in this story the chief value of the tool himself is that he has no value. he made his statements against us to mr. dorr, assistant u.s. district attorney. then he gave me a statement, signed in the presence of witnesses, recanting the statements made to mr. dorr. to this he later added a written postscript enforcing his recantation. then he re-recanted and said that a large part of his first recantation, signed by him and initialed by him on each page with his initials was false. the reader is left to judge just which one of the tool's three positions is the one in which he tells the truth. it is obvious that he must be lying in the two others, and it is not impossible that he may be lying in all three--except that some of the stuff in his first recantation, which he later denies in his second, has been verified from other sources. here is the main point to bear in mind concerning the tool,--the sovereign power of seizure, search and confiscation brought into play by our great government without due process of law, was based in part on the flimsy testimony of such a person. thousands of investors suffered from the blow, as well as myself and associates. it would appear from the roach statement that he was largely instrumental in bringing about the crisis that resulted in the suspension of the simmonds firm and in the disclosures of the special agent's relations therewith. these facts have become, in most instances, matters of public record. they came out during the hearings before the receiver for the bankrupt concern. it was found that the liabilities of the "busted" firm were $85,000 and the assets 100 shares of cheap mining stock and between $1,500 and $2,000 in cash. it was at this conjunction that the special agent was allowed to resign from the department of justice. the tool he had foolishly used had proved to be a two-edged one. the agent had been "hoist by his own petard." the guggenheims probably the most surprised branch of the government at the time of the scheftels raid was the post-office department. the crime charged was misuse of the mails. why, if the scheftels aggregation were guilty, didn't the post-office department do the raiding? why didn't it issue a fraud order? the scheftels company has since been declared solvent by the courts and the temporary receiver discharged. to this day no fraud order has been issued. only a short period before the raid, a presentation on the part of the post-office department of all of the evidence in the case had been met with a decision that there was no ground for action. that the guggenheim interests did not fail to take advantage of the plight of the house of scheftels immediately after the raid finds conclusive proof in the transpirations in the ely mining camp. soon after the special agent descended on the scheftels offices, an application in ely was made for a receiver to take charge of the assets of the ely central copper company. the attorneys making the application were chandler & quale, attorneys for the nevada consolidated copper company, a guggenheim enterprise. when the court appointed a receiver he named this firm as attorneys for the receiver. attorney j. m. lockhart for the ely central made a protest that these lawyers, because of their connection with the nevada consolidated were not the proper persons to protect the interests of the now defenseless ely central stockholders. then the court appointed another attorney, named boreman. shortly after the receiver was appointed, he applied to the courts for permission to sell to the nevada consolidated for $30,000, which represented the entire cash indebtedness so far as the receiver knew, the surface rights to a large acreage of ely central and the rights through juniper canyon. this, if accomplished, would have given to the nevada consolidated a railroad right of way that would have solved the problem confronting it of the transportation of the ores from the lower levels of the steam-shovel pit. without such an outlet these ores could not have been handled without great expense and much difficulty. the benefits that would have accrued to nevada consolidated were almost incalculable. at the same time, such action would effectually cut the ely central property into two parts. according to the petition it was stipulated that in selling the surface rights the ely central should cede to the nevada consolidated practical ownership, because it was specified that ely central could not interfere in its mining operations with any rights granted. attorney lockhart of ely central fought the receiver and his attorneys and won a victory. the ely central property was saved intact for the stock-holders. later, an application was made to the court to sell the entire property of the ely central for $150,000. this was believed to be in the interests of the nevada consolidated. in answer, a petition was filed to discharge the receiver on the ground that the court originally appointing him had no jurisdiction. the court finally decided that it was without jurisdiction, because neither fraud nor incompetency had been proved, and the property had not been abandoned. the receiver was discharged. what has been the attitude of the department of justice since the raid was made? since the raid the government has spent several hundred thousand dollars to disclose sufficient evidence from the books to make a case of any kind. one stand after another has been taken only to be abandoned after exhaustive research for evidence to sustain the original excessive pretenses. grand jury after grand jury has thrashed over masses of evidence presented them. armies of accountants have worked day and night for weeks and months in an effort to substantiate the action of the authorities who were led into the commission of a grave wrong. the charge that the scheftels corporation sold fake mining stocks has fallen to the ground. government examinations of the properties have revealed them to be all that they were cracked up to be. careful and industrious reading of the mass of market literature sent through the mails by the scheftels corporation has failed to disclose deliberate misrepresentation regarding the potentialities of any of the mining properties. the scheftels corporation transacted considerable margin business with its customers in the stocks which it sponsored--ely central, jumbo extension, rawhide coalition and bovard consolidated. if the scheftels corporation was run by rascals wouldn't they have been tempted frequently to throw their weight on top of the market and endeavor to break the price of stocks to wipe out the margin traders? did the government find any evidence of this in the books? no. it found evidence--overwhelming and cumulative--that on nearly all occasions the scheftels corporation actually exhausted its every resource to support the market in its stocks and hold up the price in the interests of stockholders. evidence was also found in quantity that the scheftels company discouraged the practice of margin-trading. the superseding indictment handed down by the grand jury late in august, 1911, eleven months after the raid, eliminated the charge of mine misrepresentation regarding the scheftels promotions and reduced it practically to one of charging commissions and interest without earning them. not less than 85 per cent. of the total brokerage transactions of the scheftels corporation were in their own stocks, and at nearly all times in the scheftels history it had on hand, put up on loans or in banks under option, anywhere from three million to seven million shares of these securities. it actually bought, sold and _delivered_ in this period over fifteen million shares of stock! as already stated, the scheftels corporation made it a practice to sell stocks on the general list as an insurance against declines in the market which might carry down the price of its own securities, and this, in the finality, was what the government, after the expense of hundreds of thousands of dollars and the employment of the wisest of counsel, was compelled to tie to in order to justify in the eyes of the great american public the use of the rare power of seizure, search and arrest and of its denial of a prayer for a hearing to the victims which was made before the arbitrary power was used. chapter xii the lesson of it all what is the lesson of my experience--the big broad lesson for the american citizen? this is it: don't speculate in wall street. you haven't got a chance. the cards are stacked by the "big fellows" and you can win only when they allow you to. the information that is permitted to reach you as to market probabilities through the financial columns of the daily newspapers is, as a rule, poisoned at its fountain. it has for its major purpose your financial undoing. few financial writers dare to tell the whole truth--even on the rare occasions when they are able to learn it. most of them are, indeed, subsidized to suppress the truth and to accelerate public opinion in the channels that mean money in the pockets of the securities sellers. as for the literature of stock brokers it is generally even more misleading. few brokers ever dare to tell the whole truth for fear of embittering the interests and being hounded into bankruptcy and worse. as for myself, what excuse have i had for catering to the gambling instinct? this is it: i thought the promoter and the public could both win. i now know that this happens only rarely. as the game is now generally played by the big fellows, the public hasn't got a chance. i have not got a dollar. who profited? the answer is: if anybody, the aggregate. the world has been the gainer. it is richer for the gold, the silver, the copper, and other indestructible metals that have been brought to the surface, as a result of this endeavor, and added to the wealth of the nation. but for the gambling instinct and the promoter who caters to it, the treasure-stores of nature might remain undisturbed and fallow and the world's development forces lie limp and impotent. the end harper's pictorial library of the world war _in twelve volumes profusely illustrated_ volume xii the great results of the war economics and finance, the peace treaty, the league of nations. index [illustration: painting by frank stick a soldier of the soil] =harper's pictorial library of the world war= _in twelve volumes profusely illustrated_ foreword by charles w. eliot, phd. _president emeritus, harvard university_ volume xii the great results of the war _economics and finance, the treaty of versailles and league of nations----index_ with introduction by professor irving fisher, yale university _edited by_ dr. w. l. bevan, kenyon college _and_ dr. hugo c. m. wendel, new york university general editorial board prof. albert bushnell hart harvard university gen. douglas macarthur, u.s.a. chief of staff, 42nd division admiral albert gleaves u.s. navy prof. w. o. stevens u.s. naval academy, annapolis gen. ulysses g. mcalexander u.s. army john grier hibben president of princeton university j. b. w. gardiner military expert, _new york times_ commander c. c. gill, u.s.n. lecturer at annapolis and aide to admiral gleaves henry noble maccracken president of vassar college prof. e. r. a. seligman columbia university dr. theodore f. jones professor of history, new york university carl snyder prof. john spencer bassett professor of history, smith college major c. a. king, jr. history department, west point harper & brothers publishers new york and london established 1817 copyright, 1920, by harper & brothers printed in the united states of america m-u contents of volume xii page _introduction_ professor irving fisher vii part i i. economic results of the war 1 ii. wartime food and price problems 34 iii. industry and labor in wartime 65 iv. government control 87 v. the money cost of the war, edwin r. a. seligman 105 vi. american business in the war, grosvenor b. clarkson 115 vii. the liberty loan army, guy emerson 126 viii. food and the war, vernon kellogg 135 ix. the high cost of living, director of the council of 142 national defense part ii i. the peace conference at work, thomas w. lamont 149 ii. wilson's fourteen points 163 iii. how the peace treaty was signed 165 iv. the peace treaty--its meaning to america, george w. 170 wickersham the treaty of versailles and the covenant of the league of nations preamble 179 part i. the covenant of the league of nations 182 part ii. boundaries of germany 186 part iii. political clauses for europe 188 part iv. german rights and interests outside germany 206 part v. military, naval, and aerial clauses 209 part vi. prisoners of war and graves 216 part vii. penalties 217 part viii. reparation 217 part ix. financial clauses 226 part x. economic clauses 229 part xi. aerial navigation 246 part xii. ports, waterways, and railways 247 part xiii. labor 255 part xiv. guarantees 261 part xv. miscellaneous provisions 262 rejection of the peace treaty 264 the reservations which failed 269 peace by congressional enactment fails 271 the map of europe remade 279 our part in winning the war 280 index text 291 illustrations i. portraits 363 ii. general 368 maps 383 illustration in color a soldier of the soil _frontispiece_ illustrations in this volume price movements of the united states and england from the earliest index numbers through the first years of the world war trend of prices before and after the great wars of history william mcadoo money and the price level john pierpont morgan president wilson and rear admiral grayson passing the palace of the king in brussels women munition workers in the international fuse and arms works poster for boy scouts who worked for the victory loan dropping the first bomb a poster used during the fourth liberty loan campaign detroit--city of automobiles a woman doing road construction work a woman operating a multiple spindle drill in an english shell factory launching the quistconck at hog island ship-building at camden, n. j. diagram showing the effect of the war on the prices of stocks centres of live stock production throughout the world members of "the women's land army" in england a map issued by the food administration to show food conditions in europe after the signing of the armistice a food riot in sweden harry a. garfield drying fruit and vegetables to save tin and glass "back on the farm" the nations and their wheat supply a municipal canning station in the heart of the bethlehem steel plant forging armor plate building howitzers guns and armaments for united states and her allies plowing by night a war time warning women workers in america samuel p. gompers walker d. hines building a steel ship in seattle, washington hog island ship-building yards launching the city of portland on the columbia river, near portland, oregon examining cargoes for contraband an antidote for the submarine pest the awkward squad the economic conference in paris lord reading while the men fought, those left behind bought bonds french school children waiting to welcome general pétain united states council of national defense and its advisory commission bernard m. baruch daniel willard john d. ryan a poster used during the fourth liberty loan campaign a poster for the third liberty loan campaign victory way at night the battle scene at home a community conference on food-saving will there be enough to go around? women doing night farming the ore market--cleveland david lloyd george president poincaré with the swiss president, m. gustave ador, driving to the peace conference in paris where the peace treaty was signed awaiting the decision of the german peace delegates. the george washington paris crowds greeting president wilson henry white count von brockdorff-rantzau victoria hall at geneva william howard taft woodrow wilson, president of the united states president and mrs. wilson waving good bye president wilson's welcome in paris sir eric drummond lord robert cecil berlin demonstrations against the peace treaty german press representatives in versailles dreadnoughts welcoming president wilson home m. stephen pichon henry cabot lodge america's peace capitol in paris the white flags that meant defeat for the german cause and marked the beginning of the end of the war paris in war time senator philander c. knox of pennsylvania male population registered and not registered comparative losses of merchant shipping during the war production of training planes and engines to the end of each month number of battle aeroplanes in each army at the date of the armistice secretary of war baker drawing registration numbers our flag in alsace introduction by professor irving fisher department of political economy, yale university in various ways, as this volume shows, the war has profoundly affected our economic and political life. war has ever been a disturber and innovator, always leaving after it a different world from that which existed previous to it. on account of our tremendously complex economic organization--the specialization of industry among nations, and the network of commerce--war today causes more profound changes than ever before. there can not be a human being in the world today whose life is not altered by the war through which we have just passed. in trying, now that the war is over, to _stop drifting_, and to think our way out of the bent (or broken) remains of the _ante bellum_ life, the world is confronted by a maze of problems and a still greater maze of proffered solutions. many of these proposals are, unfortunately, of the nature of treatment directed not at fundamental conditions, but merely at _symptoms_. we should be past the stage, in our social science, as we are in medicine, where we treat symptoms without a thorough diagnosis of the fundamental causes. and yet it is just this thorough diagnosis that we lack. what, then, are the changes brought about by the war which most deeply affect "the body politic," and by meeting which the most far reaching improvements can be made? high cost of living a vital question i can not take up, or even touch on, all of them; but to one of them i wish to call especial attention--the high cost of living or, more generally, the high level of prices, which is the most striking economic effect of the war throughout the world. it is, as i see it, hard to over-emphasize the need for attacking this problem of the price level as a preliminary to attacking the other economic problems which the war has left us. we need only glance at a newspaper today, or step into a corner grocery, or fall into conversation with our neighbor in the train to have this topic come out as foremost in interest. it is, i believe, responsible for much more of our present uncertainty and confusion than is usually realized. in its ramifications it is chiefly this phase of the war's effects which, as i suggested above, touches every one of us at every point of our lives. a member of the federal reserve board has called the price level problem _the_ central economic problem of reconstruction. professor william graham sumner, who has inspired so many to the scientific study of social conditions, used to say: "in taking up the study of any social situation, divide your study into four questions--(1) what is it? (2) why is it? (3) what of it? (4) what are you going to do about it?" let us follow this outline, and look first at the facts of the case; secondly at their causes; thirdly at the evils involved; and lastly at the remedies. measuring changes in prices we now possess a device for measuring the average change in prices. this is what is known as an "index number." thus, if one commodity has risen 4 per cent. since last month and another, 10 per cent., the average rise of the two is midway between the sum of 4 per cent., and 10 per cent., or 7 per cent. it is 4 + 10 -----= 7 2 if we call the price level of the two articles last month 100 per cent., then 107 per cent. is the "index number" for the prices of the two articles this month. the same principle, of course, applies to any number of commodities. the index number of the united states bureau of labor statistics, the best index number we have, shows an average price level in 1918 of 196 for wholesale prices and 168 for retail prices of food on the basis of 100 per cent. for 1913, the year before the war; showing that wholesale prices, on the average, almost exactly doubled. the latest index number for wholesale prices (may, 1919) is 206, and for retail (july, 1919), 190. a look at the history of prices shows the interesting fact that, while prices have sometimes fallen, they have generally risen. the high cost of living has been for centuries a source of complaint. in the 16th century, people objected to the price of wheat, which was three to ten times what it cost during the preceding 300 years. worthless paper money where, through ignorance of monetary science, irredeemable paper money was used, prices have sometimes gone up quite "out of sight." this was the case with the famous assignats of the french revolution, and the "continental" paper money of our own revolution. after the revolution a barber in philadelphia is said to have covered the walls of his shop with continental paper money, calling it the cheapest wallpaper he could get! jokes were also heard of a housewife taking a market-basket full of this "money" to the butcher's shop and bringing home the meat in her purse! this money became a hissing and a byword; and, even to this day, one of the favorite expressions for worthlessness is "not worth a continental." we see the same situation repeated again today with russian paper money. but our first scientific measurement of price movements began with 1782, the beginning of jevons' index number of wholesale prices in england. comments on figure 1 figure 1 shows the course of prices in england from that date, and also, for comparison, that in the u.s. [illustration: figure 1 price movements of the united states and england from the earliest index numbers through the first years of the world war showing, in general, a close similarity. england was on a paper basis, 1801--1820; and the united states, 1862--78. the dotted lines for these periods show the prices as translated back into gold.] the conspicuous feature of these curves is their great irregularity. practically never are they for any length of time at all horizontal. sometimes, even in time of peace, a variation of over 10 per cent. is shown in one year. the curve for the u. s. shows, at the time of the civil war, a very considerable rise (especially as measured in terms of paper), followed by a decline beginning in 1873 and continuing to 1896. the fall in the first part of this period was accentuated by the return from a paper to a gold standard. from an index number of 100 in 1873, the index number dropped to 51 in 1896. this decline resulted politically in the famous bryan "free silver" campaign. [illustration: figure 2 trend of prices before and after the great wars of history] since that time, however, the course of prices has been steadily upward. between 1896 and the outbreak of the war, the index number of the u. s. rose about 50 per cent. substantially the same increase took place in canada, while in the united kingdom there was a rise of 35 per cent. this rise before the war amounted, in the united states, to about one-fifth of one per cent. per month. during the war, however, the rise amounted in this country to 1½ per cent. per month, and abroad to much more--in germany and austria to 3 per cent. per month, and in russia, apparently, to 4 or 5 per cent. per month. in the light of the excitement caused up to 1914 by the comparatively moderate increase in this country, we can better understand the russian economic unrest when a far steeper ascent of prices got under way. the total effect can be summed up as follows: between 1914, before the war, and november, 1918, the price level in this country (as indicated by the united states bureau of labor statistics retail food index number) rose 79 per cent.; that in england (according to the _statist_ index number), 133 per cent.; that in france, approximately 140 per cent.; that in western europe probably at least three-fold; and in russia perhaps ten or twenty-fold. the price level of the united states today is over three-fold that of 1896. expressing the same fact in terms of the purchasing power of money, our dollar of today is worth only 30 cents of the money in 1896, so that as contrasted with the dollar of 1896 our dollar literally "looks like thirty cents." comments on figure 2 now it is a common belief, and one which seems to be borne out by the present situation, that war raises prices whereas peace lowers them. the matter is, however, not so simple. each case must be considered on its own merits. figure 2 shows price curves for the various wars. in general prices have risen during wars. but there has not been any such uniformity of movement after wars. moreover in most cases the price disturbances both during and after the wars had scarcely anything to do with the coming and going of the war. in only four of the cases on the chart is the rise of prices during the war really and clearly due to the war. in the napoleonic wars, the war of 1812, the civil war, and the world war the rise of prices during the war was largely due to war inflation. as to the after effects on prices there are likewise only four clear cases. the fall of paper prices relatively to gold after the napoleonic wars, and the civil war was, in each case, clearly due to resumption of specie payments. the fall of prices in the united states after the war of 1812 was doubtless due in large measure to the resumption of foreign trade. in one case there was a rise of prices as an aftermath; the war of 1871, which gave germany a billion dollars of indemnity, created inflation in germany and prices rose there between 1871 and 1873 faster than in any other country. this doubtless accentuated the crash in the crisis of 1873. in the other cases in the diagram the many instances of rise of prices after the wars were due primarily at least, to other causes, although the cessation of war and the undue optimism and spirit of speculation which often follow may, in several instances, have contributed to the boom period and the crisis which so often came a few years later, viz., that of 1857 after the crimean war, that of 1866 after the civil war, as well as that of 1873 just mentioned. the only safe generalizations seem to be the following two: the first is that in so far as a war has been costly, _i. e._, has strained the economic resources of the belligerents, there has been recourse to inflation in some form and prices have risen. besides the examples in the chart are those of the french revolution, the american colonial wars, the american revolution and many others. the second generalization is that after a costly war the price level is affected up or down by the fiscal policy of the governments concerned. high prices not due to scarcity most cherish the belief that high war prices today represent war scarcity. in the case of some countries like belgium and some commodities like paper this is true and in such cases scarcity serves as a partial explanation of high prices. but in the case of most countries and most commodities there has been no general scarcity. the almost universal rise of prices cannot be ascribed to scarcity. prices have risen of many goods not affected by the war or in countries remotest from the war. [illustration: copyright by underwood & underwood william mcadoo secretary of the treasury during the world war, and director-general of the railroads.] as mr. o. p. austin, statistician of the national city bank, has said: "raw silk, for example, for which the war made no special demand and which was produced on the side of the globe opposite that in which the hostilities were occurring, advanced from $3.00 per pound in the country of production in 1913 to $4.50 per pound in 1917, and over $6.00 per pound in the closing months of the war. manila hemp, also produced on the opposite side of the globe and not a war requirement, advanced in the country of production from $180 per ton in 1915 to $437 per ton in 1918. goat skins, from china, india, mexico and south america, advanced from 25 cents per pound in 1914 to over 50 cents per pound in 1918; and yet goat skins were in no sense a special requirement of the war. sisal grass produced in yucatan advanced from $100 per ton in 1914 at the place of production to nearly $400 per ton in 1918; and egyptian cotton, a high-priced product and thus not used for war purposes, jumped from 14 cents per pound in egypt in 1914 to 35 cents per pound in 1918. even the product of the diamond mines of south africa advanced from 60 to 100 per cent. in price per karat when compared with prices existing in the opening months of the war. "the prices are in all cases those _in the markets of the country in which the articles were produced_ and in most cases at points on the globe far distant from that in which the war was being waged. they are the product of countries having plentiful supply of cheap labor and upon which there has been no demand for men for service in the war. the advance in the prices quoted is in no sense due to the high cost of ocean transportation since they are those demanded and obtained in the markets of the country of production. "why is it that the product of the labor of women and children who care for silk worms in china and japan, of the filipino laborer who produces the manila hemp, the egyptian fellah who grows the high grade cotton, the native workman in the diamond mines of south africa, the mexican peon in the sisal field of yucatan, the chinese coolie in the tin mines of malay, or the goatherd on the plains of china, india, mexico or south america has doubled in price during the war period?" mr. austin goes on to show that the scarcity or "increased demand" for war goods has been greatly exaggerated. it is true that some 40 million men were at one time fighting in the war. but this is less than 2½ per cent. of the world's population and it must not be forgotten that these 40 million were also consumers before the war. their withdrawal from industry did not really create a vacuum of even 1 per cent. of the world's productive power; as women, boys and old men took their places and others worked harder than in peace time. in addition to the 40 million soldiers, some 150 million people have been required to work on "war work" at home but they have simply been "switched" from other forms of production which have been correspondingly reduced. war supplies were demanded but these also largely "switched" the demand from former and industrial uses. lord d'abernon found that in england those objects of luxury "which would seem to be influenced not at all or only very remotely and to a very small degree by increased cost of labor and materials," such as old books, prints and coins, had, nevertheless, advanced, roughly speaking 50 per cent., during the war. thus "scarcity" and especial "war demands" do not go far toward explaining the high price level even in europe and not at all, i believe, in this country. in the united states while certain things have become scarce, including certain foods, the general mass of goods has been actually increased as a consequence of war. the raw materials used in the united states in 1918 were 16 per cent. more than in 1913 and 2 per cent. more than in 1917. the physical volume of trade is estimated variously to be in 1918 from 22 per cent. to 41 per cent. above that in 1913 and 8 per cent. above that in 1917. president wilson, in his address to congress, august 8, 1919, on the high cost of living, gave other impressive examples as to foods, especially eggs, frozen fowls, creamery butter, salt beef, and canned corn, showing that scarcity is not the cause of high prices. high prices due to monetary causes the truth is that the chief causes of the rise of prices in war time are monetary causes. it is almost invariably true that the great price movements of history are chiefly monetary. this is shown, in the first place by the fact that countries of like monetary standards have like price movements. thus--to consider gold-standard countries--there has usually been a remarkable family resemblance between the curves representing the rise and fall of the index numbers of the united states, canada, england, france, belgium, holland, scandinavia, germany, austria and italy. again, the price movements in silver countries show a strong likeness, as in india and china between 1873 and 1893. on the other hand, we find a great contrast between gold and silver countries or between any countries which have different monetary standards. in the world war the data are still too meager to enable us to express all the relations in exact figures, but we may arrange the different countries in the approximate order in which their prices have risen. the order of the nations corresponds, in general, with the order in which the currency in those nations has been inflated by paper as well as with the order in which their monetary units have depreciated in the foreign exchange markets. this order--of ascending prices and of inflated currency--is as follows, beginning with the least rise and inflation: india, australia, new zealand, united states, canada, japan, sweden, switzerland, denmark, italy, holland, england, norway, france, germany, austria and russia. [illustration: figure 3. money and the price level showing a correspondence between the quantity of money and the level of prices. since the middle of 1915, when the quantity of money in the united states began to be greatly affected by the war, the correspondence has been close, changes in the price level seeming usually to follow changes in the quantity of money one to three months later.] the ups and downs of prices correspond with the ups and downs of the money supply. throughout all history this has been so. for this general statement there is sufficient evidence even where we lack the index numbers by which to make accurate measurements. whenever there have been new discoveries of gold and rapid outpourings from mines, prices have gone up with corresponding rapidity. this was observed in the 16th century, after great quantities of the precious metals had been brought to europe from the americas; and again in the 19th century, after the californian and australian gold finds of the fifties; and still again, in the same century after the south african, alaskan and cripple creek mining of the nineties. likewise when other causes than mining, such as paper money issues, produce violent changes in the quantity or quality of money, violent changes in the price level usually follow. comments on figure 3 the world war furnishes important examples of this. in the united states the curve for the quantity of money in circulation and the curve for the index number of prices run continuously parallel, the price curve following the money curve after a lag of one to three months. it was in august, 1915, that the quantity of money in the united states began its rapid increase. one month later prices began to shoot upward, keeping almost exact pace with the quantity of money. in february, 1916, money suddenly stopped increasing, and two or three months later prices stopped likewise. as figure 3 shows, similar striking correspondences have continued to occur with an average lag between the money cause and the price effect of apparently about one and three-quarters months. on the whole, the money in circulation in the united states rose from three and one-third billions in 1913 to five and a half billions in 1918, and bank deposits from thirteen to twenty-five billions, both approximately corresponding to the rise in prices. taking a world-wide view, the money in circulation in the world outside of russia has increased during the war from fifteen billions to forty-five billions and the bank deposits in fifteen principal countries from twenty-seven billions to seventy-five billions. that is both money and deposits have trebled; and prices, on the average have perhaps trebled also. the bolsheviki are a law unto themselves. they have issued eighty billion dollars of paper money, or more than in all the rest of the world put together. consequently prices in russia have doubtless reached the sky, though no exact measure of them, since the bolshevist régime, is at hand. the increase of over thirty billions in the money of the world (outside of russia) is as austin says "more, _in its face value_, than all the gold and all the silver turned out by all the mines of all the world in 427 years since the discovery of america." the conclusion toward which the foregoing and other arguments lead is that, in this war as in general in the past, the great outstanding disturber of the price level has always been money. if this is the case, how fruitless, except as treatments of symptoms, are price-fixing, or campaigns aimed at profiteers! the cry of profiteering may hinder a real solution of the difficulty by diverting attention from the real issue and fanning and giving up an object to the spirit of revolt. money is so much an accepted convenience in practice that it has become a great stumbling block in theory. since we talk always in terms of money and live in a money atmosphere, as it were, we become as unconscious of it as we do of the air we breathe. associate evils of high prices we have now considered the cost of living situation under the two questions "what is it?" and "why is it?" the third question, "what of it?"--_i. e._, what are the evils connected with it--is more easily answered today, when it comes home to all of us, that it might have been 10 years ago. if, for each one of us, the rise of income were to keep up exactly with the rise in cost of living, then the high cost of living would have no terrors; it would be merely on paper. but no such perfect adjustment ever occurs or can occur. outstanding contracts and understandings in terms of money make this out of the question. the salaried men and the wage earners suffer--that is, the cost is borne by those with relatively "fixed" incomes. the truth is, the war was largely paid for, not by taxes or loans but by the high cost of living. the result is that the effort to avoid discontent of tax payers has created or rather aggravated the discontent over high prices. every rise in the cost of living brings new recruits to the labor malcontents who feel victimized by society and have come to hate society. they cite, in their indictment, the high price of necessities and the high profits of certain great corporations both of which they attribute, not to the aberrations of our monetary yardstick but to deliberate plundering by "profiteers" or a social system of "exploitation." they grow continually more suspicious and nurse an imaginary grudge against the world. we are being threatened by more quack remedies--revolutionary socialism, syndicalism, and bolshevism. radicalism rides on the wave of high prices. as a matter of fact, the real wages in 1918, that is, their purchasing power, were only 80 per cent. of the real wages of 1913. that is, while the retail prices of food advanced 68 per cent., wages in money advanced only 30 per cent. the real wages of 1913 were in turn less than in earlier years. lord d'abernon, in a recent speech in the house of lords said: "i am convinced and cannot state too strongly my belief that 80 per cent. of our present industrial troubles and our bolshevism which is so great a menace to europe are due to this enormous displacement in the value of money." in fact, before the war, rising costs of living were manufacturing socialists all over the world, including germany, and the german government may have weighed, as one of the expected dynastic advantages of war, the suppression of the growing internal class struggle which this high cost of living was bringing on apace. many suggested remedies inadequate we are now ready for the question, "what can be done about it?" so far as the past is concerned, comparatively little. bygones must largely be bygones. so far as wages and salaries are concerned, the remedy must be to raise them rather than to lower the high cost of living. while some kinds of work have had excessive wages during the war, this has not been true in general, public opinion to the contrary notwithstanding. i quite agree with mr. gompers that the wage level should not be lowered even if it could be. on the contrary it should be raised to catch up with prices, just as was done after the civil war. but in regard to contracts little relief for past injuries can be expected. we would best use the past as a lesson for the future. that is what i understand by "reconstruction." [illustration: john pierpont morgan the banking house of morgan was closely identified with international finance throughout the world war.] many impracticable plans have been proposed. secretary redfield undertook to stabilize prices by arbitrarily fixing them. he failed, necessarily. we might as well try to fix the sea level by pressing on the ocean. the same, as i stated above, is true of a campaign against profiteers though proposed by so high an authority as president wilson. proposed remedy the plan i shall here outline has received the approval of a large number of leading economists, business men, and organizations, including president hadley of yale; a committee of economists appointed to consider the purchasing power of money in relation to the war; frank a. vanderlip, president of the national city bank of new york; george foster peabody, federal reserve banker of new york; john perrin, federal reserve agent of san francisco; henry l. higginson, the veteran banker of boston; roger w. babson, statistician; john hays hammond, mining engineer; john v. farwell, of chicago; leo s. rowe, assistant secretary of the treasury: united states senator, robert l. owen, one of the authors of the federal reserve act; ex-senator shafroth; the late senator newlands; sir david barbour, one of the originators of the indian gold exchange standard; the society of polish engineers; the new england purchasing agents' association; and a few chambers of commerce. wanted--a standardized dollar our dollar is now simply a fixed weight of gold--a unit of weight, masquerading as a unit of value. it is almost as absurd to define a unit of value, or general purchasing power, in terms of weight as to define a unit of length in terms of weight. what good does it do us to be assured that our dollar weighs just as much as ever? we want a dollar which will always buy the same aggregate quantity of bread, butter, beef, bacon, beans, sugar, clothing, fuel, and the other essential things that we spend it for. what is needed is to stabilize or standardize the dollar just as we have already standardized the yardstick, the pound weight, the bushel basket, the pint cup, the horsepower, the volt, and, indeed, all the units of commerce except the dollar. money today has two great functions. it is a medium of exchange and it is a standard of value. gold was chosen because it was a good medium, not because it was a good standard. and so, because our ancestors found a good medium of exchange, we now find ourselves saddled with a bad standard of value! the problem before us is to retain gold as a good medium and yet to make it into a good standard; not to abandon the gold standard but to rectify it; not to rid ourselves of the gold dollar but to make it conform in purchasing power to the composite or goods-dollar. the method of rectifying the gold standard consists in suitably varying the weight of the gold dollar. the gold dollar is now fixed in weight and therefore variable in purchasing power. what we need is a gold dollar fixed in purchasing power and therefore variable in weight. i do not think that any sane man, whether or not he accepts the theory of money which i accept, will deny that the weight of gold in a dollar has a great deal to do with its purchasing power. more gold will buy more goods. therefore more gold than 25.8 grains will, barring counteracting causes, buy more goods than 25.8 grains itself will buy. if today the dollar, instead of being 25.8 grains or about one-twentieth of an ounce of gold, were an ounce or a pound or a ton of gold it would surely buy more than it does now, which is the same thing as saying that the price level would be lower than it is now. a mexican gold dollar weighs about half as much as ours and has less purchasing power. if mexico should adopt the same dollar that we have and that canada has, no one could doubt that its purchasing power would rise--that is, the price level in mexico would fall. since, then, the heavier or the lighter the gold dollar is the more or the less is its purchasing power, it follows that, if we add new grains of gold to the dollar just fast enough to compensate for the loss in the purchasing power of each grain, or vice versa take away gold to compensate for a gain, we shall have a fully "compensated dollar," a stationary instead of fluctuating dollar, when judged by its purchasing power. but how, it will be asked, is it possible, in practice, to change the weight of the gold dollar? the feat is certainly not impossible, for it has often been accomplished. we ourselves have changed the weight of our gold dollar twice--once in 1834, when the gold in the dollar was reduced 7 per cent., and again in 1837, when it was increased one-tenth of 1 per cent. if we can change it once or twice a century, we can change it once or twice a month! how gold circulates in actual fact, gold now circulates almost entirely through "yellowbacks," or gold certificates. the gold itself, often not in the form of coins at all but of "bar gold," lies in the government vaults. the abolition of gold coin would make no material change in the present situation. if gold thus circulated only in the form of paper representatives it would evidently be possible to vary at will the weight of the gold dollar without any such annoyance or complication as would arise from the existence of coins. the government would simply vary the quantity of gold bullion which it would exchange for a paper dollar--the quantity it would give or take at a given time. as readily as a grocer can vary the amount of sugar he will give for a dollar, the government could vary the amount of gold it would give for a dollar. criterion of standardization but, it will now be asked, what criterion is to guide the government in making these changes in the dollar's weight? am i proposing that some government official should be authorized to mark the dollar up or down according to his own caprice? most certainly not. a definite and simple criterion for the required adjustments is at hand--the now familiar "index number" of prices. if, for instance, the index number is found to be 1 per cent. above the ideal par, this fact will indicate that the purchasing power of the dollar has gone down; and this fact will be the signal and authorization for an increase of 1 per cent. in the weight of the gold dollar. what is thereby added to the purchasing power of the gold dollar will be automatically registered in the purchasing power of its circulating certificate. if the correction is not enough, or if it is too much, the index number next month will tell the story. absolutely perfect correction is impossible, but any imperfection will continue to reappear and so cannot escape ultimate correction. suppose, for instance, that next month the index number is found to remain unchanged at 101. then the dollar is at once loaded an additional 1 per cent. and if, next month, the index number is, let us say, 100½ (that is, one half of 1 per cent above par) this one-half of 1 per cent. will call for a third addition to the dollar's weight, this time of one-half of one per cent. and so, as long as the index number persists in staying even a little above par, the dollar will continue to be loaded each month, until, if necessary, it weighs an ounce--or a ton, for that matter. but, of course, long before it can become so heavy, the additional weight will become sufficient; so that the index number will be pushed back to par--that is, the circulating certificate will have its purchasing power restored. or suppose the index number falls below par, say 1 per cent. below. this fact will indicate that the purchasing power of the dollar has gone up. accordingly, the gold dollar will be reduced in weight 1 per cent., and each month that the index number remains below par the now too heavy dollar will be unloaded and the purchasing power of the certificate brought down to par. thus by ballast thrown overboard or taken on, our dollar is kept from drifting far from the proper level. the result is that the price level would oscillate only slightly. instead of there being any great price convulsions, such as we find throughout history, the index number would run, say 101, 100½, 101, 100, 102, 101½, 100, 98, 99, 99, 99½, 100, etc., seldom getting off the line more than 1 or 2 per cent. a problem calling for urgent action with the question now before us, it is evident that the problem of our monetary standards has much more than theoretical significance. it is a practical problem, and, i submit, the most pressing which the war has left us. i do not offer the solution described above as the only answer to the problem. it is, however, a working basis, a starting point, from which we may be able to work out a better plan. _some_ scientifically sound plan is essential, or we shall be the victims of quack remedies. finally, _now_ is the time to take up the matter. public interest is now focused on the cost of living and is very largely educated to the fact that the high prices have a monetary basis. furthermore, the world is looking to us, as never before, for leadership. it is our golden opportunity to set _world_ standards. if we adopt a stable standard of value, it seems certain that other nations, as fast as they can straighten out their affairs, resume specie payments, and secure again stable pars of exchange, will follow our example. let us, then, who realize the situation, act upon our knowledge; and secure a boon for all future generations, a true standard for contracts, a stabilized dollar. [illustration: copyright by underwood & underwood president wilson and rear admiral grayson passing the palace of the king in brussels] the great results of the war the great results of the war _part i_ i--economic results of the war striking changes made by the european conflict upon the economic life of the great nations the paramount position of war finance was brought vividly and continuously before the whole people of the united states by the liberty loan campaigns. this lesson was an old one though it was enforced by all the improved methods of modern publicity. to napoleon bonaparte is attributed the statement that three things are necessary to wage a successful war: money, more money, and still more money. finding the money for war it has been well said that: "perhaps the greatest surprise of the war to most people, even to those who had studied political economy, has been the enormous expenditure of money which a nation can incur, and the length of time which it can go on fighting without complete exhaustion. this should not have been in reality a surprise to anyone who had studied past history, for all experience shows that lack of money itself has never prevented a nation from continuing to fight, if it were determined to fight. the financial condition of revolutionary france at the commencement of napoleon's career was wretched in the extreme, yet france went on fighting for nearly twenty years after that. the balkan states can hardly be said ever to have had great financial resources, and yet they fought, one after the other, two severe wars, and are now fighting a third still more severe and prolonged. the boers in south africa found no difficulty in fighting the british empire for three years with practically no financial resources. the mexicans recently managed to fight one another for a good many years in the same way. lastly, the southern states in our own civil war fought for years a desperate and losing fight and were ultimately beaten to the ground, not so much by a lack of money, as by an actual lack of things to live on and fight with. in fact, all history proves, and this war proves over again, that if what the germans call 'the will to fight' exists lack of money will never stop a nation's fighting, provided it possesses or can obtain its absolutely minimum requirements of food, clothing, and munitions of war. it was bismarck who said: 'if you will give me a printing press, i will find you the money.' in finding the money required for an exhausting war a nation is driven to all sorts of desperate financial expedients which may very seriously affect its economic life, but if a nation wants to continue fighting and can produce, or be induced to produce, the things that are absolutely necessary for life and warfare, the government will get hold of those things somehow. if it cannot get them in any other way, ultimately it will take them." strong position of united states when the war opened england was in the strongest position of any of the allies. she was the greatest creditor nation in the world. that is, she was able to purchase goods from foreign countries on easier terms than her associates. russia and italy were debtor nations and had to borrow even before the war in order to balance their foreign accounts. so these members of the entente had to be assisted in making purchases abroad. england was able for a long time to keep up her exchange rate in new york. this was done by the shipment of gold and by inducing the holders of american securities in england to sell or lend such securities to their government. england was forced to act as the agent of other powers who were fighting with her. until the united states came in, it was the greatest industrial arsenal among the allies. large imports were naturally a feature of this policy. the united states soon began to feel the result of the changes in international credit. exports almost doubled between 1912 and 1917, the figures being in millions, $2,399,000,000 and $6,231,000,000, respectively. another side of the united states trade account to the world is indicated by the following classified list of loans to january, 1917: "between august 1, 1914, and december 31, 1916, the loans raised in the united states by foreign countries were estimated to reach $2,325,900,000, of which $175,000,000 had been repaid. the net indebtedness on january 1, 1917, was therefore $2,150,900,000. the loans may be classified geographically as follows: europe $1,893,400,000 canada 270,500,000 latin america 157,000,000 china 5,000,000 ------------- total foreign loans $2,325,900,000 less amount paid, estimated 175,000,000 ------------- net foreign indebtedness $2,150,900,000 "the loans of the belligerent countries which were floated in the united states up to the close of 1916 are divided as follows: great britain $908,400,000 france 695,000,000 russia 160,000,000 germany 45,000,000[1] canada 270,500,000 ------------- total $2,078,900,000[2] [1] estimated. [2] nearly $1,900,000,000 of this constituted war loans. new pace in war finance a new pace in war finance was set by the united states when it became a belligerent. it had to provide for an increase of taxation ascending from the point of $3,000,000,000 in 1917 to over $8,000,000,000 in 1918. the largest source of estimated revenue was from taxes on excess profits, including war profits of $3,100,000,000, and the next was from taxes on incomes, $1,482,186,000 from individuals, and $828,000,000 from corporations. the new york _journal of commerce_ shows by the following table the difference between the old and the new system of taxation. exemptions under the new law were the same as under the old: $1,000 for single persons and $2,000 for married, $200 additional allowed for each dependent child under eighteen years of age: incomes tax under old new law law $2,500 $10 $30 3,000 20 60 3,500 30 90 4,000 40 120 4,500 60 150 5,000 80 180 5,500 105 220 6,000 130 260 6,500 155 330 7,000 180 400 7,500 205 470 8,000 235 545 8,500 265 620 9,000 295 695 9,500 325 770 10,000 355 845 12,500 530 1,320 15,000 730 1,795 20,000 1,180 2,895 25,000 1,780 4,240 30,000 2,380 5,595 35,000 2,980 7,195 40,000 3,580 8,795 45,000 4,380 10,645 50,000 5,180 12,495 55,000 5,980 14,695 60,000 6,780 16,895 70,000 8,880 21,895 80,000 10,980 27,295 100,000 16,180 39,095 150,000 31,680 70,095 200,000 49,180 101,095 300,000 92,680 165,095 500,000 192,680 207,095 1,000,000 475,180 647,095 5,000,000 3,140,180 3,527,095 the following estimated yield from other sources is given by the same authority: "transportation--freight, $75,000,000; express, $20,000,000; passenger fares, $60,000,000; seats and berths, $5,000,000; oil by pipe lines, $4,550,000. "beverages (liquors and soft drinks), $1,137,600,000; stamp taxes, $32,000,000; tobacco cigars, $61,364,000; cigarettes, $165,240,000; tobacco, 104,000,000; snuff, $9,100,000; papers and tubes, $1,500,000. "special taxes.--capital stock, $70,000,000; brokers, $1,765,000; theaters, etc., $2,143,000; mail order sales, $5,000,000; bowling alleys, billiard and pool tables, $2,200,000; shooting galleries, $400,000; riding academies, $50,000; business license tax, $10,000,000; manufacturers of tobacco, $69,000; manufacturers of cigars, $850,000; manufacturers of cigarettes, $240,000; use of automobiles and motor cycles, $72,920,000. "telegraph and telephone messages, $15,000,000; insurance, $12,000,000; admissions (theaters, circuses, etc.), $100,000,000; club dues, $9,000,000. "excise taxes.--automobiles, etc., $123,750,000; jewelry, sporting goods, etc., $80,000,000; other taxes on luxuries at 10 percent., $88,760,000; other taxes on luxuries (apparel, etc., above certain prescribed prices), at 20 percent., $181,095,000. "gasoline, $40,000,000; yachts and pleasure boats, $1,000,000." "the income tax law levies on all citizens or residents of the united states a normal tax of 12 percent. upon the amount of income in excess of exemptions, except that on the first $4,000 of the taxable amount the rate shall be 6 percent. the law also increases the surtaxes all along the line. the advances by grades compared with the percentage under the old law are: $5,000 to $7,500 incomes, increased from 1 to 2 percent.; $7,500 to $10,000, from 2 to 3 percent.; $10,000 to $12,500, from 3 to 7 percent.; $12,500 to $15,000, from 4 to 7 percent.; $15,000 to $20,000, from 5 to 10 percent.; $20,000 to $30,000, from 8 to 15 percent.; $30,000 to $40,000, from 8 to 20 percent.; $40,000 to $50,000, from 12 to 25 percent.; $50,000 to $60,000, from 12 to 32 percent.; $60,000 to $70,000, from 17 to 38 percent.; $70,000 to $80,000, from 17 to 42 percent.; $80,000 to $90,000, from 22 to 46 percent.; $90,000 to $100,000, from 22 to 46 percent.; $100,000 to $150,000, from 27 to 50 percent.; $150,000 to $200,000, from 31 to 50 percent.; $200,000 to $250,000, from 37 to 52 percent.; $250,000 to $300,000, from 42 to 55 percent. the rate continues to increase, but on incomes of over $5,000,000 the increase is only from 63 percent., under former law to 65 percent." [illustration: copyright by international film service women munition workers in the international fuse and arms works before entering the war, the united states was the great arsenal of the allies. after our entry, production of munitions increased, while the man power in the industry diminished through enlistments and the draft. women took up the work and showed surprising ability.] meaning of new taxation according to a calculation published in the new york _world_ the war revenue bill imposed a war tax of $80 on every man, woman and child in the united states, or approximately $400 for each family. the amount expected to be derived from each item is given in the following table: individual income tax $1,482,186,000 corporation income tax 894,000,000 excess and war profits 3,200,000,000 estate tax 110,000,000 transportation 164,550,000 telegraph and telephone 16,000,000 insurance 12,000,000 admissions 100,000,000 club dues 9,000,000 excise, luxury, and semi-luxury 518,305,000 beverages 1,137,600,000 stamp taxes--chiefly documentary 32,000,000 tobacco and products 341,204,000 special business and automobile-user's taxes 165,607,000 ------------- total $8,182,452,000 with the operation of this tax the people of the united states found it no longer possible to speak in terms of opprobrium of the tax-ridden people of europe. the american income tax has a higher rate on large incomes than that provided for under the english system. a man in the united states with an income of $5,000,000 is taxed nearly 50 percent., more than in england. the new york _tribune_ published tables printed below comparing the income tax rates of the united states with those existing in france and in great britain. income tax comparison a compilation made for the _wall street journal_ shows that the united states income tax even with the increases made in 1918 was still far lower than the english income tax: "the great bulk, numerically, of incomes taxed in 1917 was in the field reached by the lowering of the exemption in the 1917 law.... it is a fact, however, that no one of these new taxpayers was called on to contribute more than $40 to the government, as the rate was only 2 percent., while all other incomes paid a basic normal tax of 4 percent. the lowest rate for normal tax in great britain is 2 shillings and 3 pence on the pound, or 11¼ percent., and the exemption is only $600. the basic normal tax under the new english law is 6 shillings on the pound, or 30 percent., on all incomes over $25,000. _united states old law new law united kingdom france income rate rate rate (%) rate am't (%) am't (%) unearned earned (%)_ $ 2,500 $10 .40 $30 1.20 11.25 8.44 1.25 3,000 20 .67 60 2.00 14.84 11.87 1.67 3,500 30 .86 90 2.57 16.24 12.96 2.07 4,000 46 1.00 120 3.00 18.16 14.53 2.44 4,500 60 1.33 150 3.33 18.75 15.00 2.86 5,000 80 1.60 180 3.60 18.75 15.00 3.20 5,500 105 1.91 220 4.00 22.50 18.75 3.48 6,000 130 2.16 260 4.33 22.50 18.75 3.71 6,500 155 2.38 330 5.08 22.50 18.75 3.90 7,000 180 2.57 400 5.71 22.50 18.75 4.07 7,500 205 2.73 470 6.27 22.50 18.75 4.21 8,000 235 2.93 545 6.81 26.25 22.50 4.34 8,500 265 3.12 620 7.29 26.25 22.50 4.53 9,000 295 3.28 695 7.72 26.25 22.50 4.69 9,500 325 3.42 770 8.11 26.25 22.50 4.84 10,000 355 3.55 845 8.45 26.25 22.50 4.98 12,500 530 4.24 1,320 10.56 30.00 26.25 5.53 15,000 730 4.87 1,795 11.97 32.08 32.08 6.07 20,000 1,180 5.90 2,895 14.48 34.06 34.06 6.99 25,000 1,780 7.12 4,245 16.98 35.75 35.75 7.84 30,000 2,380 7.93 5,595 18.65 37.29 37.29 8.41 35,000 2,980 8.51 7,195 20.56 38.75 38.75 8.99 40,000 3,580 8.95 8,795 21.99 39.84 39.84 9.43 45,000 4,380 9.73 10,645 23.66 40.97 40.97 9.77 50,000 5,180 10.36 12,495 24.99 41.88 41.88 10.05 55,000 5,980 10.87 14,695 26.72 42.84 42.84 10.27 60,000 6,780 11.30 16,895 28.16 43.65 43.65 10.45 70,000 8,880 12.69 21,895 31.26 44.91 44.91 10.75 80,000 10,980 13.72 27,295 34.12 45.86 45.86 10.96 100,000 16,180 16.18 39,095 39.10 47.19 47.19 11.27 150,000 31,680 21.12 70,095 46.73 48.96 48.96 11.68 200,000 49,180 24.59 101,095 50.55 49.84 49.84 11.89 300,000 92,680 30.89 165,095 55.03 50.73 50.73 12.09 500,000 192,680 38.54 297,095 59.42 51.44 51.44 12.25 1,000,000 475,180 47.52 647,095 64.71 51.97 51.97 12.38 5,000,000 3,140,000 62.80 3,527,095 70.54 52.39 52.39 12.48 "actual rate, allowing for deductions, normal tax, and surtaxes, based on taxes on incomes of heads of families. persons with no dependents pay more; those with more than one pay less. $2,000 is exempted for heads of families, $1,000 for bachelors. below $4,000, 6 per cent. is the normal tax; above, 12 per cent. surtaxes begin at $5,000." "if the new normal tax in the united states were made uniformly 12 percent.--wiping out the 2 percent. discrimination of the 1917 law--a single man in this country with a salary of $1,500 a year would be called on to pay $60 in income tax, as against an english tax of $101.25. assuming that the normal tax were raised to 12 percent. and the surtax and excess tax were left as at present, an unmarried american with a salary of $10,000 would pay $1,430.20, while the unmarried englishman would pay $2,250. if the englishman derived his $10,000 income from rentals, his tax would be increased to $2,625, while the american tax would be reduced to $1,165--an irish dividend on effort. "according to a level where the british surtax becomes effective, take a salary of $20,000. the english normal tax on this would be $6,000 and the surtax $812.50 (figuring $5 to the pound), a total of $6,812.50. at the suggested rate of 12 percent., the american's normal tax would be $2,145.60 (rate applying to $20,000, less $1,000 exemption and $1,120 excess tax); the surtax would be $444 and the excess tax $1,120; a total of $3,709.60. if the american cut non-tax-free coupons for his income instead of working for it, his tax would be reduced to $2,780, making it more than $600, less than one-half the english tax. this, be it remembered, is figuring the american normal tax at the supposititious rate of 12 percent. "going abruptly to an income of $1,000,000, the american normal tax at 12 percent., would be $119,880, against an english normal tax of $300,000. the increase in the american normal tax would be $79,960 over present rates. the american surtax at present rates would be $435,300, as against a british surtax of $217,915; total american, $555,180, english, $519,687.50. no account is taken in this computation of any excess tax on the american income. with an income of $3,000,000. the american normal tax at 12 percent. would be $359,880, an increase of $239,960 over present rates. the surtax at present rates would be $1,680,300, a total of $2,040,180, or nearly 70 percent., the rate on the last $1,000,000 being at 75 percent. the corresponding british tax is, normal, $900,000, and surtax $669,685; total, $1,569,685, or nearly 52 percent., the actual maximum rate being 52½ percent. on all excess over $50,000. "expressed in tabular form, comparative results from a normal tax of 12 percent., combined with present surtax rates and assuming all income up to $50,000 to be earned income for a single man, would be as follows: u.s. per british per income tax cent. tax cent. $1,500 $60.00 4.00 $101.25 6.75 3,000 240.00 8.00 375.00 12.50 5,000 480.00 9.60 750.00 15.00 7,500 789.40 10.52 1,406.25 18.75 10,000 1,430.20 14.30 2,250.00 22.50 15,000 2,534.80 16.90 4,812.50 32.08 20,000 3,709.60 18.55 6,812.50 34.06 30,000 6,336.00 21.12 11,187.50 37.29 40,000 8,956.00 22.39 15,937.50 39.84 50,000 11,855.20 23.71 20,937.50 40.18 75,000 18,605.20 24.81 34,062.50 45.42 100,000 26,855.20 26.80 47,187.50 47.19 150,000 46,355.20 30.90 73,437.50 48.96 250,000 92,355.20 36.94 125,937.50 50.37 500,000 235,355.20 47.07 257,187.50 51.44 700,000 359,355.20 51.33 362,187.50 51.74 750,000 390,355.20 52.05 388,437.50 51.79 1,000,000 557,855.20 55.78 519,687.50 51.97 3,000,000 2,042,855.20 68.09 1,569,687.50 52.32 10,000,000 7,292,855.20 72.93 5,244,687.50 52.45 "with additional exemption of $1,000 for heads of families and $200 each for dependent children, the united states figures in the table would be reduced by $120 for the $1,000 exemption and $24 for each child. there are similar deductions to be made in the english figures. furthermore, for incomes above $50,000, deduction for the excess tax has not been figured exactly in order to avoid long computations. this would slightly reduce the figure on the large incomes. but for demonstrative purposes, the table gives a fairly accurate general comparison of the range of taxes under the proposed english law and a tentative 12 percent. normal rate under our law. "it will be noticed that the rates would come together just below $750,000. it is in the range between $5,000 and $500,000 incomes that greatest divergence in rates occurs. the british tax takes its largest jump between $10,000 and $15,000, where the surtax begins to operate. the united states gradations are erratic and irregular, showing the haphazard manner in which the steps of the surtax were applied." attitude toward war tax bill the passing of the war tax bill was not altogether easy sailing; there was plenty of criticism from the press throughout the country. republican editors and congressmen wondered why the bill did not contain a tax on cotton, and one pennsylvania congressman thought that the tax levy should be at the rate of three dollars a bale. senator smoot of utah attacked the bill as a bunglesome measure. the new york _journal of commerce_ called attention to the discrimination between those whose income is in the form of services or property and those who get it in cash: "take the case, for instance, of the salaried employee of a bank or factory who receives $5,000 a year, out of which he pays his house rent and his usual costs of living; contrast him with the case of a farmer who owns his land and obtains the bulk of what he needs, both in food, fuel, and other essentials, for himself and family in produce or in goods obtained by trade at the neighboring village; the situation becomes clear and shows why it is that the farming class pays only a microscopic proportion of the income tax at the present time." and the democratic new york _world_ agreed that the farmer "is not carrying his share of the load of war taxation," and observes: "an analysis of income tax returns for the fiscal year 1916, recently published, shows that, although farmers are the most numerous class of americans engaged in gainful occupations, they were at the foot of the list proportionately among income tax payers. outside of the notorious war profiteers, no element of our population has advantaged so greatly by war as agriculturists; yet in the year of which we speak only one farmer in four hundred paid a farthing's tax upon income. in this respect preachers and teachers showed a higher percentage." there was some demand for extending the income tax downwards to cover smaller incomes, for example, we find the council bluffs' _nonpareil_ contending: "the men of more moderate income should be required to pay at least a nominal income tax. this is a common country. it belongs to common people. and common people will esteem it a privilege to contribute their mites. one dollar per hundred on a thousand-dollar income would be both reasonable and just." criticism of the tax the attitude of the new york press is indicated by the _evening sun_ and the _times_. the new york _evening sun_ (rep.) said the committee "left so many rough edges upon their work." in the opinion of this newspaper, mr. kitchin "has given us a measure of class-taxation highly accentuated, and yet has failed to suit the mcadoo group, the most clear-minded adherents of the conscription-of-wealth idea. he has produced a confused series of taxes beyond the practical power of the ordinary busy citizen to master or comprehend, but has not combined these into a harmonious system." the morning _sun_ even went so far as to remark that "nothing that the senate could do could make the kitchin measure worse than it is." yet it by no means criticized all the features of the bill. it objected to the proposed taxes on oil producers as discouraging the production of oil, and styled the plan to tax distributed corporation earnings at twelve percent. and undistributed earnings at eighteen percent. "simply a fool tax," which "will help to lock the wheels of every great industry in this country." the foundation mistake of the bill, in the opinion of the new york _times_ (ind. dem.) was the "attempt to assess taxes upon the smallest possible number of persons and businesses, leaving a great majority of the people free from a levy direct or indirect." the _times_ thought that this policy was dictated by the desire "to leave the mass of voters free from grounds of complaint against the party in power." it insisted that there should be a consumption tax levying "upon the breakfast table and upon the purchases of a great mass of people." such necessities as tea, coffee, cocoa, sugar, should bear a tax, in the opinion of this and other newspapers. the number of those taxed was also kept comparatively small by the retention of the old income exemption limits, namely, $1,000 for bachelors and $2,000 for married men, with the normal tax rate placed at only six percent. on incomes up to $5,000. wilson's tax program an outline of what was expected from the people of the country as a financial contribution was given by mr. wilson in his may (1918) address to congress, when he decided to ask its members to remain in washington and prepare a new revenue bill. mr. wilson's call for immediate action in behalf of both the public and the treasury department was a summons to a universal duty in language which, it is remarked, "was never before used in a tax speech." he said in part: "we can not in fairness wait until the end of the fiscal year is at hand to apprize our people of the taxes they must pay on their earnings of the present calendar year, whose accountings and expenditures will then be closed. "we can not get increased taxes unless the country knows what they are to be and practices the necessary economy to make them available. definiteness, early definiteness, as to what its tasks are to be is absolutely necessary for the successful administration of the treasury.... "the present tax laws are marred, moreover, by inequities which ought to be remedied.... "only fair, equitably distributed taxation of the widest incidence, drawing chiefly from the sources which would be likely to demoralize credit by their very abundance, can prevent inflation and keep our industrial system free of speculation and waste. [illustration: poster for boy scouts who worked for the victory loan] "we shall naturally turn, therefore, i suppose, to war profits and incomes and luxuries for the additional taxes. but the war profits and incomes upon which the increased taxes will be levied will be the profits and incomes of the calendar year 1918. it would be manifestly unfair to wait until the early months of 1919 to say what they are to be.... "moreover, taxes of that sort will not be paid until the june of next year, and the treasury must anticipate them.... "in the autumn a much larger sale of long-time bonds must be effected than has yet been attempted.... "and how are investors to approach the purchase of bonds with any sort of confidence or knowledge of their own affairs if they do not know what taxes they are to pay and what economies and adjustments of their business they must effect? i can not assure the country of a successful administration of the treasury in 1918 if the question of further taxation is to be left undecided until 1919." mr. wilson's appeal for the practice of personal economy met with widespread approval in england, as it did in the united states. the _economist_ considered that his manifesto to the american people on this subject was among the greatest documents that the war has produced. national self-sacrifice had gone far, but not far enough. to attain mr. wilson's standard of individual patriotism much was still needed, the _economist_ says: "we still have a very long way to go before we can attain to president wilson's standard of individual patriotism. from the outbreak of war to the end of last year the small investor in this country has lent £118,179,000 to the government. moreover, in the first two months of 1917 as much as £40,000,000 was contributed to war loans in one form or another in the shape of small savings. that result represents a great deal of patriotic saving, and reflects the highest credit on the committee, as well as upon the montagu committee, which devised so suitable a form of investment as the 15s 6d certificate. but far more is required. during the war loan campaign, war savings certificates brought in £3,000,000 in a single week. that effort was, perhaps, too great to be kept up; but it is hardly satisfactory that, in spite of the hard work of the committee, and an enormous growth in the number of active war savings associations all over the country, the weekly receipts from the 15s 6d certificates have fallen back to the £800,000 to £900,000 level which was reached last december. this relapse may be partially accounted for by the late increase in the cost of living, but there can be no doubt that much more might yet be done by the masses of people of moderate means to whom the small certificates appeal. nor is there any evidence that the wealthier classes, generally speaking, have done nearly as much, in the matter of war self denial, as they might have done." luxury taxes when it came to a question of taxing luxuries, the difficulty was to decide what was a luxury. the situation perplexed congress, for we find one congressman in pennsylvania who held that collar buttons and cuff buttons were a necessity, while a representative from texas asserted that texas could get along without either collar buttons and cuff buttons and still be patriotic. a congressman from oklahoma thought that all kinds of buttons could be done away with, adding, "before i came to congress i could use nails for my suspenders." congressman from agricultural states considered that automobiles and gasoline were not luxuries but were really necessities, especially for farmers. many newspapers opposed anything like a luxury tax. we find the new york _times_ advising the imposition of taxes on tea, sugar, coffee and cocoa. these are good revenue producers but few politicians care to interfere with the free breakfast table. the _wall street journal_ approved of luxury taxes because they would be a means of enforcing thrift. the treasury's plan for imposing these taxes may be gathered from the following condensed summary: "fifty percent. on the retail price of jewelry, including watches and clocks, except those sold to army officers. "twenty percent. on automobiles, trailers and truck units, motor cycles, bicycles automobile, motor cycle, and bicycle tires, and musical instruments. "a tax on all men's suits selling for more than $30, hats over $4, shirts over $2, pajamas over $2, hosiery over 35 cents, shoes over $5, gloves over $2, underwear over $3, and all neckwear and canes. "on women's suits over $40, coats over $30, ready-made dresses over $35, skirts over $15, hats over $10, shoes over $6, lingerie over $5, corsets over $5. dress goods--silk over $1.50 a square yard; cotton over 50 cents a square yard, and wool over $2 per square yard. all furs, boas and fans. "on children's clothing--on children's suits over $15, cotton dresses over $3, linen dresses over $5, silk and wool dresses over $8, hats $5, shoes $4, and gloves $2. "on house furnishings, all ornamental lamps and fixtures, all table linen, cutlery and silverware, china and cut glass; all furniture in sets for which $5 or more is paid for each piece; on curtains over $2 per yard, and on tapestries, rugs, and carpets over $5 per square yard. "on all purses, pocketbooks, handbags, brushes, combs and toilet articles, and all mirrors over $2. "ten percent. on the collections from the sales of vending machines. "ten percent. on all hotel bills amounting to more than $2.50 per person per day. also the present 10 percent. tax on cabaret bills is made to apply to the entire restaurant or café bill. taxes of manufacturer or producer "ten cents a gallon on all gasoline to be paid by the wholesale dealers. "ten percent. tax on wire leases. "graduated taxes on soft drinks. mineral now taxed 1 cent a gallon to pay 16 cents. chewing gum now taxed 2 percent. of the selling price, to pay 1 cent on each 5-cent package. "motion-picture shows and films: abolish the foot tax of ¼ and ½-cent a foot and substitute a tax of 5 percent. on the rentals received by the producer, and double the tax rate on admissions. "double the present taxes on alcoholic beverages, tobacco and cigarettes. "automobiles--a license tax on passenger automobiles graduated according to horsepower. "double club membership dues. "household servants, made 25 percent. of the wages of one servant up to 100 percent. of the combined wages of four or more. female servants, each family exempted from tax on one servant. all additional servants (female) from 10 to 100 percent. on all over four." luxuries imported heavy taxes on luxuries were anticipated but until these taxes were considered it was hardly realized how much of the consumption in america was concerned with articles that could be considered luxuries; for example, the country imported $6,000,000 worth of foreign cigarette papers. pictures, statuary and other works of art were brought into the country to the extent of $17,000,000. over $2,000,000 worth of ivory was imported every year; over $2,000,000 worth of mother-of-pearl and more than $2,500,000 worth of bulbs and roots. higher taxes were urged by the financial experts, so we see a writer in _financial america_ emphasizing the connection between the importation of luxuries and the need of shipping: "america can not spare ships to bring costly garments and furnishings thousands of miles across the sea. for the war period these articles can be replaced at home with materials that cost less labor and less money. the money spent for domestic goods remains in america and maintains our working population and our business and banking resources. "we lack a sufficient market for our cotton crop, owing to the lack of ships. americans should wear more cotton. the money spent upon it maintains the southern planter and his family. modern processes give it the appearance of silk. it serves very well as carpets, curtains, hangings, and furniture coverings. it should answer present needs for such fabrics. a heavier tax on imports of these goods is indicated as a means of revenue and war economy. "imported wearing apparel of silk pays 60 percent. duty and of wool 44 cents a pound and 60 percent. _ad valorem_. there is a graduated rate on dress goods of these materials. despite the tax, america spent more on imported manufactures of silk in 1917 than ever, the total being nearly $40,000,000. the same was true of woolen goods, amounting to $23,000,000. "our imports of woolen carpets and rugs, most of them brought half way round the world from oriental lands, were also larger. they cost us $3,740,000, though america is a large producer of carpets and rugs, fine as well as coarse. these imports paid ten cents a square foot and 40 percent. _ad valorem._ evidently, it was not enough. "we also spent $53,000,000 for imported cotton manufactures, including cloth, laces, curtains, handkerchiefs, veils, and wearing apparel, though america is the world's chief producer of cotton. a higher tariff is indicated as a tax on those who insist on the foreign product. taxes on tobacco "america has a large tobacco industry at home. we import tobacco in vast quantities from every producing land to satisfy the whimsical and varying tastes of connoisseurs. our own tobacco is discouraged by those who smoke it under the name of turkish, egyptian, cuban, dutch, spanish, and other foreign products, and pay a heavy price for the critical taste which their vanity causes them to imagine they possess. last year these imports of leaf tobacco alone were valued at $26,000,000, or $10,000,000 more than in 1915. the war tax is five cents a pound added to eight cents paid under the internal revenue act, or thirteen cents altogether. there is also a duty of $1.85 to $2.50 a pound. to increase the tax would encourage the industry in kentucky, virginia, pennsylvania, connecticut, and other states, while saving our resources in ships and keeping our money at home. "in addition, america spent $7,000,000 for foreign-made cigars and cigarettes last year. these purchases support foreign factories, although our own factories use the same raw material which they import. they have jumped nearly $3,000,000 in two years. until the war is ended, americans should be satisfied with cigars 'made in america.' the present war tax ranges from one tenth of a cent to one cent on each cigar, according to value, in addition to a duty of $4.50 a pound and 25 percent. _ad valorem_. a higher tax would deprive the smoker of nothing but a craving for the foreign label on his cigar box, unless he chose to pay well for it. he can even get a spanish name on his american-made cigar. diamonds, leather and millinery "america spent $41,000,000 in 1917 to import diamonds, pearls, and other precious stones and imitations, not set. they paid a war tax of only 3 percent. when made into jewelry. america could be content with beauty less adorned to keep this $40,000,000 at home, or those who insist on sending their money to african mine owners and dutch cutters should pay a larger tax. "america last year had a tremendous bill for hides and skins of $209,000,000, nearly two and a half times that of 1915. much of it was for the great necessities of the army. a good proportion of the rest was unnecessary. these imports of raw material are free of duty and there is no war tax on leather goods. substitutes have been devised for many of them. these should be encouraged by a tax on the unnecessary use of leather in furnishings, decorations, toilet articles, hand bags, trunks, high shoes, belts, hatbands, and many small articles. substitutes for these will be provided quickly enough if leather is lacking. a heavy tax would help the movement. the tremendous military and other legitimate demands for leather goods will keep the industry in thriving condition without so much waste. "for imported millinery materials america spent nearly $13,000,000 last year, and we also spent $3,000,000 for mere feathers, tributes to feminine vanity that filled up many ships needed for war use. the greater part of this stuff came 10,000 miles from china and japan. there are plenty of substitutes that a high war tax would encourage, including those provided by the american hen. "our imported glassware, on which there is no war tax, cost nearly $2,000,000. it occupies large space aboard ship, owing to voluminous packing that is necessary. imported china, porcelain, earthenware, and crockery cost america nearly $6,500,000." bearing the burden in spite of the enormous cost of war operations, roseate views were taken of the ability of the country to surmount the unusual difficulties. unprecedented taxes were being paid, heavy subscriptions to the liberty loans were being collected and yet the business of the country seemed to show a high degree of prosperity. this optimistic outlook marks the following comment found in a circular published by the first national bank in boston, after it had called attention to the small number of failures reported throughout the country for august, 1918. no such low record had been reached since july, 1901: "the steps that have been taken to curtail credits have resulted in greater conservatism, and have had a beneficent effect, which is likely to continue for some time after the present necessity disappears. the business foundation is extremely sound. figures of resources of savings banks show that the subscriptions to the liberty loans have brought only a trifling decrease in savings deposits. evidently subscribers are buying bonds with their current income rather than with their savings. in other words, the liberty loans represent additions to the savings of the country, and not merely transfers of investments." it was prophesied that in spite of the enormous financial obligations assumed by the united states normal conditions would soon be restored. history shows, the circular goes on to say, that financial recovery from devastation has been prompt and complete. even the railway conditions at this time were viewed optimistically. such a competent authority as the _wall street journal_ did not anticipate the financial troubles that soon overtook railway administration under government control. it thought that, by the end of the year, the existing debits on current operations would probably be wiped out: "aggregate railroad earnings and expenses for july of all the important roads in the country are in line with the individual statements of the different roads already published in showing large increases in both gross and net revenues. they also indicate, so far as one month's operating results may be used to generalize from, that the railroads are now on a self-supporting basis, if they are not actually returning a profit to the government on current operation. "net operating income of these roads for the month of july (1918) was $137,845,425 as compared with $92,599,620 in the same month of 1917. in a recent statement from the director-general's office the compensation payable to the railroad companies for the use of their property by the government was estimated at $650,000,000 for the first eight months of the year, or at the rate of $81,250,000 a month. the net operating income of the class 1 roads as mentioned above exceeds this monthly rental figure by $56,595,000." the first government loan, 1789 although called by other names, the united states has had issues of liberty bonds on several occasions during a period of one hundred and twenty-nine years, notably in the first years of the republic and in the civil war. the first was floated in 1789, the year when the federal government was established. alexander hamilton was secretary of the treasury and on him devolved the duty of raising funds for the government. "conditions being pressing, hamilton, in raising the necessary money, at first did not wait even for the approval of congress, but went to the bank of new york, which he had helped to found in 1784--the second bank in the united states and the first in new york city--to raise the first necessary money. at a meeting of the board of directors the new secretary of the treasury asked for a loan of $200,000. it was promptly and unanimously granted, the money to be advanced in five installments of $20,000 each and ten of $10,000 each, at 6 percent. on the following day hamilton sent to the bank the first bond ever issued by the united states treasury--a bond of $20,000--on receipt of which the money was paid over, so that the united states treasury could show $20,000 cash on hand. in _the investor's magazine_, where these facts were recently brought to light, we are further told that the bond then issued is still carefully preserved by the bank which bought it. quite unlike the now familiar liberty bonds of 1917 and 1918, it was executed with an ordinary quill pen, such as was in use in those times, and signed in ink by the secretary. with its seal somewhat yellow with age, the bond is still in an excellent state of preservation." [illustration: richards in the phila. _north american_ dropping the first bomb] popularity of the liberty loans america's financial reputation stood at a fairly high level after the close of the civil war. an era of unexampled production ensued for more than five decades, yet there were many timorous souls who were frightened at the thought of the united states being called upon to bear the burden of the colossal loans. the surprising feature of the liberty loans was the elasticity of the subscriptions. the subscribers for the first three loans numbered respectively 4,500,000, 10,020,000, 17,000,000; in every case the records show over subscription. a graphic statement of the nation's riches was presented by s. l. frazier in the _northwestern banker_, des moines, october, 1918: "our resources are well up toward $300,000,000,000, or about equal to the combined resources of france, england, and germany. our annual production is close to $50,000,000,00, amounts that stagger the imagination. why it would take ten thousand years to count the dollars representing out country's resources counting one each second, and working day and night and sundays." the new york _tribune_ remarked, "if any learned professor of economics had predicted that on top of ten billions of government loans in one year a fourth liberty loan would reach nearly seven billions we know what we all would have thought." how europe will pay us back an official in the national city bank of new york, mr. g. e. roberts, is quoted by the new york _times_ as saying that the wealth-producing equipment of the country had become greater than ever during the war. he did not believe either that there would be any difficulty of the united states being paid back for the money it had loaned foreign governments. "we are going to be peculiarly situated in our foreign relations after the war. we have paid off the greater part of what we owe abroad, and we have lent to foreign governments some $7,000,000,000 or $8,000,000,000. including all loans by the time the war is over, probably there will be annual interest payments coming to us amounting to $400,000,000 or $500,000,000. how are we going to receive our pay? i am not questioning the ability of our debtors to raise this amount from their people. i have no doubt they can do it, but in what manner are they going to make payment to us? they can't pay it in gold; they haven't the gold to do it, and the total production of gold in the world outside of the united states wouldn't be enough to do it. we won't want them to pay it in goods, for that would interfere seriously with our home industries.... "there is only one way out, and that is by extending more credit to them. we will have to capitalize the interest payments and reinvest them abroad. and if we want to sell goods to them we will have to take their bonds and stocks. in short, we will have to play the part that england has played in the past, of steadily increasing our foreign investments." while the great sums subscribed for the fourth loan by banks, corporations, and individuals had a spectacular interest, observed the new york _world_, it was the plain people who made the loan a conspicuous success, and the twenty-one million subscribers mean in effect the purchase of a new liberty bond by "every american family." the loan periods there were very good reasons on the part of the government for selecting the definite periods at which the liberty loans were to be issued. there were also very good reasons derived from experience by which the government was guided in preparing for the loans. prior to the fourth loan secretary mcadoo believed that it could be made to reach fully one-fourth of the population of the country. preparation for it was made through publicity on a scale hitherto unprecedented. the washington correspondent of the new york _journal of commerce_, writing on july 31, 1918, said: "the country will be appealed to, with new and striking film arguments, with a great variety of poster slogans, and with a use of the press and the platform such as has never been witnessed before in this country. "there are to be nineteen days of actual campaign work. the great task of organization and preparation is now going on. artists have been making posters, writers have been preparing arguments, and printing presses in all parts of the country have been turning out many millions of mottoes, cartoons, and slogans." he added interesting data as to outstanding treasury certificates and war expenses. the time chosen for the loan was probably as good, it thought, as could have been selected, inasmuch as it would fall just after the bulk of the crops had been harvested and when much of them had been sold at good figures. "war expenses for july were somewhat less than for june and may, amounting to about $1,482,000,000 as compared with $1,512,000,000, the record for june, and $1,508,000,000 for may, the treasury department announced. the outlay for july, however, was approximately the amount estimated in advance by the treasury, and expenses for august probably will be higher, it was said. "during july the government's daily outlay was about $48,000,000, an average of $38,000,000 daily was for ordinary expenses of the army, navy, shipping board, and other agencies, and $10,000,000 daily in loans to the allies. total ordinary expenditures for the month were about $1,157,000,000 and loans to the allies $325,000,000. "receipts from sale of war savings stamps july 3rd passed the half-billion dollar mark, of which $200,000,000 came in this month as a result of the campaign on thrift day, june 28th. "the government now is financing itself mainly through the sale of certificates of indebtedness, in anticipation of the fourth liberty loan. more than $1,600,000,000 came in from this source in july. in addition, the government received $491,000,000 from belated income and excess profits taxes, and $97,000,000 from miscellaneous internal revenue. customs duties yielded only $14,000,000. "payments on the third liberty loan now amount to $3,652,000,000, leaving $524,000,000 to come in from the next installment payment." ----------------------------------------------------------------------- the liberty loans--by federal reserve districts ----------------------------------------------------------------------- first loan second loan third loan fourth loan (june, 1917- (oct., 1917- (1918- (1918- 3½ 4 4¼ 4¼ per cent.) per cent.) per cent.) per cent.) -----------------------------------------------------------------------boston $332,447,600 $476,950,050 $354,537,250 $632,221,850 new york 1,186,788,400 1,550,453,450 1,115,243,650 2,044,778,000 philadelphia 232,309,250 380,350,250 361,963,500 598,763,650 cleveland 286,148,700 486,106,800 405,051,150 702,059,800 richmond 109,737,100 201,212,500 186,259,050 352,688,200 atlanta 57,878,550 90,695,750 137,649,450 213,885,200 chicago 357,195,950 585,853,350 608,878,600 969,209,000 st. louis 86,134,700 184,280,750 199,835,900 296,388,550 minneapolis 70,255,500 140,932,650 180,892,100 241,028,300 kansas city 91,758,850 150,125,750 204,092,800 294,646,450 dallas 48,948,350 77,899,850 116,220,650 145,944,450 san francisco 175,623,900 292,671,150 287,975,000 459,000,000 -----------------------------------------------------------------------total $3,035,226,850 $4,617,532,300 $4,176,516,850 $6,989,047,000 subscriptions -----------------------------------------------------------------------total quotas $2,000,000,000 $3,000,000,000 $3,000,000,000 $6,000,000,000 total 2,000,000,000 3,808,766,150 4,176,516,850 6,989,047,000 allotments total number of 4,500,000 10,020,000 17,000,000 21,000,000 subscribers ----------------------------------------------------------------------- new york city subscriptions -----------------------------------------------------------------------manhattan $960,417,050 $1,095,189,000 $702,577,750 $1,353,449,550 bronx 404,700 1,015,500 5,112,350 5,751,800 brooklyn 30,312,000 44,424,200 52,427,600 100,469,650 queens 2,202,600 4,136,150 10,137,350 17,331,900 richmond 679,600 1,373,700 3,386,800 5,075,750 -----------------------------------------------------------------------total city $994,015,950 $1,146,139,150 $773,641,859 $1,482,078,650 subscriptions -----------------------------------------------------------------------included in the third loan subscription total is $17,917,750 subscribed by the united states treasury. war savings stamps subscriptions totalled $879,330,000 up to november 20, 1918. the individual investor some curious facts were brought out in the effort of the liberty campaign propaganda to reach the individual investor. in the large cities the organization was remarkably successful. in the smaller communities it was a greater difficulty. in a suburb or a small town everybody knows everybody else and the liberty loan committee had hard work in getting subscribers. mr. a. w. atwood of princeton thinks that the occupational and vocational classification of possible investors was not tried. widows and maiden ladies who had inherited $50,000 or $75,000 were not reached. some of them who were patriotic came forward of their own accord. the little town of kircunkson in new york state exceeded its quota many times and there was an item in the papers about it. the success of the liberty loan in that town was due to the fact that it contained a large sanitarium patronized by millionaires. yet there were no banks in the town and if their banking resources were used as a basis their quota would have been very small indeed. as to the assignment of quotas mr. atwood makes the point that it was sometimes based on population, sometimes based on the amount of bank resources. he thought that in small places it would be better to post up a list of those who had subscribed and he even thought that if the country made the effort it could ultimately raise a loan of $100,000,000,000, his reason being the following: "this country is approaching, as england has long ago, the position of being a possessor of great accumulated wealth. one broker after another is really nothing but a family investment agent. that is what it amounts to. there are railroad magnates, bankers, steel kings, copper kings and so on indefinitely. hundreds of firms in the new york stock exchange are nothing but channels for the investment of accumulated wealth and i do not think we realize how much there is of that in this country." liberty loans and thrift one of the best methods of testing the influence of liberty loan activities on the thrift of the country is used by _bradstreet's_ in its examination of the annual report of the united states league of building and loan associations. these associations, be it remembered, are not patronized by capitalists but almost wholly by wage earners. during the past fifteen years the membership of building and loan associations has increased 150 percent. and since the war broke in 1914, the number of members has extended 52 percent. the latest report shows a gain in assets of 30 percent. over the amount indicated in 1914. the following tables taken from _bradstreet's_ give detailed items of the financial situation of these important organizations: the following table gives membership and total assets of building and loan associations for a fifteen-year period: membership assets 1902--03 1,530,707 $577,228,014 1903--04 1,566,700 579,556,112 1904--05 1,631,046 600,342,586 1905--06 1,642,127 629,344,257 1906--07 1,699,714 673,129,198 1907--08 1,839,119 731,508,446 1908--09 1,920,257 784,175,753 1909--10 2,016,651 856,332,719 1910--11 2,169,893 931,867,175 1911--12 2,332,829 1,030,687,031 1912--13 2,518,442 1,136,949,465 1914--15 3,103,935 1,357,707,900 1915--16 3,334,899 1,484,205,875 1916--17 3,568,342 1,696,707,041 1917--18 3,838,612 1,769,142,175 the following table shows total membership and total assets for states in which accurate statistics are compiled by state supervisors. the data for other states are consolidated under the heading, "other states," and the figures given are estimated: --------------1917--18-------------- members assets increase pennsylvania 677,911 $324,265,393 $25,438,326 ohio 767,100 321,741,529 51,188,940 new jersey 329,063 168,215,913 13,088,951 massachusetts 247,725 126,695,037 13,389,130 illinois 246,800 113,528,525 8,050,122 new york 199,571 86,072,829 6,442,948 indiana 202,409 78,112,917 5,818,661 nebraska 101,929 54,545,630 6,627,783 california 42,227 35,928,447 3,134,429 michigan 69,041 35,659,360 4,279,888 kentucky 62,846 27,085,282 1,272,372 missouri 56,116 26,770,144 3,226,311 kansas 66,442 26,000,167 2,446,058 louisiana 47,793 25,911,928 1,362,683 dist. columbia 37,075 22,399,995 255,115 wisconsin 50,612 19,887,368 3,013,526 north carolina 37,400 17,608,000 1,703,230 washington 46,318 14,444,177 2,366,450 arkansas 21,053 10,583,447 409,439 iowa[3] 33,035 9,638,852 ........ minnesota 22,020 8,979,642 626,537 west virginia 21,500 8,119,131 369,564 colorado[3] 10,200 6,688,983 ........ maine 14,959 6,671,239 233,961 oklahoma 18,142 6,554,175 2,354,175 rhode island 11,499 5,938,436 577,906 connecticut 14,900 4,869,748 610,423 south dakota 5,857 3,603,836 89,286 n. hampshire 8,554 3,336,072 322,812 tennessee 5,166 3,207,754 [4]112,865 north dakota 5,785 2,837,118 90,308 texas 7,156 2,314,927 372,489 montana 4,239 1,849,935 209,906 new mexico 3,545 1,469,276 72,660 vermont 749 287,791 52,079 other states 341,875 157,319,172 10,975,756 -------- ------------- ----------- total 3,838,612 $1,769,142,175 $170,514,039 [3] reports issued biennially; figures of 1916 used. [4] decrease. [illustration: a poster used during the fourth liberty loan campaign] the thrift habit such was the success of the liberty loan campaign in appealing to all classes of private investors, that it became an interesting speculation whether the popular thrift habit would survive war conditions. it was the general belief in financial centers that the habit of saving had been promoted. perhaps no better illustration of the thrift habit could be presented than returns made by the savings banks of boston in october, 1918. at that date these banks had $321,000,000 against $319,000,000 at the same date in 1917, the previous banner total for the end of a banking year. it was estimated by mr. ingalls kimball, the new york _times_ annalist, that twenty million separate individuals were saving by the method of subscribing to the liberty loans, and, as more than $800,000,000 worth of war saving stamps had been sold, it was probable that nearly half the population of the country was saving money in one of these new ways. as to the method of continuing to encourage thrift, mr. kimball pointed out the value of the experience derived from the liberty bond campaign: "the thrift machine set up by the treasury was as follows: 1. small unit government bonds; 2. non-interest-bearing thrift stamps; 3. war savings stamps--a short-term obligation paying interest at maturity. "this was the mechanism. what was the power that actuated the machine to such wonderful effect? 1. salesmanship, including every modern device of advertising; 2. distribution: (a) through retail stores; (b) through employers, by partial payments (usually pay-roll deduction). "from these simple elements was built up a campaign that induced the people to save in a new and unaccustomed way at least twenty times as much as they had ever before saved in the same time. none of the elements was unimportant, but salesmanship, probably, contributed most. the selling campaigns of the liberty loans and war savings stamps were carried on by the largest and most effective selling organization ever put together, under the direction of the ablest men in the united states, and with an energy and devotion that were unimaginable. this selling force was irresistible. everybody bought because everybody was asked, or begged, or told, to buy. under the same stimulus almost anything would have sold. "saving at the source" "next in importance to the direct selling effort came distribution. for the first time in the history of finance it has been made easy to save; for the first time the great retail channels of distribution have been thrown open to saving; for the first time millions of wage-earners have learned the value and ease of 'saving at the source' by pay-envelope deduction of a dollar or so a week toward a liberty bond." mr. kimball questioned whether or not we are to lose the benefit of the great lesson of thrift and whether some plan could be devised to make us keep on saving. no problem of reconstruction seemed to him more important than this, "yet in no one of the announced conferences on reconstruction do i find mention of it." he then goes on to say: "the greatest thrift lesson in the world is thrift, no matter what its motive. a great many hundred thousand persons in this country have found themselves this year possessed of $100 or more in one piece for the first time in their lives; often without realization of how they got it. will that lesson last? will the wage-earner, now that loan drives are over, keep on saving, going weekly to the bank to put in his dollar. the answer to these questions is, unfortunately, 'no.' "it would be perfectly possible to continue the issue of war savings stamps, and there are many advocates of this plan, but it is doubtful if distribution could be permanently maintained on anything like its present scale. merchants and banks, with rare exceptions, would scarcely continue to handle them, for the cost is not inconsiderable, and there is no compensating commercial gain. in the postoffices alone their continued sale would set up competition with the present postal savings system, which would serve no good purpose and would be highly confusing. "can the savings banks successfully undertake this great task? i believe they could. i believe a national savings bank, operating through commercial banks, stores, and employers all over the united states, making its investments through a small compact, very highly paid and very efficient and very stringently supervised board of executives in one city, supporting a vigorous, numerous, and far-flung selling organization, similar in many respects to the industrial life insurance organizations, could undertake this work and, were it possible to act quickly enough, could keep the thrift movement going without losing the amazing momentum which it has now acquired." spending the money for a period of twenty-five months, from april, 1917, through april, 1919, the united states spent for war purposes more than $1,000,000 an hour. all sorts of comparisons are used to make this figure seizable by the imagination. for example, the whole sum, nearly $22,000,000,000, was twenty times the whole of the pre-war debt. indeed, it was nearly large enough to pay the entire cost of our government from 1791 up to the outbreak of the european war. in addition to the actual war cost of our own government congress paid to various associated governments the sum of $8,850,000,000. as to how this enormous sum of money was spent, two-thirds of the amount practically was spent upon the army, and the rate of expenditure for the army was constantly advancing period by period. even after the termination of hostilities there was a very high daily average owing to the building of ships for the emergency fleet corporation, the construction and operation of naval vessels, food, clothing, pay and transportation of the army. the quartermaster's department had the largest proportion of expenditure. the amount spent about equals the value of all the gold produced in the whole world from the discovery of america up to the outbreak of the european war. the pay for the army during the period of warfare was larger than the combined salaries of all of the public school principals and teachers in the united states for five years, from 1912 to 1916. some of the money spent represents permanent assets. at the end of the war there were large stocks of clothing on hand and large supplies of standardized trucks. there were thousands of liberty motors and service planes that were available for other uses. engineer, signal and medical equipment still continued to have a value, but if the race for militarism is maintained it is hard to see how the quantities of war munitions can fail to escape the scrap heap in a few years' time. comparing the individual estimates of war expenditure, it is noteworthy that the austro-hungarian empire spent almost as much as the united states. of all the powers germany spent the largest sum, $39,000,000,000--one billion more than england. money loaned to associate nations the following is quoted from the _annalist_ for december, 1918: "money owed to a government by the nations of the world, with whom it is in active commercial competition, is another line of fortifications in defense of the frontier. let us, then consider our debts and our debtors, and how we both propose to pay. our long-time loans may be scheduled as follows: first loan $2,000,000,000 second loan 3,808,766,000 third loan 4,170,019,650 fourth loan 6,989,047,000 -------------- $16,967,832,650 "the totals of each of the above loans have changed substantially since allotment, through conversions with a correspondingly increasing charge on the service. however, the gross amount is substantially unchanged. of the old loans the treasury statement of march 31 showed the following totals: consol. 2's of 1930 $599,724,050 4's of 1925 118,489,900 panama canal 2's, 1906 48,954,180 panama canal 2's, 1908 5,947,400 panama canal 3's, 1911 50,000,000 conversion 3's, 1946--7 28,894,500 postal savings 2½'s, 1931--7 10,758,560 postal savings 2½'s, 1938 302,140,000 ------------- $1,184,908,590 "the short-term loans in the shape of certificates of indebtedness and war savings stamps at the present writing are as follows: 4½% certificates, series e $639,493,000 4½% certificates, series 4f 625,216,500 4½% certificates, series 4g 614,069,000 ------------ $1,878,778,500 "in addition to the above a series of certificates of indebtedness, designated as ta, bearing interest at four per cent. and maturing july 15, 1919, was issued to a small amount in anticipation of next year's income taxes. the sale proved to be slow, and further issuance was discontinued and a new issue for the same purpose and of a similar maturity bearing interest at 4½% per cent. was substituted. the sale of these securities through the agency of the federal reserve banks is in the nature of a continuous operation, and no totals so far have been announced. [illustration: detroit--city of automobiles many thousands of standardized trucks were made in detroit during the war rush, the automobile having proved to be indispensable to the fighting forces overseas.] "the sale of war savings stamps and certificates has increased the national debt by $1,257,000,000, or within 400 million of the maximum under the first authorization. a second series, however, amounting to two billion dollars, has been authorized, so that the operation will probably continue into the coming year. the treasury for the fiscal year 1917--18 estimated receipts of $663,200,000 from this source and about a billion for 1918--19. the first estimate was out of line, owing to the difficulty in getting the plan into smooth operation. subsequent results have, however, justified the average of expectations. "the pre-war debt, in the light of recent figures, is almost negligible, and the outstanding certificates in anticipation of taxes and the fourth liberty loan will be redeemed in due course by the flow of funds owing to the government in taxes and subscription payments. the problem of how to deal with the eighteen-billion-dollar war debt is the vital question. how much of this sum represents a charge on the coming generation and how much an invaluable national asset? what is owed the american people. "we have loaned abroad the following items: great britain $3,745,000,000 france 2,445,000,000 italy 1,160,000,000 russia 325,000,000 belgium 183,520,000 greece 15,790,000 cuba 15,000,000 serbia 12,000,000 rumania 6,666,666 liberia 5,000,000 czechoslovak republic 7,000,000 ------------ [5]$7,919,976,666 [5] increased to $9,646,419,494 by october, 1919. "here, then, are figures totaling nearly half of our war debts that are not only self-supporting but also a double-edged weapon in the international market. in the first place, they represent money spent at home on american goods, from which the american manufacturer has taken his toll of profit; and in the second place, they have put the world in our debt to an extent that will be difficult to pay in the exchange of goods. "imports of foreign commodities or even gold will take a decade to halve the debt, for the gold can not be spared, nor do we wish it, and our creditors will find it difficult to increase their exports to a point capable of bringing about a balance in their favor. the imports from europe are bound to be offset by our own exports, some able economists predicting a balance of a billion dollars in our favor for the next five years. regardless of the demands to be made upon us from this source, it is probable that the peak-load of expenditure has been reached and the period of readjustment and redemption set in. "charging off, then, our loans to the allies as an asset, let us then consider how we may best meet the bill due the american people. vague discussions of the creation of a huge sinking fund have been heard, although for some reason or other, in history these operations have not been entirely successful. fortunately the bulk of our debt has an early callable date, and the treasury has recently come in for much applause by advocating no more loans unless they be in the nature of a one-to five-year currency. experience teaches that the full benefit and effect of war taxes are rarely felt until after the war. england, after the napoleonic wars, came back with a rapidity that astonished the exchequer itself. taxes rolled up in such a volume and expenses dropped with demobilization to such an extent that the government found itself anticipating the callable date in national debts by market purchases, and even then it was found convenient gradually to reduce the scale of taxation. "our experience after the civil war was very similar to england's, and the treasury's surplus annually accumulated to a point that forced the government to buy back at high premiums the bonds it was not privileged to call. this was true, though to a lesser degree, with the spanish war loan. "it seems as though the two operations of liquidating our own debts and the debt of europe to the united states dovetailed perfectly into one gradual and stupendous task. while europe is paying her indebtedness to us without interfering with the development of international trade by the sale of foreign securities in our home market our buyers here must receive the tools to operate with through the redemption and repurchase of their liberty bonds. in this half of the deal safety, as usual, lies in the middle course. it is hoped that taxes will be maintained at a level that will infallibly provide funds for fixed redemptions with a sufficient surplus to get a flying start by purchase around the present low levels." financial status of england in 1914 one year before the war england's position in regard to the balance of trade was most favorable. her imports were valued at $3,210,000,000 and her exports at $2,560,000,000. but it was usually estimated that foreign countries owed england about $1,610,000,000 annually for interest on capital lent for shipping freights and for banking insurance and other commissions. the total amount owed her, therefore was $4,170,000,000 as against $3,210,000,000 which she owed for her imports. she had therefore a favorable balance of about $960,000,000 which was lent abroad. the war brought an enormous decrease in tonnage, and the excess of imports over exports attained the figure of $1,950,000,000 a year. exceptional measures had to be taken to maintain the exchange rates with the united states from whom the chief purchases were made. large amounts of gold were exported, but by june, 1915, there was a collapse in american exchange. drastic measures were used to induce the holders of american securities in england to sell or lend those securities to the government. in this way exchange was kept up practically to the gold point. this question of exchange and the position of england as the director of the financial campaign of the allies is illustrated from an address given by mr. r. h. brand to the american bankers association, in september, 1917: "of course no nation could permanently tolerate such unfavorable trade balances as those from which the allies in europe are now suffering. they can only do so now and keep their exchanges with the united states steady by borrowing immense sums here. but the war itself is not permanent, and the question is merely whether the present state of affairs can be continued long enough to enable all the enemies of the central powers to exert their full strength and win a final victory. "you will no doubt all have noticed that the credits granted great britain have been greater than those granted to any other ally. the reasons are simple, though they are not, i think, generally understood. we have, in the first place, the largest war and munition program of any ally; in the second place, as i have shown above, we are, with the exception of the united states, the greatest industrial arsenal among the allies; that necessarily involves large imports. we send a great deal of steel from england to our allies; we have to replace it by steel from here. we make rifles for russia; we have to import the steel to make them. we send boots to russia; we have to import the leather needed. these examples might be multiplied many times. thirdly, we extend large credits in england to our allies, some part of which they may use anywhere in the world, and this part may ultimately come back on the sterling exchange in new york. lastly, it is well known that neutrals who are owed money by england unfortunately find it convenient to utilize the sterling exchange in new york in order to recoup themselves in dollars. but so also do neutrals who are owed money by the other allies. so long as we maintain the sterling exchange this appears to be inevitable, and the burden of financing both our own and our allies' trade tends to fall on that exchange. it is by our maintenance of this sterling exchange that the continuance of our allies' trade is rendered possible. the maintenance of the sterling exchange means the maintenance of the allied exchanges. all these factors together exert an immense influence. if england had had only herself to finance since the beginning of the war, and indeed even if she had only herself to finance now, it is quite possible she would not have needed to borrow at all abroad." loss in productive power the extent of the withdrawal of productive power can only be judged by figures. of the 7,500,000 men serving in the british army, 4,530,000 were contributed by great britain, 900,000 by the british dominions and colonies; and the remaining 1,000,000 by india and the various british african dependencies. production went on to a remarkable degree, but this production was largely for war purposes. it was secured by recruiting female labor to an unheard of extent in the munition factories. according to the london _economist_, the financial side of the british administration was anything but satisfactory. it speaks of waste and faulty methods: "on the financial side our record is by no means so satisfactory. we have, it is true, poured out money like water, but much of it has been raised by faulty methods, and the amount of it that has been wasted is appalling to consider. in the matter of borrowing, our methods have lately been greatly improved; and the recommendation of the committee on national expenditure, that the system of raising money by bank credits should be checked as far as possible, is being brought within the bounds of practical politics by the great success of the war savings committee's energetic and ingenious campaign for prompting the sale of national war bonds. perhaps also we may claim some small share in that success through the adoption of the principle so long advocated in these columns of a lower rate for money at home combined with special terms for money left here by foreigners. but successful borrowing, direct from the investor, instead of in the shape of money manufactured by banks, is a welcome, but not sufficient, improvement. we have to raise much more money by taxation. we have also to do much more than has yet been done to reduce the wicked waste of public money and support the efforts of the committee on national expenditure to husband the resources of the nation. a correspondent in a provincial town in which a tank has lately been busy asks: 'is it not pathetic to see widows and children scraping together their shillings and pennies to help the government, while we have tens of thousands of pounds being squandered by a profligate ministry of munitions!'" [illustration: copyright underwood & underwood a woman doing road construction work of the 7,500,000 men serving in the british army, 4,530,000 were contributed by great britain. yet production was speeded up by recruiting and training the labor of women.] equalizing loans and taxation a thorny problem of all war finance is how to equalize as far as possible the amount of money furnished by taxation with the amounts borrowed. the proportion indicated in the last english war budget of 1918 was that between £842,000,000 raised by taxes and 2,000,000,000 sterling by fresh borrowing. besides, war experience shows that the parliamentary estimates in each year were always far below the amount spent. in 1917 in great britain the shortage was upwards of £400,000,000. according to the london _economist_, no effective steps were taken to stop the profligate extravagance by which public money was poured out through the sieves of the war spending departments into the pockets of innumerable manufacturers, middlemen and traders, not to mention the ever growing sums allocated to the privy purses of countless new bodies of officials. each year, it says, there is a new debt charge of some £120,000,000 and each year there is a constant rise of prices in wages that enhances the cost of governmental goods and services. the amount raised by taxation, £842,000,000, seems enormously large, but as the london _nation_ states: "the enormous rise of prices only makes it represent half that amount in actual purchasing power. before the war our expenditure was 200 millions. if money had kept the same value, the taxation and other public income for this year would only have been 420 millions, a little more than twice the pre-war level. would that have seemed so heroic an effort for a patriotic nation? no. it can never be repeated too often that a really rigorous taxation, begun in 1914 and carried on till now, would have left us in a far sounder condition both for conducting the war and for facing the peace finance. the money and the goods are there. we get them. but we get them by crooked and expensive methods of borrowing which inflate prices, oppress the poorer purchasers, put huge war loot into the pockets of contractors and financiers, and fail to restrain expenditure in luxuries." germany's economic preparation for war there is much evidence to show that long before the war began financial preparations were made in germany for the great struggle. for a considerable period prior to 1914, germany and russia had been engaged in a contest to accumulate a gold supply. russia, it is known, had begun to withdraw the large balances which she kept in german, french and english banks. in germany the story was circulated that in 1913 the kaiser inquired of the governor of the imperial bank if the german banks were equipped for war. being told that they were not ready he is said to have replied: "when i ask that question again i want a different answer." the imperial bank of germany became an active bidder at the london gold auctions for the gold which arrived weekly from south africa, and its activity along these lines was shown by the increasing of the german gold reserve in the bank vaults from $184,000,000 on december 31, 1912, to $336,000,000, the amount it stood at a month before the war began. in addition, the imperial bank collected for the government a sum of about thirty million dollars to be added to the same amount said to be stored in the vaults of the julius thurm at spandau, and to be used as a war chest. other european countries were increasing their gold supplies, so it was not surprising that the new york markets were called upon to export eighty-four million dollars of gold for six months before the outbreak of the war. the entire gold production of the world during the eighteen months ending on june 30, 1914, was approximately $705,000,000. of this amount, about two million dollars was required for the arts, and one hundred and fifty million dollars went to british india. this left about $350,000,000 to be applied to monetary uses and the whole of this amount was absorbed by the four great central banks of germany, france, russia and austria-hungary. in order to resist raids on the german gold reserve a policy of note issuing was adopted. the situation, as forecast by mr. c. a. conant in september, 1914, in the new york _times_, can be gathered from the following extract: "with the general suspension of gold payments at the central banks of europe, except at the bank of england, the banks are in a position to resist raids upon their gold and to lend their resources, as far as sound banking policy permits, to the struggle of their governments to maintain national independence. in england, while the bank is still paying gold for notes, the policy of keeping gold in circulation has been abandoned, and the old limit of note issue, which was £5 ($24.40), has been lowered to 10 shillings ($2.44) and £1 ($4.88). "it is not the purpose of any of the european powers, however, to carry on the war by issues of paper money. the suspension of gold payments at the banks and the issue of notes for small denominations, which are legal tender in domestic transactions, is for the purpose of husbanding the gold stock against needless runs and keeping it as a guaranty fund of national solvency. it is the course which was adopted by france at the time of the franco-german war in 1870, but so prudently were the affairs of the bank of france conducted that the paper never fell more than 2½ per cent. below its value in gold. "a similar policy of reserve will probably be pursued by the banks of france, germany, and russia in the present contest. the government of france has raised the maximum limit of the note circulation of the bank by nearly $1,000,000,000, but the increase will not be used except as additional currency may be required, owing to the restriction in other forms of credit and the special demand for notes in the districts where the armies are gathered. "the suspension of specie payments does not convey to the banking community quite the same doleful warning of the unlimited issue of paper and its steady depreciation in gold which were conveyed by specie suspension in the united states in 1861 or by austria-hungary and russia in the desperate contest of the napoleonic wars. monetary science is better understood at the present time than in those days." german war finance among all the belligerent powers germany occupied the unique position of using the war as an excuse for not publishing national accounts. the sole guide to her expenditure must be looked for in the credit votes passed by the reichstag. using this method, it is estimated that germany spent about $30,000,000 a day. to cover this expenditure there was a regular plan of national loan--in march and september. this was the method followed in all the four years of the war. during the intervening six months there was an issue of treasury bills. the german people were, apparently, schooled to these regular demands with commendable promptness, but the imperial government adopted a policy of inflation in the hope that a speedy victory would bring fruits in the shape of an indemnity, and so the german people would avoid being called upon to bear war burdens. taxation was introduced only reluctantly and at a later period, and merely for the purpose of meeting so-called normal civil expenditure and interest on war debt. the plan followed was to spare the middle classes as far as possible from additional taxation charges. the loan bureau scheme the war loans have been, on paper, most successful. for example, the seventh loan of september, 1917, yielded $3,000,000,000; the eighth loan nearly $4,000,000,000. there was a large amount of ready money in the country and besides this all stocks of raw material have been realized. large as the loans have been they have not been able to keep pace with the increase of expenditure. out of the total amount of $30,000,000,000 about $20,000,000,000 have been covered by long-term loans. of course, owing to the peculiar situation of germany in relation to her allies, which were dependent upon her financial support, these loans have been raised by the german people themselves. the german loan bureaus were criticized at the beginning of the war, and german figures show that only about ten percent. of the national loans were involved in the loan bureau scheme. these loan bureaus, it was announced, would continue after the declaration of peace. according to the london _economist_, germany followed an easy and sure policy of war finance, although the same authority does not hesitate to use the terms "complete financial ruin" in connection with german post-war finance. the whole subject of german inflation is difficult to analyze. the _economist_ works out a post-war expenditure of $5,000,000,000 a year against a revenue of a billion and a half. its estimate of german inflation is contained in the following passage: "to take note circulation alone is obviously misleading, particularly in view of the violent efforts that have been made, especially during the last year, to extend the use of the check, and in other ways to limit as far as possible the use of notes. for what these figures are worth, it may be said that the total note circulation of the country at the end of june (1918), including reichsbank notes, state bank notes, treasury notes, and loan notes, stood at £1,030,000,000, as compared with £109,300,000 on july 23, 1914. reichsbank deposits, again, stood on june 30, at £459,100,000, as compared with £47,600,000 on july 23, 1914, while the deposits of the eight 'great' banks, even at the end of 1917, stood at £800,000,000, as compared with £250,000,000 at the end of 1914, £362,000,000 at the end of 1915, and £500,000,000 at the end of 1916." in this connection it is interesting to give a summary of germany's war expenses as reported in the london _economist_: "in his comparison of german war finance with ours, the chancellor, in his budget speech, made the following points: first, that german war expenditure is now £6,250,000--almost the same as ours--though our expenditure includes items (such as separation allowances) which are not included in the german figures. second, that the whole amount of the german votes of credit (£6,200 millions) has been added to their war debt, 'because their taxation has not covered their peace expenditure in addition to their debt charge.' third, the total amount of new taxation levied by them since the beginning of the war comes to £365 millions, against our £1,044 millions. fourth, in a year's time they will have a deficit, comparing the revenue with the expenditure, of £385 millions at least. 'if that were our position,' the chancellor added, 'i should certainly think that bankruptcy was not far from the british government.' fifth, with the exception of the war increment tax, 'scarcely any of the additional revenue has been obtained from the wealthier classes in germany'." german war profits an extraordinary list of the gigantic war profits collected by germany was drawn up by a. cheraband, the well known french critic. he estimated that in three years germany had spent $322.50 per head, france $444.00, great britain $559.75. he presents a list of war profits made by germany. the "booty" he divided into movable and immovable property. in the former category he includes the 212,000 square miles of territory that had fallen into german clutches, and this he values at $32,000,000,000, which, he says, is a conservative estimate. turning to the movable booty, he classifies it as follows: "_(a) capture of 'human material.'_--this consists of the 46,000,000 allied subjects from whom the germans obtain free labor. "_(b) capture of war material._--guns, rifles, munitions, vehicles, locomotives, railway trucks, and thousands of miles of railway. the belgian railway system alone is worth nearly $600,000,000. "_(c) capture of foodstuffs._--everywhere the germans have stolen horses, cattle, corn, potatoes, sugar, alcohol, foodstuffs of every kind, and crops grown by the forced labor drawn from the 46,000,000 allied subjects whom they have enslaved. "_(d) theft of raw materials._--throughout the occupied territories the germans have appropriated coal, petroleum, iron, copper, bronze, zinc, lead, etc., either in the mines or from private individuals; textile materials, such as woolen and cotton. in the towns of northern france alone the germans stole $110,000,000 worth of wool. "_(e) theft of industrial plant._--on a methodical plan throughout the occupied territories, the motors, engines, machine-tools, steam and electric hammers, steel-rolling mills, looms, models, and industrial plant of all kinds have been carried off to germany. "_(f) thefts of furniture._--the way in which furniture and household goods were stolen and carried off is confessed by implication in the following advertisement published in the _kölnische zeitung_ at the beginning of april, 1917: "'furniture moved from the zones of military operations in all directions by rettenmayer at wiesbaden.' "it is impossible to estimate the money value of the goods thus removed. "_(g) seizure of works of art._--the works of art collected for centuries in museums, churches, and by private individuals in poland, italy, belgium, and france have been carried off by the germans. "_(h) war levies._--scores of millions in money have been secured by the germans in the form of requisitions, fines, war levies, war taxes, and forced loans. "_(i) thefts of coin, jewels, and securities._--in the occupied regions, and especially wherever they have been obliged to evacuate those regions, as, for instance, at noyon, the germans have emptied, by order, the safes and strong boxes of private persons and of banks and have carried off securities, jewels, and silver. in september and october, 1917, they seized at one stroke the deposits of allied subjects in the belgian banks amounting to $120,000,000. "in view of the high prices of foodstuffs, coal, metals, petroleum, war materials and machines, it is clear that the booty thus secured by the germans during the last three years in the occupied territories is certainly worth several billion dollars." [illustration: a woman operating a multiple spindle drill in an english shell factory photo by james m. beck "since the war broke out," said m. barriol, a french celebrated actuary, "no less than 1,500,000 women have been added to the ranks of wage earners in england, an increase of fully 25 per cent."] german money indemnity it became commonplace after germany's defeat was evident that her war cost must include the cost of the destruction she had caused her enemies. to estimate this was no easy matter. the attitude of the germans on the subject was indicated by their constantly expressed hope that trade would recommence as usual and that they would be able to start economic relations in a favorable position. so we find the cologne chamber of commerce beginning to prepare for peace by adopting a resolution expressing the hope that the destruction of french and belgian industries would allow the rapid recovery of german power. the _wall street journal_ used this statement as a guide to the allied powers for measuring the kind of indemnity that would be imposed upon germany. "one of the departments of the government at washington has in its files a report of a german commission on industry after the war. reading this, one can understand the motive for what at one time looked like pure vandalism. vandalism it was, by descendants of the vandals, but it was a deliberate destruction of international competitors, killing the workmen--and workwomen--and destroying plants and machinery for the one purpose of removing competition. a physical injury to a child helped to weaken future competition in the world's trade; and it was upon the power gained thereby that germany hoped to launch another war for world domination.... "a peace that gives the cold-blooded perpetrators of these crimes an advantage over their victims would not be equitable. if any must suffer, let it be those who are guilty, but don't give them a start ahead of their victims. "in substance, that point should declare that germany shall not profit through the wrecking of any allied industry. except to admit necessary foodstuffs, the blockade should not be lifted until every allied country from england to serbia has been industrially rebuilt. one object of the wholesale murder of civilians was to weaken industrially the enemy countries. the greater proportionate loss of man-power in the allied countries should be met by restrictions on the entry of raw materials into germany. every piece of stolen machinery should be returned before her own industries are allowed to resume." the soft plan of dealing with germany's war cost was championed by secretary daniels. the springfield _republican_ and the _new republic_ seemed to agree with the manchester _guardian_ that germany ought to be helped rather than punished, that the main thing was to set her on her feet again. "representative papers like the new york _times_, syracuse _post-standard_, buffalo _express_, and sacramento _bee_ all insist that while we might or perhaps should claim no war-expenses from germany, 'we must exact payment,' in the words of the syracuse daily, 'to the last penny for losses suffered through illegal warfare.' germany's submarine campaign cost us, according to this paper's figures, 375,000 tons of shipping and 775 civilian lives. if we take the burden of payment for this property and these lives from the guilty shoulders of germany it would only be to 'pass it on to the innocent shoulders of the american taxpayer,' which, the new york _times_ declares, would be 'rank injustice'." forecasting the total cost of war it is interesting also to note an attempt made by one of the expert statisticians attached to the guaranty trust company of new york to estimate the total cost of the war at the close of the four-year period. the five main allies possessed, before the war, $406,000,000,000 for national work, a sum nearly four times as great as the national wealth of the two central powers. in four years the seven leading belligerents had spent $134,000,000,000. the only way to grasp the meaning of this enormous sum is to contrast the cost of the world war with all former wars. the total cost of wars that had taken place since the american revolution was $23,000,000,000; the world war costs therefore, are six times greater. in these figures, staggering as they are, it was comparatively easy to figure out the costs, debts and interests of actual war expenditures. much more complicated is the problem of estimating the property value destroyed through military operations on land and sea: loss from destruction of property "the total area of the war zone is 174,000 square miles, of which the western theater of the war, in france and belgium, stretches over an area of 19,500 square miles, and it contains over 3,000 cities, villages, and hamlets, great manufacturing and agricultural districts, of which some have been totally annihilated and some heavily affected. the estimate by the national foreign trade council of the war losses, which unfortunately does not go beyond 1916, is as follows: "'destruction of buildings and industrial machinery in belgium, $1,000,000,000, and in france $700,000,000. the destruction of agricultural buildings and implements, of raw materials, of crops and live stock, has been estimated at a sum of $780,000,000 in belgium and $680,000,000 in france. roads were destroyed frequently by the retreating troops and have been seriously damaged by heavy gun fire and excessive use. the losses from destruction of railway bridges, etc., have been estimated in belgium at $275,000,000 and in france at $300,000,000. "'in the eastern theater of the war germany has been invaded only in eastern prussia, where the agricultural population has been seriously impaired. heavy damage was inflicted upon bridges, roads, and governmental property, including railroads. the direct cost to germany through the loss of agricultural products, of manufacturing products, as well as in interest on investments abroad, of earnings from shipping and banking houses, and profits of insurance and mercantile houses engaged in business abroad has been enormous'." economic loss of man-power the same expert goes on to figure out the economic value of the loss of human life: "mr. m. barriol, the celebrated actuary, gives the following figures as the capital value of man: in the united states, $4,100; in great britain, $4,140; in germany, $3,380; in france, $2,900; in russia, $2,020; in austria-hungary, $2,020 or an average capital value for the five foreign nations of $2,892. "the number of men already lost is 8,509,000 killed and 7,175,000 permanently wounded, or a total of 15,684,000. thus society has been impoverished through the death and permanent disability of a part of its productive man-power to the extent of $45,000,000,000. "the loss of men, measured in terms of the capital value of the workers withdrawn from industry, is offset in some degree by the enhancement of the capital value of the remaining producers.... this loss of man-power is also partly offset by the large contingents of women drawn into industries. in england, out of a female population of 23,000,000, about 6,000,000 were engaged before the outbreak of the war in gainful occupations. since the war broke out no less than 1,500,000 women have been added to the ranks of wage-earners, an increase of fully 25 per cent. moreover, about 400,000 women have shifted from non-essential occupations to men's work. in the united states, approximately 1,266,000 women are now engaged in industrial work, either directly or indirectly necessary to carry on the war. effects on population "the physical and moral effects of the war, the moral strain to which the nations have been subjected, the 'shell-shock' which has reacted upon the population at home as well as upon the soldiers on the battlefield, the undernourishment and starvation of children as well as adults, all have resulted in a lowered vitality, the ill effects of which, especially in the countries of the central powers, are already seen in an increase of the death rate, in a spread of epidemics and diseases that have taxed the medical resources of all countries. the lowered vitality of the race, which is still further aggravated by the millions of incapacitated soldiers and the premature and excessive employment of children and women in the industries, will eventually make for a lower standard of efficiency in all human activities, or a retardation of human progress. authoritative statements are to the effect that in belgium in the earlier period of the war, the deaths of women and children far outnumbered those of men. annual deaths among the german civilian population have increased by a million above the normal. "besides the loss in actual population there is a loss of potential population. carefully compiled figures show that by 1919 the population of germany will be 7,500,000 less than it would have been under ordinary circumstances. the people in austria in 1919 will be 8 per cent. less in numbers than in the year before the war. hungary will be still worse off; it will have a population of 9 per cent. lower than in pre-war days." carnegie endowment's estimates the carnegie endowment for international peace made public in november, 1919, an elaborate report on the cost of the world war in human life and in property and the consequent economic losses. the chief conclusions derived from this intensive study of all the conditions may be summarized as follows: all the wars of the nineteenth century from the napoleonic down to the balkan wars of 1912--1913, show a loss of life of 4,449,300, according to the report, while the known and presumed dead of the world war reached 9,998,771. (see vol. iii, pp. 403-5.) the monetary value of the individuals lost to each country is estimated, the highest value on human life being given to the united states, where each individual's economic worth is placed at $4,720, with england next at $4,140; germany third, at $3,380; france and belgium, each $2,900; austria-hungary at $2,720, and russia, italy, serbia, greece, and the other countries at $2,020. with a loss of more than 4,000,000 the estimate puts russia in the lead in human economic loss, the total being more than $8,000,000,000; germany is next with $6,750,000,000; france, $4,800,000,000; england, $3,500,000,000; austria-hungary, $3,000,000,000; italy, $2,384,000,000; serbia, $1,500,000,000; turkey, almost $1,000,000,000; rumania, $800,000,000; belgium, almost $800,000,000; the united states slightly more than $500,000,000; bulgaria, a little more than $200,000,000; greece, $75,000,000; portugal, $8,300,000, and japan, $600,000. on this basis the total in human life lost cost the world $33,551,276,280, and the loss to the world in civilian population is placed at an equal figure. the attempt to determine property losses is the least satisfactory, as it is the most difficult. the destruction and devastation in the invaded areas of belgium, france, russian poland, serbia, italy and parts of austria are probably incapable of exact determination, and it may well be doubted if the exact losses will ever be known. the total property loss on land is put at $29,960,000,000, one-third of which was suffered by france alone, its loss being given as $10,000,000,000, with belgium next at $7,000,000,000, and the other countries following as follows: italy, $2,710,000,000; serbia, albania, and montenegro, $2,000,000,000; the british empire and germany, each, $1,750,000,000; poland, $1,500,000,000; russia, $1,250,000,000; rumania, $1,000,000,000, and east prussia, austria, and ukraine together, the same amount. [illustration: copyright by central news service launching the quistconck at hog island according to the report of the carnegie endowment the cargo loss at sea was $3,800,000,000, the total tonnage and cargo loss being $6,800,000,000. to offset the allied loss in shipping, ship-building in the united states was rushed at topmost speed.] in the property losses on sea, that is, to shipping and cargo, the report estimates that "the construction cost of the tonnage loss can scarcely be estimated at less than $200 a ton, and the monetary loss involved in the sinking of this 15,398,392 gross tons may, therefore, be placed at about $3,000,000,000." to this is added loss of cargo, which is estimated at $250 a ton, giving a cargo loss of $3,800,000,000, and a total tonnage and cargo loss of $6,800,000,000. among the indirect costs of the war, loss of production is placed at $45,000,000,000. in arriving at this figure an average of 20,000,000 men are counted as having been withdrawn from production during the whole period of the war, and their average yearly productive capacity is placed at $500. war relief is another indirect cost which totalled up to $1,000,000,000; and the loss to the neutral nations is given as $1,750,000,000. with the total direct costs of the war amounting to $186,336,637,097 and the indirect costs to $151,612,542,560, the stupendous total of $337,946,179,657 is reached. finally, the report says: "the figures presented in this summary are both incomprehensible and appalling, yet even these do not take into account the effect of the war on life, human vitality, economic well-being, ethics, morality, or other phases of human relationships and activities which have been disorganized and injured. it is evident from the present disturbances in europe that the real costs of the war cannot be measured by the direct money outlays of the belligerents during the five years of its duration, but that the very breakdown of modern economic society might be the price exacted." the war as a product of high prices all of the great wars in european history have been followed by periods of increased production and economic expansion. experts are convinced that the world war will prove no exception to the world's previous experience. wars have been the principal influence that have determined the course of commodities and prices. in the napoleonic wars the index number rose seventy-two points in twenty years, but during the four years between 1914 and 1918 there was a rise of one hundred and eight points in four and a half years, a movement which edgar crammond, widely known british expert in economic and financial affairs, declared to be a movement to which there was no precedent in point of rapidity or magnitude. in an address outlined in the new york _journal of commerce_ this authority estimated the direct cost of the war to the allies as being roughly $145,000,000,000. the central powers had spent about $60,000,000,000. the total cost in dollars he estimated at $260,000,000,000. the upheaval caused by the war was manifested, according to the same authority, in the rise of the cost of living and in the universal increase of wages. other economic consequences will be more gradually unfolded. prospects of fall in the price of commodities and wages as the result of peace, he thinks, will be arrested for two reasons: first, the vast increase in the amount of paper money; second, the huge amount of public debts to the belligerents. he saw an additional psychological cause in the attitude of the laboring classes to maintain wages at a higher level than before the war and to improve the standard of living. reduced production is sufficient to account for all the economic disturbances that were produced during the war, according to the london _statist_, which says: "it is enough to say that production is reduced almost to a minimum, while consumption is going on at a most extravagant rate. those who wish to pose as economists without competent knowledge are telling the public that all the evil is due to this, that, and the other thing--such, for example, as inflation, the rise in prices, the enormous loans raised, and several other fads. it is pure moonshine. the world is impoverished, firstly, because so much of the world's manhood is withdrawn from production to consumption; and, secondly, because reduction in production is so serious that very little has been saved either by the belligerents or the neutral countries of europe, at all events. international trade is really carried on by barter. it is true that money is frequently paid. at the present time money has in some markets to be paid because credit has been injured, and those who possess wealth are not as willing as they used to be to trust to mere credit." questions of inflation the enormous advance of prices in england was synchronous with the issue of currency notes to an excess of £700,000,000 beyond the gold reserve. high officials in british administration ascribed this rise to the increased consuming capacity. according to the british board of trade a sovereign could purchase no more during the war time than eleven shillings would just before the war started. a writer in the _fortnightly review_, mr. w. f. ford, quotes jevons' remark in his classical book on money in explanation of the phenomenon. "a number of bankers all trying to issue additional notes resemble a number of merchants offering to sell corn for future delivery, and the value of gold will be affected as the price of corn certainly is. we are too much inclined to look upon the value of gold as a fixed datum line in commerce, but in reality it is a very variable thing." substitute today the word government for bankers and one can see the reason for the upward rise in prices. this rise would take place apart from any questions of war waste, profiteering, difficulties of transport by sea or land or shortage of labor. all the countries involved have followed the same policy of inflation. the operation is depicted in the following passage: "the inevitable result of extensive note issues by a number of governments was that prices were irresistibly impelled upwards in all belligerent countries--apart from any questions of war waste, profiteering, difficulties of transport by sea or land, or shortage of labor. belligerent countries became extraordinarily good markets in which to sell goods; and a golden harvest was temptingly displayed to neutral nations, in whose favor enormous trade balances rapidly grew up. in large part these balances were met by payment in gold.... but just as gold substitutes in the shape of paper money swelled the currencies and increased prices in the belligerent countries, so also the large quantities of gold coin sent to neutral states in payment for goods supplied to the warring nations swelled the currencies and increased prices in the neutral states themselves. the withdrawal of gold set up a natural tendency for prices to fall in the countries from which it had been exported; but not only was this tendency overcome, but the upward movement of prices was continued by the action of the several governments in placing still further issues of inconvertible paper money on their respective markets. the net results have been that currencies have been inflated and prices forced up all over the world, that inconvertible paper money is tending more and more to drive out gold from the currencies of the states that issue it, and that the gold so driven out is being absorbed into the currencies of the neutral nations. between august, 1914, and the date of her own declaration of war, america increased the amount of her gold currency by approximately £200,000,000 sterling. no real benefit has accrued. "the currencies of the whole world have been artificially inflated to the extent that, under the most favorable circumstances existing in any part of the world, £5 are now needed to do the work in circulation that before the war was accomplished by £3. the loss to people with fixed incomes, the disturbance of trade, the potential labor difficulties are stupendous. and as a result of purchasing war material at excessively high prices, the dead weight of debt incurred by all the countries at war is very much greater than it need have been had currencies been kept within reasonable bounds." currency expansion in great britain in great britain £200,000,000 worth of new paper currency was placed in circulation and there was a considerable expansion in the use of banknotes, silver and copper coinage. proposals were made that the famous english bank act should be repealed and that excess issues of banknotes should be made legal on the payment of a tax. but apart from these theories of involving the banking system there was a good deal of adverse criticism. "mr. herbert samuel made a masterly attack upon the vicious system of war finance, by which no less a sum than £196,170,000 is added to the expenditure by bonuses and increases of wages, which, in their turn, only force prices still higher and raise the cost of living. lives have been conscripted; incomes have been conscripted; the only thing which has not been conscripted is labor. if the government had at an early stage of the war had the courage to fix wages, instead of prices, the cost of living would then have been regulated by supply and demand. by fixing prices of commodities, after they had risen to almost famine figures, we have the maximum of loss and inconvenience, high wages, dear food, and a war bill that increases day by day. despite mr. bonar law's assurance that the bill of the year would not be so high as he expected, we have the fact that we are spending over seven millions a day. the satire of 'the cheap loaf' consists in its cost to the nation at large of £45,000,000 a year. bonuses to munition workers amount to £40,000,000, bonuses to miners come to £20,000,000, to railway workers £10,000,000, to potato growers £5,000,000. is this anything else but a system of gigantic corruption? in order that artisans and agriculturists may be kept in good humor with the war, they are bribed with bonuses and allowed to buy food at prices which are partially paid by the rest of the community. if ever there was a case of robbing peter to pay paul it is here." america's experience with inflation protests against war inflation were not confined to british specialists in finance. what is inflation? as used by the more careful writers on the subject today, it is taken to signify the increase of bank credits not represented by any immediate addition to current wealth. for example, if the government borrows by an issue of bonds, such bonds taken by the banks, and payment for them made in the form of bank credit which is at once transferred to individuals who have furnished labor or supplies, it is evident that there has been a net addition to the purchasing power of the community not represented by any corresponding addition to wealth whether of a saleable or available form. mr. delano, a member of the federal reserve board, said that the war had produced a world inflation the like of which had never occurred before--"the usual symptoms of such methods of inflation are the disappearance of metallic money and the general advance in the prices of commodities." he gives the following illustration of what has taken place in this process of inflation: "prior to our entry into the war, when the european nations were buying heavily in the united states, they paid largely in gold for what they bought, and as a result about a billion dollars in gold coin came to this country in the period of two and one-half years. the reason the european nations were able to send us their gold was that they printed paper money for their own use, releasing gold for us. but that gold inflation in this country is one explanation of the general advance in prices of all commodities, although undoubtedly it is not the only explanation; for it must be freely admitted that prices have been affected, first, by scarcity, occasioned by increased demand from europe for many articles produced by us; second, by reason of the fact that increases in taxes and wages of labor have entered into the cost of production and sale of all articles and account for a share of the increased prices of commodities." civil war inflation. the united states had large experience with inflation during the civil war. some $500,000,000 were in this way added to the cost of the war which might have been avoided. a plain statement of the real incidents of inflation is given by mr. a. c. miller of the federal reserve board in his _financial mobilization for war_, in the following passage: "for let it not for a moment be overlooked that inflation, in its effects, amounts to conscriptive taxation of the masses. it is, indeed, one of the worst and the most unequal forms of taxation, because it taxes men, not upon what they have or earn, but upon what they need or consume. the only difference for the masses between this kind of disguised and concealed taxation and taxes which are levied and collected openly is that in the case of the latter the government gets the revenue, while in the former case it borrows it, and those to whom it is eventually repaid are not those, for the most part, who have been mulcted for it. inflation therefore produces a situation akin to double taxation in that the great mass of the consuming public is hard hit by the rise of prices induced by the degenerated borrowing policy and later has to be taxed in order to produce the revenue requisite to sustain the interest charge on the debt contracted and to repay the principal. the active business and speculative classes can usually take care of themselves in the midst of the confusion produced by inflation and recoup themselves for their increasing outlays. indeed inflation frequently makes for an artificial condition of business prosperity. that is why war times are frequently spoken of in terms of enthusiasm by the class of business adventurers. but it is a prosperity that is dear-bought and at the expense of the great body of plain living people. it would be a monstrous wrong if in financing our present war we should pursue methods that would land us in a sea of inflation in which the great body of the american people, who are called upon to contribute the blood of their sons to the war, were made the victims of a careless or iniquitous financial policy." inflation illustrated. one of the ways in which inflation was caused in the united states during the war period was the plan adopted by the banks of financing the loan directly by means of bank credits to the buyers. according to mr. carl snyder the banking officials roughly agree that on the first liberty loan for $2,000,000,000 the banks may have loaned somewhere near half the total and on the second loan even more. of course, this means a heavy expansion of bank credit. economists are generally agreed that the flooding of the country with paper money brings about an enormous rise in prices. they differ chiefly in regard to the degree of inflation. the most accepted statement of inflation is that prices vary directly as the volume of the actual currency employed and its rate of turn over or velocity, and inversely with the volume of trade. the effect of bank credits is exactly that of an excessive issue of notes; that is, if they are expanded more rapidly than the actual volume of business there is a rise in prices, that is to say there is inflation. the situation of the country during the war in regard to business was put plainly by mr. snyder in the following words: "railroads cannot haul any more goods. the government is already stepping in to shut down on shipments on certain lines of industry. we can not get any more coal unless labor is drafted from other industries, and as a whole we cannot get any more labor as is evident from the fantastic wages that are now being paid. in a word, production and therefore the actual volume of exchange is practically at the limit and has been for a year or more. no expansion of bank credits can put this production any higher. it follows, therefore, as a practical fact that _any expansion of bank loans now means inflation_--to all practical intents dollar for dollar." because of the introduction of a billion dollars worth of gold into the country, prices have risen nearly one hundred percent. the expansion of bank credits increases the cost of living and the cost of the war will be doubled. some bankers estimated that if the war lasted the expansion of bank loans might reach $50,000,000,000. the progress of these loans was encouraged by the cutting of the required metallic reserve under the new federal reserve system and the system of book credits with the federal reserve banks allowed to the banks that are members of the system. the following is mr. snyder's description of the way the inflation was encouraged. "every dollar of gold may become three dollars of federal bank credits and each dollar of this may in turn become the basis of eight dollars of credits for the central reserve cities, ten dollars for the smaller cities and fifteen dollars for the country banks, which works out to a practical average of ten dollars for all the banks in the federal reserve system." he then went on to speak of the possibilities of this inflation and uttered a warning of the danger, because the only obstacle in the way was the good sense and conservatism of the american banks. some authorities hold that a war cannot be fought without inflation. mr. snyder thought that the united states with large ante-war income could and should have tried the experiment. people want easy money and flush times. if credit were contracted there would be tight money and a high interest rate. mr. mcadoo and the administration at washington feel highly elated when they roll up five billion of statistics, half of which are merely bank rolls. it seems not to matter that all this may add two or three billion to the already swollen credit currency and that the millions of poor people, small investors and life insurance holders who cannot expand their income in any adequate way must pay the piper. these are the millions who rarely have any voice in national affairs, and all the more so because they are for the most part ignorant. it seems an idle consequence that we may spend perhaps ten long weary years of hard times, of falling prices, declining business and sharp distress, paying for the orgy of inflated prices, waste and extravagance in which we are now indulging. [illustration: photo by paul thompson ship-building at camden, n. j. one of the financial effects of the war was the transformation of the united states from a debtor to a creditor nation. immense private fortunes were made. in no industry was there a greater boom than in ship-building.] credit expansion the wide expansion of credit can be studied by making a comparison of the gold holdings of the leading nations. for example, in 1914 just before the outbreak of the war, the amount of cash held by all the banks of the united states was estimated at about $1,639,000,000. of this amount about $913,000,000 was in the form of gold or gold certificates. upon this basis there rested a structure of credit amounting to $21,351,000,000. in other words the gold basis of the country's deposit credits amounted to 4.27 percent. in 1916 the cash held was $1,911,000,000; about $1,140,000,000 was in gold; and on this basis there rested a credit structure of $28,250,000,000. united states a creditor nation one of the financial effects of the war was the transformation of the united states from a debtor to a creditor nation. the reconstruction period in finance is certain to bring about a situation described by a writer in the _wall street journal_ as one of the most interesting developments known in financial history. financial waste in emergency measures was a superficial side of america's part in the world war. but this writer considers that what happened during the war was not altogether financial waste: "a great upheaval took place in the world of finance. credit resources were brought to the fore and nations established on a financial basis of far-reaching importance, but of a kind that had only a secondary place before. "the war has turned the united states from a debtor to a creditor nation. formerly we owed abroad something like $4,000,000,000, about three-quarters of which sum we have bought back. moreover, europe now owes us about $9,000,000,000--on private account; about $2,000,000,000 in securities; in united states government obligations over $7,000,000,000. the world is under obligations to us in interest alone of between $400,000,000 and $500,000,000 a year." after the united states took an active part in the war large credits and loans were made in behalf of other countries as the following excerpt shows: "a total appropriation of $7,000,000,000 has been made, $3,000,000,000 by the act of april 24, 1917, and $4,000,000,000 by the act of september 24, 1917. under these authorizations credits have been established in favor of the governments of great britain, france, italy, russia, belgium, and serbia. these loans, up to january 17, 1918, are given in the following table: loans and balances country credits agreed loans under-established upon made credits great britain $2,045,000,000 $1,985,000,000 $60,000,000 france 1,285,000,000 1,225,000,000 60,000,000 italy 500,000,000 450,000,000 50,000,000 russia 325,000,000 187,729,750 137,270,250 belgium 77,400,000 75,400,000 2,000,000 serbia 6,000,000 4,200,000 1,800,000 totals $4,238,400,000 $3,927,329,750 $311,070,250 "on the basis of the requests being made on the treasury, it is estimated that credits aggregating approximately $500,000,000 per month will be required to meet the urgent war needs of the foreign governments receiving advances from the united states. at this rate approximately the entire appropriation authorized by congress will be accredited to our allies by the close of the present fiscal year (june 30, 1918). "a significant feature of the loans floated in this country in the last three and a half years has been the fact that many states and municipalities which formerly went to london to sell their securities have recently been financed through the united states. about $150,000,000 of the canadian loans went to provinces and municipalities, and many of the south american obligations were contracted for municipal improvements. the neutral nations of europe have also sought accommodation in the american money market. loans have been made to the city of dublin, ireland, the london water board, and the french cities of paris, bordeaux, lyons, and marseilles." disappearance of gold currency during the war gold almost ceased to be currency in all the allied countries. the central powers at the end of the struggle had comparatively little. of the total gold production the united states produced about twenty-five percent., while the british empire produced nearly sixty-four. a writer in the _edinburgh review_ proposed to take the opportunity of creating a standard price for gold. for example, if the standard price of gold were reduced to half, the prices of all commodities would come down in sympathy. we must take advantage of the fact that we are working with a paper currency, and all authorities agree that financial stability is only secured by the backing of as much gold as possible against paper securities and emergencies. the plan involved an increase of the standard price. the success of the scheme depends upon the concordant will of the united states and great britain to adopt it as the following article suggests: "obviously if great britain or any other country _alone_ attempted to alter the standard price of gold, and therefore the value of the present sovereign (or its equivalent), the currency would be debased, instead of being enhanced. it would also in effect amount to a partial repudiation of national debt. a standard ceases to be a standard if _one_ nation can arbitrarily alter it, but surely there can be no argument against the creation of a new standard sanctioned by the whole civilized world for their mutual advantage. if great britain and the united states were to proclaim their desire to adopt my scheme it is hardly likely that any country other than the central powers would fail to welcome it. spain, for instance, has increased her gold reserve to about £80,000,000 and greatly enhanced the value of her currency thereby. would she fail to grasp the happy chance of making this £120,000,000, and would any country continue to part with its gold at £4 per ounce when it could get £6 or £8?" war's effect on silver along with all other commodities, that cinderella of finance--silver--had a share in the general rise in prices. one of the reasons is the enormous falling off of silver production in mexico, where one-third of the total world supply is produced; another is the great demand for silver. prior to the war, the use of silver plate by the wealthy classes had largely fallen off; but the war, because of the rise in wages, brought about a largely increased demand for silver to be used in ornaments: "the war has brought into the market a vast number of new buyers for ornaments, whose demand in the aggregate is estimated to more than compensate for the falling off in the purchases by the wealthy classes of silver plate. wages everywhere, not merely in england, but practically all over the world, have advanced, and particularly in western europe; moreover, immense numbers of women, and even children, are being employed who were not employed before, and those who were employed before have a larger income, particularly amongst the wage earning classes, than has been the case in this country for many years past." the use of silver in coinage, too, was notably increased. gold disappeared in countries where gold coins were used; paper money and silver token money took its place. another reason for the advance in silver is connected with the demand for the metal in eastern countries. according to the _london statist_: " ... about half the annual production of silver throughout the world is absorbed by the east, meaning principally india and china. it has to be borne in mind that prices in the east have advanced as well as in europe and the two americas, and, consequently, more token money is required there as well as here. silver is the standard of value, and not token money at all, in china; and in india, while gold is nominally the standard of value, the rupee is the actual coin in which the indian natives, as distinct from mere government officials, reckon their wealth. now, as one result of the war, nearly all the governments forbid the export of gold; consequently, india requires a steadily increasing supply of silver, not merely to do the work that silver did before the war, but, in addition, to supply the void created by the prohibition of the export of gold." stock exchange war the accompanying diagram showing how military operations in europe affected the average prices of fifty stocks, half industrial and half railway, was published in the _new york times annalist_: the wider black area shows the high and low average prices of the twenty-five industrials included in the fifty, and the white area the corresponding figures for the twenty-five rails. the lines begin at a time when germany was suffering severely from her failure at verdun and from losses in men and territory from the great allied somme offensive. the subsequent rapid decline (november to february) embraces the period of bethmann-hollweg's sensational peace offensive, followed a few weeks later by germany's intensified submarine warfare. the lowest point of all (december, 1917) was reached after germany's successful counter-thrust for cambrai, her "peace offensive" with the bolsheviki at brest-litovsk, and the taking over of our railroads by the government.--_literary digest_, october 19, 1918. a further indication of how military operations reacted on stock exchange quotations was shown in the decided improvement that took place since the end of july, 1918, after the germans were pushed back in their drive towards paris. the most direct way of measuring this influence is to take the quotations for the bonds and notes of the allied governments dealt in at the new york stock exchange since 1915: "the lowest quotations for these bond and note issues were reached in 1917, when the cause of the allies assumed a gloomy appearance. the depression was aggravated by the general decline of the entire securities market in the later part of that year. some recovery occurred by the end of last year, but the beginning of 1918 saw them still depressed. last march, april, may and june, when the great german drives were in progress, they showed little disposition to break, but after the active participation of the american army in the fighting began and news came that the counter-offensive had assumed a decided and successful phase, an assertion of strength took place in foreign government bonds, carrying quotations 'not only to the highest of the year, but in some instances to the best figures attained since they first made their appearance in the american market.' the following tabulation is presented by _bradstreet's_ as giving the range of prices for the most prominent bonds and short-term notes of foreign countries during 1917 and 1918, with the quotations for them on august 22nd: /---1917----\ /---1918----\ aug. high low high low 22 am. for. sec. 5s. 1919 97-7/8 90 98 94½ 97½ anglo-french 5s. 1920 95 81-7/8 95 88¼ 94¾ canada 5s. 1926 100 89 95 90-7/8 92 canada 5s. 1931 100¼ 87½ 94 88-7/8 92-3/8 fr. republic 5-1/2s. 1919 101 91½ 99 94 98-7/8 u. kingdom 5s. 1918 98-5/8 95½ 100 97 99-7/8 u. kingdom 5-1/2s. 1919 98-7/8 93¼ 99¼ 95¼ 98¾ u. king. 5-1/2s, new 1919 101-9/16 95¼ 100 9¾ 99-5/8 u. kingdom 5-1/2s. 1921 98½ 84½ 95¾ 91-5/8 95-3/8 _french cities_ paris 6s. 1921 96-7/8 73½ 92-1/8 81-5/8 91-7/8 bordeaux 6s. 1919 96-7/8 74 95½ 84 94-7/8 lyons 6s. 1919 96-7/8 74 95½ 84 94¾ marseilles 6s. 1919 96-7/8 74 95½ 84 94¾ _russian govern._[6] external 6½% 98¾ 45 64½ 33 61 external 5½% 1921 98-5/8 36 60½ 34½ 57 [6] curb market quotations. [illustration: diagram showing the effect of the war on the prices of stocks (see explanation on page 32)] "british issues, as shown above, declined least of all, 'and consequently had less ground to regain in the rise,' _bradstreet's_ adds: "the feeling of confidence in england's credit has all along been a factor in connection with its american obligations. this will doubtless be strengthened by the announcement made this week that the united kingdom secured 5 per cent. notes, due september 1, 1918, will be paid at their maturity on that date. there were originally $250,000,000 of these notes, which were sold in our market in 1916; but the outstanding issue has been reduced to about $180,000,000 by purchases in the market for redemption. french obligations have been one of the chief features of the advance. as will be seen from the above table, the french republic 5½ per cents., due 1919, have risen 6 points from the low figures of the year. the 6 per cent. notes of the french cities, paris, lyons, bordeaux, and marseilles, with rises of about 10 points each, are conspicuous examples of the good effects following the checking of the german advance and the counter-offensive launched by the allies and the american army. no division of this part of the bond market has, however, shown such a marked improvement as the russian external or dollar bonds, which though not listed at the stock exchange, are dealt in extensively on the new york curb market'." german property in america until the united states entered the war with germany it had never been realized that an enormous share of the economic wealth of the country was under german control. attorney-general palmer, in an address at detroit, estimated this share to be about two billion dollars in money value, with an economic and political value far greater: "furthermore, this structure was 'designed so to hold american industry as to frustrate the organization of our resources in case of war.' with two hundred american corporations controlled by the financial and military power in germany, we had a situation that 'might easily have been fatal in america had it not been discovered in time.' when the war began in 1914 the structure 'had become so large and powerful and was so firmly entrenched in the industrial life of our country that its real commanders in germany cherished the hope that it would prove the make-weight which would keep america out of the war, or, failing in that, constitute a powerful ally of the german cause in our very midst.'" mr. palmer added: "'during the last twenty-five or thirty years germany had built up upon american soil a structure reaching into every part of the country and stretching its arms across the seas to fasten upon porto rico, the virgin islands, hawaii, and the philippines. congress has declared that all these enemy properties shall be managed and administered by the alien property custodian with all the powers of a common law trustee, the proceeds to be distributed after the war in such manner as the congress may determine. this means that the final disposition of the properties or the funds realized from their sale will be a topic for discussion and a subject for settlement at the council table of the nations at which permanent peace shall be restored to the world. "'this being so, it seems to me to be an important part of our work to capture the army which germany skilfully and craftily planted midst the busy wheels of american industry, and to break, never to be again repaired, the industrial and commercial chain which germany has stretched across the american continent and our insular possessions. i would let germany understand now that her plan has dismally failed. i would let her understand now that no matter how long she fights, or what sacrifice she makes, or what price she pays, however much territory she may occupy, or whatever worlds she may conquer, there is one place which she will never soil again with the tramp of the marching legions of her industrial army. that is the united states of america. i would divorce utterly and forever all german capital from american industry'." ii--wartime food and price problems intricacies of a perplexing and critical situation which taxed the ingenuity of statesmen of all the belligerents europe was financially plunged into anarchy in august, 1914. all the exchanges were demoralized, checks were not cashed, the five-pound note became a worthless scrap of paper. the only thing that counted was gold and goods. prices advanced to prohibited levels. england, in danger of a food famine, set up a food control committee. then the discovery was made that the country was short of sugar. this shortage was due to the fact that the war broke out when supplies from cuba and elsewhere were stopping and when the german imports had not begun. sugar was bought to the value of $86,000,000 from every country which had it to sell. when the sugar merchants began to put the price up, purchasing was stopped for the time. later the government managed to secure the quantity required, because it became the only sugar importer. it also supplied the french government with sugar at cost price. any further difficulties with the sugar supply were due to freight shortage. by this system sugar was cheaper in england than in any other belligerent country and the exchequer took in $34,000,000 in the way of taxes, after raising the rate from 45¢ per hundred weight to $3.36 per hundred weight. in its control of the meat situation, the government put itself in a dominating position by seizing all steamers that had refrigerating space. enormous quantities of canned meats were imported from the united states from the american packing firms, but the government practically created a state monopoly in frozen meat. this product was distributed by it to all the other belligerents, except russia. the purchase of wheat was entrusted to a large importing house, which acted as an agent of the government. for supplying the fish market, a service of fishing boats was maintained and a deal with norway was made by which the whole norwegian fish supply was secured: "the british government went into the beef business in order to supply the troops at home and overseas with chilled meat. it did so at an average cost of 12 cents per pound. it also supplied all meat of this kind required by the french army, the italian army, the belgians, and the serbians. the amount of meat required for the british and french armies was over 50,000 tons per month; for the italian army about 10,000 tons per month. these quantities increased proportionately with the additions to the forces. having created a state monopoly in the importation and control of chilled meat, the government had to make provisions for domestic supplies outside the army. the board of trade arranged to sell to british firms the surplus meat at market prices. they obtained a small commission, lower than it hitherto received from traders. sales to speculators were prohibited. "wheat was quite as important as sugar and beef, although there was less risk of a world-corner. wheat was purchased for government account on somewhat similar lines as beef. one of the largest importing houses was commissioned to do all the purchasing, while the other houses held off, and it was four months before the corn trade, on the selling side, discovered that purchases were made for the state. naturally the commission which the state paid on such transactions was nominal. the british government organization bought and shipped wheat, oats, fodder, etc., for italy. the french government bought their civil _ravitaillement_ wheat through the hudson bay company. large purchases were made in canada on behalf of the italian government." united states as food producer "it is hard to realize that the united states was in 1917 much less favorably situated for producing a huge food surplus than it was thirty years before. in the interim industrialism had made huge strides in the land, and a great urban population has risen to eat up a large part of the surplus of food produced by the farms. this change is indicated by a growth of the urban population in the twenty years from 1890 to 1910 from 22,720,223 to 42,625,383, or more than 80 per cent., while rural population during the same period increased from 40,227,491 to 49,348,883, or less than 25 per cent. if the same ratios have been maintained since 1910 urban population has now become one-half of the whole. in terms of food production decidedly more than one-half of our population now produces a very insignificant part of the food which it consumes, for the rural population includes all who live in towns of less than 2,500. the significance of the change is indicated by the following figures of the production, export, and consumption of typical food products. the comparison is between the average of the five-year period ending in 1895 and that ending in 1914. the average production of wheat per year for the former period was 476,678,000 bushels; for the latter 697,459,000 bushels, an increase of 46 per cent. between these periods domestic consumption increased from 310,107,000 to 588,592,000 bushels, or about 90 per cent., while exports decreased from 166,571,000 to 104,945,000 bushels, or 37 per cent. the average production of corn for the former period was 1,602,171,000 bushels; for the latter 2,752,372,000 bushels, or an increase of 72 per cent. consumption increased from 1,552,003,000 to 2,790,962,000 bushels, or 79 per cent., while exports decreased from 50,168,000 to 41,509,000 bushels, or 17 per cent. the figures upon sugar, beef, pork, and other staples lead to similar conclusions. the growth of industrial centers has given us an increasingly urban population which has been consuming a larger and larger part of the food surplus." the food controller no policy of _laissez-faire_ for handling the food situation was possible. the need of direction was paramount and required administrative talent of a high order. fortunately the united states met this demand. the work of herbert m. hoover was one of the main factors in securing the allied victory. this was recognized by as conservative an organ of public opinion as the london _economist_, which speaks of him as an unimpeachable authority and as the organizer of the allied victory. his experience is a tribute to the wonderful readiness and self-sacrifice shown by the americans in the matter of food consumption and to the untiring and increasing success of our fleet in combating the submarine. how much success in the war depended upon food supplies may be gauged from the panicky feeling prevailing in government quarters in england when it was reported in the winter of 1917--18, that the american wheat surplus had been used up. lord rhonda, the british food controller, cabled to mr. hoover--"we are beaten, the war is over." then began the era in the united states of wheatless days and war bread. the result of this period of national abstinence enabled the exportation to europe of about 150,000,000 bushels of wheat. a british member of the allied food commission said it was very remarkable to see a whole nation denying itself of all wheat products, "not because it was short but because it wanted to assist." this rationing was accomplished with very little exercise of authority, and the peril of the defeat of the allies by famine was averted. [illustration: centres of live stock production throughout the world] america's contribution in food to the allies mr. hoover in a letter to president wilson stated that the total value of american food shipments to allied countries for their armies, for the civilian population, belgium relief and red cross, amounted to about $1,400,000,000 for the fiscal year, 1918: "shipments of meats, fats, and dairy products were as follows, pounds. fiscal year, 1916--17 2,166,500,000 fiscal year, 1917--18 3,011,100,000 increase 844,600,000 "'our slaughterable animals at the beginning of the last fiscal year were not appreciably larger in number than the year before, and particularly in hogs; they were probably less'; so, as mr. hoover points out, 'the increase in shipments is due to conservation and the extra weight of animals added by our farmers.' our shipments of cereal and cereal products have been, bushels. fiscal year, 1916--17 259,900,000 fiscal year, 1917--18 340,800,000 increase 80,900,000 "the total shipment of wheat from our last harvest was about 141,000,000 bushels, with 13,900,000 of rye, a total of 154,900,000 bushels, of prime breadstuffs. mr. hoover notes a remarkable achievement in connection with the wheat shipments: "'since the urgent request of the allied food controllers early in the year for a further shipment of 75,000,000 bushels from our 1917 wheat than originally planned, we shall have shipped to europe, or have _en route_, nearly 85,000,000 bushels. at the time of this request our surplus was already more than exhausted. "'this accomplishment of our people in this matter stands out even more clearly if we bear in mind that we had available in the fiscal year 1916--17 from net carry over and a surplus over our normal consumption about 200,000,000 bushels of wheat, which we were able to export that year without trenching on our home loaf. this last year, however, owing to the large failure of the 1917 wheat crop we had available from net carry over and production and imports only just about our normal consumption. therefore, our wheat shipments to allied destinations represent approximately savings from our own wheat bread.' "the effort and sacrifice made by our people to do this are more fully appreciated when we consider that last year's wheat crop was a small one and that the corn failed to mature properly. mr. hoover concludes his letter with these words of warm appreciation of the people who have made up the army of which he has been the commanding general: "'i am sure that all the millions of our people, agricultural as well as urban, who have contributed to these results should feel a very definite satisfaction that, in a year of universal food shortages in the northern hemisphere, all of these people, joined together against germany, have come through into sight of the coming harvest, not only with health and strength fully maintained, but with only temporary periods of hardship. the european allies have been compelled to sacrifice more than our own people, but we have not failed to load every steamer since the delays of the storm months of last winter. "'our contributions to this end could not have been accomplished without effort and sacrifice, and it is a matter for further satisfaction that it has been accomplished voluntarily and individually. it is difficult to distinguish between various sections of our people--the homes, public eating places, food trades, urban or agricultural populations--in assessing credit for these results, but no one will deny the dominant part of the american women'." agriculture and the war the significance of the strides made in agricultural productivity by which mr. hoover's food campaign was made possible and successful is brought out in the report of the secretary of agriculture for 1918: "the efforts put forth by the farmers and the agricultural organizations to secure increased production can perhaps best be concretely indicated in terms of planting operations. the size of the harvest may not be the measure of the labors of the farmers. adverse weather conditions and unusual ravages of insects or plant diseases may partly overcome and neutralize the most exceptional exertions." acreage under cultivation "the first year of our participation in the war, 1917, witnessed the nation's record for acreage planted--283,000,000 of the leading cereals, potatoes, tobacco, and cotton, as against 261,000,000 for the preceding year, 251,000,000 for the year prior to the outbreak of the european war, and 248,000,000 for the five-year average, 1910--14. this is a gain of 22,000,000 over the year preceding our entry into the war and of 35,000,000 over the five-year average indicated. even this record was exceeded the second year of the war. there was planted in 1918 for the same crops 289,000,000 acres, an increase over the preceding record year of 5,600,000. it is especially noteworthy that, while the acreage planted in wheat in 1917 was slightly less than that for the record year of 1915, it exceeded the five-year average (1910--14) by 7,000,000; that the acreage planted in 1918 exceeded the previous record by 3,500,000; and that the indications are that the acreage planted during the current fall season will considerably exceed that of any preceding fall planting." yields of principle cereals "in each of the last two years climatic conditions over considerable sections of the union were adverse--in 1917 especially for wheat and in 1918 for corn. notwithstanding this fact, the aggregate yield of the leading cereals in each of these years exceeded that of any preceding year in the nation's history except 1915. the estimated total for 1917 was 5,796,000,000 bushels and for 1918, 5,638,000,000 bushels, a decrease of approximately 160,000,000 bushels. but the conclusion would be unwarranted that the available supplies for human food or the aggregate nutritive value will be less in 1918 than in 1917. fortunately, the wheat production for the current year--918,920,000 bushels--is greatly in excess of that for each of the preceding two years, 650,828,000 in 1917 and 636,318,000 in 1916, and is next to the record wheat crop of the nation. the estimated corn crop, 2,749,000,000 bushels, exceeds the five-year pre-war average by 17,000,000 bushels, is 3.4 per cent. above the average in quality, and greatly superior to that of 1917. it has been estimated that of the large crop of last year, approximately 900,000,000 bushels were soft. this, of course, was valuable as feed for animals, but less so than corn of normal quality. it should be remembered, in thinking in terms of food nutritional value, that, on the average, only about 12 per cent. of the corn crop is annually consumed by human beings and that not more than 26 per cent. ever leaves the farm. it should be borne in mind also that the stocks of corn on the farms november 1, 1918, were 118,400,000 bushels, as against less than 35,000,000 bushels last year, and 93,340,000 bushels, the average for the preceding five years. it is noteworthy that the quality of each of the four great cereals--barley, wheat, corn, and oats--ranges from 3 to 5.4 per cent., above the average. "the tables printed below may facilitate the examination of these essential facts: need of food conservation statistics have not yet been published as to the comparative food production before the war and during the war years. statistics of this kind would go a long way towards settling the question whether high prices were due to currency inflation or due to a scarcity of food. it must be remembered that the arguments on both sides are expressed very dogmatically. take, for example, the following passage from an address by mr. moulton: "the food problem," he says, "goes much deeper than conserving the use of an existing stock of foodstuffs. the real food problem is how to secure a supply of food large enough to meet the continuous requirements of this nation and our allies. this is more a question of production than of consumption. that is to say, conservation in consumption is less important than large production. there is no possible escape from a substantial shortage of the necessities of life." ========================================================================= acreage of crops in the united states. [figures refer to planted acreage.] ------------------------------------------------------------------------ | 1918, | 1917, | | | annual crop |subject to |subject to | 1916 | 1914 | average | revision | revision | | | 1910--1914. --------+-----------+-----------+-----------+--------------+------------ cereals | | | | corn |113,835,000|119,755,000|105,296,000| 103,435,000| 105,240,000 wheat | 64,659,000| 59,045,000| 56,810,000| 54,661,000| 52,452,000 oats | 44,475,000| 43,572,000| 41,527,000| 38,442,000| 38,014,000 barley | 9,108,000| 8,835,000| 7,757,000| 7,565,000| 7,593,000 rye | 6,119,000| 4,480,000| 3,474,000| 2,733,000| 2,562,000 buckwheat 1,045,000| 1,006,000| 828,000| 792,000| 826,000 rice | 1,120,400| 964,000| 869,000| 694,000| 733,000 kafirs | 5,114,000| 5,153,000| 3,944,000| | --------+-----------+-----------+-----------+--------------+------------ total |245,475,400|242,810,000|220,505,000|[7]208,322,000[7]207,420,000 ========================================================================= vegetables | | | | potatoes| 4,113,000| 4,390,000| 3,565,000| 3,711,000| 3,686,000 sweet | 959,000| 953,000| 774,000| 603,000| 611,000 potatoes| | | | | --------+-----------+-----------+-----------+--------------+------------ total | 5,072,000| 5,343,000| 4,339,000| 4,314,000| 4,297,000 ========================================================================= tobacco | 1,452,900| 1,447,000| 1,413,000| 1,224,000| 1,209,000 cotton | 37,073,000| 33,841,000| 34,985,000| 36,832,000| 35,330,000 --------+-----------+-----------+-----------+--------------+------------ grand |289,073,300|283,441,000|261,242,000|[7]250,692,000[7]248,256,000 total.| | | | | --------+-----------+-----------+-----------+--------------+------------[7] excluding kafirs. production in the united states [figures are in round thousands; i. e., 000 omitted.] ====================================================================== crops | 1918 | 1917, | 1916 | 1914 | annual |(unrevised| subject | | | average | estimate | to | | |1910--1914 | november |revision.| | | | 1918). | | | | -------------------+----------+---------+---------+---------+-------- cereals | | | | | corn | bush| 2,749,198|3,159,494|2,566,927|2,672,804|2,732,457 wheat | do| 918,920| 650,828| 636,318| 891,017| 728,225 oats | do| 1,535,297|1,587,286|1,251,837|1,141,060|1,157,961 barley | do| 236,505| 208,975| 182,309| 194,953| 186,208 rye | do| 76,687| 60,145| 8,862| 42,779| 37,568 buckwheat | do| 18,370| 17,460| 11,662| 16,881| 17,022 rice | do| 41,918| 36,278| 40,861| 23,649| 24,378 kafirs | do| 61,182| 75,866| 53,858| | |-----+----------+---------+---------+---------+-------- total | do| 5,638,077|5,796,332|4,792,634|4,983,143|4,883,819 |======================================================== vegetables | | | | | potatoes | bush| 390,101| 442,536| 286,953| 409,921| 360,772 sweet | do| 88,114| 87,141| 70,955| 56,574| 57,117 potatoes| | | | | | beans | do| 17,802| 14,967| 10,715| 11,585| (commercial)| | | | | | onions, fall | do| 13,438| 12,309| 7,833| [8] | commercial| | | | | | crop| | | | | | cabbage | tons| 565| 475| 252| [8] | (commercial)| | | | | | fruits | | | | | peaches | bush| 40,185| 45,066| 37,505| 54,109| 43,752 pears | do| 10,342| 13,281| 11,874| 12,086| 11,184 apples | do| 197,360| 174,608| 204,582| 253,200| 197,898 cranberries, | bbls| 374| 255| 471| 644| 3 states| | | | | | miscellaneous | | | | | flaxseed | bush| 14,646| 8,473| 14,296| 13,749| 18,353 sugar beets | tons| 6,549| 5,980| 6,228| 5,585| 5,391 tobacco | lbs| 1,266,686|1,196,451|1,153,278|1,034,679| 991,958 all hay | tons| 86,254| 94,930| 110,992| 88,686| 81,640 cotton |bales| 11,818| 11,302| 11,450| 16,135| 14,259 sorghum sirup|galls| 29,757| 34,175| 13,668| | peanuts | bush| 52,617| 56,104| 35,324| | broom corn, 5| tons| 52| 52| 39| | states| | | | | | clover seed | bush| 1,248| 1,439| 1,706| | ---------------------------------------------------------------------[8] no estimate the same point of view is expressed in the following extract: "it is not usually understood that the chief cause of the enormously high prices of the necessities of life at the present time is their relative scarcity. the supply of necessities in this country has not materially increased, but the demand for them, owing to the requirements of our allies, has enormously increased. we can prevent a still further soaring of prices only by increased production of necessities--increased production to be accomplished, let it be repeated through a diversion of productive power from the non-essential lines. "the wealthy have often been urged since the war started to spend lavishly on luxuries and to economize on necessities in order that the necessities will remain for consumption by the poor. this is sheer shortsightedness; for the energy devoted to the production of luxuries for consumption by the wealthy would, if diverted to the production of essentials, give us a sufficient supply of the necessities of life that all might have them in relative abundance. the result of a policy of spending lavishly on luxuries is an inadequate production of necessities and hence prices so high as to cause real privation among the masses. those engaged in producing luxuries obviously cannot at the same time be engaged in producing necessities." in a war of attrition, physical deterioration of the masses of society in consequence of inadequate nourishment was certain to result in a serious decline in national morale, and this was a decided factor in the final outcome of the struggle. food and other physical necessities would win the war. mr. f. a. vanderlip used the same argument for economies: "thus the diversion of productive resources to public ends requires of each of us a voluntary or compulsory rearrangement of individual and household budgets and radical changes in the habits of our lives. we must encourage direct diversion by reducing to a minimum our consumption of articles which can be used by our soldiers. but it is even more important that we give up the consumption of non-essential things in order that the productive energy which they embody be devoted to the accomplishment of the purpose in hand. the amount which we are forced to give up or voluntarily surrender constitutes a surplus over private consumption that measures the extent of our ability to wage war. we are fighting a nation which continues to be willing to reduce private consumption to the barest subsistence minimum. unless a large surplus is produced we can gain no active participation in war and cannot hope for a victorious peace. the larger the surplus the shorter the war will be, and the nearer we are to victory." great britain's food danger under the long rgime of free trade great britain depended upon other countries for its food supply. to offset the submarine campaign earnest appeals were made to make england self-supporting in this respect. the appeals were answered and were given enthusiastic popular support. what strides were made in england's agriculture since the war began can be seen from a paragraph in the london _new statesman_: "in 1918, as against 1916, the acreage (england and wales) under oats is up by 35 per cent.; that under wheat by 38 per cent.; that under barley by 11 per cent.; that under other grain by 69 per cent.; that under potatoes by 50 per cent. the number of allotments (1,300,000) has increased by 140 per cent. the report of the food-production department ... is as satisfactory as we could wish; the number of acres under cultivation in the united kingdom has gone up by over four millions in two years, all records being broken. "this figure ignores the great increase in gardens and allotments, and it is estimated that, on the present scale of consumption, this year's home harvest will be sufficient to feed the population for forty weeks. the supply before the war was only enough to meet a ten weeks' consumption. breadstuffs are not everything; and even of them one-fifth still has to be provided. but granted that we can keep this rate of production up, and--in spite of the drains of the army upon our labor--can, with the help of women and prisoners, save what we produce, the wolf has now been driven a considerable distance from the door. with sinkings diminishing and ship-building on the increase, we can, we think, congratulate ourselves on the final failure of the german attempt to starve us out." acreage increase due to women's labor "much of the increased cultivation has been done by women, we are told, and mr. prothero, the british minister of agriculture, had a cheerful picture to paint when appealing for recruits for 'the women's land army.' as reported by the london _morning post_ his speech ran: "'today (1918) the acreage under wheat, barley, and oats is the highest ever recorded in the history of our agriculture. that is one of the finest achievements of the war. in the same period the number of allotments has been increased by 800,000, which means something like 800,000 tons of produce raised additionally a big saving in transport, and an improvement socially and morally. this advance has been effected in spite of the fact that there are 500,000 fewer laborers on the land. it is because of that decrease of labor that the appeal is being made for more women. i do not believe that any assembly of british farmers will hold back men who can possibly be spared when the alternative is our troops being driven back by overwhelming numbers and butchered on the beach by german guns. the promise of the harvest is not yet fulfilled, and there is much to be done. women's work on the land is a vital necessity. i know the work they are asked to do is hard, bringing with it discomforts, and, comparatively speaking, is poorly paid. life on the land is not luxurious, but it brings health with it, and the women have the conviction that they are doing something in one of the most important fields to make victory sure.'" evidences of food shortage one of the by-products of the food situation in england was the suffering occasioned by the scanty food supply on the canine population of the island. the london _times_ of june, 1918, contained the following pathetic paragraph: "considerable alarm has been caused among dog owners by the intimation that stocks of biscuits are practically exhausted. not only is this the case, but the prospects of more flour being released for their manufacture are also remote unless some action is taken by the government to insure further importations of low-grade flours suitable for the purpose. "the state of things is undoubtedly acute. until the food economy campaign set in early last year most households provided enough waste to feed a dog, and where more than one was kept butchers' offals could be had for a few pence. these sources of supply having now vanished, much ingenuity will have to be exercised in order to preserve the family friend and guard from extinction. blood, steamed until it is of a solid consistency, fish heads, and the heads of poultry offer some alternatives. rice, oatmeal, and other cereal products may not be used. "the whole question of dogs is engaging the closest attention of the authorities. admittedly the problem of reducing the numbers is beset with difficulties, and, whatever is done, it is extremely unlikely the one-dog owner will be disturbed, the government recognizing the sentimental forces involved, to say nothing of the utility value of many breeds." [illustration: members of "the women's land army" in england girls weeding frames in which cauliflower plants were set out to be ready for market in the early spring. copyright by underwood & underwood] but while english dogs were threatened with starvation, dogs of germany were having a still worse time. numerous cable paragraphs were published giving the price of dog flesh in various german cities. indeed, from all over germany, at the closing period of the war, the hope of drawing upon russian food supplies was seen to be illusory. there was much talk of getting food from the ukraine, but this was probably used to keep up popular morale. the situation in the ukraine did not encourage german hopes. this was frankly admitted by the _frankfort zeitung_: "the stores and warehouses in the ukraine are almost emptied. the peasants' stocks are depleted, while the best seed corn has been used to feed cattle or to supply a secret still, which nearly every household possesses. "the outlook for next harvest is most unpromising. the peasants have plundered the estates, destroyed farm buildings and machinery, and have stolen or slaughtered most of the cattle. no labor is available for cultivation, and there are no facilities for harvesting the next crop, while the sugar industry is confronted with ruin, owing to the decrease of beet cultivation." food control for neutrals it is interesting to study the effect of the war on the food situation of the neutral powers. in scandinavia, there was at first a panicky feeling of a world-wide catastrophe; then there came the realization of an unparalleled chance for making profit. the international shortage of tonnage made freight rates soar. shipping shares became attractive. then came the submarine sinkings, and the refusal of the allies to allow goods to be imported into scandinavia for the sole purpose of selling them to the central powers. imports fell off rapidly. everything which could be sold had been sold in the beginning of the war. the next step was the placing of an embargo on exports by the scandinavian governments: "the index of the swedish official list of laws, dated october 31, 1916, forbidding exports, mentioned more than 1,100 articles, and even that was expressly called only a help to find the commodity looked for and did not pretend to be a complete index. the result was, of course, that trade, compared to former volumes, decreased very considerably, and the energy as well as the wealth actually earned was turned towards speculation on the local exchange. "to supply all the people of scandinavia with the necessities of life was a problem. law upon law, one governmental decree after the other, tried to regulate the distribution of commodities as well as their prices. the majority of the people were in actual need. prices soared, and it really did not matter to the ordinary man whether the cause of this rise in the cost of living was a too big circulation of paper currency or a limited supply of goods. what confronted him was the fact itself, not theories, and he realized all too well that he could not make 'both ends meet.' there was, generally speaking, no doubt that under normal circumstances the laws of supply and demand will work satisfactorily to the community and that artificial interference was only harmful. the supply being short, consequently the demand and the consumption must be controlled to secure a fair distribution. sugar cards, which had been used in sweden for months, and which were decreed in denmark to go into force january 1, 1917, were an example of the means employed to control the distribution and to prevent waste to supplies. "while on the one hand one saw new millionaires permit themselves to indulge in the most senseless luxuries, which incidentally added considerably to the high cost of living under circumstances like these, the less well-to-do actually were without many things formerly considered necessities. collections of money and foodstuffs were made all over scandinavia to help the less fortunate through the winter. the poorer population of the cities was especially considered. it was even difficult to get a roof over one's head. proposals and counter proposals to remedy the evil were forthcoming, but no real remedy seemed to be in sight." feeding europe's starving millions a preliminary accounting was rendered on december 1, 1919, by herbert c. hoover, covering the $100,000,000 fund appropriated by congress for the relief of starving europeans. from mr. hoover's report it appears that in payment for relief supplied to eight european countries mr. hoover decided to accept their notes bearing 5% interest. mr. hoover's report stated: "about 88 per cent. of the relief supplies furnished were sold under contract to the various governments in the relief areas. for all such sales these governments gave their special treasury notes in a form approved by the united states treasury, bearing 5 per cent. interest, due june 30, 1921, to june 30, 1924. it was impossible to obtain reimbursement in cash because the currency in the countries to which these supplies were sent was impossible to convert into foreign exchange, except in comparatively insignificant amounts. poland the biggest debtor "i give herewith approximate list of the notes of each government, which we expect to turn over to the united states treasury. poland $57,000,000 czechoslovakia 6,750,000 armenia 10,000,000 russia. 5,000,000 esthonia 2,300,000 latvia 3,000,000 lithuania 700,000 finland 4,000,000 total $88,750,000 "the remaining 12 per cent. of the supplies was donated in assistance to private organizations set up in each country under direction of the american relief administration for the purpose of furnishing food on a charitable basis to undernourished children. for such supplies it was, of course, impossible to obtain reimbursement. this service has contributed greatly to stabilizing the situation in those countries, aside from the physical benefits to more than 3,000,000 undernourished children, to whom the war threatened serious and permanent injury. certainly this service is one for which the name of america will always be held in deepest gratitude." food conditions after the armistice [illustration: a map issued by the food administration to show food conditions in europe after the signing of the armistice.] it is impossible in words to show what the food conditions were in europe after the armistice was signed. the united states food administration issued a statement that there were 420,000,000 people in europe with food supplies sufficient to last only until next harvest for a small proportion of them. some countries had to be supplied at once; others, it was believed, could help themselves temporarily, provided they could be given guarantees of food for the future. many countries were devastated, undernourished and stripped bare of food and agricultural equipment because of enemy occupation. a graphic picture of the situation was presented by the food administration in the hunger map of europe. new factors after november, 1918 an official survey of how cessation of active fighting introduced new factors in the food situation is presented in a publication of the agricultural department, july, 1919. "with the signing of the armistice and the cessation of active fighting, new factors were introduced which affect the food situation. one of these was the step taken to release shipping as rapidly as possible, with the probable result that the agricultural products of the more distant producing countries will again largely appear on the markets of europe. the channels of trade are being reëstablished and food supplies will be sought wherever they can be secured most cheaply. "a provision of the armistice required the immediate evacuation by the germans of a large area in belgium, france, alsace-lorraine, luxemburg, and other territory. as a result many millions of people have been added to those that must be aided and fed by the allies, and a material increase in the amount of foodstuffs to be imported has been made necessary. it may be found, too, that turkey, austria, and even germany will have to draw on outside supplies to meet their needs. "the demobilization of the european armies will permit men to return to the farms, and it may be expected that under the stimulus of an urgent demand for food an attempt will be made this year to increase food production in all the affected european countries. the devastated regions will be slow in recovering. much time and labor will be required to construct necessary homes and farm buildings, level the ground, remove obstructions, and in other ways prepare for a resumption of regular agricultural activities. but it must be remembered that as compared with the whole of the countries concerned these areas are small and should not affect the results in any large way. "in many sections of europe there is a shortage of horses and other work stock, farm machinery, seeds, and fertilizers. in these localities a normal production should not be expected, but it is evident that under favorable conditions a material increase over the past year will be secured. cereal requirements for 1919 "the following table presents estimates of the cereal requirements for 1919 and shows the world balance as deficit or surplus. figures for the cereals, except rice, represent millions of bushels. ========================================================== import requirements |wheat| rye|barley| oats| corn| rice, | | | | | | hulled --------------------+-----+----+------+-----+-----+------ europe | | | | | |_million_ | | | | | | _pounds_ allies | 525| 25| 50| 150| 220| 1,945 neutrals | 124| 40| 30| 38| 78| 302 |-----+----+------+-----+-----+------ | 649| 65| 80| 188| 298| 2,247 |-----+----+------+-----+-----+------ germany | 68| | 149| 3| 32| 438 austria-hungary | 11| | | 2| 15| 183 |-----+----+------+-----+-----+------ total europe | 728| 65| 22| 193| 345| 2,868 |-----+----+------+-----+-----+------ other countries | | | | | | 7,411 |-----+----+------+-----+-----+------ grand total | | | | | | 10,279 |===================================== surplus (estimated):| | | | | | canada | 100| | 50| 75| | argentina | 185| | | | 90| australia | 210| | | | | india | | | | | | 18,000 other countries | | | | | | 7,400 (pre-war) | | | | | | |-----+----+------+-----+-----+------ total, except united| 495| | 50| 75| 90| 25,400 states | | | | | | |===================================== net deficit | 233| 65| 179| 118| 255| |===================================== united states, 1918 | | | | | | production | 917| 89| 250|1,538|2,583| 1,123 consumption | 640| 32| 130|1,254|2,730| 816 |-----+----+------+-----+-----+------ surplus | 277| 57| 120| 284| | 307 deficit | | | | | 147| |-----+----+------+-----+-----+------ world | | | | | | surplus | 44| | | 166| | 14,428 deficit | | 8| 59| | 402| |-----+----+------+-----+-----+------ note.--estimates of european crop and live-stock production, consumption, and stocks on hand, surplus or deficiency, are based on incomplete data, which are subject to change as more complete data become available. "the figures on import requirements of the allies and neutrals are those estimated for 1917--18, while the estimated requirements of germany and austria are pre-war net imports. "the rice surplus might be required in the orient for countries whose crops may have failed. miscellaneous crop requirements, 1919. ================================================================= import requirements of- | cotton (500| tobacco| flaxseed |pounds bales).| (million| (million | | pounds).| bushels). ----------------------------+--------------+----------+--------- europe | | | allies, including japan | 8,058,000| 340| 21.6 neutrals | 720,000| 150| 7.9 germany and austria-hungary | 2,932,000| 355| 15.7 (pre-war boundaries) | | | other countries | 1,200,00| 17| ----------------------------+--------------+----------+--------- total requirements | 13,010,000| 1,022| 45.2 |==================================== surplus (estimated) | | | countries, except united | 2,680,000| | 40 states, recently reported | | | (1918) | | | average, 1900--1913, for | 500,00| 650| [9]5.7 other surplus countries | | | |--------------+----------+--------- total, except united states | 3,180,000| 650| 40 united states | | | production, 1918 | 11,700,00| 1,340| 14.7 consumption | 6,600,000| 720| 26.7 surplus | 5,100,000| 620| deficit | | | 12 world | | | surplus | | 148| deficit | 4,730,000| | 17.2 ----------------------------|--------------+----------+---------[9] russia note.--the figures are based on pre-war averages, 1909--1913, which may be considerably changed by post-war conditions. "the cotton table is based upon normal industrial conditions in all the consuming countries and upon the restoration of the spinning industry in the devastated regions. if conditions do not reach normal, and if the industry is not restored, the consumption of cotton will be substantially less. with practically complete restoration, cotton consumption may well be expected to equal the normal or pre-war times on account of the present shortage of cotton goods in various countries. the economies which the peoples of europe must practice for some years to come must be considered." central europe in dire want news from europe showed everywhere acute suffering from lack of food; even in france the country districts were badly off. a member of the federal food administration reported that bread was practically the only food that anyone could afford. president wilson referred to this subject in the address with which he accompanied his announcement of the terms signed by germany. he definitely took a stand in favor of provisioning the country, explaining that by use of the idle tonnage of the central empires it ought presently to be possible to lift the fear of utter misery, "'from their oppressed populations and set their minds and energies free for the great and hazardous tasks of political reconstruction which now face them on every hand. hunger does not breed reform; it breeds madness and all the ugly distempers that make an ordered life impossible. "'for with the fall of the ancient governments which rested like an incubus on the peoples of the central empires has come political change not merely, but revolution.' "putting this danger into a nutshell, the _wall street journal_ asks whether central europe shall have 'bread or bolshevism?' this strong exponent of a firm social order is of the opinion that 'we must recognize the fact that hunger breeds anarchy, and that the most effective weapon against bolshevism is a loaf of bread.' victory has made the allied peoples, 'through their governments, responsible for world conditions,' in the opinion of this paper as well as of the montreal _star_ quoted above, and food administrator hoover declares that 'the specter of famine abroad now haunts the abundance of our tables at home.'" to prevent famine in germany both in england and in france there was official recognition of the need of preventing famine conditions in germany. it was believed that large imports of wheat could be brought from australia and india. the _times_ (london) said: "mr. hoover expects that enough wheat will be brought from those countries to permit reduction of the percentage of substitutes now required in bread, and thus release fodder grain for dairy use. the change, it is said, may take place within three months. but it will not reduce the total of foodstuffs which we must supply. he predicts that 'our load will be increased,' and that there will be a greater demand for economy. "the available quantities of grain are sufficient. from our great crop of wheat we can spare more than 300,000,000 bushels. canada, with a yield almost equal to last year's, has a surplus. while our crop of corn shows a decline of 441,000,000 bushels from that of a year ago, it is very near to recent averages and of very good quality. the output of home gardens, increased by one half, is not included in official reports, although its value exceeds $500,000,000. australia has on hand the surplus of three wheat crops, india is said to have 120,000,000 bushels for shipment, and much can be taken from argentina. as a rule, our war partners in europe increased their crops this year. england gains 30,000,000 bushels of wheat, italy 24,000,000, and france 35,000,000. but other crops in france are short, and the nutritive value of the entire yield is less than that of last year's harvest. it is well known that the central powers have very little food; and no help can come to them from the east. before the war russia exported a large surplus of wheat. many of her people are now starving. so far as can be learned, she has no grain to sell. bulgaria and rumania have the smallest crops in fifty years. germany and austria can get no grain from the northern neutrals; we are sending wheat to them. there is food enough to supply the wants of our european friends and foes until the next harvest if it can be carefully distributed. but if the plans for helping those who have fought against us, as well as our partners in the war, are carried out, the american people must practice economy and submit to restrictions for some time to come." [illustration: copyright underwood & underwood a food riot in sweden news from europe immediately following the armistice showed everywhere acute suffering from lack of food. a member of the federal food administration reported that bread was practically the only food that anyone could afford.] sugar distribution among the multiform activities of the american food administration, the distribution of sugar was most difficult. america had to supply sugar to the allies and retain enough for the use of its own people. the matter of the feeling of personal self-sacrifice was difficult enough but there was the further question of how to organize and allocate distribution. the government had to decide the amount to be distributed to sugar-using industries. these industries had to be classified. for the manufacture of soft drinks it was decided to allow only one-half of the sugar used in normal times. bakers were given a 70 percent. allotment and hotels were permitted three pounds of sugar to every ninety meals served, including cooking. the sugar resources of the country, both cane and beet-root, were regulated by the so-called sugar equalization board. the operation of this body was explained officially in the _literary digest_: "this board is a part of the food administration and approved by the president. its purpose is to equalize the cost of various sugars and to secure better distribution. it can also coöperate with the allies in the procurement of sugar for them and in the adjustment of overseas freight rates. through capital supplied by the president through his special funds, it is enabled, when desirable, to buy up all available sugars at different prices and resell them at one fixed and even rate. "in other words, it provides a sort of vast storehouse of sugar, which may be doled out where it is most needed, at a price secure from the fluctuations otherwise inevitable in war time." keeping down the price what might happen without this sugar equalization board is illustrated by the civil war, when sugar, because of speculation, went as high as thirty-five cents a pound. and at _that_ time there was no world shortage of sugar. if there were no sort of sugar control today, it may readily be believed that the consumer might have to pay sugar prices soaring far above those civil war levels. "it costs more to produce and market some sugars (such as domestic beet sugar and louisiana cane) than it does others, such as cuban cane sugar. but that is no reason why the sugar manufacturer, whose production costs are high, should suffer, even to the extent of being forced out of the market. nor can the country afford to have this happen under present war time shortage of nearby supplies. consequently, when it becomes necessary, the sugar equalization board through its purchasing powers can insure fair profits to the manufacturers. then the board may resell this sugar, so that it reaches the public at a price lower than what the maximum would otherwise be." potato economy in order to remedy the generally inadequate food supply, it became necessary to treat such a standard food as the potato according to newly devised methods by which it could be stored for permanent use and widely distributed. in a lecture in economics given to a class of the national city bank, it was stated that, since the war began, it was found practicable so to preserve the potato by grinding and drying as to transform it from a local and perishable commodity to one which could be produced in almost unlimited quantities and distributed to any part of the world: "the potato can be grown in almost any temperate zone area, but theretofore nine-tenths of the world's crop of 6,000,000,000 bushels is grown in a half-dozen countries, and almost exclusively in europe and north america. germany, russia, austria-hungary, france, great britain, and the united states have produced in favorable years about 5,000,000,000 bushels, while the remainder of the world produced only 1,000,000,000. these six countries that produced five-tenths of the world's potato crop have only 450,000,000 peoples, while the potatoless world has a population of over 1,200,000,000, from which it appears that 'fully two-thirds of the population of the world live outside of the area.' "germany is by far the largest potato grower of the world, producing about 2,000,000,000 out of a world crop of 6,000,000,000 bushels, using them as a food for man and animals and the production of alcohol for use in her industries, and for the production of heat and power when necessary. next in line is european russia, with an annual crop of about 1,000,000,000 bushels; austria-hungary, 600,000,000; france, 500,000,000; united states, 450,000,000, and great britain, 300,000,000 bushels. "this new system of turning the potato into a condition in which it can be readily distributed has, quite naturally, developed in the country which has the largest potato production of the world, germany. factories for the crushing and drying of the potato and turning the product into flour for man, flakes and cubes for animals, or alcohol for the chemical industry and also as a substitute for petrol, have grown from about a dozen a few years ago to over 400 in 1914 and 840 in 1916, with a capacity to turn into this condensed form more than 1,000,000,000 bushels of potatoes a year. the reduction in weight is about 60 per cent., while the product can be preserved almost indefinitely. "the value of our own potato crop in the united states last year was approximately $540,000,000 at the place of production, and yet the amount entering international trade was only $4,000,000. our potato crop averages about 90 bushels per acre, that of european russia 100 bushels; france 135 bushels; austria 150 bushels; united kingdom 124 bushels, and germany 200 bushels and upward per acre, her large flavorless potato, grown chiefly for alcohol, having reached and sometimes exceeded 500 bushels per acre." fuel control the coal industry was the one basic war industry. food and munitions were dependent upon the coal supply. it is not necessary to elaborate this argument; it is patent to every one. the following table gives a view of the coal production of the most important countries: coal production in the leading coal-producing countries of the world ========================================================================= country | 1913 | 1914 | 1915 | 1916 | 1917 -------------+-----------+-----------+-----------+-----------+---------- united states|570,048,125|513,525,477|531,619,487|585,372,568|621,409,629 great britain|287,698,617|265,664,393|253,206,081|256,348,351|248,473,119 germany |278,627,497|245,482,135|235,082,000| | austria-hungary59,647,957| | | 30,896,388| 28,558,719 france | 40,843,618| 29,786,505| 19,908,000| 21,477,000| 28,960,000 russia | 35,500,674| | 27,820,632| 13,622,400| 13,266,760 belgium | 22,847,000| | 15,930,000| | japan | 21,315,962| 21,293,419| 20,490,747| 22,901,580| india | 18,163,856| | 17,103,932| 17,254,309| china | 15,432,200| | 18,000,000| | canada | 15,012,178| 13,637,529| 13,267,023| 14,483,395| 14,015,588 spain | 4,731,647| 4,424,439| 4,686,753| 5,588,594| holland | 2,064,608| | 2,333,000| 2,656,000| ========================================================================= the coal shortage a rapid advance in coal prices was inevitable under war conditions of unceasing demand and diminishing supply. says mr. william notz in an article in the _journal of political economy_, june, 1918: "the question of war-time coal prices offers many angles of interest. everywhere prices have increased far above pre-war levels. voluntary agreements on the part of producers and dealers to limit prices and profits have failed without exception. in all the leading coal-consuming countries of the world maximum prices had to be fixed sooner or later by government action. in every case the maximum mine prices are considerably above the average scale of prices obtaining in the years immediately prior to the war. in every country where maximum sales prices at the mines were fixed, liberal allowances were made for wage increases to mine workers. in great britain present maximum mine prices approximate 6s. 6d. above the average mine price which obtained during the year ending june 30, 1914. in the united states special mine prices have been fixed for each state, and in many cases also for certain coal fields within a state. the f.o.b. price for bituminous coal in pennsylvania was in 1913 $1.11 and in 1918, $2.60. anthracite increased to $4.00 ($4.55 for white ash broken). "in germany the total increase in mine prices of the rhenish-westphalian coal syndicate from the beginning of the war to january, 1917, approximated $1.25 per ton. "while a certain degree of uniformity is noticeable in the rise in price levels for coal at the mines in the countries where maximum prices have been fixed, an entirely different picture presents itself if we compare the maximum retail coal prices obtaining under government regulations in different sections of the same country. in most countries the national coal controller has established a uniform maximum margin of profit for all retail coal dealers, while local authorities have fixed maximum retail coal prices for their communities. by reason of the fact that in establishing maximum retail consumers' prices allowances had to be made for increased handling expenses, freight rates, middlemen's profits, war taxes, etc., retail coal prices at the present time universally show a very heavy increase over pre-war prices." fuel conservation measures american fuel control had to grapple drastically with a situation of shortage so dangerous that a catastrophe might have been precipitated at any moment. fuel administrator garfield issued orders for coal conservation of a most startling and unusual character. factories east of the mississippi were ordered shut down for five days beginning january 18, 1918. monday, furthermore, "was decreed a holiday for ten weeks on which offices, factories, and stores, except drug and food stores, must use only such fuel as is necessary to prevent damage. the order under which these restrictions were made, according to the fuel administration's statement to the press, was 'designed to distribute with absolute impartiality the burden,' and it added that the fuel administration 'counts upon the complete patriotic coöperation of every individual, firm, and corporation affected by the order in its enforcement.' we read further that the government aims to carry out its plan without 'undue interference with the ordinary course of business' and earnestly desires to 'prevent entirely any dislocation of industry or labor.' shut-down of industry to save coal "fuel administrator garfield hoped to save 30,000,000 tons of coal and to give the railroads a chance to straighten out the transportation tangle in the eastern states, according to a washington correspondent of the new york _tribune_, who notes that the measures were taken by the president and the government heads 'as a desperate remedy.' the closing down of the greater part of the nation's industries, trades, and business, says the new york _sun_, is the 'fruit of the insane, criminal starvation of the railroads by the government for a generation'; yet regardless of what it may cost any individual or group of individuals, the order is to be 'greeted without protest.' a surgeon was more welcome than an undertaker, in the view of this daily, and a disaster of the second degree and a temporary one is better than a disaster of the first degree and a permanent one. if the five-day term clears the railroads and the monday holidays set the trains running with their former clocklike regularity, the _sun_ added, we can resume being the 'busiest nation on earth, instead of being an industrial paralytic.' while recognizing that the order struck utica and all cities in the designated territory 'a staggering blow,' the _utica press_ holds that there is really nothing a patriotic city could do about it save to accept the situation with as good grace as possible, and if the result hasten the end all will agree that it was a good investment. the chicago _herald_ considered the order 'a tremendous decision' carrying with it a 'tremendous responsibility,' and while the chief industries of the principal part of a nation can not be stopped even for a day without disorganization and loss, still the country is willing to pay the price 'if it is the necessary cost of preventing the suffering of hundreds and thousands, perhaps millions, of individuals and of keeping certain indispensable war and public functions going at their accustomed speed.'" [illustration: copyright by underwood & underwood =harry a. garfield= as fuel administrator during the war he issued orders for coal conservation of a most startling character. factories east of the mississippi were ordered shut down for five days beginning january 18, 1918. monday was decreed a holiday for ten weeks "on which offices, factories and stores must use only such fuel as is necessary to prevent damage."] the government's explanation from fuel administrator garfield's explanation of the necessity of the order the following passage is taken: "the most urgent thing to be done is to send to the american forces abroad and to the allies the food and war supplies which they vitally need. war munitions, food, manufactured articles of every description, lie at our atlantic ports in tens of thousands of tons, while literally hundreds of ships, waiting, loaded with war goods for our men and the allies, can not take the seas because their bunkers are empty of coal. the coal to send them on their way is waiting behind the congested freight that has jammed all the terminals. "it is worse than useless to bend our energies to more manufacturing when what we have already manufactured lies at tidewater, congesting terminal facilities, jamming the railroad yards and side tracks for a long distance back into the country. no power on earth can move this freight into the war zone, where it is needed, until we supply the ships with fuel. "once the docks are cleared of the valuable freight for which our men and associates in the war now wait in vain, then again our energies and power may be turned to manufacturing, more efficient than ever; so that a steady and uninterrupted stream of vital supplies may be this nation's answer to the allies' cry for help.... "this is war. whatever the cost, we must pay it, so that in the face of the enemy there can never be the reproach that we held back from doing our full share. those ships, laden with our supplies of food for men and food for guns, must have coal and put to sea." garfield's plan for fuel economy, 1918--19 after the trying experiences of the winter of 1918, the fuel administration began to prepare in the following summer for another prospective shortage in coal supply. fortunately the following winter was remarkably mild throughout the country. but the plans outlined by the fuel administration are more than useful as a matter of record. they may be used as a model under other conditions of fuel shortage. the following passage from the fuel administration _bulletin_ illustrates the plan of campaign: "fuel economy is being given intensive study in connection with steam plants and industrial uses. an organization is already in existence, provided with engineers and inspectors who will visit every one of the two hundred and fifty thousand steam-producing plants in the country with a view to the improvement both of equipment and firing practice. this is expected to save twenty million tons of coal. "the economical use of power in factories will be in the hands of organized shop committees. the power loads of the public utilities throughout the country are being studied with a view to readjustments which will result in large saving. "in many cities the isolated power plants which use an extravagant amount of coal in proportion to the power produced will be urged to obtain more economical power from large producing stations. "the introduction of 'skip-stop' schedules on all the street railways is expected to save a million tons of coal. the consolidation of ice plants will yield a still larger tonnage. unnecessary outdoor lighting, including advertising signs and display illumination, will be reduced. hotels, office buildings, apartment houses, and public buildings are being asked to join in rigid economy of light and heat. "every american citizen will be asked to clean his furnace, keep it in repair, and study economical firing. instructions prepared by the highest authority will be furnished by the fuel administration. "if every one joins in this movement, from the owner of an industrial plant to the householder with his furnace and cook stove, if indoor and outdoor lighting is reduced to the amount absolutely needed, if houses are not overheated, the furnace dampers properly adjusted, and the ashes sifted, it will be possible to save from fifty to seventy-five million tons of coal without serious inconvenience to the american people." difficulties of fuel control some conception of the difficulties involved in the work of fuel control was set forth officially in a paper published by the fuel administration called _fuel problems in war time_. the production of coal, it pointed out, stands on a different basis from that of any other major industry of the country. the differences are illustrated in the following paragraphs: "as an illustration, consider the cotton crop with its millions of bales. every bale of cotton raised in the country last year amounted to no more than the coal moved in one and one-third days. or take the wheat crop for comparison. we hear of the immense preparations made during the fall months for moving the wheat crop; yet the weight of america's enormous wheat crop of 1917 is equaled by the coal mined and transported every eight days. "every year the miners go into the ground and dig out coal and the railroads ship it for hundreds of miles, dragging back the empty cars, until the amount mined equals two and one-fourth times the earth and rock removed in digging the panama canal. _it took sixteen years to dig the panama canal. our miners will dig two and one-half panama canals this year._ "in the mining of coal we are dealing with a task so gigantic that the wonder is not why we have not increased production to meet the demand, whatever that might be, but how, with the men and equipment overtaxed by the multiplicity of the demands of the war, we were able to increase the output fifty million tons in 1917, and will be able to add a probable fifty million tons to that high record the present year. "the wonder is increased when we note that every other coal-producing country now in the war found it impossible to maintain the pre-war production of coal. in every case the output is less now than before the war. in england seven and one-half per cent. less coal was produced the first year of the war than in the previous year and five per cent. less than this reduced output in the following year. america alone has been able to increase its production of coal in addition to meeting the thousands of other increases demanded by war preparation. coal and the steel supply "as every one knows, coal mining is very largely a matter of coal transportation. the most difficult task involved in an increase must fall upon the railroads. the wonderful work these railroads are doing is brought into bold relief when we remember that in 1914, when the great war started, the output of bituminous coal in the united states was 423,000,000 tons, and that in 1918 it promises to be nearly 200,000,000 tons greater. "apparently, this country today can furnish the steel required if only it can get the necessary coal. the work of the fuel administration during many months has been directed toward increasing coal production. these efforts have borne much fruit, miners are approaching one hundred per cent. service, while the railroads are outdoing themselves expediting the movement of coal cars from the mine to the consumer and back again. "but war's demands mount so rapidly that even with full speed ahead production can not make the pace. _a fuel deficit can be averted only by the most intensive conservation._ conservation, economy, savings, sacrifice must fill the gap between the possible increase of production and the greater increase of demand. if every user of coal will join the army of fuel conservationists, realizing that the need for steel to carry on this war is practically unlimited and that every ton saved means an additional five hundred pounds of steel, there is prospect--the figures show it--that the work of the miners will not be in vain. our increased production, plus conservation, the fuel administration believes, can furnish the coal, and hence the steel needed for the war, and still leave none of our people cold." side issues of fuel control economizing coal involved all kinds of unexpected side issues. as an illustration of the far extended reach of the fuel administration there was the example of the skip-stop plan in street railway traffic enforced by the federal administration. a writer in the chicago _engineering and contracting journal_ suggested, september 4, 1918, that the government should adopt and extend the policy of compelling individuals and corporations to use economic methods and machines: "conceive, if you can, what could be accomplished in america in the way of increased productivity and economy if our federal government had the authority to make every individual and every company adopt any method or device that had been proved to be economic. no engineer acquainted with the application of the principles of the science of management can doubt that if the universal adoption of those principles could be forced upon producers in general, this nation could increase its productivity fully 25 per cent. that would alone add more than twelve million dollars annually to the national income. but that is not all. the application of the principles of the science of management is only a fraction of the total enginery at our disposal. we have literally countless labor and material-saving machines and appliances that are scarcely used, although many of them are generations old. does this sound incredible? certainly not to any engineer who has a wide acquaintance with the literature of engineering. "take so simple a thing as the heat insulator for steam pipes and boilers. it has been known to engineers for nearly a century that by encasing boilers and pipes with magnesia or other suitable insulators, practically all heat radiation and conduction losses could be stopped. furthermore, it has been known to engineers that the saving in fuel thus effected would pay an annual interest of 20 per cent. on the cost of the heat insulator. but go into the basements of steam-heated residences if you want to get a conception of how rarely this knowledge is applied. the landlord may know that heat insulators would earn a big return on their cost, but since they would earn it for the tenant and not for himself, he does not cover the boiler and pipes adequately, if at all. the tenant, even if he knows the economics of heat insulating, will not spend the money for insulators whose use he may not enjoy for more than a year or two before he moves out. for similar reasons very few houses have double windows, although double windows will save fully 15 per cent. of the fuel required to heat the average house. on these matters the fuel administration has power to act, and it should act." fuel control in great britain coal mining was always one of the most significant elements in british trade. before the war 270,000,000 tons of coal were produced in the mines of great britain. parliamentary legislation of a most radical character dealing with the ownership and operation of coal mines was passed. the main provision of this legislation was described in the following passage from the london _morning post_: "briefly, the main provisions of the bill are the following: under the present finance act the state takes 80 per cent. of the profits in excess of those made in the two best of the last three pre-war years, or above 9 per cent. of the capital employed. the new scheme deprives owners of these statutory rights. it does away altogether with the percentage standard. output is made the chief determining factor in the regulation of the profits to be retained by the coal owner. the production of a colliery working under normal conditions during the two pre-war years, which has already been adopted under the finance act for the purposes of the excess profits duty, is adopted as the standard output. if that output is maintained in any accounting period under the new bill, the colliery owner will be guaranteed a profit equal to the average profit made in the standard period, whether he makes it or not. if his trading profits in the accounting period are greater than those in the standard period, the treasury will take its 80 per cent. of the difference under the authority of the finance act, the controller will retain 15 per cent. of it in order to create a fund for the compensation of the less fortunate collieries and the administration of his department, and the coal owner will be allowed to retain 5 per cent. of the excess. thus a colliery company with a profits standard of £50,000 will, if it maintain its standard output, continue to receive £50,000; if such company make, say, £70,000, it will be permitted, generally speaking, to retain only 5 per cent. of the extra £20,000, that is to say, £1,000, plus the statutory £200, or £51,200 in all; but in no case shall the retainable profits exceed five-sixths of the profits standard. in that illustration the scheme is to be seen at its best, and, under the conditions, it is not unreasonable." [illustration: photo by p. thompson drying fruit and vegetables to save tin and glass conservation became a great watchword during the world war. mr. f. p. lund of the u. s. department of agriculture showed women how tin and glass could be saved by drying fruit instead of canning it.] other forms of conservation the war industries board worked out a program for clothing conservation that showed a positive genius for detail. the most technical directions were issued regarding clothing. double breasted coats, for example, were eliminated and the board urged the wearing of sack suits only. even the complicated subject of handling women's attire had no terrors for the experts employed by the board. the characteristic features of its order can be judged by the following extract from the directions published on this subject: "all shoes, both leather and fabric, shall be restricted to black, white, and two colors of tan (the two colors of tan to be dark brown or tan and a medium brown or tan). "patent leather shall be black only. these color regulations do not apply to baby shoes made of fabrics. "shoe-manufacturers shall not, for the next six months, introduce, purchase, or use any new style lasts. they may replenish to cover wastage or to meet requirements on present lasts now in use in the manufacture of shoes. this is to be effective at once. by new style lasts is meant any lasts which have not actually been used for the manufacture of shoes in the past season. "the use of leather as a quarter lining in oxfords and low shoes is permitted only when used in skeleton form with fabric. leather linings will be permitted in evening slippers where uppers are made of fabrics. we advocate the use of full fabric linings for low shoes wherever possible. "the maximum height of women's shoes, both leather and fabric, shall not exceed eight inches (measured from breast of heel at side to center of top at side of finished shoes), size 4b to be the base measure. "the maximum height of misses' shoes, size 1½, shall not exceed 6½ inches (measured as above). "the maximum height of children's shoes, sizes 8½-11, shall not exceed six inches. "the maximum height of boys' and youths' shoes shall not exceed 5½ inches. "the maximum height of infants' shoes, sizes 4-8, shall not exceed 5½ inches. "the maximum height of button shoes for women shall not exceed 6½ inches. "the maximum height of all women's overgaiters shall not exceed eight inches, measured from breast of heel at side to center of top at side. "the maximum height of misses' overgaiters shall not exceed 6½ inches (measured as above)." leather conservation germany was not the only country prepared to employ substitutes. when the national army in the united states was organized the _wall street journal_ predicted that on account of the large consumption of leather for military purposes, the civilian population would be obliged to have thinner soles and probably to use leather substitutes: "price fixing on leather is still 'in the air.' it is not an easy proposition, in view of the complexity of grades and the variations in quality. the most practicable arrangement would be a series of general price standards, with allowance for deviations. unlike other commodities, leather trading is a very flexible affair. the trade is confident of fair price maxima in relation to recently fixed hide quotations; possibly, in view of higher labor and other costs, of somewhat more liberal rates than hide prices, which have just been modified upward somewhat. "leather prices have been tending upward all round. heavy sole leather, which did not recede nearly as much as lighter grades in the slump of last winter, are now nearly back to the high point of early last fall. union sole has advanced four cents since may 1, and for some varieties of leather above no. 9 iron the market is around eighty cents, against sixty-five cents earlier this spring. "in leather it is a case of all-round conservation, plus intensive effort for maximum output with government aid. export license-restrictions have just been tightened, and most of what is shipped now goes to england. neutrals must wait. in nine months to april 1st we exported but 20,342,101 pounds of sole leather, against 84,267,573 a year before. in march we shipped only 490,000 pounds to other countries than england, against 1,945,000 a year earlier. hardly any is now moving save on british government order. "men's shoes of higher quality and price will be affected chiefly by the requirement to carry soles as light as women's wear. this will involve either more frequent buying or more resort to tapping. cheapest grades of shoes will be least affected, being almost wholly outside the military scope. in fact, some manufacturers of low-priced shoes have lately been enabled to use better material than usual, thanks to army 'leavings.' it is the urgent advice of the government and tanners that shoe manufacturers promptly conform to the new program and that consumers cheerfully accept it. meanwhile, experiments are continuing under government direction as to further extension of the use of composition or even of wooden soles to help meet the increased demand and short supply equation in leather." fair price lists [illustration: photo by p. thompson "back on the farm" the number of slaughterable animals decreased in the united states and in europe during the war. the shortage of fats was helped by the production of more animals, increasing the weight of those slaughtered, and by changed methods of cooking, including the substitution of vegetable oils for butter.] one of the plans to prevent the discontent arising from food speculation promoted by retailers and profiteers, was the preparation of fair price lists to protect the consumer. every week new price lists were prepared so as to cover new fluctuation of cost to the retailer. these lists were given to the newspapers so that the consumer might be steadily informed and advised as to what he ought to pay the retailers in his city or town. it was shown how the patriotic retailer gained by the protection that this list afforded him against the danger of unpatriotic profiteering. the united states food administration explained in a public statement the significance of the fair price lists. "they were nothing more," it said, "than bulletins to inform the public of the prices the retailer has to pay for certain foods, and the price he has to sell them to the consumer. "such a bulletin at one stroke does away with all the obscurity which too often veils the price increase which takes place at the hands of the retailer. "to give an example, it shows at just what price a retailer is able to buy oatmeal and at just what price he is entitled to sell it. if any retailer decides to set upon the food he has for sale a higher price than that which brings him a fair profit, he is labeling himself 'profiteer.' and thereafter it depends upon the public's own choice whether they shall trade with him or not. "in accordance with the plans of the food administration such a system of fair price lists is now in operation throughout the country. every week new price lists are prepared so as to cover new fluctuations of cost to the retailer. and these up-to-the-minute fair price lists are given to the newspapers to print so that the consumer may be steadily informed and advised as to what he ought to pay the retailers in his city or town." how fair price lists are made up "in theory the plan is the simplest imaginable. but it is complicated by the size of this country and by the variety of local food conditions which are bound to affect the price at which the retailer can buy and sell his foodstuffs. it would be utterly impossible to set forth one fair price list which would _be_ fair for every spot in this country at any one time. a grocer in calais, maine, may be able to buy potatoes at a lower rate than a grocer in snohomish, washington. and the grocers of red oak, iowa, may have to pay a different price from either. obviously, each locality must determine its own fair price list. "this is done by establishing in every community or county where fair price lists are to be put out a price interpreting board, consisting of representatives of wholesale grocers, retailers, and consumers. the county food administration or his representative should act as chairman of this board. such boards include representatives of both 'cash and carry' stores and 'credit and delivery' stores. these boards secure from wholesale representatives the prices charged to the retailer for various staple foods. with this as a basis, plus their knowledge of local conditions, and guided by a schedule of maximum margins submitted to them by the food administration at washington, they determine what is a reasonable profit at which the retailer may sell to the consumer. thus the retailer does not have a scale of selling prices arbitrarily thrust upon him; he helps determine them himself." profiteering the natural and inevitable results of war on living conditions with food shortage and high prices were an unfamiliar factor in american experience for two generations. the artificial product of war time industry, "profiteering," was hard to be evoluted and caused resentment against those responsible for the practice. to deal with profiteers was no easy matter. how can profiteering be discriminated from legitimate profit-taking? how, too, can its existence be proved, for high fixed prices are not always an evidence of profiteering methods. the complexities of the various trade practices lumped together under the term profiteering are illustrated in the pamphlet on _profiteering_, issued by w. b. colver, chairman of the federal trade commission, in the form of a letter submitted on request to the u.s. senate: "survey of the petroleum field shows that the market, when under the control of dominating factors, such as standard oil, can be one of huge profits without the device of the high fixed price. no price for the public has been fixed upon petroleum and its products by the government. unlike the situation in steel, flour, and coal, there has been as yet no government interference with the law of supply and demand except in the instances of government purchases. under that law large profits may eventuate through the bidding up of prices by anxious buyers. and, moreover, even in the absence of this element, prices may be forced up by spreading false and misleading information concerning the condition of supply and demand. reports, for instance, have been circulated that the supply of gasoline was endangered for the purpose of maintaining the high price of that product and the heavy profits from it. at different stages of the oil industry different products of petroleum have yielded the heavy profits. kerosene was once the chief profit producer. gasoline followed and superseded it as the chief producer of profits. enormous profits are now being made in fuel oil, with the advantage to the refiner that the high price of that product meets no popular challenge. gasoline is maintained at its present high price and produces heavy profits for the low cost refiners." profiteering in the meat industry "similarly, the power of dominant factors in a given industry in maintaining high prices and harvesting unprecedented profits is shown in a survey of the meat packing situation. five meat packers, armour, swift, morris, wilson, and cudahy, and their subsidiary and affiliated companies, have monopolistic control of the meat industry and are reaching for like domination in other products. their manipulations of the market embrace every device that is useful to them, without regard to law. their reward, expressed in terms of profit, reveals that four of these concerns have pocketed in 1915, 1916, and 1917, $140,000,000. comparisons between their present profits and those of the pre-war period are given below. however delicate a definition is framed for 'profiteering,' these packers have preyed upon the people unconscionably. they are soon to come under further governmental regulation approved by executive order." profiteering in the meat industry some further details on the methods of securing huge profits in the meat packing industry are given in the following: "an exposition of the excess profits of four of the big meat packers (armour, swift, morris, cudahy, omitting wilson as not comparable) is given in the fact that their aggregate average pre-war profit (1912, 1913, and 1914) was $19,000,000; that in 1915 they earned $17,000,000 excess profits over the pre-war period; in 1916, $36,000,000 more profit than in the pre-war period; and in 1917, $68,000,000 more profit than in the pre-war period. in the three war years from 1915 to 1917 there their total profits have reached the astounding figure of $140,000,000, of which $121,000,000 represents excess over their pre-war profits. "these great increases in profits are not due solely to increased volume of business. the sales of these companies in this period increased 150 per cent., much of this increase being due to higher prices rather than to increased volume by weight, but the return of profit increased 400 per cent., or two and one-half times as much as the sales. "the profit taken by morris & co. for the fiscal year ended november 1, 1917, is equal to a rate of 18.6 per cent. on the net worth of the company (capital and surplus) and 263.7 per cent. on the three millions of capital stock outstanding. in the case of the other four companies the earned rate on common capital stock is much lower--from 27 per cent. to 47 per cent.--but the reason for this is that these companies have from time to time declared stock dividends and in other ways capitalized their growing surpluses. thus armour in 1916 raised its capital stock from twenty millions to one hundred millions without receiving a dollar more of cash. if swift, wilson, cudahy, and armour had followed the practice of morris in not capitalizing their surpluses (accumulated from excessive profits), they too would now show an enormous rate of profit on their original capital." juggling of accounts--huge salaries mr. colver gives information supported by trustworthy data on other devious and subtle types of profiteering practices: "in cases where the government fixes a definite margin on profit above costs, as in the case of flour, there is a considerable incentive to a fictitious enhancement of costs through account juggling. this has added to the volume of unusual profits. increase of cost showing on the producers' books can be accomplished in various ways. the item of depreciation can be padded. officers' salaries can be increased. interest on investment can be included in cost. new construction can be recorded as repairs. fictitious valuations on raw material can be added, and inventories can be manipulated. "the federal trade commission has been vigilant and untiring in its exclusion of these practices. an instance of this practice was afforded by the ismert-hincke milling co., of kansas city, mo. this company padded its costs by heavily increasing all its officers' salaries and by manipulating the inventory value of flour bags on hand. as evidence of the length to which padding can be carried, it may be added that this company even included in its costs the gift of an automobile which it charged to advertising expenses. this case was heard of by the commission for the food administration. the commission recommended revocation of license and the recommendation was followed. "payment of extraordinary salaries and in some instances bonuses to executives of corporations have been found by the commission during its investigations." war cost of living a complete synopsis of the cost of living situation in the united states, during the four years' period july, 1914, to june, 1918, was issued by the national industrial conference board after a country-wide survey. the basis taken was that of family budgets divided under five heads: food, shelter, clothing, fuel and light, and sundries. the average increase for the period was shown to be between 50 and 55 per cent. the most marked advance was in clothing, 77 per cent. but the food advance of 62 per cent. was really more important because food represented 43 per cent. of the average expenditure, while clothing represented only 13 per cent. wholesale prices, the report pointed out, are not to be relied upon in estimating the cost of living, because many articles enter only indirectly into the family budget. often, too, wholesale prices are not reflected in retail prices until months later. the estimates given by the board were based upon the expenditures of eleven thousand families: "in reaching 52.3 per cent. as the amount of increase in the cost of living for the four years' period, the expenditures of 11,000 families were considered. following is a table in which besides the 52.3 per cent. for all items entering into the family budget, the percentage for rent, clothing, fuel, and light, and sundries are given: per cent. per cent. per cent. inc. in cost increase distribution dur'g war as related budget of family period to to total item expenditure june, 1918 budget all items. 100.0 52.3 food 43.1 62 26.7 rent 17.7 15 2.7 clothing 13.2 77 10.2 fuel and light 5.6 45 2.5 sundries 20.4 50 10.2 the figures examined prove that there was a fair similarity of increase in the different sections of the country. the advance in rent in the dwelling places of the average wage earner was put down at 15 per cent. "a general summary is given of changes in the cost of living among industrial workers as presented by the railroad wage commission for the period between december, 1915, and the end of april, 1918, as follows: per cent. for families with incomes up to $600 43 for families with incomes from $600 to $1,000 41 for families with incomes from $1,000 to $2,000 40 "by the brotherhood of locomotive firemen and enginemen the advance in living costs between 1914 and 1917 was placed at 43 per cent. conditions among ship-building workers on the pacific coast, as arrived at by the united states shipping board, indicated that between june, 1916, and february, 1918, living costs had gone up 46 per cent. a table is given which shows relative increase in the cost of food as measured by wholesale and retail prices for the past six years." relative relative year and month wholesale price of retail farm food, price of 1913 products etc. food average for year 100 100 100 january 97 99 98 april 97 96 98 july 101 101 100 october 103 102 104 1914 average for year 103 103 102 january 101 102 104 april 103 95 97 july 104 103 102 october 103 107 105 1915 average for year 105 104 101 january 102 106 103 april 107 105 99 july 108 104 100 october 105 104 103 1916 average for year 122 126 114 january 108 114 107 april 114 117 109 july 118 121 111 october 136 140 121 1917 average for year 188 177 146 january 147 150 128 april 180 182 145 july 198 180 146 october 207 183 157 1918 january 208 188 160 april 217 179 154 civil war cost of living the civil war years of the united states were always remembered as the era of high prices. yet it is interesting to know that the increase in living cost after the united states had been in war one year was greater than the increases in the fourth year of the civil war. during the civil war prices rose from 100 to 117 per cent., but necessities were relatively cheaper than at present because the currency was depreciated. in january, 1864, gold was at a premium of 52 per cent. emerson david fite, assistant professor of history in yale university, describes "social and industrial conditions during the civil war" as follows: "the situation in new york city at the end of the year 1863 is typical of the period. eggs had then reached 25 cents per dozen, from 15 cents in 1861; cheese, 18 cents from 8 cents; potatoes, $2.25 from $1.50 per bushel, and for all the necessities of life there was an advance ranging from 60 to 75 and in some cases even 100 per cent. wages, on the other hand, lagged behind; the blacksmith's increase was only from $1.75 to $2 per day, that of common laborers from $1 to $1.25, that of bricklayers from $1.25 to $2, and the average increase in all the trades was about 25 per cent., or less than one-half the increase of prices. the winter of 1863--64 and the ensuing months were accordingly a time of unusual industrial unrest, which increased in severity as the discrepancy between wages and prices continued. the dollar was slowly but surely diminishing in value, and labor engaged in a determined struggle to force wages up, capital to keep them down. the advantage lay with the employing classes, but labor in 1864 recovered much of the ground that had been lost in the two previous years, and the war closed with wages much nearer prices than a year earlier. it was generally agreed at the time that prices during the entire war period advanced approximately 100 per cent. and wages from 50 to 60 per cent." where the cost of lives weighed the most the rapid rise in the cost of living was much more severely felt by the classes of the population dependent upon small or less rigid incomes. in many industries wages increased faster than average living expenses. figures published by the new york labor bureau show that the sum distributed in wages to industrial workers was substantially doubled in the four years of warfare. investigation conducted by the national industrial board of boston showed that there had been an increase of 50 to 55 per cent. in the budget of the average wage earner from july, 1914, to june, 1918. "the increases for the different items are given as follows: food 62% rent 15% clothing 77% fuel and light 45% sundries 50% average increase (depending on apportionment of these respective items in the family budget) 50% to 55% in explanation of these figures the report goes on to say: "'in combining the percentages of increase for the respective items, in order to determine the average increase for the budget as a whole, food was taken as constituting 43 per cent. of the total family expenditure, rent 18 per cent., clothing 13 per cent., fuel and light 6 per cent., and sundries 20 per cent. applying the board's percentages of increase for the respective items to this distribution of the budget, the average increase is 52 per cent. the distribution of budget items just given is an average based on cost of living studies made by several united states government bureaus and other agencies, covering in all 12,000 families. "the proportions of these major items of expenditure can be varied within narrow limits, but no reasonable arrangement would cause a wide change in the increase in the total cost of living as given above. for instance, if, instead of this average distribution of the budget, food be allocated as much as 45 per cent., rent and clothing 15 per cent. each, fuel and light 5 per cent., and sundries 20 per cent., the indicated increase in the total cost of living, using the board's percentages of increase for the respective items, would be 54 per cent." all articles of food, we are told, show a considerable increase in price since 1914, exceptional advances being recorded in the case of flour, lard, and cornmeal. the item of rent, says the report, "showed such wide variation that no general average applicable to all sections of the country could be reached," but the 15 per cent. estimate "is apparently ample to cover the increase in wage-earners' rents in new york, chicago, philadelphia, boston, and st. louis, which alone include several millions of the country's industrial population." of the increase in clothing prices we read: increased cost for wearing apparel "information secured from retail stores in cities well distributed throughout the country indicates increases in prices of the most common articles of wearing apparel, ranging from 50.5 per cent. for women's dollar blouses up to 161 per cent. for men's overalls. striking increases occurred in the prices of certain yard goods, where advances in cost over 1914 prices amounted, in a number of cases, to more than 100 per cent. "men's hosiery, selling for 15 cents in 1914, cost in june, 1918, usually not less than 25 cents, and women's hosiery, selling for 25 cents four years ago, brought 45 cents in june of this year. knit underwear, the report finds, had increased nearly 100 per cent. women's shoes of a standard grade increased 88.5 per cent.; men's 69 per cent. women's kid gloves which in 1914 cost $1 averaged more than $2 in june, 1918. "the report places the average rise in the total clothing budget since 1914 at 77 per cent. this increase compares with an increase of 51.33 per cent. between 1914 and 1917 for families in the ship building districts of philadelphia and an increase of 54.21 per cent. among similar families in the ship building district of new york, as reported by the united states bureau of labor statistics. the difference between these increases and the board's figure of 77 per cent. is largely explained by the difference in the period of time covered; clothing prices have continued to advance since 1917. further increases in the fall of 1918 were, moreover, clearly indicated by the statements of retail dealers." war prices and luxury imports in spite of the contention that war-time conditions led to an increased standard of luxurious living, statistics of imports indicated a rapid fall in articles of luxury brought into the country. in the fiscal year, 1918, there was a material decline compared with the preceding year and a marked decline when compared with the year before the war: "a recent compilation by the national city bank shows this in practically all imports usually classed as luxuries. that the imports should be less than before the war was quite natural by reason of the fact that many articles of this character originated in european countries, some in countries with which we are now at war, and some with our allies who are otherwise too busily employed. "in art works, for example, the value of the imports of 1918 was only about $11,000,000 against $23,000,000 in 1917, and $35,000,000 in the fiscal year 1914. in automobiles the value in 1918 was about $50,000 against nearly $2,000,000 in 1913, and more than $2,000,000 in 1912, while the average value per machine imported in 1918 was less than one-half what it was before the war. decorated china imported in 1918 was about $3,500,000 in value against practically $8,000,000 in 1914. of cotton laces imported in 1918 the value was about $10,000,000 against $16,500,000 in 1917, and nearly $34,000,000 in 1914. of silk laces the 1918 imports were valued at little more than one-half those of 1914. of cotton plushes and velvets the quantity in 1918 was less than 1,000,000 yards against more than 3,000,000 in 1917, and practically 5,000,000 in 1914. of ostrich feathers, in 1918 the imports were valued at nearly $1,000,000 against nearly $4,000,000 in 1914 and over $6,000,000 in 1913. in precious stones the total for 1918 was only about $32,000,000 against $47,000,000 in 1917 and $50,000,000 in 1913; while of pearls alone the value in 1918 was less than $2,000,000 against over $8,000,000 in 1917, and more than $10,000,000 in 1916. "in articles of food usually classed as luxuries there was also a marked fall. cheese imported in 1918 amounted to about 9,000,000 pounds against 15,000,000 in 1917, and 64,000,000 in 1914. of currants the imports of 1918 were over 5,000,000 pounds against 25,000,000 in 1916 and 32,000,000 in 1914, and of dates only 6,000,000 pounds in 1918 against 34,000,000 in 1914; while olives and olive oil showed totals in 1918 of about one-half those of the year before the war." [illustration: the nations and their wheat supply under the lever bill, which became the food control law after the united states declared war, the president was authorized to fix a reasonable guaranteed price for wheat.] good effects of price control it became accepted on all sides that price control was the one method to correct the inequalities of war conditions. it was necessary to prevent the poorer classes in the population from having an inadequate consumption of wealth. there was the political side, too. price control had an effect on the morale of large strata of the population. it acted as a bulwark against the rising tide of discontent and internal dissension incident to warfare on a democratic scale. mr. sydney webb, a well known english student of labor problems, conceded that the british government had by its system of price control been fairly successful in staving off any general fall in the standard of life in its people. how the system worked is summarized by him in the following passage: "what has been successful in great britain in economizing supplies has been a widespread appeal to the whole nation to limit its consumption of wheaten bread (4 pounds per week), meat (2½ pounds per week), and sugar (¾ of a pound per week) to a prescribed maximum per person in the household; and to make up the necessary subsistence by the use of substitutes, such as fish, other cereals than wheat, and other vegetables than potatoes, of which the crop throughout all europe has largely failed. more efficacious still has been the absolute government monopoly of sugar, secured at the very beginning of the war, and the drastic restriction of the total quantity allowed to be issued from store, the aggregate reduction being thus infallibly secured, and the retailers being left to share what sugar they obtained among their customers. it has been found useful, too, to make the wheaten flour go farther by compelling all the millers to include both an increased proportion of bran and a certain proportion of other cereals. more drastic measures are near at hand." stay-at-homes who made money the important effort, as seen by the _economist_, was to back up the armies at the front by a policy of self-sacrifice at home, and it spoke in drastic terms of the constant evidence of profiteering among certain classes in england. the contrast in the attitudes of those at the front and those active in business life is set forth in the following words: "one of the most curious and interesting psychological facts of the war is the manner in which one man goes to the front and becomes a hero and a _preux chevalier_, while another, just like him in training and blood and outlook, stays at home and works for spoils, whether in wages or profits, resenting taxation, grumbling about his food, and seeming to think that this war for justice was invented to increase his wealth and comfort." price control in united states although price control is a measure disapproved of by economists, experience has shown that for certain products, such as wheat and flour, it produced good results. in the case of bituminous coal, professor anderson of harvard said that it had probably done much harm and little good, because the cut in price was too drastic. one good feature of the price control system was the ability to apply it to draft labor from non-essential industries to the production of munitions and necessities of life. it was possible to do this by refusing coal, copper, steel and freight cars to the non-essential industries. how the food administration came to be a general price fixing body is explained in the following article by a member of the food administration: wheat at $2.20 a bushel "there are many evidences that price fixing has come to lodge itself as an unwelcome factor in the program of the food administration. price fixing came to be a fact even while avoided as a theory, and eventually it has become necessary to face it, if not to accept it, even as a theory. what are the evidences that price fixing is essentially involved in the program of the food administration? one piece of evidence lies in the fact that when once you have fixed the price of one commodity the condition is bound to be reflected in other commodities. in fixing the price of wheat congress fixed as well, though not so explicitly, the price of corn, and hogs, and sugar beets. the determining and administering of these prices it left to the food administration. "a further evidence that the food administration could not avoid the onus of price fixing lies in the reasons for which the administration was brought into existence and the services it was created to perform. the food administration is a war agency. its chief purpose is the feeding of warring nations, our own nation and the allies. all its other activities, its conservation, its stabilization of trade processes, its encouragement of production, are tributary to the one purpose of segregating stocks of food for the effective prosecution of the war. this latter purpose, in fact, takes the food administration directly or indirectly into the market.... by section 14 of the lever bill, which became the food control law, the president is authorized from time to time to determine and fix a reasonable guaranteed price for wheat and this section itself fixed the price for the crop of 1918 at not less than $2 per bushel at the principal interior primary markets. pursuant to this section the president has, by two separate decrees, set the price of 1917 wheat and of the 1918 crop at $2.20 per bushel. section 11 of the law authorizes the president to purchase and store and sell wheat and flour, meal, beans, and potatoes. manifestly any purchase so made by the government would in effect fix the price. aside from these delegations of power no authority is given by the food control law to fix prices. and yet a study of the operations of these provisions as well as a regard for the implications of other functions of the food administration carry the conviction that price fixing is a necessary and inescapable corollary of the effective prosecution of the food administration program." price level, november, 1918 with the close of military operations there was noted a slight decline in commodity prices; how far the downward tendency would reach was considered a moot point. the apparent zenith point in prices was attained in july, 1918, but _bradstreet's_ prudently thought it unwise to indulge in any prophecies regarding low prices. the increased demand for food products among the stricken peoples of europe would, it was believed, prevent any considerable fall in prices. there was not much to encourage consumers in the study of the index numbers of food commodities. the writer in _bradstreet's_ shows a wide range of price movements in the following table, in which are given the index numbers based on the prices per pound of ninety-six articles: 1912 january $8.9493 february 8.9578 march 8.9019 april 9.0978 may 9.2696 june 9.1017 july 9.1119 august 9.1595 september 9.2157 october 9.4515 november 9.4781 december 9.5462 1913 january 9.4935 february 9.4592 march 9.4052 april 9.2976 may 9.1394 june 9.0721 july 8.9522 august 9.0115 september 9.1006 october 9.1526 november 9.2252 december 9.2290 1914 january 8.8857 february 8.8619 march 8.8320 april 8.7562 may 8.6224 june 8.6220 july 8.6566 august 8.7087 august 15 9.8495 september 9.7572 october 9.2416 november 8.8620 december 9.0354 1915 january $9.1431 february 9.6621 march 9.6197 april 9.7753 may 9.7978 june 9.7428 july 9.8698 august 9.8213 september 9.8034 october 9.9774 november 10.3768 december 10.6473 1916 january 10.9163 february 11.1415 march 11.3760 april 11.7598 may 11.7485 june 11.6887 july 11.5294 august 11.4414 september 11.7803 october 12.0699 november 12.7992 december 13.6628 1917 january 13.7277 february 13.9427 march 14.1360 april 14.5769 may 15.1208 june 15.4680 july 16.0680 august 16.3985 september 16.6441 october 16.9135 november 17.0701 december 17.5966 1918 january $17.9636 february 18.0776 march 18.0732 april 18.4656 may 18.9133 june 19.0091 july 19.1849 august 19.1162 september 19.0485 october 19.0167 november 18.9110 the groups that make up the index number are as follows: nov. 1, sept. 1, oct. 1, nov. 1, 1917 1918 1918 1918 breadstuffs $0.2105 $0.2077 $0.2026 $0.1999 live stock .6785 .7400 .7100 .6960 provisions 4.0285 4.3264 4.5359 4.5889 fruits .4288 .3725 .3725 .3725 hides and leather 2.3900 2.2150 2.2150 2.2050 textiles 5.1179 5.8742 5.7554 5.7029 metals 1.1477 1.4233 1.3662 1.3062 coal and coke .0101 .0119 .0120 .0120 oils .9084 1.3185 1.3121 1.2734 naval stores .0956 .1295 .1255 .1348 building materials .1448 .2047 .2047 .2046 chemicals and drugs 1.4261 1.5153 1.5253 1.5278 miscellaneous .4832 .7095 .6795 .6870 --------------------- ------ total $17.0701 $19.0485 $19.0167 $18.9110 [illustration: photo by p. thompson a municipal canning station in city establishments like the one shown above, food that would otherwise go to waste in the markets was saved, and women were instructed in the best methods of putting up fruits and vegetables for winter use.] food conditions and price level, 1919 a clear summary of the food situation and price conditions in the half-year succeeding the armistice is to be found in the federal commission's memorandum on food stocks and wholesale prices, june, 1919: "the comparative amounts of food stocks on hand june 1, 1919, as against june 1, 1918, in the case of many important foods, show that the stocks are considerably larger. "on june 1, 1918, the united states stocks were in demand for feeding the armies of the allies as well as the civilian population. the fact that stocks of many important foods were much larger on june 1, 1919, while prices were as high or higher, apparently, means that they are being withheld speculatively for a world demand which is not now here but which is expected when hunger-impelled strikes secure higher wages with which higher food prices can be paid. "the statistics of stocks are from the latest and last issue of the bureau of markets 'food surveys,' june 27, 1919. we use the quantities reported by identical firms for 1918 and 1919. (stocks held june 1, 1919, by other firms not reporting for june 1, 1918, increase the actual stocks from 5 or 10 per cent. up to 20 or 25 per cent. over the comparable stocks). the stocks are those in warehouses and cold storage houses and in hands of wholesale dealers. retail stocks are not reported. the prices are wholesale prices, furnished by the bureau of labor statistics, for the first tuesday in june. commodities increasing in stocks and in price (wholesale prices) ========================================================================= | | quantity | | price |------+----------+----------+--------| |-----------+---- | | | | | | | commodity unit |june, 1919|june, 1918|per cent| unit of| june | june | of | | | in | price | 1919 | 1918 |quan| | | crease | | | | tity | | | 1919 | | | | | | | over | | | | | | | 1918 | | | --------+------+----------+----------+--------+--------+-----------+---- wheat |bushel|41,955,167|15,286,331| 174.5| dollars| 2.51| 2.20 | | | | | per bu.| 2.46| 2.17 --------+------+----------+----------+--------+--------+-----------+---- wheat |barrel| 3,942,205| 3,236,671| 21.8| dollars| 12-12.20| 9.80 flour | | | | |per bbl.|11.50-11.80| 9.95 --------+------+----------+----------+--------+--------+-----------+---- canned |pound |99,203,544|82,616,582| 20.1| dollars| 2.70-2.75| 2.70 salmon | | | | |per doz.| | | | | | | no. 2 | | | | | | | cans | | --------+------+----------+----------+--------+--------+-----------+---- canned |pound |81,233,023|42,352,994| 91.8| dollars| | 1.70 corn | | | | |per doz.| 1.75-(mch)| 1.75 | | | | | no. 2 | | | | | | | cans | | --------+------+----------+----------+--------+--------+-----------+---- fresh | case | 5,975,817| 5,441,560| 9.8| cents| .40-40½| .29 eggs | | | | |per doz.| | .30¾ --------+------+----------+----------+--------+--------+-----------+---- butter |pound |29,190,222|12,749,055| 129.0| cents| .53 .41 (creamery) | | | | per lb.| | --------+------+----------+----------+--------+--------+-----------+---- salt |pound |25,701,138|24,962,881| 3.0| dollars| 35.00|32.00 beef | | | | |per bbl.| 36.00|34.00 --------+------+----------+----------+--------+--------+-----------+---- frozen |pound |10,962,670| 2,749,077| 298.8| cents | .37½| .34½ fowls | | | | | per lb.| | ========================================================================= commodities increasing in stocks and decreasing in price. (wholesale prices.) ========================================================================= | quantity | | | price ---------+--------+-----------+----------+--------+-------+--------+---- |unit of | | | |unit of| | |quantity| | |per cent| price | june | june commodity| | june, 1919|june, 1918|increase| | 1919 | 1918 ---------+--------+-----------+----------+--------+-------+--------+---- | | | | |dollars| 1.19 | 1.21 barley | bushel | 16,399,396| 7,916,073| 107.2|per bu.| 1.27 | 1.26 ---------+--------+-----------+----------+--------+-------+--------+---- rye | bushel | 11,613,127| 3,355,349| 246.1|dollars| 1.53½ | 1.73 | | | | |per bu.| | ---------+--------+-----------+----------+--------+-------+--------+---- buckwheat| pound | 18,053,230| 5,523,850| 226.8|dollars| 5.00 | 5.75 flour | | | | |per cwt| (apr) | 6.25 | | | | | | |(apr) ---------+--------+-----------+----------+--------+-------+--------+---- canned | pound |179,101,286|88,531,024| 102.3|dollars| 2.05 | 2.30 tomatoes | | | | | per |(dec'18)| | | | | | doz. | | | | | | | no. 3 | | | | | | | cans | | ---------+--------+-----------+----------+--------+-------+--------+---- commodities decreasing in stocks and in price. (wholesale prices) ======================================================================= | | quantity | | price | |----------+-----------+--------+ |------+---- commodity|unit of |june, 1919| june, 1918|per cent|unit of| june | june |quantity| | |decrease| price | 1919 | 1918 | | | | 1919| | | | | | | 1918 | | | ---------+--------+----------+-----------+--------+-------+------+---- oats | bushel |37,827,343| 41,763,555| 9.4| cents | 69|73½ | | | | |per bu.| | ---------+--------+----------+-----------+--------+-------+------+---- corn meal| pound |34,231,066|117,674,918| 70.9|dollars| 3.90| 4.25 | | | | |per cwt| | ---------+--------+----------+-----------+--------+-------+------+---- beans | bushel | 4,252,451| 4,408,686| 3.5|dollars| 7.75-|12.25 | | | | |per cwt| 8.00|12.50 ---------+--------+----------+-----------+--------+-------+------+---- rice | pound |75,134,920| 80,727,516| 6.9| cents | 6 | 8.5 (blue | | | | |per lb.| 7-7/8| 8.9 rose | | | | | | | honduras)| | | | | | 9-1/8| 8½ | | | | | [10][11] 9-5/8 ======================================================================= [10] first week june. [11] increase in price. commodities decreasing in stocks and increasing in price. (wholesale prices) ========================================================================= | | quantity | | price | | | | | |-----------+-----------+--------+ +-----+----- | | | | | | | commodity |unit of |june, 1919 |june, 1918 |percent |unit of|june | june |quantity| | |decrease| price |1919 | 1918 | | | | 1919 | | | | | | | 1918 | | | ----------+--------+-----------+-----------+--------+-------+-----+----- corn | bushel | 13,260,910| 27,883,361| 52.4|dollars| 1.76| 1.50 | | | | |per bu.| 1.77| 1.55 ----------+--------+-----------+-----------+--------+-------+-----+----- sugar | pound |207,622,237|217,632,365| 4.6| cents | 8.82| 7.30 | | | | |per lb.| | ----------+--------+-----------+-----------+--------+-------+-----+----- cheese | pound | 10,174,502| 15,875,236| 35.9| cents | 31|21½ (american)| | | | |per lb.| | ----------+--------+-----------+-----------+--------+-------+-----+----- dry salt | pound |395,940,437|488,344,838| 18.9|dollars|58.00| 48-50 pork | | | | | per |58.50| | | | | | bbl. | | ----------+--------+-----------+-----------+--------+-------+-----+----- lard | pound | 81,275,392|106,649,588| 23.8| cents |33.80|24.15 | | | | |per lb.|34.30|24.25 ========================================================================= the following data, taken from the _monthly labor review_ of july 1919, give a survey of the retail prices of food in the united states: average retail prices and per cent of increase or decrease in the united states may 15 of each specified year compared with may 15, 1913 ========================================================================+ | | | | | | | | | | | average retail prices, may 15- | | +---------------------------------------+ article | unit | | | | 1913|1914|1915|1916|1917|1918|1919| -----------------------+--------+---------+----+----+----+----+----+----| | | _cts.|cts.|cts.|cts.|cts.|cts.|cts._ sirloin steak | pound | 25.7|25.9|25.7|27.8|32.2|40.0|44.4| round steak | do | 22.3|23.3|23.0|25.0|29.6|38.0|41.6| rib roast | do | 19.9|20.1|19.9|21.6|25.7|31.8|35.2| chuck roast | do | 16.1|17.0|16.3|17.5|21.8|27.8|29.7| plate beef | do | 12.1|12.5|12.3|13.1|16.6|21.9|22.5| | | | | | | | | | pork chops | do | 20.9|22.2|20.9|22.9|30.6|36.7|43.0| bacon | do | 27.0|26.7|26.4|28.4|41.6|50.5|56.7| ham | do | 26.8|26.8|25.6|31.8|38.8|45.6|54.6| lamb | do | 19.4|19.8|21.7|23.2|29.7|36.8|39.6| hens | do | 22.2|22.7|21.5|24.1|29.3|37.9|43.5| | | | | | | | | | salmon, canned | do | | |19.8|20.0|25.7|29.6|31.9| milk, fresh | | | | | | | | | milk, evaporated | | | | | | | | | (unsweetened) | [12] | | | | | |15.1| | butter | pound | 35.9|32.7|34.7|37.0|46.5|51.0|67.9| oleomargarine | do | | | | | | |40.4| | | | | | | | | | nut margarine | do | | | | | | |35.3| cheese | do | | |23.5|24.8|33.8|33.4|42.2| lard | do | 15.8|15.6|15.1|20.1|27.8|32.9|38.8| crisco | do | | | | | | |33.9| eggs, strictly fresh | dozen | 26.3|26.6|26.3|28.1|39.8|42.4|53.1| | | | | | | | | | bread |pound[13] 5.6| 6.2| 7.2| 7.0| 9.6| 9.8| 9.8| flour | pound | 3.3| 3.3| 4.5| 3.9| 8.7| 6.6| 7.5| corn meal | do | 3.0| 3.1| 3.3| 3.3| 5.4| 7.0| 6.2| rolled oats | pound | | | | | | | 8.4| corn flakes | [14] | | | | | | |14.1| | | | | | | | | | cream of wheat | [15] | | | | | | |25.1| rice | pound | | | 9.1| 9.1|10.5|12.3|13.4| macaroni | do | | | | | | |19.0| beans, navy | do | | | 7.6| 9.4|19.1|17.8|12.0| potatoes | do | 1.6| 1.9| 1.6| 2.5| 6.1| 2.2| 3.3| | | | | | | | | | onions | do | | | 4.3| 5.1| 8.6| 5.6|10.7| cabbage | do | | | | | | | 9.6| beans, baked | |no. 2 can. | | | | |17.5| corn, canned | do | | | | | | |19.1| peas, canned | do | | | | | | |19.0| | | | | | | | | | tomatoes, canned | do | | | | | | |15.8| sugar, granulated | pound | 5.4|5.0 | 6.8| 8.5|10.0| 9.1|10.6| | | | | | | | | | tea | do | | |54.6|54.6|55.7|63.8|69.8| coffee | do | | |27.9|29.9|30.2|30.1|40.5| | | | | | | | | | prunes | do | | |13.7|13.3|15.3|16.5|23.2| raisins | do | | |12.5|12.6|14.4|15.1|16.3| bananas | dozen | | | | | | |38.8| oranges | do | | | | | | |54.1| | | | | | | | | | all articles combined | | | | | | | | | -----------------------+--------+---------+----+----+----+----+----+----+ ========================================================================= | | |per cent of increase (+) or | | | |decrease (-) may 15 of each | | | |specified year compared with | | | |may 15, 1913. | | |---------------------------------------+ article | unit | | | | |1914|1915|1916|1917|1918|1919| -----------------------+--------+---------+----+----+----+----+----+----| | | | | | | | | | sirloin steak | pound | | +1|[16]| +8| +25| +56| +73| round steak | do | | +4| +3| +12| +33| +70| +87| rib roast | do | | +1|[16]| +9| +29| +60| +77| chuck roast | do | | +6| +1| +9| +35| +73| +84| plate beef | do | | +3| +2| +8| +37| +81| +86| | | | | | | | | | pork chops | do | | +6|[16]| +10| +46|+ 76|+106| bacon | do | | -1| -2| +5| +54|+ 87|+110| ham | do | |[16]| -5| +19| +45|+ 70|+104| lamb | do | | +2| +12| +20| +53|+ 90|+104| hens | do | | +2| -3| +9| +32|+ 71|+ 96| | | | | | | | | | salmon, canned | do | | | | | | | | milk, fresh | | | | | | | | | milk, evaporated | | | | | | | | | (unsweetened) | [12] | | | | | | | | butter | pound | | 9 | 3| +3| +30| +42| +89| oleomargarine | do | | | | | | | | | | | | | | | | | nut margarine | do | | | | | | | | cheese | do | | | | | | | | lard | do | | -1| 4| +27| +76|+108|+146| crisco | do | | | | | | | | eggs, strictly fresh | dozen | | +1|| +7| +51| +61|+102| | | | | | | | | | bread |pound[13] | +11| +29| +25| +71| +75|+ 75| flour | pound | |[16]| +36| +18|+164|+100|+127| corn meal | do | | +3| +10| +10|+ 80|+133|+107| rolled oats | pound | | | | | | | | corn flakes | [14] | | | | | | | | | | | | | | | | | cream of wheat | [15] | | | | | | | | rice | pound | | | | | | | | macaroni | do | | | | | | | | beans, navy | do | | | | | | | | potatoes | do | |+ 19|[16]|+ 56|+281|+ 38|+106| | | | | | | | | | onions | do | | | | | | | | cabbage | do | | | | | | | | beans, baked | |no. 2 can. | | | | | | corn, canned | do | | | | | | | | peas, canned | do | | | | | | | | | | | | | | | | | tomatoes, canned | do | | | | | | | | sugar, granulated | pound | | 7|+ 26|+ 57|+ 85|+ 69|+ 96| | | | | | | | | | tea | do | | | | | | | | coffee | do | | | | | | | | | | | | | | | | | prunes | do | | | | | | | | raisins | do | | | | | | | | bananas | dozen | | | | | | | | oranges | do | | | | | | | | | | | | | | | | | all articles combined | | |+ 1|+ 3|+ 13|+ 56|+ 64|+ 91| -----------------------+--------+---------+----+----+----+----+----+----| [12] 15-16 ounce can. [13] baked weight. [14] 8-ounce package. [15] 28-ounce package. [16] no change in price. "the total of dry storage stocks, including those that increased and those that decreased is as follows, all items being reduced to pounds: june 1, 1919 7,875,280,040 june 1, 1918 6,336,763,505 "that is the total dry storage stocks reported on june 1, 1919, were 124 per cent. of those on june 1, 1918. "the total of cold storage items reported in pounds in june, 1919, and june, 1918 (omitting apples in barrels but covering eggs; frozen eggs; butter; cheese, frozen and cured beef; frozen lamb and mutton; frozen, dry salt and pickled pork; lard; and frozen poultry), was as follows: june 1, 1919 1,671,777,990 june 1, 1918 1,669,826,166 "that is, cold storage stocks this june are 100.1 per cent. of those last june. "none of the above figures include army stores nor the army excess supply which is to be distributed by the war department under resolution of the house of representatives. "the sum of dry storage and cold storage (except apples) for the two periods (combining the figures already given) was as follows: june 1, 1919 9,547,058,030 pounds june 1, 1918 8,006,589,671 pounds "that is the total stocks reported on june 1, 1919, were 119 per cent. of those on june 1, 1918. "this as noted does not include army supplies. "grouping the commodities in four classes: "(1) those increasing in stocks and increasing in price. "(2) those increasing in stocks and decreasing in price. "(3) those decreasing in stocks and increasing in price. "(4) those decreasing in stocks and decreasing in price; we have the accompanying significant tables, which indicate that the 'law of supply and demand' is not working. iii--industry and labor in wartime unprecedented conditions and developments due to the world war and how they were met the issue of the great world conflict between autocracy and democracy rested largely in the hands of the laboring classes behind the lines. mr. william b. wilson, secretary of labor, placed vividly before the public in one of his official statements the views of american labor at the outbreak of the war: "during the past decade the sentiment of american labor has crystallized against resort to arms as a means of settlement of disputes between nations. war had come to be considered wasteful economically, socially, and morally. labor felt that no national advantage gained through force of arms could offset the human life sacrificed, the burden of taxation levied upon successive generations to pay the cost of war, the standards of life set back or destroyed, which had to be rebuilt slowly and with infinite sacrifice. in short, war had come to be looked upon as morally wrong, entirely unnecessary, a calamity that could be avoided and must be avoided if the race was to progress. this feeling was shared to a greater or lesser extent by the workers of all civilized nations, and there was a universal feeling in world labor ranks prior to the outbreak of the european war that this sentiment, shared by many thoughtful people outside the ranks of the wage workers in all civilized nations, was strong enough to prevent any armed conflict which would involve any number of peoples. this sentiment was undoubtedly responsible for the lack of military preparedness, in the sense that germany prepared, among the other major powers now engaged in the world conflict. "when the war clouds broke in europe, american labor was stunned. all its preconceived notions as to the inability of any great nation to wage war upon another nation because the working people would refuse either to fight or produce munitions and supplies of war were shattered when nation after nation quickly mobilized its armies and the organized labor movements of each country, without exception, quickly pledged their men and their resources to the support of their respective governments. but the fact that america itself might be drawn into the world conflict was still foreign to the mind of the american workman. while american labor grieved over the fate which had befallen its kind in europe no sense of danger to this country was apparent. from the beginning of this republic it had been our national policy to hold aloof from the quarrels of the old world. the splendid isolation of thousands of miles of ocean protected us. we had no quarrel with europe and we asked but to be let alone. we stood upon our rights to protect the people of continental america from invasion or aggression as enunciated by the monroe doctrine, and further than that we could not see that the european conflict embroiled us as a nation. let europe settle her own family quarrel. we were to remain the one great neutral nation of the earth. when the time came america, untrammeled by participation in the conflict, with no desire for american aggrandizement or territorial expansion, would be the natural messenger of peace to war-worried europe." safeguards for workingmen from the moment of the declaration of war the general loyalty of the laboring classes throughout the united states was apparent. this attitude of loyalty found a ready response in the immediately declared intention of the government to safeguard the interests of the workingmen. congress announced its attitude toward standards of legal protection for workers. it was printed verbatim in _labor laws in war time_, 201, p. 1, as follows: "whereas, the entrance of the united states into the world war appears imminent; and "whereas, other countries upon engaging in the conflict permitted a serious breakdown of protective labor regulations with the result, as shown by recent official investigations, of early and unmistakable loss of health, output, and national effectiveness; and "whereas, our own experience has already demonstrated that accidents increase with speeding up and the employment of new workers unaccustomed to their tasks, that over fatigue defeats the object aimed at in lengthening working hours, and that new occupational poisoning has accompanied the recent development of munition manufacture; and "whereas, the full strength of our nation is needed as never before and we cannot afford to suffer loss of labor power through accidents, disease, industrial poisoning, and overfatigue; now, therefore, be it. "_resolved_, that the american association for labor legislation, at this critical time, in order to promote the success of our country in war as well as in peace, would sound a warning against the shortsightedness and laxness at first exemplified abroad in these matters, and would urge all public-spirited citizens to coöperate in maintaining, for the protection of those who serve in this time of stress the industries of the nation (who as experience abroad has shown are quite as important to military success as the fighting forces), the following essential minimum requirements: i. safety "1. maintenance of all existing standards of safeguarding machinery and industrial processes for the prevention of accidents. ii. sanitation "1. maintenance of all existing measures for the prevention of occupational diseases. "2. immediate agreement upon practicable methods for the prevention of special occupational poisonings incident to making and handling explosives. iii. hours "1. three-shift system in continuous industries. "2. in non-continuous industries, maintenance of existing standard working day as basic. "3. one day's rest in seven for all workers. iv. wages "1. equal pay for equal work, without discrimination as to sex. "2. maintenance of existing wage rates for basic working day. "3. time and one-half for all hours beyond basic working day. "4. wage rates to be periodically revised to correspond with variations in the cost of living. v. child labor "1. maintenance of all existing special regulations regarding child labor, including minimum wages, maximum hours, prohibition of night work, prohibited employment, and employment certificates. "2. determination of specially hazardous employments to be forbidden to children under sixteen. vi. woman's work "1. maintenance of existing special regulations regarding woman's work, including maximum hours, prohibition of night work, prohibited hazardous employments, and prohibited employment immediately before and after childbirth. vii. social insurance "1. maintenance of existing standards of workmen's compensation for industrial accidents and diseases. "2. extension of workmen's compensation laws to embrace occupational diseases, especially those particularly incident to the manufacture and handling of explosives. "3. immediate investigation of the sickness problem among the workers to ascertain the advisability of establishing universal workmen's health insurance. viii. labor market "1. extension of existing systems of public employment bureaus to aid in the intelligent distribution of labor throughout the country. ix. administration of labor laws "1. increased appropriations for enlarged staffs of inspectors to enforce labor legislation. "2. representation of employees, employers, and the public on joint councils for coöperating elsewhere with the labor departments in drafting and enforcing necessary regulations to put the foregoing principles into full effect." organizing labor for war work supplying the man power for industrial action during the war was a really more complicated task than drafting men for military service. in the earlier period of american participation labor was distributed more or less according to the law of supply and demand. the unequal distribution of workers became a grave problem. to meet this the united states employment service of the department of labor took over the supply of war industries with common labor, and all independent recruiting of labor by manufacturers having a pay roll of more than a hundred men was discontinued. [illustration: in the heart of the bethlehem steel plant h. e. coffin, chairman on industrial preparedness of the council of national defence, described the conflict as a war of munitions, of factories, of producing powers, of sweating men and women workers. in the plant sketched above, 26,000 men toiled and sweated during the war to make munitions for our troops overseas.] "on this board were representatives of the war, navy, and agriculture departments, the shipping board and the emergency fleet corporation, the war industries board, and the food, fuel, and railroad administrations. assistant director nathan a. smyth, of the united states employment service, was quoted in the new york _globe_ as saying in part: "'today the war industries of the country are short about 500,000 unskilled workers, and the coming requirements of war production necessitate finding between 2,000,000 and 3,000,000 more. "'similarly the demand for skilled workers in war industries is greater than the immediately available supply. before long we will have to take every tool maker and die-sinker in non-war work and put him in war production.' "the country was divided into thirteen federal districts, by the regulation of labor for war industries, and each was in charge of a superintendent of the united states employment service, while the states within the several districts were in charge of a state director. the labor problem this measure was designed to remedy and control was pictured by secretary of labor wilson, who was quoted in the new york _sun_ as saying in part: "'the government found itself in need of men, and on going out to get them found itself in competition with private industry, which was equally hard pressed. men who had never drawn more than a common laborer's wages found themselves at a premium in the market, and began to ask and receive extortionate prices, and to rove from place to place seeking still higher prices. "'everywhere industry was hampered by what is known as the turnover, or the constant shifting of itinerant labor, in some cases the loss in efficiency running as high as 100 per cent. this is what is perhaps best described as the evil of the individualistic strike--the strike by the man, thousands of him, in different yards and factories all over the country, who is forever throwing down his tools and wandering away on the slightest rumor of higher wages elsewhere, who by his habit of roving never masters the details of any trade, and who in the mass accounts for a greater loss than all the organized strikes and walkouts in the land.'" influence of war conditions in the united states under war conditions labor unrest did not reach the intense form manifested in england. nevertheless a great many strikes were reported. surprise was expressed that the labor adjustment machinery of the war department and of the navy department was not appealed to. besides there was the national war labor board to take up mediation. investigations in bridgeport, connecticut, showed an increase of earnings of 81 per cent. against an increase of living prices of 61 per cent. yet at one time the press reported strikes in over 350 machine shops in new jersey--nearly all engaged in necessary war work--as well as trouble in many shipyards. of course there was the explanation of foreign propaganda or a tendency toward industrial bolshevism. such explanations failed to account for the fact that american workmen as a whole were patriotic. attention was called, on the other hand, to the warm tribute given by the federal fuel administrator to the bituminous coal miners who had brought production past the 13 million ton mark in the second week in july, 1917, and the exceptional efforts of diligent and patriotic workers in the shipyard. a portion of the press emphasized the unreasonableness of striking while the laboring people enjoyed, during war time, immunity from service and immunity from the pressure of competition for wages. the springfield _republican_ protested against applying to the workingmen exaggerated standards of economic rectitude. "it is easy to be harsh in one's judgment even in the case of the strikes that occur. why do they strike at all while the war continues? have they no capacity for self-sacrifice for the country? these questions will be asked by many people whenever war work anywhere is checked in the least degree by workmen dropping their tools. "on the other hand, let us not be unjust to labor, for in the american army in france labor is represented by multitudes of youth upon whose gallantry and steadiness all our hopes of victory depend. no class here at home gives 100 per cent. efficiency or commits itself to 100 per cent. of sacrifice in the winning of the war. why demand it of the wage earners or the labor unions? "simply because of its organization and its machinery of leadership, however, labor enjoys an exceptional opportunity to contribute to the winning of the war. this is the first great war in history in which labor has been organized into an economic unit, and that is the reason for some special war problems today which were never encountered by governments in previous wars. but there can be gains even more than losses to the national strength by reason of this organization, if the opportunity be accepted to promote labor's contribution. this is a task especially for the leadership of organized labor. it is certainly no exaggeration to say that in no way can labor be advantaged after the war so much as by the wholehearted acceptance of its opportunity for loyal service to the nation during the war. let labor splendidly do its part in bringing victory and its future influence will expand beyond the dreams of its prophets.... "labor and victory are inseparable; nay more, the one may command the other, and thus it may control the fate of the world." industrial meaning of war mr. h. e. coffin, chairman of the committee on industrial preparedness, described the european war in its last analysis as a war of munitions, a war of factories, of producing powers, of sweating men and women workers. when the united states entered the war there were four main things required of its government and its people, viz., ships, munitions and materials of war, food and soldiers. it can be seen that three out of these four factors are matters that belong to the economic history of the war. fortunately for our government, it had the experience of foreign countries to learn from, and learning was an essential part of war preparation in spite of the resources in hand in the united states; as mr. coffin said: "a close observation of the experience in foreign countries has shown us the vital necessity for a peace time prearrangement for conversion in all industries. wars, as now waged, involve every human and material resource of a belligerent nation. every factory and every man, woman, and child are affected. every sinew of industry, of transportation, and of finance must be harnessed in the country's service. in england two years and a half ago there were three government arsenals. today thousands of england's industrial plants are being operated as government factories for the production of war materials, and many other thousands of plants, still under private control, are centering their energies in this same direction. "we have here in the united states vast resources in manufacturing and producing equipment, but they are unorganized and uneducated for the national service. our observations of the european war have taught us that it is upon organized industry that we must base every plan of military defense. in the event of trouble with any one of the several first-class powers, between 80 and 90 per cent. of our industrial activity would of necessity be centered upon the making of supplies for the government. we have learned also that from one to two years of time and of conscientious effort are needed to permit any large manufacturing establishment to change over from its usual peace-time commercial line to the quantity production of war materials for which it has had no previous training." in certain respects the position of the united states was unique, not only because of its resources but because it was to a certain extent self-dependent as a belligerent. england was able for some time to import large quantities of munitions and supplies from other countries. in the case of the united states when it entered the war, munition and food supplies had to come from its own resources. practically all of the war materials had to be ultimately produced in the united states. many observers were optimistic because they had a sanguine opinion of the efficiency presented by american industrial democracy. but efficiency alone could not win the war. there were certain limitations to the sphere of efficiency. this was pointed out by mr. h. g. moulton in an address on "industrial conscription," delivered before the western economic society, at chicago, in 1917: "at this point it should be emphasized that the position of the united states is unique, so far as the allied nations are concerned. england, for instance, at the outbreak of the conflict could import vast quantities of munitions and supplies from other countries. england, therefore, had a fourth alternative, one denied to us because the struggle is now world-wide. all of the materials of war that we furnish must come from the current energy of our own people. we must ourselves produce these ships, munitions, food supplies, and stocks in the coming months. there is no one else to do it for us. in this connection i should like to emphasize with all the power at my command the argument that we cannot by bond issues shift the burdens of this war to future generations. the mere fact that all of us--as represented by the government--borrow from some of us--as represented by bond purchasers--does not change the other essential fact that we, the people within this country, must actually produce practically all the war materials we are to have for use in the war. "there is also much current discussion of the wonderful gains that may be made through increasing efficiency. it is argued that we should make our patriotic impulses the occasion for the universal introduction of scientific management. it of course goes without saying that we should do all that we possibly can to further the improvement of industrial methods; and doubtless something may be accomplished." [illustration: forging armor plate "every man, in the draft age at least, must work or fight," said general crowder. and the workers were just as important a factor in winning the war as the fighters. in the gigantic machine sketched above, ingots of sixty and seventy tons were pressed into plates of any size and thickness for use on our super dreadnoughts.] labor dislocation it is estimated that about 35,000,000 men, women and children in the united states do the country's work: dig its coal, raise its crops, run its trains, build its roads, make its powder, turn out its munitions. there was an increase each year of a million man-power through immigration. the result of the war was that this source of supply was cut off. what was the economic significance of this cutting off of immigration? the immigrant was almost the only source of what we call day labor--the men who do the building and repairing of railroads, the mending of streets and roads, mining, and the rough work of steel mills and other factories. along with the cessation of immigration came the withdrawal from labor power of two million men who were drawn into the army. these men, incidentally, became large consumers of goods rather than normal producers of wealth. some estimates were made that the united states government was using for war purposes about one-half of the entire productive capacity of the country. these figures enable one to gauge the industrial dislocation caused by the war. in matters affecting the members of what might be called the labor army, which still kept up the work of production, the government laid great emphasis on the need of securing industrial peace. a mediation commission was appointed by the president to deal with conditions of labor unrest. this commission made a report early in 1918, in which it spoke of the lack of knowledge on the part of capital as to labor's feelings and needs and on the part of labor as to problems of management. the program outlined by the commission was as follows: "1. modern large scale industry has effectually destroyed the personal relation between employer and employee--the knowledge and coöperation that come from personal contact. it is therefore no longer possible to conduct industry by dealing with employees as individuals. some form of collective relationship between management and men is indispensable. the recognition of this principle by the government should form an accepted part of the labor policy of the nation. "2. law, in business as elsewhere, depends for its vitality upon steady employment. instead of waiting for adjustment after grievances come to the surface there is needed the establishment of continuous administrative machinery for the orderly disposition of industrial issues and the avoidance of an atmosphere of contention and the waste of disturbances. "3. the eight-hour day is an established policy of the country; experience has proved justification of the principle also in war times. provision must of course be made for longer hours in case of emergencies. labor will readily meet this requirement if its misuse is guarded against by appropriate overtime payments. "4. unified direction of the labor administration of the united states for the period of the war should be established. at present there is an unrelated number of separate committees, boards, agencies, and departments having fragmentary and conflicting jurisdiction over the labor problems raised by the war. a single-headed administration is needed, with full power to determine and establish the necessary administrative structure. "5. when assured of sound labor conditions and effective means for the just redress of grievances that may arise, labor in its turn should surrender all practices which tend to restrict maximum efficiency. "6. uncorrected evils are the great provocative to extremist propaganda, and their correction would be in itself the best counter-propaganda. but there is need for more affirmative education. there has been too little publicity of an educative sort in regard to labor's relation to the war. the purposes of the government and the methods by which it is pursuing them should be brought home to the fuller understanding of labor. labor has most at stake in this war, and it will eagerly devote its all if only it be treated with confidence and understanding, subject neither to indulgence nor neglect, but dealt with as a part of the citizenship of the state." advisory labor council in order to prevent lack of coördination in the government's handling of the labor situation an advisory council was created to help the secretary of labor to organize the new war work. the field of this advisory council is indicated in a series of memoranda presented to him in january, 1917. "1. an adjustment service which will have to do with the adjustment of industrial disputes according to policies and principles arrived at through the deliberations of the war labor conference board. "2. a condition of labor service which will have charge of the administration of conditions of labor within business plants. "3. an information and education service which will devote itself to the establishment of sound sentiment among both employers and employees and to the establishment in individual plants of the local machinery (_e. g._, employment management) and policies necessary for the successful operation of a national labor program. "4. a woman in industry service which will meet the problems connected with the more rapid introduction of women into industry as a result of war conditions. "5. a training and dilution service which will administer such training and dilution policies as may be agreed upon. "6. a housing and transportation of workers service whose duty it will be to provide the housing facilities to meet the nation's needs. "7. a personnel service whose duties it shall be to assemble and classify information concerning appropriate candidates for positions in the war-labor administration and make recommendations for appointment. "8. a division for the investigation of special problems which would be a part of the secretary's office force and would conduct investigations in the placing of contracts, in priority of labor demand, in powers of the department, in problems of reconstruction, and would assist in formulating the national labor policy. "9. an investigation and inspection service to provide the field force of examiners and inspectors required by the other services." after various stages of experience the war industries board secured something more than an advisory position. this was done only after a year of warfare. the final situation was explained by mr. c. m. hitchcock in the _journal of political economy_, june, 1918: "when on march 4th of the present year the president appointed bernard m. baruch chairman of the war industries board and defined his duties he did not, as certain press reports have implied, create an industrial dictator. his action did clear the way for mr. baruch's assumption of the duties of a director of industrial war strategy, of an industrial chief of staff--for the present position of the war industries board in the american government is comparable in its relation to national industrial policy to nothing so much as the functions of the general staff of the army in its jurisdiction over military strategy. after a year of war the direction of industrial policy is placed in single hands, and a central planning board is established for dealing not only with the problems of production and purchase but with the whole attitude of the government toward the mobilization of business resources for the prosecution of the war. leadership has been focused and an administrative channel opened for the inauguration of a studied and inferentially constructive industrial policy. "from the present trend of events the war industries board promises to become the sole directing agency between the government and industry. backed by the power of the president to commandeer, to withhold fuel, and in other ways to force the halting into line, it can mold the country's industrial system almost as it will--whether in organizing the nation for war or in directing the lines along which it shall return to normal conditions when peace comes. in a system of government such as ours, where the responsibility for directing the war rests almost exclusively in the hands of the president, and where his power ultimately becomes almost absolute, the board has been shaped into a very potent instrument. "yet powerful as it may become, subject only to the jurisdiction of the president, it is well to remember that in a comprehensive national war plan it cannot stand alone. its policies must be subject to the administration's general strategy in the war--for instance, to the amount of munitions in comparison with the number of men or the amount of food that it wishes to send abroad at any given time. the munitions program and the conversion of industry to war purposes must be governed by the ultimate end in view. in addition, one of the great factors in production--the labor factor--is being administered by another government agency, and it is obvious that priority in the labor supply must go hand in hand with priority in materials." work or fight military men were as keen as business men in realizing the industrial factor as a powerful contributory cause in winning the war. general crowder's famous "work or fight" alternative was a sufficient witness of this fact. he said: "every man, in the draft age at least, must work or fight. "this is not alone a war of military maneuvers. it is a deadly contest of industries and mechanics. germany must not be thought of as merely possessing an army; we must think of her as _being_ an army--an army in which every factory and loom in the empire is a recognized part in a complete machine running night and day at terrific speed. we must make ourselves the same sort of effective machine. "we must make vast withdrawals for the army and immediately close up the ranks of industry behind the gap with an accelerating production of every useful thing in necessary measure. how is this to be done? the answer is plain. the first step toward the solution of the difficulty is to prohibit engagement by able-bodied men in the field of hurtful employment, idleness, or ineffectual employment, and thus induce and persuade the vast wasted excess into useful fields. "one of the unanswerable criticisms of the draft has been that it takes men from the farms and from all useful employments and marches them past crowds of idlers and loafers away to the army. the remedy is simple--to couple the industrial basis with other grounds for exemption and to require that any man pleading exemption on any ground shall show that he is contributing effectively to the industrial welfare of the nation." [illustration: building howitzers a nine-mile howitzer nearly ready for transportation. beyond are seen heavy armorplate turrets in the making. the small and large manufacturers were given equal opportunity to obtain war business.] industrial preparation for war was guided by the principle of priority. this is an old principle, but it began to be applied in unheard-of ways. when an army is to be moved all means of transport in sight are commandeered. when an army is to be fed, civilians protest in vain against the seizure of stores. these practices were always features in the history of warfare. a novel factor in priority as applied during the present war was the breadth of its scope. "when the whole industry of a nation is mobilized behind the fighting line, it is not merely finished munitions that must be given priority in transportation, but also the materials and fuel for further munitions production. the food supply of the industrial population, as well as that of the army, has a claim to priority. so also have clothing supplies, lumber for housing, and whatever else is essential to working efficiency. in production it would be impossible to fix definite limits upon the application of the priority principle. we can not much longer permit the free flotation of the securities of foreign enterprises, nor even of the less essential domestic enterprises, so long as national loans or issues designed to finance railways or industrial enterprises of prime necessity are to be floated. modern warfare, in involving the whole national life, has made inevitable a control of business practically coextensive with the economic system. "the application of the priority principle to transportation and production is quite in accord with plain common sense. it is none the less revolutionary in its social economic implications. what it means is that necessities shall have right of way. if we have excess productive capacity, the unessentials and luxuries may be provided, but not otherwise. and necessities are definable in terms that take account only of physical requirements. there is no room in the definition for class distinction. a new country house may seem a matter of necessity to the man of fortune, but he will persuade no priority board to permit shipment of building materials while cars are needed for coal or wheat. nor will he persuade them to let him have lumber that could be used for ships or workingmen's camps, or labor that could be employed to advantage in production for more clearly national and democratic needs." war supplies the united states, following the experience of other belligerents, adopted the policy of decentralization in the production of war supplies. a plan was worked out under which the small and large manufacturer were given equal opportunity to obtain war business: "under the plan that has been worked out for bringing the manufacturing resources of the country into more effective coöperation with the government, the country is to be divided into twenty industrial regions, with the following cities as centers: boston, bridgeport, new york, philadelphia, pittsburgh, rochester, cleveland, detroit, chicago, cincinnati, baltimore, atlanta, birmingham, kansas city, st. louis, dallas, milwaukee, st. paul, seattle, san francisco. the following plan for effecting the organization is suggested by the officials in charge: "1. organize through chambers of commerce and other business associations industrial committees with the principal industrial center as headquarters and such subdivisions as are recommended by the business association of each district. "2. develop such organization in various classes of industry as well as in area for greatest convenience, to get information of all classes of products in and between regions. "3. having established such region and sub-region, through the coöperation of the best business men in each district have a survey of the industries recorded in the hands of the section in washington of the war industries board for information to the various procurement sections of the government. "4. each region may have in washington a representative who through the resources and conversion section of the war industries board may keep in direct contact with his region and be available to the governmental procurement divisions or the war industries board for prompt action in giving data from his region. "the detailed form of organization suggested for each region (subject, of course, to modifications as desired to meet the needs of any region) is known as the cleveland plan, which has been for some time in operation. under this plan each region is divided into eight sub-regions, an important industrial city in each sub-region being designated as a center. each sub-region has a local war industries commission which coördinates all industry within its territory. within each sub-region manufacturing is divided into the following classes: castings, forgings and stampings; machinery and machine products; rubber products; clay products, chemicals, oils, and paints; textiles and clothing, wood and leather; engineering; automotive. other classifications may of course be added in important lines of industry." such regional divisions were but one factor in industrial administration. government needs and labor shortage made imperative the regulation of manufactures by the priority system. [illustration: guns and armaments for united states and her allies interior of one of the bethlehem steel company's mills--among the largest plants in the world for the production of munitions during the war.] the priority system the actual working of the priority system is shown in the following general classification of industry for the purpose of priority treatment: ships--including destroyers and submarine chasers. aircraft. munitions, military and naval supplies and operations--including building construction for government needs and equipment for same. fuel--for domestic consumption, and for manufacturing necessities named herein. food and collateral industries--(_a_) foodstuffs for human consumption, and plants handling same. (_b_) feeding stuffs for domestic fowls and animals, and plants handling same. (_c_) all tools, utensils, implements, machinery, and equipment required for production, harvesting and distribution, milling, preparing, canning and refining foods and feeds such as seeds of foods, and feeds, binder twine, etc. (_d_) products of collateral industries, such as fertilizer, fertilizer ingredients, insecticides and fungicides, containers for foods and feeds, collateral products. (_e_) materials and equipment for preservation of foods, and feeds, such as ammonia and other refrigeration supplies, including ice. clothing--for civilian population. railroad--or other necessary transportation equipment, including water transportation. public utilities--serving war industries, army, navy, and civilian population." but the perplexity of applying this system to such a question as fuel administration is shown in the following list taken from one of the trade publications of the administration for april, 1918: "the fuel administration has therefore arranged the following list of preferred industries: aircraft--plants engaged exclusively in manufacturing aircraft or supplies and equipment therefor. ammunition--plants engaged in the manufacture of ammunition for the united states government and the allies. arms (small)--plants engaged in manufacturing small arms for the united states government and the allies. army and navy cantonments and camps. chemicals--plants engaged exclusively in manufacturing chemicals. coke plants. domestic consumers. electrical equipment--plants manufacturing same. electrodes--plants producing electrodes. explosives--plants manufacturing explosives. farm implements--manufacturers exclusively of agricultural implements and farm-operating equipment. feed--plants producing feed. ferro-alloys--plants producing same. fertilizers--manufacturers of fertilizers. fire brick--plants producing same exclusively. food--plants manufacturing, milling, preparing, refining, preserving, and wholesaling food for human consumption. food containers--manufacturers of tin and glass containers and manufacturers exclusively of other food containers. gas--gas-producing plants. guns (large)--plants manufacturing same. hemp, jute, and cotton bags--plants manufacturing exclusively hemp, jute, and cotton bags. insecticides--manufacturers exclusively of insecticides and fungicides. iron and steel--blast furnaces and foundries. laundries. machine tools--plants manufacturing machine tools. mines. mines--plants engaged exclusively in manufacturing mining tools and equipment. newspapers and periodicals--plants printing and publishing exclusively newspapers and periodicals. oil--refineries of both mineral and vegetable oils. oil production--plants manufacturing exclusively oil-well equipment. public institutions and buildings. public utilities. railways--plants manufacturing locomotives, freight cars and rails, and other plants engaged exclusively in manufacture of railway supplies. refrigeration--refrigeration for food and exclusive ice-producing plants. seeds--producers or wholesalers of seeds (except flower seeds). ships (bunker coal)--not including pleasure craft. ships--plants engaged exclusively in building ships (not including pleasure craft) or in manufacturing exclusively supplies and equipment therefor. soap--manufacturers of soap. steel--steel plants and rolling mills. tanners--tanning plants, save for patent leather. tanning extracts--plants manufacturing tanning extracts. tin plate--manufacturers of tin plate. twine (binder) and rope--plants producing exclusively binder twine and rope. civil war conditions during the war period labor was much better off than during the civil war epoch. the new york _world_ presented the following table from the _merchants' magazine_ of december, 1864, showing the rise of prices during the civil war era: _1862_ _1864_ copper, 100 lbs $22.00 @ $25.00 $41.00 @ $42.00 coal, ton 4.50 @ 5.00 9.00 @ 10.00 iron, pig 21.00 @ 25.00 48.00 @ 49.00 lead, 100 lbs 6.50 @ 6.75 11.75 @ 12.00 nails, 100 lbs 3.25 @ 3.75 6.00 @ 6.25 ashes, pot bbl 5.50 @ 5.75 8.75 @ 8.87 dry cod, cwt 3.37 @ 4.25 6.50 @ 7.00 flour, bbl 4.50 @ 5.60 7.30 @ 7.35 corn, 100 bush 58.50 @ 60.00 131.00 @ 134.00 hay, 100 lbs .80 @ .85 1.35 @ 1.40 wheat, bush 1.30 @ 1.45 1.63 @ 1.65 hemp, cwt 10.00 @ 11.25 14.00 @ 16.12 barley, bush .85 @ 1.00 1.35 @ 1.50 oats, bush .37 @ .39 .90 @ .91 hops, 100 lbs 14.00 @ 20.00 26.00 @ 33.00 clover seed, 100 lbs 7.50 @ 7.75 12.50 @ 13.50 lime, bbl .60 @ .65 1.25 @ 1.35 oil, whale, gal .25 @ .35 .58 @ .60 oil, coal, gal .48 @ .57 1.10 @ 1.12 pork, bbl 13.25 @ 13.75 21.75 @ 23.50 beef, bbl 5.50 @ 8.00 10.00 @ 15.00 lard, 100 lbs 7.50 @ 8.25 13.59 @ 14.00 whisky, 100 gals 25.00 @ 25.50 89.00 @ 91.00 tallow, 100 lbs 8.75 @ 9.00 12.62 @ 12.75 whalebone, 100 lbs 68.00 @ 70.00 150.00 @ 155.00 wool, fleece, 100 lbs 52.00 @ 53.00 78.00 @ 82.00 wool, pl'd, 100 lbs 44.00 @ 45.00 70.00 @ 75.00 butter, 100 lbs 16.00 @ 21.00 36.00 @ 37.00 cheese, 100 lbs 5.00 @ 7.00 15.00 @ 18.00 "wheat flour, one of the prime necessities, 'was at no time during the civil war above $7.35 per barrel, which is somewhat less than four cents per pound,' while at the present time it is seven cents per pound, 'or close to 100 per cent. higher than the top notch of the '60s.' lard has already advanced about 100 per cent., while its greatest advance during the civil war was 75 per cent. "'the present-day advance in the price of clothing in general has not been proportionate with the advance of foodstuffs, though it has been considerable, especially as to the cheaper grades. cotton shirts that sold for 48 cents in 1913 are now bringing 90 cents to $1. cheap hosiery has also about doubled in value. suits that formerly sold for $15 are now bringing $17, which is about 10 per cent. advance. cotton goods during the civil war were exceptionally high, owing to the difficulty of procuring the staple. after the stocks on hand at the beginning of the war were exhausted, new england mills shut down because of inability to get supplies. in 1864 raw cotton ruled at 72 cents per pound, while at one time it touched $1.90. cotton goods of all kinds were therefore extraordinarily high.' [illustration: plowing by night the number of men drawn from great britain into the army and navy during the war was about 5,000,000. this meant extraordinary efforts of production were necessary on the part of those who were left behind. by means of a motor tractor and an acetylene gas generator, the owner of the farm shown above was able to run day and night shifts. copyright underwood & underwood] "the public spirit manifested at present is much more admirable than that displayed in the '60s, as shown by the following first-hand description of life in those days, as compared with what we see on every hand today. said the new york _independent_ of june 25, 1864: "'who at the north would ever think of war if he had not a friend in the army or did not read the newspapers? go into broadway and we will show you what is meant by the word "extravagance." ask stewart about the demand for camel's-hair shawls and he will say "monstrous." ask tiffany what kind of diamonds and pearls are called for. he will answer "the prodigious, as near hen's-egg size as possible, price no object." what kind of carpetings are now wanted? none but "extra." brussels and velvets are now used from basement to garret. ingrains and three-plys won't do at all. "'call a moment at a carriage repository. in reply to your first question you will be told, "never such a demand before, sir." and as for horses, the medium-priced $500 kind are all out of the market. a good pair of fast ones, "all right," will go for $1,000 sooner than a basket of strawberries will sell for four cents. those a "little extra" will bring $1,500 to $2,000, while the "superb" 2.40 sort will bring any price among the high numbers.'" great britain's productive power to appreciate what industrial mobilization meant in england the best method is to start with the figures on national production taken from the british census of 1907, the last accessible for the peace period: in 1907 the british people are estimated to have produced goods to the total amount of, roughly $10,000,000,000 the nation consumed during that year in personal consumption 7,050,000,000 it spent on capital purposes at home: (_a_) on betterment of its national plant 950,000,000 (_b_) on maintenance of its national plant 900,000,000 it used up goods to the value of (in keeping up and probably increasing its stocks of material on hand) 325,000,000 it exported goods in the form of loans to foreign countries of about 500,000,000 by 1914 the british empire had probably advanced its income to at least $12,500,000,000; and the surplus of goods which it had to export as loans to foreign countries seems to have increased from about $500,000,000 to $1,000,000,000. what happened in war-time? first of all there was an unprecedented manufacture of munitions and war supplies. this production was needed not only for great britain, but also for her allies. seven-tenths of what was produced in great britain in the year 1907 was immediately used up in the form of personal consumption by its population; accordingly war industrial activities meant either that british production must be increased or british consumption reduced, or that more goods must be bought from foreign countries through the sale of british liquid capital assets. first of all, consumption was cut down; in detail, this was accomplished in the following ways: 1. by cutting down all normal additions to england's national plant, _i. e._, by building no more houses, factories, railways, roads, etc., except for purely war purposes. this expenditure in 1907 amounted to about $950,000,000. 2. by cutting down and ceasing as far as possible to spend money on the maintenance of this national plant, except the minimum required to keep it running. this expenditure in 1907 amounted to $900,000,000. 3. most important of all, by cutting down civil personal expenditure. this was so far the largest item of consumption that it was here that the most important savings were made. a whole population at work in england the total number of "occupied males" between the ages of 18 and 44, _i. e._, roughly, the conscription age was, in 1911, 7,200,000. the number of men from the united kingdom in the army and navy amounted to over 5,000,000; therefore, out of every seven of these men, on the average five were soldiers or sailors. these men were lost from the productive capacity of the nation. it is obvious that if english production remained the same, or increased, it must have been the result of extraordinary efforts on the part of the small percentage of occupied males of fighting age left, on the part of all the other males occupied or formerly occupied, and on the part of all females. mr. r. h. brand, in discussing the situation in 1918, said: "notwithstanding the great difficulties, i think it is probable that our production is quite as great as before. measured in money, and owing to the rise of prices, it would probably be much greater. this is due to the fact that the whole population, practically speaking, has been working, and working intensely. millions of women who have not worked before are working now. no one is idle. every acre of land or garden that can be used is being used. methods of production have been speeded up, labor-saving machinery in industry and agriculture multiplied. in every direction the wheels have been turning faster. "but, perhaps more important still, the _character_ of our production has entirely changed--almost our entire industry is producing for war purposes. ordinary civil needs are no longer considered. we have of course to produce what is essential for life, but beyond that all our energies are directed to war production. the government has of necessity compelled the whole of british industry to produce for war and to produce what it is told to produce, because in no other way could our own armies and our allies have been supplied. no man is free to do what he likes with his labor and capital, with his ships, or with his steel. he has to do what he is told to do. by this means production for war purposes has enormously increased, and civil consumption has enormously decreased, because the goods for the civil population were no longer produced and one cannot buy what isn't there. instead of gramophones, the gramophone company makes fuses; instead of cloth for ordinary clothes, the woolen factory makes khaki; instead of motor cars, the motor-car maker makes shells. british industry on war basis. "apart from selling our liquid capital assets in return for foreign goods, and apart from borrowing from foreign countries for the same purpose, our power to provide our own army and navy with all they want and have any surplus over for our allies has indeed depended entirely on our extraordinary efforts in production--not in normal production, but in war production--and also on the extent to which we have been able to reduce our civil consumption of all kinds. i put production first because, while economy in consumption is exceedingly important, increased productive capacity devoted to war material, in my opinion, is still more important. our increased productivity has, as i say, been devoted entirely to war requirements. we have had to turn over our whole industry from a peace to a war basis. we have both voluntarily and compulsorily cut off the production of goods which are unnecessary for war purposes. many trades have been actually shut down and the labor taken from them and handed over to war industries. labor itself has been subjected to restrictions which would have been wholly impossible before the war. labor may not leave its employment without government leave; salaries and wages may not be increased without government approval. measures for the control of industry which were unheard of and, in fact, absolutely impossible before the war have been imposed upon all industry. "fixed prices had been placed on the most important materials; the government now has the absolute control of the use of steel, copper, lead, wool, leather, and other materials for which the war demand is insatiable, and also of all materials manufactured therefrom. no use may be made of most of these materials for any purpose whatever without a certificate being first obtained, no buildings of any kind may be erected without leave of the ministry of munitions. the whole of industry may now be said to be directed according to the requirements of the government, its regulation is an enormous task. in the head office of the ministry of munitions alone there are more than 10,000 people. mr. r. h. brand, who is responsible for these statements and used them in an address to the american bankers' association, showed how these regulations had resulted in a decline of british imports from peace conditions of 55,000,000 tons annually to war conditions of 20,000,000 tons. the imports were nearly all foodstuffs. england exported large amounts of munitions and supplies to her allies. in the year 1916 alone we supplied them with 9,000,000 pairs of boots, 100,000,000 sand bags, 40,000,000 yards of jute, millions of socks and blankets, and in addition several thousand tons of leather; also cloth, foodstuffs of every kind, portable houses, tools, hospital equipment and so on. labor power in england mr. lloyd george became the man naturally selected to be prime minister because of his success in directing one of the chief war industries--the work of munitions. in may, 1915, when he was made head of the newly created department of munitions, the problem before him was no easy one. the central empires were able to turn out 250,000 shells a day, while the british rate of production was 2,500 high-explosive shells a day, and 13,000 shrapnel shells. lloyd george selected a large technical staff; the work was decentralized as much as possible, and special committees were formed for the purpose of organizing the work in each district. the question of raw materials had to be handled and this was not always easy because there were unscrupulous suppliers trying to make a corner in their goods. new machinery had to be made for the manufacture of large shells; all the big machine works were taken under direct control by the government. old factories had to be equipped and altered and twenty-six large plants had to be created. to provide the labor power, workmen were recruited by voluntary methods. a hundred thousand were in this way got together by july, 1915, most of whom were experts in machinery and ship-building. the result is pictured in the following extract by a french expert, jules destrée: "on the 20th of december, 1915, mr. lloyd george, in a speech delivered in the house of commons, summarized the results of the first six months of his tenure of office. we will take a few points. "orders placed before the formation of the department were delivered with an increase of 16 per cent. on previous deliveries. the number of new orders placed increased by 80 per cent. "the state regulation of the metal market resulted in a saving of from 15 to 20 million pounds sterling. "the present output of shells for a single week is three times as great as the entire output for may, 1915, which means that the rate of production is twelve times as great. "the enormous quantity of shells consumed during the offensive of september, 1915, was made good in a month. the time will soon come when a week will suffice. "the output of machine guns is five times as great; that of hand grenades is increased forty fold. "the production of heavy artillery has been accelerated, and the heaviest guns of the early days of the war are now among the lightest. "an explosive factory in the south of england, which on october 15, 1915, started to fill bombs at the rate of 500 a week with a staff of 60, was in march, 1916, turning out 15,000 a week with a staff of 250. "an entirely new factory which started work at the end of october, 1915, with one filling shed and six girl fillers and an output of 270 a week, was in march, 1916, employing 175 girls and handling 15,000 bombs a week. "the ministry of munitions has built, or is building, housing accommodation for 60,000 workers, and canteens and mess rooms in munition works now give accommodation for 500,000 workers a day. "all the workmen were assigned either to the works already in existence--which in many cases were short of hands and unable for this reason to fulfill their contracts--or else they were allotted to the new factories. "but in view of influence wielded by the labor unions, various provisions were inserted in the munitions act. they related to the settlement of labor disputes and to the prohibition of strikes and lockouts the grounds for which had not been submitted to the board of trade. "to obviate such disputes, which were generally called forth by the excessive profits accruing to the employers and the demands of the wage-earners, the system of 'controlled establishments' was instituted. every establishment engaged on munition work was placed, so far as the regulation of profits and salaries was concerned, under direct government control. any modification in the rate of wages had to be submitted to the ministry of munitions, which had power to refer the question to an arbitration board specially set up by the act. "to complete this rapid survey it must be added that a department was created by the ministry of munitions, under the control of an undersecretary, whose special business it was to examine war inventions." industrial dislocation in france when war was declared in 1914, the result in france was a complete disorganization. it must be remembered that workingmen from the age of 19 to 45 were called to the colors. this meant that the labor supply was reduced by about three-fourths. the revival of trade was very slow until the beginning of 1915. when it began to be realized that the war would be a long one, and when the consumption of ammunition and war materials was beyond all previous records, the government was forced to prepare a program for industrial warfare. it was a hard task because much of industrial france was under enemy occupation. munition work had to be undertaken in neighborhoods largely agricultural. everything was lacking: labor, coal, raw material and transportation. as it became evident that the stoppage of industrial work was a serious mistake, an attempt was made to revive industries not connected with munitions, such as paper manufacture, glove and silk making. the operations undertaken by the government are described in the following passage from m. r. blanchard's article in the _north american review_ (1917): "the first was to take men out of the army and send them to industrial work. this was done with great caution during the winter of 1914--15. the proportion of the men thus taken increased more and more during the year 1915 and reached its fullest extent in 1916. the specialists in steel work were the first to be taken out of the trenches; these were far from being sufficient, and common workmen were added to them. then chemists and workmen trained in the manufacture of explosives were recalled; electric engineers were sent back to the hydro-electric plants; miners above thirty-five years of age who belonged to the territorial regiments were sent to the mines; paper-makers and cardboard-makers who could be employed in the preparation of explosives were put to work; cabinet-makers were put to manufacturing rifle stocks; wood-cutters were brought back from the front in order to see that there was no waste in providing the enormous amount of wood needed in the army. all this recalling of mobilized men was effected at first according to the need, and without method. by degrees it became clear that the output would be greater if these soldier-workmen were assigned to the plants or factories where they were working before the war. as it would have been unwise to take too large a number of men out of the fighting units, hundreds of thousands were taken from the auxiliary troops of the interior, men who through lack of physical ability to fight were employed in sedentary tasks. thus in 1915 and 1916 auxiliaries were swept away to become workmen, foremen, secretaries, bookkeepers, accountants, etc. finally the administration decided to draw from the oldest classes of men still under the military law. these were called in 1915 and sent to the factories--men born in 1868, either bachelors or married men without children. "another draft was made on the civil population. to make up for the absence of male help, women were called upon for a great number of occupations. along with the women the refugees were to do their part. after a rather long period of unsettled life these refugees took again to regular occupations, some working in the fields as agricultural hands, others in factories. today it is difficult to find unemployed people among them. "the alien population for france is also large, considerable numbers of italians, spaniards, and portuguese being employed in the southeastern region. a newer element was provided by natives from french colonies, namely, morocco and algeria. since the war started large numbers of greeks and armenians had been imported into france; and during the last two years something like 200,000 chinamen had been brought to france for unskilled work. the last resource was the enemy itself. there were in france more than 250,000 german prisoners engaged in various work and receiving a salary for it." germany's industrial mobilization was picturesquely described by the head of the general electric co., dr. walter rathenau, who was appointed at the beginning of the war to superintend the supplying of the german war office with raw materials. he told the officials at the war office that germany was provided with more war materials only for a limited number of months. accurate statistics were prepared in a short time on the power of production in various german industries. then all the raw material was put where it could be commandeered. the flow of products was restricted, so that the raw material and also half manufactured products could be automatically diverted to articles needed by the army. new methods were discovered and developed. where former technical means were insufficient substitutes had to be found. where it was prescribed that this or that article was to be made out of copper or aluminum, it was permitted to make it out of something else. all the laboring power of the country, including men from 16 to 60, were enrolled and controlled from the central organization called the war office, described by general gröner as follows: "the new war office represents germany as a colossal firm which includes all production of every kind and is indifferent to the kind of coat, civil or military, which its employes wear. the new measures are intended to mobilize all effective labor, whereas up to the present we have only mobilized the army and industry. the whole war is becoming more and more a question of labor, and in order to give the army a firm basis for its operations the domestic army must also be mobilized. all the labor, women's as well as men's, must be extracted from the population, so far as possible voluntarily. but if voluntary enlistment does not suffice we shall not be able to avoid the introduction of compulsion." the german nation in arms sixteen months after this war organization was effected, general ludendorff said that when the great spring offensive of 1918 opened the germans were superior to the allies in every form of war supplies. there was a speeding up all round; the output of shells and cannon was double. this meant the doubling of the coal and iron production, and could be done only by increasing the workers necessary to double the output of basic war materials. adequate food had to be supplied to the workers; there was what is known as the hindenburg "fat fund" to which contributions were sent in from german peasantry and agriculturists. general gröner, the head of the german war office, outlined optimistically the future of german war industrial production as quoted in the new york _times_ of december 14, 1916: [illustration: photo by p. thompson a war time warning dairy production among the allies decreased 30 per cent. during the war. the lard supply was also decreased. kitchen economy in fats was never more important. fats were so scarce in germany during the latter part of 1917 that a "hindenburg fat fund" was organized to which contributions were sent in from german peasantry and agriculturists.] "german locomotives are running to the taurus in asia minor; we are operating practically all the serbian railways with german rolling stock; we have thousands of cars in transylvania and rumania, to say nothing of other occupied territories. after the transportation problem, we are taking measures to double the production of the auxiliary raw materials and semi-finished products. as one example, we are doubling our efforts for the manufacture of nitres from the nitrogen of the air. not only of the basic raw materials, coal and iron, but of auxiliary raw materials we have no lack. "the brains of our chemists and technicians are supplying the missing imports, and will continue to do so. only when we have accomplished all this will we proceed to the last step of doubling the production of shells and cannon. such a war is not to be won by looking ahead from month to month, but only by thinking of the distant future. after we have doubled the pyramid, we shall proceed to treble it. "by spring we shall be going full steam ahead. after that our production will increase from month to month; and we have the labor and raw materials for keeping up the pace indefinitely. "the male working forces available between the ages of seventeen and sixty, as provided by the auxiliary service law, will cover our requirements into the distant future, but ultimately, aside from the children, aged and sick, every man and woman will be enlisted for home defense, if necessary. the home army will be the whole nation. "what we are engaging on is not alone the progressive mobilization of all the nation's physical strength and material resources, but the mobilization of the nation's brains. an army corps of professors, scientists, chemists, engineers, technicians, and other specialists is already working with the kriegstaat. our idea is to be eminently scientific and practical--no theorizing. we are working to show results. "we are coöperating closely with the war industries of turkey, bulgaria, and austria. it means doubling and trebling their ammunition supply, too. "the military successes achieved in rumania, which synchronize with the birth of patriotic auxiliary service, are an advantage that cannot be overestimated. the danube means everything to us. last year we had to beg rumania for her oil and grain and pay our good money for it too. now we don't need to beg costly favors of rumania. "lloyd george does not scare us. we have, however, not time for busying ourselves with politics; we have more important things to do--supplying hindenburg with the means of victory." russia's industrial mobilization in russia industrial mobilization was badly managed. cattle were taken to the front in herds. often driven on foot, they were slaughtered on the spot where the meat was needed for the soldiers. the hides were thrown aside to rot. as a result of this wasting of hides, the supply of leather for military uses and for shoes for both the army and the civilian population was soon utterly inadequate. horses were requisitioned in the most unintelligent way, the result being that agricultural production decreased and with the lack of transportation facilities the army horses could not be supplied with food. they died by the tens of thousands. gross mismanagement marked the war handling of the russian railway system. the rolling stock was allowed to deteriorate. locomotives and cars were put aside permanently when they needed slight repairs. they could not be repaired because the railway machine shops had been converted into munition factories. there was an appalling shortage of manufactured goods for the civilian population, because the entire output of many manufacturing concerns was taken over for the army. it was almost impossible to get clothing, boots and articles of wearing apparel. so great was the dearth of cloth at the end of the third year of the war that one was struck by the contrast between the lines in front of the bakeries formed in the early morning hours and the groups of women gathered at eight in the evening before the shops which sold cloth to stand all through the night in line for the opening of the shop in the morning. a bright spot in russian war administration was the work of the municipal and provincial councils. the members of these bodies did valiant service in preventing the growing disorganization of the economic life of their country. their activities are described by prof. harper of chicago university, an actual eye witness of russian conditions during the war, in the following passage: "so these organizations entered upon a campaign of 'saving' and 'production.' they saved the hides that were being thrown away, collected the discarded boots at the front and repaired them, and took over the task of supplying the underwear for the whole army--mobilizing the village coöperative societies to fill the large orders. and they did much to organize the refugees from the invaded districts for productive work. in a word, these men saw that the war was going to extend into years, and they realized that only foresight and organization of productive resources would make it possible for russia to withstand economically the burdens of a protracted struggle. "the attitude of the governmental authorities (the bureaucratic departments) toward the work of these non-bureaucratic, but public, institutions (the unions of the municipal and provincial councils) was one of suspicion and antagonism, and difficulties were put in their way with the deliberate intent to block their activities. the institutions were suspected of pursuing political aims. only when it became clear that the ruling group in the bureaucracy was consciously allowing the country to drift into a state of anarchy in order to bring russia out of the war did these leaders venture to risk revolutionary methods of action. "the president of the all-russian union of provincial councils, the zemstvo, was prince lvoff, the first prime minister of the new russia after the revolution of march, 1917. in the monthly reports of the work of the all-russian union of zemstva, prince lvoff, repeatedly issued warnings of the impending economic collapse of the country. but neither he nor kerensky was able to liquidate the heritage received from the old régime in time to stave off the series of economic and financial crises of which the bolsheviki availed themselves." forebodings of russia's collapse but it was not only foreign observers who were able to detect the prevailing rottenness in russia's economic status. the following passage from an address made by a. i. konovalov, a member of the moscow stock exchange, shows that russian business men were keenly alive to the dangers of the situation as early as april, 1917: "the old régime has seemingly done everything deliberately to destroy and demoralize the trade-industrial apparatus it took years to build up. as a result the usual course of the country's economic life was stopped, and at the same time, through the peculiarly enforced system of regulations, a wide field for all sorts of abuses and speculations was opened. we must frankly acknowledge that from these abuses and speculations a system of oppression grew up which has called forth fully merited reproach, distrust, and hostile feelings towards the representatives of the trade-industrial class. "at the same time there can be no doubt but that under present circumstances, lacking most of the necessaries of existence, with the factories and mills forced to cut down their production due to lack of raw material and fuel, with the demoralization of the transportation system, and being compelled, despite all these obstacles, to meet the numerous requirements at the front--there is no other way out but government control of private industrial and mercantile enterprises, and the coöperation of the democratic masses of the population in the matter of regulating the trade-industrial life of the country. in addition to fair distribution it should be the task of all the committees, which are to become parts of the ministry, also to regulate the prices. "closely connected with this question there is another one which i personally consider of tremendous importance. i have in mind the question of limiting the profits of all mercantile and industrial establishments. undoubtedly a properly worked-out solution of this question would have the tendency to check the unwarranted growth of prices that would appease the masses. the normal effect of a decree limiting profits is of tremendous importance, not only in that it would soften the feeling of ill-will towards the trade-industrial class, but also because it would afford the government a new, convincing proof that the commercial and industrial class is ready to make all possible sacrifices for the common good, a proof which would paralyze the voicing of any new demands on the part of the masses. "now, these are the main ideas, the fundamental points of view which the trade-industrial class should consider as a starting point in its efforts to win the confidence of the population and to safeguard that important position which it ought to occupy in the life of the country. "the situation is becoming all the more difficult because of the ever-increasing famine due to the shortage of means of production as well as of all the necessaries of life; this famine will be felt very acutely, not only on account of the lack of these goods, but also because of the overabundance of paper money." labor traditions upset all kinds of economic theories and all varieties of economic experiences have been overturned by the abnormal industrialism of the war. the world really passed into a _terra incognita_. even the firmest foundations of trade unionism have been shaken. there was no more firmly established fact before the war than the inability of women to secure a level of wages equal to that of the male wage earner. such theories have passed to the limbo of forgotten things. prejudice and tradition have given away before the actual test of facts. women have taken the place of men called away to war service in practically all the fields of industrial activity. apart from theory, biological and otherwise, it is now seen that the old exclusion of women from skilled industry was largely the result of trade union regulation. but the woman war-worker was found in fields untouched by trade unionism. there was the woman bank clerk as well as the woman engineer. there was much discussion, mostly pessimistic, as to what would happen if the woman labor supply should permanently take the place of man labor after the war was over. the best solution was thought to be the placing of the woman worker under a régime of trade unionism. how far such prognostications went is illustrated in the following quotation from miss mary stocks in the london _athenaeum_. "it has been presupposed that the war will end decisively before the armies engaged are reduced to inappreciable numbers of able-bodied men. it has been presupposed that the return of peace will find british industry based upon the old system of private ownership of capital and haphazard production in response to the effective demand of individuals. it presupposes no change of heart on the part of employers, government or trade unions. but, in view of possible, if not probable dangers, the most urgent stress should be laid upon what is an undoubted palliative, if not a fundamental cure for such prospective economic ills; that is, the strenuous promotion and public encouragement of trade unionism among women. what women, by reason of underlying social and economic causes, are not able to do for themselves, the moral and financial support of the public must do for them, and such support should be regarded not merely as an interference in the old struggle between capital and labor, but as an attempt to ward off a national danger. "the root of the evil is the old incompatibility between male and female labor in the skilled and semi-skilled grades of industry. that incompatibility has arisen partly from fallacious theorizing of the 'wages-fund' type, but largely from the fact that the industrial woman, in spite of the uphill and often successful trade union work which has been accomplished, mainly from above, during the past forty years, is regarded by her male colleague as nature's blackleg. and in spite of the short-sighted policy of hostility to women members displayed by a few trade unions, it is fairly clear that it is not the woman trade unionist that the man is afraid of, but the woman blackleg; not the well-paid woman, but the sweated woman. now there are three ways of dealing with a blackleg: he may be elbowed out of the industrial world altogether; he may be penned up, as women have been penned up, in the lowest and most undesirable grades; or he may be turned into a trade unionist. as far as women are concerned, the first two are closed by national expediency, humanity and justice. the third lies open; and in view of the peculiar economic rocks which loom vaguely ahead of us, it may be said without exaggeration that one woman trade-union leader is worth a hundred welfare workers." [illustration: copyright underwood & underwood women workers in america a field of winter lettuce, with the cloches, or glass bells, which made it possible during the war to raise plants in cold weather.] women workers in america as a result of the labor dislocation due to the operation of the american draft law, a large number of women were employed in railway work. the experience of the united states railroad administration in the matter of women employes was summarized in a paper read by miss pauline goldmark, manager of the women's service section of the railroad administration, at a conference at the academy of political science, in 1918: "the number of women employed on the railroads of the united states had been 60,000 at the beginning of the year, and reached approximately 100,000 by october 1st. the greatest number are in the clerical and semi-clerical occupations. of the 81,000 employed july 1st, 61,000 were working as clerks of all kinds, stenographers, accountants, comptometer operators, etc. in this class appear women ticket sellers and bureau of information clerks, who served the public for the first time; they were found well fitted for this type of work, and special instruction agencies were opened by the government in various states to train them in the intricacies of tariffs and routes. "the next largest group of 4,000, it is not surprising to learn, appears in women's time-honored occupation of cleaning. women have long been cleaning stations, offices, etc., but now they are employed in the yards to clean coaches and pullmans, both inside and outside; and in the roundhouses, doing the heavier work of wiping locomotives; 800 were so employed. in personal service, including work in dining rooms and kitchens, as matrons and janitresses, 2,000 were found. in the railroad shops, women entered the greatest variety of new occupations. three thousand were employed, ranging at one end of the scale from common laborers, at the other end of the scale of skilled mechanics earning the machinists' or carmen's rate of pay. "many women were employed a year and a half ago, before the railroads were put under federal control, because they could be obtained for less pay than men. they were, for instance, engaged as common laborers at 20¢ to 22¢ an hour, at a time when men were receiving 28¢ to 30¢ for the same class of labor. with rare exceptions where adjustments are still necessary, the wage orders have absolutely stopped this undercutting of men's wages by women. work unsuitable for women "soon after women began to be largely employed it became apparent that some of their work was neither profitable nor appropriate. the use of women as section laborers, for instance, in a gang of men working along the tracks at a distance from any house or station was judged to be unsuitable. this was also found to be the case where women were employed as truckers in depots and warehouses on account of the extraordinary physical exertion required of them. in view of the wages now paid it was believed possible to secure men and to transfer the women to some class of work suitable to their strength and with proper regard to their health. the railroads were accordingly asked to discontinue their employment in both these positions. "comparisons with other industries can probably best be made in respect to the women employed in the shops. they are operating a number of machines such as bolt-threaders, nut-tappers, drill presses, for which no great skill or experience is needed, and which is classed as 'helpers' work,' and rated at the specified pay of 45¢ an hour. they are also employed for highly skilled work. a number have succeeded as electric welders and oxy-acetylene-burners. they have been found well adapted for work on the air-brake equipment and are cleaning, testing, and making minor repairs on triple valves. in some places they are now working in a separate group on the lighter-weight valves, weighing not more than forty pounds. after a period of training they are giving satisfaction without the help of any man operator. "a remarkably fine type of woman is now to be seen in many of the shops, who enjoys the greater freedom of her work as compared with factory routine, although in many cases the discomfort, the dirt, and exposure are far greater. it remains to be seen whether the women will remain in these jobs to any great extent. the railroads will, of course, recognize the seniority rights of all their employees returning from military service, but as far as the new employees are concerned, women will have the same privileges as other new employees in retaining their positions or being assigned to other jobs. there can be no doubt that in the clerical and semi-clerical positions they have proved their worth, and will to a great extent be retained." alien labor for war purposes the man in the fighting line was only one factor in the prosecution of warlike operations. the success of strategy and tactics was dependent upon the organization of the man in the labor line not only at home but also in the territory behind the miles of trenches in france. for this purpose chinese labor was drafted by both the british and the french government. large numbers of british ships sailed with crews practically consisting of chinese sailors. the sentiment in favor of chinese exclusion had to give way before imperative needs for labor power. there were tens of thousands of chinamen in the service of the allies. in the _sunset magazine_, mr. g. c. hodges calls attention to the fact that the break between the chinese republic and germany was precipitated largely by the allied drafting of china's manpower. even in its beginnings he says, the french and british mobilization of chinese labor caused a diplomatic battle royal. the significance of chinese labor behind the battle front is described in the following words: "they are a war factor. his britannic majesty's chinese labor corps now behind the battle line in france is almost as large as the total chinese population in the united states. the french republic has recruited a force of similar dimensions, bringing chinese manpower overseas for non-combatant and industrial work. even teeming russia, before its tragic collapse, had drawn upon thousands of chinese for work as far west as the ural mines. in 1914 there were but 7,000 in this rich country, but a fourfold increase brought the total to 30,000. all told, 200,000 chinese are 'carrying on' in the war zone, laboring behind the lines, in munition works and factories, manning ships. "though the pages of no white book say it, the break between the chinese republic and germany was precipitated largely by the allied drafting of china's manpower. even in its beginnings, the french and british mobilization of chinese labor caused a diplomatic battle royal." economic value of american army to french industry permanent economic improvements were one result of the presence in france of the american expeditionary force. an industrial movement was created that will probably continue long after the war is over. in various french seaports, docks had to be constructed to handle the enormous tonnage of supplies needed for the american troops. a letter in the new york _journal of commerce_ gives a picture of the transformation in the transport system in france made in order to handle with speed and certainty the various supplies on which the american army depended: "our project comprises nearly 1,000 miles of railroad construction, but not continuous. france already controls on her lines such facilities that she has been able to support her great military burden and not break. their local development in the way of sidings and so forth is chiefly in the big towns, and small engines and cars are used. to meet our larger needs, it is necessary to establish terminals outside the towns for the change of engines and for our great storage warehouses. our great railway construction in france, apart from a few cut-off lines, is in the way of storage yards. we have practically the use of two trunk-line tracks. the french run over them, too, for there is a tremendous civil population to be supported. the french are necessarily supreme, and we simply have the right to run over their railroads subject to their rules. "the french have an arrangement with their railroads by which a piece of track that is put in for military purposes is paid for by the french government. if the civil requirements of the railroad grow up to the use of that particular piece of track, then the government is reimbursed by the railroad. we are in the same position toward these railroads as the french government. at the end of the war the improvements which we make will be surveyed. if they are useful to the railroads our expenditures will be reimbursed. if not, we are at liberty to take up the stuff and clear the ground. two days ago a semi-official statement was made to the paris press, reading: "'americans, in full agreement with the french authorities, are making every effort to carry out, by their own means, the debarkation of their troops in ports, their provisioning as well as their transportation over our railroads. sidings, large stations, and establishments of every kind are being constructed by the most modern and expeditious processes. one of the warehouses has an area of about 4,000 acres, and it has a cold-storage plant capable of holding several thousand tons of meat. aviation training camps and repair shops, considerable in size and with the most improved machinery, are being erected on every side.'" french industrial exhaustion a realistic picture of the industrial exhaustion of france at the close of the war was given by m. tardieu, general commissioner for franco-american war affairs. the war expenses of 120,000,000,000 francs was only a fractional part of the whole loss. another 50,000,000,000 would have to be raised to secure raw material destroyed during the war. m. tardieu presented in detail the various items indicating to what extent france had suffered economic disability and paralysis: "the territories which have been under german occupation for four years were the wealthiest part of france. their area did not exceed six per cent. of the whole country. they paid, however, 25 per cent. of the sum total of our taxes. these territories are now in a state of ruin even worse than we had anticipated. of cities and villages nothing remains but ruins; 350,000 homes have been destroyed. to build them up again--i am referring to the building proper, without the furnishings--600 million days of work will be necessary, involving, together with building material, an outlay of 10,000,000,000 francs. as regards personal property of every description either destroyed by battle or stolen by the germans, there stands an additional loss of at least 4,000,000,000 francs. this valuation of lost personal property does not include--as definite figures are lacking as yet--the countless war contributions and fines by the enemy, amounting also to billions. i need hardly say that, in those wealthy lands, no agricultural resources are left. the losses in horses and in cattle, bovine and ovine species, hogs, goats, amount to 1,510,000 head--in agricultural equipment to 454,000 machines or carts--the two items worth together 6,000,000,000 francs. "as regards industries, the disaster is even more complete. those districts occupied by the germans, and whose machinery has been methodically destroyed or taken away by the enemy, were, industrially speaking, the very heart of france, the very backbone of our production, as shown in the following startling figures: in 1913 the wool output of our invaded regions amounted to 94 per cent. of the total. french production and corresponding figures were: for flax from the spinning mills, 90 per cent.; iron ore, 90 per cent.; pig iron, 83 per cent.; steel, 70 per cent.; sugar, 70 per cent.; cotton, 60 per cent.; coal, 55 per cent.; electric power, 45 per cent. of all that--plants, machinery, mines--nothing is left. everything has been carried away or destroyed by the enemy. so complete is the destruction that, in the case of our great coal mines in the north, two years of work will be needed before a single ton of coal can be extracted and ten years before the output is brought back to the figures of 1913. [illustration: samuel p. gompers president of the american federation of labor. copyright underwood & underwood] the work of rebuilding "all that must be rebuilt, and to carry out that kind of reconstruction only, there will be a need of over 2,000,000 tons of pig iron, nearly 4,000,000 tons of steel--not to mention the replenishing of stocks and of raw materials which must of necessity be supplied to the plants during the first year of resumed activity. if we take into account these different items, we reach as regards industrial needs a total of 25,000,000,000 francs. to resurrect these regions, to reconstruct these factories, raw materials are not now sufficient; we need means of transportation. the enemy has destroyed our railroad tracks, our railroad equipment, and our rolling stock, which, in the first month of the war, in 1914, reduced by 50,000 cars, has undergone the wear and tear of fifty months of war. "our merchant fleet, on the other hand, has lost more than a million tons through submarine warfare. our shipyards during the last four years have not built any ships. for they have produced for us and for our allies cannon, ammunition, and tanks. here, again, for this item alone of means of transportation we must figure on an expense of 2,500,000,000 francs. this makes, if i sum up these different items, a need of raw material which represents in cost, at the present rate of prices in france, not less than 50,000,000,000 francs." iv--government control wartime nationalization of railways and shipping--ship-building at high speed--trade licensing, etc. on april 5, 1917, the day before war was declared, franklin k. lane, secretary of the interior, introduced and had passed by the council of national defense the following resolution: _resolved_, that commissioner willard be requested to call upon the railroads to organize their business so as to lead to the greatest expedition in the movement of freight. acting in accordance with this resolution, the principal railroad executives of the country met in washington on april 11, 1917, and resolved that during the war they would coördinate their operations in a continental railway system, merging during such period all their merely individual and competitive activities in the effort to produce a maximum of national transportation efficiency. the direction of the continental railway system thus organized was placed by the railroads in the hands of the executive committee of the special committee on national defense of the american railway association. this executive committee was also known as the railroads' war board. under this resolution the railroads of the united states continued to be operated under private ownership and private management until december 28, 1917. on that date president wilson, exercising his war-time prerogative, took control of the railways of the country and appointed w. g. mcadoo director general. 2. congress in january passed a railroad-control bill. 3. on april 11, 1918, president wilson issued a proclamation taking over for the government the property of coastwise shipping lines. 4. on may 24th, director general mcadoo placed in charge of each railroad property a federal manager whose duty it was to report to the regional director. 5. on june 29th, the railroad administration relinquished from federal control nearly 2,000 short-line railroads whose control by the administration was regarded as not "needful or desirable." during the first six months after the united states entered the war statistics showed that the railways not only handled far more traffic than in any earlier six months of their history but also as much as in any entire year prior to 1907. it will be remembered that the years 1906 and 1907 marked the climax of a long period of rapid increase of railroad business which resulted in the longest and most acute congestion of traffic and shortage that had ever been known prior to the war period. the grounds offered by the government for taking over the railway systems during the war might be explained as the resultant of the findings of the interstate commerce commission on december 5th, in which it was stated that the claim of the roads for higher rates could not be granted. "from the standpoint of the government three principal reasons are seen for the taking over of the lines: "1. the avoidance of obstructions to transportation due to the routing and division of freight, intended to give a fair share to each line in a given territory. "2. the abolition of preferences to given shippers and kinds of freight, and the centralization of control over priority in shipment. "3. the practical termination of rate controversies and labor discussions as between private individuals and the placing of the roads on a semi-military basis. "the railroads themselves have received the announcement of the president's action with much greater equanimity than could have been expected. they undoubtedly see in the step the following advantages: "1. assurance of a moderate if not generous income in a period of great uncertainty and difficulty, during which they have been caught between the upper and nether millstones of fixed rates and advancing costs and wages. "2. termination of the danger that threatened them from the continually maturing obligations which ordinarily they would have little trouble in refinancing, but which, under existing conditions, can scarcely be provided for on any basis. "3. provision of means for betterment and improvement at a time when such provision can be had practically only through government orders designed to place such requirements ahead of those of private concerns." objects of government control this experiment in government control was discussed and explained by the director general after six months' experience in the following statement issued by him on june 15, 1918: "the policy of the united states railroad administration has been informed and shaped by a desire to accomplish the following purposes, which are named in what i conceive to be the order of their importance: "_first_, the winning of the war, which includes the prompt movement of the men and the material that the government requires. to this everything else must be subordinated. "_second_, the service of the public, which is the purpose for which the railways were built and given the privileges accorded them. this implies the maintenance and improvement of the railroad properties so that adequate transportation facilities will be provided at the lowest cost, the object of the government being to furnish service rather than to make money. "_third_, the promotion of a spirit of sympathy and a better understanding between the administration of the railways and their two million employees, as well as their one hundred million patrons, which latter class includes every individual in the nation, since transportation has become a prime and universal necessity of civilized existence. "_fourth_, the application of sound economies, including: (_a_) the elimination of superfluous expenditures. (_b_) the payment of a fair and living wage for services rendered and a just and prompt compensation for injuries received. (_c_) the purchase of material and equipment at the lowest prices consistent with a reasonable, but not an excessive, profit to the producer. (_d_) the adoption of standardized equipment and the introduction of approved devices that will save life and labor. (_e_) the routing of freight and passenger traffic with due regard to the fact that a straight line is the shortest distance between two points. (_f_) the intensive employment of all equipment and a careful record and scientific study of the results obtained, with a view to determining the comparative efficiency secured. "the development of this policy will, of course, require time. the task to which the railroad administration has addressed itself is an immense one. it is as yet too early to judge of the results obtained, but i believe that great progress has been made toward the goal of our ideals." government control criticised the defects of the government administration of the railways have been the subject of both criticism and apology. a diagnosis published by the _engineering news record_ of new york states that the whole difficulty is ascribed to the employment of bankers in high places of railway management. railroads, it was asserted, cannot be run by men of the banking type of mind. the article continues: "here was, and is, an agency with daily influence on the life of every member of the community, performing a service essential to the nation's life. yet it has few friends among the people at large; more now than formerly, however, due to the number of those whose pity has been excited at the railroads' plight. the first of the railroads' plagues was the type of management--manipulation, it would better be called--which regarded the properties not as carriers but as media for stock-jobbing operations. consolidations with the addition of water, and reconsolidations, with still more water, were the order of the day; while those operating the properties danced riotously over their territories waving insolently the flag of 'the public be damned.' rebates, car-withholding tyrannies, all manner of schemes were worked to aid the favored few, while the purchasing methods honeycombed the organization with rottenness. "then came the day for the people to have their say, and one national and forty-eight state commissions began to bedevil the carriers. what the stock-jobbers and the grafters had failed to do the people in their vengeance helped to complete. the public at large, which under intelligent management of the properties would have been the railroads' best friend, had been alienated. as a result we have had the drift into bankruptcy which has been railroad history during the past decade. instances need not be cited. each one can supply them from his own neighborhood. probably the mention of the new haven will furnish sufficient nausea to carry the right impression. "and that _débâcle_ we attribute to the banking type of mind, that type of mind that places personal profit ahead of all other considerations. the engineering type of mind, we hold, would have analyzed the purpose of the railroads--would have seen that service to the public at large, and not to any private interest, was the prime object, would have erected that as the railroads' ideal and builded a machine for its attainment." british railway management like american railways the railway system of great britain was under private control prior to the war, but the experiment of government direction began to be applied as soon as the war was declared. government control did not mean government ownership. the lines remained the property of the companies. they retained the management of their own concerns subject to the instructions of an executive committee appointed by the government and the whole machinery of administration went on as before. at the beginning the sole purpose was to facilitate the movement of troops, but as the war developed the scope of the railway executive committee became greatly extended. working in coöperation with the acting chairman were twelve general managers of leading british lines. under the central body were groups of committees, each made up of railway experts. the war office and the director general of transport were in touch with the central committee. a writer in the _railway age gazette_ for december, 1917, explains the arrangements as follows: "under the terms on which the railways were taken over for the period of the war the government guaranteed to the proprietors of the railways that their net revenue should be the same as in 1913, except when the net receipts for the first half of 1914 were less than the first half of 1913; in that case the sum payable was to be reduced in the same proportion. the entire government traffic--men and freight--was to be carried without any direct charge being made for it or any accounts rendered. this plan was considered satisfactory by both sides. in the majority of cases there had been a reduction of earnings in the first half of 1914 over the previous half-year, and companies were contemplating a still further reduction. the interests of their shareholders being assured, they were able to devote themselves to the work of economical and efficient distribution, quite apart from the usual financial problems. the one weak side of this agreement was that it made no allowance to cover increased interest payments on account of new investments and new capital expenditure since the war began. this point was afterward met by an arrangement that the government should pay interest at 4 per cent. on all new capital invested by the railways since august 4, 1914, on new lines, branches, terminals, equipment, or other facilities put into use since january 1, 1913. "the conclusion of the financial agreement between the government and the companies automatically brought about a great economy in the system of railway accounts. the reports of the companies were cut down to a bare minimum, and in many cases even these reduced reports were not sent to the shareholders unless they specially asked for them." railway nationalization in canada a definite proposal to nationalize the railway systems of the dominion of canada was made during the war. canada has nearly one-sixth of the railway mileage of the united states, although it has less than one-fourteenth of the population. canada has three trans-continental systems. there is sufficient trade in the dominion for two good systems. a royal commission appointed to inquire into the subject reported that the net returns of the railways were so low as to prove that more railways had been built than could be justified on commercial grounds. large subsidies had been granted by the government. in the case of the grand trunk pacific this public subsidy amounted to nearly two-thirds of the total investment; in the case of the canadian northern to nearly three-quarters. the canadian pacific was reported as the strongest railway in canada, economically built and well managed. the other companies, such as the canadian northern and the grand trunk pacific, were facing heavy annual deficits. [illustration: walker d. hines he succeeded william mcadoo as director-general of railroads after the signing of the armistice. copyright underwood & underwood] the commissioners recommended heroic measures. they did not consider that operation by a minister directly responsible to parliament would be in the public interest. it would not secure better service nor lower rates. what the commissioners did recommend was to transfer the three companies to a new body, a board of trustees to be incorporated as the dominion railway company and that the canadian northern, the canadian pacific and the grand trunk pacific be transferred to this body. the government-owned intercolonial and transcontinental railways stretching from halifax to winnipeg were to be transferred to the dominion company. under the scheme worked out by the commission, the government would assume responsibility to the dominion railway company for the interest on existing securities of the transferred companies. as to the composition of the board of trustees, the commissioner recommended that they be five; three railway members, one member selected on the ground of business and financial experience and one as especially possessing the confidence of the railway employees. the commissioners laid stress on the importance of the board being non-political, permanent and self-perpetuating, and in this connection pointed to the experience of the australian state railways. french railways in wartime the great strain on a country's railway system caused by war was illustrated by the french mobilization. four thousand seven hundred and fifty trains were required. after mobilization was over the army still had a permanent need of railways for two purposes: for its communications in the rear, and for its movements from place to place. to bring supplies to one army corps trainloads aggregating 200 tons a day were required. mr. g. blanchon in _new warfare_ explained the situation as follows: "the preparation of railways for war uses is not confined to the planning of the system itself. it extends to the provision and adaptation of stations, to the duplication of the lines, to the defence of bridges and other structures, to the provision of rolling-stock. considerable extension may be looked for in all these directions. however important the motor-car and the aeroplane may be in military transport, it is probable that the railways will always be the most satisfactory means of conveying heavy material. "the railway carriage itself can be adapted for military uses. we have tank cars, cold-storage cars, hospital trains; above all, we have armored trains and truck gun-carriages. "railways will perhaps render more effective service than ever in the matter of bringing to the required spot huge guns too heavy to be transported in any other way. these will be fired without leaving the rails. the truck gun-carriage is so arranged as to withstand the recoil; this result is obtained by placing on the ground, once the carriage is stationary, supports which take the load off the wheels. the recoil is transferred to the ground so that the rails do not suffer. "whether the object is to organize a supply line, to transfer reinforcements, or to carry heavy material to its destination, it may be of service to provide for the absence of normal lines by laying down rails along the road. both the germans and ourselves have done this very frequently. a narrow gauge of sixty centimeters is generally used. a team of skilled sappers takes about three hours to lay down about one kilometer of railway." america's shipping preparation the two great means of transport--railways and ships--furnished in this war the greatest examples of modified state socialism which america had yet seen. as to the general way in which they were controlled these two services show a fairly close family resemblance, though the forms of organization were technically quite different. the larger railroads and the larger ships were taken possession of by the government and were operated by the same people, in general, who operated them before, but under orders of the railroad administration and the shipping board respectively. new ships and new railroad equipment were built on plans made under federal direction, and in both cases the output was being largely standardized. the heads of the shipping board and the emergency fleet corporation were men drawn from private business, while the regional directors of the railroad regions and the federal managers of the separate roads were railroad men, usually managing their own roads, under the government's direction. thus in both cases private enterprise furnished the traditions and training of the personnel that made this experiment in socialism. besides the points of likeness there were differences between the two services. in the case of ship-building, the industry was virtually re-created, so great was the expansion and the revolution in methods. in the case of railroads the emphasis was, as has been seen, on the task of utilizing an existing and limited plant to its utmost capacity for war purposes. war's effect on shipping the following table, taken from a pamphlet distributed by the emergency fleet corporation six months before the conclusion of the war, gives a perspicuous view of the shipping situation at the opening of military operations in the united states: the war and world shipping gross tons world's shipping (except german and austrian) august 1, 1914 42,574,537 additional ships built, august, 1914 december 31, 1917 6,621,003 german and austrian interned ships available for use of allies 875,000 --------- total 50,070,540 losses since 1914. due to ordinary causes. 1,600,000 due to mines, raiders and submarines: allies 8,900,119[17] norway 1,031,778 other neutrals 400,000 total 11,931,897 --------- balance actual tonnage available 38,138,643 net decrease since 1914 4,435,894 add 2 tons constantly required to maintain each man in france (1,500,000 men × 2) 3,000,000 shortage for merchant traffic, at least 7,435,894 [17] to october, 1917. another table gives a view of the rates between the building and sinking of ships among the allied, neutral, and british nations from the beginning of the war to april, 1918: "the world's shipping suffered a net loss of 2,632,279 tons from the beginning of the war to april 1, 1918, the greater part of this having occurred since the beginning of the unrestricted submarine warfare which brought america into the war. this loss is partly due to england's having increased her naval building at the expense of merchant tonnage. while naval construction must not be neglected, some building capacity can be turned back to merchant ship-building in case of extreme need. however, in april, 1918, great britain and the united states built 40,000 tons more shipping than was lost, and american construction is still rapidly increasing." america's ship-building program american ship-building was planned on grandiose lines, partly to make good the losses by submarine, partly to provide transportation for american troops to europe, and partly for propaganda purposes in friendly and in enemy countries. the american program was an ambitious one. inflated figures were offered for popular consumption and undoubtedly they were consumed and had their influence in securing a successful close to the struggle. while reports were coming from great britain telling of constant labor troubles on the clyde and other ship-building localities, every item of news from washington spoke of the marvelous achievements of american ship-building. one message read after eight months of the war had passed: "for the first time in history america has outdistanced england in her ship-building output." foreign critics called attention to the fact that american figures of ship-building (1918) had a different basis of valuation from those of other countries. in one case there were vessels completed and entered for service, and in another there were vessels launched. the situation is presented by the london _economist_: "british shipping, still in magnitude far beyond that of any of the allies, is declining; it is still being sunk faster than it is being replaced. american shipping, on the other hand, is rapidly expanding, and has already turned the scale against the u-boats. the american army in france as it is reinforced must become more and more dependent upon american ships for transport and supply. up to the end of july the net loss in british shipping due to enemy action and marine risks since august, 1914, had been 3,851,537 gross tons. during the current year to july 31 we have lost 583,600 gross tons more than we have built. british sea power, the power to use the sea as measured in merchant shipping, is wasting. on the other hand, the net gain since august, 1914, in allied and neutral shipping--to which the united states have largely contributed--was nearly 1,100,000 tons at the end of june this year, and was showing a very remarkable rate of expansion. thanks chiefly to the united states, the allied and neutral monthly gain now more than offsets the british loss. the critical corner has been turned. to those whose eyes look beyond the war, and who already anticipate a great american mercantile marine in competition with depleted british lines, we would point out that after all its losses british merchant shipping still amounts to over 14,000,000 tons gross, and that america's ocean-going tonnage built and completing--exclusive of captures--is as yet little more than 4,000,000. what the relative positions will be a year hence--or two years hence, should the war last so long--we do not venture to predict." the fourth of july splash reports of the shipping board's activity led to expectations of an unprecedented number of ships to be launched, fitted and ready for transport and trade purposes within a very short interval. much enthusiasm was created by the fourth of july splash, 1918, when, according to the new york _tribune_, in twelve hours steel and wooden ships hit the water in clouds of smoke and spray, at the rate of one every seven minutes. the era of mr. jefferson brick had undoubtedly returned, for the _tribune_ went on to expatiate in poetical exuberance that the shores of "puget sound, san francisco bay, columbia river, the gulf of mexico, the delaware, chesapeake bay, new york bay, and all the coast of new england and the great lakes were laved by the backwash of the great ships of the liberty fleet rushing to their proper element." the bureau of navigation estimated that by the end of june, 1918, 1,622 ships of 1,430,793 gross tons would be launched--more than double the output of german yards in times of peace. one article refers to the actual event as follows: [illustration: copyright by charles phillip norton building a steel ship in seattle, washington american ship-building during the war was planned on a gigantic scale to make good the losses by submarines and to provide transportation for american troops to europe. the _west lianga_, shown above, an 8,800-ton cargo carrier was launched within 55 working days and delivered, ready for cargo, in 67 days.] american losses--new tonnage built "at san francisco on july 4th, mr. charles m. schwab, director-general of the emergency fleet corporation, said to the shipworkers: 'if you stand up to your job, we'll make the kaiser take his medicine lying down.' mr. schwab also ventured the statement that this fourth of july shows the greatest record of launchings for a single day in the world's history, and added: "'every time we launch a cargo or troopship or tanker we add to the certainty that german submarines can not win this war. already we have the u-boats on the run, and if we keep up the pace we will have them beaten by next year. and when we achieve this victory it will be you who will deserve the credit. "'in 1915 all the shipyards in america turned out 215,602 dead-weight tons of shipping. the next year our output jumped to 520,847 tons. in 1917 the hot pace continued until we very nearly doubled the output of the previous year, completing a total of 901,223. i am confident now that if we pull together and every man stays on the job, we will produce more than 3,000,000 dead-weight tons in 1918--the greatest output of any nation in the world in a single year.' "premier lloyd george sent a cable to president wilson on the launching of the ships, in which he extended 'heartfelt congratulations on this magnificent performance,' and in an independence-day speech secretary of the navy josephus daniels said in part: "'we are launching this day far more tonnage than that of all the american vessels sunk by submarines since the war began. we are launching today more than the germans sank of the ships of all nations in the last month for which we have the official figures. the recent enemy submarine activities off our coast resulted in the loss of 25,411 dead-weight tons of american shipping. during this same time 130,000 gross tons of shipping were built. "'to give some idea of the tonnage situation with reference to american shipping, it may be of interest to know that the total tonnage of american vessels lost prior to the entry of the united states into the war was 67,815. the total american tonnage sunk since the entry of the united states into the war is 284,408, or a total of 352,223 tons sunk during the whole period of the european war. as against this loss, the gross tonnage of merchant ships built in the united states since the commencement of the european war is 2,722,563 tons, 1,736,664 gross tons of which have been built since the entry of the united states into the war. in addition to the tonnage thus built 650,000 tons of german shipping have been taken over. this does not include the tonnage acquired of dutch, japanese, and other vessels. it will be of further interest to know that today there will be launched in the great shipyards of this country over 400,000 dead-weight tons. these figures are in addition to those previously given.'" a ship-building capacity of over 1,500,000 tons a year the war program of the shipping board implied a multiplication by three of existing outputs. this increased output signified the possibility of labor difficulties, and in order to prevent these an agreement was reached between representatives of the labor unions, the navy department, the shipping board and the emergency fleet corporation, to the effect that all disputes concerning wages, hours or conditions in shipyards in ship-building plants should be determined by a committee of three, one representing the corporation, one nominated by the president and the third selected by mr. samuel gompers. when this agreement was entered into the united states reported a ship-building capacity of over one and one-half million gross tons a year. two years previously the ship-building capacity was only five hundred thousand tons, but according to the london _economist_, a rate of four million gross tons a year would have to be supplied if the american army was to have sufficient means of transport. when this forecast was made on both sides of the atlantic, it was realized that so far as the marine situation was concerned the war had become simply a question of ship-building against the submarine. military operations intervened to prevent a full test of our ship-building strength, but there was full confidence in the united states that american ship-building would by increased production make the german submarine program an inconsiderable factor in the question of terminating the war. transporting the american army when there came a demand for an increase of man-power to be sent to the battle front few appreciated what this effort meant in its effect on increased shipping activities. half a million american soldiers crossed the atlantic in the first thirteen months of the war, after our entrance into the war, and a million and a half in the last six months of the war. the shipment across the atlantic was at first anything but rapid. there were only a few american and british troop ships chartered directly from their owners. then the former german liners were brought into service and with this addition embarkations greatly increased. [illustration: hog island ship-building yards the expenditure of millions of dollars and the labor of thousands of workmen transformed in a short time a tract of marsh lands near philadelphia into one of the greatest ship yards in the world.] early in 1918 increased shipping facilities were arranged for with the british government. the results of this arrangement became visible in the growth of troop movements for march, 1918. then there came the great german drive; after this every ship that could be secured was pressed into service. more british troop ships were used. accordingly, in may, 1918, more than twice as many men were carried as in april. the june record was greater than that of may and before the first of july one million had been embarked. during the summer the number carried was more than 10,000 men per day. this record has only been excelled by the achievement in bringing back the same men to the shores of the united states.[18] [18] for complete official figures of the troop movement overseas, see volume iv. in addition to the transatlantic fleet there was an american cross-channel fleet carrying men and cargo from england to france. this fleet consisted of more than a third of a million tons by the end of 1918. one-fourth of these vessels were swedish or norwegian, while the rest were american. this fleet comprised large numbers of small wood and steel vessels built by the emergency fleet corporation at the yards of the great lakes and along the coast. accelerated shipping the emergency fleet corporation turned over nearly a million tons of new ships for military purposes, and besides scandinavian and japanese tonnage was chartered. by doing this and by taking over lake steamers the large tonnage figures were secured, but it must be remembered that the allies were largely concerned in the american troop movement. of every 100 men who went over, 49 went in british ships, 45 in american, three in italian, two in french and one in russian shipping under british control. moreover, a way was found to increase the loading of transports by as much as 50 per cent. the duration of the voyage round trip was considerably decreased. in the spring of 1917 the average turn around for troop ships was 52 days. some of the fast ships averaged under 30. the _leviathan_, for example, landed the equivalent of a german division in france each month. most of the cargo ships were american and these ships carried thousands of articles of the most varied sort. nearly one-half of all the cargoes consisted of food and clothing. then came the engineering and ordnance supplies. a large number of locomotives were shipped, set up on their own wheels so that they could be unloaded on the tracks in france and run off in a few hours under their own steam. these locomotives were of the hundred-ton type. shipments of this type had never been made before. when the armistice was signed the army was prepared to ship these set-up locomotives at the rate of 200 a month. the actual record shows that 1,791 were sent to france on transports. nearly 27,000 standard-gauge freight cars were shipped abroad, and motor trucks to the number of 47,000; rails and fittings were sent to france aggregating in all 423,000 tons. moreover, the army shipped nearly 70,000 horses and mules. the increase in the shipping of cargo from the united states was consistently maintained from the start of the war, and at its cessation it was undergoing marked acceleration. british ship-building ship-building in england was taken over by the government early in the war. this plan was described by many as an example of a blundering surrender to socialism and a concession to bureaucratic tendencies. these critics pointed to the fact that in 1914 british shipping tonnage had reached the figure of 19 million tons, an increase of over 10 millions in 15 years; and this was done in spite of subsidized competition from abroad and lack of reasonable encouragement at home. the policy of government interference was regarded as simply a method of discouraging english initiative in this industry. a writer in the london _outlook_, mr. e. t. good, described the project in a most unfavorable light: "on top of foreign subsidized competition our people are to be subjected to government competition at home, and their whole position and prospects rendered uncertain, if not impossible. this new government undertaking can have nothing but a chilling, blighting effect upon our splendid ship-building and engineering trades, and it will not give us one additional ton of shipping. the government policy--or lack of policy--is such that no one knows what to expect next. there is no certainty. there is no continuity of policy. there is no encouragement. there is no common justice for british enterprise. whilst germany, france, italy and other nations are preparing large subsidization schemes for their shipping and ship-building trades, our government excessively penalizes our industries and enterprises, and gives no hint of any fair dealing in the future. before the war german subsidized liners were permitted to come into our harbors and take on board british passengers at 'blackleg' rates, and without paying even a due share for the upkeep of our ports and lights. now our government, whilst paying neutral shipowners--our future rivals--freights up to as much as 500 per cent. above the bluebook rates paid to our own vessels, is taxing our shipping people up to the eyes--doing all that it can to render it difficult, if not impossible, for our companies to increase their fleets and maintain british supremacy after the war." [illustration: copyright by underwood & underwood launching the city of portland on the columbia river, near portland, oregon most of the cargo ships that carried supplies to our troops after we entered the war were american owned, and carried thousands of articles of the most varied sort. the _city of portland_, shown above, was a three hundred foot wooden motor vessel.] it must be remembered that great britain's shipping problem was a matter of extreme complexity. there were first of all the submarine sinkings. there was the lack of labour for ship-building. there was, besides, the fact that the tonnage available for ordinary imports was considerably lessened by the commandeering of merchant ships for the carriage of government material. the following statement of the problem was presented by the british premier himself in august, 1917: "in addition to this, the shipping controller has taken steps for the quickening of ship-building. the tonnage built in this country during peace times is, i think, on an average something a little under 2,000,000. in 1915 the ship-building came to 688,000 tons. in 1916 it was 538,000 tons. in this year a little over a million tons, nearly 1,100,000 tons, will be built in this country and 330,000 tons will be acquired abroad, so that this year the tonnage which we shall acquire will be 1,900,000. this is purely mercantile marine. bear in mind the condition under which the tonnage is built. it is the fourth year of the war. there is a difficulty in labor and great difficulty in material. you require steel for guns and shells for the navy, because the ship-building program of the navy has gone up considerably in the course of the present year. in spite of that fact the ship-building of the country in this year will not be very far from what it was in the days of peace. "even now we have not got enough tonnage for all essential purposes. we have got to provide tonnage for france, italy and russia, as well as for ourselves, and we need more ships instead of fewer ships. and i am not going to pretend that there will not be at best a rate of diminution of our shipping which will embarrass us in the struggle, and therefore it is essential, not merely that this country should build, but that the only other countries which have a great ship-building capacity should also build. if the united states of america puts forth the whole of her capacity, and i have no doubt, from what i hear, that she is preparing to do it in her own thorough and enterprising way, i have no doubt at all that we shall have sufficient tonnage not merely for this year but for the whole of 1918 and, if necessary, for 1919 as well, because america can expand very considerably her ship-building capacity if the real need ever arises for her to do so." british bureaucratic methods on the whole it must be allowed that after the results were published there was a great disappointment, particularly as the government had put forth roseate plans for ship-building on a large scale. at the beginning of the war there were 16 million tons gross of steamers of more than 600 tons each. a large part of this total was used in the service of the navy; and the balance, available for the carriage of food, materials and exports, was lost during the submarine campaign. the government seemed to show no ability to replace it. sometimes it is contended that the responsibility was to be charged up to the labor organizations. according to the _economist_ the situation was due to bureaucratic methods of control. in a debate in parliament the whole subject was ventilated: "from every quarter members with first-hand knowledge of ship-building got up to tell the same story of over-centralization, fussy control, conflicting orders, leading all to the same result--discouragement of masters and men. mr. mackinder, speaking for a glasgow constituency, and sir walter runciman, speaking as a ship-owner--two men whose views on economics are the poles apart--were in agreement here. the fault, they declared, lay, not in the want of patriotism or the inherent vice of the british workman, or even in the lethargy of the british employer, but in the third and predominant member of the ship-building partnership, the british government. keeping the direction in its own hands, the government started with a preconceived theory of the standard ship--a theory that might be of great value to a builder of revolutionary ideas laying the foundations of a prosperity to be enjoyed twenty years hence, but is of considerably less value to a nation that is losing steamers at the rate of fifteen or twenty a week, and wants new steamers now. when the standard ship was first proposed, builders pointed out that in practice each had a standard ship of his own, and they could build most quickly by confining themselves to their own familiar types. mr. macnamara told them that they were solomons, wise after the event, but that is less than fair. they were wise from the beginning, and their predictions have come true." trade policy as a war weapon the building of ships under government supervision and control was only one side of allied war shipping administration. seaborne trade was rigidly directed as a potent arm in bringing germany's war power to ruin. the industrial and economic effect of the marine blockade was fully conceded by a number of german and austrian newspapers. _the frankfurter zeitung_ said: "if the final peace does not return to us what our enemies have taken and destroyed in the outside world, if it does not restore to us freedom in our work and our spirit of enterprise in the world, then the german people is crippled for an immeasurable period. we demand restoration for all violation of the law and for all acts of destruction. we demand indemnification for all damages done, and we meet the plan of differentiation with the demand for the most-favored-nation treatment and equal rights; the plan of exclusion with the demand for the open door and free seas; and the threat of a blockade of raw materials with the demand for the delivery of raw materials." a true picture of the situation is given in the following passage from the vienna _arbeiter zeitung_: "even if hindenburg's genius and german bravery won a complete victory on land, even if the english army fell into our hands to the last man, and france was disarmed and had to submit to germany's terms, even then england and america could not be compelled to the capitulation that the pan-german word-heroes prophesy daily. even then they would blockade our coasts and the war would continue at sea. and even if they could not or would not do that, even if peace was concluded and all the battles ended, they would still have a terrible weapon to use against us. our domestic economy can not exist permanently without the wheat, the copper, and the cotton from america, the nickel from canada, the cotton from egypt and india, the phosphates from the north african coasts, the rubber from the english tropical colonies, indian jute, and the oilplants of the south sea islands. "there will be a scarcity of all these things after the war and there will be great competition for them. if england and america do not deliver to us these raw materials after the war, then we as conquerors are conquered." germany's potash boycott before we entered the war germany viewed with great concern the effect of the economic weight of the united states if added to the side of her antagonists. she felt that if this country remained neutral she could depend on us for raw materials. to be sure, german ingenuity had produced ten thousand substitutes, due to the skill of german chemists, ranging from bacteria fats to synthetic rubber. but even the war office in berlin was under no illusion on this point. "we need copper and no stripping of palace roofs, no raiding of door knockers or kitchen pans can make up for the deficiency." even the vision of economic self-sufficiency in central europe had rifts in it. raw material was so important that, in the boot and shoe industry 1,400 factories in the german empire were amalgamated into 300. in the silk industry the spools were reduced from 45,000 to 2,500. out of 1,700 spinning and weaving mills, only 70 were running at high pressure. the plan, as outlined by german experts, to force the united states to supply raw material was to cut off potash exports and certain manufactured goods. "if america will sell us no cotton," was the threat of the berlin _deutsche-zeitung_, "she shall get no potash--the indispensable fertilizer in which we have a world monopoly. if she withholds her oil and grain, then she shall get no _dyes_, no drugs, no glassware or optical instruments." but as a writer in the london _outlook_ stated, this threat could not be made an effective instrument of trade control: "there is potash in plenty in the great republic, especially in the alkali lakes of nebraska and southern california. potash is now obtained from the great salt lake in utah, and from the vast kelp beds of the pacific coast. american chemists are also extracting potash (by the cottrell process) from the dust of cement-kilns and blast-furnaces. so the german monopoly will pass, and many others with it. america will produce her own dyes and optical instruments, though i may not linger on the details of this supplanting. "american genius has long been busy with these things; another year or two will see her wholly independent of german supplies. the potash monopoly--from the mines of stassfurt in saxony--was undeniably a problem; there are still richer sources in alsace, as we all know germany's resolve to hold that province through thick and thin. america needs 500,000 tons of potash every year, for the sandy soils of the atlantic seaboard, and also for the citrus fruits of florida, the tobacco of georgia and the carolinas, the potatoes and garden produce of maryland." shutting off german trade pessimistic anticipations of german statesmen regarding the curtailing of german trade were realized when the war trade board in the united states began to deal with the question of american exports to neutrals. the report of the board, published in 1918, contains the following passage: "neutral exports of foodstuffs to the central powers have declined from last year's corresponding exports in amounts estimated at from 65 to 85 per cent., depending on the neutral, and there has been a decrease in the export of many other important commodities. "in november, 1917, we became party to great britain's tentative agreement with norway, as a result of which action on our part 1,400,000 tons dead-weight of norwegian shipping were chartered into the service of the united states and great britain for the period of the war. shortly following, temporary agreements were concluded with holland and with sweden. that with holland gives us the use, for periods up to 90 days, of 450,000 tons dead-weight of her shipping which had heretofore, for a long period, lain idle. the agreement with sweden gives us the use for three months of tonnage estimated at 250,000 tons dead-weight which had not theretofore been employed in services useful to us. "specific accomplishments of this character are, however, far from constituting a full measure of the results achieved by the war trade board. the elimination of enemy advantage from our trade and, to a considerable extent, from that of the world, the securing and conserving of commodities essential to ourselves and those associated with us in the war, the bringing of shipping generally into the services most useful to us--these results can not be accurately stated or appraised at the present time, nor have they been accomplished by any single act or agreement." [illustration: examining cargoes for contraband an inspector is using the x-ray on a bale of cotton, it having been found that smuggling of every conceivable sort was being carried by german agents.] the trade license system the united states trade license system was extremely effective in cutting off the business of firms whose controlling motive was the advancement of german commercial interests. it was largely directed against preventing pro-german firms in neutral countries from engaging in the re-exportation process, a familiar practice in the earlier part of the war. the policy of the war trade board is indicated in the march (1918) issue of the _war trade journal_: "to accomplish these results the war trade board, through its bureau of imports, has adopted certain regulations in connection with the importation of many of these raw materials, to which it is the duty of every patriotic american citizen to give complete and wholehearted support. "organizations have been voluntarily created in many of the trades, such as rubber, wool, jute, tin, etc., to act as consignees when required and to perform other duties in connection with importations, under and by direction of the war trade board. "every effort will be made to administer these regulations with the slightest possible detriment to legitimate business interests, but when it is considered that the transmittal of a few pounds of rubber or copper to germany may cost the lives of scores of our men at the front, and that each day's supply of wool, or food, or money to the enemy means another day's war, with its accompanying toll of lives, the very thought of hesitancy or weakness is inconceivable. the policy will be 'safety first' for our soldiers, regardless of every other consideration. persons and firms in this country, as well as abroad, who before our entrance into the war had little sympathy with the war-time commercial safeguards of the allies must be taught that these are now matters of the first importance to this country, and violators of present restrictions need expect no favors, regardless of how important such individuals or firms may be in the business world. the time has come when all must realize that the war is not limited to combating the enemy on the battle fields of france, but must be carried into our every-day transactions of life, and that our business practices must be remolded, where necessary, to meet existing conditions. "it is unnecessary to mention other desirable results which may be obtained by this import control, such as the gathering of trade information or the conservation of tonnage by elimination of non-essentials. "no anxiety need be felt by importers that there will be any serious restrictions of the importation of necessary articles if the transaction does not involve dealing with an enemy or ally of an enemy, or otherwise giving him aid or comfort." the anti-german toy episode an example of the intense popular indignation against encouraging trade with germany was furnished when a dutch boat arrived in new york in 1918, laden with 400 cases of toys made in germany. the ship that carried them had been guaranteed against submarines by the german government. its arrival in america brought about a storm of indignation strong enough to remind many editors of the famous boston tea-party. one of the consignees of the cargo refused to accept delivery of his share; the _manufacturers record_ of baltimore offered him its congratulations: "it is none too soon to begin the campaign against the importation of german-made goods. imagine for one moment any american mother giving to her baby toys made by germany while she thinks of tens of thousands of babies murdered by germany in this war. every toy made in germany and every other piece of goods of every kind will for generations bear a bloody stain which all the waters of all the oceans can never wash out." patriotic organizations passed resolutions on the subject. american feeling as to german merchandise was well shown through the publication of an editorial in the _hardware age_ against american use of german toys. the paper received 4,000 letters on the subject and over 250,000 reprints of the editorial were sent out, all on request. on the subject of german toys, it said, among other things: "america has fed starving belgium. we fed and clothed and cared for her suffering people long before we became her proud ally on the battlefields. thousands of orphaned belgian and french children have been adopted into american homes. in the days to come are we going to force these children to play with german-made toys? god forbid! american toy manufacturers have stripped us of the last vestige of an excuse for the purchase of toys from the huns. our factories are making more toys than we ever imported, and they are not the flimsy jim-cracks we formerly bought from abroad. they are largely exercise toys which develop a child's body, or mechanical or structural toys which train the mind. before the war we imported eight million dollars' worth of toys from the central powers. who will make our kiddies' toys in the days to come? once more, mr. buyer, it's up to you." smuggling from neutral countries considerable aid was afforded to germany by her trade with neutral countries. first, there was a good deal of direct re-exportation of materials imported from abroad. then there was an exportation of domestic products, and the filling up of this deficit by importation from abroad, mainly from the united states. mr. j. l. moore of harvard university, thought that smuggling deserved to be added to the source of german supply from the outside, and he mentioned the fact that a member of the commerce department of the swiss government was convicted of this offense and served a prison sentence. his exposition of how neutrals aided germany is given in the following passage from the new york _times_: "to direct and indirect re-exportation must be added, finally, smuggling, which has always been a factor in the evasion of blockades. in switzerland a member of the commerce department of the government was recently convicted of this offense and is serving a prison sentence. "that this aid was precious to the central powers and enabled them to stave off starvation and consequent submission can be corroborated in various ways. first, in spite of the enormous volume of imports from the neutrals germany was on the verge of starvation during the last winter, the economic crisis reaching its critical stage coincidentally with the political crisis in the reichstag at the beginning of july. the most potent cause of this political upheaval was the economic destitution which cast its melancholy shadow over the whole nation and increased the desperation of people and reichstag till it exploded in a violent outburst of wrath against the government. secondly, the general impression of press and people in germany and switzerland is that the most sensational part of the speech of erzberger, which brought the crisis into being, consisted of an exposé proving the futility of the submarine policy and impugning the judgment of the officials responsible for its inauguration, inasmuch as the entrance of the united states into the list of germany's enemies, which resulted therefrom, was likely to result in a curtailment of the imports obtained through the neutrals, and without a continuance of these imports germany could not hold out long." surprising increase of neutral shipping the shutting off of the german commercial fleet from trade and the employment of allied shipping under government contract offered an exceptional opportunity to small neutral countries to advance their shipping business. this opportunity was eagerly seized. norway reported the establishment in 1915 of no fewer than 488 shipping firms. this was followed in 1916 by an increase of 459. some of these norwegian firms paid dividends as high as 400 per cent. statistics from sweden also show a significant expansion. swedish firms of inconsiderable capitalization before the war became important companies, able to undertake transatlantic trade on a large scale. it seems likely that these swedish transatlantic lines will constitute a formidable competitor to the old established german companies--now that the war is over. corroborative evidence on the shipping situation in neutral powers is found in the following passage taken from the new york _journal of commerce_: "of great importance for an estimate of the future of our shipping combines is the progress which the two largest danish lines--the forenede, which sails to north america; and the estasiatisk kompagni, which, as the name suggests, runs lines to east asia--have made during the war. the forenede, for instance, made in 1916, with a stock capital of 30,000,000 crowns, a net profit of no less than 40,000,000 crowns, of which a good 10,500,000 crowns was allotted to the reserve and emergency funds. the collective reserves of this company amounted to more than 26,000,000 crowns at the end of 1916: and its bank credits totaled 44,000,000 crowns. "the large dutch shipping firms have likewise made enormous profits. the following table presents their results for 1916 (the dutch florin, or guilder, is worth $0.402 united states currency at normal exchange): reserve and stock net emergency shipping firm capital, profits, funds, florins florins florins holland-amer. line 12,000,000 26,500,000 10,200,000 stoomvaart mij. nederland 19,000,000 18,600,000 8,800,000 kon. nederl. stoomboot mij 15,050,000 19,000,000 7,800,000 rotterdamsche lloyd 15,000,000 15,100,000 12,600,000 kon. holland lloyd 10,000,000 10,900,000 2,000,000 "the example of the holland-america line shows best what enormous progress took place in the inner consolidation of the dutch firms. the reserve of this company, which in 1913 amounted to 6,600,000 florins, grew to 24,800,000 by the end of 1916--in other words, the previous stock capital (which in the meantime had been increased by 15,000,000 florins) by more than double. in addition, the company has available funds amounting in all to 21,700,000 florins. the reserves in the nederland company, which have increased in the same period from 6,700,000 to 23,000,000 florins, exceed the capital by 4,000,000 florins. the available funds of the rotterdamsche lloyd amounted at the end of 1916 to about 25,000,000 florins, with a share capital of 15,000,000 florins and a ready reserve of 16,000,000 florins. "but the business successes of the neutral european shipping firms are far surpassed by the earnings of the japanese overseas lines. thus the largest japanese shipping firm, nippon yusen kaisha, that sails from east asia to all the important shipping markets, had a net profit in the summer half-year 1916 of 19,780,000 yen (the japanese yen is equivalent to $0.498 united states currency); in the winter half-year 1916--17 actually 22,150,000; in a single fiscal year it earned, therefore, about 42,000,000 yen. the company's capital stock amounted at the end of the fiscal year 1916--17, after a previous increase through the distribution of free shares, to 27,500,000 yen, the net profits of this single company being thus about 15,000,000 yen more than the amount of the capital. "the company's fleet has grown considerably. the total available reserves amount to nearly 63,000,000 yen. of ready money the company had at its disposal at the end of march, 1917, 55,300,000 yen." germans at work in spain germany's astuteness in dealing with neutral countries was especially marked in spain. the country was filled with german propaganda and there were skeleton german trade organizations ready to begin functioning at a moment's notice. the extent to which this propaganda was carried on was described by a correspondent of the _saturday evening post_, mr. i. f. marcosson, in an address to the national machine tool builders' association at atlantic city: "the german propagandists have carried on a campaign on the proposition of the kaiser. it has been the finest selling campaign that i have ever seen. they have organized it. each man had his territory, his selling territory; each man has his line of samples, and that line of samples was the finest lot of german gold and german 'hot air' that any propaganda has ever produced. "the germans have sold spain on the proposition of german trade and german good-will, because they are giving the spaniard, as they did in business before the war, what the spaniard had in mind. "germany went into spain to fill the spaniard with 'hot air' and to tell him he was the finest aristocrat in the world. and he got it over. and if you had gone, as i have, from one end of spain to the other and looked into these great warehouses you would have found hundreds of them jammed and packed with copper and oil and cotton, and all the material with which to re-establish a great industry. and today, whenever there is a water-right for sale, whenever there is stock for sale, or whenever anything can be leased, or a factory can be bought, who buys it? =the germans.= "they have got the finest industrial secret service in spain that i have seen in my life. and to what end? all to the great end that when the war is over, in spain as in holland and in switzerland, the wheels of german output will be going.... germany will put on the goods, as i have seen with my own eyes, 'made in spain,' 'made in switzerland,' and 'made in holland.' your own goods, machine tools, are going out in the markets of the world now and forevermore in competition with german-made stuff, made by german hands, made by german capital, part with stuff that is marked offensive, in competition with stuff that is marked as i have said it would be marked." [illustration: photo by paul thompson an antidote for the submarine pest quantity production of eighty-foot motor boats in a shipyard at bayonne, n. j., for use as scouts and submarine hunters.] no economic boycott after the war the official leaders of the allied governments soon found that the scheme to start an economic war after peace had been negotiated had no very strong support. president wilson took a hand in subjecting the paris resolutions advocating this economic war to unfavorable criticism. the british trades union by a large majority showed their disapproval of them. the london _economist_ also disapproved of the program of a vindictive trade policy after the war, though it thought that an economic boycott might be used as a threat to force germany to make peace. lord robert cecil took the ground that it would not be wise to attempt an economic war. the labor point of view was that an economic war was bound to produce another outbreak of militarism. the speaker of the british house of commons, who always occupies a non-partisan position, in an address at carlisle on war aims, showed no sympathy with the proposal: "we had heard of war after the war, and it had been suggested that whatever the terms of peace might be we in england should have no dealings with germany, that we should boycott them commercially, allow none of our raw materials to go to germany, that we should form a combination with our allies, and that together we should cut her off altogether and treat her as though she were a leper. he did not believe in this idea. he was out for peace, and when he said he wanted peace he meant a lasting peace. he wanted peace founded on sound conditions, which would stand wear and tear and last forever, if possible--at all events, for many, many years, it might be centuries; but a boycott of germany would not be the way to attain a peace of that kind. that would be a way of carrying on the war, and although it would not be with the weapons we were now using, there would be the same hatred and struggle between one combination of nations and another, and it would leave the world divided and engender seeds of hatred and dissent. in many respects it would be almost as bad as the war at the present time. he did not, therefore, accept that condition of things." in explaining england's position as to war aims the premier, lloyd george, made the following observations: "germany has occupied a great position in the world. it is not our wish or intention to question or destroy that position for the future, but rather to turn her aside from hopes and schemes of military domination and to see her devote all her strength to the great beneficent tasks of the world.... the economic conditions at the end of the war will be in the highest degree difficult. owing to the diversion of human effort to warlike pursuits, there must follow a world shortage of raw materials, which will increase the longer the war lasts; and it is inevitable that those countries which have control of the raw materials will desire to help themselves and their friends first." an impossible program in the emotional atmosphere of the war period some astonishing economic propositions were accepted as if they were axiomatic truths. notably was this the case in the discussion of germany's program of peaceful penetration in the economic sphere. it was undoubtedly linked up with schemes of military aggression. there was wide discussion of the methods to be used to guard against germany's commercial policy. sometimes these proposals indicated the desire that those who opposed germany should take a leaf from her dog-in-the-manger policy. strange conceptions of international trade that suggest the mercantilism of the seventeenth and eighteenth centuries were revived in order to guard against any attempt on the part of germany to secure a privileged industrial position after the war. as early as 1916 there was the famous proposal of an anti-german economic league contemplated in the paris resolutions of that date. in great britain the supporters of this policy also actively advocated a system of imperial preference by which special advantages would be given to countries within the bounds of the british empire. the result of upholding any double-barreled policy of this type is described by the edinburgh _review_ as impossible of realization. "even if belgium, france, and italy alone took that course, the whole policy of an economic boycott, or partial boycott, to prevent german expansion or to punish german crimes would fall to the ground. we cannot imprison germany in an economic strait jacket if her territorial neighbors are willing to trade with her. as a matter of fact before the war the most important and the most expansive portion of german export trade was with the continent of europe." commercial aviation a great advance in aeroplane development was one of the most spectacular results of war activity. the military side of this development must be discussed in another place, but the fact that aeroplanes had to be constructed substantial enough to carry a large amount of explosives naturally brought up the whole question of the commercial side of aeroplane employment. although the aeroplane has been developed to a remarkable extent for war purposes, it must not be taken for granted that every type of aeroplane has its use for peace. in the military machine regard has been paid rather to gun positions, bomb carrying capacity and performance than to economy in operation and large cargo space, which are the essential peace requirements. this aspect of the problem was discussed by f. handley-page in an article in the _fortnightly review_. "the type of aeroplane for commercial work requires careful consideration and design. in estimating the value of a transport vehicle account must be taken of the respective proportions of the load that are and are not remunerative. a steam motor wagon that was only just able to transport the coke for its own consumption would be useless for transport work. the large quantity of fuel the aeroplane must carry makes this point an important one regarding it. it affects very largely the _type_ of aeroplane that must be chosen for each duty. "the total lift of a large bombing aeroplane of medium speed is about 20 lbs., while that of a small high-speed scout may not be more than about 8 to 10 lbs. per horse-power. from these lifts have to be deducted the weight per horse-power of the aeroplane structure and engines. these leave a margin of about 11 pounds per horse-power in the case of the large machine and of only about two to four pounds per horse-power in the case of the smaller and higher speed machine. from these margins have to be deducted the weight _per horse-power_ of the pilot and of the fuel to be carried." according to this expert's opinion there is little probability of using for commercial purposes the small high-powered aeroplane. but if large machines are used with a speed limit of 100 miles an hour and fitted with twin engines, mr. page thinks that such machines will have economic possibilities. countries now far distant from one another can be brought close together. for example australia will be within a week of london, and he thinks that passengers can be carried at the rate of about six cents a mile. if air transport is to be systematized he is in favor of strict state regulation: "there must be no possible chance of the wildcat schemes of the early railway days recurring, nor must aircraft or their pilots be below a specified standard. the state must see that projects doomed to failure owing to lack of financial or technical backing are prevented from being placed before the public. "regulations must be drawn up which will insure that the machines cannot be used for the public service until they have received a certificate similar to that now issued by lloyd's for ships. pilots must not be allowed to fly machines conveying the public or mails, unless they have received a certificate equivalent to that issued to the master of a ship by the board of trade before he can take charge. "the aeroplane will not compete with the telegraph system, cable, or wireless, but will be a useful adjunct conveying written signed statements, important documents, long reports, and descriptive letters in the time of a week-end cable and at a fraction of the cost. "it will enable the business man to visit his overseas agencies and friends, to discuss matters with them on the spot and examine the requirements of their districts, at the cost of a few _days_ instead of months of travel." [illustration: the awkward squad "left, right--one, two, three, four," was the slogan heard throughout the national army cantonments, such as this at camp dodge, des moines, ia., during the first days in teaching the recruits one of the first lessons of the soldier; how to keep step. copyright international film service] v--the money cost of the war over $210,000,000,000 spent by the belligerents--how this stupendous sum was raised--what the war cost uncle sam by edwin r. a. seligman professor of political economy and finance in columbia university the cost of a war may mean several different things. it may mean, in the first place, the actual money cost, or expenditure in dollars and cents, directly involved in prosecuting the war. or, secondly, it may mean the war cost, both direct and indirect, from the economic point of view. the real cost of a war from this latter point of view may mean either actual loss of lives and property or the diminution of the annual social production. the wealth of a country measured in its social income may be reduced either by the actual loss of territory, as in germany; by the impairment of its natural resources like the coal mines and forests, as in france; by the reduction of labor power, due to the wounded workmen or the results of starvation or privation, as in many countries of europe; or by the loss of economic efficiency due to a reduction of the standard of life or to a changed attitude toward habits of work. the real costs of war, although often incalculable, are none the less of profound significance. the actual money costs or expenditures of government for war include not only the actual outlays for military and naval purposes, but also the whole range of expenditures incurred in industrial life to prepare the wherewithal for the army and navy; and they also comprise the sums devoted to the maintenance of the families of the soldiers. all these items are far greater in modern times than they used to be. it is a far cry from the meeting of two savage tribes armed only with bows and arrows or javelins, to the modern 16-inch guns, the dreadnoughts, the airplanes, the submarines, the poison gas and the innumerable technical adjuncts of modern warfare. the consequence is that the money costs of the world war have far transcended those of all previous conflicts. the attempt to present in figures the costs of the war meets with several difficulties. in the first place the question arises as to the period at which we ought to stop. in one sense the war ceased when the armistice was declared. in another sense the war did not actually stop until the peace was declared--in this case a matter of many months additional. but even when peace was declared the war expenses were by no means over. the process of demobilization is a slow one: moreover it is necessary to continue for some time the policing of the conquered countries; and finally comes the question of the pensions to the wounded soldiers or to the families of the dead. it will be seen, therefore, how impossible it is to state with any accuracy at the present time the costs of the war, when those are still being incurred. furthermore, the figures ordinarily given contain additional inaccuracies. the richer countries make loans to the poorer countries and these expenditures are consequently counted twice in the total,--a procedure legitimate only on the assumption that the loans will not be repaid. again, in a country like the united states, which has substituted an insurance system for the pension system, the nominal expenditures appear smaller than is really the case, because of the receipt of vast insurance premiums which will ultimately all be expended again. finally the figures make no allowances for the change in the price level or the alteration in the value of money. in a great war like the present, prices have risen: in some countries they have doubled, in some countries they have more than tripled, for reasons which it is needless to discuss here. what appears, therefore, to be a great and increasing outlay from year to year may be in reality due in part, at least, to this cause. after making all allowances for these difficulties we may proceed to state some of the facts as to the actual outlays of various countries. the cost of the war day by day in all the belligerent countries it naturally took some time for them to get into their stride. this is especially true of great britain. the figures of the average daily expenditures, as given by the chancellor of the exchequer, amounted to almost $10,000,000 in the opening months of the war and reached a maximum of almost $36,000,000 by 1918. these figures, however, are not exact because they include all of the expenditures. the real war expenditures may be arrived at by deducting in each case the amount of the expenditures in the last year of peace, ending march 31, 1914. making these corrections, it appears that the average daily war expenditures in england rose from about $9,500,000 during the first eight months of the war to about $33,500,000 in 1918, then slowly receding in 1919. in france the average daily expenditures were naturally somewhat less, rising from about $8,500,000 during the first three months of the war to over $21,000,000 during 1917, the last full year of the war. in germany the daily expenses were approximately the same as in great britain, rising from about $13,000,000 in the first nine months of the war to $34,500,000 during the last six months of 1918. in the case of both germany and france, it is not known whether the figures comprise the total expenditures or only the pure war expenditures. in the former event the daily expenditures of germany would be a little less than those of great britain; in the latter, they would be a little more. in italy and austria-hungary the daily expenditures were naturally smaller, amounting at the maximum to about $10,500,000 and $20,000,000 respectively. in russia the daily expenditures rose in 1916 to about $20,000,000 and in 1917, just prior to the october revolution, nominally to $47,000,000. but, owing to the great depreciation of the ruble, the actual expenditures were much less. our war expenses month by month when the united states entered the war the scale of its operations became so stupendous that its daily war expenditures soon far exceeded those of any other belligerent. in the second month of the war the average daily expenditures for pure war purposes were $15,000,000 and little over a year later they had risen to almost $50,000,000. by the end of 1918, the daily average war expenditures reached the staggering figure of $64,500,000. [illustration: the economic conference in paris mr. bonar law talking with m. clementel (minister of commerce) and m. doumergue (colonies) in the garden of the foreign ministry.] if, now, we attempt to present the statistics of the total cost of the war we must be mindful of the difficulties mentioned above. the figures are not entirely accurate, and cannot be made entirely accurate for the following reasons: in the first place, the last date in the official return differs from country to country. they are, however, all subsequent to the armistice, with the exception of russia, where we have no trustworthy figures after the advent of bolshevism. in the second place, we do not know, except in the case of the united states and great britain, whether the figures comprise the total expenditures or only the purely war expenditures. even making allowance for these differences it will be seen that the total war expenditures amount to over $232,000,000,000. in japan and some of the minor belligerents, there were virtually no war expenses. inasmuch, however, as most of the countries will continue to have expenses attributable to the war for some little time in the future, it is probable that the total war expenditures will amount, by the end of 1920, to almost $236,000,000,000. from this must, however, be deducted the sums counted twice, because advanced to their allies by the united states, great britain, france and germany. making allowance for this, it is safe to say that the total net war expenditures will be about $210,000,000,000. war expenditures of all belligerents in millions ==================================================================== | from entrance | to | | | into war | | | --------------+----------------+----------------+----------+------- great britain | august 4, 1914 | march 31, 1919 | £ 8,601| $41,887 | | | | australia | august 4, 1914 | march 31, 1919 | £ 291| 1,461 | | | | canada (inc. | august 4, 1914 |august 31, 1919 | | 1,545 newfoundland) | | | | new zealand | august 4, 1914 | march 31, 1919 | £ 76| 365 | | | | south africa | august 4, 1914 | march 31, 1919 | £ 33| 243 | | | | india | august 4, 1914 | march 31, 1919 | £ 119| 584 | | | | ------ british empire| | | | $46,083 | | | | france | august 3, 1914 | march 31, 1919 |fr 169,000| $32,617 | | | | russia | august 1, 1914 |october 31, 1917| ru 51,500| 26,522 | | | | italy | may 23, 1915 |october 31, 1918| li 81,016| 15,636 | | | | belgium | august 2, 1914 |october 31, 1918| fr 5,900| 1,387 | | | | rumania |august 27, 1916 |october 31, 1918| | 907 | | | | serbia | july 28, 1914 |october 31, 1918| | 635 | | | | united states | april 15, 1917 | june 30, 1919 | | 32,261 | | | |------- entente powers| | | |$156,050 | | | | germany | august 1, 1914 |october 31, 1919|mk 204,268| 48,616 | | | | austria | july 28, 1914 |october 31, 1919|kr 119,504| 24,858 hungary | | | | turkey |november 3, 1914|october .., 1919| | 1,802 | | | | bulgaria |october 4, 1915 |october .., 1919| | 732 | | | | ------ central powers| | | | $76,008 | | | | total | | | in |$232,058 | | | millions | ==================================================================== how money for war was raised the question now arises as to the steps taken by the various countries to meet these stupendous outlays. of the older expedients, such as war treasures, or the sale of public property there was naturally no question. in only one country, viz., germany, was there a war treasure; but this was so small as to be well-nigh negligible. the only two available resources were accordingly taxation and borrowing. when we compare these two expedients, we are struck not only by the great difference in the theories of war finance followed by the various countries, but also by the diversity in the economic conditions which largely influenced the choice. in a general way, it may be said that all countries were compelled to rely to an overwhelming extent on public loans, but that great britain and the united states raised a far greater share by taxation than did other countries. italy was able to raise by new taxation only just about enough to pay the interest on the new loans; germany accomplished this only in part; while france was not in a position to defray any of her war expenditures from additional taxation. the same is true of the other belligerents, with the exception of the british colonies. proceeding now to take up this matter in detail, we shall first attempt to set forth the facts as to war taxation. united states ----------------------------+-------------+-------------+----------- | monthly | | |expenditures | | |exclusive of | | |the principal| | | of the | monthly | average | public debt | war | daily |and of postal|expenditures |expenditures |expenditures | [19] | ----------------------------+-------------+-------------+----------- | million $ | million $ | million $ april 6--30, 1917 | 279 | 219 | 8. may, 1917 | 527 | 467 | 15. june, 1917 | 410 | 350 | 11.7 | ----- | ----- | total april 6--june 30, 1917| 1,216 | 1,156 | | | | july 1917 | 662 | 602 | 19.4 august 1917 | 757 | 697 | 22.5 september 1917 | 746 | 686 | 22.9 october 1917 | 944 | 884 | 29.5 november 1917 | 986 | 926 | 30.9 december 1917 | 1,105 | 1,045 | 33.7 january 1918 | 1,090 | 1,030 | 33.2 february 1918 | 1,012 | 952 | 34. march 1918 | 1,156 | 1,096 | 35.9 april 1918 | 1,215 | 1,155 | 38.5 may 1918 | 1,508 | 1,448 | 46.7 june 1918 | 1,512 | 1,452 | 48.4 | ----- | ----- | total for fiscal year, 1918 | 12,697 | 11,977 | july 1918 | 1,608 | 1,548 | 49.9 august 1918 | 1,805 | 1,745 | 56.8 september 1918 | 1,557 | 1,497 | 49.9 october 1918 | 1,665 | 1,605 | 51.8 november 1918 | 1,935 | 1,875 | 62.5 december 1918 | 2,061 | 2,001 | 64.5 january 1919 | 1,962 | 1,902 | 61.4 february 1919 | 1,189 | 1,129 | 40. march 1919 | 1,379 | 1,319 | 42.5 april 1919 | 1,429 | 1,369 | 45.6 may 1919 | 1,112 | 1,052 | 33.9 june 1919 | 809 | 749 | 24.9 | ----- | ----- | total for fiscal year 1919 | 18,505 | 17,785 | | | | total april 6, 1914 to june | | | 30, 1919 | 32,428 | 30,918 | ----------------------------+-------------+-------------+-----------[19] obtained by deducting 11/12 of the annual (peace) expenditures for 1915--1916 exclusive of postal expenditures, i. e. 11/12 of $1,008--287 millions--60 millions. secretary glass in his letter of july 9, 1919 to the chairman of the committee of ways and means excludes postal expenditures in the first column, but fails to exclude them when making the deduction for peace expenditures. he consequently arrives at the figure of 30,177 billions as the cost of the war; making allowance for this fact, and using the final corrected figures, we reach the figure of $32,261,000,000 as the cost of the war to june 30, 1919. war taxation in other countries great britain, as the wealthiest country at the outbreak of the war, endeavored to raise as much as possible from taxation. from year to year, as the expenses mounted up, more and more demands were made upon the taxpayer. but the expenditures for the war were so enormous that it soon turned out to be impracticable, even with the best of will, to secure more than a comparatively small proportion of the total cost from taxation. the figures usually advanced by the various chancellors of the exchequer and repeated parrot-like by most commentators take the proportion that total taxes bear to total expenditures. this method of calculation, as will be seen from the table, shows that almost a quarter of the total expenditures, or to be more exact, 24.9 per cent., was derived from taxes. these figures, however, err doubly. in the first place the significant problem is to ascertain the war expenditures, not simply the total expenditures. these can naturally be obtained only by deducting from the annual total expenditures the sums equal to the peace expenditures, _i. e._, the expenditures for the last full year of peace. in the second place, what is significant is not the total taxes, but the war taxes; that is, the proceeds of the additional taxes raised during the war. these again can be obtained only by deducting from the total tax revenue the proceeds of the taxes during the last full year of peace. if then we endeavor to ascertain how much of the war expenditures were met by war taxes--and this is really the important problem--we find that, immense as were the burdens resting upon the british taxpayer, the percentage of war expenditures raised by war taxes is much smaller than is usually stated. as a matter of fact, in the first year of war only a little over 7 per cent. of the total war expenditures were raised from taxes. with every succeeding year the percentage increased until the last year of war, 1918--19, a little over one-quarter of the war expenditures were met from war taxes. for the entire five years the proportion of war taxes to war expenditures was slightly over 17 per cent. in the other belligerent countries the showing was by no means so good. france struggled under a double difficulty. in the first place france was invaded at the very outset of the war, and the territory occupied, although relatively small in extent, represented the richest and the most industrially developed part of the country. this operated largely to reduce the ordinary revenues. in the second place the resultant economic confusion, as well as the general political situation, made it very difficult to impose any new taxes at all. the consequence was that for the first three years of the war, the tax revenues of france did not even suffice to defray the ordinary peace expenditures. after a little while, indeed, france found it possible to levy some war taxes; but these were exceedingly slight compared with what had been accomplished in great britain. the result is that the new war taxes of france were only just about sufficient to make up the deficit on the ordinary peace budget--a deficit caused chiefly by the devastation of the occupied territory. in france, therefore, we may say that as a result no part of the expenditures was met by war taxes. in italy the situation was a little better. italy had not been invaded and its financial situation was not so desperate as that of france. moreover, italy entered the war somewhat later and did not have to endure a strain for so long a time. italy consequently proceeded as soon as possible to levy new war taxes; but as italy had always been relatively overtaxed, as compared with great britain, it was not feasible to do as much. as a result, the war taxes levied by italy were just about sufficient to pay the interest on the war loans. while italy, therefore, did better than france, she also was not able to defray any of the war expenditures proper out of war taxation. the condition of russia soon became worse than that of france and italy, and even before the october revolution, russia was able to put very little reliance upon revenues from war taxation. among the central powers the situation was much the same, but for a different reason. germany at the outset of the war had so confidently counted upon victory and upon huge indemnities that it resolved to defray its war expenses entirely from loans. it must, however, be observed that in germany a not insignificant part of the war expenses were met by the separate states; and in these various states a considerable increase of taxation was provided for at once. as the war proceeded and the hopes of a speedy and complete victory gradually faded away, germany began to change her policy and decided, especially from 1916 on, to impose more and more taxes. the result was that by the end of the war germany had done a little better than france. our war taxes compared with war expenditures we come finally to the experience of the united states. when the united states entered the war it was confronted by two rival theories of public finances. one was to the effect that the war expenses should be defrayed entirely by war loans, as had been the case in the early years of the civil war and as was true of many of the belligerents during this war. the other theory was that the war expenditures ought to be defrayed entirely out of war taxes. this was equally extreme and perilous as the former theory, and labored under the additional disadvantage of being impossible of achievement. the president went so far as to adopt the fifty-fifty theory, namely, that half of the war expenditures ought to be defrayed from taxation. the prodigious profits made during the beginning years of the european war and the resulting prosperity throughout the country enabled congress to levy taxes far higher than had before been attempted in our history. even with an immense addition to taxation, however, the proportion of war expenses derived from war taxes was relatively small. here, again, we must observe the same caution as in the case of the british figures. we must not compare total expenditures with total taxes, but war expenditures with war taxes. war expenditures are easily ascertained by deducting for each year the amount of the expenditures for the last year of peace, the year ending june 30, 1916. in the case of war taxes, however, it is more exact to deduct from the total revenues the tax revenues for the year ending june 30, 1915. for during the year 1915--16 a number of taxes were already levied in preparation for our possible entrance into the war. as a matter of fact, during the first quarter of war ending june 30, 1917, the proportion of war expenditures derived from war taxes was less than one-third or 30 per cent. if we exclude loans to allies on the assumption that they will all be repaid some day, the showing is somewhat better--as two-thirds of the expenditures of that period consisted of such loans. as soon, however, as we struck our full gait the situation was less satisfactory. the proportion of war expenditures derived from war taxes during the year 1917--18 was less than one-quarter or more exactly only 24.8 per cent. and if we again exclude loans to allies, only 30 per cent. in the last year of the war the showing was still less favorable. if we take the expenditures for the entire period of our participation in the war the figures are respectively 21.7 per cent. and 27 per cent. for the entire period of our participation in the war, less than one-fourth (or exactly 23.3 per cent.) of the war expenditures were paid out of war taxes. and if the loans to allies are again excluded the proportion is still under one third, or more exactly 32.5 per cent. [illustration: copyright underwood & underwood =lord reading= president of the anglo-french loan mission to the united states in 1915, and special envoy of the british government to the united states in 1917.] this compares favorably even with the british figures. but it conclusively shows how impossible it is even with the best of will, to raise more than a relatively small part of war expenses from war taxes; especially during the early period of a war. character of war taxation the next point of interest is that of the character of the war taxes imposed by the various countries. here again we notice a very great difference. in all of the european belligerents on the continent, at least as much additional revenue was raised from direct, as from indirect, taxation. in france about as much new revenue came from indirect taxation or taxes on consumption as from direct taxation or taxes on wealth. the situation is still less satisfactory in the other continental countries. in england, on the other hand, a different path was pursued from the beginning. while it is true that a considerable increase of revenue was derived from indirect taxes like customs and excise, the chief reliance was placed on the increase of the income tax, on a new war profits tax and finally, although to a minor degree, on an increase in the inheritance tax. when we come, however, to the situation in the united states we find the democratic movement so strong that the overwhelming proportion of the new tax revenue was derived from direct taxation on wealth rather than from indirect taxation on consumption. in the great revenue act of 1917 over 79 per cent. of the new tax revenue came from direct taxation, principally the income tax and the excess profits tax. in the second great revenue act of 1918, the proportions were still more favorable, the amount ascribable to direct taxation in 1919 being almost 81 per cent. united states internal revenue receipts in millions of dollars per per year ending june 30 1918 cent. 1919 cent. income and profits taxes 2,839 2,596[20] munition manufacturers tax 13 ..... estate tax 47 82 corporate capital stock tax 25 29 ---- ---- total taxes on wealth 2,924 79.1 2,707 70.5 distilled spirits 318 365 fermented liquors 126 118 tobacco 158 206 stamp taxes 19 37 transportation 71 234 insurance 6 15 excise taxes 37 78 soft drinks 2 7 admissions 26 51 miscellaneous 8 22 --- --- total taxes on consumption, transactions and commodities 771 20.9 1,133 29.5 total 3,695 .... 3,840 .... [20] as the new taxes are payable in instalments, about 2 millions of the 1919 tax will not be received until the fiscal year 1920. making allowance for this the proportion of taxes on wealth really ascribable to the year 1919 rises to 80.6 per cent. with the impossibility of securing more than a comparatively small proportion of the war expenditures from taxation, it accordingly became necessary to resort to borrowing. this was consequently done by every country on a gigantic scale; although here again the fiscal and economic conditions in the various countries were so different that they employed quite diverse expedients. great britain provided at the outset of the war for immediate needs by the selling of short time securities, principally treasury bills. before long these had amounted to such a sum that it became necessary to issue long time bonds. accordingly, subscriptions were invited to the first war loan, which was issued on march 1, 1915, followed by the second war loan on june 1, 1915. these bore interest at the rate of 3½ and 4½ per cent. and the amount issued was $1,703,000,000 and $2,883,000,000 respectively. on february, 1916, a continuous issue of war savings certificates was inaugurated. on april 15, 1917, the third war loan was issued at 4 per cent., followed on june 1, by the issue of 5 per cent. bonds. of these $4,811,000,000 were issued. beginning on october 2, 1917, a continuous issue of 4 and 5 per cent. national war bonds was made, the difference in the rate of interest being due to the tax exemption. the temporary and short time paper was gradually funded into these bonds. in the meantime the anglo-french loan of $500,000,000, of which england had one-half, had been contracted in the united states; and with the entrance of the united states into the war on april 6, 1917, continually larger sums were borrowed from the american government. during the period of the war the british debt rose from £650,000,000 to £7,643,000,000 or from $3,115,000,000 to $37,221,000,000. it is expected that $250,000,000 will be borrowed during the year 1919--20, so that in all probability the debt of great britain at the end of 1920 will amount to almost £8,000,000,000, or $38,500,000,000, meaning that the war debt probably will amount to about £7,500,000,000, or $35,000,000,000. france was in a far less favorable situation than england at the outset of the war. the total debt of france at the close of 1913 amounted to fr. 32,594,000,000, or $6,291,000,000, and the ordinary budget had closed with a large deficit. so that it had been necessary to issue a loan during the spring and summer of 1914. when the war suddenly broke out, precipitating an economical and financial crash, it became practically impossible to issue another loan. the government was therefore compelled to rely upon advances from the banque de france, which was permitted correspondingly to increase its notes issue. it was not until november, 1915, that france saw her way to issue her first war loan of 5 per cent. bonds. this was followed on august 6, 1916, by the second war loan, also of 5 per cent. bonds, on december 15, 1917, by the third war loan of 4 per cent. bonds, and on dec. 15, 1918, by the fourth war loan, also at 4 per cent. the first war loan issued at 88 yielded $1,894,000,000; the second, at 83.75, yielded $1,981,000,000; the third at 68.60 yielded $2,914,000,000 and the fourth at 70.8 yielded $5,382,000,000. meanwhile national defense bonds were issued continuously from february 25, 1915, and foreign loans had been contracted in england, in the united states and in japan. the result was that at the close of the year 1918 the french debt amounted to fr. 167,469,000,000 or $32,322,000,000. this meant that the debt due to the war amounted to fr. 134,875,000,000 or $26,031,000,000. it is expected, however, that a considerable sum will still have to be borrowed during the year 1919, thus bringing the total french debt to 27 or 28 billions of dollars. [illustration: while the men fought, those left behind bought bonds not all brave hearts beat under khaki during the war. more than $20,000,000,000 was raised by the four liberty loans and the fifth victory loan. among those who bought bonds were hundreds of thousands of wives and children of the men at the front. courtesy mcclure's magazine] russia was the first of the entente powers to issue public loans. on september 14, 1914, it issued a 5 per cent. loan at 94, yielding $259,000,000. this was followed at regular intervals by six more loans prior to the revolution of 1917. after the revolution there was considerable confusion which, of course, was much accentuated by the advent of bolshevism. the consequence was that the public debt of russia, which amounted for july, 1914, to $4,623,000,000, increased by the time of the october revolution in 1917 to 49,288 millions of rubles or 25,383 millions of dollars. this would mean a war debt of almost twenty-one billions of dollars. as a matter of fact of course it is very uncertain whether the debt will ever be redeemed at these figures. the debt of italy before it entered the war amounted to lire 13,636,000,000 or $2,621,000,000. italy started at once with a so-called mobilization loan followed by its first war loan in july, 1915, and successive war loans on the first of january of each of the following years. the result was that on october 31, 1918, the total debt amounted to lire 63,093,000,000 or $12,177,000,000. by the end of may, 1919, the debt had grown to 77,763,000,000 lire or $15,009,000,000 leaving as the war debt lire 64,127,000,000 or $12,388,000,000. of the central powers, germany started at once on october 1, 1914, to issue a war loan at 5 per cent., having from the outset decided to rely upon comparatively long time bonds rather than upon temporary or short time securities as was the case in england and in france. there followed in regular succession eight war loans bearing 4½ and 5½ per cent. interest. as a result, the debt of germany, which before the war amounted to mk. 4,732,000,000 increased on october 31, 1919, to mk. 204,000,000,000 or $48,552,000,000; the war debt proper in germany would therefore amount to $47,426,000,000. total war debt, united states when the united states entered the war it depended, for the time being, on temporary war certificates. but at the beginning of june, 1917, liberty loans were issued in continually greater dimensions. in the table below the details of the four liberty loans and the fifth victory loan are given, showing that over $20,000,000,000 were raised from bonds alone. to these is to be added the unfunded loans. it appears that the total net debt of the united states, which in april, 1917, was $1,190,000,000, increased by june 30, 1919, to $24,232,000,000, making a war debt of $23,042,000,000. inasmuch, however, as somewhat over a billion dollars from the victory loan will be paid in the course of the year 1919--20, and as still more will have to be borrowed temporarily, the total war debt of the united states by the end of 1920 will amount to over $25,000,000,000, including the nine billions advanced to the allies. united states in millions debt less annual cash in interest treasury charge april 5, 1917 $1,189 $23 june 30, 1917 1,909 84 june 30, 1918 10,924 466 june 30, 1919 24,233 619 debt on june 30, 1919 bonds pre-war bonds 833 war loans first liberty loan $1,985 second liberty loan 3,566 third liberty loan 3,959 fourth liberty loan 6,795 victory loan (notes) 3,468 20,455 treasury certificates 3,634 old debt on which interest increased 2 non-interest bearing debt 236 ----- total gross debt 25,485 cash on hand 1,252 ------ net debt (in millions) $24,233 the other belligerents need not be treated separately. the total pre-war debt, including japan, whose debt was increased only by the money raised to loan to great britain and france, amounted to almost $28,000,000,000. the debt at the close of the war amounted to over $224,000,000,000, making the net war debt somewhat over $196,000,000,000. when we compare this with the total cost of the war, which, as we have seen, will amount to about $210,000,000,000, it appears that almost the entire cost of the war will have been defrayed from loans, the difference of well-nigh $15,000,000,000 derived from taxation being due almost entirely to the efforts of great britain and the united states respectively. public debt of the belligerents 000,000 omitted ========================================================== |before | | after | war debt | |the war| |the war | | ---------+-------+----------+--------+-----------+ great |aug. 4,| £650 = |mar. 31,|£7,643[21] | $34,056 britain | 1914 | $3,165 | 1919 | = $37,221 | | | | | | australia|aug. 4,| 97 = 472 |jan. 31,|[22] 336 = | 1,162 | 1914 | | 1919 | 1,634 | | | | | | canada. |aug. 4,| 332 |mar. 31,| 1,584 | 1,250 | 1914 | | 1919 | | | | | | | new |aug. 4,|100 = 487 |mar. 31,| 170 = 828 | 341 zealand | 1914 | | 1919 | | | | | | | south |aug. 4,|126 = 614 |mar. 31,| 175 = 846 | 332 africa | 1914 | | 1919 | | | | ----- | | ------ | ------ british | | $5,070 | | $42,213 | $37,143 empire | | | | | | | | | | france | july |fr. 32,594|dec. 31,|fr. 167,459| 26,031 | 1914 | = $6,291 | 1918 | = 32,322 | | | | | | russia | july |ru. 8,800 |jan. 1, |ru. 49,288 | 20,760 | 1914 | = 4,623 | 1918 | = 25,383 | | | | | | italy | may |li. 13,636|oct. 31,|li. 77,763 | 12,388 | 1915 | = 2,621 | 1918 | = 15,009 | | | | | | belgium |aug. 2,|fr. 3,743 |apr. 30,|fr. 9,787 =| 1,166 | 1914 | = 722 | 1919 | 1,888 | | | | | | rumania | aug. | 292 |oct. 31,| 1,020 | 728 | 1916 | | 1918 | | | | | | | serbia | july | 271 |oct. 31,| 730 | 459 | 1914 | | 1918 | | | | | | | japan | july |yen 2,494 |july 31,|yen 2,530 =| 18 | 1914 | = 1,190 | 1918 | 1,265 | | | | | | united |apr. 5,| 1,190 |june 30,| 24,232 | 23,042 states | 1917 | | 1919 | | | | ----- | | ------ | ------ entente | | $22,327 | | 144,062 | 121,735 powers | | | | | ---------+-------+----------+--------+-----------+------- germany |aug. 1,|mk. 4,732 |dec. 31,|mk. 204,000| 47,426 | 1914 | = $1,126 | 1918 | = $48,352 | | | | | | austria|aug. 1,| 3,726 |oct. 31,|kr. 137,858| 24,858 hungary | 1914 | | 1918 | = 25,584 | [23] | | | | | turkey | nov. | lt 112 = |oct. 31,| lt 455 = | 1,517 | 1914 | 485 | 1918 | 2,002 | | | | | | bulgaria |oct. 4,| 219 |oct. 31,| 974 | 755 | 1915 | | 1918 | | | | ----- | | ------ | ----- central | | $5,556 | | $80,112 | 74,556 powers | | | | | | | | | | total | | $27,883 | | $224,174 | 196,291 | |in millions |in millions| ========================================================== [21] counting on repayments of one half of the loans to the allies (£816 millions). [22] not including the debts of the separate states. [23] obtained by considering the debt of the new austria as representing 70 per cent of the debt of all the states which constituted the old empire. [illustration: french school children waiting to welcome general pétain] vi--american business in the war voluntary coöperation of experts and loyal support of labor put our industries on a war basis by grosvenor b. clarkson director of the u. s. council of national defense and of its advisory commission modern wars are not won by mere numbers. they are not won by mere enthusiasm. they are not won by mere national spirit. they are won by the scientific conduct of war, the scientific application of irresistible force. --woodrow wilson. war today means that for every man on the fighting line there must be approximately ten men--and women--behind him in the factories, mills, and mines of the nation that enters the conflict. it is an enterprise to which military men alone have ceased to be called, for it enlists the specialists of every industry and every science from the fighting line clear back to the last line of defense. when the american marines were thrown into the battle line at the marne, a french general officer rode up to headquarters. "how deep is your front?" he asked. "from here to san francisco," was the reply; and in that statement lay the story of america's industrial and economic mobilization for war. for america the actual arena of the war was 3,000 miles oversea, and into this arena the government of the united states threw 2,000,000 of the most superb troops that the drama of warfare has known; and, what is more, got them there on time to make possible the final smashing blow. the organization, transportation, and clocklike delivery at the eleventh hour of these irresistible citizen armies of the great republic of the western world is an epic in itself. but here at home there were armies too. they were created without mandates; they were welded into cohesive form by suggestion rather than by order; they were galvanized from beginning to end by the mighty force of voluntary coöperation; and they went into the home stretch with a power which nothing could have stopped. these were the armies of production--production mainly, it is true, of guns and steel plates and soldiers' shoes; but production as well of energy, of thought that made the sword a flaming thing, of optimism to offset the stupid pessimism of people who criticized but had nothing tangible to contribute, of the immortal spirit of "carry on," of, above all, unification. in all of this endeavor, in all of this uprooting of the static national life of peace time, the business man of america reached his apotheosis and surprised even himself in his ability to merge his heart and nerves and brain into the national interest in the most emergent hour of the country's history. in effect, america went into the war unprepared. the will to war was a dormant thing throughout the nation. the country was swollen with material success almost to the point expressed in lincoln's phrase: "a fat hound won't hunt." the evolution of the government of the united states, enjoying profound peace for more than half a century, except for the minor military operations of the spanish-american conflict, into a great war-making machine in mercilessly short time was a task to challenge the ability of even the most resourceful nation of the earth. there, broadly stated, was the national picture in the spring of 1917. war came, and almost with every day grew the need for increased participation on america's part. council of national defense the only federal agency in existence on april 7, 1917, capable of the elasticity to mobilize industry, labor, and science for the national defense was the united states council of national defense. this body, composed of the secretaries of war, navy, interior, agriculture, commerce, and labor, had providentially been created by congress eight months before. it was charged by congress with "the coördination of industries and resources for the national security and welfare" and "the creation of relations which will render possible in time of need the immediate concentration and utilization of the resources of the nation." with it was to act an advisory commission of seven men, each to have expert knowledge of some special industry, public utility, or the development of some natural resource. the council was further charged with the following particular duties: 1. to supervise and direct investigations and make recommendations to the president and the heads of executive departments as to: (_a_) the location of railroads with reference to the frontier of the united states, so as to render possible expeditious concentration of troops and supplies to points of defense. (_b_) the coördination of military, industrial, and commercial purposes in the location of extensive highways and branch lines of railroads. (_c_) the utilization of waterways. (_d_) the mobilization of military and naval resources for defense. (_e_) the increase of domestic production of articles and materials essential to the support of the armies and of the people during the interruption of foreign commerce. (_f_) the development of sea-going transportation. (_g_) data as to amounts, location, methods and means of production and availability of military supplies. (_h_) the giving of information to producers and manufacturers as to the class of supplies needed by the military and other services of the government, the requirements relating thereto, and the creation of relations which will render possible in time of need the immediate concentration and utilization of the resources of the nation. 2. to report to the president or to the heads of executive departments upon special inquiries or subjects appropriate thereto. 3. to submit an annual report to congress, through the president, giving as full a statement of the activities of the council and the agencies subordinate to it as is consistent with the public interest, including an itemized account of the expenditures made by the council or authorized by it, in as full detail as the public interest will permit, providing, however, that when deemed proper the president may authorize, in amounts stipulated by him, unvouchered expenditures and report the gross so authorized not itemized. personnel of the council save for preliminary meetings late in the winter of 1916, the council and advisory commission did not get under way to any appreciable degree until february, 1917, when both bodies began to meet separately and jointly with the primary purpose of taking the national balance, chiefly with regard to industrial resources. the permanent organization of both bodies was made on march 3, 1917. the council of national defense was composed as follows: secretary of war newton d. baker, chairman. secretary of the navy josephus daniels. secretary of the interior franklin k. lane. secretary of agriculture david f. houston. secretary of commerce william c. redfield. secretary of labor william b. wilson. the members of the advisory commission were: _transportation and communication_: daniel willard, chairman, president of the baltimore and ohio railroad. _munitions and manufacturing, including standardization and industrial relations_: howard e. coffin, vice-president of the hudson motor car company. _supplies, including food and clothing_: julius rosenwald, president of sears, roebuck & company. _raw materials, minerals and metals_: bernard m. baruch, financier. _engineering and education_: doctor hollis godfrey, president of the drexel institute. _labor, including conservation of health and welfare of workers_: samuel gompers, president of the american federation of labor. _medicine and surgery, including general sanitation_: doctor franklin martin, secretary-general of the american college of surgeons. the director of the council and the advisory commission during the greater part of the war was walter s. gifford, now vice-president of the american telephone and telegraph company, a most capable organizer, who with the writer had been closely associated with howard coffin in a pioneer industrial preparedness movement inaugurated in the spring of 1916 to examine into the capacity of industrial plants for military purposes. this was an entirely volunteer movement of business men and industrial engineers under the naval consulting board of the united states, acting with the full approval of the president and the war and navy departments. mr. coffin's committee on industrial preparedness did a remarkable job in a very short space of time, and the creation of the council of national defense was the logical sequence of the committee's work, its records being turned over to the council. the writer was the secretary of the council and the advisory commission throughout until the early summer of 1918, when he became acting director, succeeding mr. gifford shortly after the signing of the armistice. [illustration: copyright by harris & ewing =united states council of national defense and its advisory commission= seated, left to right: david f. houston, secretary of agriculture; josephus daniels, secretary of the navy; newton d. baker, secretary of war; franklin k. lane, secretary of the interior; william b. wilson, secretary of labor. standing, left to right: grosvenor b. clarkson, secretary, later director, of both council and advisory commission; julius rosenwald, bernard m. baruch, daniel willard, chairman of the advisory commission; dr. franklin martin, dr. hollis godfrey, howard e. coffin and walter s. gifford, director of the council and advisory commission.] proposals of the advisory committee although the council and advisory commission did not, as has been stated, make permanent organization until march 3, 1917, the advisory commission on december 7, 1916, determined on the following proposals of action: to begin immediately a study to determine the most effective flexible organization and mechanism for the securing of all necessary information and for the clarifying, recording, and classifying of such information when secured. to begin immediately a study as to what media now exist which can aid in the carrying out of the purposes of the council. this study to be made in three divisions--governmental media in the departments, governmental media outside the departments, and civil media. as this study progresses it is believed that the council can aid materially in the development of such media, and can from time to time define (_i. e._, delimit and delineate) spheres of activity in which existing organizations may operate intensively without duplication. to assist in the advance of the physical well being of the people of the nation. to begin immediately a study of the possibility of the coördination of transportation, communication and surveys. to continue the work done on the inventory of manufactures, of medical equipment and officers, of supplies, and of resources. to assist in the development of the "personal index" already begun. to set a fixed date (a date three months after the beginning of action is suggested) on which an inspection may be made of the work accomplished to that date. this inspection to be made through the submitting to the commission of an actual problem by the departments of war and navy, with the intent to determine at that time what needed information is or is not available. to form a temporary organization to put the above proposals or any part of them or additional proposals into effect at the earliest possible date, with the intention of changing from a temporary organization to a permanent organization as the progress of the work makes this possible. to begin a study of the best methods of expression of the work of the council to the people of the nation. to scrutinize all legislative action touching national defense. to do any other thing or take any other action necessary to give effect to the law under which the council and commission are organized. pre-war activities at this time there was consideration of plans to enroll labor in an industrial reserve, and the question of mobilization of american railroads for military purposes was seriously discussed against future need. at the same time commissioner baruch stated that he had been making a study of the steel and metal industries in connection with the national defense, and wished for authority to consult further with the leaders in those trades. the director was asked to establish relations in the interest of the national defense with civic organizations, patriotic associations, and chambers of commerce. at a meeting on february 12, 1917, plans were discussed to call a series of conferences with the leading men in each industry fundamental to the defense of the country in the event of war, and at the same meeting a plan was laid down and afterwards agreed upon to split the advisory commission up into seven separate committees as detailed above, the chairman of each committee to be given power to select the members of his committee from either governmental or civil life, or both. at a meeting on february 14, 1917, e. s. stettinius, who, acting for j. p. morgan and company, was the purchasing agent of the allies at that time, was called before the council to confer with it on the manufacture of munitions. in the same way during this early period men of the authority and standing of herbert hoover, admiral peary, and general kuhn, who had closely studied the german armies, were called into consultation by the council, mr. hoover of course, discussing the mobilization, distribution, and conservation of food supplies, and admiral peary the development of the aeroplane and seaplane for modern war. on february 15th the advisory commission, further to progress its work then already under way, requested detailed lists of materials, with specifications and detailed dimensioned blueprints covering all equipment needed for a force of 1,000,000 men and for the assumed force of the navy and marine corps with its numbers increased to emergency strength. it also called for estimates of reasonable accuracy covering the maintenance of a force of the size mentioned in the field during each ninety days of active service. the information was desired in order that approximations might be made as to the amounts of both manufactured and raw material for which it would be necessary to draw upon the resources of the country. the advisory commission later furnished estimates of its own. on march 3rd chairman willard of the advisory commission read to the council a list of men nominated by the commission to compose a munitions standards board. it is highly significant to detail the names of these men with their occupations, for they were typical of the cream of american industry which from that time on was enlisted in the government's interest: w. h. vandervoort, builders of special machine tools, and president of the moline automobile co. e. a. deeds, formerly general manager for the national cash register co., president of the dayton engineering laboratories co., and interested in many industrial activities. frank a. scott, warner & swasey co., cleveland, manufacturers of automatic machinery and optical instruments. frank pratt, general electric co., schenectady. samuel vauclain, baldwin locomotive works, remington and westinghouse cos. john e. otterson, vice-president, winchester arms co. the council duly approved these nominations. [illustration: copyright underwood & underwood bernard m. baruch known as the "eye of industry," because his task was to see that the raw materials were brought to the factories and the finished products shipped overseas.] men of vision it is impossible here to give more than a few instances such as the foregoing of the way in which the council and commission, with remarkable vision and perhaps even more remarkable disregard of precedent when precedent got in the way of the national welfare, made history in these pre-war days. fully to tell the story of this period would pack a large volume. i quote from a recent partisan criticism directed by an american congressman, as chairman of a congressional committee to investigate war expenditures, against the advisory commission particularly, which he characterized as the "secret government of the united states" during this vital space of time: it appears from the minutes of the advisory commission and the council, which were kept separately, that practically all of the measures which were afterwards considered as war measures, were initiated by this advisory commission, adopted by the council, and afterwards acted upon by congress. in many cases, a considerable period before the actual declaration of war with germany this advisory commission was discussing matters which were thought to be new legislation, conceived by reason of the necessities of war. for instance, on march 3rd, over a month before the war declaration, the advisory commission indorsed to the council of national defense a daylight-saving scheme, and recommended a federal censorship of the press. the question of federal censorship of the press was further discussed on march 24th, two weeks before the declaration of war. on february 15th, about two months before the declaration of war, commissioners coffin and gompers made a report as to the exclusion of labor from military service, and the draft was discussed; the draft was also discussed on other occasions before anyone in this country, except this advisory commission and those who were closely affiliated with the administration, knew that a declaration of war was to be made later. at a meeting, on february 15th, this same commission of seven men (none of whom had any official authority except as advisors), recommended that herbert hoover be employed by the government in connection with food control. it was generally understood, as appears from the minutes, that mr. hoover was to be in control of this matter, although war was two months in the future. the advisory commission first met on december 6, 1916. almost the first thing the commission did was to take up the matter of arranging an easy method of communication between the manufacturers and the government. on february 12th, for example, secretary lane offered a resolution to the advisory commission suggesting to them to call a series of conferences of the leading men in various industries, so the industries might organize and be able to do business with the council through one man. in several meetings, long before the war was declared, this advisory commission of seven men met with the representatives of the manufacturing industries and formed an organization of them for selling supplies to the government, which organization was well perfected before the war was declared. this method consisted of having the representatives of the various businesses, producing goods which the government would have to buy, form themselves into committees so that they might be able to sell to the government the goods direct, which their industries produced. in almost every meeting that this advisory commission had before the declaration of war, they discussed and recommended to the council (which consisted of six cabinet members) these plans for fixing prices and selling to the government. when war was declared on april 6th, this machinery began to move, headed by the advisory commission of these minutes, the active government of the seven men, who were, in effect, as shown by united states, so far as the purchase of supplies was concerned. so far as i can observe, there was not an act of the so-called war legislation afterward enacted that had not before the actual declaration of war been discussed and settled upon by this advisory commission. it should be said, of course, that no member of this council organization ever sold commodities to himself. but that is another story. men of experience i could not complete even a skeleton outline of the period in question without certain other references. further to emphasize the quality of the business men being called to washington by the council and advisory commission, i quote part of a letter to chairman willard of the commission from commissioner baruch of march 23, 1917: mr. daniel willard, chairman, advisory commission, council of national defense, washington, d. c. dear sir: in pursuance of the authority given me and in order to be prepared to meet the requests made of the advisory commission, i have appointed the following committees. as the necessity arises and the advisability becomes apparent, i shall add from time to time other members to these committees, always bearing in mind keeping them down to such a size that they will be workable. it has been my endeavor to appoint on these committees men of proved ability and undoubted integrity. leather.--walter c. garritt, u. s. leather co., boston, mass.; george f. johnson, endicott, n. y.; theodore p. haight, american hide & leather co., new york city. rubber.--a. marks, diamond rubber co., akron, ohio; fred hood, hood rubber co., watertown, mass.; stuart hotchkiss, general rubber co., new york city. steel.--e. h. gary, president, american iron & steel institute, new york. wool.--j. f. brown, boston, mass.; sigmund silberson, chicago, ill.; joseph r. grundy, bristol, pa.; f. j. hagenbarth, president, national association of wool growers, salt lake city, utah. nickel.--ambrose monell, president, international nickel co., new york. oil.--i have asked mr. a. c. bedford, president of the standard oil co., to serve on the committee, but i shall probably add another from the middle west, whose name i have not yet determined upon, and mr. ed. l. doheny, of los angeles, calif. zinc.--i have in the process of formation a committee representing the zinc trade. there are certain difficulties in the way of trade jealousies which we have to smooth away. the same thing is occurring in other lines, but it will be adjusted, and i shall report on them from time to time. coal.--i have been in consultation with the producers of coal, both bituminous and anthracite, and am now studying that situation as to the best method of covering coal. spruce wood.--i have also under consideration, but have come to no conclusion, the employment through a committee of those best fitted for obtaining the manufacture of aeroplanes for the government the proper amount of spruce wood which seems to be needed. labor pledges support it will be long before the writer forgets the dramatic meeting of the advisory commission as early as march 3, 1917, when commissioner gompers reported that he had called an executive council meeting of the american federation of labor for march 9, 1917, for the purpose of considering the attitude of labor toward the preparedness plans of the government. the labor leader spoke with great emotion. he referred to england's difficulty in the first year of the war in enlisting the services of the working people. he went on to say that in england unity was then lacking between government and labor and that the same situation, if not properly handled before hand, could arise in this country in even more acute form, largely because of the racial diversity of our working classes. he concluded by stating that he was now bending his efforts to mobilizing good will in this direction, saying: [24] "i want the workingmen to do their part if war comes to america." he forecasted the meeting in washington on march 12, 1917, of the officers of the national and international trade unions of america, and said: "i am expecting a definite response of support from every trade union in america." there is no doubt in the writer's mind that samuel gompers kept the faith throughout. [24] i took mr. gompers' words verbatim. on april 6, 1917, the council and advisory commission approved a declaration of the attitude of american labor toward the war presented by mr. gompers' committee on labor of the advisory commission. this action was directed toward the maintenance of existing standards of employment, and provided, among other things, that the council should issue a statement to employers and employees in industrial plants and transportation systems advising that neither employers nor employees should endeavor to take advantage of the country's necessities to change existing standards; and providing further that when economic or other emergencies might arise requiring changes of standards, the same should be made only after such proposed changes were investigated and approved by the council. it likewise provided that the council urge upon the legislatures of the states, as well as upon all administrative agencies charged with the enforcement of labor and health laws, the great duty of rigorously maintaining the existing safeguards as to the health and welfare of workers, and that no departure from such standards in state laws and state rulings affecting labor should be taken without a declaration of the council that such departure was essential for the effective pursuit of the national defense. merging the railroads on april 7, 1917, the council directed chairman willard of the advisory commission to call upon the railroads so to organize their business as to lead to the greatest expedition in the movement of freight and troops. the response of the railroads was literally splendid. their executives came to washington, conferred with mr. willard, and passed the following resolution: resolved, that the railroads of the united states, acting through their chief executive officers here and now assembled and stirred by a high sense of their opportunity to be of the greatest service to their country in the present national crisis, do hereby pledge themselves, with the government of the united states, with the governments of the several states, and one with another, that during the present war they will coördinate their operations in a continental railway system, merging during such period all their merely individual and competitive activities in the effort to produce a maximum of national transportation efficiency. to this end they hereby agree to create an organization which shall have general authority to formulate in detail and from time to time a policy of operation of all or any of the railways, which policy, when and as announced by such temporary organization, shall be accepted and earnestly made effective by the several managements of the individual railroad companies here represented. coöperating committees the first of july, 1917, found the council and advisory commission directing the operation of the following boards and committees: aircraft production board. committee on coal production. commercial economy board. woman's committee. general munitions board with its sub-committees on army vehicles, armored cars, emergency construction and contracts, optical glass, storage facilities, machine guns, priority, and accounting. munitions standards board with its sub-committees on gauges and dies, army and navy artillery, fuses and detonators, small arms and munitions, optical instruments, and army and navy projectiles. section on coöperation with states. committee on inland waterways. committee on telegraphs and telephones. committee on railroad transportation, with which acted an executive committee made up of leading railroad presidents and six departmental committees composed likewise of railroad executives and paralleling the military departments over the country, and sub-committees on express, car service, military equipment standards, military transportation accounting, military passenger tariffs, military freight tariffs, and materials and supplies. committees on cars and locomotives, with their personnel made up of the high executives of such concerns as the baldwin locomotive works, the pullman company, and the american locomotive company. committee on electric railroad transportation, composed of electric railway presidents. committee on gas and electric service. committee on automotive transport. committee on supplies, with its sub-committees on cotton goods, woolen manufacturers, shoe and leather industries, knit goods, leather equipment, mattresses and pillows, and canned goods. committee on raw materials, with its sub-committees, popularly known at the time as the "a to z" committees, on alcohol, aluminum, asbestos, magnesia and roofing, brass, cement, chemicals, acids, alkalis, electrochemicals, fertilizers, miscellaneous chemicals, coal-tar products, pyrites, sulphur. sub-committees on copper, lead, lumber, mica, nickel, steel products, with sub-committees on alloys, sheet steel, pig tin, steel distribution, scrap iron, pig iron, iron ore, and lake transportation, tubular products, tin plate, wire rope, wire products, and cold rolled and cold drawn steel. sub-committee on oil, rubber, wool, and zinc. committee on engineering and education, with its sub-committees on general engineering, production engineering, universities and colleges, secondary and normal schools, and construction engineering. committee on labor, with its sub-committees on mediation and conciliation, wages and hours, women in industry, welfare work, sanitation with twelve subdivisions, vocational education with nine subdivisions, information and statistics, cost of living and domestic economy. general medical board, with a long and active list of sub-committees. [illustration: copyright by underwood & underwood daniel willard president of the baltimore and ohio railroad. he was chairman of transportation and communication in the council of national defense.] service of experts on these boards and committees sat, almost without exception, the american leaders of industry, science, and labor. scattered through the list one finds such names as: rear admiral david w. taylor, one of the world's leading naval constructors. f. s. peabody, the great coal operator. james j. storrow, of lee, higginson & co., of boston. a. w. shaw, publisher of the _system_ magazine, who, as chairman of the commercial economy board, preached with remarkable success the gospel of conservation in business. dr. anna howard shaw, who for her labors as chairman of the woman's committee received the distinguished service medal. frank a. scott, on whom was bestowed the same distinction for his leadership of the general munitions board. w. a. starrett, constructing architect of new york, to whom in great measure is due the credit for the building of the cantonments in an incredibly short space of time. samuel vauclain, president of the baldwin locomotive works, whose contribution in the matter of army and navy artillery was monumental. theodore vail, president of the american telephone & telegraph company, who brought the wire communication men of the country to a common center in the national interest. charles clifton, president of the national automobile chamber of commerce. gen. george h. harries, the famous electric railway operator. samuel insull, president of the commonwealth edison co., of chicago. charles eisenman, who, as active head of the council's committee on supplies, procured for the government $800,000,000 of supplies in 200 days at an overhead cost of but $20,000, involving the handling of 45,000 contracts, and who justly received the distinguished service medal. a. f. bemis, president of the national association of cotton manufacturers. john p. woods, the eminent woolen manufacturer. j. f. mcelwain, of the mcelwain shoe company. lincoln cromwell, of wm. iselin & co., new york. arthur v. davis, president of the aluminum co. of america. thomas f. manville, president of h. w. johns-manville co. charles f. brooker, president of the american brass company. john e. morron, president of the atlas portland cement company. john d. ryan, president of the anaconda copper company. r. l. agassiz, president of the calumet & hecla mining company. w. a. clark, president of the united verde copper company. murry m. guggenheim. r. h. downman, president of the national lumber manufacturers' association. ambrose monell, president of the international nickel company. gary, farrell, burden, dinkey, king, grace, schwab, topping, dalton, and clarke, the great steel executives. bedford, davison, doheney, lufkin, markham, sinclair, van dyke, muir, james, and guffy, in whose hands lay almost the entire oil output of america. stuart hotchkiss, president of the general rubber company. f. j. hagenbarth, president of the national association of wool growers. the presidents of the leading zinc companies. then when we come to engineering and education: dr. henry e. crampton, of columbia university. charles a. stone, of stone and webster. the heads of the great engineering societies. the presidents of harvard, johns hopkins, and other famous universities and colleges. among labor leaders such persons as: warren s. stone, grand chief of the brotherhood of locomotive engineers. james w. sullivan, matthew woll and frank morrison, all high in the american federation of labor. such well-known men as: v. everit macy, benjamin ide wheeler, john h. finley, august belmont, e. t. stotesbury and charles g. dawes, afterwards a brilliant figure as a general in france. such nationally and internationally known physicians as: general gorgas; dr. william h. welch, of johns hopkins; the mayos; dr., afterwards brigadier-general, finney; dr. george e. brewer; dr. george w. crile; dr. simon flexner; and dr. theodore janeway. dr. george e. hale, chairman of the national research council, which was and is the council's department of science and research. thomas a. edison, president of the naval consulting board, which was and is the council's board of inventions. the activities of these men and their hundreds of colleagues, nearly all dollar-a-year workers and men whose time could not be bought, as a rule, in days of peace, reached out and touched almost every town and village in almost every part of the united states. they were moved and stimulated by the philosophy of voluntary coöperation, which was first and in a very daring way thrust into the consciousness of the nation by the council of national defense. it was the policy that won the war. one distinct benefit which the government received from calling the industrial intelligence of the country to its aid was the breadth of view which industrial leaders possess. their habit of mind to survey the field as a whole, to take a bird's-eye view of the problem to be solved, enabled the government agencies to obtain a proper comprehension of the task of building the war machine. the country will probably never know the debt that it owes to these men and their like who came to washington and bent their backs throughout the hot southern summer during a series of endeavors in which absolutely no paths were charted. non-partisan representation it has been asked why a coalition government was not formed to wage the war. that very thing was in effect done by the council, though we were all too busy to point it out at the time. a majority of the advisory commission was made up of republicans. certainly republicans were in the huge preponderance in the committee and boards of the council and advisory commission. speaking as one who was not affiliated with the politics of the administration of woodrow wilson, the writer never perceived a trace of political flavor in the organization and operation of the council from first to last. never did the six democratic cabinet officers forming the council itself so much as inquire into the politics of the hundreds of business men and experts nominated to them for appointment. it was an amazing demonstration of non-partisanship in a national crisis. the council was an organization of specialists from beginning to end, and the work was everywhere carried forward on the most impersonal basis. the writer attributes this state of affairs to the breadth of view, and the very genuine passion for national service, of secretary of war baker, chairman of the council. it should be plainly stated that, utilizing in the main dollar-a-year experts, the council made the preliminary mobilization of industry to july 1, 1917, at the grotesquely small sum of $127,000. to may 1, 1919, its total expenditures, including the operation of the war industries for nearly a year, amounted to but $1,500,000, and this comprehended the expenditure of $225,000 for the erection of a building. i doubt if there is anything in governmental or commercial history to match those figures, squared with results. the savings of the council and advisory commission to the government and the people mounted literally into the billions, as careful analysis of pre-war and war-time prices on certain commodities will demonstrate. it was made possible by the council's course in commandeering to its side the business men of the united states. some results of coöperation one of the practical results of voluntary coöperation was the agreement made by mr. baruch and mr. ryan with the largest copper producers of the country to furnish the navy 20,000,000 pounds of copper and the army 25,510,000 pounds at 16-2/3¢ a pound when the market price was 35¢ a pound. this meant saving to the government close to $10,000,000. the copper men made this offer notwithstanding their increased cost for labor, materials, etc., because, as they said: "we believe it to be our duty to furnish the requirements of the government in preparing the nation for war with no more profit than we receive from our regular production in normal times." in the same way the steel makers of the country, represented in the steel institute, agreed to furnish steel to the government at the basic price of 2.9¢ per pound as compared with the then market price of from 5¢ to 7¢ a pound. this represented an approximate saving to the government of $18,000,000. the field division the tremendous effort of the council to mobilize and coalesce into a fluid and powerful whole the industrial, economic and scientific forces, was supplemented and to a great extent made possible by the council's section on coöperation with states, later known as the field division. through this subordinate body was created, guided and coördinated the 185,000 units of the state, county, community and municipal councils of defense, which literally unified the citizenship of america for war. if production was to win the war, it was elementary that the civilian morale must be brought to the highest pitch of coöperation and efficiency--and it was accomplished. in this vital task a noble part was played by the woman's committee of the council, which in the most thorough-going and swift manner brought the services of the women of the country to the government. the director of this committee, miss hannah j. patterson, received the distinguished service medal. war industries board on august 1, 1917, the council, with its fortunate power to create subordinate bodies, brought into being the war industries board, of which the first chairman was frank a. scott, and of which some of the other members up to the end of the war were: robert s. brookings. brigadier-general hugh s. johnson. rear admiral f. f. fletcher. hugh frayne, of the american federation of labor. george n. peek, a prominent middle western manufacturer. j. l. replogle, who became the very efficient director of steel supply. l. l. summers, an expert on explosives. alexander legge, general manager of the international harvester company. and judge edwin b. parker. mr. brookings was later placed in charge of price fixing and judge parker in charge of priorities. the war industries board undoubtedly accomplished a much better centralization of effort than was possible in the hurried organization of the early days, when the imperative need was to increase the sources of supply and get production going until the executive departments of the government could get into their full stride. mr. scott was succeeded as chairman of the war industries by daniel willard, who in turn was succeeded by b. m. baruch, who, in his leadership of this vital and powerful agency, duplicated the success that mr. willard had made as chairman of the pioneer advisory commission. cantonment construction in indicating even an outline statement of the american industrial and economic effort in the war, the writer feels helpless to paint the picture within the space of a few thousand words. it simply cannot be done. but to visualize what the measure of the task was, let one thing be cited: [illustration: copyright underwood & underwood =john d. ryan= president of the anaconda copper company. he was made chairman of the aircraft production board after we entered the war.] at our entrance into the war there were one colonel and four men to build the cantonments. the job involved the expenditure of $150,000,000 in about three months. the largest year's work on the panama canal amounted to but some $50,000,000. the situation was heart-breaking. on hearing of it frank scott, then chairman of the general munitions board, called up the secretary of war and said that something had to be done, with which the secretary instantly agreed. the result was that the colonel, afterwards brigadier-general littell, had a civilian organization built around him by the council of national defense, notably by w. a. starrett, later himself a colonel in the army, which functioned until the army was in shape to carry on the job alone. the building of the cantonments was the greatest job of the ages. incidentally it should be stated that the average profit to the contractors was less than three per cent. men little known the writer likewise feels great reluctance in mentioning, as he has mentioned, only a few of the men who waged the industrial side of the war. many business men little known to the country gave up their businesses and came to washington and did superhuman things--did them in an impersonal, selfless way that was nothing less than stirring. many of them remain unknown to this day, and their chief reward must lie in the satisfaction that they drew to their own souls by what they did, which is, of course, the greatest satisfaction of all in such situations as war-time washington exemplified. it has not even been possible to touch on the work of business men in such great war agencies as the food and fuel administration, the war trade board, the shipping board, the aircraft production board, the office of the alien property custodian, the war finance corporation, and those divisions of the war department which called highly qualified civilians to their aid. it would seem better to emphasize the initial effort, when the council, through force of circumstances, became the great administrative laboratory for the examination, organization, and, at the proper time, allocation of totally new and untried phases of federal action related to the prosecution of the war. it was in effect a fecund mother, which, it is not the slightest exaggeration to say, gave birth to and propelled the war machine which in the closing days of the conflict overseas was reaching to the peak of its load, and which in fact dealt the death blow to the imperial german government. it made, in truth, its fair share of mistakes, but some day its part in sending out the trumpet call to the business and labor and scientific leaders of america to join in the national defense will be fully told. then there will be perceived in clear and true light the extent to which peace-loving american civilians offered all they had and all they were to the government of the united states so that decency might again be paramount upon the face of the earth. vii--the liberty loan army mobilizing americans at home to pay for the war--a national effort which yielded $24,065,810,350 by guy emerson vice-president of the national bank of commerce, formerly director of publicity, government loan organization our army was our first line in the war against germany. our second line of offense and defense was the navy, and behind both stood another line without which neither the army nor the navy could have "carried on." this third force was the greatest unit ever marshalled in the history of this or any other country--the liberty loan army. before a man in the united states uniform entered a trench, before the first depth bomb had been dropped on a u-boat, this army, which finally carried a roster of 22,777,680 names, had entered the war. think of it! one person in every five in the immense population was in the war! true, their contribution to the eventual triumph of our arms was measured in dollars while that of the men at the front or on the seas was in lives or limbs. yet it is a fact that dollars were as powerful relatively as men in bringing the boche to bay. various causes have been given to account for the startlingly sudden collapse of the kaiser's army. some say that the allies' superior military strategy brought it to its knees. others contend that success against the u-boats broke it down. both are partly right, for each helped to undermine the german morale. but however great the contribution of both was, it is safe to say that the front presented by the liberty loan army was a vital factor. the belated german consciousness that the united states as a whole was in the war, as tangibly represented in the strength of the liberty loan army, helped to shatter the germans' will to victory. as much as the men in khaki or in blue, this gigantic unit bore in upon his mind as an unyielding opponent. he understood the futility of trying to defeat a people that enlisted against him to the number of 22,777,680 at home, 4,000,000 in the field and 300,000 on the water. the spirit behind the dollar there is another angle to this important element of morale. in inverse ratio to the weakening of the spirit of the germans against this resistless body there came a daily strengthening of the morale of our own men and those of the allies through this manifestation at home. where there are two opposing wills to victory in the field, the one that has the greater backing at home is certain to overwhelm the other. it was not the dollar that won the war, it was the spirit behind the dollar. before prince max asked for the armistice he had learned that $9,978,835,800 had been subscribed in this country toward his defeat. it is natural to assume that this fact did not impress him so much as the related fact that millions of persons had participated in the subscription. up to the end of the fourth loan, which coincided with the negotiations for the armistice, $16,971,909,050 had been paid in and this helped to save life to an extent that we can only imagine. it was the confident expectation when the americans halted the german onslaught at château-thierry that the end of the war would come in the following spring. none dared to hope that it would come before christmas. when the crash came in november, even the allied commanders were bewildered by its suddenness. had the war been prolonged to the spring of 1919, it is certain that we would have paid a large toll in lives. some have estimated that 100,000 more of our young men would have been sacrificed. that the war did not drag along for six months more may be ascribed in part to the effect that the demonstrated loyalty of the liberty loan army had upon german morale. we know that the germans fed lies to their own troops and dropped pamphlets with these same falsehoods into our own trenches. they tried to convince their own and our men that the loans had no support. mobilizing the liberty loan army when at 11 o'clock on november 11, 1918, peace dawned upon a war-sick world we had 2,000,000 men in europe, and as many more on this side putting themselves in readiness to go across. on the seas we had close to 300,000 men. this tremendous force was welded into form in the nineteen months we were in the war. yet within a few months after our entrance into the war there were more than this total in the liberty loan army. the list of subscribers to the first liberty loan which closed two months after our entry had 4,500,000 names. and this number remained for the duration of the war, giving every penny they could spare, mortgaging their property, committing themselves to personal privations. when the second loan books were totalled in november the number had increased to 9,500,000, and it leaped to 17,000,000 in the third. in the fourth--the last loan of war-time--it had grown to 22,777,680 and in the fifth which closed six months after the armistice, it finished with 12,000,000 names. as in the army, where organization is half the battle, it was through organization of the enthusiasm and the deep fervor of the american people that success came in this big venture. we had to create a state of mind, we had to educate the american public in finance--which in itself appeared an insuperable task--we had to marshal resources on a scale such as never before had been attempted, and we had to map out a sales campaign that would comprehend millions of persons. there were no precedents to go by; the example set in europe could not have application in the united states because of temperamental and financial differences; the flotation of the loans in the civil war afforded no practicable working basis. it was pioneering, and this fact was made clear in the first conference held in washington when secretary of the treasury william g. mcadoo called together the financial leaders of the country. [illustration: a poster used during the fourth liberty loan campaign] only three weeks were allowed to prepare for the first loan drive. as soon as we had decided to get into the war, this decision carried with it the determination to go in to the limit of our resources. the secretary of the treasury informed the bankers that the first issue would be for $2,000,000,000 and this would be merely the forerunner of a succession of loans in larger amounts. the bonds were to be put on the market at three and a half percent. and the campaigns were to be conducted according to the territories of the federal reserve districts, twelve in all. "it is quite likely," said the secretary of the treasury, "that we could induce a group of men to take up this loan but that would compromise the country before the world. we must sell to the public in such numbers that there shall exist no doubt among our enemies that our people are back of the government as a unit in this war." the men whom he addressed were all recognized as organizers, all had been identified with big business. however, few of them had had the general contact with the public so essential to popularizing the loan. they knew how to sell, but not in small denominations or to millions of purchasers. in an abstract sense they realized the value of advertising and newspaper publicity, but not one of them had the remotest idea of how the ideal of secretary mcadoo could be realized. organizing the first drive it was at this point that their resourcefulness came into play. their first move was the right one; they engaged specialists to undertake the tasks of which they knew little. they addressed themselves to the public through men skilled in establishing such contacts as are given through advertising, publicity, and canvassing. in the brief time allotted to them, they barely had time to surround themselves with this trained talent. verily, it was shooting in the dark, a process of hit and miss. some one said that the campaign in the first loan was planned as we went along, and that is literally true. the patriotism was there--that was an unquestionable fact; the problem was to make it manifest itself in sacrifice of savings and earnings. the work of the whole three weeks was experimental and the country was the laboratory. let it be said that the alchemy of patriotism transmuted the hearts and minds of the public into pure gold. once the people were informed of their duty toward the united states they rallied instantly. newspapers turned over their columns, advertisers offered their precious space--and it was precious in those days of paper shortage; stores and banks opened booths for sales, public speakers cancelled every other engagement that they might participate, factories strove to enlist every person in their employment as purchasers, clubs responded in whole memberships, women's committees were formed for the acceleration of interest, churches consecrated themselves to the project, trade unions abandoned all differences with employers and allied themselves unselfishly, writers pleaded for a chance to exercise their influence, foreign language groups demanded opportunity to prove their americanism, actors, singers, and lecturers begged for a place in the campaign. wholeheartedly and with utter disregard of personal sacrifice this vast aggregation committed itself to the task. the initial momentum gave the drive the force of an avalanche that swept everything else aside. there came times during this first drive when the issue seemed in doubt, but this was due more to an excess of enthusiasm than to a lack of support. when the totals were in, it was realized that these misgivings were due to the physical inability of the tabulators to keep abreast of the tide of subscriptions. the subscriptions went to $3,035,226,850. it had been said that the first campaign in its directive agencies was largely hit and miss. when it was over the strikes were recorded and the misses eliminated for the preliminary work of the second loan which was to follow in october. out of the mass was evolved a system of methods that served as the groundwork of the real organization. the results afforded a working basis that would have carried a dozen loans through, granting that the people remained faithful to their patriotism. the appeal let it be admitted that in the first loan there was no defined appeal. we were in the war and in to win, that was sufficient. it was foreseen that the psychology of the public must have a central theme for the next loan to which it must respond. the second campaign began on october 1, 1917, after the embarkation of the nucleus of the vast army that eventually was to overwhelm the foe. none of them yet had been called into action. the keynote of this drive was the education of the people on the meaning of a german victory. we had before us the ghastly stories of what the germans had done in belgium and in france; we had to throw ourselves into the conflict to keep our own homes safe. the eyes of all europe, our allies and our enemies, were upon us. it was clear that by the results at home we would be judged, as we had not yet had the opportunity to show ourselves in the field. for four weeks and a day the campaign went on, this time for $3,000,000,000. the appeal which touched the heartstrings of all persons served a double purpose. not only did it carry the message of the loan, but it knit closer the sentiment of the whole american people to the purposes of the war. through its constant reiteration it had the effect of a prayer and like a prayer gained added meaning with deeper thought. thought was compelled through its manifold repetitions. all the functions of life were linked with it, all the recreations, all the relaxations embodied it in part. it formed the backbone of conversation, it became a part of every daily activity. it assailed the eye at every turn, it smote the ear constantly, it crashed into consciousnesses in every conceivable form. through a strange paradox it linked a fear and a hope. it embraced the whole gamut of emotions. growing response again there was a resounding response. in the first loan the subscriptions were limited to the actual amount of the issue, but in the second all subscriptions were accepted. the number of those who took bonds was increased more than 100 percent.--it reached 9,500,000, to be exact, and the $3,000,000,000 issue went to $3,808,766,150. so it was in the third, which was put before the public on the anniversary of our entrance into the war. at this time our men had gone into the trenches which in itself made the war our own in its most serious meaning. this was intensified throughout the land by the operation of the selective service act. the draft had entered almost every home; many of those who had qualified in the first call were at that time in france. casualty lists were beginning to appear in the newspapers. it needed only this fact--the fact in itself was its own appeal--to bring out the finest in our people. all previous sentiment faded into insignificance compared with the solemnity of the actual participation. the resources that we had been led to believe had been plumbed to their depths were now revealed to us as inexhaustible. giving seemed to be the poorest means of showing how the country was touched; the people gave as if in despair because this was all they might do. the campaign had been for $3,000,000,000 and it brought in returns of $4,170,069,650 from 17,000,000 men, women and children in the united states; men, who regretted that this was all they might give to their country's need; women, who offered with each dollar a passionate prayer that it might help the men now matching themselves against the foe, and children, who realized with joy that they were becoming part of the world's greatest war. fourth liberty loan before the fourth loan the rolls of honor in the daily newspapers were carrying a lengthening list of those who had paid the supreme sacrifice. in the training camps more and more hundreds of thousands of drafted men were preparing themselves to take their places on the line; the sea lanes were crowded with troopships, each bearing the best of our country away. there had been a depressing period when ludendorff's men seemed to carry everything before them, when the coast ports of france seemed menaced, but before the bugle called the non-combatants at home to attention again our boys had turned the tide at château-thierry and now were in full cry after the fugitive enemy. [illustration: a poster for the third liberty loan campaign] on september 27, 1918, the call for the fourth loan came and it seemed at the time as if it had been postponed too long because the foe was crumbling. president wilson sounded the tocsin in the metropolitan opera house in new york city. this time the appeal was to drive home the finishing blows, to demonstrate to the crumbling empire of the hohenzollerns that here was a people undivided and unafraid. the campaign was carried through in a veritable ecstasy of delight. where before there had been the spirit to give in order to wage the war to any length, here was the spirit to bring the end swiftly and splendidly, to crown the triumphs of our arms abroad with another triumph at home. in truth, the prospect of impending triumph at first almost defeated the need of a campaign. the enthusiasm during the period of the drive transcended everything ever seen in this country before. the result reflected it: in an issue of $6,000,000,000 there was an oversubscription of $933,073,250 and the total number was the 22,777,680 which will stand as the high mark of americanism for many generations to come. arousing the half-hearted it has been set forth here that all appeals were based on arousing the emotions of the people. this was necessary because, had the offerings gone before the public solely on their practical value as investments, the results would have been considered abroad as another demonstration of our sordidness. had the people of the united states been sordid, it is certain that they might have obtained better investment values. that they were not touched by selfish instincts is further proved by the fact that all through the drives the bonds of the previous issues had been quoted below par, due to the machinations of a group that never could be lifted above self-interest. the public, in full realization of this apparent depreciation, fought it out and showed their utter contempt for the manipulators by subscribing in greater force and for greater amounts to each subsequent issue. it has been said before that the feeling of the public toward the war was made clear in the first loan. it became the problem of the second and the succeeding drives to organize enthusiasm so that through contagion the more resistant types might be affected. this compelled an organization of psychology. back of each demonstration there were stage managers. these managers of psychology worked upon the public through the newspapers, through advertising, through "stunts," and generated a force of example which affected the whole community in which they were expressed. for instance, a parade always has the effect of stirring people; feelings deep-hidden cannot be well concealed when, in war-time, marching men stride past. unconsciously there comes to the mind of people the question: "what will become of these fine boys when they reach france?" there is the wish to help them, and the means to help them has been before their eyes for days in the liberty loan publicity. that is what is meant by stage management. through all the loans it was necessary to manipulate the emotions first, to bring to the consciousness of the people in the news reports the facts and purposes of the loans; secondly, to carry the "urge" to them through the advertising; and thirdly to work upon their feelings through spectacles, meetings, aeroplane flights, sham battles, motion pictures of actual warfare, and like accelerants. it was necessary to infect them in the mass so that as individuals they might infect others with the fever to buy bonds. all this work had to be carried through and was carried through with brilliant success in the four war-time loans. the army, the navy, the stage women's committees, police organizations, boy scouts, foreign language groups, all played a part. when the call came for the fifth loan, practically everything that had been done before had to be scrapped. it was all part of the war equipment and would help little in getting over another loan when people were striving with every fiber to get away from the thought and the sacrifices of the war. "finish the job" we had to deal, then, with a people who were beginning to adjust themselves to peace, who were consoling themselves with the thought that they had done their part and should not be called upon again. it looked like a hopeless prospect from the vista presented at the close of the fourth campaign to expect the same response for a peace campaign. the one optimistic fact that stood out was that the people had proved their patriotism, and such patriotism never dies. the fifth loan based its appeal solely upon patriotism's one expression in peace, duty. [illustration: victory way at night during the victory loan drive, park avenue, just above the grand central station, was shut off and devoted to propaganda for the drive. the photograph shows a pyramid of captured german helmets.] "finish the job" was the slogan of the fifth loan. the country was told that the war was not ended until its debts were paid, that we should feel gratitude in the lives spared by its sudden end. the liberty loan workers had to create a new state of mind, to begin a new education--for this time the issue was in victory notes instead of bonds--and to arouse the people to new emotions through spectacles, parades and other features. it may be mentioned here that the greatest parade of the entire war was held in new york in this fifth loan, when the different branches of the army showed in procession the men and weapons they had employed to win victory. the call was for $4,500,000,000 and the answer was subscribed in notes by 12,000,000 persons, who paid in $5,249,908,300. war savings campaign in between the drives there was a lesser drive constantly carried on among people who were not able to participate in bond buying. this was the war savings campaign which was a part of the government loan enterprise. newsboys, bootblacks, shop-girls, clerks and others who had been unable to participate in the loan drives or who wanted to prove again their devotion to their country answered this appeal. in these savings there was collected for the country up to the date of the armistice $932,339,000 and the number of persons hoarding in small sums was far beyond a million. liberty loan figures entire country | | | no. of quota |am't subscribed| allotted |subscribers first loan |$ 2,000,000,000|$ 3,035,226,850|$ 2,000,000,000| 4,500,000 second loan| 3,000,000,000| 4,617,532,300| 3,808,766,150| 9,500,000 third loan | 3,000,000,000| 4,170,069,650| 4,170,069,650|17,000,000 fourth loan| 6,000,000,000| 6,993,073,250| 6,993,073,250|22,777,680 fifth loan | 4,500,000,000| 5,249,908,300| 4,500,000,000|12,000,000 +---------------+---------------+---------------+--------- totals | 18,500,000,000|$24,065,810,350|$21,471,909,050|65,777,680 federal reserve district of new york first loan |$ 600,000,000|$ 1,191,992,100|$ 617,831,650| 978,959 second loan| 900,000,000| 1,550,453,500| 1,164,366,950| 2,259,151 third loan | 900,000,000| 1,115,243,650| 1,115,243,650| 3,046,929 fourth loan| 1,800,000,000| 2,044,901,750| 2,044,901,750| 3,604,101 fifth loan | 1,350,000,000| 1,762,684,900| 1,318,098,450| 2,484,532 +---------------+---------------+---------------+--------- totals |$ 5,550,000,000|$ 7,665,275,900|$ 6,260,442,450|12,373,672 benefits derived from loan campaigns the benefits derived from the loan campaigns were many. prominent among them was the growth of thrift among the american people. the growth of this habit will be an important factor in the future greatness of this country. a lasting monument to the war spirit of those who had to stay at home is the fact that more than a million persons, men, women and children, were engaged actively in the promotion of the five loans. in other words, one person in every hundred in the united states was a part of the organization, and each induced twenty other persons in that hundred to buy bonds. this colossal force did not work in haphazard fashion nor scatter its energy but acted under a definite plan of campaign in which each had an assigned part and in which each worked according to a method that would avoid duplication or extra expense. the five campaigns which united such an aggregation of workers and which produced such remarkable results were carried forward with a minimum of expense. never before in the history of finance had such widespread exploitation been accomplished at so low a cost. of the million workers all but a small nucleus were volunteers; the resources of the country were thrown open to the organizers with unexampled prodigality, mediums of flotation in a veritable flood being contributed without cost to the officers in the liberty loan army. a single purpose animated the whole nation. party lines, race prejudice, creed distinctions, social barriers, all were wiped out in these loan drives. the whole country formed itself into an all-american team that rushed onward irresistibly. the closest approximation to a common brotherhood had been achieved. war, with its terrible losses, with its impairment of lusty young men, with its heartbreaks and agonies, surely had not been waged in vain when it brought about such a unity. the united states in waging the war for democracy had won that democracy for herself at home. viii--food and the war how scientific control and voluntary food-saving kept belgium from starving and enabled the allies to avert famine by vernon kellogg member of the commission for the relief of belgium america was made familiar with a slogan during 1917 and 1918 which declared that "food will win the war." the european allies became familiar from the very beginning of the war with the fact that without much more food than they could count on from their own resources they could not hope to win the war. and it became equally obvious to germany and her associates that if their normal food resources were materially impaired they also could not hope to win the war. so there arose almost from the beginning of the great military struggle an equally great struggle to get food and to keep food from being got. the allies, devoting their manpower to fighting and munitions-making, saw their farms doomed to neglect and their food reduction doomed to lessen. and they began their call on america for food in such quantities as america had never dreamed of exporting before. in the last years before the war we had been sending about five million tons of foodstuffs a year to europe. in 1918 we sent over fourteen million tons. also the allies began trying, by their blockade, to prevent the central empires from adding to their own inevitably lessened native production by importations from without. on the other hand, germany and her associates began to husband carefully their internal food supplies by instituting a rigid, or would-be rigid, control of internal marketing and consumption, and to collect from any outside sources still accessible to them, such as the contiguous neutral lands, whatever food was possible. also they had strong hopes of preventing, by their submarine warfare, the provisioning of the allies from america and other overseas sources. thus, from the beginning of the war, and all through its long course, food supply and food control were of the most vital importance. if our epigrammatic slogan, "food will win the war," was, like most epigrams, not literally true, it was, nevertheless, literally true that there was always possible to either side the loss of the war through lack of food, and it is literally true that the food victory of the allies was a great element in the final war victory. germany's military defeat was partly due to food defeat, and if a military decision had not been reached in the fall of 1918, germany would have lost the war in the spring of 1919 anyway from lack of food and raw materials. economic self-sufficiency the great struggle for food supply and food control involved so many and such complex undertakings that it is hopeless to attempt a detailed account of it in any space short of a huge volume. yet the very limitations of the present discussion may have its advantages in compelling us to concentrate our attention on the most important aspects of the struggle and to try to sum up the most important results of it. some of these at least should not be forgotten, for they have a bearing on the peace-time food problem as well as the war-time one. fortunately the war-time food situation has developed in us a national and an individual food consciousness that will certainly not disappear in this generation at least. the first important lesson that has been learned is that it is of great value to a nation to be able to provide in its own land its own necessary food supply. for although in times of peace and usual harvests international food exchanges enable a country, such as england or belgium, highly industrialized and of large population in proportion to area, to make up without much difficulty its deficit as between production and consumption, the moment the great emergency arrives there is the utmost danger for its people. the history of the "relief of belgium" during the war will illustrate this. $600,000,000 worth of food supplied this little country, famous through all past history as a battleground and now famous for all future time for its heroic and pathetic rôle in the world war, found itself at the very beginning of the war faced with a food problem that seemed at first insoluble, and which, if not solved, meant starvation for its people. it is a country highly industrialized, and with an agriculture which, though more highly developed as to method than that of almost any other country, was yet capable of providing but little more than a third of the food necessary to its people. it depended for its very life on a steady inflow of food from outside sources. but with its invasion and occupation by the germans this inflow was immediately and completely shut off. belgium was enclosed in a ring of steel. what food it possessed inside this ring disappeared rapidly. the terrible situation was met in a way of which americans may be proud. for the commission for the relief of belgium, which was the agency that solved belgium's great problem, was an american organization with a staff composed chiefly of young americans, most of them from american colleges and universities, headed by an american, herbert hoover, of great organizing and diplomatic genius, and with the large heart of a world philanthropist. in the four and a half years from november 1, 1914, to may 1, 1919, which was the period of activity of the commission, belgium depended upon it for the supplying of three-fourths of the food of its people, over seven million in number. this amounted to about one million tons a year. in addition, the commission supplied the food through practically all this period for the maintenance of the nearly two million unfortunate people in the german-occupied area of france. this amounted to a total of about one million tons. the total value of the food supplied to belgium and occupied france was about six hundred million dollars, which was provided by the governments of belgium, france, england, and america, and the private charity of the world. the food production of germany for another impressive war-time food problem--which did not have the same solution as belgium's--let us take that of germany. in peace times the germans produce about 80 percent. of the total food annually consumed by them. but their tremendous military effort necessarily entailed some reduction in their capacity for food production, although they also made a tremendous effort to stimulate and direct into most effective channels the native production of food. although it is true, as already stated, that germany normally produces about 80 percent. of her food needs, making it seem possible for the nation to meet the blockade emergency by repressing consumption by 10 per cent. and increasing production by 10 per cent. this does not mean that they normally produce 80 per cent. of each kind of food consumed by them. as a matter of fact, they produce more than their total needs of certain kinds of food, as sugar, for example, and less than 80 per cent. of certain other kinds. and while there is a possibility of substituting, within certain limits, one kind of food for another, so that a shortage of wheat might be made up by an abundance of rye, or a shortage of bread-grains in general be made up, in some degree, by increasing the ration of potatoes, if they are available, this substitution cannot go to the extent of substituting pure carbo-hydrate or starchy foods like potatoes, which simply produce heat or energy for the body, for the protein foods like meat, fish, eggs and dairy products which produce not only energy but new tissues. a child must have protein food in order to grow; an adult must have it in order to replace the tissues worn out by daily work. also, there are certain peculiar and so far little understood elements, called vitamines, found only in certain kinds of food, notably fats, milk and the green vegetables, which are essential to the proper metabolism of the body. [illustration: photo by p. thompson the battle scene at home during the war the allies called on the united states for food in far greater quantities than we had ever dreamed of exporting. for example, in the last years before the war we had been sending yearly to europe about five million tons of food. in 1918 alone we shipped more than fourteen million tons of foodstuffs overseas.] germany's food problem now in the light of these needs for proper feeding, and in the light of the special conditions produced by the war, what was germany's food problem through the war? it was that of attempting to increase production when the men and work animals had been sent to the fighting lines, of repressing consumption when both men in the army and the men in the war factories had to be well fed in order to fight well and work well, of attempting to get in food from outside the country when a blockade was steadily closing the borders ever and ever more tightly, and finally, of trying to get the people to modify their food habits in the way of accepting substitutes and using strange new semi-artificial foods in place of the familiar staples. in 1916 the potato crop of germany was a failure--but the turnip crop was enormous. so turnips were substituted largely for potatoes, and for many other kinds of food as well. even marmalade and coffee substitutes were made from them, and turnip meal was mixed in the already too coarse and too much mixed flour. the germans will never forget that terrible _kohl-rüben zeit_, or turnip time, of late 1916 and early 1917. and it was just after this time that the effects of germany's great food difficulties began to show in a really serious way; they began to undermine the strength and health of the people. those diseases like tuberculosis, which can rest in incipient or suppressed form for years without becoming serious as long as the body is well nourished, began to develop rapidly and dangerously. the birth rate decreased and the death rate increased. the physical and mental and moral tone of the whole nation dropped. the sugar shortage belgium and germany illustrate a special food situation created by the war, namely, one in which a country, which relied on outside sources for a greater or lesser part of its food needs, had access to these sources suddenly and almost completely shut off. but grave food problems also confronted the countries which were not blockaded in so specific a way. england and france, with full access to all the great food-producing lands overseas (except to the extent that the submarines reduced this freedom of access), nevertheless had food problems hardly less serious than those of the more strictly blockaded countries. their difficulties arose primarily from the fact that there was only so much shipping in the world and that the war conditions created suddenly a need for much more shipping than existed. the transference of large numbers of troops with their necessary equipment and munitions from the distant colonies to the european seat of fighting, and of other numbers from the mother countries to extra-european battlegrounds, made great demands on the shipping available to these nations. at the same time, the reduction of their native production increased largely their needs of food importations. take, for example, the case of the sugar supply for england and france. england is accustomed to use about 2,000,000 tons of sugar a year but she does not produce, at home, a single ton. she had relied before the war chiefly on importations from germany and austria with some little from belgium and france. but with the outbreak of the war, she could get none from the central empires, and none from belgium, while france, instead of being able to export sugar, suddenly found herself with her principal sugar-producing region invaded by the germans and able to produce hardly a third of her former output. in fact, france herself was suddenly placed in the position of needing to import nearly two-thirds of the supply needed for her own consumption. so england and france had to turn to cuba, the nearest great sugar-producing country, and ask for large quantities of her output. but the united states has always depended on cuba for a large part of its own needs. consequently there was a sugar problem for our own country as well as for england and france long before we entered the war. the situation was serious; the demands on cuba were much larger than she could meet, although she was able under this stimulation of demand to increase materially her sugar crop in the years following the first of the war. one way of meeting this problem, which was promptly resorted to, was to cut down the consumption of sugar in the countries involved. in england and france sugar was strictly rationed; and in america the people were called on to limit their use of sugar by voluntary agreement. england cut her sugar allowance per capita from about seven and a half pounds a month to two, and france from nearly four to one. in america we reduced our per capita consumption by legally restricting the making of soft drinks and candy and by the voluntary restriction of the home use of sugar by about one-half. all this lessened the demand on cuba, and also the demand on shipping. national tastes in food in this discussion of the war-time sugar problem one may be struck by the fact, as noted, that the people of france were normally accustomed to eat much less sugar than the people of england, indeed only about one-half as much. this introduces a subject of importance in any general discussion of the world food problem. it is that of the varying food habits of different peoples, even peoples living under very similar climatic and general physical conditions. for example, the people of germany are accustomed to eat twice as many potatoes as the people of england, who in turn use more than three times as many as the people of italy. on the other hand, england uses twice as much sugar as germany, although she produces no sugar and germany produces much sugar. the italians eat only a third as much meat as the english and the french only half as much. but the english eat only two-thirds as much bread as the french. these differences in food use, established by long custom, have to be taken into account in all considerations of the world's food supply. they are differences which cannot be easily or quickly changed, even under circumstances which such great emergencies as war may produce. for example, we in america are accustomed to eat corn as food in the form of green corn, corn meal, corn flakes, etc. and in italy one of the great national dishes is _polenta_ (corn meal cooked in a certain way). but when the commission for the relief of belgium tried to introduce corn as human food in belgium, because of the large amount that could be obtained from america when wheat and rye were scarce, it met with great opposition and but little success. to the belgians, corn is food for animals. scientific control of food an important point brought out by the war-time food problem is that of the "scientific" make-up of the personal ration. not only are the national food habits of a people often difficult to understand from a point of view of taste, but they are often of such a character as to lead to a most uneconomical use of food. the exigencies of a world food shortage and a shortage of shipping for food transport have made it necessary for food ministries and relief organizations to give careful consideration to the most economical selection of foods for import and distribution, both from the point of view of economy of space and weight and lack of deterioration during shipping and storage, and from that of concentrated nutritional values and proper balancing of the ration. food provides energy for bodily work and maintenance. it is the fuel for the human machine. scientific students of nutrition measure the amount of energy thus provided, or the amount needed by the body, in units termed calories. physiologists have determined by experiment the different amounts of calories produced by different kinds of foods and the varying amounts needed by men at rest, at light work, at hard work, by women and by children. by analyzing the make-up of a given population as to proportions of men, women and children, and of work done by them, it is possible to express the total food needs of the population in calories and to arrange for the most economical provision of the total calories necessary. but the simple provision of the total sum of calories may by no means satisfy the real food needs of the population. for example, all the calories might be provided by potatoes alone, or grains alone, or meat or fats alone. but the population would starve under such circumstances. food provides not merely the energy for the body, but the substances from which the body adds new tissue to itself during growth and reproduces its constantly breaking down tissues during all of life. now while all kinds of food produce energy in greater or less quantity, only certain kinds are the source of new tissues. hence there must be in the personal or national ration a sufficient proportion of the tissue-producing foods, the protein carriers, as well as a sufficient amount of the more strictly energy-producing foods, such as the fats and carbohydrates. and there is necessary, too, in any ration capable of maintaining the body in properly healthy condition, the presence in it, in very small quantities, of certain food substances called vitamines which have an important regulatory effect on the functioning of the body. these substances occur only in certain kinds of food. all these things had to be taken into account in the war-time handling of food. so important was a proper knowledge of scientific food use and application of this knowledge, in connection with the efforts of the various countries to feed themselves most economically and to best effect in the light of their possibilities in the way of food supply, that every country concerned called on its scientific men to advise and help control the obtaining and distribution of its national food supply. for example, america and the allies (england, france, belgium and italy) established an inter-allied scientific food commission composed of experts who met at various times at london, paris, and rome, and on whose advice the determination, both as to kind and quantity, of the necessary importations of food from overseas to england, france, belgium and italy was largely made. thus the war has done more to popularize the scientific knowledge of food, and to put into practice a scientific control of food-use than all the efforts of colleges and scientific societies and food reform apostles for years and years before. calories, proteins, carbohydrates, fats and vitamines have been taken out of the dictionary and put into the kitchen. [illustration: photo by p. thompson a community conference on food-saving the importance of work of this kind increased after the signing of the armistice, because the poles, the belgians, and other peoples whom we could not reach during the war needed every pound of food we could spare.] government regulations america's special relation to the world's war food problem was primarily that of a provider of the allies, but in order to insure that this provision should be sufficient to keep the allied soldiers and war workers up to full fighting and working strength and their families in full health, it was necessary for america to stimulate its own production, repress considerably its consumption and cut out all possible waste in food handling. to do this there was needed some form of governmental food control and a nation-wide voluntary effort of the people. each of the allied countries had established governmental food control early in the war under the direction of a "food controller" either attached to an already existing government department of agriculture or commerce, or acting as an independent food minister. on the actual entrance of america into the war in 1917, governmental food control was vested in a "united states food administration" with powers given it by congress to control all exports of food and all food-handling by millers, manufacturers, jobbers, wholesalers, and large retail dealers. but no retail dealer doing a business of less than $100,000 a year, nor any farmer or farmers' coöperative association came under the food administration's control. thus the american food administration differed from that of most european countries in that it had no authority to fix the prices at which the actual producers should sell their products or the small retailers should charge the consumers. but, indirectly, it was able to do, and did, a good deal in this direction. by its direct control of exports, and of the millers, manufacturers and large dealers, it was able to cut out a great part of the middleman profits, and reduce wholesale prices for most staple foodstuffs, especially that most important one, flour. by publicity of prices and by indirect pressure through the wholesaler it was also able to restrain the further sky-rocketing of retail prices. nation-wide food saving but if the food administration was limited in what it could effect by legal authority, there was no limit to what it could do by calling on the voluntary action of the people of the country, except by the possible refusal of the people to help. so there was set in movement a nation-wide propaganda for food-production and food-saving which resulted in the voluntary acceptance of wheatless and meatless days, voluntarily modified hotel and restaurant and dining-car meals, and the adoption of household pledges, taken by more than 12,000,000 american homes, to follow the food administration's suggestions for food-saving. all this, and the many other things which the food administration asked the people to do, and which the people did, resulted in accomplishing a very necessary thing. it enabled america not only to meet all those ever-increasing absolutely imperative calls of the allies for food for their armies and people through 1917 and 1918, but to supply its own army and people sufficiently well to carry on the war effectively. the more food sunk by submarines, or prevented from coming to europe from distant food sources, as australia and argentine and india, the more we provided by saving and increasing our production. a few figures will illustrate the actual results of the call for food conservation. we entered the crop year of 1917 (july 1, 1917, to july 1, 1918), with a wheat supply which gave us only about 20,000,000 bushels available for export. by december 1, 1917, our surplus had gone overseas and an additional 36,000,000 bushels had been shipped to the allies. in january we learned of the further imperative need of the allies of 75,000,000 bushels. we responded by sending 85,000,000 bushels between the first of the year and the advent of the new crop. when the crop year ended we had sent in all about 136,000,000 bushels of wheat to europe. we were assisted in these operations by the importation of 28,000,000 bushels of wheat from australia and the argentine to supplement our domestic supply, but the outstanding fact was the saving in our domestic consumption, most of which was accomplished in the six-months' period from january 1 to july 1, 1918. american relief administration but the cessation of the war did not produce food for the war-ravaged countries of europe. the newly liberated peoples of central and eastern europe found themselves, at the time of the armistice, facing a period of starvation until their 1918 harvest could come in. something to save these peoples had to be done quickly and on a large scale. the situation was met by the establishment of a new american governmental organization called the american relief administration which, with mr. hoover as director-general, worked in connection with the inter-allied supreme economic council. representatives of the a. r. a. were sent at once into all the countries crying for help to find out the exact food situation, and to arrange with the respective governments for the immediate beginning of the importation and distribution of staple foodstuffs. programs for a food supply sufficient to last until the 1919 harvest were determined on a basis of minimum necessity, and provision for sufficient shipping and rail transportation was arranged by international agreement. modern war has thrown the spotlight on food. it has partly realized that famous prophecy of the polish economist, jean bloch, who wrote, twenty years ago: "that is the future of war, not fighting, but famine." in the world war of 1914--18 there was fighting on a scale never before reached, but there was also famine, as never before dreamed of. ix the high cost of living a study of the extraordinary conditions subsequent to the armistice by the director of the council of national defense on august 9, 1919, grosvenor b. clarkson, director of the council of national defense, submitted to the secretary of war, a report entitled "an analysis of the high cost of living problem." this report was the result of much careful study and investigation. it is non-academic in form and by omitting details presents a "panoramic view of the problem." it laid chief stress upon conditions since the armistice. in the report the problem of the high cost of living is viewed as a permanent one. it was, in other words, not peculiar to past war conditions. careful investigation by the council has resulted in the following analysis of the problem. the essence of the high cost of living situation "1. the only complaints of the high cost of living which have justification are those which are based upon inability of the present income to maintain previous or reasonable standards of living at present prices--such well-founded complaints mean that increase of income has not kept pace with increased cost of living, and therefore imply enforced reduction in standards of living. america's productive capacity "2. america's industrial and economic achievements during the war, notwithstanding depleted man power and diversion of productive effort to war purposes, demonstrate the ample ability of the nation to sustain its population according to a standard of living equal to or above standards of living which obtained previous to or during the war. "3. the fundamental basis for the maintenance of national standards of living is adequate production, economical distribution, and fair apportionment among the various economic groups which constitute our society. with the exception of agricultural activity, production since the armistice has shown evidence of curtailment, and has in general been abnormally low. normal consumption can not continue unless an adequate rate of production is maintained. food situation and readjustment "4. food production and the facilities for food production were improved rather than injured during the war. moreover, the program with respect to food production since the signing of the armistice has been one of vigorous expansion of the means of providing raw food products. the actual consumption of wheat, as shown by the grain corporation's report of may 25, 1919, had for the previous ten months averaged 37,700,000 bushels per month, as against 39,000,000 bushels for the previous twelve months. this does not necessarily imply reduced consumption of cereals. "the number of cattle slaughtered in the period january to may, 1919, was 3,803,000, as against 4,204,000 for the corresponding period of 1918, though the national reserve of cattle on farms had increased during the war. the swine slaughtered january to may increased from 18,260,000 in 1918 to 20,500,000 in 1919. clothing situation "5. the production of civilian cloths and clothing suffered some reduction during the war, and has suffered heavy curtailment for many months since the signing of the armistice. "boot and shoe production for civilian use was unfavorably affected by the war and has likewise undergone extreme curtailment since the signing of the armistice. housing problem "6. housing facilities developed acute shortage through curtailment of building during the war and, due to curtailment, for many months following the armistice, of the production of building material and of building construction, housing is still far below normal. rents continue to rise. provision of new capital "7. the first half of 1919 shows diminished production of raw materials and subnormal construction of new capital, and thus indicates failure to utilize an adequate proportion of our productive forces in the preliminary processes of provision to meet future requirements. in fact, due to business uncertainty and hesitation and tendencies to disagreement between productive groups, retailers, wholesalers, manufacturers, labor, etc., there ensued after the armistice a disuse of a large proportion of america's productive capacity. unless this slump in production is atoned for by consistent future activity, and unless production is constantly maintained on an adequate scale, reduced standards of living will become inescapable, regardless of prices, whether they rise or fall. "8. the very fact that prices of finished commodities, consumption goods, so called, have risen to an extent out of proportion to the rise in prices of raw materials and perhaps out of proportion to the rise in general wages, indicates that production and distribution carried on under these conditions is, in general, yielding profits abnormally high." in corroboration of the preceding analysis, the report cites statistical data gathered from various sources. the relation of currency and credit to prices is admirably epitomized in the following extract: currency and credit "the manner in which the volume of circulating credit and currency is related to the war-time rise in prices is about as follows: "the outbreak of the war brought to america urgent government orders for munitions and supplies. inasmuch as the belligerent governments could not brook delay they were obliged to pay the increased prices which american producers found it possible to demand, and thus the wave of war prices was started in america. when america entered the war it required, in order to perform its part, almost boundless quantities of equipment and man power. producers naturally took advantage of the extremely urgent character of these demands in order to increase their prices, and, as a natural sequence, wages began to advance. these increased prices and wages of course necessitated larger expenditures by the government. "increased prices also necessitate the employment of larger funds in the conduct of a business. a larger volume of credit is required at higher prices to take care of bills for raw materials, and more money is necessary to meet increased payrolls. as a consequence, therefore, of increased prices, business men required increased credit if they were to avoid curtailment of operations and reduced production. due to higher prices, therefore, the banks were under the necessity of meeting the business demand for expansion of credit." inflation the inflation process is described as follows: "in pre-war times every dollar finding its way to the market was supposedly the counterpart of some commodity or part of a commodity also appearing in the market. funds expended for the purchase of food, clothing, and for the payment of rentals were assumed to have been earned by some productive contribution to the general supply of commodities. with the outbreak of war there began to appear in the market, funds derived from wages, profits, etc., which had been paid out in connection with nonproductive activities of war, and which therefore implied no corresponding contribution to the market supply of commodities. the producers of, and the dealers in, the decreased quantity of commodities brought to market increased the prices of these commodities to the point where they might absorb all the purchase money that became available. these increased prices and wages have required increased circulating medium. this requirement has been met primarily by increased credit and the increased use of bank checks as an instrument of payment. as to the currency situation, the total money in the united states in 1900 amounted to $2,340,000,000. according to a statement issued by governor w. p. g. harding, of the federal reserve board, the amount of money in circulation has varied during the last five years as follows: july 1, 1914, $3,419,108,368, or $34.53 per capita. april 1, 1917, $4,100,976,000, or $37.88 per capita. december 1, 1918, $5,129,985,000, or $48.13 per capita. august 1, 1919, $4,796,890,000, or $45.16 per capita. "this shows an increase during our war period of $7.28 per capita. the amount of money in the treasury and in federal reserve banks is not in circulation, and is, therefore not included in the figures quoted from governor harding's statement. "in regard to the part played by national credit in meeting the situation growing out of the extraordinary requirements of the government and the rise in prices which the urgency of demands made possible, it is to be noted that government bonds had to be sold to pay for a large proportion of the goods which war activities were consuming. in consequence the national debt up to august 1, 1919, had been increased by $24,518,000,000, or approximately $230 per capita. of course, government bonds are always good security for bank credit." food supply--wheat, corn and sugar despite the fact that we sent large shipments of food to our allies, our supply at the close of the war was not seriously diminished. the 1919 crop, while not expected to be large, was amply sufficient to prevent a real shortage. this is supported by the following extract from mr. clarkson's report: "the wheat crop for 1918 amounted to 917,000,000 bushels, as compared to an average for 1910--14 of 728,000,000 bushels; and the probable harvest in 1919 is 1,236,000,000 bushels. our supply of wheat in elevators, mills, etc., on may 9, 1919, was 96,000,000 bushels, as against 34,000,000 bushels the year before. our flour mills, whose capacity is estimated at something like double their usual output, were milling week by week during 1919 considerably more flour than the year before. they produced for the week ending may 9, 1919, for example, 2,553,000 barrels as against 1,569,000 barrels for the corresponding week of 1918. notwithstanding large exports, our wheat supply is obviously adequate. in 1918, a record year, we exported 21,000,000 barrels of flour. in 1915 our wheat exports reached their maximum--206,000,000 bushels. [illustration: mccutcheon in the chicago tribune will there be enough to go around?] "the corn crop of 1918 was likewise sufficient. the supply of corn on hand on may 1, 1919, was 23,000,000 bushels, as compared with 16,000,000 bushels may 1, 1918, and 7,000,000 bushels on may 1 of both 1917 and 1913. though the 1919 corn crop is not expected to be unusually large, there is no prospect of real shortage. and the situation with respect to the other cereals is generally very good. "the sugar industry of the united states passed through the period of the war with a tendency to increased production, notwithstanding shipping difficulties. though present stocks are somewhat low in the united states, our exports during 1919 have been unusually large. the future is normally provided for." the meat supply the meat situation is described as follows: "america emerged from the war producing meat at a rate far above pre-war figures, and yet possessing in reserve a larger number of animals on the farms than we had before the heavy war drafts upon our supplies began. the number of cattle slaughtered in 1918 was 11,000,000, as compared with 6,978,000 in 1913. swine slaughtered were 41,214,000 in 1918 and 34,163,000 in 1913. the cattle slaughtered in 1919, january--may, were 3,803,000, as against 4,204,000, january--may, 1918. the swine slaughtered january--may, 1919, made an increase over the 1918 record, the figures being 20,500,000 for the present year, as against 18,260,000 for the corresponding interval last year. although exports of hams and shoulders for 1918 approximately doubled previous records, amounting to 518,000,000 pounds, as against 172,000,000 pounds for 1913, and exports have continued large during 1919, there is no doubt that our productive capacity is vastly more than ample to meet our requirements." high price of food in view of the apparent abundance of food it is interesting to know the reason for the high price of foodstuffs. the council of national defense is of the opinion that the probability that the production of garden products in war gardens had fallen far below that of 1918, when, it is estimated, to have reached the value of $525,000,000, would not account for the high prices. exportation and storage had not depleted our stock sufficiently to affect prices abnormally. in regard to the question of exports the report gives the following illuminating figures: "present food prices are not to be accounted for largely on the basis of heavy exports. exports of beef, canned, fresh, and pickled, for example, have been less for 1919 than in the previous year, the quantity amounting to 23,499,000 pounds in may, 1919, as compared with 82,787,000 pounds in may, 1918. the may figures for exports of hog products show 125,937,000 pounds in 1919, as against 201,279,000 pounds in may, 1918. the monthly exports of beef and pork show a declining tendency during the first five months of 1919, contrary to the tendency in 1918, the total amounting to 1,090,000,000 pounds in 1919, as against 1,122,000,000 pounds for the corresponding period of 1918--less than the amount of all meats in cold storage on july 1, 1919, which was 1,336,000,000 pounds." concerning storage the same report states that: "even the fact that the report of goods in cold storage shows an increase of over 9 per cent. in the quantity of all meats held on july 1, 1919 (1,336,000,000 pounds), as compared with the figures for july 1, 1918, is, though very important, not a matter of significance for any considerable period of time. storage poultry july 1, 1919, was 48,895,704 pounds, or 181 per cent. above last year; cheese, about 25 per cent.; butter, about 75 per cent.; and eggs, about 25 per cent. above july 1 last year. there was a decrease of frozen fish of about 13 per cent. from last year. taken in connection with the evidence of relatively abundant reserves of live animals and large crops for the current year, it would seem that some relief from high prices of food should be possible." why food prices were high the explanation of the post-war high prices of food is given as follows: "it is true that food is, by comparison, plentiful. but it is also true that money or other circulating medium is unprecedently plentiful. the fact that food prices are relatively high and that the prices of chemicals, metals, lumber, etc., are relatively low, though their supply is relatively small, may be due to a concentration of purchasing power upon food, and the general direction of the flow of currency toward the purchase of immediate consumables. some relatively minor luxuries such as jewelry (and perhaps automobiles should also be included here as the semi-luxury of greater magnitude) find favor with purchasers, but the main trend of purchase seems to bear toward demand for the necessities of life now in a finished state or nearly so, with a relatively weaker tendency toward demand of capital goods. if the supply, and also the production, of raw materials has been relatively small, and if the prices at which they have exchanged have also been relatively low, it seems obvious that the proportionate amount of currency and credit engaged in their purchase must be abnormally small, thus accounting for the ability of the producers and purveyors of food to demand abnormally high prices regardless of the relative plentifulness of their goods." conditions favorable to profiteering "the conditions just described are highly favorable to both speculative profiteering and wasteful distribution, through the intervention of supernumerary middlemen and caterers. in fact, the statistics published by the new york industrial relations commission seem to indicate an unusually large increase of persons engaging in certain kinds of salesmanship after the armistice. it should, however, be remembered that even though it may smack of profiteering to produce a very large crop and sell it at abnormally high prices, this is a kind of profiteering which deserves unstinted praise as compared with that other species of profiteering which deliberately reduces output in the expectation that the extortionate prices which the reduced product will command may more than make up to the producer or speculator for the portion of production withheld or the percentage of hoarded goods condemned to spoil and be lost to the nation." other commodities the price of commodities other than foodstuffs was influenced in 1919 by the inadequacy of supply and the curtailment of production. this was especially true of woolens, as stated by the council: "the most obvious explanation of the high prices of woolens is the glaring fact of the extreme reduction in output which ensued after the signing of the armistice and the completion of army orders, which practically ended in january, 1919. "the war came to an end with the supply of civilian woolens unprecedentedly low. the total quantity of wool available for civilian fabrics between april and november, 1918, was probably somewhere in the neighborhood of 75,000,000 pounds, an amount perhaps a little more than sufficient to meet the demands of normal manufacture for civilian consumption for one and one-half months. * * * * * "in consequence of the general situation the total consumption of wool in manufacture during first five months of the year 1919 amounted to but little more than one-half the amount consumed during the corresponding months of the previous year. the proportion of looms, 50-inch reed space and over, idle increased from 21 per cent. in november, 1918, to 52 per cent. idle in february, 1919, and these looms were still 39 per cent. idle in may, 1919. of worsted spindles, 27 per cent. were reported idle in december, 1918, and 52 per cent. idle in march, 1919, and 26 per cent. were still idle in may. in the meantime an extraordinary number of textile workers were condemned to idleness, their productive capacity perishing day by day and week by week, while the deficiency in the supply of clothing was developing to such a point that it became possible for the wholesale index number of the prices of cloths and clothing to rise to 250 in june." the production of cotton and cotton goods also was far below normal. to quote again from the report: "when the war ended the world's cotton supply was understood to be below normal. the supplies of cotton goods were also reported low. the acreage planted to cotton was in 1919 approximately 9 per cent. less than for 1918. the present prospects are that the cotton crop will be small, and published articles are appearing expressing gratification over the prospectively large commercial returns which the cotton producers may be able to command because of the high prices which may be had for the reduced cotton output. the forecast of the cotton crop for 1919 is 10,900,000 bales--about 10 per cent. below that of recent years and but little over two-thirds as large as the record crop of 1914." "output and more output" abandoned "in regard to cotton manufacture, it may be recorded that the situation is less unsatisfactory than as regards wool manufacture. in this industry, as in most of our industries, the economic watchword of war-time, which was 'output, and more output' (the necessary condition of full prosperity in peace, as well as of success during war), was not heard after the armistice. there soon developed, on the contrary, groundless doubts about future demand, and hints of unhealthy fears of 'overproduction.' "notwithstanding the release of labor, if it were needed, by demobilization, and notwithstanding adequate supplies of raw cotton to meet the season's requirements and the lack of any important difficulties in the way of reconversion to peace-time products, and with low supplies of finished goods in stock, the cotton industry kept more spindles idle during the first five months of 1919 than were idle during the corresponding period for 1918. the amount of cotton consumed in the united states during the nine months ending with april, 1919, was approximately 12 per cent. less than for the corresponding nine months of 1918. the prices of cloths and clothing, as above mentioned, show in june, 1919, an increase of 150 per cent. over 1913 prices." the boot and show industry showed a marked decline after the signing of the armistice. this, too, was borne out by the investigations of the council. "the production of boots and shoes for the first quarter of 1919 was reported as about 60 per cent. below the production for the last quarter of 1918. plants were partially closed and in some cases it is reported that machinery was returned to the shoe machinery co. all in all, there were 75,000,000 less pairs of shoes produced in the first quarter of 1919 than in the last quarter of 1918. "the census report shows a reduction of more than 25 per cent. in the output of civilian men's shoes in the quarter ending with march, 1919, as compared with production in the quarter ending with december, 1918, and nearly 25 per cent. reduction as compared with the quarter ending with september, 1918. the reduction in output of women's shoes amounted to approximately 30 and 25 per cent., respectively, in comprising corresponding periods. the reduction in the output of shoes for youths, boys and misses was even more marked." coal and iron what has been said of the production of cotton and woolen goods applied equally to the mining of coal and to the output of iron and steel. during the war we increased our coal production. in 1918 it amounted to "685,000,000 short tons, almost 50 per cent. of the world's estimated output for that year. production for 1913 was 571,000,000 short tons." the coal situation since the armistice is stated as follows: "coal, the source of a vast proportion of our industrial power as well as our chief source of heat and light, is a commodity the production of which is itself an index of our economic life. coal output since the armistice has been greatly reduced, the weekly production of anthracite for the first half of 1919 being from 1,200,000 to 1,800,000 net tons, as against 1,800,000 net tons to 3,000,000 net tons for the corresponding period of 1918. bituminous production was 9,147,000 net tons for a typical week in 1919, as against 12,491,000 net tons for the corresponding week in 1918. coke production for the week ending june 28, 1919, amounted to only 287,000 net tons, as compared with 627,000 net tons for the week ending june 29, 1918. the total amount of coal produced up to july 5, 1919, was 261,000,000 long tons, as compared with 364,000,000 long tons for the corresponding period of 1918." the production of iron and steel which was greatly stimulated by the war was allowed to decline as soon as the concentrated effort of the nation to win the war was abandoned. the resulting condition is succinctly described by the council: "the record of our after-war steel and iron output furnishes us with another warning that we have been neglecting to keep pace with the established american rate of industrial improvement and expansion and foresighted preparation for future requirements and progress. "the iron and steel business was considerably stimulated by war-time requirements. there was a governmental agency whose business it was to for see the war needs and to place orders so that those productive forces which are wrapped up in the steel industry might be utilized to capacity. the steel industry's activity has, however, since the armistice greatly declined. pig-iron production for april, 1919, was 82,607 tons per day, as against 109,607 tons in april, 1918. birmingham properties are reported to have been working in april, 1919, at about 50 per cent. of the 1918 production. for the period january to may, 1919, pig-iron production was only 2,114,000 tons, as against 3,446,000 tons during the same period in 1918. steel-ingot production fell in the spring of 1919 to lower figures than had been reached in more than two years. in fact, a regular decline in production was in evidence after december, 1918. "the figures representing the unfilled orders of the united states steel corporation at the end of may, 1919, were smaller than they had been since 1915." [illustration: copyright underwood & underwood women doing night farming girls running a tractor plow and harrow at farmingdale, long island.] recommendations the council summarized its findings and recommends remedial measures as follows: "the findings of the reconstruction research division council of national defense, indicate that the high cost of living is primarily due to curtailment in the production of nearly all commodities except raw food products, to hoarding of storage food products, to profiteering, conscious and unconscious, and to inflation of circulating credit. the findings indicate that the situation may be most advantageously met by: "1. stimulated production. "2. some readjustment of incomes to the basis of higher price levels. "3. the repression of hoarding and profiteering. "4. improvement and standardization of methods and facilities for distributing and marketing goods. "5. the perfecting of means of keeping the nation frequently, promptly, and adequately informed regarding probable national requirements and of current production and stocks of the more important commodities. "the findings emphasize the fact that high standards of living can not be maintained upon a basis of reduced production, regardless of whether price levels be high or low." [illustration: the ore market--cleveland] _part ii_ i--the peace conference at work a vivid account from the inside of the machinery which produced the peace treaty. how the crises with japan, italy and belgium were averted by thomas w. lamont financial and economic adviser at paris to the american commission to negotiate peace when we finally gain an historic perspective of the work of the peace conference we shall realize that, instead of being unduly delayed, it was accomplished in an astonishingly brief period. the treaty of vienna, back in 1815, took eleven months, and the factors to be dealt with were nothing like so numerous nor so complex. the paris conference occupied only about six months, and the earlier weeks were largely given over to questions relating to the renewal of the armistice, rather than to the actual framing of the peace treaty. the treaty text itself--aside from the league of nations covenant--was whipped through in a little over three months; for the active work of the commissions which were to draft the various chapters did not get under way until february 1st; and the treaty was presented to the german delegates at versailles on may 7th. covenants "openly arrived at" no adequate history of the peace conference can be written until years have elapsed--until it is possible, as it is not now possible, to make public a multitude of intimate details. hundreds of important documents were woven into the completed text of the treaty. such documents must eventually be made available to the chroniclers of history, who must finally have access to the official records, so that in course of time they can acquaint the world with the details of those momentous conferences which were held among the chiefs of state, where the ultimate decisions settling every important question were made. there have been complaints that the covenants of the treaty were not as president wilson had promised, "openly arrived at." in point of fact, as far as lay within the bounds of possibility, the covenants of the treaty _were_ "openly arrived at," inasmuch as their essence was made public just as soon as an understanding upon them had been reached, and in many cases, long before the final agreement. nothing was held back which the public had any legitimate interest in knowing. it would, of course, have been quite out of the question for the chiefs of state to discuss in public all the highly delicate and complex situations which were bound to, and which did, arise at paris. every man of strong character and powerful conviction has a view of his own upon any given subject, and naturally maintains that view with vigor and tenacity--even at times, if he be bitterly opposed--with acrimony. to take a familiar instance, it is an open secret that m. clemenceau's first solution of the question of the saar basin did not at all suit president wilson. not unnaturally, m. clemenceau simply wanted in effect to annex the saar basin, on the grounds that the germans had destroyed the coal mines of northern france. mr. wilson was in entire accord--to this extent, that france should, until her coal mines had been repaired, enjoy the entire output of the saar coal fields; but to have france permanently annex the basin was contrary to his profoundest convictions, as expressed in the well-known fourteen points. in the course of the discussion between m. clemenceau and mr. wilson, their ideas at the start being so divergent, vigorous views were undoubtedly expressed; quite possibly tart language was used, at any rate by the french premier, who was feeling all the distress of german frightfulness and war weariness. but to what possible good end could the detail of such intimate conversations have been made public? i allude to the possible conversations on the saar basin not as an historical fact, but as an example of what might have taken place, and very likely did take place; and if such temporary disagreements existed on that question, undoubtedly, among so many chiefs of state as were gathered together at paris, they existed on others. but in all cases amicable and cordial agreements were finally reached. whenever agreements were even in sight, the press was informed; so that, when the treaty of peace and the summary of it finally came out, there were no surprises for the public. every covenant, every clause, had been already foreshadowed and accurately pictured. the "big three" naturally, the question is often asked: who were the peacemakers at paris? were they two or three powerful chiefs of state? the answer is both "yes" and "no." the final decision on every important matter lay in the hands of the so-called big four, and after premier orlando's defection and return to italy, it narrowed down to the big triumvirate, messrs. wilson, lloyd george, and clemenceau. yet while they made the final decisions, these were almost invariably based upon reports and opinions expressed to this trio, or to the quartet, by their advisers and experts. the actual text of the treaty was, of course, written by the technicians, and there is hardly a phrase in the whole of it that can claim as its original author any one of the chiefs of state. in every true sense, then, the treaty of peace has been the product, not of three men, not even of three-score, nor of three hundred, but of thousands; for quite aside from the official delegations at paris, which comprised several hundred persons, we must remember that the data and the various suggested solutions on most of the questions had been canvassed at home for each delegation by large groups of office and technical experts. of course it sounds well to say that the treaty was written by three men: the picture of those few chiefs of state sitting in conference day after day is dramatic in the extreme. that is, i must confess, the picture which comes back oftenest to my mind. i see them today, as i saw them for months at paris, sitting in that large but cosy salon in the house allotted to president wilson on the place des états unis; for, by common consent, it was there that the supreme council finally held all its meetings. it is in that theatre, with the three or four chiefs of state taking the leading rôles, that we saw the other characters in the great drama moving slowly on the stage, playing their parts, and then disappearing into the wings. today it might be paderewski, pleading with all his earnestness and sincerity, to have danzig allotted to the sovereignty of poland. to-morrow it might be hymans, the belgian secretary for foreign affairs, begging that there should be a prompt realization of those pledges to belgium, which belgium felt had been made by all the allies; or it might even be word brought by special aeroplane from the king of the belgians at brussels, with fresh and important instructions to his delegation in the matter of reparation. or it might be a group of the representatives of those newer nationalities, czechoslovakia, rumania, jugoslavia, arguing some burning question of boundary rights. or it might be the british shipping experts, maintaining that the captured german ships should be restored to the various allies upon a basis dividing the ships _pro rata_ to the losses sustained by submarines, and contending against the american claim that the united states should have all the german ships finding lodgment in american harbors. or it might be herbert hoover, that brilliant american, come to describe to the big four starvation conditions in vienna, and to emphasize his belief that, enemy or no enemy, those conditions must be relieved or bolshevism would march into austria and directly on west until it reached france--and beyond. the place of meeting the stage for this world drama was originally set at the ministry of war, behind the chamber of deputies and across the seine; and here premier clemenceau--who, it will be remembered, was minister of war as well as president of the council of french ministers--was the presiding genius. but eventually, as the result of an interesting trend of circumstances, the all important conferences took place at president wilson's house. [illustration: copyright walter adams & sons =david lloyd george= ray standard baker, who attended the peace conference, wrote in his book, "what wilson did at paris": "lloyd george personally was one of the most charming and amiable figures at paris, full of celtic quicksilver, a torrential talker in the conference, but no one was ever quite sure, having heard him express an unalterable determination on one day, that he would not be unalterably determined some other way the day following."] the original theatre of operations at the war ministry had been so large, and there was such an enormous chorus brought into play, that progress was interminably slow. there were usually present all five of the plenipotentiaries of each of the five great powers, including japan, and very frequently marshal foch as well. his presence automatically commanded the attendance of the chief military experts of the other delegates. with the innumerable secretaries who had to attend the plenipotentiaries, with the interpreters and whatnot, the supreme council came to look like a legislative chamber, in the midst of which sat clemenceau, presiding with his usual incisiveness. at such meetings progress could be made only upon rather formal matters which had been threshed out beforehand. when it came to a point of great delicacy, where the discussions could be only on a most intimate basis, it became quite impossible to "carry on." nobody would feel like speaking out in meeting and calling the other fellow names--as was necessary at times in order to clear the atmosphere--if there were half a hundred other people around, to hear those names, and promptly to babble them to an expectant throng outside. so finally the supreme council was boiled down to the four chiefs of state, including japan's representative on any questions not strictly confined to western europe; and the small council began to meet alternately at clemenceau's office in the war ministry, at mr. lloyd george's house, and at mr. wilson's, which was just around the corner from the british premier's. then in march, shortly after president wilson's second coming from the united states, he fell ill with the grippe. after a rather severe attack he was able to get on his feet again and to do business, but was warned by his vigilant friend and physician, admiral grayson, to keep within doors for a time. mr. lloyd george, m. clemenceau, and signor orlando were glad to accommodate themselves to mr. wilson's necessities, and formed the habit of meeting regularly at his house. his large salon was much better adapted for these conferences than the room at mr. lloyd george's. so there it was they met during all the final weeks of the conference, leading up to the very end. a description of the council chamber in the middle of the salon, facing the row of windows looking out upon the place, was a large yet most inviting fireplace. on the left of this, a little removed from it, president wilson usually ensconced himself on a small sofa, where he made room for some one member of his delegation, whom, for the particular subject under discussion, he desired to have most available. on the other side of the fireplace sat mr. lloyd george in a rather high, old-fashioned chair of carved italian maple, and at his left sat his experts. opposite the fireplace, to the right of it, and about half-way across the room, sat m. clemenceau, with such of his ministers as he needed, and then between him and president wilson was signor orlando with the italians. this made a semi-circle around the fireplace, and whenever viscount chinda of the japanese delegation was present, the circle was usually enlarged so as to give him a seat in the middle of it. behind this first semi-circle was a second one, made up of secretaries and various technical experts, but the conference was always a limited one, and was not allowed to grow so large as to become unwieldy. directly in front of the fireplace, almost scorching his coat-tails, sat professor mantou, the official interpreter for the big four. mantou is a frenchman, professor of french in the university of london, so he had a perfect mastery of both french and english, with a good working knowledge of italian. mantou was quite an extraordinary character, and the most vivid interpreter i have ever heard, or rather seen; for at times he entered into the spirit of the discussions more vigorously than the original actors. m. clemenceau, for instance, might make a quiet, moderate statement, in french, of course; and when it became mantou's time to interpret it into english, he would enliven and embellish it with his own unique gestures. the secretary of the council was sir maurice hankey, a british army officer of great skill and tact, who had a marvelous aptitude for keeping everything straight, for taking perfectly adequate, and yet not too voluminous minutes, for seeing that no topic was left in the air without further reference, and in the last analysis, for holding the chiefs of state with their noses to the grindstone. he knew french and italian well, and was a distinct asset to the council. i note that, in the honors and money-grants disbursed by parliament to marshal haig, admiral beatty and others, hankey received £25,000. everybody who worked with him at paris will be glad of this just recognition. i have described this council chamber in the president's house rather minutely because, as i have said, it formed the stage for all of the momentous decisions which went to make up the final peace settlement. at these conferences there was no formal presiding officer, but to president wilson was usually accorded the courtesy of acting as moderator. how the treaty was compounded what, then, is the treaty? the answer is that it is a human document, a compound of all the qualities possessed by human beings at their best--and at their worst. people might expect a treaty of peace to be a formal, legal, mechanical sort of document; and undoubtedly an effort was made by some of the drafting lawyers, who bound all the different clauses together, to throw the treaty into the mold of formality. but all the same, it is a compound quivering with human passion--virtue, entreaty, fear, sometimes rage, and above all, i believe, justice. the reason fear enters into the treaty must be manifest. take, for instance, the case of france. france had lived under the german menace for half a century. finally the sword of damocles had fallen, and almost one-sixth of beautiful france had been laid waste. her farms, her factories, her villages, had been destroyed; her women ravished and led captive; her children made homeless; her men folk killed. do we realize that almost 60 per cent. of all the french soldiers under thirty-one years of age were killed in the war? is it any wonder france could not believe that the german menace was gone forever, and that the world would never again allow german autocracy to overwhelm her? she could not believe it, and for that reason she felt it essential that the terms of the treaty should be so severe as to leave germany stripped for generations of any power to wage aggression against beautiful france. if her allies pointed out that to cripple germany economically was to make it impossible for germany to repair the frightful damage she had wrought in france, france would in effect reply that this might be so, but never again could she endure such a menace as had threatened her eastern border for the previous half century. if certain of the treaty clauses appear to some minds as unduly severe, it must be remembered that the allies, little more than france, could bear the thought of letting germany off so easily that within a few years she might again prepare for war. there was fear, too, on the part of those new nations, which had been largely split off from the effete and outworn austro-hungarian empire, that in some way their ancient oppressors would once more gain sway over them. and, every nation, great and small, was overshadowed with the constant terror of bolshevism,--that dread specter which seemed to be stalking, with long strides, from eastern europe west towards the atlantic. unless peace were hastened that evil might overtake all the allies. such apprehensions as these, far more than imperial ambition or greed, were factors in the treaty decisions. judgments that might take many months in the ripening could not with safety be awaited. the protection demanded by france france, i say, was thoroughly shocked at the frightful fate which had come upon so great a portion of her land and population. she seemed to have real fear that out of the ground, or from the sky, or from the waters of the earth, at the waving of the devil's wand, there would spring into being a fresh german army, ready to overwhelm her. it was this fear that led france to ask for a special treaty by which england and america would pledge themselves to come to her aid in case of germany's unprovoked attack against her. those americans who object to this have no conception of the real terror in france which led her to entreat her two most powerful allies to make such a special treaty with her. france maintained, and with some reason, that during the formative period of the league of nations, before it might become an effective instrument, if she did not have the psychological and practical protection of england and america, she must look to her own defense, and the only real defense she could conceive was to make the rhine her eastern boundary. this suggestion of marshal foch, based upon sound military concept, was rejected by president wilson and mr. lloyd george on the theory that it would mean the annexation of german territory, would change germany's ancient boundary line of the rhine, and inevitably lead to future trouble. [illustration: copyright underwood & underwood president poincaré with the swiss president, m. gustave ador, driving to the peace conference in paris.] "very well," in effect answered m. clemenceau, "we see your point, but if you will not allow us to fix this natural boundary for defense, then we must beg you to guarantee us by treaty your coöperation against german aggression. that coöperation you will never be called upon to render with military force, because if germany knows you are pledged to come to our defense, that very fact will act as a complete deterrent to any aggression." this was the sound reasoning which led president wilson and mr. lloyd george to agree to submit respectively to congress and parliament this special french treaty; this is the reasoning which ought to lead congress, as it has led parliament, to ratify the french treaty promptly. my belief is that after five years, this special treaty will be abrogated by mutual consent, because by that time the league of nations will be built up into such an effective instrument for the prevention of future wars, any special treaties will be deemed unnecessary. the league of nations covenant if, in the foregoing paragraphs, i have given some idea as to how the treaty of peace was compounded, how it was made up of a mixture of virtue, selfishness, fear and justice, then perhaps i can proceed to describe briefly how the document was actually evolved. first, then, we deal with the drafting of the league of nations covenant: the world has come to regard president wilson as the special promoter and sponsor for the league of nations. it is perfectly true that mr. wilson went to paris with a fixed determination, above all else, to bring about some definite arrangement which would tend to prevent future wars. it is also true, however, that english statesmen had, for an even longer time than president wilson, been giving this same subject earnest thought and study. some of the more enlightened french statesmen, like leon bourgeois, had also been sketching out plans for a league of free nations. in england viscount grey of falloden, england's really great minister of foreign affairs for almost a decade prior to the war, the man who did everything that human intelligence and wisdom could devise to prevent the war, and now happily named as british ambassador to the united states, had long worked for a league of nations. lord robert cecil, a worthy son of a noble father, was another british statesman who had given his mind to the same subject. general smuts of south africa, recently made premier in succession to the late general botha, was another. so that president wilson, colonel house, and the other delegates, upon their arrival in paris, found themselves in a not uncongenial atmosphere. to be sure, on the part of clemenceau and of course of the militarists, there was great scepticism. nevertheless the french joined in, and early in january the covenant for the league of nations began to evolve. it was built up step by step, president wilson taking a most active part in the work. finally the covenant was adopted in a preliminary way and made public late in february. it was subject to amendment, and those who drafted the document welcomed amendments and urged that they be offered. an especial effort was made to secure suggestions from various republican statesmen. no amendments, so far as i have been able to learn, were offered by any of the republican senators, but ex-president taft suggested certain changes, some of which were adopted. president lowell of harvard contributed one or two which were taken over almost verbatim. ex-senator elihu root also made valuable suggestions, some of which were utilized in the final drafting of the covenant, made public early in april. essence and spirit of the league roughly, as the situation developed, the purpose of the league of nations became two-fold. the initial purpose, of course, was to set up the machinery for a body, representative of the nations, keeping in such close contact and guided by such general principles as would tend to make it impossible for one nation to begin war upon another. elsewhere in this volume ex-attorney general wickersham has described in detail the clauses of the covenant; but even in this brief allusion it is proper to set down the essence and spirit of the league. it is this: no two peoples, if they come to know each other and each other's motives sufficiently well, and if by certain machinery they are maintained in close personal and ideal contact, can conceivably fly at each other's throats. now no machinery can be devised that will absolutely prevent war, but a carrying out of the spirit and principles set forth in the present covenant ought to make war well-nigh impossible. the machinery that was thus set up at paris was deemed at the time to be of course imperfect and subject to constant improvement. the second purpose of the league was to act as the binder, and in a way, the administrative force of the present existing treaty. that is to say, we found as time went on there were many situations so complex that human wisdom could not devise an immediate formula for their solution. hence, it became necessary for the peace conference to establish certain machinery which, if necessary, should function over a series of years, and thus work out permanently the problems involved. therefore, as it fell out, there were established under the treaty, almost a score of commissions, most of them to act under the general supervision of a league of nations. here, then, is another great function that the league of nations is immediately called upon to fulfil. work of the commissions with the covenant of the league of nations more or less complete, the next business of the conference was the setting up of the treaty proper. the method for this work was roughly as follows: about the first of february there was appointed a large number of special commissions, made up of members of the various delegations. these commissions, which were each to treat of separate topics, having arrived at a solution of the special subject, were then to draft their reports in such language that they could readily be embodied in the final treaty of peace itself. thus, for instance, there was appointed a commission on reparations, a commission on economic phases of the treaty, a commission on finance, a commission on boundaries, a commission on military and naval armament, a commission on german colonies, a commission on the saar basin coal fields, a commission on inland waterways, and so on to the number of perhaps twenty. these commissions immediately organized, and if the subject were particularly complex and many-sided, resolved themselves into sub-commissions. these sub-commissions in turn organized, each with its chairman and vice-chairman, its secretariat, and its interpreters, together with experts called into attendance. delays to the treaty the sittings of all these commissions began, as i say, about february 1st, and at that time the plan was that the work of the commissions should be concluded in the form of a report to the supreme council six weeks later, or about march 15th. the plan, further, was for the supreme council to pass upon these various reports, amend them if need be, and then have them drafted in such form as together would go to make up the treaty, which, under this scheme, would be presented to the germans on or about april 1st. the germans would presumably sign within a fortnight, and we should all be going home about april 15th. as a matter of fact, the germans signed the treaty at versailles at three o'clock on the afternoon of june 28th, two and one-half months later than the time originally planned. this delay was, however, not at all unreasonable, if one stops to consider the number of questions involved, their magnitude, and the difficulty of dealing with them promptly. in the first place, each commission was supposed to present the supreme council a unanimous report. the council had ruled that the commissions should not report by majority vote, for if in any given instance the majority overruled the minority, the minority might have such bitter complaint that there would be left in the situation the seed for future trouble. therefore the council determined that in the case of divergence of opinion in the same commission, the two or more groups in the commission should make separate reports to the council, each having its own day in court. the council would act as judges of the last resort, and no delegation would go away feeling that it had not had ample opportunity to present its case. inevitable and sharp differences of opinion did arise, so that at least half the reports, i should say, as presented to the big four had to be thrashed out there in considerable detail. the second handicap to rapid progress, of course, lay in the composition of the various commissions. each of the large five powers had to be represented on each commission, and in most instances smaller powers also demanded representation. on some of the important commissions the larger powers had two or more delegates sitting. owing to the fact that paris was full of influenza, each delegate had to have his alternate so as to keep the ball rolling. when they first met these delegates were not well acquainted with each other. they did not know how to get along together. it took weeks for them to shake down, so as to understand each other's methods and points of view; so as to be prepared to make the necessary give and take, certain meetings of views which are always essential where people are gathered from the four corners of the earth with a single aim, but with vastly different ideas for attaining it. [illustration: copyright by underwood & underwood where the peace treaty was signed this was the table and chair at which the delegates sat and signed the peace document.] politics at the conference still another difficulty was the question of politics which could not be eliminated. it is easy enough to say, "cut out politics," but in any international gathering it is never possible to do it. i must say right here, however, that--as it seemed to me--the american delegation well-nigh attained that ideal, and be it to president wilson's credit, i never once saw him throughout the length of the conference, "play" politics. but some of the other delegations naturally felt that at home there was a "list'ning senate" to applaud or to condemn, and many of these delegates, being members of their respective parliaments or ministries, naturally had their ear to the ground for the effect that their course at paris was producing. then if, at the sittings of a commission, one delegate made a particularly eloquent speech, his fellow delegate might feel it incumbent upon him to make another equally long. some of the delegates deemed it their duty to make an extended speech every day and seemed to feel that they were lacking in patriotism if they failed each morning to cover several pages of the record with their views. the difficulty of language then the final difficulty, uniting with the other troubles to prevent rapid progress, was that of language. the paris conference was, of course, a regular tower of babel. there were two official languages--french and english. each delegation used the language with which its delegates were most familiar, and every word uttered by those delegates had to be translated into the vernacular of the others. not only did this interpretation consume a vast amount of time, but of course it frequently proved most unsatisfactory. both the english and french languages are so idiomatic that the finer shades of meaning can never be well transmuted from one to the other. hence, frequent and sometimes serious mistakes arose. for instance, a serbian delegate who knew not a word of english would misunderstand something said by the british delegate, poorly translated into french. as the serbian delegate's knowledge of french was also very limited he could not readily understand. so he would fly into a towering rage, and for an hour a heated argument would volley back and forth. perhaps, at the end of that time, some cool-headed delegate (frequently an american), would point out that neither of the honorable delegates had any conception of what the other had said, and at bottom their views were precisely similar. each of the competitors would then listen to reason, the situation would clear up, and things move on more happily. i use here as an example a serbian delegate, not that the serbian delegates were more prone to passion than anybody else. we were all fighting like mad to make peace. we realized that though fundamentally we all had the same aim, yet as to methods our views were so divergent, that when we entered into conference at ten o'clock in the morning we should probably have one continuous struggle, with interludes for luncheon and dinner, until perhaps late in the evening. these struggles never ceased altogether, but as we got to know one another better, they of course let up materially, and we got on amicably and effectively. the commission on reparations no sketch of the peace conference, even one as cursory and superficial as this, could give any idea of the picture without a more detailed reference to the workings of some particular commission that played an important part in the building up of the peace treaty. hence i may be permitted to mention the commission on reparations. all things considered, this was perhaps the most important commission at work. the original commission on reparations was divided into three sub-commissions. commission number one was to determine upon what principles reparation should be demanded from germany, that is to say, what items of damage should be included. in addition to physical damage inflicted by germany upon the allies, by reason of her aggression on land or sea, and from the air, should the cost of pensions for dead french soldiers be claimed? was the entire cost of the war as waged by england, for instance, to be included as a charge against germany? in other words, just what categories should be adopted in order to define germany's liability? this commission number one sat for weeks, and it was only towards the very end that it succeeded in establishing the categories. at the start there was a sharp divergence of opinion among the various delegations. the american delegation pointed out that under president wilson's fourteen points costs of war would have to be excluded. the british delegation maintained otherwise. the french thought the costs of war ought to be included, but deemed the matter academic, inasmuch as germany could never pay the total war costs. and so the argument ran. sub-commission number two on reparations had for its object to determine what germany's capacity to pay was, and what the proper method of payment should be. sub-commission number three was to devise sanctions or guarantees by which the allies should be assured of receiving the payments finally determined upon. for weeks i was active upon sub-commission number two, and in fact was charged with the duty of drawing up the initial report covering the question of germany's capacity to pay. early in the deliberations of this sub-commission it became apparent that its work was of momentous import, for whatever the sub-commission determined as germany's capacity to pay, undoubtedly that sum would be fixed as what germany should be obligated to pay. theoretically, as the french had pointed out, it did not make a great difference what categories of damage were included, because germany would probably be unable to pay even the extent of material damage she had wrought. it was equally evident that she would be compelled by the allies to pay to the utmost extent of her capacity. therefore sub-commission number two was in effect, naming the amount of the german "indemnity." an estimate of germany's capacity to pay this knowledge rendered the work of the delegates on sub-commission number two considerably more difficult. to estimate germany's capacity to pay over a series of years was by no means a purely scientific matter. no banker, or economist, or financier, whatever his experience, could look far enough into the future to be able to say what germany could or could not pay, in ten, twenty, or thirty years. the initial estimate made by one of the delegations, as representing germany's capacity to pay, was one thousand million of francs. another estimate was twenty-four billion sterling, about one hundred twenty billion of dollars. now germany's entire wealth was estimated at not over eighty billion dollars, so it was inconceivable how it could be possible, even over a series of years, for germany to pick up her entire commonwealth and transfer it to the allies. most of germany's property consists of the soil, railroads, factories, dwellings, and none of those things can be transported, none can be made available for the payment of reparation. hence the question arose as to how much liquid wealth germany could export year after year and still maintain her own economic life. this was the estimate upon which the british, french and american delegations wrangled pleasantly for weeks. whenever we reached too tense a point, tea and toast was served, with jam to sweeten the atmosphere a bit, and then we would start afresh. as a matter of fact, as we encouraged newspaper reporters to surmise, we had nearly arrived upon a basis of agreement for demanding a fixed sum from germany. that sum would not have exceeded forty or forty-five billion dollars, with interest added. the american delegation believed it to be far sounder economically to name a fixed sum and thus limit germany's liability, so that all nations could address themselves to a definite end and arrange their fiscal and taxation policies accordingly. but both mr. lloyd george and m. clemenceau urged that public opinion in both their countries would not acquiesce in any sum that fell far below previous expectations; that, therefore, inasmuch as it was difficult anyway to arrive at once upon the exact amount of damage caused, it would be wiser to leave the amount of reparation open, to be determined by a commission which should examine into the damage sustained, and fix the total amount within two years. america's material interest in the question was so limited that president wilson finally did not oppose mr. lloyd george's and m. clemenceau's judgment. this, in brief, is the history of the reparation clauses in the treaty. as i have already said, if we realize that in almost every one of the other chapters similar complex courses of procedure had to be followed, we shall not be surprised at the time which the treaty took for drafting. the italian crisis the world is already familiar with the several crises which arose during the course of the peace conference. the so-called fiume crisis, when the italian delegation walked out and returned to rome, was regarded as the most serious. i am not sure it was, although it was generally so considered. i believe most of italy's warmest friends maintain that her action in going home was a mistake. the question of putting fiume under italian sovereignty was not covered nor even touched upon in the treaty of london. in face, the question of fiume arose long after the peace conference was under way. signor orlando, the italian premier, was accused of fostering italian feeling on fiume and of fanning it into flame. i believe there is no truth in this. at any rate, if the italians had been wise, they would have prevented the matter of fiume from becoming such a _cause celèbre_. i think that by judicious work they could have prevented it. then, too, probably the difficulty would have been lessened if president wilson's statement to the italian people had previously met signor orlando's approval. mr. wilson made his statement with the best will in the world, with the intent to allay and not inflame italian public opinion. it should have been possible to coördinate his idealism with signor orlando's position. later on the italian delegation returned to paris, realizing that the question of fiume, which was formerly an austrian port, did not bear one way or another upon the treaty with germany. but the italians had lost a certain tactical position which was important to them, and in my judgment the move cost italy much more than the whole question of fiume amounted to. [illustration: copyright underwood & underwood awaiting the decision of the german peace delegates. president clemenceau is shown standing. next to him from right to left are: president wilson, secretary of state robert lansing, commissioner henry white, colonel house, gen. tasker h. bliss, stephen pichon, french minister of foreign affairs; louis klotz, french minister of finance, and andré tardieu, french high commissioner. from clemenceau, left to right: premier lloyd george, bonar law and a. j. balfour.] the question of shantung the shantung crisis was another serious one. it was so realized at the time by the conferees at paris. the japanese delegation considered that it had already suffered one or two rebuffs. their clause to embody race equality in the league of nations covenant had not been accepted. they, as the leading far eastern power, were being urged to take an active part in the organization and development of the league of nations, yet they could see nothing for japan in the idea except a chance to help the other fellow. it was at this time that the treaty clause was being drafted covering the disposition of german rights in the far east, including those on the shantung peninsula. it will be remembered that at the outbreak of the war germany, by reason of treaty rights with china, had possession of kiauchau, upon the neck of the shantung peninsula. back in 1916, at a time when the war was going badly, after japan had driven the germans out of the far east and had prevented german submarines from getting a base there to prey upon british troop ships from australia, japan had demanded from england and france that she become the inheritor of whatever rights germany had in shantung. england and france readily granted this request, as america probably would have done if she had been in the war at the time. later on, according to the record, china confirmed japan in these rights. president wilson's idea, however, was "china for chinamen"; therefore shantung should be turned over to china. this was a proper point of view. it was a great pity that it could not be made to prevail. the difficulty, however, was two-fold: first, the agreement which i have just cited between england and france on one hand, and japan on the other; second, japan's statement to president wilson that if he began his league of nations by forcing england and france to break a solemn agreement with japan, then japan would have no use for such a faithless confederation and would promptly withdraw. at the same time, however, japan reiterated that her inheritance of shantung was largely a formal matter, and that if the allies gave her that recognition, she would feel in honor bound to withdraw from shantung in the near future. this statement, made repeatedly by the japanese delegates to president wilson, finally led him to refrain from forcing great britain and france to break their agreement, as he might perhaps otherwise have done. the climax, of course, came when japan gave her ultimatum and said that unless she had her rights she would retire from the conference. demands of belgium then came the third and last crisis--the belgians threatened to withdraw and go home. they had, as they claimed, been promised by their allies, as well as by their enemies, including specifically germany, that their country, trampled over and devastated in order to defend france and england from attack, was to be fully restored and reimbursed for its expenditures. early in the conference colonel house projected a plan to mr. balfour of the british delegation and mr. klotz of the french delegation, granting belgium a priority of $500,000,000 on the german reparation, this sum being sufficient to set belgium well on her way to recovery. there was, however, great delay in getting the final assent to this priority. the american delegation worked hard to bring it about and to push the plan on every occasion, but it still hung fire. the belgian delegation, finally becoming alarmed, insisted on formally taking up the question with the council of four. the belgian delegation, under the leadership of mr. hymans, minister of foreign affairs, made two chief demands, one for the priority already mentioned, and one for reimbursement for what the war had cost her. to this latter item there was vigorous objection on the ground that it was inadmissible to provide for belgium's "costs of war" and not for those of england, france, italy and the other allies. as a compromise to meet the situation, a formula was finally proposed in a phrase to the effect that germany was to be obligated especially "to reimburse belgium for all the sums borrowed by belgium from the allies as a necessary consequence of the violation of the treaty of 1839." inasmuch as all such sums borrowed by belgium were used for the prosecution of the war, this phrase was simply a euphemism for granting to belgium the war costs which she had demanded. but it was finally agreed to on all hands, and the crisis was averted. [illustration: copyright by press illustrating service the george washington it was on this ship that president and mrs. wilson made their two trips across the atlantic and back during the peace conference.] the treaty presented to the germans at versailles the treaty in its final form was presented to the germans at versailles may 7th. the germans were hoping they would be permitted to discuss certain phases of the treaty in person with the allied delegates, and in fact repeatedly requested the opportunity. some of us believed such conversations might be advantageous if they were held; not between the chiefs of the allied states and the heads of the german delegation, but between technical experts on both sides. mr. wilson favored this view, as tending to enlighten the germans on certain phases of the treaty, which from their written communications it was evident they did not understand. we thought that some weeks of delay might possibly be averted by sitting around the table with the germans, distasteful as that task might be, and holding a kind of miniature peace conference. this suggestion, however, was strongly opposed by m. clemenceau, although it was favored by some of his ministers. in fact, some of the latter, as well as many of the british, were for a time convinced that the terms of the treaty were such that germany would never sign them. again and again clemenceau was urged to give way on this point, but he sturdily opposed the view and declared positively that he knew the german character; that the only way to secure a german signature to the treaty was to insist upon purely formal and written communications. clemenceau had his way, and then began the laying of a good many wagers as to whether the germans would sign. this was after the original german delegation, or at least the chiefs of it, had returned to berlin and declared that they would not come back again to versailles. my own opinion was, that after making as great a kick as possible the germans would undoubtedly sign. the logic of the situation was all for their signing, the reasoning being this: if the treaty were a just treaty, then they ought to sign any way; if it were an unjust treaty, then, even if signed, it would eventually fall of its own weight, and the germans would run no risk in signing it. i felt that the german psychology of the situation would be acute enough to see these points and to lead to a signature. germany signs the treaty this proved to be the case, and on saturday, the 21st of june, after questionings and misgivings, we finally got the word that the germans were to sign. i shall never forget the moment that the news came. some of us were in session with the council of four at the president's house. mr. wilson sat on the right of the fireplace, mr. lloyd george on the left, and m. clemenceau in the middle. mr. orlando was in italy but his foreign minister, baron sonnino, was there in his place. the afternoon was a tense one, for the time was growing short and the germans had, as i say, not yet signified their intention of signing the treaty. in the mind of every one of us there lurked the question as to the terrible steps that would have to be taken in the event the germans refused to sign. late in the afternoon an orderly slipped into the room and whispered into m. clemenceau's ear. he struggled to his feet, marched up to president wilson and mr. lloyd george, and, drawing himself up, said in solemn tones, "i have the honor to announce to you that the germans will sign the treaty." and then a moment later the cannon boomed forth to the expectant populace the news that the germans would sign, and m. clemenceau, turning to me, breathed: "ah, that is the sound that i have been waiting to hear for forty-eight years." ii--wilson's fourteen points an attempt to raise international morality to the level of private morality on january 8, 1918, president wilson outlined the fourteen points on the basis of which the allies should make peace. this program was the startling climax of a whole series of peace proposals which had kept coming from both camps of belligerents, from neutrals, socialists, and the pope. it is without doubt one of the greatest and most inspiring state documents in the history of the world. it struck a vital and telling blow at the basic causes of modern wars. for that reason it electrified into complete unity the masses of the allied countries. liberal, radical and pacifist opponents of the war rallied around it as the last great hope of civilization. its most important effect was to give a democratic basis to the weary and disillusioned masses of the central powers who were longing for peace. it was on the basis of the fourteen points that the enemy surrendered. the wilson program we entered this war because violations of right had occurred which touched us to the quick and made the life of our own people impossible unless they were corrected and the world secured once for all against their recurrence. what we demand in this war, therefore, is nothing peculiar to ourselves. it is that the world be made fit and safe to live in; and particularly that it be made safe for every peace-loving nation which, like our own, wishes to live its own life, determine its own institutions, be assured of justice and fair dealings by the other peoples of the world, as against force and selfish aggression. all the peoples of the world are in effect partners in this interest and for our own part we see very clearly that unless justice be done to others it will not be done to us. the programme of the world's peace, therefore, is our programme, and that programme, the only possible programme, as we see it, is this: i. open covenants of peace, openly arrived at, after which there shall be no private international understandings of any kind, but diplomacy shall proceed always frankly and in the public view. ii. absolute freedom of navigation upon the seas, outside territorial waters, alike in peace and in war, except as the seas may be closed in whole or in part by international action for the enforcement of international covenants. iii. the removal, as far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance. iv. adequate guarantees given and taken that national armaments will be reduced to the lowest point consistent with domestic safety. v. a free, open minded, and absolutely impartial adjustment of all colonial claims, based upon a strict observance of the principle that in determining all such questions of sovereignty the interests of the populations concerned must have equal weight with the equitable claims of the government whose title is to be determined. [illustration: copyright by underwood & underwood paris crowds greeting president wilson a general holiday was declared to welcome the president of the united states. this photograph was taken in the place dé la concorde.] vi. the evacuation of russian territory and such a settlement of all questions affecting russia as will secure the best and freest coöperation of the other nations of the world in obtaining for her an unhampered and unembarrassed opportunity for the independent determination of her own political development and national policy and assure her of a sincere welcome into the society of free nations under institutions of her own choosing; and, more than a welcome, assistance also of every kind that she may need and may herself desire. the treatment accorded russia by her sister nations in the months to come will be the acid test of their good will, of their comprehension of her needs as distinguished from their own interests, and of their intelligent and unselfish sympathy. vii. belgium, the whole world will agree, must be evacuated and restored, without any attempt to limit the sovereignty which she enjoys in common with all other free nations. no other single act will serve as this will serve to restore confidence among the nations in the laws which they have themselves set and demanded for the government of their relations with one another. without this healing act the whole structure and validity of international law is forever impaired. viii. all french territory should be freed and the invaded portions restored, and the wrong done france by prussia in 1871 in the matter of alsace-lorraine, which has unsettled the peace of the world for nearly fifty years, should be righted, in order that peace may once more be made secure in the interest of all. ix. a readjustment of the frontiers of italy should be effected along clearly recognizable lines of nationality. x. the peoples of austria-hungary, whose place among the nations we wish to see safeguarded and assured, should be accorded the freest opportunity of autonomous development. xi. rumania, serbia and montenegro should be evacuated; occupied territories restored; serbia accorded free and secure access to the sea, and the relations of the several balkan states to one another determined by friendly counsel along historically established lines of allegiance and nationality, and international guarantees of the political and economic independence and territorial integrity of the several balkan states should be entered into. xii. the turkish portions of the present ottoman empire should be assured a secure sovereignty, but the other nationalities which are now under turkish rule should be assured an undoubted security of life and an absolutely unmolested opportunity of autonomous development, and the dardanelles should be permanently opened as a free passage to the ships and commerce of all nations under international guarantees. xiii. an independent polish state should be erected which should include the territories inhabited by indisputably polish population, which should be assured a free and secure access to the sea and whose political and economic independence and territorial integrity should be guaranteed by international covenant. xiv. a general association of nations must be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small states alike. iii--how the peace treaty was signed a description of the historic ceremony in the hall of mirrors at the palace of versailles, june 8, 1919 (reprinted from the new york _times_.) no nobler and more eloquent setting could have been found for this greatest of all modern events, the signing of the peace of versailles, after five years of terrific struggle on whose outcome the fate of the whole world had hung, than the palace of the greatest of french kings on the hillcrest of the paris suburb that gave its name to the treaty. to reach it, says the correspondent of _the new york times_, the plenipotentiaries and distinguished guests from all parts of the world motored to versailles that day, and drove down the magnificent tree-lined avenue du château, then across the huge square--the famous place d'armes of versailles--and up through the gates and over the cobblestones of the court of honor to the entrance, where officers of the republican guard, whose creation dates back to the french revolution, in picturesque uniform, were drawn up to receive them. all day the crowd had been gathering. it was a cloudy day; not till noon did the sky clear. by noon eleven regiments of french cavalry and infantry had taken position along the approaches to the palace, while within the court on either side solid lines of infantry in horizon blue were drawn up at attention. hours before the time set for the ceremony an endless stream of automobiles began moving out of paris up the cannon-lined hill of the champs elysées, past the massive arc de triomphe, bulking somberly against the leaden sky, and out through the bois de boulogne. this whole thoroughfare was kept clear by pickets, dragoons, and mounted gendarmes. in the meantime thousands of parisians were packing regular and special trains on all the lines leading to versailles, and contending with residents of the town for places in the vast park where the famous fountains would rise in white fleur-de-lis to mark the end of the ceremony. a memorable scene past the line of gendarmes thrown across the approaches to the square reserved for ticket holders, the crowd surged in a compact and irresistible wave, while hundreds of the more fortunate ones took up positions in the high windows of every wing of the palace. up the broad boulevard of the avenue de paris the endless chain of motor cars rolled between rows of french soldiers; and a guard of honor at the end of the big court presented arms to the plenipotentiaries and delegates as they drove through to the entrance, which for the allied delegates only was by the marble stairway to the "queen's apartments" and the hall of peace, giving access to the hall of mirrors. a separate route of entry was prescribed for the germans, an arrangement which angered and disconcerted them when they discovered it, through the park and up the marble stairway through the ground floor. the delegates and plenipotentiaries began to arrive shortly after 2 p. m., their automobiles rolling between double lines of infantry with bayonets fixed--it was estimated that there were 20,000 soldiers altogether guarding the route--that held back the cheering throngs. the scene from the court of honor was impressive. the place d'armes was a lake of white faces, dappled everywhere by the bright colors of flags and fringed with the horizon blue of troops whose bayonets flamed silverly as the sun emerged for a moment from behind heavy clouds. at least a dozen airplanes wheeled and curvetted above. up that triumphal passage, leading for a full quarter of a mile from the wings of the palace to the entrance to the hall of mirrors, representatives of the victorious nations passed in flag-decked limousines--hundreds, one after another, without intermission, for fifty minutes. just inside the golden gates, which were flung wide, they passed the big bronze statue of louis xiv., the "sun-king," on horseback, flanked by statues of the princes and governors, admirals and generals who had made louis the grand monarque of france. and on the façade of the twin, temple-like structures on either side of the great statue they could read as they passed an inscription symbolic of the historic ceremony just about to occur: "to all the glories of france." notabilities arrive one of the earliest to arrive was marshal foch, amid a torrent of cheering, which burst out even louder a few moments later when the massive head of premier clemenceau was seen through the windows of a french military car. to these and other leaders, including president wilson, general pershing, and premier lloyd george, the troops drawn up all around the courtyard presented arms. after clemenceau the unique procession continued, diplomats, soldiers, princes of india in gorgeous turbans and swarthy faces, dapper japanese in immaculate western dress, admirals, aviators, arabs; one caught a glimpse of the bright colors of french, british, and colonial uniforms. british tommies and american doughboys also dashed up on crowded camions, representing the blood and sweat of the hard-fought victory; they got an enthusiastic reception. it was 2:45 when mr. balfour, bowing and smiling, heralded the arrival of the british delegates. mr. lloyd george was just behind him, for once wearing the conventional high hat instead of his usual felt. at 2:50 came president wilson in a black limousine with his flag, a white eagle on a dark blue ground; he received a hearty welcome. by 3 o'clock the last contingent had arrived, and the broad ribbon road stretched empty between the lines of troops from the gates of the palace courtyard. the germans had already entered; to avoid any unpleasant incident they had been quietly conveyed from their lodgings at the hotel des reservoirs annex through the park. the scene inside the final scene in the great drama was enacted in the magnificent hall of mirrors. versailles contains no more splendid chamber than this royal hall, whose three hundred mirrors gleam from every wall, whose vaulted and frescoed ceiling looms dark and high, in whose vastness the footfalls of the passer re-echo over marble floors and die away reverberatingly. it was no mere matter of convenience or accident that the germans were brought to sign the peace treaty in this hall. for this same hall, which saw the german peace delegates of 1919, representing a beaten and prostrate germany, affix their signatures to the allied terms of peace, had witnessed in the year 1871 a very different ceremony. it was in the hall of mirrors that the german empire was born. forty-nine years ago, on a january morning, while the forts of beleaguered paris were firing their last defiant shots, in that mirror-gleaming hall was inaugurated the reign of that german empire the virtual end of which, so far as the concept held by its originators is concerned, was signalized in versailles in the same spot on saturday, june 28. and in 1871 president thiers had signed there the crushing terms of defeat imposed by a victorious and ruthless germany. in anticipation of the present ceremony carpets had been laid and the ornamental table, with its eighteenth century gilt and bronze decorations, had been placed in position on the daïs where the plenipotentiaries were seated. fronting the chair of m. clemenceau was placed a small table, on which the diplomatic instruments were laid. it was to this table that each representative was called, in alphabetical order by countries, to sign his name to the treaty and affix to it his governmental seal. the four hundred or more invited guests were given places in the left wing of the hall of mirrors, while the right wing was occupied by about the same number of press representatives. sixty seats were allotted to the french press alone. besides the military guards outside the palace, the grand stairway up which the delegates came to enter the hall was controlled by the republican guards in their most brilliant gala uniform. the peace table the peace table--a huge hollow rectangle with its open side facing the windows in the hall--was spread with tawny yellow coverings blending with the rich browns, blues, and yellows of the antique hangings and rugs; these, and the mellow tints of the historical paintings, depicting scenes from france's ancient wars, in the arched roof of the long hall, lent bright dashes of color to an otherwise austere scene. against the sombre background also stood out the brilliant uniforms of a few french guards, in red plumed silver helmets and red, white, and blue uniforms, and a group of allied generals, including general pershing, who wore the scarlet sash of the legion of honor. but all the diplomats and members of the parties who attended the ceremony of signing wore conventional civilian clothes. all gold lace and pageantry was eschewed, the fanciful garb of the middle ages was completely absent as representative of traditions and practices sternly condemned in the great bound treaty-volume of japanese paper, covered with seals and printed in french and english, which was signed by twenty-seven nations that afternoon. as a contrast with the franco-german peace session of 1871, held in the same hall, there were present some grizzled french veterans of the franco-prussian war. they took the place of the prussian guardsmen of the previous ceremony, and gazed with a species of grim satisfaction at the disciples of bismarck, who sat this time in the seats of the lowly, while the white marble statue of minerva looked stonily on. entrance of chief actors the ceremony of signing was marked only by three minor incidents: a protest by the german delegation at the eleventh hour over the provision of separate entrance, the filing of a document of protest by general jan smuts of the south african delegation, and the deliberate absence of the chinese delegates from the ceremony, due to dissatisfaction over the concessions granted to japan in shantung. [illustration: copyright underwood & underwood henry white former ambassador to france and italy and one of the united states delegates to the peace conference.] the treaty was deposited on the table at 2:10 p.m. by william martin of the french foreign office; it was inclosed in a stamped leather case, and bulked large. because of the size of the volume and the fragile seals it bore, the plan to present it for signing to premier clemenceau, president wilson, and premier lloyd george had been given up. a box of old-fashioned goose quills, sharpened by the expert pen pointer of the french foreign office, was placed on each of the three tables for the use of plenipotentiaries who desired to observe the conventional formalities. secretary lansing, meanwhile, had been the first of the american delegation to arrive in the palace--at 1:45 p.m. premier clemenceau entered at 2:20. three detachments each consisting of fifteen private soldiers--from the american, british, and french forces--just before 3 o'clock and took their places in the embrasures of the windows overlooking the château park, a few feet from marshal foch, who was seated with the french delegation at the peace table. marshal foch was present only as a spectator, and did not participate in the signing. these forty-five soldiers of the three main belligerent nations were present as the real "artisans of peace" and stood within the inclosure reserved for plenipotentiaries and high officials of the conference as a visible sign of their rôle in bringing into being a new europe. these men had been selected from those who bore honorable wounds. premier clemenceau stepped up to the poilus of the french detachment and shook the hand of each, expressing his pleasure at seeing them, and his regrets for the suffering they had endured for france. president wilson enters delegates of the minor powers made their way with difficulty through the crowd to their places at the table. officers and civilians lined the walls and filled the aisles. president wilson entered the hall of mirrors at 2:50. all the allied delegates were then seated, except the chinese representatives, who were conspicuous by their absence. the difficulty of seeing well militated against demonstrations on the arrival of prominent statesmen. the crowd refused to be seated and thronged toward the center of the hall, which is so long that a good view was impossible from any distance, even with the aid of opera glasses. german correspondents were ushered into the hall just before 3 o'clock and took standing room in a window at the rear of the correspondents' section. at 3 o'clock a hush fell over the hall. there were a few moments of disorder while the officials and the crowd took their places. at 3:07 the german delegates, dr. hermann müller, german secretary for foreign affairs, and dr. johannes bell, colonial secretary, were shown into the hall; with heads held high they took their seats. the other delegates remained seated, according to a prearranged plan reminiscent of the discourtesy displayed by von brockdorff-rantzau, who at the ceremony of delivery of the peace treaty on may 7th, had refused to rise to read his address to the allied delegates. the seats of the german delegates touched elbows with the japanese on the right and the brazilians on the left. they were thus on the side nearest the entrance, and the program required them to depart by a separate exit before the other delegates at the close of the ceremony. delegates from ecuador, peru, and liberia faced them across the narrow table. the germans sign m. clemenceau, as president of the peace conference, opened the ceremony. rising, he made the following brief address, amid dead silence: "the session is open. the allied and associated powers on one side and the german reich on the other side have come to an agreement on the conditions of peace. the text has been completed, drafted, and the president of the conference has stated in writing that the text that is about to be signed now is identical with the 200 copies that have been delivered to the german delegation. the signatures will be given now, and they amount to a solemn undertaking faithfully and loyally to execute the conditions embodied by this treaty of peace. i now invite the delegates of the german reich to sign the treaty.' there was a tense pause for a moment. then in response to m. clemenceau's bidding the german delegates rose without a word, and, escorted by william martin, master of ceremonies, moved to the signatory table, where they placed upon the treaty the sign-manuals which german government leaders had declared over and over again, with emphasis and anger, would never be appended to this treaty. they also signed a protocol covering changes in the documents, and the polish undertaking. all three documents were similarly signed by the allied delegates who followed. wilson signs next when the german delegates regained their seats after signing, president wilson immediately rose and, followed by the other american plenipotentiaries, moved around the sides of the horseshoe to the signature tables. it was thus president wilson, and not m. clemenceau, who was first of the allied delegates to sign. this, however, was purely what may be called an alphabetical honor, in accordance with which the nations were named in the prologue to the treaty. premier lloyd george, with the british delegation, came next. the british dominions followed. m. clemenceau with the french delegates, was next in line; then came baron saionji and the other japanese delegates, and they in turn were followed by the representatives of the smaller powers. [illustration: copyright underwood & underwood count von brockdorff-rantzau foreign minister of germany and president of the german peace delegates.] during the attaching of the signatures of the great powers and the germans a battery of moving picture cameras clicked away so audibly that they could be heard above the general noise and disorder of the throng. the close of the ceremony came so quickly and quietly that it was scarcely noticed until it was all over. m. clemenceau arose almost unremarked, and in a voice half lost amid the confusion and the hum of conversation which had sprung up while the minor powers were signing declared the conference closed, and asked the allied and associated delegates to remain in their seats for a few moments--this to permit the german plenipotentiaries to leave the building before the general exodus. the germans depart none arose as the germans filed out, accompanied by their suite of secretaries and interpreters, just as all the plenipotentiaries had kept their seats when dr. müller and dr. bell entered. the germans went forth evidently suffering strong emotion. outside an unsympathetic crowd jammed close to the cars which took them away. there was no aggression, but the sentiment of the throng was unmistakable. meanwhile the great guns that announced the closing of the ceremony were booming, and their concussion shook the old palace of versailles to its foundations. amid confusion the assembly dispersed, and the most momentous ceremony of the epoch was at an end. the great war which for five long years had shaken europe and the world was formally ended at last. it was a war which had cost the belligerents over $200,000,000,000; which had caused the deaths of 8,000,000 human beings, and which had left the world a post-war burden of debt amounting to $135,000,000,000. it was a war which had changed the whole face of europe, which had brought many new nations into existence, which had revolutionized the organization of all national and international life. it was a war which had brought the world the consciousness of its common obligation to unite against all war. the booming of the great guns of versailles seemed to proclaim a new epoch. iv--the peace treaty--its meaning to america america's "place in the sun" due to her efforts to secure a just peace by george w. wickersham formerly attorney-general of the united states. "the cause of our entrance into the great war," declares dr. david jayne hill in a recent essay, "being the violation by the german imperial government of our legal rights as a nation, our object in the war was to make our rights respected. the one clear duty of the treaty-making power in concluding peace with germany, therefore, is to secure this result."[25] [25] "americanizing the treaty."--_north american review_, august, 1919. in these words, one of the most distinguished and accomplished of the opponents of the treaty of paris reveals the profound abyss which separates those who oppose from those who are urging the approval of the treaty of versailles. dr. hill, perhaps unconsciously, gives expression to a sordid, narrow, selfish view of the issues of the war, which would transmute into the most elemental act of self-defense one of the greatest crusades of high idealism ever conducted by any people in the history of nations. if, in fact, the cause of our participation in the war was merely to repel attacks upon our legal rights as a nation, then indeed, that end being attained, and the aggressor reduced to impotence for the future, we may return within our own borders, withdraw unto ourselves, disclaim all responsibility for the condition of the world elsewhere and plunge into the selfish exploitation of our national resources, "the world forgetting, by the world forgot." it is a strange perversion of the facts of recent history that leads to such a conception of america's responsibility for the future of civilization. there were undoubtedly, as mr. wilson said, "violations of right which touched us to the quick." was it merely violations of our own national rights that roused this peace-loving nation to array itself for battle; that sent two million of our young men across three thousand miles of ocean to take their places beside the heroes of verdun and the marne, the veterans of cambrai and arras, ypres and the somme; infused the weary defenders of civilization with new courage; converted their defense into an irresistible offensive which shattered the greatest military machine of history, overthrew the kaiser and his government, and brought the german nation to its knees? no! it was not the german attacks upon our rights as a nation; it was the german challenge of the whole basis of modern christian civilization. it was her cynical disclaimer of the binding character of treaties; her inhuman method of warfare; her brutal cruelties of non-combatant men, women and children; her ruthless destruction of monuments of art--the possessions of not merely one nation, but of the entire world of men and women in every land who love beauty and revere art. it was the growing conviction that a government which ordered the sinking of the _lusitania_ and the _sussex_; that destroyed the priceless literary treasures of louvain; that separated families in belgium and france, and deported great companies of men to work in german munition factories; that ruthlessly cut up by the roots the fruit trees and shrubs of the occupied regions of france; that sought to destroy not merely the men, but the souls of nations, so that its own horrid philosophy of force might reign over them--that such a government must no longer exist; that its pestilential influence was more noxious than tuberculosis or the bubonic plague. the basis of peace therefore, the youth of america joyously leaped to arms and crowded overseas in the greatest of all crusades, insuring victory and promising the opening of a new and better epoch of human history. it was the recognition of human kinship; the perception of human brotherhood, that inspired them to the great endeavor. our proud sense of american nationality took on a deeper and holier significance as we joined forces with the older peoples in defense of the great principles of human right which had been formulated by our fathers and upon which was reared the american state. we were no less americans that we had accepted a common responsibility with great britain, france and italy for the preservation of the ideals of human freedom for which washington fought and lincoln died. nay! better americans, as we realized that the war was being fought in defense of those principles upon which our own institutions were founded and by which we had become the great, strong, free nation we are. and as the hideous carnage went on, and we saw a whole generation of the youth of the free nations of europe butchered because the german people had become so obsessed with their own sense of superiority that they were determined to rule the world and impose upon all other peoples subservience to their moloch-like gospel of efficiency, another feeling began to struggle for expression in europe and america alike--a determination that all wars of aggression must cease; that disputes between nations must be settled like those between individuals, by peaceful arbitration or conciliation; that the causes of war must be examined and, so far as possible, removed, and that no such war as this ever again should desolate the earth. this was the meaning of the phrase one came to hear on many lips, that it was "a war against war." how could such a result be attained? obviously, only by the continued association in peace of those powers whose close coöperation in war was compelling the overthrow of german militarism, and the widening of that association to include all the other nations who should accept its program and give an earnest of adherence to its ideals. there was also the hope that some time--when they should have offered up that ancient sacrifice, "an humble and a contrite heart"--even the german people, enfranchised and regenerated, might be admitted into the society of free peoples and with new significance become entitled to be called a civilized nation. these were the principles that underlay mr. wilson's program of peace--the fourteen points of january 8, 1918, and subsequent addresses; the only definite formulation of the basis of peace which was laid before the world, a program concerning which the american congress expressed no definite criticism and for which it offered no substitute; a program which was accepted by allies and opponents alike, and which constituted the chart by which the conference of paris was required to endeavor to formulate the terms of the treaty of peace. the work of that conference now has been submitted to the judgment of mankind. it was accepted by the new government of germany with a wry face, as the judgment of the victors naturally would be taken by the vanquished. it has been ratified by the parliament of great britain, by italy, by france and by japan. it has been for weeks under debate in the senate of the united states. daily efforts have been made to create a partisan political issue over it, and to visit upon it party resentment against the past actions of the president.[26] [26] this article by mr. wickersham was prepared prior to the senate deadlock and the rejection of the treaty with the lodge reservations. dr. hill again sums up the case against the treaty--the final basis which the confused gropings after some means of making it unpopular with the people finally have evolved--in these words: "the league of nations, as proposed, includes not only obligations not related to the reasons for engaging in the war, but also obligations opposed to the traditions, the time-honored policies, and even the constitutional provisions of the united states. it commits the whole future policy of this country to the decisions of an international body in which it would have only a single voice; it permits that body to intrude its judgments, and thereby its policies into a sphere hitherto regarded as exclusively american, and, in addition, it demands that the territories held by each of the members of the league under this treaty shall receive the permanent protection of the united states as integral parts of the nations that now claim them." is it true? what is the real meaning of the peace treaty and its effect upon the people of the united states? the answer to these questions, and indeed to most of the criticism of the covenant, is conclusively met by a reading of the treaty. but first let us turn for a moment to the fourteen points of mr. wilson's address of january 8, 1918. the basis of the territorial readjustment of europe which he then proposed, was the giving of national expression to racial aspiration. alien imperial rule such as that of austria over hungary and bohemia, and that of germany, austria or russia over poland, was to end, and the poles, the croats, serbs, hungarians, bohemians, and the czechoslavs and jugoslavs each were to be allowed national existence, with the right of self-determination. whatever may now be thought of the wisdom of this theory, it was accepted by all of the allies, who thereby were committed to a responsibility for the protection, certainly in the early years of their existence, of the new nations they united to call into being. recognizing this fact, the fourteenth of the wilson points provided for the creation of an association of the allied nations to protect the work of their arms. aside from that practical purpose, the league of nations was recognized by many in every land as furnishing the only practicable machinery for the removal of causes of war and the prevention of new assaults upon civilization, such as that which germany had launched in august, 1914. [illustration: copyright underwood & underwood =victoria hall at geneva= selected by the council of the powers as the meeting place of the league of nations.] the first chapter of the peace treaty, therefore, is a covenant or compact forming a league of nations, whose purpose, as expressed in the preamble, is "to promote international coöperation and to achieve international peace and security." worthy objects, these: how are they to be attained? the preamble answers, "by the acceptance of obligations not to resort to war, by the prescription of open, just and honorable relations between nations, by the firm establishment of the understandings of international law as to actual rule of conduct among governments, and by the maintenance of justice and a scrupulous respect for all treaty obligations in the dealings of organized peoples with one another." are not these methods such as america has made her own? have we not in many treaties accepted obligations not to make war until all peaceful methods of settling disputes shall have been exhausted; have we not striven to make the principles of international law rules for the government of nations; and was not one of the main points in the indictment of germany on which we prosecuted the war against her that she had flouted the sanctity of treaties and made them mere scraps of paper? the objects of the league therefore, as set forth in the covenant, are expressive only of policies and principles to which the united states has given a consistent and unbroken adherence from the days of the jay treaty to the present hour. how are these objects proposed to be attained in the text of the covenant? what is there in its provisions to justify the frantic abuse that has been heaped upon it by its opponents and to sustain the final accusation that it is "un-american?" machinery of the league first, as to the machinery of the league. there is an assembly of its members to which each sovereign state may send delegates. there is an assembly of its members to which each nation necessarily has one vote. in the united states senate, rhode island and new york have equal representation, despite disparity in wealth and population. the principle of sovereignty requires this recognition of equality. but the powers of the assembly are restricted to voting upon the admission of new members to the league, the addition of members to the council, the disposition of international disputes which may be referred to it by the council under article xv, and the general consideration at its meetings of "any matter within the sphere of action of the league or affecting the peace of the world." this general authority only can embrace the right of discussion, save in very exceptional cases, as by article v, "decisions at any meeting of the assembly or of the council shall require the agreement of all the members of the league represented at the meeting." the actual governing body of the league is the council, which is to consist of representatives of the five greater powers,--the united states, great britain, france, italy and japan, together with representatives of four other members of the league selected by the assembly from time to time. these numbers may be increased, but only by the unanimous vote of the council, approved by a majority of the assembly. as noted above, save in the very few expressly expected cases, the council can reach decisions only by unanimous vote. what are to be its functions? they need not be enumerated in detail here. briefly, they deal with the reduction of armaments, the control by governments of the private manufacture of munitions and implements of war, the consideration of any war or threat of war--"of any circumstance whatever affecting international relations which threatens to disturb either the peace or the good understanding between nations upon which peace depends." they require the formulation and submission to the members of the league for adoption of plans for the establishment of a permanent court of international justice. they empower the council to endeavor to effect a settlement of any international dispute which shall not be submitted to arbitration by the parties; to investigate, consider and report upon any such dispute, and to publish its conclusions. the parties to the league solemnly covenant and agree that if any dispute shall arise between them likely to lead to a rupture they will submit it either to arbitration or inquiry by the council, and that in no case will they resort to war until three months after the award by the arbitrators or the report by the council. they agree also to carry out in good faith any award that may be rendered, and not to make war against any member of the league that complies therewith. if a report by the council is unanimously agreed to by its members, other than the representatives of the disputants, the members agree not to go to war with any party to the dispute which complies with the recommendations of the report. objections to the plan it is objected by some that the decision of questions between nations by these provisions is left to a body of delegates composing the council who are not bound to decide according to rules of international law, but may reach conclusions merely as political expediency. this seems a strained interpretation. the members of the league agree to submit either (1) to arbitration or (2) to investigation by the council, every dispute which may arise between them likely to lead to a rupture and in no case to resort to war until three months after the award by arbitrators or the report by the council. they declare (by article xiii) "disputes as to the interpretation of a treaty, as to any question of international law, as to the existence of any fact which, if established, would constitute a breach of any international obligation, or as to the extent and nature of the reparation to be made for any such breach," to be among those which are generally suitable for submission to arbitration. disputes of the character thus enumerated are what are known as justiciable, _i. e._, subject to be decided by a court by the application of the recognized principles of international law. mr. root recommended that such disputes should be required to be arbitrated. the conference at paris, like those at the two hague conferences, would not agree to that. but in view of the declaration just quoted, any power which should bring before the council a dispute of the character mentioned, but which it was unwilling to submit to arbitration, would have the burden of showing convincing reason for such attitude. when the first draft of the covenant was before the country, american critics objected that it would compel the united states to submit to arbitration on inquiry by the council purely domestic questions such as tariff, immigration and coastwise traffic. to meet this objection, there was inserted in art. xv the following paragraph: "if the dispute between the parties is claimed by one of them, and is found by the council to arise out of a matter which by international law is solely within the domestic jurisdiction of that party, the council shall so report, and shall make no recommendation as to its settlement." to this it is objected that the determination of the question whether or not a matter of dispute is by the rules of international law solely with the domestic jurisdiction of a member is left to the council and not to the member. surely, it requires no explanation to demonstrate, that if a member state may oust the council of jurisdiction to inquire into a given dispute which threatens the peace of the world merely by itself asserting that it arises out of a matter within its exclusive domestic jurisdiction, a very imperfect means of averting war will have been provided, and the league covenant will hardly have more efficacy than the second hague convention. remember too, that the reports of the council must be unanimous, and the unreasonableness of the objection to the provisions cited will appear. means to prevent war articles xi to xvi constitute the heart of the covenant, the most effective means ever formulated to prevent war. the agreements of the nations not to resort to war until the processes of arbitration or inquiry are exhausted, are buttressed by the provision that should any member violate these agreements it shall _ipso facto_ be deemed to have committed an act of war against all the other members of the league, entailing as a consequence commercial boycott, expulsion and the application of armed force, if the members shall so determine. the employment of force in this case, as in every other contemplated by the covenant, is not left to the decision of council or assembly. they can only recommend. the member states agree _not to go_ to war. there is nowhere in the document any provision compelling them _to go_ to war. even where one state in violation of its covenant threatens the peace of the world, the utmost the council can do is "to recommend to the several governments concerned what effective military or naval forces the members of the league shall severally contribute to the armaments of forces to be used to protect the covenants of the league." much heated objection has been directed against article x, which reads as follows: "the members of the league undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all members of the league. in case of any such aggression or in case of any threat or danger of such aggression, the council shall advise upon the means by which this obligation shall be fulfilled.' again, it is left to the determination of each state what force it shall employ to enforce this provision. as a matter of fact, this article adds little, if anything, to the provisions of article xi, which declares that "any war or threat of war ... is hereby declared a matter of concern to the whole league, and the league shall take any action that may be deemed wise and effectual to safeguard the peace of nations." any external aggression against the territorial integrity or political independence of a member of the league would amount to a war or threat of war, and would invoke action under article xi, if not under article x. but the guaranty of article x is very necessary as affording a moral protection to the new nations brought into being through the peace conference. the united states of america, whose president formulated the principles of peace to which these nations owe their existence, can not afford to shirk responsibility for their protection. the covenant abolishes the evil of secret treaties between the nations composing the league, while preserving the effectiveness of existing treaties of arbitration. [illustration: copyright harris & ewing =william howard taft= an earnest supporter of the president and his administration throughout the war, though of the opposite party.] the monroe doctrine to meet the objection that the covenant would deprive us of the monroe doctrine--a national policy adopted by the united states as its own and maintained for its own protection--article xxi of the amended covenant provides that- "nothing in this covenant shall be deemed to affect the validity of international engagements such as treaties of arbitration or regional understandings like the monroe doctrine for securing the maintenance of peace." the phrase "regional understanding," as applied to the monroe doctrine, is not a happy one. but the article certainly excludes the monroe doctrine from modification or effect by the treaty. it secures from every one of the thirty-two original members and the thirteen other states which shall be invited to join the league, a recognition of the existence of the monroe doctrine and an agreement that it is not to be affected by anything contained in the covenant. certainly _that_ is not an un-american result to accomplish, and when one reads dr. hill's statement that the covenant "does not embody our traditional american ideals," one wonders in what museum of forgotten lore the learned doctor has found those "traditional ideals" preserved. dr. hill's so-called ideals conflict with the expression in this great treaty of the peculiarly american ideal of averting war by providing peaceful methods of settling disputes among nations, with the express recognition by all the other nations of the doctrine that "was proclaimed in 1823 to prevent america from becoming a theater for the intrigues of european absolutism," and with the official commentary of the delegates of great britain which says that- "at first a principle of american foreign _policy_, it (monroe doctrine) has become an international _understanding_, and it is not illegitimate for the people of the united states to ask that the covenant should recognize this fact." german colonies one of the most difficult problems presented to the peace conference was the disposition of the former colonies of germany in asia, africa and australasia, and of the communities formerly belonging to the turkish empire. it was recognized that the victors in the war shared a common responsibility for the just and wise treatment of these peoples, who were utterly unable to stand alone. the method adopted declared all of them to be wards of the league of nations and provided that they should be governed by mandatory powers willing to undertake the task and appointed by the league under charters framed by the council. these powers would be answerable to the league for the right exercise of their powers, and subject to inspection and report. a great deal of impassioned rhetoric has been expended over these provisions, upon the false assumption that thereby the united states was committed to a responsibility for the government of remote regions of the earth. the covenant commits us to nothing. our participation in the war has entailed upon us a common responsibility with our allies for the protection and wise government of these communities. we no more can escape that responsibility with honor than we could after the spanish war escape responsibility for the philippine islands. but it is for the american congress to determine the extent of recognition of our duty and the means by which we shall discharge it. in the case of the philippine islands, the united states set for the world a great moral example in the government of colonies, not in its own interest, but for the benefit and exclusively in the interest of the inhabitants of possessions which fell into our hands as a consequence of the war with spain. the principle thus proclaimed and practiced has been followed in the case of the colonies and territories which the world war has left at the disposition of the allied and associated nations. this principle, in the words of the covenant, is "that the well-being and development of such peoples form a sacred trust of civilization." the best method yet devised for giving practicable effect to this principle undoubtedly is, "that the tutelage of such peoples be intrusted to advanced nations who, by reason of their resources, their experience or their geographical position, can best undertake this responsibility, and who are willing to accept it, and that this tutelage should be exercised by them as mandatories on behalf of the league." this is the american attitude toward undeveloped peoples. to remove these provisions from the peace treaty would be to _de_-americanize the treaty. miscellaneous provisions the covenant brings within the cognizance of the league the regulation of international relations affecting (1) efforts to secure and maintain fair and humane conditions of labor for men, women and children--a subject elaborated and provided for in great detail in part xiii of the peace treaty; (2) the execution of international agreements with regard to traffic in women and children, and in opium and other dangerous drugs; (3) the trade in arms and ammunition with the countries in which the control of this traffic is necessary in the common interest; (4) the prevention and control of disease. the members of the league further agree (1) "to make provision to secure and maintain freedom of communication and of transit and _equitable_ treatment for the commerce of all members of the league," and (2) "to encourage and promote the establishment and coöperation of duly authorized voluntary national red cross organizations having as purposes improvement of health, the prevention of disease and the mitigation of suffering throughout the world." all these are subjects customarily dealt with in international agreements. these provisions are designed to bring into coördination with the league and make more effective all provisions concerning such matters. the framers of this great program recognized that it was, necessarily, an experiment, and that experience doubtless would develop defects and suggest needed changes. provision is therefor made for amendments which should take effect when ratified by the members of the league whose representatives compose the council, and by a majority of the members whose representatives compose the assembly. but, preserving the theory that the league is to be an alliance of sovereign powers, it also is provided that no member shall be bound against his will by any such amendment. it may dissent, and thereby cease to be a member of the league. finally, any member may, at will, after two years' notice, withdraw from the league, "provided that all its international obligations and all its obligations under this covenant shall have been fulfilled at the time of its withdrawal." no jurisdiction is vested in any organ of the league to determine whether or not in any instance this condition has been complied with. it is conceivable that pending some arbitration or inquiry by the council, the application of a commercial boycott or other disciplinary process for violation of a provision of the covenant, the offending power should seek to escape the jurisdiction of the league, by exercising the right of withdrawal. the period of notice probably is too long to allow of this, and yet the slow process of international procedure might require more than two years to reach a conclusion. does it not seem fair that before a nation should withdraw from this great association it should be required to fulfil its obligations under the treaty? probability of war minimized the treaty of peace with germany deals with many questions of vital import to european nations, but with which america has but little direct concern. part i, the covenant, is the section which touches us most nearly. it is the part which embodies the idealism of our people, and through which we are enabled to discharge the responsibilities we assumed by formulating for friend and foe the conditions of peace. human nature changes but little from century to century, but the highest and purest aspirations of the human heart find expression from age to age with greater force and with wider acceptance. doubtless, in the future, the passions of man will again flare up in bloody wars, but the creation of an adequate machinery for discussion and cooling reflection, must tend to minimize the probabilities of war. the spirits of millions of slaughtered youth who sleep in the fields of france and flanders call out to us, for whom they died, to consecrate their sacrifice by a new and greater endeavor to safeguard the future peace of the world. the conferees of paris have formulated a measure for this purpose. it is not perfect. experience may develop even greater imperfections than study has revealed. but it contains much of hope and promise. it is practical; it is subject to amendment. it commits no one irrevocably to its provisions. it is instinct with american idealism. it is in accord with the best american traditions. washington, lincoln, mckinley, and roosevelt--each has contributed to the establishment of some of its main provisions. no partisan, no provincial prejudice should be permitted to influence or control the judgment of our people concerning it. * * * * * =when peace came to verdun= it was 10:45 on the morning of november 11th in verdun. the germans had thrown a barrage over the little french city, now immortal; and shells were falling, plowing up the earth that had been turned over and over, ground to powder by four years of artillery fire. would the germans stop at 11 o'clock? reason said "yes." everyone in verdun knew that at that hour the armistice would go into effect. it was 10:50. the guns continued bellowing. a feeling deeper than reason came over those in the city that the germans would not stop. verdun had lived through four years of fire, smoke, thunder, blood, and ruin. sometimes for days there would be a lull, but the guns were never quiet long. the germans never forgave the "they-shall-not-pass" spirit that had hurled them back just as the prize--this military key to the west front--seemed within their grasp. it was 10:55. men were crouching between buildings. they kept coming--doughboys, morrocans, english soldiers, more doughboys. even the general and his aids began to look anxious. "then," says b. c. edworthy in _association men_, "as suddenly as though god himself had dropped a wet blanket over the crackling flames of hell and at one blow had extinguished them all, the firing ceased. there was an instant's pause, in which it seemed as though the world had come to an end. then from the forty bells, high in the still untouched towers of that old cathedral at verdun, which had witnessed the most heroic sacrifice of life and love save that on calvary alone, pealed forth as did the voices over the bethlehem hills those silver tones that once again were saying, 'peace on earth.' the men were joyously and deliriously leaping about, yelling and shouting and singing and kissing one another. slowly those heavy cathedral doors opened and in rushed about six hundred of the allied soldiers." there were mohammedans, catholics, jews, and protestants. they pressed forward into the choir space, the roofs above them open to heaven. a simple impromptu service of thanksgiving followed. an english soldier led the doxology, and all who knew the hymn joined in. six hundred worshipers knelt, each soldier praying according to his faith. mohammedans bowed to the stones, catholics crossed themselves, jews and protestants with moving lips bent their heads or lifted their faces to heaven. dr. oscar e. maurer, of new haven, conn., led the _lord's prayer_. as the strange congregation rose, the americans began "my country 'tis of thee," the english joining in with "god save the king." there could be only one closing hymn in that battered shell of verdun cathedral. now, as though it had been arranged, the french pushed forward and began the "marseillaise." it was the singing of the soul of a nation, a soul redeemed: _allons, enfants de la patrie le jour de gloire est arrivé_ peace had come to verdun, deliverance to france, safety to the world. with the last words of the national hymn of france, the service was finished, and the worshipers turned and reverently left the building. the treaty of versailles and the covenant of the league of nations (signed june 28, 1919, rejected by the united states, november 19, 1919 and again rejected, with the lodge reservations, march 19, 1920) the preamble contains the names of the plenipotentiaries that took part in the negotiations and signed the treaty, with a few exceptions: dr. hermann müller and dr. johannes bell were substituted for brockdorff-rantzau and his associates, china's delegates refused to sign on account of the shantung concessions to japan, and italy was represented by a new commission headed by signor tittoni, the new foreign minister. the text here reproduced is the revised edition of the treaty distributed in french and english among the delegates at the time of the signing. the copy actually signed is deposited in the archives of the republic of france in paris. preamble the united states of america, the british empire, france, italy, and japan, these powers being described in the present treaty as the principal allied and associated powers; belgium, bolivia, brazil, china, cuba, ecuador, greece, guatemala, haiti, the hedjaz, honduras, liberia, nicaragua, panama, peru, poland, portugal, rumania, the serb-croat-slovene state; siam, czechoslovakia, and uruguay, these powers constituting with the principal powers mentioned above the allied and associated powers of the one part; and germany, of the other part: bearing in mind that on the request of the imperial german government an armistice was granted on nov. 11, 1918, to germany by the principal allied and associated powers in order that a treaty of peace might be concluded with her, and the allied and associated powers being equally desirous that the war in which they were successively involved directly or indirectly, and which originated in the declaration of war by austria-hungary on july 28, 1914, against serbia; the declaration of war by germany against russia on aug. 1, 1914, and against france on aug. 3, 1914, and in the invasion of belgium, should be replaced by a firm, just, and durable peace; for this purpose the high contracting parties represented as follows: the president of the united states of america, by: the honorable woodrow wilson, president of the united states, acting in his own name and by his own proper authority; the honorable robert lansing, secretary of state; the honorable henry white, formerly ambassador extraordinary and plenipotentiary of the united states at rome and paris; the honorable edward m. house; general tasker h. bliss, military representative of the united states on the supreme war council; his majesty the king of the united kingdom of great britain and ireland and of the british dominions beyond the seas, emperor of india, by: the right honorable david lloyd george, m. p., first lord of his treasury and prime minister; the right honorable andrew bonar law, m. p., his lord privy seal; the right honorable viscount milner, g. c. b., g. c. m. g., his secretary of state for the colonies; the right honorable arthur james balfour, o. m., m. p., his secretary of state for foreign affairs; the right honorable george nicoll barnes, m. p., minister without portfolio; and for the dominion of canada, by: the right honorable sir george eulas foster, g. c. m. g., minister of trade and commerce; the right honorable charles joseph doherty, minister of justice; for the commonwealth of australia, by: the right honorable william morris hughes, attorney general and prime minister; the right honorable sir joseph cook, g. c. m. g., minister for the navy; for the dominion of south africa, by: general the right honorable louis botha, prime minister; lieut. general the right honorable jan christiaan smuts, k. c., minister of defense; for the dominion of new zealand, by: the right honorable william ferguson massey, minister of labor and prime minister; for india, by: the right honorable edwin samuel montagu, m. p., his secretary of state for india; major general his highness maharaja sir ganga singh bahadur, maharaja of bikanir, g. c. s. i., g. c. i. e., g. c. v. o., k. c. b., a. d. c.; the president of the french republic, by: mr. georges clemenceau, president of the council, minister of war; mr. pichon, minister of foreign affairs; mr. l. l. klotz, minister of finance; mr. andré tardieu, commissary general for franco-american military affairs; mr. jules cambon, ambassador of france; his majesty the king of italy,[27] by: mr. v. e. orlando, president of the council of ministers; [27] on account of the overthrow of the orlando ministry and the formation of the nitti ministry, the treaty was signed by a delegation headed by signor tittoni, the new foreign minister. baron s. sonnino, minister of foreign affairs; mr. s. crespi, deputy, minister of supplies; marquis g. imperiali, senator of the kingdom, ambassador of his majesty the king of italy at london; mr. s. barzilai, deputy, formerly minister; his majesty the emperor of japan, by: marquis saionji, formerly president of the council of ministers; baron makino, formerly minister of foreign affairs, member of the diplomatic council; viscount chinda, ambassador extraordinary and plenipotentiary of h. m. the emperor of japan at london; mr. k. matsui, ambassador extraordinary and plenipotentiary of h. m. the emperor of japan at paris; mr. h. ijuin, ambassador extraordinary and plenipotentiary of h. m. the emperor of japan at rome; his majesty the king of the belgians, by: mr. hymans, minister of foreign affairs, minister of state; mr. van den heuvel, envoy extraordinary and minister plenipotentiary of h. m. the king of the belgians, minister of state; mr. vandervelde, minister of justice, minister of state; the president of the republic of bolivia, by: mr. ismael montes, envoy extraordinary and minister plenipotentiary of bolivia at paris; the president of the republic of brazil, by: mr. epitacio pessoa, formerly minister of state, formerly member of the supreme court of justice, federal senator; mr. pandiá calogeras, deputy, formerly minister of finance; mr. raul ferdnandes; the president of the chinese republic,[28] by; mr. lou tseng-tsiang, minister of foreign affairs; mr. chengting thomas wang, formerly minister of agriculture and commerce; [28] refused to sign on account of shantung concessions to japan. the president of the cuban republic, by: mr. antonio sanchez de bustamante, dean of the faculty of law in the university of havana, president of the cuban society of international law; the president of the republic of ecuador, by: mr. enrique dorn y de alsua, envoy extraordinary and minister plenipotentiary of ecuador at paris; his majesty the king of the hellenes, by: mr. eleftherios venizelos, president of the council of ministers; mr. nicolas politis, minister of foreign affairs; the president of the republic of guatemala, by: mr. joaquin mendez, formerly minister of state for public works and public instruction, envoy extraordinary and minister plenipotentiary of guatemala at washington, envoy extraordinary and minister plenipotentiary on special mission at paris; the president of the republic of haiti, by: mr. tertullien guilbaud, envoy extraordinary and minister plenipotentiary of haiti at paris; his majesty the king of the hedjaz, by: mr. rustem haidar; mr. abdul hadi aouni; the president of the republic of honduras, by: dr. policarpe bonilla, on special mission to washington, formerly president of the republic of honduras, envoy extraordinary and minister plenipotentiary; the president of the republic of liberia, by: the honorable c. d. b. king, secretary of state; the president of the republic of nicaragua, by: mr. salvador chamorro, president of the chamber of deputies; the president of the republic of panama, by: mr. antonio burgos, envoy extraordinary and minister plenipotentiary of panama at madrid; the president of the republic of peru, by: mr. carlos g. candamo, envoy extraordinary and minister plenipotentiary of peru at paris; the president of the polish republic, by: mr. roman dmowski, president of the polish national committee; mr. ignace paderewski, president of the council of ministers, minister of foreign affairs; the president of the portugese republic, by: dr. affonso costa, formerly president of the council of ministers; mr. augusto soares, formerly minister of foreign affairs; his majesty the king of rumania, by: mr. jean j. c. bratiano, president of the council of ministers, minister of foreign affairs; general constantin coanda, corps commander, a. d. c. to the king, formerly president of the council of ministers; his majesty the king of the serbs, the croats, and the slovenes, by: mr. n. p. pachitch, formerly president of the council of ministers; mr. ante trumbic, minister of foreign affairs; mr. milenko r. vesnitch, envoy extraordinary and minister plenipotentiary of h. m. the king of the serbs, the croats, and the slovenes at paris; his majesty the king of siam, by: prince charoon, envoy extraordinary and minister plenipotentiary of h. m. the king of siam at paris; prince traidos prabandhu, under secretary of state for foreign affairs; the president of the czecho-slovak republic, by: mr. charles kramar, president of the council of ministers; mr. edouard benes, minister of foreign affairs; the president of the republic of uruguay, by: mr. juan antonio buero, minister of industry, formerly minister of foreign affairs; [illustration: woodrow wilson, president of the united states on january 8, 1918, president wilson outlined the fourteen points on the basis of which the allies should make peace.] germany,[29] by; count brockdorff-rantzau, minister for foreign affairs of the empire; [29] treaty signed by dr. hermann müller, minister for foreign affairs of the empire, and dr. johannes bell, minister of the empire. dr. landsberg, minister of justice of the empire; mr. giesberts, minister of posts of the empire; oberbürgermeister leinert, president of the prussian national assembly; dr. schücking; dr. karl melchior; acting in the name of the german empire and of each and every component state. who having communicated their full powers found in good and due form have agreed as follows: from the coming into force of the present treaty the state of war will terminate. from that moment and subject to the provisions of this treaty official relations with germany and with any of the german states will be resumed by the allied and associated powers. part i the covenant of the league of nations the high contracting parties, in order to promote international coöperation and to achieve international peace and security by the acceptance of obligations not to resort to war, by the prescription of open, just, and honorable relations between nations, by the firm establishment of the understandings of international law as the actual rule of conduct among governments, and by the maintenance of justice and a scrupulous respect for all treaty obligations in the dealings of organized peoples with one another, agree to this covenant of the league of nations. =article 1.=--the original members of the league of nations shall be those of the signatories which are named in the annex to this covenant and also such of those other states named in the annex as shall accede without reservation to this covenant. such accession shall be effected by a declaration deposited with the secretariat within two months of the coming into force of the covenant. notice thereof shall be sent to all other members of the league. any fully self-governing state, dominion, or colony not named in the annex may become a member of the league if its admission is agreed to by two-thirds of the assembly, provided that it shall give effective guarantees of its sincere intention to observe its international obligations, and shall accept such regulations as may be prescribed by the league in regard to its military, naval and air forces and armaments. any member of the league may, after two years' notice of its intention so to do, withdraw from the league, provided that all its international obligations and all its obligations under this covenant shall have been fulfilled at the time of its withdrawal. =article 2.=--the action of the league under this covenant shall be effected through the instrumentality of an assembly and of a council, with a permanent secretariat. =article 3.=--the assembly shall consist of representatives of the members of the league. the assembly shall meet at stated intervals and from time to time as occasion may require at the seat of the league or at such other place as may be decided upon. the assembly may deal at its meetings with any matter within the sphere of action of the league or affecting the peace of the world. at meetings of the assembly each member of the league shall have one vote, and may have not more than three representatives. =article 4.=--the council shall consist of representatives of the principal allied and associated powers, together with representatives of four other members of the league. these four members of the league shall be selected by the assembly from time to time in its discretion. until the appointment of the representatives of the four members of the league first selected by the assembly, representatives of belgium, brazil, spain, and greece shall be members of the council. with the approval of the majority of the assembly, the council may name additional members of the league whose representatives shall always be members of the council; the council with like approval may increase the number of members of the league to be selected by the assembly for representation on the council. the council shall meet from time to time as occasion may require, and at least once a year, at the seat of the league, or at such other place as may be decided upon. the council may deal at its meetings with any matter within the sphere of action of the league or affecting the peace of the world. any member of the league not represented on the council shall be invited to send a representative to sit as a member at any meeting of the council during the consideration of matters specially affecting the interests of that member of the league. at meetings of the council, each member of the league represented on the council shall have one vote, and may have not more than one representative. =article 5.=--except where otherwise expressly provided in this covenant or by the terms of the present treaty, decisions at any meeting of the assembly or of the council shall require the agreement of all the members of the league represented at the meeting. all matters of procedure at meetings of the assembly or of the council, including the appointment of committees to investigate particular matters, shall be regulated by the assembly or by the council and may be decided by a majority of the members of the league represented at the meeting. the first meeting of the assembly and the first meeting of the council shall be summoned by the president of the united states of america. =article 6.=--the permanent secretariat shall be established at the seat of the league. the secretariat shall comprise a secretary general and such secretaries and staff as may be required. the first secretary general shall be the person named in the annex; thereafter the secretary general shall be appointed by the council with the approval of the majority of the assembly. the secretaries and staff of the secretariat shall be appointed by the secretary general with the approval of the council. the secretary general shall act in that capacity at all meetings of the assembly and of the council. the expenses of the secretariat shall be borne by the members of the league in accordance with the apportionment of the expenses of the international bureau of the universal postal union. =article 7.=--the seat of the league is established at geneva. the council may at any time decide that the seat of the league shall be established elsewhere. all positions under or in connection with the league, including the secretariat, shall be open equally to men and women. representatives of the members of the league and officials of the league when engaged on the business of the league shall enjoy diplomatic privileges and immunities. the buildings and other property occupied by the league or its officials or by representatives attending its meetings shall be inviolable. =article 8.=--the members of the league recognize that the maintenance of peace requires the reduction of national armaments to the lowest point consistent with national safety and the enforcement by common action of international obligations. the council, taking account of the geographical situation and circumstances of each state, shall formulate plans for such reduction for the consideration and action of several governments. such plans shall be subject to reconsideration and revision at least every ten years. after these plans shall have been adopted by the several governments, the limits of armaments therein fixed shall not be exceeded without the concurrence of the council. the members of the league agree that the manufacture by private enterprise of munitions and implements of war is open to grave objections. the council shall advise how the evil effects attendant upon such manufacture can be prevented, due regard being had to the necessities of those members of the league which are not able to manufacture the munitions and implements of war necessary for their safety. the members of the league undertake to interchange full and frank information as to the scale of their armaments, their military and naval programs and the condition of such of their industries as are adaptable to warlike purposes. =article 9.=--a permanent commission shall be constituted to advise the council on the execution of the provisions of articles 1 and 8 and on military and naval questions generally. =article 10.=--the members of the league undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all members of the league. in case of any such aggression or in case of any threat or danger of such aggression the council shall advise upon the means by which this obligation shall be fulfilled. =article 11.=--any war or threat of war, whether immediately affecting any of the members of the league or not, is hereby declared a matter of concern to the whole league, and the league shall take any action that may be deemed wise and effectual to safeguard the peace of nations. in case any such emergency should arise the secretary general shall on the request of any member of the league forthwith summon a meeting of the council. it is also declared to be the friendly right of each member of the league to bring to the attention of the assembly or of the council any circumstance whatever affecting international relations which threatens to disturb international peace or the good understanding between nations upon which peace depends. =article 12.=--the members of the league agree that if there should arise between them any dispute likely to lead to a rupture, they will submit the matter either to arbitration or to inquiry by the council, and they agree in no case to resort to war until three months after the award by the arbitrators or the report by the council. in any case under this article the award of the arbitrators shall be made within a reasonable time, and the report of the council shall be made within six months after the submission of the dispute. =article 13.=--the members of the league agree that whenever any dispute shall arise between them which they recognize to be suitable for submission to arbitration and which cannot be satisfactorily settled by diplomacy, they will submit the whole subject-matter to arbitration. disputes as to the interpretation of a treaty, as to any question of international law, as to the existence of any fact which if established would constitute a breach of any international obligation, or as to the extent and nature of the reparation to be made for any such breach, are declared to be among those which are generally suitable for submission to arbitration. for the consideration of any such dispute the court of arbitration to which the case is referred shall be the court agreed on by the parties to the dispute or stipulated in any convention existing between them. the members of the league agree that they will carry out in full good faith any award that may be rendered, and that they will not resort to war against a member of the league which complies therewith. in the event of any failure to carry out such an award, the council shall propose what steps should be taken to give effect thereto. =article 14.=--the council shall formulate and submit to the members of the league for adoption plans for the establishment of a permanent court of international justice. the court shall be competent to hear and determine any dispute of an international character which the parties thereto submit to it. the court may also give an advisory opinion upon any dispute or question referred to it by the council or by the assembly. =article 15.=--if there should arise between members of the league any dispute likely to lead to a rupture, which is not submitted to arbitration in accordance with article 13, the members of the league agree that they will submit the matter to the council. any party to the dispute may effect such submission by giving notice of the existence of the dispute to the secretary general, who will make all necessary arrangements for a full investigation and consideration thereof. for this purpose the parties to the dispute will communicate to the secretary general, as promptly as possible, statements of their case with all the relevant facts and papers, and the council may forthwith direct the publication thereof. the council shall endeavor to effect a settlement of the dispute, and if such efforts are successful, a statement shall be made public giving such facts and explanations regarding the dispute and the terms of settlement thereof as the council may deem appropriate. if the dispute is not thus settled, the council either unanimously or by a majority vote shall make and publish a report containing a statement of the facts of the dispute and the recommendations which are deemed just and proper in regard thereto. any member of the league represented on the council may make public a statement of the facts of the dispute and of its conclusions regarding the same. if a report by the council is unanimously agreed to by the members thereof other than the representatives of one or more of the parties to the dispute, the members of the league agree that they will not go to war with any party to the dispute which complies with the recommendations of the report. if the council fails to reach a report which is unanimously agreed to by the members thereof, other than the representatives of one or more of the parties to the dispute, the members of the league reserve to themselves the right to take such action as they shall consider necessary for the maintenance of right and justice. if the dispute between the parties is claimed by one of them, and is found by the council to arise out of a matter which by international law is solely within the domestic jurisdiction of that party, the council shall so report, and shall make no recommendation as to its settlement. the council may in any case under this article refer the dispute to the assembly. the dispute shall be so referred at the request of either party to the dispute, provided that such request be made within fourteen days after the submission of the dispute to the council. in any case referred to the assembly all the provisions of this article and of article 12 relating to the action and powers of the council shall apply to the action and powers of the assembly, provided that a report made by the assembly, if concurred in by the representatives of those members of the league represented on the council and of a majority of the other members of the league, exclusive in each case of the representatives of the parties to the dispute, shall have the same force as a report by the council concurred in by all the members thereof other than the representatives of one or more of the parties to the dispute. =article 16.=--should any member of the league resort to war in disregard of its covenants under articles 12, 13, or 15, it shall =ipso facto= be deemed to have committed an act of war against all other members of the league, which hereby undertake immediately to subject it to the severance of all trade or financial relations, the prohibition of all intercourse between their nationals and the nationals of the covenant-breaking state and the prevention of all financial, commercial, or personal intercourse between the nationals of the covenant-breaking state and the nationals of any other state, whether a member of the league or not. it shall be the duty of the council in such case to recommend to the several governments concerned what effective military, naval or air force the members of the league shall severally contribute to the armed forces to be used to protect the covenants of the league. the members of the league agree, further, that they will mutually support one another in the financial and economic measures which are taken under this article, in order to minimize the loss and inconvenience resulting from the above measures, and that they will mutually support one another in resisting any special measures aimed at one of their number by the covenant-breaking state, and that they will take the necessary steps to afford passage through their territory to the forces of any of the members of the league which are coöperating to protect the covenants of the league. any member of the league which has violated any covenant of the league may be declared to be no longer a member of the league by a vote of the council concurred in by the representatives of all the other members of the league represented thereon. =article 17.=--in the event of a dispute between a member of the league and a state which is not a member of the league, or between states not members of the league, the state or states not members of the league shall be invited to accept the obligations of membership in the league for the purposes of such dispute, upon such conditions as the council may deem just. if such invitation is accepted, the provisions of articles 12 to 16 inclusive shall be applied with such modifications as may be deemed necessary by the council. upon such invitation being given the council shall immediately institute an inquiry into the circumstances of the dispute and recommend such action as may seem best and most effectual in the circumstances. if a state so invited shall refuse to accept the obligations of membership in the league for the purposes of such dispute, and shall resort to war against a member of the league, the provisions of article 16 shall be applicable as against the state taking such action. if both parties to the dispute when so invited refuse to accept the obligations of membership in the league for the purposes of such dispute, the council may take such measures and make such recommendations as will prevent hostilities and will result in the settlement of the dispute. =article 18.=--every treaty or international engagement entered into hereafter by any member of the league shall be forthwith registered with the secretariat and shall as soon as possible be published by it. no such treaty or international engagement shall be binding until so registered. =article 19.=--the assembly may from time to time advise the reconsideration by members of the league of treaties which have become inapplicable and the consideration of international conditions whose continuance might endanger the peace of the world. =article 20.=--the members of the league severally agree that this covenant is accepted as abrogating all obligations or understandings inter se which are inconsistent with the terms thereof, and solemnly undertake that they will not hereafter enter into any engagements inconsistent with the terms thereof. in case any member of the league shall, before becoming a member of the league, have undertaken any obligations inconsistent with the terms of this covenant, it shall be the duty of such member to take immediate steps to procure its release from such obligations. =article 21.=--nothing in this covenant shall be deemed to affect the validity of international engagements, such as treaties of arbitration or regional understandings like the monroe doctrine, for securing the maintenance of peace. =article 22.=--to those colonies and territories which as a consequence of the late war have ceased to be under the sovereignty of the states which formerly governed them and which are inhabited by peoples not yet able to stand by themselves under the strenuous conditions of the modern world, there should be applied the principle that the well-being and development of such peoples form a sacred trust of civilization and that securities for the performance of this trust should be embodied in this covenant. the best method of giving practical effect to this principle is that the tutelage of such peoples should be intrusted to advanced nations who by reason of their resources, their experience or their geographical position can best undertake this responsibility, and who are willing to accept it, and that this tutelage should be exercised by them as mandatories on behalf of the league. the character of the mandate must differ according to the stage of development of the people, the geographical situation of the territory, its economic conditions and other similar circumstances. certain communities formerly belonging to the turkish empire have reached a stage of development where their existence as independent nations can be provisionally recognized subject to rendering of administrative advice and assistance by a mandatory until such time as they are able to stand alone. the wishes of these communities must be a principal consideration in the selection of the mandatory. other peoples, especially those of central africa, are at such a stage that the mandatory must be responsible for the administration of the territory under conditions which will guarantee freedom of conscience and religion, subject only to the maintenance of public order and morals, the prohibition of abuses such as the slave trade, the arms traffic and the liquor traffic, and the prevention of the establishment of fortifications or military and naval bases and of military training of the natives for other than police purposes and the defense of territory, and will also secure equal opportunities for the trade and commerce of other members of the league. there are territories such as southwest africa and certain of the south pacific islands, which, owing to the sparseness of their population or their small size, or their remoteness from the centers of civilization; or their geographical contiguity to the territory of the mandatory, and other circumstances, can be best administered under the laws of the mandatory as integral portions of its territory, subject to the safeguards above mentioned in the interests of the indigenous population. in every case of mandate the mandatory shall render to the council an annual report in reference to the territory committed to its charge. the degree of authority, control, or administration to be exercised by the mandatory shall, if not previously agreed upon by the members of the league, be explicitly defined in each case by the council. a permanent commission shall be constituted to receive and examine the annual reports of the mandatories and to advise the council on all matters relating to the observance of the mandates. =articles 23.=--subject to and in accordance with the provisions of international conventions existing or hereafter to be agreed upon, the members of the league: (a) will endeavor to secure and maintain fair and humane conditions of labor for men, women and children, both in their own countries and in all countries to which their commercial and industrial relations extend, and for that purpose will establish and maintain the necessary international organizations; (b) undertake to secure just treatment of the native inhabitants of territories under their control; (c) will intrust the league with the general supervision over the execution of agreements with regard to the traffic in women and children and the traffic in opium and other dangerous drugs; (d) will intrust the league with the general supervision of the trade in arms and ammunition with the countries in which the control of this traffic is necessary in the common interest; (e) will make provision to secure and maintain freedom of communications and of transit and equitable treatment for the commerce of all members of the league. in this connection the special necessities of the regions devastated during the war of 1914--1918 shall be borne in mind; (f) will endeavor to take steps in matters of international concern for the prevention and control of disease. =article 24.=--there shall be placed under the direction of the league all international bureaus already established by general treaties if the parties to such treaties consent. all such international bureaus and all commissions for the regulation of matters of international interest hereafter constituted shall be placed under the direction of the league. in all matters of international interest which are regulated by general conventions but which are not placed under the control of international bureaus or commissions, the secretariat of the league shall, subject to the consent of the council and if desired by the parties, collect and distribute all relevant information and shall render any other assistance which may be necessary or desirable. the council may include as part of the expenses of the secretariat the expenses of any bureau or commission which is placed under the direction of the league. =article 25.=--the members of the league agree to encourage and promote the establishment and co-operation of duly authorized voluntary national red cross organizations having as purposes the improvement of health, the prevention of disease, and the mitigation of suffering throughout the world. =article 26.=--amendments to this covenant will take effect when ratified by the members of the league whose representatives compose the council and by a majority of the members of the league whose representatives compose the assembly. no such amendment shall bind any member of the league which signifies its dissent therefrom, but in that case it shall cease to be a member of the league. annex i. original members of the league of nations signatories of the treaty of peace. united states of america. belgium. bolivia. brazil. british empire. canada. australia. south africa. new zealand. india china.[30] cuba. ecuador. france. greece. guatemala. uruguay. haiti. hedjaz. honduras. italy. japan. liberia. nicaragua. panama. peru. poland. portugal. rumania. serb-croat-slovene state. siam. czecho-slovakia. states invited to accede to the covenant. argentine republic chile. colombia. denmark. netherlands. norway. paraguay persia. salvador. spain. sweden. switzerland. venezuela. [30] refused to sign. ii. first secretary general of the league of nations. the honorable sir james eric drummond, k. c. m. g., c. b. part ii. boundaries of germany =article 27.=--the boundaries of germany will be determined as follows: 1. with belgium: from the point common to the three frontiers of belgium, holland, and germany, and in a southerly direction; the northeastern boundary of the former territory of neutral moresnet, then the eastern boundary of the kreis of eupen, then the frontier between belgium and the kreis of montjoie, then the northeastern and eastern boundary of the kreis of malmédy to its junction with the frontier of luxemburg. 2. with luxemburg: the frontier of the 3d august, 1914, to its junction with the frontier of france of the 18th july, 1870. 3. with france: the frontier of the 18th july, 1870, from luxemburg to switzerland, with the reservations made in article 48 of section 4 (sarre basin) of part iii. 4. with switzerland: the present frontier. 5. with austria: the frontier of the 3d august, 1914, from switzerland to czechoslovakia is hereinafter defined. 6. with czechoslovakia: the frontier of the 3d august, 1914, between germany and austria from its junction with the old administrative boundary separating bohemia and the province of upper austria to the point north of the salient of the old province of austrian silesia situated at about eight kilometers east of neustadt. 7. with poland: from the point defined above to a point to be fixed on the ground about 2 kilometers east of lorzendorf: the frontier as it will be fixed in accordance with article 88 of the present treaty; thence in a northerly direction to the point where the administrative boundary of posnania crosses the river bartsch; a line to be fixed on the ground leaving the following places in poland: skorischau, reichthal, trembatschau, kunzendorf, schleise, gross kosel, schreibersdorf, rippin, fürstlich-niefken, pawelau, tscheschen, konradau, johannisdorf, modzenowe, bogdaj, and in germany: lorzendorf, kaulwitz, glausche, dalbersdorf, reesewitz, stradam, gross wartenberg kraschen, neu mittelwalde, domaslawitz, wodelsdorf, tscheschen hammer; thence the boundary of posnania northwestward to the point where it cuts the rawitsch-herrnstadt railway; thence to the point where the administrative boundary of posnania cuts the reisen-tschirnau road: a line to be fixed on the ground passing west of triebusch and gabel and east of saborwitz; thence the administrative boundary of posnania to its junction with the eastern boundary of the kreis of fraustadt; thence in a northwesterly direction to a point to be chosen on the road between the villages of unruhstadt and kophitz: a line to be fixed on the ground passing west of geyersdorf, brenno, fehlen, altkloster, klebel, and east of ulbersdorf, buchwald, ilgen, weine, lupitze, schwenten; thence in a northerly direction to the northernmost point of lake chlop: a line to be fixed on the ground following the median line of the lakes; the town and the station of bentschen, however, (including the junction of the lines schwiebus-bentschen and züllichau-bentschen,) remaining in polish territory; thence in a northeasterly direction to the point of junction of the boundaries of the kreise of schwerin, birnbaum, and meseritz: a line to be fixed on the ground passing east of betsche; thence in a northerly direction the boundary separating the kreise of schwerin and birnbaum, then in an easterly direction the northern boundary of posnania and to the point where it cuts the river netze; thence upstream to its confluence with the küddow: the course of the netze; thence upstream to a point to be chosen about 6 kilometers southeast of schneidemühl; the course of the küddow; thence northeastward to the most southern point of the re-entrant of the northern boundary of posnania about 5 kilometers west of stahren: a line to be fixed on the ground leaving the schneidemühl-konitz railway in this area entirely in german territory; thence the boundary of posnania northeastward to the point of the salient it makes about 15 kilometers east of flatow; thence northeastward to the point where the river kamionka meets the southern boundary of the kreis of konitz about 3 kilometers northeast of grunau: a line to be fixed on the ground leaving the following places to poland: jasdrowo, gr. lutau, kl. lutau and wittkau, and to germany: gr. butzig, cziskowo, battow, böch, and grunau; thence in a northerly direction the boundary between the kreise of konitz and schlochau to the point where this boundary cuts the river brahe; thence to a point on the boundary of pomerania 15 kilometers east of rummelsburg: a line to be fixed on the ground leaving the following localities in poland: konarzin, kelpin, adl. briesen, and in germany: sampohl, neuguth, steinfort, and gr. peterkau; then the boundary of pomerania in an easterly direction to its junction with the boundary between the kreis of konitz and schlochau; [illustration: copyright press illustrating service president and mrs. wilson waving good bye this picture was taken as they were starting out for their first trip to the peace conference.] thence northward the boundary between pomerania and west prussia to the point on the river rheda about 3 kilometers northwest of gohra, where that river is joined by a tributary from the northwest; thence to a point to be selected in the bend of the piasnitz river about 1½ kilometers northwest of warschkau: a line to be fixed on the ground; thence this river downstream, then the median line of lake zarnowitz, then the old boundary of west prussia to the baltic sea. 8. with denmark: the frontier as it will be fixed in accordance with articles 109 and 110 of part iii., section xii., (schleswig.) =article 28.=--the boundaries of east prussia, with the reservations made in section ix. (east prussia) of part iii. will be determined as follows: from a point on the coast of the baltic sea about 1½ kilometers north of pröbbernau church in a direction of about 159 degrees east from true north: a line to be fixed on the ground for about 2 kilometers, thence in a straight line to the light at the bend of the elbinger channel in approximately latitude 54.19½ north, longitude 19.26 east of greenwich; thence to the easternmost mouth of the nogat river at a bearing of approximately 209 degrees east from true north; thence up the course of the nogat river to the point where the latter leaves the vistula, (weichsel;) thence up the principal channel of navigation of the vistula, then the southern boundary of the kreis of marienwerder, then that of the kreis of rosenberg, eastward to the point where it meets the old boundary of east prussia; thence the old boundary between east and west prussia, then the boundary between the kreise of osterode and neidenburg, then the course of the river skoppau down stream, then the course of the neide up stream to a point situated about 5 kilometers west of bialutten, being the nearest point to the old frontier of russia, thence in an easterly direction to a point immediately south of the intersection of the road neidenburg-mlava with the old frontier of russia; a line to be fixed on the ground passing north of bialutten; thence the old frontier of russia to a point east of schmalleningken, then the principal channel of navigation of the niemen (memel) down stream, then the skierwieth arm of the delta to the kurisches haff; thence a straight line to the point where the eastern shore of the kurische nehrung meets the administrative boundary about 4 kilometers southwest of nidden; thence this administrative boundary to the western shore of the kurische nehrung. =article 29.=--the boundaries as described above are drawn in red on a one-in-a-million map which is annexed to the present treaty. (map no. 1.) in the case of any discrepancies between the text of the treaty and this map or any other map which may be annexed, the text will be final. =article 30.=--in the case of boundaries which are defined by a waterway, the terms "course" and "channel" used in the present treaty signify: in the case of non-navigable rivers, the median line of the waterway or of its principal arm, and in the case of navigable rivers the median line of the principal channel of navigation. it will rest with the boundary commissions provided by the present treaty to specify in each case whether the frontier line shall follow any changes of the course or channel which may take place or whether it shall be definitely fixed by the position of the course or channel at the time when the present treaty comes into force. part iii political clauses for europe section i.--_belgium_ =article 31.=--germany, recognizing that the treaties of april 19, 1839, which established the status of belgium before the war, no longer conform to the requirements of the situation, consents to the abrogation of the said treaties and undertakes immediately to recognize and to observe whatever conventions may be entered into by the principal allied and associated powers, or by any of them in concert with the governments of belgium and of the netherlands, to replace the said treaties of 1839. if her formal adhesion should be required to such conventions or to any of their stipulations, germany undertakes immediately to give it. =article 32.=--germany recognizes the full sovereignty of belgium over the whole of the contested territory of moresnet, (called moresnet neutre.) =article 33.=--germany renounces in favor of belgium all rights and title over the territory of prussian moresnet situated on the west of the road from liége to aix-la-chapelle: the road will belong to belgium where it bounds this territory. =article 34.=--germany renounces in favor of belgium all rights and title over the territory comprising the whole of the kreise of eupen and of malmédy. during the six months after the coming into force of this treaty, registers will be opened by the belgian authorities at eupen and malmédy in which the inhabitants of the above territory will be entitled to record in writing a desire to see the whole or part of it remain under german sovereignty. the results of this public expression of opinion will be communicated by the belgian government to the league of nations, and belgium undertakes to accept the decision of the league. =article 35.=--a commission of seven persons, five of whom will be appointed by the principal allied and associated powers, one by germany and one by belgium, will be set up fifteen days after the coming into force of the present treaty to settle on the spot the new frontier line between belgium and germany, taking into account the economic factors and the means of communication. decisions will be taken by a majority and will be binding on the parties concerned. =article 36.=--when the transfer of the sovereignty over the territories referred to above has become definitive, german nationals habitually resident in the territories will definitively acquire belgian nationality ipso facto, and will lose their german nationality. nevertheless german nationals who become resident in the territories after the 1st august, 1914, shall not obtain belgian nationality without a permit from the belgian government. =article 37.=--within the two years following the definitive transfer of the sovereignty over the territories assigned to belgium under the present treaty, german nationals over 18 years of age habitually resident in those territories will be entitled to opt for german nationality. option by a husband will cover his wife, and option by parents will cover their children under 18 years of age. persons who have exercised the above right to opt must within the ensuing twelve months transfer their place of residence to germany. they will be entitled to retain their immovable property in the territories acquired by belgium. they may carry with them their movable property of every description. no export or import duties may be imposed upon them in connection with the removal of such property. =article 38.=--the german government will hand over without delay to the belgian government the archives, registers, plans, title deeds and documents of every kind concerning the civil, military, financial, judicial or other administrations in the territory transferred to belgian sovereignty. the german government will likewise restore to the belgian government the archives and documents of every kind carried off during the war by the german authorities from the belgian public administrations, in particular from the ministry of foreign affairs at brussels. =article 39.=--the proportion and nature of the financial liabilities of germany and of prussia which belgium will have to bear on account of the territories ceded to her shall be fixed in conformity with articles 254 and 256 of part ix. (financial clauses) of the present treaty. section ii.--_luxemburg_ =article 40.=--with regard to the grand duchy of luxemburg, germany renounces the benefit of all the provisions inserted in her favor in the treaties of feb. 8, 1842; april 2, 1847; oct. 20--25, 1865; aug. 18, 1866; feb. 21 and may 11, 1867; may 10, 1871; june 11, 1872, and nov. 11, 1902, and in all conventions consequent upon such treaties. germany recognizes that the grand duchy of luxemburg ceased to form part of the german zollverein as from january 1, 1919; renounces all right to the exploitation of the railways, adheres to the termination of the régime of neutrality of the grand duchy, and accepts in advance all international arrangements which may be concluded by the allied and associated powers relating to the grand duchy. =article 41.=--germany undertakes to grant to the grand duchy of luxemburg, when a demand to that effect is made to her by the principal allied and associated powers, the rights and advantages stipulated in favor of such powers or their nationals in the present treaty, with regard to economic questions, to questions relative to transport and to aerial navigation. section iii.--_left bank of the rhine_ =article 42.=--germany is forbidden to maintain or construct any fortifications either on the left bank of the rhine or on the right bank to the west of a line drawn fifty kilometers to the east of the rhine. =article 43.=--in the area defined above the maintenance and the assembly of armed forces either permanently or temporarily, and military maneuvers of any kind, as well as the upkeep of all permanent works for mobilization, are in the same way forbidden. =article 44.=--in case germany violates in any manner the provisions of article 42 and 43 she shall be regarded as committing a hostile act against the powers signatory of the present treaty and as calculated to disturb the peace of the world. section iv.--_sarre basin_ =article 45.=--as compensation for the destruction of the coal mines in the north of france and as part payment toward the total reparation due from germany for the damage resulting from the war, germany cedes to france in full and absolute possession, with exclusive rights of exploitation, unincumbered and free from all debts and charges of any kind, the coal mines situated in the sarre basin as defined in article 48. =article 46.=--in order to assure the rights and welfare of the population and to guarantee to france complete freedom in working the mines, germany agrees to the provisions of chapters 1 and 2 of the annex hereto. =article 47.=--in order to make in due time permanent provision for the government of the sarre basin in accordance with the wishes of the population, france and germany agree to the provisions of chapter 3 of the annex hereto. =article 48.=--the boundaries of the territory of the sarre basin, as dealt with in the present stipulations, will be fixed as follows: on the south and southwest: by the frontier of france as fixed by the present treaty. on the northwest and north: by a line following the northern administrative boundary of the kreise of merzig from the point where it leaves the french frontier to the point where it meets the administrative boundary, separating the commune of saarhölzbach from the commune of britten; following this communal boundary southward and reaching the administrative boundary of the canton of merzig so as to include in the territory of the sarre basin the canton of mettlach, with the exception of the commune of britten: following successively the northern administrative limits of the cantons of merzig and haustadt, which are incorporated in the aforesaid sarre basin, then successively the administrative boundaries separating the kreise of saare louis, ottweiler, and saint-wendel from the kreise of merzig, treves, (trier.) and the principality of birkenfeld as far as a point situated about 500 meters north of the village of furschweiler, (viz.: the highest point of the metzelberg.) on the northeast and east: from the last point defined above to a point about 3½ kilometers east-northeast of saint wendel: a line to be fixed on the ground passing east of furschweiler, west of roschberg, east of points 418, 329, (south of roschberg,) west of leitersweiler, northeast of point 46'4, and following the line of the crest southward to its junction with the administrative boundary of the kreis of kusel; thence in a southerly direction the boundary of the kreis of kusel, then the boundary of the kreis of homburg toward the south-southeast to a point situated about 1,000 meters west of dunzweiler; thence to a point about one kilometer south of hornbach: a line to be fixed on the ground passing through point 424, (about 1,000 meters southeast of dunzweiler,) point 363, (fuchsberg,) point 322, (southwest of waldmohr,) then east of jagersburg and erbach, then encircling homburg, passing through the points 361, (about 2½ kilometers northeast by east of that town,) 342, (about 2 kilometers southeast of that town,) 347, (schreinersberg,) 356, 350, (about 1½ kilometers southeast of schwarzenbach,) then passing east of einöd, southeast of points 322 and 333, about 2 kilometers east of webenheim, about 2 kilometers east of mimbach, passing east of the plateau which is traversed by the road from mimbach to böckweiler, (so as to include this road in the territory of the sarre basin,) passing immediately north of the junction of the roads from böckweiler and altheim, situated about 2 kilometers north of altheim, then passing south of ringweilderhof and north of point 322, rejoining the frontier of france at the angle which it makes about 1 kilometer south of hornbach, (see map no. 2, scale 1-100,000, annexed to the present treaty.) a commission composed of five members, one appointed by france, one by germany, and three by the council of the league of nations, which will select nationals of other powers, will be constituted within fifteen days from the coming into force of the present treaty, to trace on the spot the frontier line described above. in those parts of the preceding line which do not coincide with administration boundaries, the commission will endeavor to keep to the line indicated, while taking into consideration, so far as is possible local economic interests and existing communal boundaries. the decisions of this commission will be taken by a majority and will be binding on the parties concerned. =article 49.=--germany renounces in favor of the league of nations, in the capacity of trustee, the government of the territory defined above. at the end of fifteen years from the coming into force of the present treaty the inhabitants of the said territory shall be called upon to indicate the sovereignty under which they desire to be placed. =article 50.=--the stipulations under which the cession of the mines in the sarre basin shall be carried out, together with the measures intended to guarantee the rights and the well-being of the inhabitants and the government of the territory, as well as the conditions in accordance with which the plebiscite hereinbefore provided for is to be made, are laid down in the annex hereto. this annex shall be considered as an integral part of the present treaty, and germany declares her adherence to it. annex in accordance with the provisions of articles 45 to 50 of the present treaty, the stipulations under which the cession by germany to france of the mines of the sarre basin will be effected, as well as the measures intended to insure respect for the rights and well-being of the population and the government of the territory, and the conditions in which the inhabitants will be called upon to indicate the sovereignty under which they may wish to be placed, have been laid down as follows: chapter 1.--cession and exploitation of mining property 1. from the date of the coming into force of the present treaty, all the deposits of coal situated within the sarre basin, as defined in article 48 of the said treaty, become the complete and absolute property of the french state. the french state will have the right of working or not working the said mines or of transferring to a third party the right of working them, without having to obtain any previous authorization or to fulfill any formalities. the french state may always require that the german mining laws and regulations referred to below shall be applied in order to insure the determination of its rights. 2. the right of ownership of the french state will apply not only to the deposits which are free, and for which concessions have not yet been granted, but also to the deposits for which concessions have already been granted, whoever may be the present proprietors, irrespective of whether they belong to the prussian state, to the bavarian state, to other states or bodies, to companies or to individuals, whether they have been worked or not, or whether a right of exploitation distinct from the right of the owners of the surface of the soil has or has not been recognized. 3. as far as concerns the mines which are being worked, the transfer of the ownership to the french state will apply to all the accessories and subsidiaries of the said mines, in particular to their plant and equipment both on and below the surface, to their extracting machinery, their plants for transforming coal into electric power, coke and by-products, their workshops, means of communication, electric lines, plant for catching and distributing water, land, buildings, such as offices, managers', employes', and workmen's dwellings, schools, hospitals, and dispensaries, their stocks and supplies of every description, their archives and plans, and in general everything which those who own or exploit the mines possess or enjoy for the purpose of exploiting the mines and their accessories and subsidiaries. the transfer will apply also to the debts owing for products delivered before the entry into possession by the french state, and after the signature of the present treaty, and to deposits of money made by customers, whose rights will be guaranteed by the french state. 4. the french state will acquire the property free and clear of all debts and charges. nevertheless the rights acquired, or in course of being acquired, by the employes of the mines and their accessories and subsidiaries at the date of the coming into force of the present treaty, in connection with pensions for old age or disability, will not be affected. in return, germany must pay over to the french state a sum representing the actuarial amounts to which the said employes are entitled. 5. the value of the property thus ceded to the french state will be determined by the reparation commission referred to in article 233 of part viii. (reparations) of the present treaty. this value shall be credited to germany in part payment of the amount due for reparation. it will be for germany to indemnify the proprietors or parties concerned, whoever they may be. 6. no tariff shall be established on the german railways and canals which may directly or indirectly discriminate to the prejudice of the transport of the personnel or products of the mines and their accessories or subsidiaries, or of the material necessary to their exploitation. such transport shall enjoy all the rights and privileges which any international railway conventions may guarantee to similar products of french origin. 7. the equipment and personnel necessary to insure the dispatch and transport of the products of the mines and their accessories and subsidiaries, as well as the carriage of workmen and employes, will be provided by the local railway administration of the basin. 8. no obstacle shall be placed in the way of such improvements of railways or waterways as the french state may judge necessary to assure the dispatch and transport of the products of the mines and their accessories and subsidiaries, such as double trackage, enlargement of stations, and construction of yards and appurtenances. the distribution of expenses will, in the event of disagreement, be submitted to arbitration. the french state may also establish any new means of communication, such as roads, electric lines, and telephone connections, which it may consider necessary for the exploitation of the mines. it may exploit freely and without any restrictions the means of communication of which it may become the owner, particularly those connecting the mines and their accessories and subsidiaries with the means of communication situated in french territory. 9. the french state shall always be entitled to demand the application of the german mining laws and regulations in force on the 11th of november, 1918, excepting provisions adopted exclusively in view of the state of war, with a view to the acquisition of such land as it may judge necessary for the exploitation of the mines and their accessories and subsidiaries. the payment for damage caused to immovable property by the working of the said mines and their accessories and subsidiaries shall be made in accordance with the german mining laws and regulations above referred to. 10. every person whom the french state may substitute for itself as regards the whole or part of its rights to the exploitation of the mines and their accessories and subsidiaries shall enjoy the benefit of the privileges provided in this annex. 11. the mines and other immovable property which become the property of the french state may never be made the subject of measures of forfeiture, forced sale, expropriation or requisition, nor of any other measure affecting the right of property. the personnel and the plant connected with the exploitation of these mines or their accessories and subsidiaries, as well as the product extracted from the mines or manufactured in their accessories and subsidiaries, may not at any time be made the subject of any measures of requisition. 12. the exploitation of the mines and their accessories and subsidiaries, which become the property of the french state, will continue, subject to the provisions of paragraph 23 below, to be subject to the régime established by the german laws and regulations in force on the 11th november, 1918, excepting provisions adopted exclusively in view of the state of war. the rights of the workmen shall be similarly maintained, subject to the provisions of the said paragraph 23, as established on the 11th november, 1918, by the german laws and regulations above referred to. no impediment shall be placed in the way of the introduction or employment in the mines and their accessories and subsidiaries of workmen from without the basin. the employes and workmen of french nationality shall have the right to belong to french labor unions. 13. the amount contributed by the mines and their accessories and subsidiaries, either to the local budget of the territory of the sarre basin or to the communal funds, shall be fixed with due regard to the ratio of the value of the mines to the total taxable wealth of the basin. 14. the french state shall always have the right of establishing and maintaining, as incidental to the mines, primary or technical schools for its employes and their children, and of causing instruction therein to be given in the french language, in accordance with such curriculum and by such teachers as it may select. it shall also have the right to establish and maintain hospitals, dispensaries, workmen's houses and gardens, and other charitable and social institutions. 15. the french state shall enjoy complete liberty with respect to the distribution, dispatch and sale prices of the products of the mines and their accessories and subsidiaries. nevertheless, whatever may be the total product of the mines, the french government undertakes that the requirements of local consumption for industrial and domestic purposes shall always be satisfied in the proportion existing in 1913 between the amount consumed locally and the total output of the sarre basin. chapter ii.--government of the territory of the sarre basin 16. the government of the territory of the sarre basin shall be intrusted to a commission representing the league of nations. this commission shall sit in the territory of the sarre basin. 17. the governing commission provided for by paragraph 16 shall consist of five members chosen by the council of the league of nations, and will include one citizen of france, one native inhabitant of the sarre basin not a citizen of france, and three members belonging to three countries other than france or germany. the members of the governing commission shall be appointed for one year and may be reappointed. they can be removed by the council of the league of nations, which will provide for their replacement. the members of the governing commission will be entitled to a salary which will be fixed by the council of the league of nations, and charged on the local revenues. 18. the chairman of the governing commission shall be appointed for one year from among the members of the commission by the council of the league of nations and may be reappointed. the chairman will act as the executive of the commission. 19. within the territory of the sarre basin the governing commission shall have all the powers of government hitherto belonging to the german empire, prussia or bavaria, including the appointment and dismissal of officials, and the creation of such administrative and representative bodies as it may deem necessary. it shall have full powers to administer and operate the railways, canals, and the different public services. its decisions shall be taken by a majority. 20. germany will place at the disposal of the governing commission all official documents and archives under the control of germany, of any german state, or of any local authority, which relate to the territory of the sarre basin or to the rights of the inhabitants thereof. 21. it will be the duty of the governing commission to insure, by such means and under such conditions as it may deem suitable, the protection abroad of the interests of the inhabitants of the territory of the sarre basin. 22. the governing commission shall have the full right of user of all property, other than mines belonging, both in public and in private domain, to the imperial german government, or the government of any german state, in the territory of the sarre basin. as regards the railways, an equitable apportionment of rolling stock shall be made by a mixed commission on which the government of the territory of the sarre basin and the german railways will be represented. persons, goods, vessels, carriages, wagons, and mails, coming from or going to the sarre basin, shall enjoy all the rights and privileges relating to transit and transport which are specified in the provisions of part xii. (ports, waterways, railways) of the present treaty. 23. the laws and regulations in force n nov. 11, 1918, in the territory of the sarre basin, (except those enacted in consequence of the state of war,) shall continue to apply. if, for general reasons or to bring these laws and regulations into accord with the provisions of the present treaty, it is necessary to introduce modifications, these shall be decided on, and put into effect by the governing commission, after consultation with the elected representatives of the inhabitants in such a manner as the commission may determine. no modification may be made in the legal régime for the exploitation of the mines, provided for in paragraph 12, without the french state being previously consulted, unless such modification results from a general regulation respecting labor adopted by the league of nations. in fixing the conditions and hours of labor for men, women, and children, the governing commission is to take into consideration the wishes expressed by the local labor organizations, as well as the principles adopted by the league of nations. 24. subject to the provisions of paragraph 4, no rights of the inhabitants of the sarre basin acquired or in process of acquisition at the date of the coming into force of this treaty, in respect of any insurance system of germany, or in respect of any pension of any kind, are affected by any of the provisions of the present treaty. germany and the government of the territory of the saare basin will preserve and continue all the aforesaid rights. 25. the civil and criminal courts existing in the territory of the sarre basin shall continue. a civil and criminal court will be established by the governing commission to hear appeals from the decisions of the said courts, and to decide matters for which these courts are not competent. the governing commission will be responsible for settling the organization and jurisdiction of the said court. justice will be rendered in the name of the governing commission. 26. the governing commission will alone have the power of levying taxes and dues in the territory of the sarre basin. these taxes and dues will be exclusively applied to the needs of the territory. the fiscal system existing on nov. 11, 1918, will be maintained as far as possible, and no new tax except customs duties may be imposed without previously consulting the elected representatives of the inhabitants. 27. the present stipulations will not affect the existing nationality of the inhabitants of the territory of the sarre basin. no hindrance shall be placed in the way of those who wish to acquire a different nationality, but in such case the acquisition of the new nationality will involve the loss of any other. 28. under the control of the governing commission the inhabitants will retain their local assemblies, their religious liberties, their schools, and their language. the right of voting will not be exercised for any assemblies other than the local assemblies, and will belong to every inhabitant over the age of 20 years without distinction of sex. 29. any of the inhabitants of the sarre basin who may desire to leave the territory will have full liberty to retain in it their immovable property or to sell it at fair prices and to remove their movable property free of any charge. 30. there will be no military service, whether compulsory or voluntary, in the territory of the sarre basin, and the construction of fortifications therein is forbidden. only a local gendarmerie for the maintenance of order may be established. it will be the duty of the governing commission to provide in all cases for the protection of persons and property in the sarre basin. 31. the territory of the sarre basin as defined by article 48 of the present treaty shall be subjected to the french customs régime. the receipts from the customs duties on goods intended for local consumption shall be included in the budget of the said territory after deduction of all costs of collection. no export tax shall be imposed upon metallurgical products or coal exported from the said territory to germany, nor upon german exports for the use of the industries of the territory of the sarre basin. natural or manufactured products originating in the basin in transit over german territory and similarly german products in transit over the territory of the basin shall be free of all customs duties. products which both originate in and pass from the basin into germany shall be free of import duties for a period of five years from the date of the coming into force of the present treaty, and during the same period articles imported from germany into the territory of the basin for local consumption shall likewise be free of import duties. during these five years the french government reserves to itself the right of limiting to the annual average of the quantities imported into alsace-lorraine and france in the years 1911 to 1913 the quantities which may be sent into france of all articles coming from the basin, which include raw materials and semi-manufactured goods imported duty free from germany. such average shall be determined after reference to all available official information and statistics. 32. no prohibition or restriction shall be imposed upon the circulation of french money in the territory of the sarre basin. the french state shall have the right to use french money in all purchases, payments, and contracts connected with the exploitation of the mines or their accessories and subsidiaries. 33. the governing commission shall have power to decide all questions arising from the interpretation of the preceding provisions. france and germany agree that any dispute involving a difference of opinion as to the interpretation of the said provisions shall in the same way be submitted to the governing commission, and the decision of a majority of the commission shall be binding on both countries. chapter iii.--plebiscite 34. at the termination of a period of fifteen years from the coming into force of the present treaty, the population of the territory of the sarre basin will be called upon to indicate their desires in the following manner: a vote will take place, by communes or districts, on the three following alternatives: (a) maintenance of the régime established by the present treaty and by this annex; (b) union with france; (c) union with germany. all persons without distinction of sex, more than 20 years old at the date of the voting, resident in the territory at the date of the signature of the present treaty, will have the right to vote. the other conditions, methods, and the date of the voting shall be fixed by the council of the league of nations in such a way as to secure the liberty, secrecy, and trustworthiness of the voting. 35. the league of nations shall decide on the sovereignty under which the territory is to be placed, taking into account the wishes of the inhabitants as expressed by the voting. (a) if, for the whole or part of the territory, the league of nations decides in favor of the maintenance of the régime established by the present treaty and this annex, germany hereby agrees to make such renunciation of her sovereignty in favor of the league of nations as the latter shall deem necessary. it will be the duty of the league of nations to take appropriate steps to adapt the régime definitely adopted to the permanent welfare of the territory and the general interests. (b) if for the whole or part of the territory the league of nations decides in favor of union with france, germany hereby agrees to cede to france in accordance with the decision of the league of nations all rights and title over the territory specified by the league. (c) if for the whole or part of the territory the league of nations decides in favor of union with germany, it will be the duty of the league of nations to cause the german government to be re-established in the government of the territory specified by the league. [illustration: copyright underwood & underwood =president wilson's welcome in paris= a general view of the place de l'etoile, showing the president's carriage, passing the triumphant arch on its way to the murat castle, where president wilson established his home during his stay in the french capitol.] 36. if the league of nations decides in favor of the union of the whole or part of the territory of the sarre basin with germany, france's rights of ownership in the mines situated in such part of the territory will be repurchased by germany in their entirety at a price payable in gold. the price to be paid will be fixed by three experts, one nominated by germany, one by france, and one, who shall be neither a frenchman nor a german, by the council of the league of nations. the decision of the experts will be given by a majority. the obligation of germany to make such payment shall be taken into account by the reparation commission, and for the purpose of this payment germany may create a prior charge upon her assets or revenues upon such detailed terms as shall be agreed to by the reparation commission. if, nevertheless, germany after a period of one year from the date on which the payment becomes due shall not have effected the said payment, the reparation commission shall do so in accordance with such instructions as may be given by the league of nations, and, if necessary, by liquidating that part of the mines which is in question. 37. if, in consequence of the repurchase provided for in paragraph 36, the ownership of the mines or any part of them is transferred to germany, the french state and french nationals shall have the right to purchase such amount of coal of the sarre basin as their industrial and domestic needs are found at that time to require. an equitable arrangement regarding amounts of coal, duration of contract, and prices will be fixed in due time by the council of the league of nations. 38. it is understood that france and germany may, by special agreements concluded before the time fixed for the payment of the price for the repurchase of the mines, modify the provisions of paragraphs 36 and 37. 39. the council of the league of nations shall make such provisions as may be necessary for the establishment of the régime which is to take effect after the decisions of the league of nations mentioned in paragraph 35 have become operative, including an equitable apportionment of any obligations of the government of the territory of the sarre basin arising from loans raised by the commission or from other causes. from the coming into force of the new régime, the powers of the governing commission will terminate, except in the case provided for in paragraph 35. (a) 40. in all matters dealt with in the present annex, the decisions of the council of the league of nations will be taken by a majority. section v.--_alsace-lorraine_ the high contracting powers, recognizing the moral obligation to redress the wrong done by germany in 1871, both to the rights of france and to the wishes of the population of alsace and lorraine, which were separated from their country in spite of solemn protests of their representatives of the assembly of bordeaux, agree upon the following articles: =article 51.=--the territories which were ceded to germany in accordance with the preliminaries of peace signed at versailles on the 26th february, 1871, and the treaty of frankfort on the 10th may, 1871, are restored to french sovereignty as from the date of the armistice of the 11th november, 1918. the provisions of the treaties establishing the delimination of the frontiers before 1871 shall be restored. =article 52.=--the german government shall hand over without delay to the french government all archives, registers, plans, titles, and documents of every kind concerning the civil, military, financial, judicial, or other administrations of the territories restored to french sovereignty. if any of these documents, archives, registers, titles, or plans have been misplaced, they will be restored by the german government on the demand of the french government. =article 53.=--separate agreements shall be made between france and germany dealing with the interests of the inhabitants of the territories referred to in article 51, particularly as regards their civil rights, their business and the exercise of their professions, it being understood that germany undertakes as from the present date to recognize and accept the regulations laid down in the annex hereto regarding the nationality of the inhabitants or natives of the said territories, not to claim at any time or in any place whatsoever as german nationals those who shall have been declared on any ground to be french, to receive all others in her territory, and to conform, as regards the property of german nationals in the territories indicated in article 51, with the provisions of article 297, and the annex to section 4 of part x. (economic clauses) of the present treaty. those german nationals who without acquiring french nationality shall receive permission from the french government to reside in the said territories shall not be subjected to the provisions of the said article. =article 54=.--those persons who have regained french nationality in virtue of paragraph 1 of the annex hereto, will be held to be alsace-lorrainers for the purposes of the present section. the persons referred to in paragraph 2 of the said annex will, from the day on which they have claimed french nationality, be held to be alsace-lorrainers with retroactive effect as from the 11th november, 1918. from those whose application is rejected, the privilege will terminate at the date of the refusal. such juridical persons will also have the status of alsace-lorrainers as have been recognized as possessing this quality, whether by the french administrative authorities or by a judicial decision. =article 55.=--the territories referred to in article 51 shall return to france, free and quit of all public debts under the conditions laid down in article 255 of part ix. (financial clauses) of the present treaty. =article 56.=--in conformity with the provisions of article 256 of part ix. (financial clauses) of the present treaty, france shall enter into possession of all property and estate within the territories referred to in article 51, which belong to the german empire or german states, without any payment or credit on this account to any of the states ceding the territories. this provision applies to all movable or immovable property of public or private domain, together with all rights whatsoever belonging to the german empire or the german states or to their administrative areas. crown property and the property of the former emperor or other german sovereigns shall be assimilated to property of the public domain. =article 57.=--germany shall not take any action, either by means of stamping or by any other legal or administrative measures not applying equally to the rest of her territory, which may be to the detriment of the legal value or redeemability of german monetary instruments or moneys which at the date of the signature of the present treaty are legally current, and at that date are in the possession of the french government. =article 58.=--a special convention will determine the conditions for repayment in marks of the exceptional war expenditure advanced during the course of the war by alsace-lorraine or by public bodies in alsace-lorraine on account of the empire in accordance with german law, such as payment to the families of persons mobilized, requisitions, billeting of troops, and assistance to persons who have been expelled. in fixing the amount of these sums germany shall be credited with that portion which alsace-lorraine would have contributed to the empire to meet the expenses resulting from these payments, this contribution being calculated according to the proportion of the imperial revenue derived from alsace-lorraine in 1913. =article 59.=--the french government will collect for its own account the imperial taxes, duties, and dues of every kind leviable in the territories referred to in article 51 and not collected at the time of the armistice of the 11th november, 1918. =article 60.=--the german government shall without delay restore to alsace-lorrainers, (individuals, juridical persons, and public institutions,) all property, rights, and interests belonging to them on the 11th november, 1918, in so far as these are situated in german territory. =article 61.=--the german government undertakes to continue and complete without delay the execution of the financial clauses regarding alsace-lorraine contained in the armistice conventions. =article 62.=--the german government undertakes to bear the expense of all civil and military pensions which had been earned in alsace-lorraine on the date of the 11th november, 1918, and the maintenance of which was a charge on the budget of the german empire. the german government shall furnish each year the funds necessary for the payment in francs, at the average rate of exchange for that year, of the sums in marks to which persons resident in alsace-lorraine would have been entitled if alsace-lorraine had remained under german jurisdiction. =article 63.=--for the purposes of the obligation assumed by germany in part viii. (reparations) of the present treaty to give compensation for damages caused to the civil populations of the allied and associated countries in the form of lines, the inhabitants of the territories referred to in article 51 shall be assimilated to the above mentioned populations. =article 64.=--the regulations concerning the control of the rhine and of the moselle are laid down in part xii. (ports, waterways, and railways) of the present treaty. =article 65.=--within a period of three weeks after the coming into force of the present treaty the port of strasbourg and the port of kehl shall be constituted, for a period of seven years, a single unit from the point of view of exploitation. the administration of this single unit will be carried on by a manager named by the central rhine commission, which shall also have power to remove him. he shall be of french nationality. he will reside in strasbourg and will be subject to the supervision of the central rhine commission. there will be established in the two ports free zones in conformity with part xii. (ports, waterways, and railways) of the present treaty. a special convention between france and germany, which shall be submitted to the approval of the central rhine commission, will fix the details of this organization, particularly as regards finance. it is understood that for the purpose of the present article the port of kehl includes the whole of the area necessary for the movements of the port and the trains which serve it, including the harbor, quays and railroads, platforms, cranes, sheds and warehouses, silos, elevators and hydro-electric plants, which make up the equipment of the port. the german government undertakes to carry out all measures which shall be required of it in order to assure that all the making up and switching of trains arriving at or departing from kehl, whether for the right bank or the left bank of the rhine, shall be carried on in the best conditions possible. all property rights shall be safeguarded. in particular, the administration of the ports shall not prejudice any property rights of the french or baden railroads. equality of treatment as respects traffic shall be assured in both ports to the nationals, vessels, and goods of every country. in case at the end of the sixth year france shall consider that the progress made in the improvement of the port of strasbourg still requires a prolongation of this temporary régime, she may ask for such prolongation from the central rhine commission, which may grant an extension for a period not exceeding three years. throughout the whole period of any such extension the free zones above provided for shall be maintained. pending appointment of the first manager by the central rhine commission, a provisional manager, who shall be of french nationality, may be appointed by the principal allied and associated powers, subject to the foregoing provisions. for all purposes of the present article the central rhine commission will decide by a majority of votes. =article 66.=--the railway and other bridges across the rhine now existing within the limits of alsace-lorraine shall, as to all their parts and their whole length, be the property of the french state, which shall insure their upkeep. =article 67.=--the french government is substituted in all the rights of the german empire over all the railways which were administered by the imperial railway administration, and which are actually working or under construction. the same shall apply to the rights of the empire with regard to railway and tramway concessions within the territories referred to in article 51. this substitution shall not entail any payment on the part of the french state. the frontier railway stations shall be established by a subsequent agreement, it being stipulated in advance that on the rhine frontier they shall be situated on the right bank. =article 68.=--in accordance with the provisions of article 268 of chapter 1. of section i. of part x. (economic clause) of the present treaty, for a period of five years from the coming into force of the present treaty, natural or manufactured products originating in and coming from the territories referred to in article 51 shall, on importation into german customs territory, be exempt from all customs duty. the french government shall fix each year, by decree communicated to the german government, the nature and amount of the products which shall enjoy this exemption. the amount of each product which may be thus sent annually into germany shall not exceed the average of the amounts sent annually in the years 1911--1913. further, during the period of five years above mentioned, the german government shall allow the free export from germany and the free reimportation into germany, exempt from all customs duties and other charges (including internal charges), of yarns, tissues, and other textile materials or textile products of any kind, and in any condition, sent from germany into the territories referred to in article 51, to be subjected there to any finishing process, such as bleaching, dyeing, printing, mercerization, gassing, twisting, or dressing. =article 69.=--during a period of ten years from the coming into force of the present treaty, central electric supply works situated in german territory, and formerly furnishing electric power to the territories referred to in article 51, or to any establishment the working of which passes permanently or temporarily from germany to france, shall be required to continue such supply up to the amount of consumption corresponding to the undertakings and contracts current on the 11th november, 1918. such supply shall be furnished according to the contracts in force and at a rate which shall not be higher than that paid to the said works by german nationals. =article 70.=--it is understood that the french government preserves its right to prohibit in the future in the territories referred to in article 51 all new german participation: 1. in the management or exploitation of the public domain and of public services, such as railways, navigable waterways, water works, gas works, electric power, &c. 2. in the ownership of mines and quarries of every kind and in enterprises connected therewith; 3. in metallurgical establishments, even though their working may not be connected with that of any mine. =article 71.=--as regards the territories referred to in article 51, germany renounces on behalf of herself and her nationals as from the 11th november, 1918, all rights under the law of the 25th may, 1910, regarding the trade in potash salts and generally under any stipulations for the intervention of german organizations in the working of the potash mines. similarly she renounces on behalf of herself and her nationals all rights under any agreements, stipulations or laws, which may exist to her benefit with regard to other products of the aforesaid territories. =article 72.=--the settlement of the questions relating to debts contracted before the 11th november, 1918, between the german empire and the german states or their nationals residing in germany on the one part, and alsace-lorrainers residing in alsace-lorraine on the other part, shall be effected in accordance with the provisions of section iii. of part x. (economic clauses) of the present treaty, the expression "before the war" therein being replaced by the expression "before the 11th november, 1918." the rate of exchange applicable in the case of such settlement shall be the average rate quoted on the geneva exchange during the month preceding the 11th november, 1918. there may be established in the territories referred to in article 51, for the settlement of the aforesaid debts under the conditions laid down in section iii. of part x (economic clauses) of the present treaty, a special clearing office, it being understood that this office shall be regarded as a "central office" under the provisions of paragraph 1 of the annex to the said section. =article 73.=--the private property rights and interests of alsace-lorrainers in germany will be regulated by the stipulations of section iv. of part x. (economic clauses) of the present treaty. =article 74.=--the french government reserves the right to retain and liquidate all the property, rights and interests which german nationals or societies controlled by germany possessed in the territories referred to in article 51 on nov. 11, 1918, subject to the conditions laid down in the last paragraph of article 53 above. germany will directly compensate its nationals who may have been dispossessed by the aforesaid liquidations. the product of these liquidations shall be applied in accordance with the stipulations of sections iii. and iv. of part x. (economic clauses) of the present treaty. =article 75.=--notwithstanding the stipulations of section v. of part x. (economic clauses) of the present treaty, all contracts made before the date of the promulgation in alsace-lorraine of the french decree of 30th november, 1918, between alsace-lorrainers (whether individuals or juridical persons) or others resident in alsace-lorraine on the one part, and the german empire or german states and their nationals resident in germany on the other part, the execution of which has been suspended by the armistice or by subsequent french legislation, shall be maintained. nevertheless, any contract of which the french government shall notify the cancellation to germany in the general interest within a period of six months from the date of the coming into force of the present treaty shall be annulled except in respect of any debt or other pecuniary obligation arising out of any act done or money paid thereunder before the 11th november, 1918. if this dissolution would cause one of the parties substantial prejudice, equitable compensation, calculated solely on the capital employed without taking account of loss of profits, shall be accorded to the prejudiced party. with regard to prescriptions, limitations, and forfeitures in alsace-lorraine, the provisions of articles 300 and 301 of section v., part x. (economic clauses) shall be applied, with the substitution for the expression "outbreak of war" of the expression "11th november, 1918," and for the expression "duration of the war" of the expression "period from the 11th november, 1918, to date of the coming into force of the present treaty." =article 76.=--questions concerning rights in industrial, literary, or artistic property of alsace-lorrainers shall be regulated in accordance with the general stipulations of section vii. of part x. (economic clauses) of the present treaty, it being understood that alsace-lorrainers holding rights of this nature under german legislation will preserve full and entire enjoyment of those rights on german territory. =article 77.=--the german government undertakes to pay over to the french government such proportion of all reserves accumulated by the empire or by public or private bodies dependent upon it, for the purposes of disability and old age insurance, as would fall to the disability and old age insurance fund at strasbourg. the same shall apply in respect of the capital and reserves accumulated in germany falling legitimately to other serial insurance funds, to miners' superannuation funds, to the fund of the railways of alsace-lorraine, to other superannuation organizations established for the benefit of the personnel of public administrations and institutions operating in alsace-lorraine, and also in respect of the capital and reserves due by the insurance fund of private employes at berlin by reason of engagements entered into for the benefit of insured persons of that category resident in alsace-lorraine. a special convention shall determine the conditions and procedure of these transfers. =article 78.=--with regard to the execution of judgments, orders and prosecutions, the following rules shall be applied: 1. all civil and commercial judgments which shall have been given since aug. 3, 1914, by the courts of alsace-lorraine between alsace-lorrainers, or between alsace-lorrainers and foreigners, or between foreigners, and which shall not have been appealed from before the 11th november, 1918, shall be regarded as final and capable of being fully executed. when the judgment has been given between alsace-lorrainers and germans, or between alsace-lorrainers and subjects of the allies of germany, it shall only be capable of execution after the issue of an exequatur by the corresponding new tribunal in the restored territory referred to in article 51. 2. all judgments given by german courts since the 3d august, 1914, against alsace-lorrainers for political crimes or misdemeanors shall be regarded as null and void. 3. all sentences passed since the 11th november, 1918, by the imperial court of leipzig on appeals against the decisions of the courts of alsace-lorraine shall be regarded as null and void and shall be so pronounced. the papers in regard to the cases in which such sentences have been given shall be returned to the courts of alsace-lorraine concerned. all appeals to the imperial court against decisions of the courts of alsace-lorraine shall be suspended. in the cases referred to above, the papers shall be returned under the aforesaid conditions for transfer without delay to the french cour de cassation which shall be competent to decide them. 4. all prosecutions of alsace-lorraine for offenses committed during the period between the 11th november, 1918, and the coming into force of the present treaty will be conducted under german law except in so far as this has been modified by decrees duly published on the spot by the french authorities. all other questions as to competence, procedure or administration of justice, shall be determined by a special convention between france and germany. =article 79.=--the stipulations as to nationality contained in the annex hereto shall be considered as of equal force with the provisions of the present section. all other questions concerning alsace-lorraine which are not regulated by the present section and the annex thereto, or by the general provisions of the present treaty, will form the subject of further conventions between france and germany. annex 1. as from the 11th november, 1918, the following persons are ipso facto reinstated in french nationality: first--persons who lost french nationality by the application of the franco-german treaty of the 10th may, 1871, and who have not since that date acquired any nationality other than german; second--the legitimate or natural descendants of the persons referred to the immediately preceding paragraph, with the exception of those whose ascendants in the paternal line include a german who migrated into alsace-lorraine after the 15th july, 1870; third--all persons born in alsace-lorraine of unknown parents or whose nationality is unknown. 2. within the period of one year from the coming into force of the present treaty, persons included in any of the following categories may claim french nationality: first--all persons not restored to french nationality under paragraph 1, above, whose ascendants include a frenchman or french woman who lost french nationality under the conditions referred to in the said paragraph; second--all foreigners not nationals of a german state who acquired the status of a citizen of alsace-lorraine before the 3d august, 1914; third--all germans domiciled in alsace-lorraine, if they have been so domiciled since a date previous to 15th july, 1870, or if one of their ascendants was at that date domiciled in alsace-lorraine; fourth--all germans born or domiciled in alsace-lorraine who have served in the allied or associated armies during the present war and their descendants; fifth--all persons born in alsace-lorraine before 10th may, 1871, of foreign parents, and the descendants of such persons; sixth--the husband or wife of any person whose french nationality may have been restored under paragraph 1 or who may have claimed and obtained french nationality in accordance with the preceding previsions. the legal representatives of a minor may exercise on behalf of that minor the right to claim french nationality; and if that right has not been exercised, the minor may claim french nationality within the year following his majority. except in the case provided in no. 6 of the present paragraph, the french authorities reserve to themselves the right in individual cases to reject the claim to french nationality. 3. subject to the provisions of paragraph 2, germans born or domiciled in alsace-lorraine shall not acquire french nationality by reason of the restoration of alsace-lorraine to france, even though they may have the status of citizens of alsace-lorraine. they may acquire french nationality only by naturalization, on condition of having been domiciled in alsace-lorraine from a date previous to the 3d august, 1914, and of submitting proof of unbroken residence within the restored territory for a period of three years from the 11th november, 1918. france will be solely responsible for their diplomatic and consular protection from the date of their application for french naturalization. 4. the french government shall determine the procedure by which reinstatement in french nationality as of right shall be effected, and the conditions under which decisions shall be given upon claims to such nationality and applications for naturalization, as provided by the present annex. section vi.--_austria_ =article 80.=--germany acknowledges and will respect strictly the independence of austria. within the frontiers which may be fixed by a treaty between that state and the principal allied and associated powers she agrees that this independence shall be inalienable, except with the consent of the council of the league of nations. section vii.--_czechoslovak state_ =article 81.=--germany, in conformity with the action already taken by the allied and associated powers, recognizes the complete independence of the czechoslovak state, which will include the autonomous territory of the ruthenians to the south of the carpathians. germany hereby recognizes the frontier of this state as determined by the principal allied and associated powers and the other interested states. =article 82.=--the old frontier as it existed on aug. 3, 1914, between austria-hungary and the german empire will constitute the frontier between germany and the czechoslovak state. =article 83.=--germany renounces in favor of the czechoslovak state all rights and title over the portion of silesian territory defined as follows: starting from a point about 2 kilometers southeast of katscher, on the boundary between the circles (kreise) of loebschütz and ratibor: the boundary between the two kreise; then, the former boundary between germany and austria-hungary up to a point on the oder immediately to the south of the ratibor-oderberg railway; thence, toward the northwest and up to a point about 2 kilometers to the southeast of katscher: a line to be fixed on the spot passing to the west of kranowitz. a commission composed of seven members, five nominated by the principal allied and associated powers, one by poland, and one by the czechoslovak state, will be appointed fifteen days after the coming into force of the present treaty to trace on the spot the frontier line between poland and the czechoslovak state. the decisions of this commission will be taken by a majority and shall be binding on the parties concerned. germany hereby agrees to renounce in favor of the czechoslovak state all rights and title over the part of the kreise of loebschütz comprised within the following boundaries in case after the determination of the frontier between germany and poland the said part of that circle should become isolated from germany: from the southeastern extremity of the salient of the former austrian frontier at about 5 kilometers to the west of loebschütz southward and up to a point of junction with the boundary between the kreise of loebschütz and ratibor: the former frontier between germany and austria-hungary; then, northward, the administrative boundary between the kreise of loebschütz and ratibor up to a point situated about 2 kilometers to the southeast of katscher; thence, northwestward and up to the starting point of this definition: a line to be fixed on the spot passing to the east of katscher. =article 84.=--german nationals habitually resident in any of the territories recognized as forming part of the czechoslovak state will obtain czechoslovak nationality ipso facto and lose their german nationality. =article 85.=--within a period of two years from the coming into force of the present treaty german nationals over 18 years of age habitually resident in any of the territories recognized as forming part of the czechoslovak state will be entitled to opt for german nationality. czechoslovaks who are habitually resident in germany will have a similar right to opt for czechoslovak nationality. option by a husband will cover his wife, and option by parents will cover their children under 18 years of age. persons who have exercised the above right to opt must within the succeeding twelve months transfer their place of residence to the state for which they have opted. they will be entitled to retain their landed property in the territory of the other state where they had place of residence before exercising the right to opt. they may carry with them their movable property of every description. no export or import duties may be imposed upon them in connection with the removal of such property. within the same period czechoslovaks who are german nationals and are in a foreign country will be entitled, in the absence of any provisions to the contrary in the foreign law, and if they have not acquired the foreign nationality, to obtain czechoslovak nationality and lose their german nationality by complying with the requirements laid down by the czechoslovak state. =article 86.=--the czechoslovak state accepts and agrees to embody in a treaty with the principal allied and associated powers such provisions as may be deemed necessary by the said powers to protect the interests of inhabitants of that state who differ from the majority of the population in race, language or religion. the czechoslovak state further accepts and agrees to embody in a treaty with the said powers such provisions as they may deem necessary to protect freedom of transit and equitable treatment of the commerce of other nations. the proportion and nature of the financial obligations of germany and prussia, which the czechoslovak state will have to assume on account of the silesian territory placed under its sovereignty will be determined in accordance with article 254 of part ix. (financial clauses) of the present treaty. subsequent agreements will decide all questions not decided by the present treaty which may arise in consequence of the cession of the said territory. section viii.--_poland_ =article 87.=--germany, in conformity with the action already taken by the allied and associated powers, recognizes the complete independence of poland and renounces in her favor all rights and title over the territory bounded by the baltic sea; the eastern frontier of germany as laid down in article 27 of part ii. (boundaries of germany) of the present treaty, up to a point situated about two kilometers to the east of the lorzendorf, then a line to the acute angle which the northern boundary of upper silesia makes about three kilometers northwest of simmenau, then to where the boundary of upper silesia has its meeting point with the old frontier between germany and russia, then this frontier to the point where it crosses the course of the niemen, and then the northern frontier of east prussia, as laid down in article 28, part ii. aforesaid. the terms of this article do not, however, apply to the territories of east prussia and the free city of danzig, as defined in article 28, of part ii. (boundaries of germany,) and in article 100 of section xi. (danzig) of this part. the boundaries of poland not laid down in the present treaty will be subsequently determined by the principal allied and associated powers. a commission consisting of seven members, five of whom shall be nominated by the principal allied and associated powers, one by germany, and one by poland, shall be constituted fifteen days after the coming into force of the present treaty to delimit on the spot the frontier line between poland and germany. the decision of the commission will be taken by a majority of votes and shall be binding upon the parties concerned. =article 88.=--in the portion of upper silesia included within the boundaries described below the inhabitants will be called upon to indicate by a vote whether they wish to be attached to germany or to poland: starting from the northern point of the salient of the old province of austrian silesia, situated about eight kilometers east of neustadt, the former frontier between germany and austria, to its junction with the boundary between the kreise of loebschütz and ratibor; thence in a northerly direction to a point about two kilometers southeast of katscher; the boundary between the kreise of loebschütz and ratibor; thence in a southeasterly direction to a point on the course of the oder immediately south of the ratibor-oderberg railway: a line to be fixed on the ground passing south of karanowitz; thence the old boundary between germany and austria, thence the old boundary between germany and russia to its junction with the administrative boundary between posnania and upper silesia; thence this administrative boundary to its junction with the administrative boundary between upper and middle silesia; thence westward to the point where the administrative boundary turns in an acute angle to the southwest about three kilometers northwest of simmenau; the boundary between upper and middle silesia; thence in a westerly direction to a point to be fixed on the ground about two kilometers east of orzendorf: a line to be fixed on the ground passing north of kein hennersdorf; thence southward to the point where the boundary between upper and middle silesia cuts the stadtel-karlsruhe road: a line to be fixed on the ground passing west of hennersdorf, polkowitz, noldau, steamersdorf and dammer, and east of strehlitz, nassadel, eckersdorf, schwirz, and stadtel; thence the boundary between upper and middle silesia to its junction with the eastern boundary of the kreise of falkenberg; thence the eastern boundary of the kreis of falkenberg to the point of the salient which is three kilometers east of puschine; thence to the northern point of the salient of the old province of austrian silesia, situated about eight kilometers east of neustadt: a line to be fixed on the ground, passing east of zulls. the régime under which this plebiscite will be taken and given effect to is laid down in the annex hereto. the polish and german governments hereby respectively bind themselves to conduct no prosecutions on any part of their territory and to take no exceptional proceedings for any political action performed in upper silesia during the period of the régime laid down in the annex hereto, and up to the settlement of the final status of the country germany hereby renounces in favor of poland all rights and title over the portion of upper silesia lying beyond the frontier line fixed by the principal allied and associated powers as this result of the plebiscite. annex 1. within fifteen days from the coming into force of the present treaty the german troops and such officials as may be designated by the commission set up under the provisions of paragraph 2 shall evacuate the plebiscite area. up to the moment of the completion of the evacuation they shall refrain from any form of requisitioning in money or in kind and from all acts likely to prejudice the material interest of the country. within the same period the workmen's and soldiers' councils which have been constituted in this area shall be dissolved. members of such councils who are natives of another region and are exercising their functions at the date of the coming into force of the present treaty, or who have gone out of office since the 1st march, 1919, shall be evacuated. all military and semi-military unions formed in the said area by the inhabitants of the district shall be immediately disbanded. all members of such military organizations who are not domiciled in the said area shall be required to leave it. 2. the plebiscite area shall be immediately placed under the authority of an international commission of four members to be designated by the following powers: the united states of america, france, the british empire, and italy. it shall be occupied by troops belonging to the allied and associated powers, and the german government undertakes to give facilities for the transference of troops to upper silesia. 3. the commission shall enjoy all the powers exercised by the german or by the prussian government; except those of legislation or taxation. it shall also be substituted for the government of the province and the regierungsbezirk. it shall be within the competence of the commission to interpret the powers hereby conferred upon it, and to determine to what extent it shall exercise them and to what extent they shall be left in the hands of the existing authorities. changes in the existing laws and the existing taxation shall only be brought into force with the consent of the commission. the commission will maintain order with the help of the troops which will be at its disposal and to the extent which it may deem necessary by means of gendarmerie recruited among the inhabitants of the country. the commission shall provide immediately for the replacement of the evacuated german officials, and, if occasion arises, shall itself order the evacuation of such authorities and proceed to the replacement of such local authorities as may be required. it shall take all steps which it thinks proper to insure the freedom, fairness, and secrecy of the vote. in particular, it shall have the right to order the expulsion of any person who may in any way have attempted to distort the result of the plebiscite by methods of corruption or intimidation. the commission shall have full power to settle all questions arising from the execution of the present clauses. it shall be assisted by technical advisers, chosen by it from among the local populations. the decision of the commission shall be taken by a majority vote. 4. the vote shall take place at such date as may be determined by the principal allied and associated powers, but not sooner than six months or later than eighteen months after the establishment of the commission in the area. the right to vote shall be given to all persons, without distinction of sex, who: (a) have completed their twentieth year on the 1st of january of the year in which the plebiscite takes place; (b) were born in the plebiscite area or have been domiciled there since a date to be determined by the commission, which shall not be subsequent to january 1, 1919, or who have been expelled by the german authorities and have not retained their domicile there. persons convicted of political offenses shall not exercise their right of voting. every person will vote in the commune where he is domiciled, or in which he was born, if he has not retained his domicile in the area. the result of the vote will be determined by the communes according to the majority of votes in each commune. 5. on the conclusion of the voting the number of votes cast in each commune will be communicated by the commission to the principal allied and associated powers with a full report as to the taking of the vote and a recommendation as to the line which ought to be adopted as the frontier of germany in upper silesia. in this recommendation regard will be paid to the wishes of the inhabitants, as shown by the vote, and to the geographical and economic conditions of the locality. 6. as soon as the frontier has been fixed by the principal allied and associated powers the german authorities will be notified by the international commission that they are free to take over the administration of the territory which it is recognized should be german; the said authorities must proceed to do so within one month of such notification and in the manner prescribed by the commission. within the same period and in the manner prescribed by the commission, the polish government must proceed to take over the administration of the territory which it is recognized should be polish. when the administration of the territory has been provided for by the german and polish authorities respectively the powers of the commission will terminate. the cost of the army of occupation and expenditure by the commission, whether in discharge of its own functions or in the administration of the territory, will be a charge on the area. =article 89.=--poland undertakes to accord freedom of transit to persons, goods, vessels, carriages, wagons, and mails in transit between east prussia and the rest of germany over polish territory, including territorial waters, and to treat them at least as favorably as the persons, goods, vessels, carriages, wagons, and mails, respectively, of polish or of any other most-favored nationality, origin, importation starting point, or ownership, as regards facilities, restrictions, and all other matters. goods in transit shall be exempt from all customs or other similar duties. freedom of transit will extend to telegraphic and telephonic services under the conditions laid down by the conventions referred to in article 98. =article 90.=--poland undertakes to permit, for a period of fifteen years, the exportation to germany of the products of the mines in any part of poland in accordance with the present treaty. such export shall be subject to duties or other charges or restrictions on exportation. poland agrees to take such steps as may be necessary to secure that such products shall be available for sale to purchasers in germany on terms as favorable as are applicable to like products sold under similar conditions to purchasers in poland or in any other country. =article 91.=--german nationals habitually resident in territories recognized as forming part of poland will acquire polish nationality ipso facto and will lose their german nationality. german nationals, however, or their descendants who became resident in these territories after january 1, 1908, will not acquire polish nationality without a special authorization from the polish state. within a period of two years after the coming into force of the present treaty, german nationals over 18 years of age, habitually resident in any of the territories recognized as forming part of poland, will be entitled to opt for german nationality. poles who are german nationals over 18 years of age, and habitually resident in germany, will have a similar right to opt for polish nationality. option by a husband will cover his wife and option by parents will cover their children under 18 years of age. persons who have exercised the above right to opt must within the succeeding twelve months transfer their place of residence to the state for which they have opted. they will be entitled to retain their immovable property in the territory of the other state, where they had their place of residence before exercising the right to opt. they may carry with them their movable property of every description. no export or import duties or charges may be imposed upon them in connection with the removal of such property. within the same period poles who are german nationals and are in a foreign country will be entitled, in the absence of any provisions to the contrary in the foreign law, and if they have not acquired foreign nationality, to obtain polish nationality and to lose their german nationality by complying with the requirements laid down by the polish state. in this portion of upper silesia submitted to a plebiscite the provisions of this article should only come into force as from the definite attribution of the territory. =article 92.=--the proportion and the nature of the financial liabilities of germany and prussia to be borne by poland will be determined in accordance with article 254 of part ix. (financial clauses) of the present treaty. there shall be excluded from the share of such financial liabilities assumed by poland that portion of the debt which, according to the finding of the reparation commission referred to in the above mentioned article, arises from measures adopted by the german and prussian governments with a view to german colonization in poland. in fixing under article 256 of the present treaty the value of the property and possessions belonging to the german empire and to the german states which pass to poland, with the territory transferred above, the reparation commission shall exclude from the valuation buildings, forests, and other state property which belonged to the former kingdom of poland; poland shall acquire these properties free of all costs and charges. in all the german territory transferred in accordance with the present treaty and recognized as forming definitely a part of poland, the property rights and interests of german nationals shall not be liquidated under article 297 by the polish government except in accordance with the following provisions: 1. the proceeds of the liquidation shall be paid direct to the owner; 2. if, on his application, the mixed arbitral tribunal provided for by the section 6 of part x. (economic clauses) of the present treaty, or an arbitrator appointed by that tribunal, is satisfied that the conditions of the sale or measures taken by the polish government outside of its general legislation were unfairly prejudicial to the price obtained, they shall have discretion to award to the owner equitable compensation to be paid by the polish government. further agreements will regulate all questions arising out of the cession of the above territory, which are not regulated by the present treaty. =article 93.=--poland accepts and agrees to embody in a treaty with the principal allied and associated powers such provisions as may be deemed necessary by the said powers to protect the interests of inhabitants of poland who differ from the majority of the population in race, language or religion. poland further accepts and agrees to embody in a treaty with the said powers such provisions as they may deem necessary to protect freedom of transit and equitable treatment of the commerce of other nations. section ix.--_east prussia._ =article 94.=--in the area between the southern frontier of east prussia, as described in article 28 of part ii. (frontiers of germany) of the present treaty, and the line described below, the inhabitants will be called upon to indicate by a vote the state to which they wish to belong: the western and northern boundary of regierungsbezirk allenstein to its junction with the boundary between the kreise of oletsko and angerburg, thence, the northern boundary of the kreise of oletsko to its junction with the old frontier of east prussia. =article 95.=--the german troops and authorities will be withdrawn from the area defined above within a period not exceeding fifteen days after the coming into force of the present treaty. until the evacuation is completed they will abstain from all requisitions in money or in kind and from all measures injurious to the economic interests of the country. on the expiration of the above-mentioned period the said area will be placed under the authority of an international commission of five members appointed by the principal allied and associated powers. this commission will have general powers of administration and, in particular, will be charged with the duty of arranging for the vote, and of taking such measures as it may deem necessary to insure its freedom, fairness, and secrecy. the commission will have all necessary authority to decide any questions to which the execution of these provisions may give rise. the commission will make such arrangements as may be necessary for assistance in the exercise of its functions by officials chosen by itself from the local population; its decisions will be taken by a majority. every person, irrespective of sex, will be entitled to vote who: (a) is 20 years of age at the date of the coming into force of the present treaty, and (b) was born within the area where the vote will take place, or has been habitually resident there from a date to be fixed by the commission. every person will vote in the commune where he is habitually resident or, if not habitually resident in the area, in the commune where he was born. the result of the vote will be determined by commune, (gemeinde,) according to the majority of the votes in each commune. on the conclusion of the voting the number of votes cast in each commune will be communicated by the commission to the principal allied and associated powers with a full report as to the taking of the vote and a recommendation as to the line which ought to be adopted as the boundary of east prussia in this region. in this recommendation, regard will be paid to the wishes of the inhabitants as shown by the vote, and to the geographical and economic conditions of the locality. the principal allied and associated powers will then fix the frontier between east prussia and poland in this region. if the line fixed by the principal allied and associated powers is such as to exclude from east prussia any part of the territory defined in article 94, the renunciation of its rights by germany in favor of poland, as provided in article 87, above, will extend to the territories so excluded. as soon as the line has been fixed by the principal allied and associated powers, the authorities administering east prussia will be notified by the international commission that they are free to take over the administration of the territory to the north of the line so fixed, which they shall proceed to do within one month of such notification and in the manner prescribed by the commission. within the same period, and as prescribed by the commission, the polish government must proceed to take over the administration of the territory to the south of the line. when the administration of the territory by the east prussian and polish authorities, respectively, has been provided for, the powers of the commission will terminate. expenditure by the commission, whether in the discharge of its own functions or in the administration of the territory, will be borne by the local revenues. east prussia will be required to bear such proportion of any deficit as may be fixed by the principal allied and associated powers. =article 96.=--in the area comprising the kreise of stuhm and rosenberg, and the portion of the kreise of marienburg which is situated east of the nogat, and that of marienwerder east of the vistula, the inhabitants will be called upon to indicate by a vote, to be taken in each commune, (gemeinde,) whether they desire the various communes situated in this territory to belong to poland or to east prussia. =article 97.=--the german troops and authorities will be withdrawn from the area defined in article 96 within a period not exceeding fifteen days after the coming into force of the present treaty. until the evacuation is completed they will abstain from all requisitions in money or in kind and from all measures injurious to the economic interests of the country. on the expiration of the above-mentioned period the said area will be placed under the authority of an international commission of five members appointed by the principal allied and associated powers. this commission, supported, if occasion arises, by the necessary forces, will have general powers of administration, and, in particular, will be charged with the duty of arranging for the vote and of taking such measures as it may deem necessary to insure its freedom, fairness, and secrecy. the commission will conform as far as possible to the provisions of the present treaty relating to the plebiscite in the allenstein area. its decision will be taken by a majority. expenditure by the commission, whether in the discharge of its own functions or in the administration of the territory, will be borne by the local revenues. on the conclusion of the voting, the number of votes cast in each commune will be communicated by the commission to the principal allied and associated powers, with a full report as to the taking of the vote and a recommendation as to the line which ought to be adopted as the boundary of east prussia in this region. in this recommendation regard will be paid to the wishes of the inhabitants as shown by the vote and to the geographical and economic conditions of the locality. the principal allied and associated powers will then fix the frontier between east prussia and poland in this region, leaving in any case to poland for the whole of the section bordering on the vistula full and complete control of the river, including the east bank as far east of the river as may be necessary for its regulation and improvement. germany agrees that in any portion of the said territory which remains german no fortifications shall at any time be erected. the principal allied and associated powers will at the same time draw up regulations for assuring to the population of east prussia to the fullest extent, and under equitable conditions, access to the vistula, and the use of it for themselves, their commerce, and their boats. the determination of the frontier and the foregoing regulations shall be binding upon all the parties concerned. when the administration of the territory has been taken over by the east prussian and polish authorities, respectively, the powers of the commission will terminate. =article 98.=--germany and poland undertake, within one year of the coming into force of this treaty, to enter into conventions of which the terms, in case of difference, shall be settled by the council of the league of nations, with the object of securing on the one hand to germany full and adequate railroad, telegraphic, and telephonic facilities for communication between the rest of germany and east prussia over the intervening polish territory, and anthe other hand to poland full and adequate railroad, telegraphic, and telephonic facilities for communication between poland and the free city of danzig over any german territory that may, on the right bank of the vistula, intervene between poland and the free city of danzig. [illustration: _copyright harris and ewing_ sir eric drummond the first secretary of the league of nations. sir eric joined the british foreign office in 1900, and later served as confidential secretary to sir edward (viscount) grey, herbert h. asquith, and arthur j. balfour. in 1917 he accompanied mr. balfour to the united states as a member of the british high commission.] section x.--_memel_ =article 99.=--germany renounces in favor of the principal allied and associated powers all rights and title over the territories included between the baltic, the northeastern frontier of east prussia as defined in article 28 of part ii. (frontiers of germany) of the present treaty and the former frontier between germany and russia. germany undertakes to accept the settlement made by the principal allied and associated powers in regard to these territories, particularly in so far as concerns the nationality of the inhabitants. section xi.--_free city of danzig_ =article 100.=--germany renounces in favor of the principal allied and associated powers all rights and title over the territory comprised within the following limits: from the baltic sea southward to the point where the principal channels of navigation of the nogat and vistula (weichsel) meet; the boundary of east prussia as described in article 28 of part ii. (boundaries of germany) of the peace treaty; thence the principal channel of navigation of the vistula downstream to a point about 6½ kilometers north of the bridge of dirschau; thence northwest to point 5, 1½ kilometers southeast of the church of güttland, a line to be fixed on the ground; thence in a general westerly direction to the salient of the kreise of berent, 8½ kilometers northeast of schöneck; a line to be fixed on the ground passing between mühlbanz on the south and rambeltsch on the north; thence the boundary of the kreise of berent, westward to the re-entrant which it forms 6 kilometers north-northwest of schöneck; thence to a point on the median line of lonkener see; a line to be fixed on the ground passing north of neu fietz and schatarpi and south of barenhütte and lonken; thence the median line of the lonkener see to its northernmost point; thence to the southern end of pollenziner see; a line to be fixed on the ground; thence the median line of pollenziner see to its northernmost point; thence in a northeasterly direction to a point about one kilometer south of koliebken church, where the danzig-neustadt railway crosses a stream; a line to be fixed on the ground passing southeast of kamehlen, krissau, fidlin, sulmin, (richthof,) mattern, schaferei, and to the northwest of neuendorf, marschau, czapielken, hoch and klein kelpin, pulvermühl, renneberg, and the towns of oliva and zoppot; thence the course of this stream to the baltic sea. the boundaries described above are drawn on a german map scale 1-100,000, attached to the present treaty, (map no. 4.) =article 101.=--a commission composed of three members appointed by the principal allied and associated powers, including a high commissioner as president, one member appointed by germany, and one member appointed by poland, shall be constituted within fifteen days of the coming into force of the present treaty for the purpose of delimiting on the spot the frontier of the territory as described above, taking into account as far as possible the existing communal boundaries. =article 102.=--the principal allied and associated powers undertake to establish the town of danzig, together with the rest of the territory described in article 100, as a free city. it will be placed under the protection of the league of nations. =article 103.=--a constitution for the free city of danzig shall be drawn up by the duly appointed representatives of the free city in agreement with a high commissioner to be appointed by the league of nations. the constitution shall be placed under the guarantee of the league of nations. the high commissioner will also be intrusted with the duty of dealing in the first instance with all differences arising between poland and the free city of danzig in regard to this treaty or any arrangements or agreements made thereunder. the high commissioner shall reside at danzig. =article 104.=--the principal allied and associated powers undertake to negotiate a treaty between the polish government and the free city of danzig which shall come into force at the same time as the establishment of said free city, with the following objects: 1. to effect the inclusion of the free city of danzig within the polish customs frontiers and to establish a free area in the port. 2. to insure to poland without any restriction the free use and service of all waterways, docks, basins, wharves, and other works within the territory of the free city necessary for polish imports and exports. 3. to insure to poland the control and administration of the vistula and of the whole railway system within the free city; except such street and other railways as serve primarily the needs of the free city and of postal, telegraphic, and telephonic communication between poland and the port of danzig. 4. to insure to poland the right to develop and improve the waterways, docks, basins, wharves, railways, and other works and means of communication mentioned in this article, as well as to lease or purchase through appropriate processes such land and other property as may be necessary for these purposes. 5. to provide against any discrimination within the free city of danzig to the detriment of citizens of poland and other persons of polish origin or speech. 6. to provide that the polish government shall undertake the conduct of the foreign relations of the free city of danzig as well as the diplomatic protection of citizens of that city when abroad. =article 105.=--on the coming into force of the present treaty german nationals ordinarily resident in the territory described in article 100 will ipso facto lose their german nationality, in order to become nationals of the free city of danzig. =article 106.=--within a period of two years from the coming into force of the present treaty german nationals over 18 years of age ordinarily resident in the territory described in article 100 will have the right to opt for german nationality. option by a husband will cover his wife and option by parents will cover their children less than 18 years of age. all persons who exercise the right of option referred to above must during the ensuing twelve months transfer their place of residence to germany. these persons will be entitled to preserve the immovable property possessed by them in the territory of the free city of danzig. they may carry with them their movable property of every description. no export or import duties shall be imposed upon them in this connection. =article 107.=--all property situated within the territory of the free city of danzig belonging to the german empire or any german state shall pass to the principal allied and associated powers for transfer to the free city of danzig or to the polish state as they may consider equitable. =article 108.=--the proportion and nature of the financial liabilities of germany and of prussia to be borne by the free city of danzig shall be fixed in accordance with article 254 of part ix. (financial clauses) of the present treaty. all other questions which may arise from the cession of the territory referred to in article 100 shall be settled by further agreements. section xii.--_schleswig_ =article 109.=--the frontier between germany and denmark shall be fixed in conformity with the wishes of the population. for this purpose the population inhabiting the territories of the former german empire situated to the north of a line from east to west, (shown by a brown line on the map no. 3 annexed to the present treaty;) leaving the baltic coast about thirteen kilometers east-northeast of flensburg, running southwest so as to pass southeast of sygum, ringsberg, munkbrarup, adelby, tastrup, jarplund, oversee, and northwest of langballigholz, langballig, bönstrup, rüllschau, weseby, kleinwolstrup, gross-solt; thence westward passing south of frörup and north of wanderup; thence in a southwesterly direction passing southeast of oxlund, stieglund, and ostenau and northwest of the villages on the wanderup-kollund road; thence in a northwesterly direction passing southwest of löwenstedt, joldelund, goldelund and northeast of kalkerheide and högel to the bend of the soholmer au, about one kilometer east of soholm, where it meets the southern boundary of the kreise of tondern; thence following this boundary to the north sea; thence passing south of the islands of fohr and amrum and north of the islands of oland and langeness shall be called upon to pronounce by a vote which will be taken under the following conditions: 1. within a period not exceeding ten days from the coming into force of the present treaty, the german troops and authorities (including the oberprasidenten, regierungs-prasidenten, landrathe, amtsvorsteher, oberbürgermeister) shall evacuate the zone lying to the north of the line above fixed. within the same period the workmen's and soldiers' councils which have been constituted in this zone shall be dissolved; members of such councils who are natives of another region and are exercising their functions at the date of the coming into force of the present treaty, or who have gone out of office since the 1st march, 1919, shall also be evacuated. the said zone shall immediately be placed under the authority of an international commission, composed of five members, of whom three will be designated by the principal allied and associated powers; the norwegian and swedish governments will each be requested to designate a member. in the event of their failing to do so, these two members will be chosen by the principal allied and associated powers. the commission, assisted in case of need by the necessary forces, shall have general powers of administration. in particular, it shall at once provide for filling the places of the evacuated german authorities, and, if necessary, shall itself give orders for their evacuation and proceed to fill the places of such local authorities as may be required. it shall take all steps which it thinks proper to insure the freedom, fairness, and secrecy of the vote. it shall be assisted by german and danish technical advisers chosen by it from among the local population. its decisions will be taken by a majority. one-half of the expenses of the international commission and of the expenditure occasioned by the plebiscite shall be paid by germany. 2. the right to vote shall be given all persons, without distinction of sex, who: (a) have completed their twentieth year at the date of the coming into force of the present treaty; and (b) were born in the zone in which the plebiscite is taken, or had been domiciled there since a date before the 1st january, 1900, or had been expelled by the german authorities without having retained their domicile there. every person will vote in the commune (gemeinde) where he is domiciled or of which he is a native. military persons, officers, non-commissioned officers and soldiers of the german army, who are natives of the zone of schleswig, in which the plebiscite is taken, shall be given the opportunity to return to their native place in order to take part in the voting there. 3. in the section of the evacuated zone lying to the north of a line from east to west (shown by a red line on map no. 3, which is annexed to the present treaty): passing south of the island of alsen and following the median line of flensburg fjord; thence leaving the fjord about six kilometers north of flensburg, and following the course of the stream flowing past kupfermühle upstream to a point north of niehuus; thence passing north of pattburg and ellund and south of fröslee to meet the eastern boundary of the kreise of tondern at its junction with the boundary between the old jurisdiction of slogs and kjaer, (slogs herred and kjaer herred;) thence the latter boundary to where it meets the scheidebek; thence the course of the scheidebek, (alte au), süder au, and wied au downstream successively to the point where the latter bends northward, about 1,500 meters west of ruttebüll; thence in a west-northwesterly direction to meet the north sea north of sieltoft; thence passing north of the island of sylt. the vote above provided for shall be taken within a period not exceeding three weeks after the evacuation of the country by the german troops and authorities. the result will be determined by the majority of votes cast in the whole of this section. this result will be immediately communicated by the commission to the principal allied and associated governments and proclaimed. if the vote results in favor of the reincorporation of this territory in the kingdom of denmark, the danish government, in agreement with the commission will be entitled to effect its occupation with their military and administrative authorities immediately after the proclamation. 4. in the section of the evacuated zone situated to the south of the preceding section and to the north of the line which starts from the baltic sea thirteen kilometers from flensburg and ends north of the islands of oland and langeness, the vote will be taken within a period not exceeding five weeks after the plebiscite shall have been held in the first section. the result will be determined by communes (gemeinden) in accordance with the majority of the votes cast in each commune, (gemeinde.) =article 110.=--pending a delimination on the spot, a frontier line will be fixed by the principal allied and associated powers according to a line based on the result of the voting, and proposed by the international commission, and taking into account the particular geographical and economic conditions of the localities in question. from that time the danish government may effect the occupation of these territories which the danish civil and military authorities, and the german government may reinstate up to the said frontier line the german civil and military authorities whom it has evacuated. germany hereby renounced definitively in favor of the principal allied and associated powers all rights of sovereignty over the territories situated to the north of the frontier line fixed in accordance with the above provisions. the principal allied and associated powers will hand over the said territories to denmark. =article 111.=--a commission composed of seven members, five of whom shall be nominated by the principal allied and associated powers, one by denmark, and one by germany, shall be constituted within fifteen days from the date when the final result of the vote is known, to trace the frontier line on the spot. the decisions of the commission will be taken by a majority of votes, and shall be binding on the parties concerned. =article 112.=--all the inhabitants of the territory which is returned to denmark will acquire danish nationality ipso facto, and will lose their german nationality. persons, however, who had become habitually resident in this territory after the 1st october, 1918, will not be able to acquire danish nationality without permission from the danish government. =article 113.=--within two years from the date on which the sovereignty over the whole or part of the territory of schleswig subjected to the plebiscite is restored to denmark: any person over 18 years of age, born in the territory restored to denmark, not habitually resident in this region and possessing german nationality, will be entitled to opt for denmark. any person over 18 years of age habitually resident in the territory restored to denmark will be entitled to opt for germany. option by a husband will cover his wife and option by parents will cover their children less than 18 years of age. persons who have exercised the above right to opt must within the ensuing twelve months transfer their place of residence to the state in favor of which they have opted. they will be entitled to retain the immovable property which they own in the territory of the other state in which they were habitually resident before opting. they may carry with them their movable property of every description. no export or import duties may be imposed upon them in connection with the removal of such property. =article 114.=--the proportion and nature of the financial or other obligations of germany and prussia which are to be assumed by denmark will be fixed in accordance with article 254 of part ix. (financial clauses) of the present treaty. further stipulations will determine any other questions arising out of the transfer to denmark of the whole or part of the territory of which she was deprived by the treaty of oct. 30, 1864. section xiii.--_heligoland_ =article 115.=--the fortifications, military establishments, and harbors of the islands of heligoland and dune shall be destroyed under the supervision of the principal allied governments by german labor and at the expense of germany within a period to be determined by the said governments. the term "harbors" shall include the northeast mole, the west wall, the outer and inner breakwaters and reclaimed land within them, and all naval and military works, fortifications, and buildings, constructed or under construction, between lines connecting the following positions taken from the british admiralty chart no. 126 of 19 april, 1918: (a) lat. 54 degrees 10 minutes 49 seconds n.; long. 7 degrees 53 minutes 39 seconds e.; (b) lat. 54 degrees 10 minutes 35 seconds n.; long. 7 degrees 54 minutes 18 seconds e.; (c) lat. 54 degrees 10 minutes 14 seconds n.; long. 7 degrees 54 minutes 0 seconds e.; (d) lat. 54 degrees 10 minutes 17 seconds n.; long. 7 degrees 53 minutes 37 seconds e.; (e) lat. 54 degrees 10 minutes 44 seconds n.; long. 7 degrees 53 minutes 26 seconds e. these fortifications, military establishments, and harbors shall not be reconstructed nor shall any similar works be constructed in future. section xiv.--_russia and russian states_ =article 116.=--germany acknowledges and agrees to respect as permanent and inalienable the independence of all the territories which were part of the former russian empire on aug. 1, 1914. in accordance with the provisions of article 259 of part ix. (financial clauses,) and article 292 of part x. (economic clauses,) germany accepts definitely the abrogation of the brest-litovsk treaties and of all treaties, conventions, and agreements entered into by her with the maximalist government in russia. the allied and associated powers formally reserve the rights of russia to obtain from germany restitution and reparation based on the principles of the present treaty. =article 117.=--germany undertakes to recognize the full force of all treaties or agreements which may be entered into by the allied and associated powers with states now existing or coming into existence in future in the whole or part of the former empire of russia as it existed on august 1, 1914, and to recognize the frontiers of any such states as determined therein. part iv german rights and interests outside germany =article 118.=--in territory outside her european frontiers as fixed by the present treaty, germany renounces all rights, titles, and privileges whatever in or over territory which belonged to her or to her allies, and all rights, titles, and privileges, whatever their origin, which she held as against the allied and associated powers. germany undertakes immediately to recognize and to conform to the measures which may be taken now or in the future by the principal allied and associated powers, in agreement where necessary with third powers, in order to carry the above stipulation into effect. in particular, germany declares her acceptance of the following articles relating to certain special subjects: section i.--_german colonies_ =article 119.=--germany renounces in favor of the principal allied and associated powers all her rights and titles over her overseas possessions. =article 120.=--all movable and immovable property in such territories belonging to the german empire or to any german state shall pass to the government exercising authority over such territories on the terms laid down in article 257 of part ix. (financial clauses) of the present treaty. the decision of the local courts in any dispute as to the nature of such property shall be final. =article 121.=--the provisions of section i. (commercial relations) and section iv. (property, rights, and interests) of part x. (economic clauses) of the present treaty shall apply in the case of these territories whatever be the form of government adopted for them. =article 122.=--the government exercising authority over such territories may make such provisions as it thinks fit with reference to the repatriation from them of german nationals, and to the conditions upon which german subjects of european origin shall, or shall not, be allowed to reside, hold property, trade, or exercise a profession in them. =article 123.=--the provisions of article 260 of part ix. (financial clauses) of the present treaty shall apply in the case of all agreements concluded with german nationals for the construction or exploitation of public works in the german overseas possessions, as well as any sub-concessions or contracts resulting therefrom which may have been made to or with such nationals. =article 124.=--germany hereby undertakes to pay in accordance with the estimate to be presented by the french government, and approved by the reparation commission, reparation for damage suffered by french nationals in the cameroons or the frontier zone by reason of the acts of the german civil and military authorities and of german private individuals during the period from jan. 1, 1900, to aug. 1, 1914. =article 125.=--germany renounces all rights under the conventions and agreements with france of nov. 4, 1911, and sept. 28, 1912, relating to equatorial africa. she undertakes to pay to the french government, in accordance with the estimate to be presented by the government and approved by the reparation commission, all the deposits, credits, advances, &c., effected by virtue of these instruments in favor of germany. =article 126.=--germany undertakes to accept and observe the agreements made or to be made by the allied and associated powers or some of them with any other power with regard to the trade in arms and spirits, and to the matters dealt with in the general act of berlin of feb. 26, 1885, the general act of brussels of july 2, 1890, and the conventions completing or modifying the same. =article 127.=--the native inhabitants of the former german overseas possessions shall be entitled to the diplomatic protection of the governments exercising authority over those territories. section ii.--_china_ =article 128.=--germany renounces in favor of china all benefits and privileges resulting from the provisions of the final protocol signed at peking on sept. 7, 1901, and from all annexes, notes, and documents supplementary thereto. she likewise renounces in favor of china any claim to indemnities accruing thereunder subsequent to march 14, 1917. =article 129.=--from the coming into force of the present treaty the high contracting parties shall apply in so far as concerns them respectively: 1. the arrangement of aug. 29, 1902, regarding the new chinese customs tariff. 2. the arrangement of sept. 27, 1905, regarding whang-poo, and the provisional supplementary arrangement of april 4, 1912. china, however, will no longer be bound to grant to germany the advantages of privileges which she allowed germany under these arrangements. =article 130.=--subject to the provisions of section viii. of this part, germany cedes to china all the buildings, wharves and pontoons, barracks, forts, arms and munitions of war, vessels of all kinds, wireless telegraphy installations and other public property belonging to the german government, which are situated or may be in the german concessions at tientsin and hankow or elsewhere in chinese territory. it is understood, however, that premises used as diplomatic or consular residences or offices are not included in the above cession, and, furthermore, that no steps shall be taken by the chinese government to dispose of the german public and private property situated within the so-called legation quarter at peking without the consent of the diplomatic representatives of the powers which, on the coming into force of the present treaty, remain parties to the final protocol of sept. 7, 1901. =article 131.=--germany undertakes to restore to china within twelve months from the coming into force of the present treaty all the astronomical instruments which her troops in 1900--1901 carried away from china, and to defray all expenses which may be incurred in affecting such restoration, including the expenses of dismounting, packing, transporting, insurance, and installation in peking. [illustration: from around the world _copyright paul thompson_ lord robert cecil a son of lord salisbury and one of the most influential statesmen in great britain during the war and an enthusiastic advocate of a league of nations.] =article 132.=--germany agrees to the abrogation of the leases from the chinese government under which the german concessions at hankow and tientsin are now held. china, restored to the full exercise of her sovereign rights in the above areas, declares her intention of opening them to international residence and trade. she further declares that the abrogation of the leases under which these concessions are now held shall not affect the property rights of nationals or allied and associated powers who are holders of lots in these concessions. =article 133.=--germany waives all claims against the chinese government or against any allied or associated government arising out of the internment of german nationals in china and their repatriation. she equally renounces all claims arising out of the capture and condemnation of german ships in china or the liquidation, sequestration or control of german properties, rights, and interests in that country since aug. 14, 1917. this provision, however, shall not affect the rights of the parties interested in the proceeds of any such liquidation, which shall be governed by the provisions of part x. (economic clauses) of the present treaty. =article 134.=--germany renounces, in favor of the government of his britannic majesty, the german state property in the british concession at shameen at canton. she renounces, in favor of the french and chinese governments conjointly, the property of the german school situated in the french concession at shanghai. section iii.--_siam_ =article 135.=--germany recognizes that all treaties, conventions, and agreements between her and siam, and all rights, titles and privileges derived therefrom, including all rights of extra territorial jurisdiction, terminated as from july 22, 1917. =article 136.=--all goods and property in siam belonging to the german empire or to any german state, with the exception of premises used as diplomatic or consular residences or offices, pass ipso facto and without compensation to the siamese government. the goods, property, and private rights of german nationals in siam shall be dealt with in accordance with the provisions of part x. (economic clauses) of the present treaty. =article 137.=--germany waives all claims against the siamese government on behalf of herself or her nationals arising out of the seizure or condemnation of german ships, the liquidation of german property, or the internment of german nationals in siam. this provision shall not affect the rights of the parties interested in the proceeds of any such liquidation, which shall be governed by the provisions of part x. (economic clauses) of the present treaty. section iv.--_liberia_ =article 138.=--germany renounces all rights and privileges arising from the arrangements of 1911 and 1912 regarding liberia, and particularly the right to nominate a german receiver of customs in liberia. she further renounces all claim to participate in any measures whatsoever which may be adopted for the rehabilitation of liberia. =article 139.=--germany recognizes that all treaties and arrangements between her and liberia terminated as from aug. 4, 1917. =article 140.=--the property, rights, and interests of germans in liberia shall be dealt with in accordance with part x. (economic clauses) of the present treaty. section v.--_morocco_ =article 141.=--germany renounces all rights, titles, and privileges conferred on her by the general act of algeciras of april 7, 1906, and by the franco-german agreements of feb. 9, 1909, and nov. 4, 1911. all treaties, agreements, arrangements, and contracts concluded by her with the sherifian empire are regarded as abrogated as from aug. 3, 1914. in no case can germany take advantage of these instruments, and she undertakes not to intervene in any way in negotiations relating to morocco which may take place between france and the other powers. =article 142.=--germany having recognized the french protectorate in morocco, hereby accepts all consequences of its establishment, and she renounces the régime of the capitulations therein. this renunciation shall take effect as from aug. 3, 1914. =article 143.=--the sherifian government shall have complete liberty of action in regulating the status of german nationals in morocco and the conditions in which they may establish themselves there. german-protected persons, semsars, and "associés agricoles" shall be considered as having ceased, as from aug. 3, 1914, to enjoy the privileges attached to their status and shall be subject to the ordinary law. =article 144.=--all property and possessions in the sherifian empire of the german empire and the german states pass to the maghzen without payment. for the purposes of this clause, the property and possessions of the german empire and states shall be deemed to include all the property of the crown, the empire, or states, and the private property of the former german emperor and other royal personages. all movable and immovable property in the sherifian empire belonging to german nationals shall be dealt with in accordance with sections iii. and iv. of part x. (economic clauses) of the present treaty. mining rights which may be recognized as belonging to german nationals by the court of arbitration set up under the moroccan mining regulations shall form the subject of a valuation, which the arbitrators shall be requested to make, and these rights shall then be treated in the same way as property in morocco belonging to german nationals. =article 145.=--the german government shall insure the transfer to a person nominated by the french government of the shares representing germany's portion of the capital of the state bank of morocco. the value of these shares, as assessed by the reparation commission, shall be paid to the reparation commission for the credit of germany on account of the sums due for reparation. the german government shall be responsible for indemnifying its nationals so dispossessed. this transfer will take place without prejudice to the repayment of debts which german nationals may have contracted toward the state bank of morocco. =article 146.=--moroccan goods entering germany shall enjoy the treatment accorded to french goods. section vi.--_egypt_ =article 147.=--germany declares that she recognizes the protectorate proclaimed over egypt by great britain on dec. 18, 1914, and that she renounces the régime of the capitulations in egypt. this renunciation shall take effect as from aug. 4, 1914. =article 148.=--all treaties, agreements, arrangements, and contracts concluded by germany with egypt are regarded as abrogated as from aug. 4, 1914. in no case can germany avail herself of these instruments, and she undertakes not to intervene in any way in negotiations relating to egypt which may take place between great britain and the other powers. =article 149.=--until an egyptian law of judicial organization establishing courts with universal jurisdiction comes into force, provision shall be made, by means of decrees issued by his highness the sultan for the exercise of jurisdiction over german nationals and property by the british consular tribunals. =article 150.=--the egyptian government shall have complete liberty of action in regulating the status of german nationals and the conditions under which they may establish themselves in egypt. =article 151.=--germany consents to the abrogation of the decree issued by his highness the khédive on nov. 28, 1904, relating to the commission of the egyptian public debt, or to such changes as the egyptian government may think it desirable to make therein. =article 152.=--germany consents, in so far as she is concerned, to the transfer to his britannic majesty's government of the powers conferred on his imperial majesty the sultan, by the convention signed at constantinople on oct. 29, 1888, relating to the free navigation of the suez canal. she renounces all participation in the sanitary, maritime, and quarantine board of egypt, and consents, in so far as she is concerned, to the transfer to the egyptian authorities of the powers of that board. =article 153.=--all property and possessions in egypt of the german empire and the german states pass to the egyptian government without payment. for this purpose the property and possessions of the german empire and states shall be deemed to include all the property of the crown, the empire, or the states, and the private property of the former german emperor and other royal personages. all movable and immovable property in egypt belonging to german nationals shall be dealt with in accordance with sections iii. and iv. of part x. (economic clauses) of the present treaty. =article 154.=--egyptian goods entering germany shall enjoy the treatment accorded to british goods. section vii.--_turkey and bulgaria_ =article 155.=--germany undertakes to recognize and accept all arrangements which the allied and associated powers may make with turkey and bulgaria, with reference to any rights, interests, and privileges whatever which might be claimed by germany or her nationals in turkey and bulgaria and which are not dealt with in the provisions of the present treaty. section viii.--_shantung_ =article 156.=--germany renounces in favor of japan, all her rights, titles, and privileges--particularly those concerning the territory of kiao-chau, railways, mines, and submarine cables--which she acquired in virtue of the treaty concluded by her with china on 6th march, 1898, and of all other arrangements relative to the province of shantung. all german rights in the tsing-tao-tsinan-fu railway, including its branch lines, together with its subsidiary property of all kinds, stations, shops, fixed and rolling stock, mines, plant, and material for the exploitation of the mines are and remain acquired by japan, together with all rights and privileges attaching thereto. the german state submarine cables from tsing-tao to shanghai and from tsing-tao to che foo, with all the rights, privileges, and properties attaching thereto, are similarly acquired by japan, free and clear of all charges and incumbrances. =article 157.=--the movable and immovable property owned by the german state in the territory of kiao-chau, as well as all the rights which germany might claim in consequence of the works or improvements made or of the expenses incurred by her, directly or indirectly, in connection with this territory, are and remain acquired by japan, free and clear of all charges and incumbrances. =article 158.=--germany shall hand over to japan within three months from the coming into force of the present treaty the archives, registers, plans, title deeds, and documents of every kind, wherever they may be, relating to the administration, whether civil, military, financial, judicial or other, of the territory of kiao-chau. within the same period germany shall give particulars to japan of all treaties, arrangements or agreements relating to the rights, title or privileges referred to in the two preceding articles. part v military, naval, and aerial clauses in order to render possible the initiation of a general limitation of the armaments of all nations, germany undertakes strictly to observe the military, naval, and air clauses which follow: section i.--_military clauses_ chapter i.--effectives and cadres of the german army =article 159=--the german military forces shall be demobilized and reduced as prescribed hereinafter. =article 160=--1. by a date which must not be later than march 31, 1920, the german army must not comprise more than seven divisions of infantry and three divisions of cavalry. after that date the total number of effectives in the army of the states constituting germany must not exceed 100,000 men, including officers and establishments of depots. the army shall be devoted exclusively to the maintenance of order within the territory and to the control of the frontiers. the total effective strength of officers, including the personnel of staffs, whatever their composition, must not exceed 4,000. 2. divisions and army corps headquarters staffs shall be organized in accordance with table no. 1 annexed to this section. the number and strength of the units of infantry, artillery, engineers, technical services, and troops laid down in the aforesaid table constitute maxima which must not be exceeded. the following units may each have their own depot: an infantry regiment; a cavalry regiment; a regiment of field artillery; a battalion of pioneers. 3. the divisions must not be grouped under more than two army corps headquarters staff. the maintenance or formation of forces differently grouped or of other organizations for the command of troops or for preparation for war is forbidden. the great german general staff and all similar organizations shall be dissolved and may not be reconstituted in any form. the officers, or persons in the position of officers, in the ministries of war in the different states in germany and in the administrations attached to them, must not exceed three hundred in number and are included in the maximum strength of four thousand laid down in the third sub-paragraph of the first paragraph of this article. =article 161.=--army administrative services consisting of civilian personnel not included in the number of effectives prescribed by the present treaty will have such personnel reduced in each class to one-tenth of that laid down in the budget of 1913. =article 162.=--the number of employes or officials of the german states, such as customs officers, forest guards, and coast guards shall not exceed that of the employes or officials functioning in these capacities in 1913. the number of gendarmes and employes or officials of the local or municipal police may only be increased to an extent corresponding to the increase of population since 1913 in the districts or municipalities in which they are employed. these employes and officials may not be assembled for military training. =article 163.=--the reduction of the strength of the german military forces as provided for in article 160 may be effected gradually in the following manner: within three months from the coming into force of the present treaty the total number of effectives must be reduced to 200,000 and the number of units must not exceed twice the number of those laid down in article 160. at the expiration of this period, and at the end of each subsequent period of three months, a conference of military experts of the principal allied and associated powers will fix the reductions to be made in the ensuing three months, so that by the 31st of march, 1920, at the latest, the total number of german effectives does not exceed the maximum number of 100,000 men laid down in article 160. in these successive reductions the same ratio between the number of officers and of men, and between the various kinds of units shall be maintained as is laid down in that article. chapter ii.--armament, munitions, and material =article 164.=--up till the time at which germany is admitted as a member of the league of nations the german army must not possess an armament greater than the amounts fixed in table no. 2, annexed to this section, with the exception of an optional increase not exceeding one-twenty-fifth part for small arms and one-fiftieth part for guns, which shall be exclusively used to provide for such eventual replacements as may be necessary. germany agrees that after she has become a member of the league of nations the armaments fixed in the said table shall remain in force until they are modified by the council of the league. furthermore she hereby agrees strictly to observe the decisions of the council of the league on this subject. =article 165.=--the maximum number of guns, machine guns, trench mortars, rifles, and the amount of ammunition and equipment which germany is allowed to maintain during the period between the coming into force of the present treaty and the date of march 31, 1920, referred to in article 160, shall bear the same proportion to the amount authorized in table no. 3 annexed to this section as the strength of the german army as reduced from time to time in accordance with article 163 bears to the strength permitted under article 160. =article 166.=--at the date of march 31, 1920, the stock of munitions which the german army may have at its disposal shall not exceed the amounts fixed in table no. 3 annexed to this section. within the same period the german government will store these stocks at points to be notified to the governments of the principal allied and associated powers. the german government is forbidden to establish any other stocks, depots, or reserves of munitions. =article 167.=--the number and calibre of the guns constituting at the date of the coming into force of the present treaty the armament of the fortified works, fortresses, and any land or coast forts which germany is allowed to retain, must be notified immediately by the german government to the governments of the principal allied and associated powers, and will constitute maximum amounts which may not be exceeded. within two months from the coming into force of the present treaty the maximum stock of ammunition for these guns will be reduced to, and maintained at, the following uniform rates: fifteen hundred rounds per piece for those the calibre of which is 10.5 cm. and under; 500 rounds per piece for those of higher calibre. =article 168.=--the manufacture of arms, munitions, or any war material shall only be carried out in factories or works the locations of which shall be communicated to and approved by the governments of the principal allied and associated powers, and the number of which they retain the right to restrict. within three months from the coming into force of the present treaty all other establishments for the manufacture, preparation, storage, or design of arms, munitions, or any war material whatever shall be closed down. the same applies to all arsenals except those used as depots for the authorized stocks of munitions. within the same period the personnel of these arsenals will be dismissed. =article 169.=--within two months from the coming into force of the present treaty, german arms, munitions, and war materials, including anti-aircraft material, existing in germany in excess of the quantities allowed must be surrendered to the governments of the principal allied and associated powers, to be destroyed or rendered useless. this will also apply to any special plant intended for the manufacture of military material, except such as may be recognized as necessary for equipping the authorized strength of the german army. the surrender in question will be effected at such points in german territory as may be selected by the said governments. within the same period, arms, munitions, and war material, including anti-aircraft material, of origin other than german, in whatever state they may be, will be delivered to the said governments, who will decide as to their disposal. arms and munitions which on account of the successive reductions in the strength of the german army become in excess of the amounts authorized by tables 2 and 3 of the annex must be handed over in the manner laid down above within such periods as may be decided by the conferences referred to in article 163. =article 170.=--importation into germany of arms, munitions, and war material of every kind shall be strictly prohibited. the same applies to the manufacture for and export to foreign countries of arms, munitions, and war material of every kind. =article 171.=--the use of asphyxiating, poisonous or other gases and all analogous liquids, materials or devices being prohibited, their manufacture and importation are strictly forbidden in germany. the same applies to materials specially intended for the manufacture, storage, and use of the said products or devices. the manufacture and the importation into germany of armored cars, tanks, and all similar constructions suitable for use in war are also prohibited. =article 172.=--within a period of three months from the coming into force of the present treaty the german government will disclose to the governments of the principal allied and associated powers the nature and mode of manufacture of all explosives, toxic substances or other like chemical preparations used by them in the war or prepared by them for the purpose of being so used. chapter iii.--recruiting and military training =article 173.=--universal compulsory military service shall be abolished in germany. the german army may only be constituted and recruited by means of voluntary enlistment. =article 174.=--the period of enlistment for non-commissioned officers and privates must be twelve consecutive years. the number of men discharged for any reason before the expiration of their term of enlistment must not exceed in any year 5 per cent. of the total effectives as fixed by the second sub-paragraph of paragraph 1 of article 160 of the present treaty. =article 175.=--the officers who are retained in the army must undertake the obligation to serve in it up to the age of forty-five years, at least. officers newly appointed must undertake to serve on the active list for twenty-five consecutive years, at least. officers who have previously belonged to any formation whatever of the army and who are not retained in the units allowed to be maintained must not take part in any military exercise, whether theoretical or practical, and will not be under any military obligations whatever. the number of officers discharged for any reason before the expiration of their term of service must not exceed in any year 5 per cent. of the total effectives of officers provided for in the third sub-paragraph of paragraph 1 of article 100 of the present treaty. =article 176.=--on the expiration of two months from the coming into force of the present treaty there must only exist in germany the number of military schools which is absolutely indispensable for the recruitment of the officers of the units allowed. these schools will be exclusively intended for the recruitment of officers of each arm, in the proportion of one school per arm. the number of students admitted to attend the courses of the said schools will be strictly in proportion to the vacancies to be filled in the cadres of officers. the students and the cadres will be reckoned in the effectives fixed by the second and third sub-paragraphs of paragraph 1 of article 160 of the present treaty. consequently, and during the period fixed above, all military academies or similar institutions in germany, as well as the different military schools for officers, student officers (aspiranten), cadets non-commissioned officers, or student non-commissioned officers (aspiranten), other than the schools above provided for, will be abolished. =article 177.=--educational establishments, the universities, societies of discharged soldiers, shooting or touring clubs, and, generally speaking, associations of every description, whatever be the age of their members, must not occupy themselves with any military matters. in particular they will be forbidden to instruct or exercise their members, or to allow them to be instructed or exercised, in the profession or use of arms. these societies, associations, educational establishments, and universities must have no connection with the ministries of war or any other military authority. =article 178.=--all measures of mobilization or appertaining to mobilization are forbidden. in no case must formations, administrative services, or general staffs include supplementary cadres. =article 179.=--germany agrees, from the coming into force of the present treaty, not to accredit nor to send to any foreign country any military, naval, or air mission, nor to allow any such missions to leave her territory, and germany further agrees to take appropriate measures to prevent german nationals from leaving her territory to become enrolled in the army, navy, or air service of any foreign power, or to be attached to such army, navy, or air service for the purpose of assisting in the military, naval, or air training thereof, or otherwise for the purpose of giving military, naval, or air instruction in any foreign country. the allied and associated powers agree, so far as they are concerned, from the coming into force of the present treaty, not to enroll in nor to attach to their armies or naval or air forces any german national for the purpose of assisting in the military training of such armies or naval or air forces, or otherwise to employ any such german national as military, naval, or aeronautic instructor. the present provision, however, does not affect the right of france to recruit for the foreign legion in accordance with french military laws and regulations. chapter iv.--fortifications =article 180.=--all fortified works, fortresses, and field works situated in german territory to the west of a line drawn fifty kilometers to the east of the rhine shall be disarmed and dismantled. within a period of two months from the coming into force of the present treaty such of the above fortified works, fortresses, and field works as are situated in territory not occupied by allied and associated troops shall be disarmed and within a further period of four months they shall be dismantled. those which are situated in territory occupied by allied and associated troops shall be disarmed and dismantled within such periods as may be fixed by the allied high command. the construction of any new fortification, whatever its nature and importance, is forbidden in the zone referred to in the first paragraph above. the system of fortified works of the southern and eastern frontiers of germany shall be maintained in its existing state. =table no. 1.= =state and establishment of army corps headquarters staffs and of infantry and cavalry divisions.= these tabular statements do not form a fixed establishment to be imposed on germany, but the figures contained in them (number of units and strengths) represent maximum figures, which should not in any case be exceeded. +----------------------+----------+----------------------------+ |unit | maximum| max. strength of each unit | | | no.| | | +----------+----------------------------+ | |authorized| officers.| n.c.o.'s| | | division.| | men.| +----------------------+----------+---------------+------------+ |army corps hdq. staffs| 2| 30| 150| |total for hdq. staffs | ..| 60| 300| +----------------------+----------+---------------+------------+ 2. establishment of an infantry division. +--------------------------+-----------------------------------------+ | |maximum no.| | | | of such | | | |units in a | max. strength of each unit | | | single +-----------+-----------------+ | unit | division | officers| n.c.o.'s and men| +--------------------------+-----------+-----------+-----------------+ |hdqrs. of inf. div. | 1| 25| 70| | | | | | |hdqrs. of divisional inf. | 1| 4| 30| | | | | | |hdqrs. of divisional art. | 1| 4| 30| | | | | | |regiment of inf. | 3| 70| 2,300| | | | | | |(each regiment comprises 3| | | | |battalions of infantry. | | | | |each battalion comprises 3| | | | |companies of infantry and | | | | |1 machine-gun company.) | | | | | | | | | |trench mortar company | 3| 6| 150| | | | | | |divisional squadron | 1| 6| 150| | | | | | |field artillery regiment | 1| 85| 1,300| | | | | | |(each regiment comprises 3| | | | |groups of artillery. each | | | | |group comprises 3 | | | | |batteries.) | | | | | | | | | |pioneer battalion | 1| 12| 400| | | | | | |(this battalion comprises | | | | |2 companies of pioneers, 1| | | | |pontoon detachment, 1 | | | | |searchlight section.) | | | | | | | | | |signal detachment\ | 1| 12| 300| | | | | | |(this detachment comprises| | | | |1 telephone detachment, 1 | | | | |listening section, 1 | | | | |carrier pigeon section.) | | | | | | | | | |divisional med. service | 1| 20| 400| | | | | | |parks and convoys | ..| 14| 800| | | | | | |total for infantry div. | ..| 410| 10,830| +--------------------------+-----------+-----------+-----------------+ 3. establishment of a cavalry division. +------------------------------------+----------+--------+---------+ | | maximum strength | | | of each unit | | +----------+------------------+ | |[31]units.|officers.|n.c.o.'s| | | | |and men.| | | | | | |headquarters of a cavalry division | 1| 15| 50| | | | | | |cavalry regiment | 6| 40| 800| | | | | | |(each regiment comprises four | | | | |squadrons.) | | | | | | | | | |horse artillery group (three | 1| 20| 400| |batteries) | | | | | | | | | |total for cavalry division | ..| 275| 5,250| +------------------------------------+----------+---------+--------+ [31] maximum number of such units in single division. =table no. 2.= =tabular statement of armament establishment for a maximum of seven infantry divisions, three cavalry divisions, and two army corps headquarters staffs.= +--------------------------+-------+-------+-------+------+-------+ |materials. | inft.| for 7| cav.| for 3| total| | | div.| inft.| div.| cav.|columns| | | | divs.| | divs.| 2 & 4| +--------------------------+-------+-------+-------+------+-------+ |rifles | 12,000| 84,000| ...| ...| 84,000| | | | | | | | |carbines | ...| ...| 6,000|18,000| 18,000| | | | | | | | |heavy machine guns | 108| 756| 12| 36| 792| | | | | | | | |light machine guns | 162| 1,134| ...| ...| 1,134| | | | | | | | |medium trench mortars | 9| 63| ...| ...| 63| | | | | | | | |light trench mortars | 27| 189| ...| ...| 189| | | | | | | | |7.7 cm. guns | 24| 168| 12| 36| 204| | | | | | | | |10.5 cm. howitzers | 12| 84| ...| ...| 84| +--------------------------+-------+-------+-------+------+-------+ army corps headquarters staff establishment must be drawn from the increased armaments of the divisional infantry. =table no. 3.= =maximum stocks authorized.= +----------------------+-----------+---------+-----------+ |material. | maximum | estab | maximum| | | number of |lishment | totals,| | | arms |per unit,| rounds.| | |authorized.| rounds. | | +----------------------+-----------+---------+-----------+ |rifles | 84,000 } | 40 | 40,800,000| | | | | | |carbines | 18,000 } | | | | | | | | |heavy machine guns | 792 } | 8,000 | 15,408,000| | | | | | |light machine guns | 1,134 } | | | | | | | | |medium trench mortars | 63 | 40 | 25,200| | | | | | |light trench mort's | 189 | 800 | 151,200| | | | | | |field artillery- | | | | | | | | | |7.7 cm. guns | 204 | 1,000 | 204,000| | | | | | |10.5 cm. howitzers | 84 | 800 | 67,200| +----------------------+-----------+---------+-----------+ section ii.--_naval clauses_ =article 181.=--after the expiration of a period of two months from the coming into force of the present treaty the german naval forces in commission must not exceed: six battleships of the deutschland or lothringen type, six light cruisers, twelve destroyers, twelve torpedo boats, or an equal number of ships constructed to replace them as provided in article 190. no submarines are to be included. all other warships except where there is provision to the contrary in the present treaty must be placed in reserve or devoted to commercial purposes. =article 182.=--until the completion of the minesweeping prescribed by article 193, germany will keep in commission such number of minesweeping vessels as may be fixed by the governments of the principal allied and associated powers. =article 183.=--after the expiration of a period of two months from the coming into force of the present treaty the total personnel of the german navy, including the manning of the fleet, coast defenses, signal stations, administration, and other land services, must not exceed 15,000, including officers and men of all grades and corps. the total strength of officers and warrant officers must not exceed 1,500. within two months from the coming into force of the present treaty the personnel in excess of the above strength shall be demobilized. no naval or military corps or reserve force in connection with the navy may be organized in germany without being included in the above strength. =article 184.=--from the date of the coming into force of the present treaty all the german surface warships which are not in german ports cease to belong to germany, who renounces all rights over them. vessels which, in compliance with the armistice of nov. 11, 1918, are now interned in the ports of the allied and associated powers, are declared to be finally surrendered. vessels which are now interned in neutral ports will be there surrendered to the governments of the principal allied and associated powers. the german government must address a notification to that effect to the neutral powers on the coming into force of the present treaty. =article 185.=--within a period of two months from the coming into force of the present treaty the german surface warships enumerated below will be surrendered to the governments of the principal allied and associated powers in such allied ports as the said powers may direct. these warships will have been disarmed as provided in article 23 of the armistice, dated nov. 11, 1918. nevertheless, they must have all their guns on board. battleships--oldenburg, thuringen, ostfriesland, heligoland, posen, westfalen, rheinland, and nassau. light cruisers--stettin, danzig, münchen, lübeck, stralsund, augsburg, kolberg, and stuttgart. and in addition forty-two modern destroyers and fifty modern torpedo boats, as chosen by the governments of the principal allied and associated powers. =article 186.=--on the coming into force of the present treaty the german government must undertake, under the supervision of the governments of the principal allied and associated powers, the breaking up of all the german surface warships now under construction. =article 187.=--the german auxiliary cruisers and fleet auxiliaries enumerated below will be disarmed and treated as merchant ships. ships interned in neutral countries: berlin, santa fé, seydlitz, yorck. ships interned in germany: ammon, fürst bülow, answald, gertrud, bosnia, kigoma, cordoba, rugia, cassel, santa elena, dania, schleswig, rio negro, möwe, rio pardo, sierra ventana, santa cruz, chemnitz, schwaben, emil georg von strauss, solingen, habsburg, steigerwald, meteor, franken, waltraute, gundomar, scharnhorst. =article 188.=--on the expiration of one month from the coming into force of the present treaty all german submarines, salvage vessels, and docks for submarines, including the tubular dock, must have been handed over to the governments of the principal allied and associated powers. such of these submarines, vessels, and docks as are considered by said governments to be fit to proceed under their own power or to be towed shall be taken by the german government into such allied ports as have been indicated. the remainder, and also those in course of construction, shall be broken up entirely by the german government under the supervision of the said governments. the breaking up must be completed within three months at the most after the coming into force of the present treaty. =article 189.=--articles, machinery, and material arising from the breaking up of german warships of all kinds, whether surface vessels or submarines, may not be used except for purely industrial or commercial purposes. they may not be sold or disposed of to foreign countries. =article 190.=--germany is forbidden to construct or acquire any warships other than those intended to replace the units in commission provided for in article 181 of the present treaty. the warships intended for replacement purposes as above shall not exceed the following displacement: armored ships, 10,000 tons; light cruisers, 6,000 tons; destroyers, 800 tons; torpedo boats, 200 tons. except where a ship has been lost, units of the different classes shall only be replaced at the end of a period of twenty years in the case of battleships and cruisers, and fifteen years in the case of destroyers and torpedo boats, counting from the launching of the ship. =article 191.=--the construction or acquisition of any submarine, even for commercial purposes, shall be forbidden in germany. =article 192.=--the warships in commission of the german fleet must only have on board or in reserve the allowance of arms, munitions, and war material fixed by the principal allied and associated powers. within a month from the fixing of the quantities as above, arms, munitions and war material of all kinds, including mines and torpedoes now in the hands of the german government and in excess of the said quantities, shall be surrendered to the governments of the said powers at places to be indicated by them. such arms, munitions and war material will be destroyed or rendered useless. all other stocks, depots or reserves of arms, munitions or naval war material of all kinds are forbidden. the manufacture of these articles in german territory for, and their export to, foreign countries shall be forbidden. =article 193.=--on the coming into force of the present treaty germany will forthwith sweep up the mines in the following areas in the north sea to the eastward of longitude 4 degrees 00 minutes east of greenwich: (1) between parallels of latitude 53 degrees 00 minutes n. and 59 degrees 00 minutes n.; (2) to the northward of latitude 60 degrees 30 minutes n. germany must keep these areas free from mines. germany must also sweep and keep free from mines such areas in the baltic as may ultimately be notified by the governments of the principal allied and associated powers. =article 194.=--the personnel of the german navy shall be recruited entirely by voluntary engagements entered into for a minimum period of twenty-five consecutive years for officers and warrant officers, and twelve consecutive years for petty officers, and men. the number engaged to replace those discharged for any reason before the expiration of their term of service must not exceed 5 per cent. per annum of the totals laid down in this section. (article 183.) the personnel discharged from the navy must not receive any kind of naval or military training or undertake any further service in the navy or army. officers belonging to the german navy and not demobilized must engage to serve till the age of 45 unless discharged for sufficient reasons. no officer or man of the german mercantile marine shall receive any training in the navy. =article 195.=--in order to insure free passage into the baltic to all nations, germany shall not erect any fortifications in the area comprised between latitudes 55.27 north and 54.00 north and longitudes 9.00 east and 16.00 east of the meridian of greenwich, nor install any guns commanding the maritime routes between the north sea and the baltic. the fortifications now existing in this area shall be demolished and the guns removed under the supervision of the allied governments and in periods to be fixed by them. the german government shall place at the disposal of the governments of the principal allied and associated powers all hydrographical information now in its possession concerning the channels and adjoining waters between the baltic and the north sea. [illustration: copyright underwood & underwood =berlin demonstrations against the peace treaty=] =article 196.=--all fortified works and fortifications other than those mentioned in article 195 and in part iii. (political clauses for europe), section xiii. (heligoland), now established within fifty kilometers of the german coast or on german islands off that coast, shall be considered of a defensive nature and may remain in their existing condition. no new fortifications shall be constructed within these limits. the armament of these defenses shall not exceed, as regards the number and calibre of guns, those in position at the date of the coming into force of the present treaty. the german government shall communicate forthwith particulars thereof to all the european governments. on the expiration of a period of two months from the coming into force of the present treaty the stocks of ammunition for these guns shall be reduced to and maintained at a maximum figure of fifteen hundred rounds per piece for calibres of 4.1-inch and under, and five hundred rounds per piece for higher calibres. =article 197.=--during the three months following the coming into force of the present treaty the german high-power wireless telegraphy stations at nauen, hanover, and berlin shall not be used for the transmission of messages concerning naval, military, or political questions of interest to germany or any state which has been allied to germany in the war, without the assent of the governments of the principal allied and associated powers. these stations may be used for commercial purposes, but only under the supervision of the said governments, who will decide the wave length to be used. during the same period germany shall not build any more high-power wireless telegraphy stations in her own territory or that of austria, hungary, bulgaria, or turkey. section iii.--_air clauses_ =article 198.=--the armed forces of germany must not include any military or naval air forces. germany may, during a period not extending beyond oct. 1, 1919, maintain a maximum number of 100 seaplanes or flying boats, which shall be exclusively employed in searching for submarine mines, shall be furnished with the necessary equipment for this purpose, and shall in no case carry arms, munitions, or bombs of any nature whatever. in addition to the engines installed in the seaplanes or flying boats above mentioned, one spare engine may be provided for each engine of each of these craft. no dirigible shall be kept. =article 199.=--within two months from the coming into force of the present treaty the personnel of the air forces on the rolls of the german land and sea forces shall be demobilized. up to the 1st october, 1919, however, germany may keep and maintain a total number of 1,000 men, including officers, for the whole of the cadres and personnel, flying and nonflying, of all formations and establishments. =article 200.=--until the complete evacuation of german territory by the allied and associated troops, the aircraft of the allied and associated powers shall enjoy in germany freedom of passage through the air, freedom of transit and of landing. =article 201.=--during the six months following the coming into force of the present treaty the manufacture and importation of aircraft, parts of aircraft, engines for aircraft, and parts of engines for aircraft shall be forbidden in all german territory. =article 202.=--on the coming into force of the present treaty all military and naval aeronautical material, except the machines mentioned in the second and third paragraphs of article 198, must be delivered to the governments of the principal allied and associated powers. delivery must be effected at such places as the said governments may select, and must be completed within three months. in particular, this material will include all items under the following heads, which are or have been in use or were designed for warlike purposes: complete airplanes and seaplanes, as well as those being manufactured, repaired, or assembled. dirigibles able to take the air being manufactured, repaired, or assembled. plant for the manufacture of hydrogen. dirigible sheds and shelters of every kind for aircraft. pending their delivery, dirigibles will, at the expense of germany, be maintained inflated with hydrogen; the plant for the manufacture of hydrogen, as well as the sheds for dirigibles, may, at the discretion of said powers, be left to germany until the time when the dirigibles are handed over. engines for aircraft. nacelles and fuselages. armament (guns, machine guns, light machine guns, bomb-dropping apparatus, torpedo-dropping apparatus, synchronization apparatus, aiming apparatus). munitions (cartridges, shells, bombs, loaded or unloaded, stocks of explosives or of material for their manufacture). instruments for use on aircraft. wireless apparatus and photographic or cinematograph apparatus for use on aircraft. component parts of any of the items under the preceding heads. the material referred to above shall not be removed without special permission from the said governments. section iv.--_interallied commissions of control_ =article 203.=--all the military, naval, and air clauses contained in the present treaty, for the execution of which a time limit is prescribed, shall be executed by germany under the control of interallied commissions specially appointed for this purpose by the principal allied and associated powers. =article 204.=--the interallied commissions of control will be specially charged with the duty of seeing to the complete execution of the delivery, destruction, demolition, and rendering things useless to be carried out at the expense of the german government in accordance with the present treaty. they will communicate to the german authorities the decisions which the principal allied and associated powers have reserved the right to take, or which the execution of the military, naval, and air clauses may necessitate. =article 205.=--the interallied commissions of control may establish their organizations at the seat of the central german government. they shall be entitled as often as they think desirable to proceed to any point whatever in german territory, or to send sub-commissions, or to authorize one or more of their members to go, to any such point. =article 206.=--the german government must give all necessary facilities for the accomplishment of their missions to the interallied commissions of control and to their members. it shall attach a qualified representative to each interallied commission of control for the purpose of receiving the communications which the commission may have to address to the german government, and of supplying or procuring for the commission all information or documents which may be required. the german government must in all cases furnish at its own cost all labor and material required to effect the deliveries and the work of destruction, dismantling, demolition, and of rendering things useless, provided for in the present treaty. =article 207.=--the upkeep and cost of the commissions of control and the expenses involved by their work shall be borne by germany. =article 208.=--the military interallied commission of control will represent the governments of the principal allied and associated powers in dealing with the german government in all matters concerning the execution of the military clauses. in particular it will be its duty to receive from the german government the notifications relating to the location of the stocks and depots of munitions, the armament of the fortified works, fortresses and forts which germany is allowed to retain, and the location of the works or factories for the production of arms, munitions and war material and their operations. it will take delivery of the arms, munitions, and war material, will select the points where such delivery is to be effected, and will supervise the works of destruction and demolition and of rendering things useless which are to be carried out in accordance with the present treaty. the german government must furnish to the military interallied commission of control all such information and documents as the latter may deem necessary to insure the complete execution of the military clauses, and in particular all legislative and administrative documents and regulations. =article 209.=--the naval interallied commission of control will represent the governments of the principal allied and associated powers in dealing with the german government in all matters concerning the execution of the naval clauses. in particular it will be its duty to proceed to the building yards and to supervise the breaking up of the ships which are under construction there, to take delivery of all surface ships or submarines, salvage ships, docks and the tubular dock, and to supervise the destruction and breaking up provided for. the german government must furnish to the naval interallied commission of control all such information and documents as the commission may deem necessary to insure the complete execution of the naval clauses, in particular the designs of the warships, the composition of their armaments, the details and models of the guns, munitions, torpedoes, mines, explosives, wireless telegraphic apparatus and in general everything relating to naval war material, as well as all legislative or administrative documents or regulations. =article 210.=--the aeronautical interallied commission of control will represent the governments of the principal allied and associated powers in dealing with the german government in all matters concerning the execution of the air clauses. in particular it will be its duty to make an inventory of the aeronautical material existing in german territory, to inspect airplane, balloon, and motor manufactories, and factories producing arms, munitions, and explosives capable of being used by aircraft, to visit all aerodromes, sheds, landing grounds, parks, and depots, to authorize, where necessary, a removal of material, and to take delivery of such material. the german government must furnish to the aeronautical interallied commission of control all such information and legislative, administrative or other documents which the commission may consider necessary to insure the complete execution of the air clauses, and, in particular, a list of the personnel belonging to all the german air services, and of the existing material as well as of that in process of manufacture or on order, and a list of all establishments working for aviation, of their positions, and of all sheds and landing grounds. section v.--_general articles_ =article 211.=--after the expiration of a period of three months from the coming into force of the present treaty the german laws must have been modified and shall be maintained in conformity with this part of the present treaty. within the same period all the administrative or other measures relating to the execution of this part of the treaty must have been taken. =article 212.=--the following portions of the armistice of nov. 11, 1918: article vi., the first two and the sixth and seventh paragraphs of article vii, article ix, clauses i., ii., and v. of annex no. 2 and the protocol, dated april 4, 1919, supplementing the armistice of nov. 11, 1918, remain in force so far as they are not inconsistent with the above stipulations. =article 213.=--so long as the present treaty remains in force, germany undertakes to give every facility for any investigation which the council of the league of nations, acting if need be by a majority vote, may consider necessary. part vi prisoners of war and graves section i.--_prisoners of war_ =article 214.=--the repatriation of prisoners of war and interned civilians shall take place as soon as possible after the coming into force of the present treaty and shall be carried out with the greatest rapidity. =article 215.=--the repatriation of german prisoners of war and interned civilians shall, in accordance with article 214, be carried out by a commission composed of representatives of the allied and associated powers on the one part, and of the german government on the other part. for each of the allied and associated powers a sub-commission composed exclusively of representatives of the interested powers and of delegates of the german government shall regulate the details of carrying into effect the repatriation of the prisoners of war. =article 216.=--from the time of their delivery into the hands of the german authorities the prisoners of war and interned civilians are to be returned without delay to their homes by the said authorities. those among them who before the war were habitually resident in territory occupied by the troops of the allied and associated powers are likewise to be sent to their homes, subject to the consent and control of the military authorities of the allied and associated armies of occupation. =article 217.=--the whole cost of repatriation from the moment of starting shall be borne by the german government, who shall also provide the land and sea transport and staff considered necessary by the commission referred to in article 215. =article 218.=--prisoners of war and interned civilians awaiting disposal or undergoing sentences for offenses against discipline shall be repatriated irrespective of the completion of their sentence or of the proceedings pending against them. this stipulation shall not apply to prisoners of war and interned civilians punished for offenses committed subsequent to may 1, 1919. during the period pending their repatriation all prisoners of war and interned civilians shall remain subject to the existing regulations, more especially as regards work and discipline. =article 219.=--prisoners of war and interned civilians who are awaiting disposal or undergoing sentence for offenses other than those against discipline may be detained. =article 220.=--the german government undertakes to admit to its territory without distinction all persons liable to repatriation. prisoners of war or other german nationals who do not desire to be repatriated may be excluded from repatriation; but the allied and associated governments reserve to themselves the right either to repatriate them or to take them to a neutral country or to allow them to reside in their own territories. the german government undertakes not to institute any exceptional proceedings against these persons or their families nor to take any repressive or vexatious measures of any kind whatsoever against them on this account. =article 221.=--the allied and associated governments reserve the right to make the repatriation of german prisoners of war or german nationals in their hands conditional upon the immediate notification and release by the german government of any prisoners of war who are nationals of the allied and associated powers and may still be in germany. =article 222.=--germany undertakes: 1. to give every facility to the commissions to inquire into the cases of those who cannot be traced; to furnish such commissions with all necessary means of transport; to allow them access to camps, prisons, hospitals, and all other places; and to place at their disposal all documents, whether public or private, which would facilitate their inquiries. 2. to impose penalties upon any german officials or private persons who have concealed the presence of any nationals of any of the allied and associated powers, or have neglected to reveal the presence of any such after it had come to their knowledge. =article 223.=--germany undertakes to restore without delay from the date of the coming into force of the present treaty all articles, money, securities, and documents which have belonged to nationals of the allied and associated powers and which have been retained by the german authorities. =article 224.=--the high contracting parties waive reciprocally all repayment of sums due for the maintenance of prisoners of war in their respective territories. section ii.--_graves_ =article 225.=--the allied and associated governments and the german government will cause to be respected and maintained the graves of the soldiers and sailors buried in their respective territories. they agree to recognize any commission appointed by an allied or associated government for the purpose of identifying, registering, caring for, or erecting suitable memorials over the said graves and to facilitate the discharge of its duties. furthermore, they agree to afford, so far as the provisions of their laws and the requirements of public health allow, every facility for giving effect to requests that the bodies of their soldiers and sailors may be transferred to their own countries. =article 226.=--the graves of prisoners of war and interned civilians who are nationals of the different belligerent states and have died in captivity shall be properly maintained in accordance with article 225 of the present treaty. the allied and associated governments on the one part, and the german government on the other part, reciprocally, undertake also to furnish to each other: 1. a complete list of those who have died, together with all information useful for identification. 2. all information as to the number and position of the graves of all those who have been buried without identification. part vii penalties =article 227.=--the allied and associated powers publicly arraign william ii. of hohenzollern, formerly german emperor, for a supreme offense against international morality and the sanctity of treaties. a special tribunal will be constituted to try the accused, thereby assuring him the guarantees essential to the right of defense. it will be composed of five judges, one appointed by each of the following powers: the united states of america, great britain, france, italy, and japan. in its decision, the tribunal will be guided by the highest motives of international policy with a view to vindicating the solemn obligations of international undertakings and the validity of international morality. it will be its duty to fix the punishment which it considers should be imposed. the allied and associated powers will address a request to the government of the netherlands for the surrender to them of the ex-emperor in order that he may be put on trial. =article 228.=--the german government recognizes the right of the allied and associated powers to bring before military tribunals persons accused of having committed acts in violation of the laws and customs of war. such persons shall, if found guilty, be sentenced to punishments laid down by law. this provision will apply, notwithstanding any proceedings or prosecution before a tribunal in germany or in the territory of her allies. the german government shall hand over to the allied and associated powers or to such one of them as shall so request, all persons accused of having committed an act in violation of the laws and customs of war who are specified either by name or by the rank, office, or employment which they held under the german authorities. =article 229.=--persons guilty of criminal acts against the nationals of one of the allied and associated powers will be brought before the military tribunals of that power. persons guilty of criminal acts against the nationals of more than one of the allied and associated powers will be brought before military tribunals composed of members of the military tribunals of the powers concerned. in every case the accused will be entitled to name his own counsel. =article 230.=--the german government undertakes to furnish all documents and information of every kind, the production of which may be considered necessary to insure the full knowledge of the incriminating acts, the discovery of offenders, and the just appreciation of responsibility. part viii reparation section i.--_general provisions_ =article 231.=--the allied and associated governments affirm, and germany accepts, the responsibility of germany and her allies for causing all the loss and damage to which the allied and associated governments and their nationals have been subjected as a consequence of the war imposed upon them by the aggression of germany and her allies. =article 232.=--the allied and associated governments recognize that the resources of germany are not adequate, after taking into account permanent diminutions of such resources which will result from other provisions of the present treaty, to make complete reparation for all such loss and damage. the allied and associated governments, however, require, and germany undertakes, that she will make compensation for all damage done to the civilian population of the allied and associated powers and to their property during the period of the belligerency of each as an allied or associated power against germany by such aggression by land, by sea, and from the air, and in general all damage as defined in annex i. hereto. in accordance with germany's pledges, already given as to complete restoration for belgium, germany undertakes, in addition to the compensation for damage elsewhere in this chapter provided for, as a consequence of the violation of the treaty of 1839, to make reimbursement of all sums which belgium has borrowed from the allies and associated governments up to nov. 11, 1918, together with interest at the rate of 5 per cent. per annum on such sums. this amount shall be determined by the reparation commission, and the german government undertakes thereupon forthwith to make a special issue of bearer bonds to an equivalent amount payable in marks gold, on may 1, 1926, or, at the option of the german government, on the 1st of may in any year up to 1926. subject to the foregoing, the form of such bonds shall be determined by the reparation commission. such bonds shall be handed over to the reparation commission, which has authority to take and acknowledge receipt thereof on behalf of belgium. =article 233.=--the amount of the above damage for which compensation is to be made by germany shall be determined by an interallied commission, to be called the reparation commission, and constituted in the form and with the power set forth hereunder and in annexes ii. to vii. inclusive hereto. this commission shall consider the claims and give to the german government a just opportunity to be heard. the findings of the commission as to the amount of damage defined as above shall be concluded and notified to the german government on or before the 1st may, 1921, as representing the extent of that government's obligations. the commission shall concurrently draw up a schedule of payments prescribing the time and manner for securing and discharging the entire obligation within a period of thirty years from the 1st may, 1921. if, however, within the period mentioned, germany fails to discharge her obligations, any balance remaining unpaid may, within the discretion of the commission, be postponed for settlement in subsequent years, or may be handled otherwise in such manner as the allied and associated governments, acting in accordance with the procedure laid down in this part of the present treaty, shall determine. =article 234.=--the reparation commission shall after the 1st may, 1921, from time to time, consider the resources and capacity of germany and, after giving her representatives a just opportunity to be heard, shall have discretion to extend the date and to modify the form of payments, such as are to be provided for in accordance with article 233; but not to cancel any part, except with the specific authority of the several governments represented upon the commission. =article 235.=--in order to enable the allied and associated powers to proceed at once to the restoration of their industrial and economic life, pending the full determination of their claims, germany shall pay in such installments and in such manner (whether in gold, commodities, ships, securities, or otherwise) as the reparation commission may fix, during 1919, 1920, and the first four months of 1921, the equivalent of 20,000,000,000 gold marks. out of this sum the expenses of the armies of occupation subsequent to the armistice of the 11th november, 1918, shall first be met, and such supplies of food and raw materials as may be judged by the governments of the principal allied and associated powers to be essential to enable germany to meet her obligations for reparation may also, with the approval of the said governments, be paid for out of the above sum. the balance shall be reckoned toward liquidation of the amounts due for reparation. germany shall further deposit bonds as prescribed in paragraph 12 (c) of annex ii. hereto. =article 236.=--germany further agrees to the direct application of her economic resources to reparation as specified in annexes iii., iv., v., and vi., relating respectively to merchant shipping, to physical restoration, and to coal and derivatives of coal, and to dyestuffs and other chemical products; provided always that the value of the property transferred and any services rendered by her under these annexes, assessed in the manner herein prescribed, shall be credited to her toward liquidation of her obligations under the above articles. =article 237.=--the successive installments, including the above sum, paid over by germany in satisfaction of the above claims, will be divided by the allied and associated governments in proportions which have been determined upon by them in advance on a basis of general equity and of the rights of each. for the purposes of this division the value of property transferred and services rendered under article 243 and under annexes iii., iv., vi., and vii. shall be reckoned in the same manner as cash payments effected in that year. =article 238.=--in addition to the payments mentioned above, germany shall effect, in accordance with the procedure laid down by the reparation commission, restitution in cash of cash taken away, seized, or sequestrated, and also restitution of animals, objects of every nature, and securities taken away, seized, or sequestrated, in the cases in which it proves possible to identify them in territory belonging to germany or her allies. until this procedure is laid down restitution will continue in accordance with the provisions of the armistice of 11th november, 1918, and its renewals and the protocols thereto. =article 239.=--germany undertakes to make forthwith the restitution contemplated by article 238 and to make the payments and deliveries contemplated by articles 233, 234, 235, and 236. =article 240.=--germany recognizes the commission provided for by article 233 as the same may be constituted by the allied and associated governments in accordance with annex ii. and agrees irrevocably to the possession and exercise by such commission of the power and authority given to it under the present treaty. the german government will supply to the commission all the information which the commission may require relative to the financial situation and operations and to the property, productive capacity, and stocks and current production of raw materials and manufactured articles of germany and her nationals, and, further, any information relative to military operations which in the judgment of the commission may be necessary for the assessment of germany's liability for reparation as defined in annex i. the german government will accord to the members of the commission and its authorized agents the same rights and immunities as are enjoyed in germany by duly accredited diplomatic agents of friendly powers. germany further agrees to provide for the salaries and expenses of the commission, and of such staff as it may employ. =article 241.=--germany undertakes to pass, issue, and maintain in force any legislation, orders, and decrees that may be necessary to give complete effect to these provisions. =article 242.=--the provisions of this part of the present treaty do not apply to the property, rights, and interests referred to in sections iii. and iv. of part x. (economic clauses) of the present treaty, nor to the product of their liquidation, except so far as concerns any final balance in favor of germany under article 243 (a). =article 243.=--the following shall be reckoned as credits to germany in respect of her reparation obligations: (a) any final balance in favor of germany under sections iii. and iv. of part x. (economic clauses) and section v. (alsace-lorraine) of part iii. (political clauses for europe). (b) amounts due to germany in respect of transfers under part ix. (financial clauses), part xii. (ports, waterways, and railways), and section iv. (sarre basin) of part iii. (political clauses for europe). (c) amounts which in the judgment of the reparation commission should be credited to germany on account of any other transfers under the present treaty of property, rights, concessions, or other interests. in no case, however, shall credit be given for property restored in accordance with article 238. =article 244.=--the transfer of the german submarine cables which do not form the subject of particular provisions of the present treaty as regulated by annex vii. hereto. annex i. compensation may be claimed from germany under article 232 above in respect of the total damage under the following categories: 1. damage to injured persons and to surviving dependents by personal injury to or death of civilians caused by acts of war, including bombardments or other attacks on land, on sea, or from the air, and all the direct consequences thereof, and of all operations of war by the two groups of belligerents wherever arising. 2. damage caused by germany or her allies to civilian victims of acts of cruelty, violence, or maltreatment, (including injuries to life or health as a consequence of imprisonment, deportation, internment, or evacuation, of exposure at sea, or of being forced to labor by germany or her allies,) wherever arising, and to the surviving dependents of such victims. 3. damage caused by germany or her allies in their own territory or in occupied or invaded territory to civilian victims of all acts injurious to health or capacity to work, or to honor, as well as to the surviving dependents of such victims. 4. damage caused by any kind of maltreatment of prisoners of war. 5. as damage caused to the peoples of the allied and associated powers, all pensions and compensations in the nature of pensions to naval and military victims of war, (including members of the air forces,) whether mutilated, wounded, sick or invalided, and to the dependents of such victims, the amount due to the allied and associated governments being calculated for each of them as being the capitalized costs of such pensions and compensations at the date of the coming into force of the present treaty, on the basis of the scales in force in france at such date. 6. the cost of assistance by the governments of the allied and associated powers to prisoners of war and to their families and dependents. 7. allowances by the governments of the allied and associated powers to the families and dependents of mobilized persons or persons serving with the forces, the amount due to them for each calendar year in which hostilities occurred being calculated for each government on the basis of the average scale for such payments in force in france during that year. 8. damage caused to civilians by being forced by germany or her allies to labor without just remuneration. 9. damage in respect of all property, wherever situated, belonging to any of the allied or associated states or their nationals, with the exception of naval and military works or materials, which have been carried off, seized, injured, or destroyed by the acts of germany or her allies on land, on sea, or from the air, or damage directly in consequence of hostilities or of any operations of war. 10. damage in the form of levies, fines and other similar exactions imposed by germany or her allies upon the civilian population. annex ii. 1. the commission referred to in article 233 shall be called "the reparation commission," and is hereinafter referred to as "the commission." 2. delegates to the commission shall be nominated by the united states of america, great britain, france, italy, japan, belgium, and the serb-croat-slovene state. each of these powers will appoint one delegate and also one assistant delegate, who will take his place in case of illness or necessary absence, but at other times will only have the right to be present at proceedings without taking any part therein. on no occasion shall the delegates of more than five of the above powers have the right to take part in the proceedings of the commission and to record their votes. the delegates of the united states, great britain, france, and italy shall have this right on all occasions. the delegates of belgium shall have this right on all occasions other than those referred to below. the delegate of japan shall have this right on occasions when questions relating to damage at sea and questions arising under article 260 of part ix. (financial clauses) in which japanese interests are concerned are under consideration. the delegate of the serb-croat-slovene state shall have this right when questions relating to austria, hungary, or bulgaria are under consideration. each government represented on the commission shall have the right to withdraw therefrom upon twelve months' notice, filed with the commission and confirmed in the course of the sixth month after the date of the original notice. 3. such of the other allied and associated powers as may be interested shall have the right to appoint a delegate to be present and act as assessor only while their respective claims and interests are under examination or discussion, but without the right to vote. 4. in case of the death, resignation or recall of any delegate, assistant delegate, or assessor, a successor to him shall be nominated as soon as possible. 5. the commission will have its principal permanent bureau in paris and will hold its first meeting in paris as soon as practicable after the coming into force of the present treaty, and thereafter will meet in such place or places and at such time as it may deem convenient and as may be necessary for the most expeditious discharge of its duties. 6. at its first meeting the commission shall elect from among the delegates referred to above a chairman and a vice chairman, who shall hold office for one year and shall be eligible for re-election. if a vacancy in the chairmanship or vice chairmanship should occur during the annual period the commission shall proceed to a new election for the remainder of the said period. [illustration: copyright underwood & underwood german press representatives in versailles these men who are shown in their work room in the hotel des reservoirs, versailles, sent the news of the progress of the peace treaty throughout germany] 7. the commission is authorized to appoint all necessary officers, agents, and employees who may be required for the execution of its functions, and to fix their remuneration; to constitute committees, whose members need not necessarily be members of the commission, and to take all executive steps necessary for the purpose of discharging its duties, and to delegate authority and discretion to officers, agents, and committees. 8. all proceedings of the commission shall be private unless, on particular occasions, the commission shall otherwise determine for special reasons. 9. the commission shall be required, if the german government so desire, to hear, within a period which it will fix from time to time, evidence and arguments on the part of germany on any question connected with her capacity to pay. 10. the commission shall consider the claims and give to the german government a just opportunity to be heard, but not to take any part whatever in the decisions of the commission. the commission shall afford a similar opportunity to the allies of germany when it shall consider that their interests are in question. 11. the commission shall not be bound by any particular code or rules of law or by any particular rule of evidence or of procedure, but shall be guided by justice, equity, and good faith. its decisions must follow the same principles and rules in all cases where they are applicable. it will establish rules relating to methods of proof of claims. it may act on any trustworthy modes of computation. 12. the commission shall have all the powers conferred upon it, and shall exercise all the functions assigned to it by the present treaty. the commission shall in general have wide latitude as to its control and handling of the whole reparation problem as dealt with in this part of the present treaty, and shall have authority to interpret its provisions. subject to the provisions of the present treaty, the commission is constituted by the several allied and associated governments referred to in paragraphs 2 and 3 above as the exclusive agency of the said governments respectively for receiving, selling, holding, and distributing the reparation payments to be made by germany under this part of the present treaty. the commission must comply with the following conditions and provisions: (a) whatever part of the full amount of the proved claims is not paid in gold, or in ships, securities, and commodities or otherwise, germany shall be required, under such conditions as the commission may determine, to cover by way of guarantee by an equivalent issue of bonds, obligations, or otherwise, in order to constitute an acknowledgment of the said part of the debt; (b) in periodically estimating germany's capacity to pay, the commission shall examine the german system of taxation, first to the end that the sums for reparation which germany is required to pay shall become a charge upon all her revenues prior to that for the service or discharge of any domestic loan, and, secondly, so as to satisfy itself that, in general, the german scheme of taxation is fully as heavy proportionately as that of any of the powers represented on the commission. (c) in order to facilitate and continue the immediate restoration of the economic life of the allied and associated countries, the commission will, as provided in article 235, take from germany by way of security for and acknowledgment of her debt a first installment of gold bearer bonds free of all taxes or charges of every description established or to be established by the government of the german empire or of the german states, or by any authority subject to them; these bonds will be delivered on account and in three portions, the marks gold being payable in conformity with article 262 of part ix. (financial clauses) of the present treaty, as follows: first. to be issued forthwith, 20,000,000,000 marks gold bearer bonds, payable not later than may 1, 1921, without interest. there shall be specially applied toward the amortization of these bonds the payments which germany is pledged to make in conformity with article 235, after deduction of the sums used for the reimbursement of expenses of the armies of occupation and for payment of foodstuffs and raw materials. such bonds as have not been redeemed by may 1, 1921, shall then be exchanged for new bonds of the same type as those provided for below, (paragraph 12, c. second.) second. to be issued forthwith, further 40,000,000,000 marks gold bearer bonds, bearing interest at 2½ per cent. per annum between 1921 and 1926, and thereafter at 5 per cent. per annum, with an additional 1 per cent for amortization beginning in 1926 on the whole amount of the issue. third. to be delivered forthwith a covering undertaking in writing, to issue when, but not until, the commission is satisfied that germany can meet such interest and sinking fund obligations, a further installment of 40,000,000,000 marks gold 5 per cent. bearer bonds, the time and mode of payment of principal and interest to be determined by the commission. the dates for payment of interest, the manner of applying the amortization fund, and all other questions relating to the issue, management, and regulation of the bond issue shall be determined by the commission from time to time. further issues by way of acknowledgment and security may be required as the commission subsequently determines from time to time. (d) in the event of bonds, obligations, or other evidence of indebtedness issued by germany by way of security for or acknowledgment of her reparation debt being disposed of outright, not by way of pledge, to persons other than the several governments in whose favor germany's original reparation indebtedness was created, an amount of such reparation indebtedness shall be deemed to be extinguished corresponding to the nominal value of the bonds, &c., so disposed of outright, and the obligation of germany in respect for such bonds shall be confined to her liabilities to the holders of the bonds, as expressed upon their face. (e) the damage for repairing, reconstructing, and rebuilding property in the invaded and devastated districts, including reinstallation of furniture, machinery and other equipment, will be calculated according to the cost at the dates when the work is done. (f) decisions of the commission relating to the total or partial cancellation of the capital or interest of any verified debt of germany must be accompanied by a statement of its reasons. 13. as to voting, the commission will observe the following rules: when a decision of the commission is taken, the votes of all the delegates entitled to vote, or in the absence of any of them, of their assistant delegates, shall be recorded. abstention from voting is to be treated as a vote against the proposal under discussion. assessors have no vote. on the following questions unanimity is necessary: (a) questions involving the sovereignty of any of the allied and associated powers, or the cancellation of the whole or any part of the debt or obligations of germany. (b) questions of determining the amount and conditions of bonds or other obligations to be issued by the german government and of fixing the time and manner for selling, negotiating, or distributing such bonds. (c) any postponement, total or partial, beyond the end of 1930, of the payment of installments falling due between the 1st may, 1921, and the end of 1926 inclusive. (d) any postponement, total or partial, of any installment falling due after 1926 for a period exceeding three years. (e) questions of applying in any particular case a method of measuring damages different from that which has been previously applied in a similar case. (f) questions of the interpretation of the provisions of this part of the present treaty. all other questions shall be decided by the vote of a majority. in case of any difference of opinion among the delegates, which cannot be solved by reference to their governments, upon the question whether a given case is one which requires a unanimous vote for its decision or not, such difference shall be referred to the immediate arbitration of some impartial person to be agreed upon by the governments, whose award the allied and associated governments agree to accept. 14. decisions of the commission, in accordance with the powers conferred upon it, shall forthwith become binding and may be put into immediate execution without further proceedings. 15. the commission will issue to each of the interested powers, in such form as the commission shall fix: first. a certificate stating that it holds for the account of the said power bonds of the issues mentioned above, the said certificate, on the demand of the power concerned, being divisible in a number of parts not exceeding five; second. from time to time certificates stating the goods delivered by germany on account of her reparation debt which it holds for the account of the said power. the said certificates shall be registered, and, upon notice to the commission, may be transferred by indorsement. when bonds are issued for sale or negotiation, and when goods are delivered by the commission, certificates to an equivalent value must be withdrawn. 16. interest shall be debited to germany as from 1st may, 1921, in respect of her debt as determined by the commission, after allowing for sums already covered by cash payments or their equivalent, or by bonds issued to the commission, or under article 243. the rate of interest shall be 5 per cent., unless the commission shall determine at some future time that circumstances justify a variation of this rate. the commission, in fixing on 1st may, 1921, the total amount of the debt of germany, may take account of interest due on sums arising out of the reparation of material damage, as from 11th november, 1918, up to 1st may, 1921. 17. in case of default by germany in the performance of any obligation under this part of the present treaty, the commission will forthwith give notice of such default to each of the interested powers and may make such recommendations as to the action to be taken in consequence of such default as it may think necessary. 18. the measures which the allied and associated powers shall have the right to take, in case of voluntary default by germany, and which germany agrees not to regard as acts of war, may include economic and financial prohibitions and reprisals and in general such other measures as the respective governments may determine to be necessary in the circumstances. 19. payments required to be made in gold or its equivalent on account of the proved claims of the allied and associated powers may at any time be accepted by the commission in the form of chattels, properties, commodities, businesses, rights, concessions, within or without german territory, ships, bonds, shares, or securities of any kind, or currencies of germany or other states, the value of such substitutes for gold being fixed at a fair and just amount by the commission itself. 20. the commission, in fixing or accepting payment in specified properties or rights, shall have due regard for any legal or equitable interests of the allied and associated powers or of neutral powers or of their nationals therein. 21. no member of the commission shall be responsible, except to the government appointing him, for any action or omission as such member. no one of the allied or associated governments assumes any responsibility in respect of any other government. 22. subject to the provisions of the present treaty this annex may be amended by the unanimous decision of the governments represented from time to time upon the commission. 23. when all the amounts due from germany and her allies under the present treaty or the decisions of the commission have been discharged and all sums received, or their equivalents, shall have been distributed to the powers interested, the commission shall be dissolved. annex iii. 1. germany recognizes the right of the allied and associated powers to the replacement, ton for ton (gross tonnage) and class for class, of all merchant ships and fishing boats lost or damaged owing to the war. nevertheless, and in spite of the fact that the tonnage of german shipping at present in existence is much less than that lost by the allied and associated powers, in consequence of the german aggression, the right thus recognized will be enforced on german ships and boats under the following conditions: the german government on behalf of themselves and so as to bind all other persons interested, cede to the allied and associated governments the property in all the german merchant ships which are of 1,600 tons gross and upward; in one-half, reckoned in tonnage, of the ships which are between 1,000 tons and 1,600 tons gross; in one-quarter, reckoned in tonnage, of the steam trawlers, and in one-quarter, reckoned in tonnage, of the other fishing boats. 2. the german government will, within two months of the coming into force of the present treaty, deliver to the reparation commission all the ships and boats mentioned in paragraph 1. 3. the ships and boats mentioned in paragraph 1 include all ships and boats which (a) fly, or may be entitled to fly, the german merchant flag; or (b) are owned by any german national, company, or corporation or by any company or corporation belonging to a country other than an allied or associated country and under the control or direction of german nationals; or (c) which are now under construction (1) in germany, (2) in other than allied or associated countries for the account of any german national, company, or corporation. 4. for the purpose of providing documents of title for the ships and boats to be handed over as above mentioned, the german government will: (a) deliver to the reparation commission in respect of each vessel a bill of sale or other document of title evidencing the transfer to the commission of the entire property in the vessel free from all incumbrances, charges, and liens of all kinds, as the commission may require: (b) take all measures that may be indicated by the reparation commission for insuring that the ships themselves shall be placed at its disposal. 5. as an additional part of reparation, germany agrees to cause merchant ships to be built in german yards for the account of the allied and associated governments as follows: (a) within three months of the coming into force of the present treaty, the reparation commission will notify to the german government the amount of tonnage to be laid down in german shipyards in each of the two years next succeeding the three months mentioned above: (b) within twenty-four months of the coming into force of the present treaty, the reparation commission will notify to the german government the amount of tonnage to be laid down in each of the three years following the two years mentioned above; (c) the amount of tonnage to be laid down in each year shall not exceed 200,000 tons, gross tonnage; (d) the specifications of the ships to be built, the conditions under which they are to be built and delivered, the price per ton at which they are to be accounted for by the reparation commission, and all other questions relating to the accounting, ordering, building and delivery of the ships, shall be determined by the commission. 6. germany undertakes to restore in kind and in normal condition of upkeep to the allied and associated powers, within two months of the coming into force of the present treaty, in accordance with procedure to be laid down by the reparation commission, any boats and other movable appliances belonging to inland navigation which since the 1st august, 1914, have by any means whatever come into her possession or into the possession of her nationals, and which can be identified. with a view to make good the loss in inland navigation tonnage, from whatever cause arising, which has been incurred during the war by the allied and associated powers, and which cannot be made good by means of the restitution prescribed above, germany agrees to cede to the reparation commission a portion of the german river fleet up to the amount of the loss mentioned above, provided that such cession shall not exceed 20 per cent. of the river fleet as it existed on the 11th november, 1918. the condition of this session shall be settled by the arbitrators referred to in article 339 of part xii. (ports, waterways and railways) of the present treaty, who are charged with the settlement of difficulties relating to the apportionment of river tonnage resulting from the new international régime applicable to certain river systems or from the territorial changes affecting those systems. 7. germany agrees to take any measures that may be indicated to her by the reparation commission for obtaining the full title to the property in all ships which have been during the war transferred, or are in process of transfer, to neutral flags, without the consent of the allied and associated governments. 8. germany waives all claims of any description against the allied and associated governments and their nationals in respect of the detention, employment, loss or damage of any german ships or boats, except when being made of payments due in respect of the employment of ships in conformity with the armistice agreement of the 13th january, 1919, and subsequent agreements. the handing over of the ships of the german mercantile marine must be continued without interruption in accordance with the said agreement. 9. germany waives all claims to vessels or cargoes sunk by or in consequence of naval action and subsequently salved, in which any of the allied or associated governments or their nationals may have any interest, either as owners, charterers, insurers or otherwise, notwithstanding any decree of condemnation which may have been made by a prize court of germany or of her allies. annex iv. 1. the allied and associated powers require, and germany undertakes, that, in part satisfaction of her obligations expressed in this part of the present treaty, she will, as hereinafter provided, devote her economic resources directly to the physical restoration of the invaded areas of the allied and associated powers, to the extent that these powers may determine. 2. the allied and associated governments may file with the reparation commission lists showing: (a) animals, machinery, equipment, tools, and like articles of commercial character, which have been seized, consumed, or destroyed by germany or destroyed in direct consequence of military operations, and which such governments, for the purpose of meeting immediate and urgent needs, desire to have replaced by animals and articles of the same nature which are being in german territory at the date of the coming into force of the present treaty; (b) reconstruction materials, (stones, bricks, refractory bricks, tiles, wood, window glass, steel, lime, cement, &c.,) machinery, heating apparatus, furniture, and like articles of a commercial character which the said governments desire to have produced and manufactured in germany and delivered to them to permit of the restoration of the invaded areas. 3. the lists relating to the articles mentioned in 2 (a), above, shall be filed within sixty days after the date of the coming into force of the present treaty. the lists relating to the articles in 2 (b), above, shall be filed on or before dec. 31, 1919. the lists shall contain all such details as are customary in commercial contracts dealing with the subject matter, including specifications, dates of delivery, (but not extending over more than four years,) and places of delivery, but not price or value, which shall be fixed as hereinafter provided by the commission. 4. immediately upon the filing of such lists with the commission, the commission shall consider the amount and number of the materials and animals mentioned in the lists provided for above which are to be required of germany. in reaching a decision on this matter the commission shall take into account such domestic requirements of germany as it deems essential for the maintenance of germany's social and economic life, and the prices and dates at which similar articles can be obtained in the allied and associated countries as compared with those to be fixed for german articles, and the general interest of the allied and associated governments that the industrial life of germany be not so disorganized as to affect adversely the ability of germany to perform the other acts of reparation stipulated for. machinery, equipment, tools, and like articles of a commercial character in actual industrial use are not, however, to be demanded of germany unless there is no free stock of such articles respectively which is not in use and is available, and then not in excess of 30 per cent. of the quantity of such articles in use in any one establishment or undertaking. the commission shall give representatives of the german government an opportunity and a time to be heard as to their capacity to furnish the said materials, articles, and animals. the decision of the commission shall thereupon and at the earliest possible moment be communicated to the german government and to the several interested allied and associated governments. the german government undertakes to deliver the materials, articles, and animals as specified in the said communication, and the interested allied and associated governments severally agree to accept the same, provided they conform to the specification given, or are not, in the judgment of the commission, unfit to be utilized in the work of reparation. 5. the commission shall determine the value to be attributed to the materials, articles, and animals to be delivered in accordance with the foregoing, and the allied or associated power receiving the same agrees to be charged with such value, and the amount thereof shall be treated as a payment by germany to be divided in accordance with article 237 of this part of the present treaty. in cases where the right to require physical restoration as above provided is exercised the commission shall insure that the amount to be credited against the reparation obligation of germany shall be the fair value of work done or materials supplied by germany and that the claim made by the interested power in respect of the damage so repaired by physical restoration shall be discharged to the extent of the proportion which the damage thus repaired bears to the whole of the damage thus claimed for. 6. as an immediate advance on account of the animals referred to in paragraph 2 (a) above, germany undertakes to deliver in equal monthly installments in the three months following the coming into force of the present treaty the following quantities of live stock: first. to the french government, 500 stallions, (3 to 7 years,) 30,000 fillies and mares, (18 months to 7 years,) type: ardennais, boulonnais, or belgian; 2,000 bulls, (18 months to 3 years); 90,000 milch cows, (2 to 6 years); 1,000 rams, 100,000 sheep, 10,000 goats. second. to the belgian government, 200 stallions, (3 to 7 years) large belgian type; 5,000 mares, (3 to 7 years) large belgian type; 5,000 fillies, (18 months to 3 years); large belgian type; 2,000 bulls, (18 months to 3 years) 50,000 milch cows, (2 to 6 years) 40,000 heifers, 200 rams, 20,000 sheep, 15,000 sows. the animals delivered shall be of average health and condition. to the extent that animals so delivered cannot be identified as animals taken away or seized, the value of such animals shall be credited against the reparation obligations of germany in accordance with paragraph 5 of this annex. 7. without waiting for the decisions of the commission, referred to in paragraph 4 of this annex, to be taken, germany must continue the delivery to france of the agricultural material referred to in article 3 of the renewal of the armistice of 16th january, 1919. annex v. 1. germany accords the following options for the delivery of coal and derivatives of coal to the under-mentioned signatories of the present treaty. 2. germany undertakes to deliver to france 7,000,000 tons of coal per year for ten years. in addition, germany undertakes to deliver to france annually for a period not exceeding ten years an amount of coal equal to the difference between the annual production before the war of the coal mines of the nord and pas de calais, destroyed as a result of the war, and the production of the mines of the same area during the years in question; such delivery not to exceed 20,000,000 tons in any one year of the first five years, and 8,000,000 tons in any one year of the succeeding five years. it is understood due diligence will be exercised in the restoration of the destroyed mines in the nord and pas de calais. 3. germany undertakes to deliver to belgium 8,000,000 tons of coal annually for ten years. 4. germany undertakes to deliver to italy up to the following quantities of coal: july, 1919, to june, 1920, 4,500,000 tons. july, 1920, to june, 1921, 6,000,000 tons. july, 1921, to june, 1922, 7,500,000 tons. july, 1922, to june, 1923, 8,000,000 tons. july, 1923, to june, 1924, 8,500,000 tons. and each of the following five years, 8,500,000 tons. at least two-thirds of the actual deliveries to be land borne. 5. germany further undertakes to deliver annually to luxemburg, if directed by the reparation commission, a quantity of coal equal to the pre-war annual consumption of german coal in luxemburg. 6. the prices to be paid for coal delivered under these options shall be as follows: (a) for overland delivery, including delivery by barge, the german pithead price to german nationals, plus the freight to french, belgian, italian, or luxemburg frontiers, provided the pithead price does not exceed the pithead price of british coal for export. in case of belgian bunker coal, the price shall not exceed the dutch bunker price. railroad and barge tariffs shall not be higher than the lowest similar rates paid in germany. (b) for sea delivery, the german export price f. o. b. the german ports, or the british export price f. o. b. british ports, whichever may be lower. 7. the allied and associated governments interested may demand the delivery in place of coal of metallurgical coke in the proportion of three tons of coke to four tons of coal. 8. germany undertakes to deliver to france and to transport to the french frontier by rail or by water the following products during each of the three years following the coming into force of this treaty: benzol--35,000 tons. coal tar--50,000 tons. sulphate of ammonia--30,000 tons. all or part of the coal tar may, at the option of the french government, be replaced by corresponding quantities of products of distillation, such as light oils, heavy oils, anthracine, naphthaline, or pitch. 9. the price paid for coke and for the articles referred to in the preceding paragraphs shall be the same as the price paid by german nationals under the same conditions of shipment to the french frontier or to the german ports, and shall be subject to any advantages which may be accorded similar products furnished to german nationals. 10. the foregoing options shall be exercised through the intervention of the reparation commission, which, subject to the specific provisions hereof, shall have power to determine all questions relative to procedure and the qualities and quantities of products, the quantity of coke which may be substituted for coal, and the times and modes of delivery and payment. in giving notice to the german government of the foregoing options the commission shall give at least 120 days' notice of deliveries to be made after 1st january, 1920, and at least thirty days' notice of deliveries to be made between the coming into force of this treaty and the 1st january, 1920. until germany has received the demands referred to in this paragraph the provisions of the protocol of the 25th december, 1918, (execution of article 6 of the armistice of the 11th november, 1918,) remain in force. the notice to be given to the german government of the exercise of the right of substitution accorded by paragraphs 7 and 8 shall be such as the reparation commission may consider sufficient. if the commission shall determine that the full exercise of the foregoing options would interfere unduly with the industrial requirements of germany, the commission is authorized to postpone or to cancel deliveries, and in so doing to settle all questions of priority, but the coal to replace coal from destroyed mines shall receive priority over other deliveries. annex vi. 1. germany accords to the reparation commission an option to require as part of reparation the delivery by germany of such quantities and kinds of dyestuffs and chemical drugs as the commission may designate, not exceeding 50 per cent. of the total stock of each and every kind of dyestuff and chemical drug in germany or under german control at the date of the coming into force of the present treaty. this option shall be exercised within sixty days of the receipt by the commission of such particulars as to stocks as may be considered necessary by the commission. 2. germany further accords to the reparation commission an option to require delivery during the period from the date of the coming into force of the present treaty until jan. 1, 1920, and during each period of six months thereafter until jan. 1, 1925, of any specified kind of dyestuff and chemical drug up to an amount not exceeding 25 per cent. of the german production of such dyestuffs and chemical drugs during the previous six months' period. if in any case the production during such previous six months was, in the opinion of the commission, less than normal, the amount required may be 25 per cent. of the normal production. such option shall be exercised within four weeks after the receipt of such particulars as to production and in such form as may be considered necessary by the commission; these particulars shall be furnished by the german government immediately after the expiration of each six months' period. 3. for dyestuffs and chemical drugs delivered under paragraph 1 the price shall be fixed by the commission, having regard to pre-war net export prices and to subsequent increases of cost. for dyestuffs and chemical drugs delivered under paragraph 2 the price shall be fixed by the commission, having regard to pre-war net export prices and subsequent variations of cost or the lowest net selling price of similar dyestuffs and chemical drugs to any other purchaser. 4. all details, including mode and times of exercising the options and making delivery, and all other questions arising under this arrangement shall be determined by the reparation commission; the german government will furnish to the commission all necessary information and other assistance which it may require. 5. the above expression "dyestuffs and chemical drugs" includes all synthetic dyes and drugs and intermediate or other products used in connection with dyeing, so far as they are manufactured for sale. the present arrangement shall also apply to cinchona bark and salts of quinine. annex vii. germany renounces on her own behalf and on behalf of her nationals in favor of the principal allied and associated powers all rights, titles or privileges of whatever nature in the submarine cables set out below, or in any portions thereof: emden-vigo: from the straits of dover to off vigo; emden-brest: from off cherbourg to brest; emden-teneriffe: from off dunkirk to off teneriffe; emden-azores (1): from the straits of dover to fayal; emden-azores (2): from the straits of dover to fayal; azores-new york (1): from fayal to new york; azores-new york (2): from fayal to the longitude of halifax; teneriffe-monrovia: from off teneriffe to off monrovia; monrovia-lome: from about latitude 2 degrees 30 minutes north, and longitude 7 degrees 40 minutes west of greenwich, to about latitude 2 degrees 20 minutes north, and longitude 5 degrees 30 minutes west of greenwich, and from about latitude 3 degrees 48 minutes north, and longitude 0 degrees 0 minutes to lome; lome-duala: from lome to duala; monrovia-pernambuco: from off monrovia to off pernambuco; constantinople-constanza: from constantinople to constanza; yap-shanghai, yap-guam, and yap-menado (celebes): from yap island to shanghai, from yap island to guam island, and from yap island to menado. the value of the above-mentioned cables or portions thereof in so far as they are privately owned, calculated on the basis of the original cost less a suitable allowance for depreciation, shall be credited to germany in the reparation account. section ii.--_special provisions_ =article 245.=--within six months after coming into force of the present treaty the german government must restore to the french government the trophies, archives, historical souvenirs, or works of art carried away from france by the german authorities in the course of the war of 1870--71 and during this last war, in accordance with a list which will be communicated to it by the french government; particularly the french flags taken in the course of the war of 1870--71, and all the political papers taken by the german authorities on oct. 10, 1870, at the château of cercay, near brunoy, (seine-et-oise,) belonging at the time to m. rouher, formerly minister of state. =article 246.=--within six months of the coming into force of the present treaty germany will restore to his majesty the king of the hedjaz the original koran of the caliph othman, which was removed from medina by the turkish authorities and is stated to have been presented to the ex-emperor william ii. within the same period germany will hand over to his britannic majesty's government the skull of the sultan mkwawa, which was removed from the protectorate of german east africa and taken to germany. the delivery of the articles above referred to will be effected in such place and in such conditions as may be laid down by the governments to which they are to be restored =article 247.=--germany undertakes to furnish to the university of louvain, within three months after a request made by it and transmitted through the intervention of the reparation commission, manuscripts, incunabula, printed books, maps, and objects of collection corresponding in number and value to those destroyed in the burning by germany of the library of louvain. all details regarding such replacement will be determined by the reparation commission. germany undertakes to deliver to belgium, through the reparation commission, within six months of the coming into force of the present treaty, in order to enable belgium to reconstitute her two great artistic works: (a) the leaves of the triptych of the mystic lamb painted by the van eyck brothers, formerly in the church of st. bavon at ghent, now in the berlin museum. (b) the leaves of the triptych of the last supper, painted by dierick bouts, formerly in the church of st. peter at louvain, two of which are now in the berlin museum and two in the old pinakothek at munich. part ix financial clauses =article 248.=--subject to such exceptions as the reparation commission may approve, a first charge upon all the assets and revenues of the german empire and its constituent states shall be the cost of reparation and all other costs arising under the present treaty or any treaties or agreements supplementary thereto or under arrangements concluded between germany and the allied and associated powers during the armistice or its extensions. up to may 1, 1921, the german government shall not export or dispose of, and shall forbid the export or disposal of, gold without the previous approval of the allied and associated powers acting through the reparation commission. =article 249.=--there shall be paid by the german government the total cost of all armies of the allied and associated governments in occupied german territory from the date of the signature of the armistice of the 11th november, 1918, including the keep of men and beasts, lodging and billeting, pay and allowances, salaries and wages, bedding, heating, lighting, clothing, equipment, harness and saddlery, armament and rolling stock, air services, treatment of sick and wounded, veterinary and remount services, transport service of all sorts, (such as by rail, sea, river, or motor lorries,) communications and correspondence, and in general the cost of all administrative or technical services, the working of which is necessary for the training of troops and for keeping their numbers up to strength and preserving their military efficiency. the cost of such liabilities under the above heads, so far as they relate to purchases or requisitions by the allied and associated governments in the occupied territories, shall be paid by the german government to the allied and associated governments in marks at the current or agreed rate of exchange. all other of the above costs shall be paid in gold marks. =article 250.=--germany confirms the surrender of all material handed over to the allied and associated powers in accordance with the armistice agreement of the 11th november, 1918, and subsequent armistice agreements, and recognizes the title of the allied and associated powers to such material. there shall be credited to the german government against the sums due from it to the allied and associated powers for reparation, the value, as assessed by the reparation commission referred to in article 233 of part viii. (reparation) of the present treaty, of the material handed over in accordance with article 7 of the armistice agreement of the 11th november, 1918, article 3 of the armistice agreement of the 16th january, 1919, as well as of any other material handed over in accordance with the armistice agreement of the 11th november, 1918, and of subsequent armistice agreements, for which, as having non-military value, credit should, in the judgment of the reparation commission, be allowed to the german government. property belonging to the allied and associated governments or their nationals restored or surrendered under the armistice agreements in specie shall not be credited to the german government. =article 251.=--the priority of the charges established by article 248 shall, subject to the qualifications made below, be as follows: (a) the cost of the armies of occupation as defined under article 249 during the armistice and its extensions; (b) the cost of any armies of occupation as defined under article 249 after the coming into force of the present treaty; (c) the cost of reparation arising out of the present treaty or any treaties or conventions supplementary thereto; (d) the cost of all other obligations incumbent on germany under the armistice conventions or under this treaty or any treaties or conventions supplementary thereto. the payment for such supplies of food and raw material for germany and such other payments as may be judged by the allied and associated powers to be essential to enable germany to meet her obligations in respect of reparation will have priority to the extent and upon the conditions which have been or may be determined by the governments of the said powers. =article 252.=--the right of each of the allied and associated powers to dispose of enemy assets and property within its jurisdiction at the date of the coming into force of the present treaty is not affected by the foregoing provisions. =article 253.=--nothing in the foregoing provisions shall prejudice in any manner charges or mortgages lawfully effected in favor of the allied and associated powers or their nationals respectively, before the date at which a state of war existed between germany and the allied and associated powers concerned, by the german empire or its constituent states, or by german nationals on assets in their ownership at that date. =article 254.=--the powers to which german territory is ceded shall, subject to the qualifications made in article 255, undertake to pay: 1. a portion of the debt of the german empire as it stood on the 1st august, 1914, calculated on the basis of the ratio between the average for the three financial years 1911, 1912, 1913, of such revenues of the ceded territory and the average for the same years of such revenues of the whole german empire as in the judgment of the reparation commission are best calculated to represent the relative ability of the respective territories to make payments. 2. a portion of the debt as it stood on the 1st august, 1914, of the german state to which the ceded territory belonged, to be determined in accordance with the principle stated above. such portions shall be determined by the reparation commission. the method of discharging the obligation both in respect of capital and of interest, so assumed, shall be fixed by the reparation commission. such method may take the form, inter alia, of the assumption by the power to which the territory is ceded of germany's liability for the german debt held by her nationals. but in the event of the method adopted involving any payments to the german government, such payments shall be transferred to the reparation commission on account of the sums due for reparation so long as any balance in respect of such sums remains unpaid. =article 255.=--1. as an exception to the above provision and inasmuch as in 1871 germany refused to undertake any portion of the burden of the french debt, france shall be, in respect of alsace-lorraine, exempt from any payment under article 254. 2. in the case of poland that portion of the debt which, in the opinion of the reparation commission is attributable to the measures taken by the german and prussian governments for the german colonization of poland shall be excluded from the apportionment to be made under article 254. [illustration: copyright underwood & underwood dreadnoughts welcoming president wilson home this photograph taken from the fighting top of the _pennsylvania_, shows american warships in the north river, firing a salute in honor of the president's return from france on the _george washington_.] 3. in the case of all ceded territories other than alsace-lorraine that portion of the debt of the german empire or german states which in the opinion of the reparation commission represents expenditure by the governments of the german empire or states upon the government properties referred to in article 256 shall be excluded from the apportionment to be made under article 254. =article 256.=--powers to which german territory is ceded shall acquire all property and possessions situated therein belonging to the german empire or to the german states, and the value of such acquisitions shall be fixed by the reparation commission, and paid by the state acquiring the territory to the reparation commission for the credit of the german government on account of the sums due for reparation. for the purposes of this article the property and possessions of the german empire and states shall be deemed to include all the property of the crown, the empire or the states, and the private property of the former german emperor and other royal personages. in view of the terms on which alsace-lorraine was ceded to germany in 1871--france shall be exempt in respect thereof from making any payment or credit under this article for any property or possessions of the german empire or states situated therein. belgium also shall be exempt from making any payment or any credit under this article for any property or possessions of the german empire or states situated in german territory ceded to belgium under the present treaty. =article 257.=--in the case of the former german territories, including colonies, protectorates, or dependencies, administered by a mandatory under article 22 of part i. (league of nations) of the present treaty, neither the territory nor the mandatory power shall be charged with any portion of the debt of the german empire or states. all property and possessions belonging to the german empire or to the german states situated in such territory shall be transferred with the territories to the mandatory power in its capacity as such, and no payment shall be made nor any credit given to those governments in consideration of this transfer. for the purpose of this article the property and possessions of the german empire and of the german states shall be deemed to include all the property of the crown, the empire or the states and the private property of the former german emperor and other royal personages. =article 258.=--germany renounces all rights accorded to her or her nationals by treaties, conventions or agreements, of whatsoever kind, to representation upon or participation in the control or administration of commissions, state banks, agencies or other financial or economic organizations of an international character, exercising powers of control or administration, and operating in any of the allied or associated states, or in austria, hungary, bulgaria or turkey, or in the dependencies of these states, or in the former russian empire. =article 259.=--1. germany agrees to deliver within one month from the date of the coming into force of the present treaty, to such authority as the principal allied and associated powers may designate, the sum in gold which was to be deposited in the reichsbank in the name of the council of the administration of the ottoman public debt as security for the first issue of turkish government currency notes. 2. germany recognizes her obligation to make annually for the period of twelve years the payments in gold for which provision is made in the german treasury bonds deposited by her from time to time in the name of the council of the administration of the ottoman public debt as security for the second and subsequent issues of turkish government currency notes. 3. germany undertakes to deliver, within one month from the coming into force of the present treaty, to such authority as the principal allied and associated powers may designate, the deposit gold constituted in the reichsbank or elsewhere, representing the residue of the advance in gold agreed to on the 5th of may, 1915, by the council of the administration of the ottoman public debt to the imperial ottoman government. 4. germany agrees to transfer to the principal allied and associated powers any title that she may have to the sum in gold and silver transmitted by her to the turkish ministry of finance in november, 1918, in anticipation of the payment to be made in may, 1919, for the service of the turkish internal loan. 5. germany undertakes to transfer to the principal allied and associated powers within a period of one month from the coming into force of the present treaty, any sums in gold transferred as pledge or as collateral security to the german government or its nationals in connection with loans made by them to the austro-hungarian government. 6. without prejudice to article 292 of part x. (economic clauses) of the present treaty, germany confirms the renunciation provided for in article xv. of the armistice convention of the 11th november, 1918, of any benefit disclosed by the treaties of bucharest and of brest-litovsk, and by the treaties supplementary thereto. germany undertakes to transfer, either to rumania or to the principal allied and associated powers, as the case may be, all monetary instruments, specie, securities and negotiable instruments or goods which she has received under the aforesaid treaties. 7. the sums of money and all securities, instruments and goods of whatever nature, to be delivered, paid and transferred under the provisions of this article, shall be disposed of by the principal allied and associated powers in a manner hereafter to be determined by these powers. =article 260.=--without prejudice to the renunciation of any rights by germany on behalf of herself or of her nationals in the other provisions of the present treaty, the reparation commission may, within one year from the coming into force of the present treaty, demand that the german government become possessed of any rights and interests of the german nationals in any public utility undertaking or in any concession operating in russia, china, turkey, austria, hungary, and bulgaria, or in the possessions or dependencies of these states or in any territory formerly belonging to germany or her allies, to be ceded by germany or her allies to any power, or to be administered by a mandatary under the present treaty, and may require that the german government transfer, within six months of the date of demand, all such rights and interests and any similar rights and interests the german government may itself possess, to the reparation commission. germany shall be responsible for indemnifying her nationals so dispossessed and the reparation commission shall credit germany on account of sums due for reparation with such sums in respect of the value of the transferred rights and interests as may be assessed by the reparation commission, and the german government shall, within six months from the coming into force of the present treaty, communicate to the reparation commission all such rights and interests, whether already granted, contingent, or not yet exercised, and shall renounce on behalf of itself and its nationals in favor of the allied and associated powers all such rights and interests which have not been so communicated. =article 261.=--germany undertakes to transfer to the allied and associated powers any claims she may have to payment or repayment by the governments of austria, hungary, bulgaria, turkey, and, in particular any claims which may arise, now or hereafter, from the fulfillment of undertakings made by germany during the war to those governments. =article 262.=--any monetary obligation due by germany arising out of the present treaty and expressed in terms of gold marks shall be payable at the option of the creditors in pounds sterling payable in london; gold dollars of the united states of america payable in new york; gold francs payable in paris, or gold lire payable in rome. for the purpose of this article, the gold coins mentioned above shall be defined as being of the weight and fineness of gold as enacted by law on the 1st january, 1914. =article 263.=--germany gives a guarantee to the brazilian government that all sums representing the sale of coffee belonging to the state of sao paolo in the ports of hamburg, bremen, antwerp, and trieste, which were deposited with the bank of the bleichröder at berlin, shall be reimbursed, together with interest at the rate or rates agreed upon. germany, having prevented the transfer of the sums in question to the state of sao paolo at the proper time, guarantees also that the reimbursements shall be effected at the rate of exchange of the day of the deposit. part x economic clauses section i.--_commercial relations_ chapter i.--customs regulations, duties, and restrictions =article 264.=--germany undertakes that goods the produce or manufacture of any one of the allied or associated states imported into german territory, from whatsoever place arriving, shall not be subjected to other or higher duties or charges (including internal charges) than those to which the like goods the produce or manufacture of any other such state or of any other foreign country are subject. germany will not maintain or impose any prohibition or restriction on the importation into german territory of any goods the produce or manufacture of the territories of any one of the allied or associated states, from whatsoever place arriving, which shall not equally extend to the importation of the like goods the produce or manufacture of any other such state or of any other foreign country. =article 265.=--germany further undertakes that, in the matter of the régime applicable on importation, no discrimination against the commerce of any of the allied and associated states as compared with any other of the said states or any other foreign country shall be made, even by indirect means, such as customs regulations or procedure, methods of verification or analysis, conditions of payment of duties, tariff classification or interpretation, or the operation of monopolies. =article 266.=--in all that concerns exportation germany undertakes that goods, natural products or manufactured articles, exported from german territory to the territories of any one of the allied or associated states shall not be subjected to other or higher duties or charges (including internal charges) than those paid on the like goods exported to any other such state or to any other foreign country. germany will not maintain or impose any prohibition or restriction on the exportation of any goods sent from her territory to any one of the allied or associated states which shall not equally extend to the exportation of the like goods, natural products or manufactured articles, sent to any other such state or to any other foreign country. =article 267.=--every favor, immunity, or privilege in regard to the importation, exportation, or transit of goods granted by germany to any allied or associated state or to any other foreign country whatever shall simultaneously and unconditionally, without request and without compensation, be extended to all the allied and associated states. =article 268.=--the provisions of article 264 to 267 inclusive of this chapter and of article 323 of part xii. (ports, waterways, and railways) of the present treaty are subject to the following exceptions: (a) for a period of five years from the coming into force of the present treaty, natural or manufactured products which both originate in and come from the territories of alsace and lorraine reunited to france shall, on importation into german customs territory, be exempt from all customs duty. the french government shall fix each year by decree communicated to the german government, the nature and amount of the products which shall enjoy this exemption. the amount of each product which may be thus sent annually into germany shall not exceed the average of the amounts sent annually in the years 1911--1913. further, during the period above mentioned the german government shall allow the free export from germany, and the free reimportation into germany, exempt from all customs duties and other charges, (including internal charges,) of yarns, tissues, and other textile materials or textile products of any kind and in any condition sent from germany into the territories of alsace or lorraine, to be subjected there to any finishing process, such as bleaching, dyeing, printing, mercerization, gassing, twisting, or dressing. (b) during a period of three years from the coming into force of the present treaty natural or manufactured products which both originate in and come from polish territories which before the war were part of germany shall, on importation into german customs territory, be exempt from all customs duty. the polish government shall fix each year, by decree communicated to the german government, the nature and amount of the products which shall enjoy this exemption. the amount of each product which may be thus sent annually into germany shall not exceed the average of the amounts sent annually in the years 1911--1913. (c) the allied and associated powers reserve the right to require germany to accord freedom from customs duty, on importation into german customs territory, to natural products and manufactured articles which both originate in and come from the grand duchy of luxemburg, for a period of five years from the coming into force of the present treaty. the nature and amount of the products which shall enjoy the benefits of this régime shall be communicated each year to the german government. the amount of each product which may be thus sent annually into germany shall not exceed the average of the amounts sent annually in the years 1911--1913. =article 269.=--during the first six months after the coming into force of the present treaty, the duties imposed by germany on imports from allied and associated states shall not be higher than the most favorable duties which were applied to imports into germany on the 31st july, 1914. during a further period of thirty months after the expiration of the first six months, this provision shall continue to be applied exclusively with regard to products which, being comprised in section a of the first category of the german customs tariff of the 25th december, 1902, enjoyed at the above-mentioned date (31st july, 1914,) rates conventionalized by treaties with the allied and associated powers, with the addition of all kinds of wine and vegetable oils, of artificial silk and of washed or scoured wool, whether or not they were the subject of special conventions before the 31st july, 1914. =article 270.=--the allied and associated powers reserve the right to apply to german territory occupied by their troops a special customs régime as regards imports and exports, in the event of such a measure being necessary in their opinion in order to safeguard the economic interests of the population of these territories. chapter ii.--shipping =article 271.=--as regards sea fishing, maritime coasting trade, and maritime towage, vessels of the allied and associated powers shall enjoy, in german territorial waters, the treatment accorded to vessels of the most-favored nation. =article 272.=--germany agrees that, notwithstanding any stipulation to the contrary contained in the conventions relating to the north sea fisheries and liquor traffic, all rights of inspection and police shall, in the case of fishing boats of the allied powers, be exercised solely by ships belonging to those powers. =article 273.=--in the case of vessels of the allied or associated powers, all classes of certificates or documents relating to the vessel, which were recognized as valid by germany before the war, or which may hereafter be recognized as valid by the principal maritime states, shall be recognized by germany as valid and as equivalent to the corresponding certificates issued to german vessels. a similar recognition shall be accorded to the certificates and documents issued to their vessels by the governments of new states, whether they have a seacoast or not, provided that such certificates and documents shall be issued in conformity with the general practice observed in the principal maritime states. the high contracting parties agree to recognize the flag flown by the vessels of an allied or associated power having no seacoast which are registered at some one specified place situated in its territory; such place shall serve as the port of registry of such vessels. chapter iii.--unfair competition =article 274.=--germany undertakes to adopt all the necessary legislative and administrative measures to protect goods the produce or manufacture of any one of the allied and associated powers from all forms of unfair competition in commercial transactions. germany undertakes to prohibit and repress by seizure and by other appropriate remedies the importation, exportation, manufacture, distribution, sale or offering for sale in its territory of all goods bearing upon themselves or their usual get-up or wrappings any marks, names, devices, or descriptions whatsoever which are calculated to convey directly or indirectly a false indication of the origin, type, nature, or special characteristics of such goods. =article 275.=--germany undertakes on condition that reciprocity is accorded in these matters to respect any law, or any administrative or judicial decision given in conformity with such law, in force in any allied or associated state and duly communicated to her by the proper authorities, defining or regulating the right to any regional appellation in respect of wine or spirits produced in the state to which the region belongs or the conditions under which the use of any such appellation may be permitted; and the importation, exportation, manufacture, distribution, sale or offering for sale of products or articles bearing regional appellations inconsistent with such law or order shall be prohibited by the german government and repressed by the measures prescribed in the preceding article. chapter iv.--treatment of nationals of allied and associated powers =article 276.=--germany undertakes: (a) not to subject the nationals of the allied and associated powers to any prohibition in regard to the exercise of occupations, professions, trade, and industry, which shall not be equally applicable to all aliens without exception; (b) not to subject the nationals of the allied and associated powers in regard to the rights referred to in paragraph (a) to any regulation or restriction which might contravene directly or indirectly the stipulations of the said paragraph, or which shall be other or more disadvantageous than those which are applicable to nationals of the most-favored nation; (c) not to subject the nationals of the allied and associated powers, their property, rights, or interests, including companies and associations in which they are interested, to any charge, tax, or impost, direct or indirect, other or higher than those which are or may be imposed on her own nationals or their property, rights, or interests; (d) not to subject the nationals of any one of the allied and associated powers to any restriction which was not applicable on july 1, 1914, to the nationals of such powers unless such restriction is likewise imposed on her own nationals. =article 277.=--the nationals of the allied and associated powers shall enjoy in german territory a constant protection for their persons and for their property, rights, and interests, and shall have free access to the courts of law. =article 278.=--germany undertakes to recognize any new nationality which has been or may be acquired by her nationals under the laws of the allied and associated powers, and in accordance with the decisions of the competent authorities of these powers pursuant to naturalization laws or under treaty stipulations, and to regard such persons as having, in consequence of the acquisition of such new nationality, in all respects severed their allegiance to their country of origin. =article 279.=--the allied and associated powers may appoint consuls general, consuls, vice consuls, and consular agents in german towns and ports. germany undertakes to approve the designation of the consuls general, consuls, vice consuls, and consular agents, whose names shall be notified to her, and to admit them to the exercise of their functions in conformity with the usual rules and customs. chapter v.--general articles =article 280.=--the obligations imposed on germany by chapter i. and by articles 271 and 272 of chapter ii. above shall cease to have effect five years from the date of the coming into force of the present treaty, unless otherwise provided in the text, or unless the council of the league of nations shall, at least twelve months before the expiration of that period, decide that these obligations shall be maintained for a further period with or without amendment. article 276 of chapter iv. shall remain in operation, with or without amendment, after the period of five years for such further period, if any, not exceeding five years, as may be determined by a majority of the council of the league of nations. =article 281.=--if the german government engages in international trade, it shall not in respect thereof have or be deemed to have any rights, privileges, or immunities of sovereignty. section ii.--_treaties_ =article 282.=--from the coming into force of the present treaty and subject to the provisions thereof the multilateral treaties, conventions, and agreements of an economic or technical character enumerated below and in the subsequent articles shall alone be applied as between germany and those of the allied and associated powers party thereto: 1. conventions of march 14, 1884; dec. 1, 1886, and march 23, 1887, and final protocol of july 7, 1887, regarding the protection of submarine cables. 2. convention of oct. 11, 1909, regarding the international circulation of motor cars. 3. agreement of may 15, 1886, regarding the sealing of railway trucks subject to customs inspection, and protocol of may 18, 1907. 4. agreement of may 15, 1886, regarding the technical standardization of railways. 5. convention of july 5, 1890, regarding the publication of customs tariffs and the organization of an international union for the publication of customs tariffs. 6. convention of dec. 31, 1913, regarding the unification of commercial statistics. 7. convention of april 25, 1907, regarding the raising of the turkish customs tariff. 8. convention of march 14, 1857, for the redemption of toll dues on the sound and belts. 9. convention of june 22, 1861, for the redemption of the stade toll on the elbe. 10. convention of july 16, 1863, for the redemption of toll dues on the scheldt. 11. convention of oct. 29, 1888, regarding the establishment of a definite arrangement guaranteeing the free use of the suez canal. 12. convention of sept. 23, 1910, respecting the unification of certain regulations regarding collisions and salvage at sea. 13. convention of dec. 21, 1904, regarding the exemption of hospital ships from dues and charges in ports. 14. convention of feb. 4, 1898, regarding the tonnage measurement of vessels for inland navigation. 15. convention of sept. 26, 1906, for the suppression of nightwork for women. 16. convention of sept. 26, 1906, for the suppression of the use of white phosphorus in the manufacture of matches. 17. conventions of may 18, 1904, and may 4, 1910, regarding the suppression of the white slave traffic. 18. convention of may 4, 1910, regarding the suppression of obscene publications. 19. sanitary conventions of january, 1892; april 15, 1893; april 3, 1894; april 19, 1897, and dec. 3, 1903. 20. convention of may 20, 1875, regarding the unification and improvement of the metric system. 21. convention of nov. 29, 1906, regarding the unification of pharmacopoeial formulae for potent drugs. 22. convention of nov. 16 and 19, 1885, regarding the establishment of a concert pitch. 23. convention of june 7, 1905, regarding the creation of an international agricultural institute at rome. 24. conventions of nov. 3, 1881, and april 15, 1889, regarding precautionary measures against phylloxera. 25. convention of march 19, 1902, regarding the protection of birds useful to agriculture. 26. convention of june 12, 1902, as to the protection of minors. =article 283.=--from the coming into force of the present treaty the high contracting parties shall apply the conventions and agreements hereinafter mentioned, in so far as concerns them, on condition that the special stipulations contained in this article are fulfilled by germany. =postal conventions:= conventions and agreements of the universal postal union concluded at vienna, july 4, 1891. conventions and agreements of the postal union signed at washington, june 15, 1897. conventions and agreements of the postal union signed at rome may 26, 1906. =telegraphic conventions:= international telegraphic conventions signed at st. petersburg july 10, (22,) 1875. regulations and tariffs drawn up by the international telegraphic conference, lisbon, june 11, 1908. germany undertakes not to refuse her assent to the conclusion by the new states of the special arrangements referred to in the conventions and agreements relating to the universal postal union and to the international telegraphic union, to which the said new states have adhered or may adhere. =article 284.=--from the coming into force of the present treaty the high contracting parties shall apply, in so far as concerns them, the international radio-telegraphic convention of july 5, 1912, on condition that germany fulfills the provisional regulations which will be indicated to her by the allied and associated powers. if within five years after the coming into force of the present treaty a new convention regulating international radio-telegraphic communications should have been concluded to take the place of the convention of july 5, 1912, this new convention shall bind germany even if germany should refuse either to take part in drawing up the convention or to subscribe thereto. this new convention will likewise replace the provisional regulations in force. =article 285.=--from the coming into force of the present treaty the high contracting parties shall apply in so far as concerns them and under the conditions stipulated in article 272 the conventions hereinafter mentioned: 1. the conventions of may 6, 1882, and feb. 1, 1889, regulating the fisheries in the north sea outside territorial waters. 2. the conventions and protocols of nov. 16, 1887, feb. 14, 1893, and april 11, 1894, regarding the north sea liquor traffic. =article 286.=--the international convention of paris of march 20, 1883, for the protection of industrial property, revised at washington on june 2, 1911; the international convention of berne of sept. 9, 1886, for the protection of literary and artistic works, revised at berlin on nov. 13, 1908, and completed by the additional protocol signed at berne on march 20, 1914, will again come into effect as from the coming into force of the present treaty, in so far as they are not affected or modified by the exceptions and restrictions resulting therefrom. =article 287.=--from the coming into force of the present treaty the high contracting parties shall apply, in so far as concerns them, the convention of the hague of july 17, 1905, relating to civil procedure. this renewal, however, will not apply to france, portugal and rumania. =article 288.=--the special rights and privileges granted to germany by article 3 of the convention of dec. 2, 1899, relating to samoa shall be considered to have terminated on aug. 4, 1914. =article 289.=--each of the allied or associated powers, being guided by the general principles or special provisions of the present treaty, shall notify to germany the bilateral treaties or conventions which such allied or associated power wishes to revive with germany. the notification referred to in the present article shall be made either directly or through the intermediary of another power. receipt thereof shall be acknowledged in writing by germany. the date of the revival shall be that of the notification. the allied and associated powers undertake among themselves not to revive with germany any conventions or treaties which are not in accordance with the terms of the present treaty. the notification shall mention any provisions of the said conventions and treaties which, not being in accordance with the terms of the present treaty, shall not be considered as revived. in case of any difference of opinion, the league of nations will be called on to decide. a period of six months from the coming into force of the present treaty is allowed to the allied and associated powers within which to make the notification. only those bilateral treaties and conventions which have been the subject of such a notification shall be revived between the allied and associated powers and germany; all the others are and shall remain abrogated. the above regulations apply to all bilateral treaties or conventions existing between all the allied and associated powers signatories to the present treaty and germany, even if the said allied and associated powers have not been in a state of war with germany. =article 290.=--germany recognizes that all the treaties, conventions, or agreements which she has concluded with austria, hungary, bulgaria, or turkey since aug. 1, 1914, until the coming into force of the present treaty are and remain abrogated by the present treaty. =article 291.=--germany undertakes to secure to the allied and associated powers, and to the officials and nationals of the said powers, the enjoyment of all the rights and advantages of any kind which she may have granted to austria, hungary, bulgaria, or turkey, or to the officials and nationals of these states by treaties, conventions, or arrangements concluded before aug. 1, 1914, so long as those treaties, conventions, or arrangements remain in force. the allied and associated powers reserve the right to accept or not the enjoyment of these rights and advantages. =article 292.=--germany recognizes that all treaties, conventions, or arrangements which she concluded with russia or with any state or government of which the territory previously formed a part of russia, or with rumania before aug. 1, 1914, or after that date until the coming into force of the present treaty, are and remain abrogated. =article 293.=--should an allied or associated power, russia, or a state or government of which the territory formerly constituted a part of russia have been forced since aug. 1, 1914, by reason of military occupation or by any other means or for any other cause, to grant or to allow to be granted by the act of any public authority, concessions, privileges, and favors of any kind to germany or to a german nation, such concessions, privileges, and favors are _ipso facto_ annulled by the present treaty. no claims or indemnities which may result from this annulment shall be charged against the allied or associated powers or the powers, states, governments, or public authorities which are released from their engagements by the present article. =article 294.=--from the coming into force of the present treaty germany undertakes to give the allied and associated powers and their nationals the benefit _ipso facto_ of the rights and advantages of any kind which she has granted by treaties, conventions or arrangements to non-belligerent states or their nationals since aug. 1, 1914, until the coming into force of the present treaty so long as those treaties, conventions, or arrangements remain in force. =article 295.=--those of the high contracting parties who have not yet signed, or who have signed but not yet ratified, the opium convention signed at the hague on jan. 23, 1912, agree to bring the said convention into force, and for this purpose to enact the necessary legislation without delay and in any case within a period of twelve months from the coming into force of the present treaty. furthermore, they agree that ratification of the present treaty should in the case of powers which have not yet ratified the opium convention be deemed in all respects equivalent to the ratification of that convention and to the signature of the special protocol which was opened at the hague in accordance with the resolutions adopted by the third opium conference in 1914 for bringing the said convention into force. for this purpose the government of the french republic will communicate to the government of the netherlands a certified copy of the protocol of the deposit of ratifications of the present treaty, and will invite the government of the netherlands to accept and deposit the said certified copy as if it were a deposit of ratifications of the opium convention and a signature of the additional protocol of 1914. section iii.--_debts._ =article 296.=--there shall be settled through the intervention of clearing offices to be established by each of the high contracting parties within three months of the notification referred to in paragraph (e) hereafter the following classes of pecuniary obligations: 1. debts payable before the war and due by a national of one of the contracting powers, residing within its territory, to a national of an opposing power, residing within its territory. 2. debts which became payable during the war to nationals of one contracting power residing within its territory and arose out of transactions or contracts with the nationals of an opposing power, resident within its territory, of which the total or partial execution was suspended on account of the declaration of war. 3. interest which has accrued due before and during the war to a national of one of the contracting powers in respect of securities issued by an opposing power, provided that the payment of interest on such securities to the nationals of that power or to neutrals has not been suspended during the war. 4. capital sums which have become payable before and during the war to nationals of one of the contracting powers in respect of securities issued by one of the opposing powers, provided that the payment of such capital sums to nationals of that power or to neutrals has not been suspended during the war. [illustration: copyright harris & ewing m. stephen pichon chosen chairman of the provisional organization of the league of nations in recognition of his long leadership, not only in france but internationally, in the work of bringing about a world-wide organization to preserve peace.] the proceeds of liquidation of enemy property, rights, and interests mentioned in section iv. and in the annex thereto will be accounted for through the clearing offices, in the currency and at the rate of exchange hereinafter provided in paragraph (d), and disposed of by them under the conditions provided by the said section and annex. the settlements provided for in this article shall be effected according to the following principles and in accordance with the annex to this section: (a) each of the high contracting parties shall prohibit, as from the coming into force of the present treaty, both the payment and the acceptance of payment of such debts, and also all communications between the interested parties with regard to the settlement of the said debts otherwise than through the clearing offices. (b) each of the high contracting parties shall be respectively responsible for the payment of such debts due by its nationals, except in the cases where before the war the debtor was in a state of bankruptcy or failure, or had given formal indication of insolvency or where the debt was due by a company whose business has been liquidated under emergency legislation during the war. nevertheless, debts due by the inhabitants of territory invaded or occupied by the enemy before the armistice will not be guaranteed by the states of which those territories form part. (c) the sums due to the nationals of one of the high contracting parties by the nationals of an opposing state will be debited to the clearing office of the country of the debtor, and paid to the creditor by the clearing office of the country of the creditor. (d) debts shall be paid or credited in the currency of such one of the allied and associated powers, their colonies or protectorates, or the british dominions or india, as may be concerned. if the debts are payable in some other currency they shall be paid or credited in the currency of the country concerned, whether an allied or associated power, colony, protectorate, british dominion, or india, at the pre-war rate of exchange. for the purpose of this provision the pre-war rate of exchange shall be defined as the average cable transfer rate prevailing in the allied or associated country concerned during the month immediately preceding the outbreak of war between the said country concerned and germany. if a contract provides for a fixed rate of exchange governing the conversion of the currency in which the debt is stated into the currency of the allied or associated country concerned, then the above provisions concerning the rate of exchange shall not apply. in the case of new states the currency in which and the rate of exchange at which debts shall be paid or credited shall be determined by the reparation commission provided for in part viii. (reparation.) (e) the provisions of this article and of the annex thereto shall not apply as between germany on the one hand and any one of the allied and associated powers, their colonies or protectorates, or any one of the british dominions or india on the other hand, unless within a period of one month from the deposit of the ratifications of the present treaty by the power in question, or of the ratification on behalf of such dominion or of india, notice to that effect is given to germany by the government of such allied or associated power or of such dominion or of india as the case may be. (f) the allied and associated powers who have adopted this article and the annex hereto may agree between themselves to apply them to their respective nationals established in their territory so far as regards matters between their nationals and german nationals. in this case the payments made by application of this provision will be subject to arrangements between the allied and associated clearing offices concerned. annex 1. each of the high contracting parties will, within three months from the notification provided for in article 296, paragraph (e), establish a clearing office for the collection and payment of enemy debts. local clearing offices may be established for any particular portion of the territories of the high contracting parties. such local clearing offices may perform all the functions of a central clearing office in their respective districts, except that all transactions with the clearing office in the opposing state must be effected through the central clearing office. 2. in this annex the pecuniary obligations referred to in the first paragraph of article 296 are described as "enemy debts," the persons from whom the same are due as "enemy debtors," the persons to whom they are due as "enemy creditors," the clearing office in the country of the creditor is called the "creditor clearing office," and the clearing office in the country of the debtor is called the "debtor clearing office." 3. the high contracting parties will subject contraventions of paragraph (a) of article 296 to the same penalties as are at present provided by their legislation for trading with the enemy. they will similarly prohibit within their territory all legal process relating to payment of enemy debts, except in accordance with the provisions of this annex. 4. the government guarantee specified in paragraph (b) of article 296 shall take effect whenever, for any reason, a debt shall not be recoverable, except in a case where at the date of the outbreak of war the debt was barred by the laws of prescription in force in the country of the debtor, or where the debtor was at that time in a state of bankruptcy or failure or had given formal indication of insolvency, or where the debt was due by a company whose business has been liquidated under emergency legislation during the war. in such case the procedure specified by this annex shall apply to payment of the dividends. the terms "bankruptcy" and "failure" refer to the application of legislation providing for such juridical conditions. the expression "formal indication of insolvency" bears the same meaning as it has in english law. 5. creditors shall give notice to the creditor clearing office within six months of its establishment of debts due to them, and shall furnish the clearing office with any documents and information required of them. the high contracting parties will take all suitable measures to trace and punish collusion between enemy creditors and debtors. the clearing offices will communicate to one another any evidence and information which might help the discovery and punishment of such collusion. the high contracting parties will facilitate as much as possible postal and telegraphic communication at the expense of the parties concerned and through the intervention of the clearing offices between debtors and creditors desirous of coming to an agreement as to the amount of their debt. the creditor clearing office will notify the debtor clearing office of all debts declared to it. the debtor clearing office will, in due course, inform the creditor clearing office which debts are admitted and which debts are contested. in the latter case the debtor clearing office will give the grounds for the non-admission of debt. 6. when a debt has been admitted, in whole or in part, the debtor clearing office will at once credit the creditor clearing office with the amount admitted, and at the same time notify it of such credit. 7. the debt shall be deemed to be admitted in full and shall be credited forthwith to the creditor clearing office unless within three months from the receipt of the notification or such longer time as may be agreed to by the creditor clearing office notice has been given by the debtor clearing office that it is not admitted. 8. when the whole or part of a debt is not admitted the two clearing offices will examine into the matter jointly, and will endeavor to bring the parties to an agreement. 9. the creditor clearing office will pay to the individual creditor the sums credited to it out of the funds placed at its disposal by the government of its country and in accordance with the conditions fixed by the said government, retaining any sums considered necessary to cover risks, expenses, or commissions. 10. any person having claimed payment of an enemy debt which is not admitted in whole or in part shall pay to the clearing office by way of fine interest at 5 per cent. on the part not admitted. any person having unduly refused to admit the whole or part of a debt claimed from him shall pay by way of fine interest at 5 per cent. on the amount with regard to which his refusal shall be disallowed. such interest shall run from the date of expiration of the period provided for in paragraph 7 until the date on which the claim shall have been disallowed or the debt paid. each clearing office shall in so far as it is concerned take steps to collect the fines above provided for, and will be responsible if such fines cannot be collected. the fines will be credited to the other clearing office, which shall retain them as a contribution toward the cost of carrying out the present provisions. 11. the balance between the clearing offices shall be struck monthly, and the credit balance paid in cash by the debtor state within a week. nevertheless, any credit balances which may be due by one or more of the allied and associated powers shall be retained until complete payment shall have been effected of the sums due to the allied or associated powers or their nationals on account of the war. 12. to facilitate discussion between the clearing offices each of them shall have a representative at the place where the other is established. 13. except for special reasons all discussions in regard to claims will, so far as possible, take place at the debtor clearing office. 14. in conformity with article 296, paragraph (b), the high contracting parties are responsible for the payment of the enemy debts owing by their nationals. the debtor clearing office will therefore credit the creditor clearing office with all debts admitted, even in case of inability to collect them from the individual debtor. the governments concerned will, nevertheless, invest their respective clearing offices with all necessary powers for the recovery of debts which have been admitted. as an exception the admitted debts owing by persons having suffered injury from acts of war shall only be credited to the creditor clearing office when the compensation due to the person concerned in respect of such injury shall have been paid. 15. each government will defray the expenses of the clearing office set up in its territory, including the salaries of the staff. 16. where the two clearing offices are unable to agree whether a debt claimed is due, or in case of a difference between an enemy debtor and an enemy creditor, or between the clearing offices, the dispute shall either be referred to arbitration if the parties so agree under conditions fixed by agreement between them, or referred to the mixed arbitral tribunal provided for in section vi. hereafter. at the request of the creditor clearing office the dispute may, however, be submitted to the jurisdiction of the courts of the place of domicile of the debtor. 17. recovery of sums found by the mixed arbitral tribunal, the court, or the arbitration tribunal to be due shall be effected through the clearing offices as if these sums were debts admitted by the debtor clearing office. 18. each of the governments concerned shall appoint an agent who will be responsible for the presentation to the mixed arbitral tribunal of the cases conducted on behalf of its clearing office. this agent will exercise a general control over the representatives or counsel employed by its nationals. decisions will be arrived at on documentary evidence, but it will be open to the tribunal to hear the parties in person, or, according to their preference, by their representatives approved by the two governments, or by the agent referred to above, who shall be competent to intervene along with the party or to reopen and maintain a claim abandoned by the same. 19. the clearing offices concerned will lay before the mixed arbitral tribunal all the information and documents in their possession, so as to enable the tribunal to decide rapidly on the cases which are brought before it. 20. where one of the parties concerned appeals against the joint decision of the two clearing offices he shall make a deposit against the costs, which deposit shall only be refunded when the first judgment is modified in favor of the appellant and in proportion to the success he may attain, his opponent in case of such a refund being required to pay an equivalent proportion of the costs and expenses. security accepted by the tribunal may be substituted for a deposit. a fee of 5 per cent. of the amount in dispute shall be charged in respect of all cases brought before the tribunal. this fee shall, unless the tribunal directs otherwise, be borne by the unsuccessful party. such fee shall be added to the deposit referred to. it is also independent of the security. the tribunal may award to one of the parties a sum in respect of the expenses of the proceedings. any sum payable under this paragraph shall be credited to the clearing office of the successful party as a separate item. 21. with a view to the rapid settlement of claims, due regard shall be paid in the appointment of all persons connected with the clearing offices or with the mixed arbitral tribunal to their knowledge of the language of the other country concerned. each of the clearing offices will be at liberty to correspond with the other, and to forward documents in its own language. 22. subject to any special agreement to the contrary between the governments concerned, debts shall carry interest in accordance with the following provisions: interest shall not be payable on sums of money due by way of dividend, interest, or other periodical payments which themselves represent interest on capital. the rate of interest shall be 5 per cent. per annum except in cases where, by contract, law, or custom, the creditor is entitled to payment of interest at a different rate. in such cases the rate to which he is entitled shall prevail. interest shall run from the date of commencement of hostilities (or, if the sum of money to be recovered fell due during the war, from the date at which it fell due) until the sum is credited to the clearing office of the creditor. sums due by way of interest shall be treated as debts admitted by the clearing offices and shall be credited to the creditor clearing office in the same way as such debts. 23. where by decision of the clearing offices or the mixed arbitral tribunal a claim is held not to fall within article 296, the creditor shall be at liberty to prosecute the claim before the courts or to take such other proceedings as may be open to him. the presentation of a claim to the clearing office suspends the operation of any period of prescription. 24. the high contracting parties agree to regard the decisions of the mixed arbitral tribunal as final and conclusive, and to render them binding upon their nationals. 25. in any case where a creditor clearing office declines to notify a claim to the debtor clearing office, or to take any step provided for in this annex, intended to make effective in whole or in part a request of which it has received due notice, the enemy creditor shall be entitled to receive from the clearing office a certificate setting out the amount of the claim, and shall then be entitled to prosecute the claim before the courts or to take such other proceedings as may be open to him. section iv.--_property, rights, and interests_ =article 297.=--the question of private property, rights, and interests in an enemy country shall be settled according to the principles laid down in this section and to the provisions of the annex hereto: (a) the exceptional war measures and measures of transfer (defined in paragraph 3 of the annex hereto) taken by germany with respect to the property, rights, and interests of nationals of allied or associated powers, including companies and associations in which they are interested, when liquidation has not been completed, shall be immediately discontinued or stayed and the property, rights, and interests concerned restored to their owners, who shall enjoy full rights therein in accordance with the provisions of article 298. (b) subject to any contrary stipulations which may be provided for in the present treaty, the allied and associated powers reserve the right to retain and liquidate all property, rights, and interests belonging at the date of the coming into force of the present treaty to german nationals, or companies controlled by them, within their territories, colonies, possessions, and protectorates including territories ceded to them by the present treaty. the liquidation shall be carried out in accordance with the laws of the allied or associated state concerned, and the german owner shall not be able to dispose of such property, rights, or interests nor to subject them to any charge without the consent of that state. german nationals who acquire _ipso facto_ the nationality of an allied or associated power in accordance with the provisions of the present treaty will not be considered as german nationals within the meaning of this paragraph. (c) the price of the amount of compensation in respect of the exercise of the right referred to in the preceding paragraph (b) will be fixed in accordance with the methods of sale or valuation adopted by the laws of the country in which the property has been retained or liquidated. (d) as between the allied and associated powers or their nationals on the one hand and germany or her nationals on the other hand, all the exceptional war measures, or measures of transfer, or acts done or to be done in execution of such measures as defined in paragraphs 1 and 3 of the annex hereto shall be considered as final and binding upon all persons except as regards the reservations laid down in the present treaty. (e) the nationals of allied and associated powers shall be entitled to compensation in respect of damage or injury inflicted upon their property, rights, or interests including any company or association in which they are interested, in german territory as it existed on aug. 1, 1914, by the application either of the exceptional war measures or measures of transfer mentioned in paragraphs 1 and 3 of the annex hereto. the claims made in this respect by such nationals shall be investigated, and the total of the compensation shall be determined by the mixed arbitral tribunal provided for in section vi, or by an arbitrator appointed by that tribunal. this compensation shall be borne by germany, and may be charged upon the property of german nationals, within the territory or under the control of the claimant's state. this property may be constituted as a pledge for enemy liabilities under the conditions fixed by paragraph 4 of the annex hereto. the payment of this compensation may be made by the allied or associated state, and the amount will be debited to germany. (f) whenever a national of an allied or associated power is entitled to property which has been subjected to a measure of transfer in german territory and expresses a desire for its restitution, his claim for compensation in accordance with paragraph (e) shall be satisfied by the restitution of the said property if it still exists in specie. in such case germany shall take all necessary steps to restore the evicted owner to the possession of his property, free from all incumbrances or burdens with which it may have been charged after the liquidation, and to indemnify all third parties injured by the restitution. if the restitution provided for in this paragraph cannot be effected, private agreements arranged by the intermediation of the powers concerned or the clearing offices provided for in the annex to section iii. may be made, in order to secure that the national of the allied or associated power may secure compensation for the injury referred to in paragraph (e) by the grant of advantages or equivalents which he agrees to accept in place of the property, rights or interests of which he was deprived. through restitution in accordance with this article the price or the amount of compensation fixed by the application of paragraph (e) will be reduced by the actual value of the property restored, account being taken of compensation in respect of loss of use or deterioration. (g) the rights conferred by paragraph (f) are reserved to owners who are nationals of allied or associated powers within whose territory legislative measures prescribing the general liquidation of enemy property, rights or interests were not applied before the signature of the armistice. (h) except in cases where, by application of paragraph (f), restitutions in specie have been made, the net proceeds of sales of enemy property, rights or interests wherever situated carried out either by virtue of war legislation, or by application of this article, and in general all cash assets of enemies, shall be dealt with as follows: (1) as regards powers adopting section iii. and the annex thereto, the said proceeds and cash assets shall be credited to the power of which the owner is a national, through the clearing office established thereunder; any credit balance in favor of germany resulting therefrom shall be dealt with as provided in article 243. (2) as regards powers not adopting section iii. and the annex thereto, the proceeds of the property, rights and interests, and the cash assets, of the nationals or allied or associated powers held by germany shall be paid immediately to the person entitled thereto or to his government; the proceeds of the property, rights and interests, and the cash assets, of german nationals received by an allied or associated power shall be subject to disposal by such power in accordance with its laws and regulations and may be applied in payment of the claims and debts defined by this article or paragraph 4 of the annex hereto. any property, rights and interests or proceeds thereof or cash assets not used as above provided may be retained by the said allied or associated power and if retained the cash value thereof shall be dealt with as provided in article 243. in the case of liquidations effected in new states, which are signatories of the present treaty as allied and associated powers, or in states which are not entitled to share in the reparation payments to be made by germany, the proceeds of liquidations effected by such states shall, subject to the rights of the reparation commission under the present treaty, particularly under articles 235 and 260, be paid direct to the owner. if on the application of that owner the mixed arbitral tribunal, provided for by section vi. of this part or an arbitrator appointed by that tribunal, is satisfied that the conditions of the sale or measures taken by the government of the state in question outside its general legislation were unfairly prejudicial to the price obtained, they shall have discretion to award to the owner equitable compensation to be paid by that state. (i) germany undertakes to compensate its nationals in respect of the sale or retention of their property, rights or interests in allied or associated states. (j) the amount of all taxes and imposts upon capital levied or to be levied by germany on the property, rights, and interests of the nationals of the allied or associated powers from the 11th of november, 1918, until three months from the coming into force of the present treaty, or, in the case of property, rights or interests which have been subjected to exceptional measures of war, until restitution in accordance with the present treaty, shall be restored to the owners. =article 298.=--germany undertakes, with regard to the property, rights and interests, including companies and associations in which they were interested, restored to nationals of allied and associated powers in accordance with the provisions of article 297, paragraph (a) or (f): (a) to restore and maintain, except as expressly provided in the present treaty, the property, rights, and interests of the nationals of allied or associated powers in the legal position obtaining in respect of the property, rights, and interests of german nationals under the laws in force before the war. (b) not to subject the property, rights, or interests of the nationals of the allied or associated powers to any measures in derogation of property rights which are not applied equally to the property, rights, and interests of german nationals, and to pay adequate compensation in the event of the application of these measures. annex 1. in accordance with the provisions of article 297, paragraph (d), the validity of vesting orders and of orders for the winding up of businesses or companies, and of any other orders, directions, decisions, or instructions of any court or any department of the government of any of the high contracting parties made or given, or purporting to be made or given, in pursuance of war legislation with regard to enemy property, rights, and interests is confirmed. the interests of all persons shall be regarded as having been effectively dealt with by any order, direction, decision, or instruction dealing with property in which they may be interested, whether or not such interests are specifically mentioned in the order, direction, decision, or instruction. no question shall be raised as to the regularity of a transfer of any property, rights, or interests dealt with in pursuance of any such order, direction, decision, or instruction. every action taken with regard to any property, business, or company, whether as regards its investigation, sequestration, compulsory administration, use, requisition, supervision, or winding up, the sale or management of property, rights, or interests, the collection or discharge of debts, the payment of costs, charges or expenses, or any other matter whatsoever, in pursuance of orders, directions, decisions, or instructions of any court or of any department of the government of any of the high contracting parties, made or given, or purporting to be made or given in pursuance of war legislation with regard to enemy property, rights or interests, is confirmed. provided that the provisions of this paragraph shall not be held to prejudice the titles to property heretofore acquired in good faith and for value and in accordance with the laws of the country in which the property is situated by nationals of the allied and associated powers. the provisions of this paragraph do not apply to such of the above-mentioned measures as have been taken by the german authorities in invaded or occupied territory, nor to such of the above mentioned measures as have been taken by germany or the german authorities since nov. 11, 1918, all of which shall be void. 2. no claim or action shall be made or brought against any allied or associated power or against any person acting on behalf of or under the direction of any legal authority or department of the government of such a power by germany or by any german national wherever resident in respect of any act or omission with regard to his property, rights, or interests during the war or in preparation for the war. similarly no claim or action shall be made or brought against any person in respect of any act or omission under or in accordance with the exceptional war measures, laws, or regulations of any allied or associated power. 3. in article 297 and this annex the expression "exceptional war measures" includes measures of all kinds, legislative, administrative, judicial, or others, that have been taken or will be taken hereafter with regard to enemy property, and which have had or will have the effect of removing from the proprietors the power of disposition over their property, though without affecting the ownership, such as measures of supervision, of compulsory administration, and of sequestration; or measures which have had or will have as an object the seizure of, the use of, or the interference with enemy assets, for whatsoever motive, under whatsoever form or in whatsoever place. acts in the execution of these measures include all detentions, instructions, orders or decrees of government departments or courts applying these measures to enemy property, as well as acts performed by any person connected with the administration or the supervision of enemy property, such as the payment of debts, the collecting of credits, the payment of any costs, charges, or expenses, or the collecting of fees. measures of transfer are those which have affected or will affect the ownership of enemy property by transferring it in whole or in part to a person other than the enemy owner, and without his consent, such as measures directing the sale, liquidation, or devolution of ownership in enemy property, or the canceling of titles or securities. 4. all property, rights, and interests of german nationals within the territory of any allied or associated power and the net proceeds of their sale, liquidation or other dealing therewith may be charged by that allied or associated power in the first place with payment of amounts due in respect of claims by the nationals of that allied or associated power with regard to their property, rights, and interests, including companies and associations in which they are interested, in german territory, or debts owing to them by german nationals, and with payment of claims growing out of acts committed by the german government or by any german authorities since july 31, 1914, and before that allied or associated power entered into the war. the amount of such claims may be assessed by an arbitrator appointed by gustave ador, if he is willing, or if no such appointment is made by him by an arbitrator appointed by the mixed arbitral tribunal provided for in section vi. they may be charged in the second place with payment of the amounts due in respect of claims by the nationals of such allied or associated power with regard to their property, rights, and interests in the territory of other enemy powers, or debts owing to them by nationals of such powers in so far as those claims or debts are otherwise unsatisfied. 5. notwithstanding the provisions of article 297, where immediately before the outbreak of war a company incorporated in an allied or associated state had rights in common with a company controlled by it and incorporated in germany to the use of trade-marks in third countries, or enjoyed the use in common with such company of unique means of reproduction of goods or articles for sale in third countries, the former company shall alone have the right to use these trade-marks in third countries to the exclusion of the german company, and these unique means of reproduction shall be handed over to the former company, notwithstanding any action taken under german war legislation with regard to the latter company or its business, industrial property or shares. nevertheless, the former company, if requested, shall deliver to the latter company derivative copies permitting the continuation of reproduction of articles for use within german territory. 6. up to the time when restitution is carried out in accordance with article 297, germany is responsible for the conservation of property, rights, and interests of the nationals of allied or associated powers, including companies and associations in which they are interested, that have been subjected by her to exceptional war measures. 7. within one year from the coming into force of the present treaty the allied or associated powers will specify the property, rights and interests over which they intend to exercise the right provided in article 297, paragraph (f). 8. the restriction provided in article 297 will be carried out by order of the german government or of the authorities which have been substituted for it. detailed accounts of the action of administrators shall be furnished to the interested persons by the german authorities upon request, which may be made at any time after the coming into force of the present treaty. 9. until completion of the liquidation provided for by article 297, paragraph (b), the property, rights and interests of german nationals will continue to be subject to exceptional war measures that have been or will be taken with regard to them. 10. germany will within six months from the coming into force of the present treaty, deliver to each allied or associated power all securities, certificates, deeds, or other documents of title held by its nationals and relating to property, rights or interests situated in the territory of that allied or associated power, including any shares, stock, debentures, debenture stock, or other obligations of any company incorporated in accordance with the laws of that power. germany will at any time on demand of any allied or associated power furnish such information as may be required with regard to the property, rights, and interests of german nationals within the territory of such allied or associated power, or with regard to any transactions concerning such property, rights or interests effected since july 1, 1914. 11. the expression "cash assets" includes all deposits or funds established before or after the declaration of war, as well as all assets coming from deposits, revenues, or profits collected by administrators, sequestrators, or others from funds placed on deposit or otherwise, but does not include sums belonging to the allied or associated powers or to their component states, provinces, or municipalities. [illustration: copyright harris & ewing henry cabot lodge republican senator from massachusetts. one of the most earnest opponents of the peace treaty as originally drawn up.] 12. all investments wheresoever effected with the cash assets of nationals of the high contracting parties, including companies and associations in which such nationals were interested, by persons responsible for the administration, of enemy properties or having control over such administration, or by order of such persons or of any authority whatsoever shall be annulled. these cash assets shall be accounted for irrespective of any such investment. 13. within one month from the coming into force of the present treaty, or on demand at any time, germany will deliver to the allied and associated powers all accounts, vouchers, records, documents, and information of any kind which may be within german territory, and which concern the property, rights and interests of the nationals of those powers, including companies and associations in which they are interested, that have been subjected to an exceptional war measure, or to a measure of transfer either in german territory or in territory occupied by germany or her allies. the controllers, supervisors, managers, administrators, sequestrators, liquidators, and receivers shall be personally responsible under guarantee of the german government for the immediate delivery in full of these accounts and documents, and for their accuracy. 14. the provisions of article 297 and this annex relating to property, rights and interests in an enemy country, and the proceeds of the liquidation thereof, apply to debts, credits and accounts, section iii. regulating only the method of payment. in the settlement of matters provided for in article 297 between germany and the allied or associated states, their colonies or protectorates, or any one of the british dominions or india, in respect of any of which a declaration shall not have been made that they adopt section iii., and between their respective nationals, the provisions of section iii. respecting the currency in which payment is to be made and the rate of exchange and of interest shall apply unless the government of the allied or associated power concerned shall within six months of the coming into force of the present treaty notify germany that the said provisions are not to be applied. 15. the provisions of article 297 and this annex apply to industrial, literary, and artistic property which has been or will be dealt with in the liquidation of property, rights, interests, companies, or businesses under war legislation by the allied or associated powers, or in accordance with the stipulations of article 297, paragraph (b). section v.--_contracts, prescriptions, judgments_ =article 299.=--(a) any contract concluded between enemies shall be regarded as having been dissolved as from the time when any two of the parties become enemies, except in respect of any debt or other pecuniary obligation arising out of any act done or money paid thereunder, and subject to the exceptions and special rules with regard to particular contracts or classes of contracts contained herein or in the annex hereto. (b) any contract of which the execution shall be required in the general interest, within six months from the date of the coming into force of the present treaty, by the allied or associated governments of which one of the parties is a national, shall be excepted from dissolution under this article. when the execution of the contract thus kept alive would, owing to the alteration of trade conditions, cause one of the parties substantial prejudice the mixed arbitral tribunal provided for by section vi. shall be empowered to grant to the prejudiced party equitable compensation. (c) having regard to the provisions of the constitution and law of the united states of america, of brazil, and of japan, neither the present article, nor article 300, nor the annex hereto shall apply to contracts made between nationals of these states and german nationals; nor shall article 305 apply to the united states of america or its nationals. (d) the present article and the annex hereto shall not apply to contracts the parties to which became enemies by reason of one of them being an inhabitant of territory of which the sovereignty has been transferred, if such party shall acquire under the present treaty the nationality of an allied or associated power, nor shall they apply to contracts between nationals of the allied and associated powers between whom trading has been prohibited by reason of one of the parties being in allied or associated territory in the occupation of the enemy. (e) nothing in the present article or the annex hereto shall be deemed to invalidate a transaction lawfully carried out in accordance with a contract between enemies if it has been carried out with the authority of one of the belligerent powers. =article 300.=--(a) all periods of prescription, or limitation of right of action, whether they began to run before or after the outbreak of war, shall be treated in the territory of the high contracting parties, so far as regards relations between enemies, as having been suspended for the duration of the war. they shall begin to run again at earliest three months after the coming into force of the present treaty. this provision shall apply to the period prescribed for the presentation of interest or dividend coupons or for the presentation for repayment of securities drawn for repayment or repayable on any other ground. (b) where, on account of failure to perform any act or comply with any formality during the war, measures of execution have been taken in german territory to the prejudice of a national of an allied or associated power, the claim of such national shall, if the matter does not fall within the competence of the courts of an allied or associated power, be heard by the mixed arbitral tribunal provided for by section vi. (c) upon the application of any interested person who is a national of an allied or associated power, the mixed arbitral tribunal shall order the restoration of the rights which have been prejudiced by the measures of execution referred to in paragraph (b), wherever, having regard to the particular circumstances of the case, such restoration is equitable and possible. if such restoration is inequitable or impossible the mixed arbitral tribunal may grant compensation to the prejudiced party to be paid by the german government. (d) where a contract between enemies has been dissolved by reason either of failure on the part of either party to carry out its provisions or of the exercise of a right stipulated in the contract itself the party prejudiced may apply to the mixed arbitral tribunal for relief. the tribunal will have the powers provided for in paragraph (c). (e) the provisions of the preceding paragraphs of this article shall apply to the nationals of allied and associated powers who have been prejudiced by reason of measures referred to above taken by germany in invaded or occupied territory, if they have not been otherwise compensated. (f) germany shall compensate any third party who may be prejudiced by any restitution or restoration ordered by the mixed arbitral tribunal under the provisions of the preceding paragraphs of this article. (g) as regards negotiable instruments, the period of three months provided under paragraph (a) shall commence as from the date on which any exceptional regulations applied in the territories of the interested power with regard to negotiable instruments shall have definitely ceased to have force. =article 301.=--as between enemies, no negotiable instrument made before the war shall be deemed to have become invalid by reason only of failure within the required time to present the instrument for acceptance or payment or to give notice of non-acceptance or non-payment to drawers or indorsers or to protest the instrument, nor by reason of failure to complete any formality during the war. where the period within which a negotiable instrument should have been presented for acceptance or for payment, or within which notice of non-acceptance or non-payment should have been given to the drawer or indorser within which the instrument should have been protested, has elapsed during the war, and the party who should have presented or protested the instrument or have given notice of non-acceptance or non-payment has failed to do so during the war, a period of not less than three months from the coming into force of the present treaty shall be allowed within which presentation, notice of non-acceptance or non-payment or protest may be made. =article 302.=--judgments given by the courts of an allied or associated power in all cases which, under the present treaty, they are competent to decide, shall be recognized in germany as final, and shall be enforced without it being necessary to have them declared executory. if a judgment in respect of any dispute which may have arisen has been given during the war by a german court against a national of an allied or associated state in a case in which he was not able to make his defense, the allied and associated national who has suffered prejudice thereby shall be entitled to recover compensation, to be fixed by the mixed arbitral tribunal provided for in section vi. at the instance of the national of the allied or associated power the compensation above mentioned may, upon order to that effect of the mixed arbitral tribunal, be effected where it is possible by replacing the parties in the situation which they occupied before the judgment was given by the german court. the above compensation may likewise be obtained before the mixed arbitral tribunal by the nationals of allied or associated powers who have suffered prejudice by judicial measures taken in invaded or occupied territories, if they have not been otherwise compensated. =article 303.=--for the purpose of sections iii., iv., v., and vii., the expression "during the war" means for each allied or associated power the period between the commencement of the state of war between that power and germany and the coming into force of the present treaty. annex i. _general provisions_ 1. within the meaning of articles 299, 300 and 301, the parties to a contract shall be regarded as enemies when trading between them shall have been prohibited by or otherwise became unlawful under laws, orders or regulations to which one of those parties was subject. they shall be deemed to have become enemies from the date when such trading was prohibited or otherwise became unlawful. 2. the following classes of contracts are excepted from dissolution by article 299 and, without prejudice to the rights contained in article 297 (b) of section iv., remain in force subject to the application of domestic laws, orders or regulations made during the war by the allied and associated powers and subject to the terms of the contracts: (a) contracts having for their object the transfer of estates or of real or personal property where the property therein had passed or the object had been delivered before the parties became enemies; (b) leases and agreements for leases of land and houses; (c) contracts of mortgage, pledge, or lien; (d) concessions concerning mines, quarries or deposits; (e) contracts between individuals or companies and states, provinces, municipalities, or other similar juridical persons charged with administrative functions, and concessions granted by states, provinces, municipalities, or other similar juridical persons charged with administrative functions. 3. if the provisions of a contract are in part dissolved under article 299, the remaining provisions of that contract shall, subject to the same application of domestic laws as is provided for in paragraph 2, continue in force if they are severable, but where they are not severable the contract shall be deemed to have been dissolved in its entirety. ii. _provisions relating to certain classes of contracts_ _stock exchange and commercial exchange contracts_ 4. (a) rules made during the war by any recognized exchange of commercial association providing for the closure of contracts entered into before the war by an enemy are confirmed by the high contracting parties, as also any action taken thereunder, provided:-(i.) that the contract was expressed to be made subject to the rules of the exchange or association in question; (ii.) that the rules applied to all persons concerned; (iii.) that the conditions attaching to the closure were fair and reasonable. (b) the preceding paragraph shall not apply to rules made during the occupation by exchange or commercial associations in the districts occupied by the enemy. (c) the closure of contracts relating to cotton "futures," which were closed as on the 31st july, 1914, under the decision of the liverpool cotton association, is also confirmed. _security_ (5) the sale of a security held for an unpaid debt owing by an enemy shall be deemed to have been valid irrespective of notice to the owner if the creditor acted in good faith and with reasonable care and prudence, and no claim by the debtor on the ground of such sale shall be admitted. this stipulation shall not apply to any sale of securities effected by an enemy during the occupation in regions invaded or occupied by the enemy. _negotiable instruments_ 6. as regards powers which adopt section iii. and the annex thereto the pecuniary obligations existing between enemies and resulting from the issue of negotiable instruments shall be adjusted in conformity with the said annex by the instrumentality of the clearing offices, which shall assume the rights of the holder as regards the various remedies open to him. 7. if a person has either before or during the war become liable upon a negotiable instrument in accordance with an undertaking given to him by a person who has subsequently become an enemy, the latter shall remain liable to indemnify the former in respect of his liability, notwithstanding the outbreak of war. iii. _contracts of insurance_ 8. contracts of insurance entered into by any person with another person who subsequently became an enemy will be dealt with in accordance with the following paragraphs: _fire insurance_ 9. contracts for the insurance of property against fire entered into by a person interested in such property with another person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war, or by the fact of the person becoming an enemy, or on account of the failure during the war and for a period of three months thereafter to perform his obligations under the contract, but they shall be dissolved at the date when the annual premium becomes payable for the first time after the expiration of a period of three months after the coming into force of the present treaty. a settlement shall be effected of unpaid premiums which became due during the war, or of claims for losses which occurred during the war. 10. where by administrative or legislative action an insurance against fire effected before the war has been transferred during the war from the original to another insurer, the transfer will be recognized and the liability of the original insurer will be deemed to have ceased as from the date of the transfer. the original insurer will, however, be entitled to receive on demand full information as to the terms of the transfer, and if it should appear that these terms were not equitable they shall be amended so far as may be necessary to render them equitable. furthermore, the insured shall, subject to the concurrence of the original insurer, be entitled to retransfer the contract to the original insurer as from the date of the demand. _life insurance_ 11. contracts of life insurance entered into between an insurer and a person who subsequently became an enemy shall not be deemed to have been dissolved by the outbreak of war, or by the fact of the person becoming an enemy. any sum which during the war became due upon a contract deemed not to have been dissolved under the preceding provision shall be recoverable after the war with the addition of interest of five per cent. per annum from the date of its becoming due up to the day of payment. where the contract has lapsed during the war owing to non-payment of premiums, or has become void from breach of the conditions of the contract, the assured or his representatives or the persons entitled shall have the right at any time within twelve months of the coming into force of the present treaty to claim from the insurer the surrender value of the policy at the date of its lapse or avoidance. where the contract has lapsed during the war owing to non-payment of premiums the payment of which has been prevented by the enforcement of measures of war, the assured or his representative or the persons entitled shall have the right to restore the contract on payment of the premiums with interest at five per cent. per annum within three months from the coming into effect of the present treaty. 12. any allied or associated power may within three months of the coming into force of the present treaty cancel all the contracts of insurance running between a german insurance company and its nationals under conditions which shall protect its nationals from any prejudice. to this end the german insurance company will hand over to the allied or associated government concerned, the proportion of its assets attributable to the policies so canceled and will be relieved from all liability in respect of such policies. the assets to be handed over shall be determined by an actuary appointed by the mixed arbitral tribunal. 13. where contracts of life insurance have been entered into by a local branch of an insurance company established in a country which subsequently became an enemy country, the contract shall, in the absence of any stipulation to the contrary in the contract itself, be governed by the local law, but the insurer shall be entitled to demand from the insured or his representatives the refund of sums paid on claims made or enforced under measures taken during the war, if the making or enforcement of such claims was not in accordance with the terms of the contract itself or was not consistent with the laws or treaties existing at the time when it was entered into. 14. in any case where by the law applicable to the contract the insurer remains bound by the contract notwithstanding the non-payment of premiums until notice is given to the insured of the termination of the contract, he shall be entitled where the giving of such notice was prevented by the war to recover the unpaid premiums with interest at five per cent. per annum from the insured. 15. insurance contracts shall be considered as contracts of life assurance for the purpose of paragraphs 11 to 14 when they depend on the probabilities of human life combined with the rate of interest for the calculation of the reciprocal engagements between the two parties. _marine insurance_ 16. contracts of marine insurance including time policies and voyage policies entered into between an insurer and a person who subsequently became an enemy, shall be deemed to have been dissolved on his becoming an enemy, except in cases where the risk undertaken in the contract had attached before he became an enemy. where the risk had not attached, money paid by way of premium or otherwise shall be recoverable from the insurer. where the risk had attached, effect shall be given to the contract notwithstanding the party becoming an enemy, and sums due under the contract either by way of premiums or in respect of losses shall be recoverable after the coming into force of the present treaty. in the event of any agreement being come to for the payment of interest on sums due before the war to or by the nationals of states which have been at war and recovered after the war, such interest shall in the case of losses recoverable under contracts of marine insurance run from the expiration of a period of one year from the date of the loss. 17. no contract of marine insurance with an insured person who subsequently became an enemy shall be deemed to cover losses due to belligerent action by the power of which the insurer was a national or by the allies or associates of such power. 18. where it is shown that a person who had before the war entered into a contract of marine insurance with an insurer who subsequently became an enemy entered after the outbreak of war into a new contract covering the same risk with an insurer who was not an enemy, the new contract shall be deemed to be substituted for the original contract as from the date when it was entered into, and the premiums payable shall be adjusted on the basis of the original insurer having remained liable on the contract only up till the time when the new contract was entered into. _other insurances_ 19. contracts of insurance entered into before the war between an insurer and a person who subsequently became an enemy other than contracts dealt with in paragraphs 9 to 18 shall be treated in all respects on the same footing as contracts of fire insurance between the same persons would be dealt with under the said paragraphs. _re-insurance_ 20. all treaties of re-insurance with a person who became an enemy shall be regarded as having been abrogated by the person becoming an enemy, but without prejudice in the case of life or marine risks which had attached before the war to the right to recover payment after the war for sums due in respect of such risks. nevertheless, if, owing to invasion, it has been impossible for the re-insured to find another re-insurer, the treaty shall remain in force until three months after the coming into force of the present treaty. where a re-insurance treaty becomes void under this paragraph, there shall be an adjustment of accounts between the parties in respect both of premiums paid and payable and of liabilities for losses in respect of life or marine risk which had attached before the war. in the case of risks other than those mentioned in paragraphs 11 to 18 the adjustment of accounts shall be made as at the date of the parties becoming enemies without regard to claims for losses which may have occurred since that date. 21. the provisions of the preceding paragraph will extend equally to re-insurances existing at the date of the parties becoming enemies of particular risks undertaken by the insurer in a contract of insurance against any risks other than life or marine risks. 22. re-insurance of life risks effected by particular contracts and not under any general treaty remain in force. the provisions of paragraph 12 apply to treaties of re-insurance of life insurance contracts in which enemy companies are the re-insurers. 23. in case of a re-insurance effected before the war of a contract of marine insurance the cession of a risk which had been ceded to the re-insurer shall, if it had attached before the outbreak of war, remain valid and effect be given to the contract notwithstanding the outbreak of war; sums due under the contract of re-insurance in respect either of premiums or of losses shall be recoverable after the war. 24. the provisions of paragraphs 17 and 18 and the last part of paragraph 16 shall apply to contracts for the re-insurance of marine risks. section vi.--_mixed arbitral tribunal_ =article 304.=--(a) within three months from the date of the coming into force of the present treaty, a mixed arbitral tribunal shall be established between each of the allied and associated powers on the one hand and germany on the other hand. each such tribunal shall consist of three members. each of the governments concerned shall appoint one of these members. the president shall be chosen by agreement between the two governments concerned. in case of failure to reach agreement, the president of the tribunal and two other persons either of whom may in case of need take his place, shall be chosen by the council of the league of nations, or, until this is set up, by m. gustave ador if he is willing. these persons shall be nationals of powers that have remained neutral during the war. if any government does not proceed within a period of one month in case there is a vacancy to appoint a member of the tribunal, such member shall be chosen by the other government from the two persons mentioned above other than the president. the decision of the majority of the members of the tribunal shall be the decision of the tribunal. (b) the mixed arbitral tribunals established pursuant to paragraph (a) shall decide all questions within their competence under sections iii., iv., v., and vii. in addition, all questions, whatsoever their nature, relating to contracts concluded before the coming into force of the present treaty between nationals of the allied and associated powers and german nationals shall be decided by the mixed arbitral tribunal, always excepting questions which, under the laws of the allied, associated or neutral powers, are within the jurisdiction of the national courts of those powers. such questions shall be decided by the national courts in question, to the exclusion of the mixed arbitral tribunal. the party who is a national of an allied or associated power may nevertheless bring the case before the mixed arbitral tribunal if this is not prohibited by the laws of his country. (c) if the number of cases justifies it, additional members shall be appointed and each mixed arbitral tribunal shall sit in divisions. each of these divisions will be constituted as above. (d) each mixed arbitral tribunal will settle its own procedure except in so far as it is provided in the following annex, and is empowered to award the sums to be paid by the loser in respect of the costs and expenses of the proceedings. (e) each government will pay the remuneration of the member of the mixed arbitral tribunal appointed by it and of any agent whom it may appoint to represent it before the tribunal. the remuneration of the president will be determined by special agreement between the governments concerned, and this remuneration and the joint expenses of each tribunal will be paid by the two governments in equal moieties. (f) the high contracting parties agree that their courts and authorities shall render to the mixed arbitral tribunal direct all the assistance in their power, particularly as regards transmitting notices and collecting evidence. (g) the high contracting parties agree to regard the decisions of the mixed arbitral tribunal as final and conclusive, and to render them binding upon their nationals. annex 1. should one of the members of the tribunal either die, retire, or be unable for any reason whatever to discharge his functions, the same procedure will be followed for filling the vacancy as was followed for appointing him. 2. the tribunal may adopt such rules of procedure as shall be in accordance with justice and equity and decide the order and time at which each party must conclude its arguments, and may arrange all formalities required for dealing with the evidence. 3. the agent and counsel of the parties on each side are authorized to present orally and in writing to the tribunal arguments in support or in defense of each case. 4. the tribunal shall keep record of the questions and cases submitted and the proceedings thereon, with the dates of such proceedings. 5. each of the powers concerned may appoint a secretary. these secretaries shall act together as joint secretaries of the tribunal and shall be subject to its direction. the tribunal may appoint and employ any other necessary officer or officers to assist in the performance of its duties. 6. the tribunal shall decide all questions and matters submitted upon such evidence and information as may be furnished by the parties concerned. 7. germany agrees to give the tribunal all facilities and information required by it for carrying out its investigations. 8. the language in which the proceedings shall be conducted shall, unless otherwise agreed, be english, french, italian, or japanese, as may be determined by the allied or associated power concerned. 9. the place and time for the meetings of each tribunal shall be determined by the president of the tribunal. =article 305.=--whenever a competent court has given or gives a decision in a case covered by sections iii., iv., v. or vii., and such decision is inconsistent with the provisions of such sections, the party who is prejudiced by the decision shall be entitled to obtain redress which shall be fixed by the mixed arbitral tribunal. at the request of the national of an allied or associated power, the redress may, whenever possible, be effected by the mixed arbitral tribunal directing the replacement of the parties in the position occupied by them before the judgment was given by the german court. section vii.--_industrial property_ =article 306.=--subject to the stipulations of the present treaty, rights of industrial, literary, and artistic property, as such property is defined by the international conventions of paris and of berne, mentioned in article 286, shall be re-established or restored, as from the coming into force of the present treaty in the territories of the high contracting parties, in favor of the persons entitled to the benefit of them at the moment when the state of war commenced, or their legal representatives. equally, rights which, except for the war, would have been acquired during the war in consequence of an application made for the protection of industrial property, or the publication of a literary or artistic work, shall be recognized and established in favor of those persons who would have been entitled thereto, from the coming into force of the present treaty. nevertheless, all acts done by virtue of the special measures taken during the war under legislative, executive or administrative authority of any allied or associated power in regard to the rights of german nationals in industrial, literary or artistic property shall remain in force and shall continue to maintain their full effect. no claim shall be made or action brought by germany or german nationals in respect of the use during the war by the government of any allied or associated power, or by any persons acting on behalf or with the assent of such government of any rights in industrial, literary or artistic property, nor in respect of the sale, offering for sale, or use of any products, articles, or apparatus whatsoever to which such rights applied. unless the legislation of any one of the allied or associated powers in force at the moment of the signature of the present treaty otherwise directs, sums due or paid in virtue of any act or operation resulting from the execution of the special measures mentioned in paragraph 1 of this article shall be dealt with in the same way as other sums due to german nationals are directed to be dealt with by the present treaty; and sums produced by any special measures taken by the german government in respect of rights in industrial, literary or artistic property belonging to the nationals of the allied or associated powers shall be considered and treated in the same way as other debts due from german nationals. each of the allied and associated powers reserves to itself the right to impose such limitations, conditions or restrictions on rights of industrial, literary or artistic property (with the exception of trade-marks) acquired before or during the war, or which may be subsequently acquired in accordance with its legislation, by german nationals, whether by granting licenses, or by the working, or by preserving control over their exploitation, or in any other way as may be considered necessary for national defense or in the public interest, or for assuring the fair treatment by germany of the rights of industrial, literary, and artistic property held in german territory by its nationals, or for securing the due fulfillment of all the obligations undertaken by germany in the present treaty. as regards rights of industrial, literary and artistic property acquired after the coming into force of the present treaty, the right so reserved by the allied and associated powers shall only be exercised in cases where these limitations, conditions or restrictions may be considered necessary for national defense or in the public interest. in the event of the application of the provisions of the preceding paragraph by any of the allied or associated powers, there shall be paid reasonable indemnities or royalties which shall be dealt with in the same way as other sums due to german nationals are directed to be dealt with by the present treaty. each of the allied or associated powers reserves the right to treat as void and of no effect any transfer in whole or in part of or other dealing with rights of or in respect of industrial, literary or artistic property effected after aug. 1, 1914, or in the future, which would have the result of defeating the objects of the provisions of this article. the provisions of this article shall not apply to rights in industrial, literary or artistic property which have been dealt with in the liquidation of businesses or companies under war legislation by the allied or associated powers, or which may be so dealt with by virtue of article 297, paragraph (b). =article 307.=--a minimum of one year after the coming into force of the present treaty shall be accorded to the nationals of the high contracting parties, without extension fees or other penalty, in order to enable such persons to accomplish any act, fulfill any formality, pay any fees, and generally satisfy any obligation prescribed by the laws or regulations of the respective states relating to the obtaining, preserving or opposing rights to, or in respect of, industrial property either acquired before the 1st of august, 1914, or which, except for the war, might have been acquired since that date as a result of an application made before the war or during its continuance, but nothing in this article shall give any right to reopen interference proceedings in the united states of america where a final hearing has taken place. all rights in, or in respect of, such property which may have lapsed by reason of any failure to accomplish any act, fulfill any formality, or make any payment, shall revive, but subject in the case of patents and designs to the imposition of such conditions as each allied or associated power may deem reasonably necessary for the protection of persons who have manufactured or made use of the subject matter of such property while the rights had lapsed. further, where rights to patents or designs belonging to german nationals are revived under this article, they shall be subject in respect of the grant of licenses to the same provisions as would have been applicable to them during the war, as well as to all the provisions of the present treaty. the period from the 1st august, 1914, until the coming into force of the present treaty shall be excluded in considering the time within which a patent should be worked or a trade mark or design used, and it is further agreed that no patent, registered trade mark or design in force on the 1st of august, 1914, shall be subject to revocation or cancellation by reason only of the failure to work such patent or use such trade mark or design for two years after the coming into force of the present treaty. =article 308.=--the rights of priority, provided by article iv. of the international convention for the protection of industrial property of paris, of the 20th march, 1883, revised at washington in 1911, or by any other convention or statute, for the filing or registration of applications for patents or models of utility, and for the registration of trade marks, designs, and models which had not expired on the 1st august, 1914, and those which have arisen during the war, or would have arisen but for the war, shall be extended by each of the high contracting parties in favor of all nationals of the other high contracting parties for a period of six months after the coming into force of the present treaty. nevertheless, such extension shall in no way affect the right of any of the high contracting parties or of any person who before the coming into force of the present treaty was _bona fide_ in possession of any rights of industrial property conflicting with rights applied for by another who claims rights of priority in respect of them, to exercise such rights by itself or himself personally, or by such agents or licensees as derived their rights from it or him before the coming into force of the present treaty; and such persons shall not be amenable to any action or other process of law in respect of infringement. =article 309.=--no action shall be brought and no claim made by persons residing or carrying on business within the territories of germany on the one part and of the allied or associated powers on the other, or persons who are nationals of such powers, respectively, or by any one deriving title during the war from such persons, by reason or any action which has taken place within the territory of the other party between the date of the declaration of war and that of the coming into force of the present treaty, which might constitute an infringement of the rights of industrial property or rights of literary and artistic property, either existing at any time during the war or revived under the provisions of articles 307 and 308. [illustration: america's peace capitol in paris the hotel crillon, facing upon the place de la concorde, was requisitioned to serve during the peace conference as the office and living quarters of president wilson's staff. copyright underwood & underwood] equally, no action for infringement of industrial, literary or artistic property rights by such persons shall at any time be permissible in respect of the sale or offering for sale for a period of one year after the signature of the present treaty in the territories of the allied or associated powers on the one hand or germany on the other, of products or articles manufactured, or of literary or artistic works published, during the period between the declaration of war and the signature of the present treaty, or against those who have acquired and continue to use them. it is understood, nevertheless, that this provision shall not apply when the possessor of the rights was domiciled or had an industrial or commercial establishment in the districts occupied by germany during the war. this article shall not apply as between the united states of america on the one hand and germany on the other. =article 310.=--licenses in respect of industrial, literary, or artistic property concluded before the war between nationals of the allied or associated powers or persons residing in their territory or carrying on business therein, on the one part, and german nationals, on the other part, shall be considered as canceled as from the date of the declaration of war between germany and the allied or associated powers. but, in any case, the former beneficiary of a contract of this kind shall have the right, within a period of six months after the coming into force of the present treaty, to demand from the proprietor of the rights the grant of a new license, the conditions of which, in default of agreement between the parties, shall be fixed by the duly qualified tribunal in the country under whose legislation the rights had been acquired, except in the case of licenses held in respect of rights acquired under german law. in such cases the conditions shall be fixed by the mixed arbitral tribunal referred to in section vi. of this part. the tribunal may, if necessary, fix also the amount which it may deem just should be paid by reason of the use of the rights during the war. no license in respect of industrial, literary, or artistic property, granted under the special war legislation of any allied or associated power, shall be affected by the continued existence of any license entered into before the war, but shall remain valid and of full effect, and a license so granted to the former beneficiary of a license entered into before the war shall be considered as substituted for such license. where sums have been paid during the war by virtue of a license or agreement concluded before the war in respect of rights of industrial property or for the reproduction or the representation of literary, dramatic, or artistic works, these sums shall be dealt with in the same manner as other debts or credits of german nationals, as provided by the present treaty. this article shall not apply as between the united states of america on the one hand and germany on the other. =article 311.=--the inhabitants of territories separated from germany by virtue of the present treaty shall, notwithstanding this separation and the change of nationality consequent thereon, continue to enjoy in germany all the rights in industrial, literary, and artistic property to which they were entitled under german legislation at the time of the separation. rights of industrial, literary and artistic property which are in force in the territories separated from germany under the present treaty at the moment of the separation of these territories from germany, or which will be re-established or restored in accordance with the provisions of article 306 of the present treaty, shall be recognized by the state to which the said territory is transferred and shall remain in force in that territory for the same period of time given them under the german law. section viii.--_social and state insurance in ceded territory_ =article 312.=--without prejudice to the provisions contained in other articles of the present treaty, the german government undertakes to transfer to any power to which german territory in europe is ceded, and to any power administering former german territory as a mandatory under article 22 of part i. (league of nations), such portion of the reserves accumulated by the government of the german empire or of german states, or by public or private organizations under their control, as is attributable to the carrying on of social or state insurance in such territory. the powers to which these funds are transferred must apply them to the performance of the obligations arising from such insurances. the conditions of the transfer will be determined by special conventions to be concluded between the german government and the governments concerned. in case these special conventions are not concluded in accordance with the above paragraph within three months after the coming into force of the present treaty, the conditions of transfer shall in each case be referred to a commission of five members, one of whom shall be appointed by the german government, one by the other interested government, and three by the governing body of the international labor office from the nationals of other states. this commission shall by majority vote within three months after appointment adopt recommendations for submission to the council of the league of nations, and the decisions of the council shall forthwith be accepted as final by germany and the other government concerned. part xi aerial navigation =article 313.=--the aircraft of the allied and associated powers shall have full liberty of passage and landing over and in the territory and territorial waters of germany, and shall enjoy the same privileges as german aircraft, particularly in case of distress by land or sea. =article 314.=--the aircraft of the allied and associated powers shall, while in transit to any foreign country whatever, enjoy the right of flying over the territory and territorial waters of germany without landing subject always to any regulations which may be made by germany, and which shall be applicable equally to the aircraft of germany and those of the allied and associated countries. =article 315.=--all aerodromes in germany open to national public traffic shall be open for the aircraft of the allied and associated powers, and in any such aerodrome such aircraft shall be treated on a footing of equality with german aircraft as regards charges of every description, including charges for landing and accommodation. =article 316.=--subject to the present provisions, the rights of passage, transit and landing provided for in articles 313, 314 and 315 are subject to the observation of such regulations as germany may consider it necessary to enact, but such regulations shall be applied without distinction to german aircraft and to those of allied and associated countries. =article 317.=--certificates of nationality, airworthiness, or competency, and licenses, issued or recognized as valid by any of the allied or associated powers, shall be recognized in germany as valid and as equivalent to the certificates and licenses issued by germany. =article 318.=--as regards internal commercial air traffic, the aircraft of the allied and associated powers shall enjoy in germany most favored nation treatment. =article 319.=--germany undertakes to enforce the necessary measures to insure that all german aircraft flying over her territory shall comply with the rules as to lights and signals, rules of the air and rules for air traffic on and in the neighborhood of aerodromes, which have been laid down in the convention relative to aerial navigation concluded between the allied and associated powers. =article 320.=--the obligations imposed by the preceding provisions shall remain in force until the 1st january, 1923, unless before that date germany shall have been admitted into the league of nations or shall have been authorized, by consent of the allied and associated powers, to adhere to the convention relative to aerial navigation concluded between those powers. part xii ports, waterways, and railways section i.--_general provisions_ =article 321.=--germany undertakes to grant freedom of transit through her territories on the routes most convenient for international transit, either by rail, navigable waterway, or canal, to persons, goods, vessels, carriages, wagons, and mails coming from or going to the territories of any of the allied and associated powers (whether contiguous or not); for this purpose the crossing of territorial waters shall be allowed. such persons, goods, vessels, carriages, wagons, and mails shall not be subjected to any transit duty or to any undue delays or restrictions, and shall be entitled in germany to national treatment as regards charges, facilities, and all other matters. goods in transit shall be exempt from all customs or other similar duties. all charges imposed on transport in transit shall be reasonable, having regard to the conditions of the traffic. no charge, facility, or restriction shall depend directly or indirectly on the ownership or on the nationality of the ship or other means of transport on which any part of the through journey has been, or is to be, accomplished. =article 322.=--germany undertakes neither to impose nor to maintain any control over transmigration traffic through her territories beyond measures necessary to insure that passengers are _bona fide_ in transit; nor to allow any shipping company or any other private body, corporation, or person interested in the traffic to take any part whatever in, or to exercise any direct or indirect influence over, any administrative service that may be necessary for this purpose. =article 323.=--germany undertakes to make no discrimination or preference, direct or indirect, in the duties, charges, and prohibitions relating to importations into or exportations from her territories, or, subject to the special engagements contained in the present treaty, in the charges and conditions of transport of goods or persons entering or leaving her territories, based on the frontier crossed; or on the kind, ownership, or flag of the means of transport (including aircraft) employed; or on the original or immediate place of departure of the vessel, wagon, or aircraft or other means of transport employed, or its ultimate or intermediate destination; or on the route of or places of transshipment on the journey; or on whether any port through which the goods are imported or exported is a german port or a port belonging to any foreign country or on whether the goods are imported or exported by sea, by land, or by air. germany particularly undertakes not to establish against the ports and vessels of any of the allied and associated powers any surtax or any direct or indirect bounty for export or import by german ports of vessels, or by those of another power, for example by means of combined tariffs. she further undertakes that persons or goods passing through a port or using a vessel of any of the allied and associated powers shall not be subjected to any formality or delay whatever to which such persons or goods would not be subjected if they passed through a german port or a port of any other power, or used a german vessel or a vessel of any other power. =article 324.=--all necessary administrative and technical measures shall be taken to shorten, as much as possible, the transmission of goods across the german frontiers and to insure their forwarding and transport from such frontiers, irrespective of whether such goods are coming from or going to the territories of the allied and associated powers or are in transit from or to those territories, under the same material conditions in such matters as rapidity of carriage and care en route as are enjoyed by other goods of the same kind carried on german territory under similar conditions of transport. in particular, the transport of perishable goods shall be promptly and regularly carried out, and the customs formalities shall be effected in such a way as to allow the goods to be carried straight through by trains which make connection. =article 325.=--the seaports of the allied and associated powers are entitled to all favors and to all reduced tariffs granted on german railways or navigable waterways for the benefit of german ports or of any port of another power. =article 326.=--germany may not refuse to participate in the tariffs or combinations of tariffs intended to secure for ports of any of the allied and associated powers advantages similar to those granted by germany to her own ports or the ports of any other power. section ii.--_navigation_ chapter i.--freedom of navigation =article 327.=--the nationals of any of the allied and associated powers as well as their vessels and property shall enjoy in all german ports and in the inland navigation routes of germany, the same treatment in all respects as german nationals, vessels and property. in particular the vessels of any one of the allied or associated powers shall be entitled to transport goods of any description, and passengers, to or from any ports or places in german territory to which german vessels may have access, under conditions which shall not be more onerous than those applied in the case of national vessels; they shall be treated on a footing of equality with national vessels as regards port and harbor facilities and charges of every description, including facilities for stationing, loading and unloading, and duties and charges of tonnage, harbor, pilotage, lighthouse, quarantine, and all analogous duties and charges of whatsoever nature, levied in the name of or for the profit of the government, public functionaries, private individuals, corporations or establishments of any kind. in the event of germany granting a preferential régime to any of the allied or associated powers or to any other foreign power, this régime shall be extended immediately and unconditionally to all the allied and associated powers. there shall be no impediment to the movement of persons or vessels other than those arising from prescriptions concerning customs, police, sanitation, emigration and immigration and those relating to the import and export of prohibited goods. such regulations must be reasonable and uniform and must not impede traffic unnecessarily. chapter ii.--free zones in ports =article 328.=--the free zones existing in german ports on the 1st august, 1914, shall be maintained. these free zones and any other free zones which may be established in german territory by the present treaty shall be subject to the régime provided for in the following articles. goods entering or leaving a free zone shall not be subjected to any import or export duty, other than those provided for in article 330. vessels and goods entering a free zone may be subjected to the charges established to cover expenses of administration, upkeep and improvement of the port, as well as to the charges for the use of various installations, provided that these charges shall be reasonable, having regard to the expenditure incurred, and shall be levied in the conditions of equality provided for in article 327. goods shall not be subjected to any other charge except a statistical duty which shall not exceed 1 per mille ad valorem, and which shall be devoted exclusively to defraying the expenses of compiling statements of the traffic in the port. =article 329.=--the facilities granted for the erection of warehouses, for packing and for unpacking goods, shall be in accordance with trade requirements for the time being. all goods allowed to be consumed in the free zone shall be exempt from duty, whether of excise or of any other description, apart from the statistical duty provided for in article 328 above. there shall be no discrimination in regard to any of the provisions of the present article between persons belonging to different nationalities or between goods of different origin or destination. =article 330.=--import duties may be levied on goods leaving the free zone for consumption in the country on the territory of which the port is situated. conversely, export duties may be levied on goods coming from such country and brought into the free zone. these import and export duties shall be levied on the same basis and at the same rates as similar duties levied at the other customs frontiers of the country concerned. on the other hand, germany shall not levy, under any denomination, any import, export, or transit duty on goods carried by land or water across her territory to or from the free zone from or to any other state. germany shall draw up the necessary regulations to secure and guarantee such freedom of transit over such railways and waterways in her territory as normally give access to the free zone. chapter iii.--clauses relating to the elbe, the oder, the niemen (russtrom-memel-niemen), and the danube (i)--_general clauses_ =article 331.=--the following rivers are declared international: the elbe (labe) from its confluence with the vitava (moldau) and the vitava (moldau) from prague; the oder (odra) from its confluence with the oppa; the niemen (russtrom-memel-niemen) from grodno, the danube from ulm; and all navigable parts of these river systems which naturally provide more than one state with access to the sea, with or without transshipment from one vessel to another; together with lateral canals and channels constructed either to duplicate or to improve naturally navigable sections of the specified river system, or to connect two naturally navigable sections of the same river. the same shall apply to the rhine-danube navigable waterway, should such a waterway be constructed under the conditions laid down in article 353. =article 332.=--on the waterways declared to be international in the preceding article, the nationals, property and flags of all powers shall be treated on a footing of perfect equality, no distinction being made to the detriment of the nationals, property or flag of any power between them and the nationals, property or flag of the riparian state itself or of the most favored nation. nevertheless, german vessels shall not be entitled to carry passengers or goods by regular services between the ports of any allied or associated power, without special authority from such power. =article 333.=--where such charges are not precluded by any existing conventions, charges varying on different sections of a river may be levied on vessels using the navigable channels or their approaches, provided that they are intended solely to cover equitably the cost of maintaining in a navigable condition, or of improving, the river and its approaches, or to meet expenditure incurred in the interests of navigation. the schedule of such charges shall be calculated on the basis of such expenditure and shall be posted up in the ports. these charges shall be levied in such a manner as to render any detailed examination of cargoes unnecessary, except in cases of suspected fraud or contravention. =article 334.=--the transit of vessels, passengers, and goods on these waterways shall be effected in accordance with the general conditions prescribed for transit in section i., above. when the two banks of an international river are within the same state, goods in transit may be placed under seal or in the custody of customs agents. when the river forms a frontier, goods and passengers in transit shall be exempt from all customs formalities; the loading and unloading of goods, and the embarkation and disembarkation of passengers, shall only take place in the ports specified by the riparian state. =article 335.=--no dues of any kind other than those provided for in the present part shall be levied along the course or at the mouth of these rivers. this provision shall not prevent the fixing by the riparian states of customs, local octroi, or consumption duties, or the creation of reasonable and uniform charges levied in the ports, in accordance with public tariffs, for the use of cranes, elevators, quays, warehouses, &c. =article 336.=--in default of any special organization for carrying out the works connected with the upkeep and improvement of the international portion of a navigable system, each riparian state shall be bound to take suitable measures to remove any obstacle or danger to navigation and to insure the maintenance of good conditions of navigation. if a state neglects to comply with this obligation any riparian state, or any state represented on the international commission, if there is one, may appeal to the tribunal instituted for this purpose by the league of nations. =article 337.=--the same procedure shall be followed in the case of a riparian state undertaking any works of a nature to impede navigation in the international section. the tribunal mentioned in the preceding article shall be entitled to enforce the suspension or suppression of such works, making due allowance in its decisions for all rights in connection with irrigation, waterpower, fisheries, and other national interests, which, with the consent of all the riparian states or of all the states represented on the international commission, if there be one, shall be given priority over the requirements of navigation. appeal to the tribunal of the league of nations does not require the suspension of the works. =article 338.=--the régime set out in articles 332 to 337 above shall be superseded by one to be laid down in a general convention drawn up by the allied and associated powers, and approved by the league of nations, relating to the waterways recognized in such convention as having an international character. this convention shall apply in particular to the whole or part of the above-mentioned river systems of the elbe (labe), the oder (odra), the niemen (russtrom-memel-niemen), and the danube, and such other parts of these river systems as may be covered by a general definition. germany undertakes, in accordance with the provisions of article 379, to adhere to the said general convention as well as to all projects prepared in accordance with article 343 below for the revision of existing international agreements and regulations. =article 339.=--germany shall cede to the allied and associated powers concerned, within a maximum period of three months from the date on which notification shall be given her, a proportion of the tugs and vessels remaining registered in the ports of the river systems referred to in article 331 after the deduction of those surrendered by way of restitution or reparation. germany shall in the same way cede material of all kinds necessary to the allied and associated powers concerned for the utilization of those river systems. the number of the tugs and boats and the amount of the material so ceded, and their distribution, shall be determined by an arbitrator or arbitrators nominated by the united states of america, due regard being had to the legitimate needs of the parties concerned, and particularly to the shipping traffic during the five years preceding the war. all craft so ceded shall be provided with their fittings and gear, shall be in a good state of repair and in condition to carry goods, and shall be selected from among those most recently built. the cessions provided for in the present article shall entail a credit of which the total amount, settled in a lump sum by the arbitrator or arbitrators, shall not in any case exceed the value of the capital expended in the initial establishment of the material ceded, and shall be set off against the total sums due from germany; in consequence, the indemnification of the proprietors shall be a matter for germany to deal with. (2) _special clauses relating to the elbe, the oder, and the niemen (russtrom-memel-niemen)_ =article 340.=--the elbe (labe) shall be placed under the administration of an international commission which shall comprise: 4 representatives of the german states bordering on the river; 2 representatives of the czechoslovak state; 1 representative of great britain; 1 representative of france; 1 representative of italy; 1 representative of belgium; whatever be the number of members present, each delegation shall have the right to record a number of votes equal to the number of representatives allotted to it. if certain of these representatives cannot be appointed at the time of the coming into force of the present treaty, the decisions of the commission shall nevertheless be valid. =article 341.=--the oder (odra) shall be placed under the administration of an international commission, which shall comprise: 1 representative of poland; 3 representatives of prussia; 1 representative of the czechoslovak state; 1 representative of great britain; 1 representative of france; 1 representative of denmark; 1 representative of sweden. if certain of these representatives cannot be appointed at the time of the coming into force of the present treaty, the decisions of the commission shall nevertheless be valid. =article 342.=--on a request being made to the league of nations by any riparian state, the niemen (russtrom-memel-niemen) shall be placed under the administration of an international commission, which shall comprise one representative of each riparian state, and three representatives of other states specified by the league of nations. =article 343.=--the international commissions referred to in articles 340 and 341 shall meet within three months of the date of the coming into force of the present treaty, the international commission referred to in article 342 shall meet within three months from the date of the request made by a riparian state. each of these commissions shall proceed immediately to prepare a project for the revision of the existing international agreements and regulations, drawn up in conformity with the general convention referred to in article 338, should such convention have been already concluded. in the absence of such convention, the project for revision shall be in conformity with the principles of articles 332 to 337, above. =article 344.=--the projects referred to in the preceding article shall, _inter alia_: (a) designate the headquarters of the international commission, and prescribe the manner in which its president is to be nominated; (b) specify the extent of the commission's powers, particularly in regard to the execution of works of maintenance, control, and improvement on the river system, the financial régime the fixing and collection of charges, and regulations for navigation; (c) define the sections of the river or its tributaries to which the international régime shall be applied. =article 345.=--the international agreements and regulations at present governing the navigation of the elbe (labe), the oder (odra), and the niemen (russtrom-memel-niemen) shall be provisionally maintained in force until the ratification of the above-mentioned projects. nevertheless, in all cases where such agreements and regulations in force are in conflict with the provisions of articles 332 to 337 above, or of the general convention to be concluded, the latter provisions shall prevail. (3) _special clauses relating to the danube_ =article 346.=--the european commission of the danube reassumes the powers it possessed before the war. nevertheless, as a provisional measure, only representatives of great britain, france, italy, and rumania shall constitute this commission. =article 347.=--from the point where the competence of the european commission ceases, the danube system referred to in article 331 shall be placed under the administration of an international commission composed as follows: 2 representatives of german riparian states; 1 representative of each other riparian state; 1 representative of each non-riparian state represented in the future on the european commission of the danube. if certain of these representatives cannot be appointed at the time of the coming into force of the present treaty, the decisions of the commission shall nevertheless be valid. =article 348.=--the international commission provided for in the preceding article shall meet as soon as possible after the coming into force of the present treaty, and shall undertake provisionally the administration of the river in conformity with the provisions of articles 332 to 337, until such time as a definitive statute regarding the danube is concluded by the powers nominated by the allied and associated powers. =article 349.=--germany agrees to accept the régime which shall be laid down for the danube by a conference of the powers nominated by the allied and associated powers, which shall meet within one year after the coming into force of the present treaty, and at which german representatives may be present. =article 350.=--the mandate given by article 57 of the treaty of berlin of the 13th july, 1878, to austria-hungary, and transferred by her to hungary, to carry out works at the iron gates, is abrogated. the commission intrusted with the administration of this part of the river shall lay down provisions for the settlement of accounts subject to the financial provisions of the present treaty. charges which may be necessary shall in no case be levied by hungary. =article 351.=--should the czechoslovak state, the serb-croat-slovene state, or rumania, with the authorization of or under mandate from the international commission undertake maintenance, improvement, weir or other works on a part of the river system which forms a frontier, these states shall enjoy on the opposite bank, and also on the part of the bed which is outside their territory, all necessary facilities for the survey, execution and maintenance of such works. =article 352.=--germany shall be obliged to make to the european commission of the danube all restitutions, reparations, and indemnities for damages inflicted on the commission during the war. =article 353.=--should a deep-draught rhine-danube navigable waterway be constructed, germany undertakes to apply thereto the régime prescribed in articles 332 to 338. chapter iv.--clauses relating to the rhine and the moselle =articles 354.=--as from the coming into force of the present treaty, the convention of mannheim of 17th october, 1868, together with the final protocol thereof, shall continue to govern navigation on the rhine, subject to the conditions hereinafter laid down. in the event of any provisions of the said convention being in conflict with those laid down by the general convention referred to in article 338 (which shall apply to the rhine), the provisions of the general convention shall prevail. within a maximum period of six months from the coming into force of the present treaty, the central commission referred to in article 355 shall meet to draw up a project of revision of the convention of mannheim. this project shall be drawn up in harmony with the provisions of the general convention referred to above, should this have been concluded by that time, and shall be submitted to the powers represented on the central commission. germany hereby agrees to adhere to the project so drawn up. further, the modifications set out in the following articles shall immediately be made in the convention of mannheim. the allied and associated powers reserve to themselves the right to arrive at an understanding in this connection with holland, and germany hereby agrees to accede if required to any such understanding. =article 355.=--the central commission provided for in the convention of mannheim shall consist of nineteen members, viz.: two representatives of the netherlands; two representatives of switzerland; four representatives of german riparian states; four representatives of france, which in addition shall appoint the president of the commission; two representatives of great britain; two representatives of italy; two representatives of belgium. [illustration: drawing by georges scott in l'illustration the white flags that meant defeat for the german cause and marked the beginning of the end of the war german delegates on their way to the armistice conference with marshal foch reaching the first french lines near haudroy, november 7, 1918.] the headquarters of the central commission shall be at strasbourg. whatever be the number of members present, each delegation shall have the right to record a number of votes equal to the number of representatives allotted to it. if certain of these representatives cannot be appointed at the time of the coming into force of the present treaty, the decisions of the commission shall nevertheless be valid. =article 356.=--vessels of all nations, and their cargoes, shall have the same rights and privileges as those which are granted to vessels belonging to the rhine navigation, and to their cargoes. none of the provisions contained in articles 15 to 20 and 26 of the above-mentioned convention of mannheim, in article 4 of the final protocol thereof, or in later conventions, shall impede the free navigation of vessels and crews of all nations on the rhine and on waterways to which such conventions apply, subject to compliance with the regulations concerning pilotage and other police measures drawn up by the central commission. the provisions of article 22 of the convention of mannheim and of article 5 of the final protocol thereof shall be applied only to vessels registered on the rhine. the central commission shall decide on the steps to be taken to insure that other vessels satisfy the conditions of the general regulations applying to navigation on the rhine. =article 357.=--within a maximum period of three months from the date on which notification shall be given germany shall cede to france tugs and vessels, from among those remaining registered in german rhine ports after the deduction of those surrendered by way of restitution or reparation, or shares in german rhine navigation companies. when vessels and tugs are ceded, such vessels and tugs, together with their fittings and gear, shall be in good state of repair, shall be in condition to carry on commercial traffic on the rhine, and shall be selected from among those most recently built. the same procedure shall be followed in the matter of the cession by germany to france of-(1) the installations, berthing, and anchorage accommodation, platforms, docks, warehouses, plant, &c., which german subjects or german companies owned on the 1st august, 1914, in the port of rotterdam, and (2) the shares or interests which germany or german nationals possessed in such installations at the same date. the amount and specifications of such cessions shall be determined within one year of the coming into force of the present treaty by an arbitrator or arbitrators appointed by the united states of america, due regard being had to the legitimate needs of the parties concerned. the cessions provided for in the present article shall entail a credit of which the total amount, settled in a lump sum by the arbitrator, or arbitrators mentioned above, shall not in any case exceed the value of the capital expended in the initial establishment of the ceded material and installations, and shall be set off against the total sums due from germany; in consequence, the indemnification of the proprietors shall be a matter for germany to deal with. =article 358.=--subject to the obligation to comply with the provisions of the convention of mannheim or of the convention which may be substituted therefor, and to the stipulations of the present treaty, france shall have on the whole course of the rhine included between the two extreme points of the french frontiers- (a) the right to take water from the rhine to feed navigation and irrigation canals (constructed or to be constructed) or for any other purpose, and to execute on the german bank all works necessary for the exercise of this right; (b) the exclusive right to the power derived from works of regulation on the river, subject to the payment to germany of the value of half the power actually produced, this payment, which will take into account the cost of the works necessary for producing the power, being made either in money or in power and in default of agreement being determined by arbitration. for this purpose france alone shall have the right to carry out in this part of the river all works of regulation (weirs or other works) which she may consider necessary for the production of power. similarly, the right of taking water from the rhine is accorded to belgium to feed the rhine-meuse navigable waterway provided for below. the exercise of the rights mentioned under (a) and (b) of the present article shall not interfere with navigability nor reduce the facilities for navigation, either in the bed of the rhine or in the derivations which may be substituted therefor, nor shall it involve any increase in the tolls formerly levied under the convention in force. all proposed schemes shall be laid before the central commission in order that the commission may assure itself that these conditions are complied with. to insure the proper and faithful execution of the provisions contained in (a) and (b) above, germany: (i) binds herself not to undertake or to allow the construction of any lateral canal or any derivation on the right bank of the river opposite the french frontiers; (ii) recognizes the possession by france of the right of support on and the right of way over all lands situated on the right bank which may be required in order to survey, to build, and to operate weirs which france, with the consent of the central commission, may subsequently decide to establish. in accordance with such consent, france shall be entitled to decide upon and fix the limits of the necessary sites, and she shall be permitted to occupy such lands after a period of two months after simple notification, subject to the payment by her to germany of indemnities of which the total amount shall be fixed by the central commission. germany shall make it her business to indemnify the proprietors whose property will be burdened with such servitudes or permanently occupied by the works. should switzerland so demand, and if the central commission approves, the same rights shall be accorded to switzerland for the part of the river forming her frontier with other riparian states; (iii) shall hand over to the french government, during the month following the coming into force of the present treaty, all projects, designs, drafts of concessions and of specifications concerning the regulation of the rhine for any purpose whatever which have been drawn up or received by the governments of alsace-lorraine or of the grand duchy of baden. =article 359.=--subject to the preceding provisions, no works shall be carried out in the bed or on either bank of the rhine where it forms the boundary of france and germany without the previous approval of the central commission or of its agents. =article 360.=--france reserves the option of substituting herself as regards the rights and obligations resulting from agreements arrived at between the government of alsace-lorraine and the grand duchy of baden concerning the works to be carried out on the rhine; she may also denounce such agreements within a term of five years dating from the coming into force of the present treaty. france shall also have the option of causing works to be carried out which may be recognized as necessary by the central commission for the upkeep or improvement of the navigability of the rhine above mannheim. =article 361.=--should belgium, within a period of 25 years from the coming into force of the present treaty, decide to create a deep-draught rhine-meuse navigable waterway, in the region of ruhrort, germany shall be bound to construct, in accordance with plans to be communicated to her by the belgian government, after agreement with the central commission, the portion of this navigable waterway situated within her territory. the belgian government shall, for this purpose, have the right to carry out on the ground all necessary surveys. should germany fail to carry out all or part of these works, the central commission shall be entitled to carry them out instead; and, for this purpose, the commission may decide upon and fix the limits of the necessary sites and occupy the ground after a period of two months after simple notification, subject to the payment of indemnities to be fixed by it and paid by germany. this navigable waterway shall be placed under the same administrative régime as the rhine itself, and the division of the cost of initial construction, including the above indemnities, among the states crossed thereby shall be made by the central commission. =article 362.=--germany hereby agrees to offer no objection to any proposals of the central rhine commission for extending its jurisdiction: (1) to the moselle below the franco-luxemburg frontier down to the rhine, subject to the consent of luxemburg; (2) to the rhine above basle up to the lake of constance, subject to the consent of switzerland; (3) to the lateral canals and channels which may be established either to duplicate or to improve naturally navigable sections of the rhine or the moselle, or to connect two naturally navigable sections of these rivers, and also any other parts of the rhine river system which may be covered by the general convention provided for in article 338 above. chapter v.--clauses giving to the czecho-slovak state the use of northern ports =article 363.=--in the ports of hamburg and stettin, germany shall lease to the czechoslovak state, for a period of ninety-nine years, areas which shall be placed under the general régime of free zones and shall be used for the direct transit of goods coming from or going to that state. =article 364.=--the delimitation of these areas, and their equipment, their exploitation, and in general all conditions for their utilization, including the amount of the rental, shall be decided by a commission consisting of one delegate of germany, one delegate of the czechoslovak state and one delegate of great britain. these conditions shall be susceptible of revision every ten years in the same manner. germany declares in advance that she will adhere to the decisions so taken. section iii.--_railways_ chapter i.--clauses relating to international transport =article 365.=--goods coming from the territories of the allied and associated powers, and going to germany, or in transit through germany from or to the territories of the allied and associated powers, shall enjoy on the german railways as regards charges to be collected (rebates and drawbacks being taken into account) facilities, and all other matters, the most favorable treatment applied to goods of the same kind carried on any german lines, either in internal traffic, or for export, import or in transit, under similar conditions of transport, for example as regards length of route. the same rule shall be applied, on the request of one or more of the allied and associated powers, to goods specially designated by such power or powers coming from germany and going to their territories. international tariffs established in accordance with the rates referred to in the preceding paragraph and involving through waybills shall be established when one of the allied and associated powers shall require it from germany. =article 366.=--from the coming into force of the present treaty the high contracting parties shall renew, in so far as concerns them and under the reserves indicated in the second paragraph of the present article, the conventions and arrangements signed at berne on the 14th of october, 1890, the 20th september, 1893, the 16th july, 1895, the 16th june, 1898, and the 19th september, 1906, regarding the transportation of goods by rail. if within five years from the date of the coming into force of the present treaty a new convention for the transportation of passengers, luggage and goods by rail shall have been concluded to replace the berne convention of the 14th october, 1890, and the subsequent additions referred to above, this new convention and the supplementary provisions for international transport by rail which may be based on it shall bind germany even if she shall have refused to take part in the preparation of the convention or to subscribe to it. until a new convention shall have been concluded, germany shall conform to the provisions of the berne convention and the subsequent additions referred to above, and to the current supplementary provisions. =article 367.=--germany shall be bound to co-operate in the establishment of through ticket services (for passengers and their luggage) which shall be required by any of the allied and associated powers to insure their communication by rail with each other and with all other countries by transit across the territories of germany; in particular germany shall, for this purpose, accept trains and carriages coming from the territories of the allied and associated powers and shall forward them with a speed at least equal to that of her best long-distance trains on the same lines. the rates applicable to such through services shall not in any case be higher than the rates collected on german internal services for the same distance, under the same conditions of speed and comfort. the tariffs applicable under the same conditions of speed and comfort to the transportation of emigrants going to or coming from ports of the allied and associated powers and using the german railways, shall not be at a higher kilometric rate than the most favorable tariffs (drawbacks and rebates being taken into account) enjoyed on the said railways by emigrants going to or coming from any other ports. =article 368.=--germany shall not apply specially to such through services or to the transportation of emigrants going to or coming from the ports of the allied and associated powers, any technical, fiscal or administrative measures, such as measures of customs examination, general police, sanitary police, and control, the result of which would be to impede or delay such services. =article 369.=--in case of transport partly by rail and partly by internal navigation, with or without through way-bill, the preceding articles shall apply to the part of the journey performed by rail. chapter ii.--rolling stock =article 370.=--germany undertakes that german wagons shall be fitted with apparatus allowing: (1) of their inclusion in goods trains on the lines such of the allied and associated powers as are parties to the berne convention of may 15, 1886, as modified on may 18, 1907, without hampering the action of the continuous brake which may be adopted in such countries within ten years of the coming into force of the present treaty, and (2) of the acceptance of wagons of such countries in all goods trains on the german lines. the rolling stock of the allied and associated powers shall enjoy on the german lines the same treatment as german rolling stock as regards movement, upkeep and repairs. chapter iii.--cessions of railway lines =article 371.=--subject to any special provisions concerning the cession of ports, waterways and railways situated in the territories over which germany abandons her sovereignty, and to the financial conditions relating to the concessionaires and the pensioning of the personnel, the cession of railways will take place under the following conditions: 1. the works and installations of all the railroads shall be handed over complete and in good condition. 2. when a railway system possessing its own rolling-stock is handed over in its entirety by germany to one of the allied and associated powers, such stock shall be handed over complete, in accordance with the last inventory before november 11th, 1918, and in a normal state of upkeep. 3. as regards lines without any special rolling-stock, commissions of experts designated by the allied and associated powers, on which germany shall be represented, shall fix the proportion of the stock existing on the system to which those lines belong to be handed over. these commissions shall have regard to the remount of material registered on these lines in the last inventory before november 11th, 1918, the length of track (sidings included), and the nature and amount of traffic. these commissions shall also specify the locomotives, carriages and wagons to be handed over in each case; they shall decide upon the conditions of their acceptance, and shall make the provisional arrangements necessary to insure their repair in german workshops. 4. stocks of stores, fittings and plant shall be handed over under the same conditions as the rolling-stock. the provisions of paragraphs 3 and 4 above shall be applied to the lines of former russian poland converted by germany to the german gauge, such lines being regarded as detached from the prussian state system. chapter iv.--provisions relating to certain railway lines =article 372.=--when as a result of the fixing of new frontiers a railway connection between two parts of the same country crosses another country, or a branch line from one country has its terminus in another, the conditions of working, if not specifically provided for in the present treaty, shall be laid down in a convention between the railway administrations concerned. if the administrations cannot come to an agreement as to the terms of such convention, the points of difference shall be decided by commissions of experts composed as provided in the preceding article. =article 373.=--within a period of five years from the coming into force of the present treaty the czechoslovak state may require the construction of a railway line in german territory between the stations of schlauney and nachod. the cost of construction shall be borne by the czechoslovak state. =article 374.=--germany undertakes to accept, within ten years of the coming into force of the present treaty, on request being made by the swiss government after agreement with the italian government, the denunciation of the international convention of the 13th october, 1909, relative to the st. gothard railway. in the absence of agreement as to the conditions of such denunciation, germany hereby agrees to accept the decision of an arbitrator designated by the united states of america. chapter v.--transitory provisions =article 375.=--germany shall carry out the instructions given her, in regard to transport, by an authorized body acting on behalf of the allied and associated powers: 1. for the carriage of troops under the provisions of the present treaty, and of material, ammunition and supplies for army use. 2. as a temporary measure, for the transportation of supplies for certain regions, as well as for the restoration, as rapidly as possible, of the normal conditions of transport, and for the organization of postal and telegraphic services. section iv.--_disputes and revision of permanent clauses_ =article 376.=--disputes which may arise between interested powers with regard to the interpretation and application of the preceding articles shall be settled as provided by the league of nations. =article 377.=--at any time the league of nations may recommend the revision of such of these articles as relate to a permanent administrative régime. =article 378.=--the stipulations in articles 321 to 330, 332, 365, and 367 to 369 shall be subject to revision by the council of the league of nations at any time after five years from the coming into force of the present treaty. failing such revision, no allied or associated power can claim after the expiration of the above period of five years the benefit of any of the stipulations in the articles enumerated above on behalf of any portion of its territories in which reciprocity is not accorded in respect of such stipulations. the period of five years during which reciprocity cannot be demanded may be prolonged by the council of the league of nations. section v.--_special provision_ =article 379.=--without prejudice to the special obligations imposed on her by the present treaty for the benefit of the allied and associated powers, germany undertakes to adhere to any general conventions regarding the international régime of transit, waterways, ports or railways which may be concluded by the allied and associated powers, with the approval of the league of nations, within five years of the coming into force of the present treaty. section vi.--_clauses relating to the kiel canal_ =article 380.=--the kiel canal and its approaches shall be maintained free and open to the vessels of commerce and of war of all nations at peace with germany on terms of entire equality. =article 381.=--the nationals, property, and vessels of all powers shall, in respect to charges, facilities, and in all other respects, be treated on a footing of perfect equality in the use of the canal, no distinction being made to the detriment of nationals, property, and vessels of any power between them and the nationals, property, and vessels of germany or of the most favored nations. no impediment shall be placed on the movement of persons or vessels other than those arising out of police, customs, sanitary, emigration or immigration regulations, and those relating to the import or export of prohibited goods. such regulations must be reasonable and uniform and must not unnecessarily impede traffic. =article 382.=--only such charges may be levied on vessels using the canal or its approaches as are intended to cover in an equitable manner the cost of maintaining in a navigable condition, or if improving, the canal or its approaches, or to meet expenses incurred in the interests of navigation. the schedule of such charged shall be calculated on the basis of such expenses, and shall be posted up in the ports. these charges shall be levied in such a manner as to render any detailed examination of cargoes unnecessary, except in the case of suspected fraud or contravention. =article 383.=--goods in transit may be placed under seal or in the custody of customs agents; the loading and unloading of goods, and the embarkation and disembarkation of passengers, shall only take place in the ports specified by germany. =article 384.=--no charge of any kind other than those provided for in the present treaty shall be levied along the course or at the approaches of the kiel canal. =article 385.=--germany shall be bound to take suitable measures to remove any obstacle or danger to navigation, and to insure the maintenance of good conditions of navigation. she shall not undertake any works of a nature to impede navigation on the canal or its approaches. =article 386.=--in the event of violation of any of the conditions of articles 380 to 386, or of disputes as to the interpretation of these articles, any interested power can appeal to the jurisdiction instituted for the purpose by the league of nations. in order to avoid reference of small questions to the league of nations, germany will establish a local authority at kiel qualified to deal with disputes in the first instance and to give satisfaction so far as possible to complaints which may be presented through the consular representatives of the interested powers. part xiii labor section i.--_organization of labor_ whereas the league of nations has for its object the establishment of universal peace and such a peace can be established only if it is based upon social justice; and whereas conditions of labor exist involving such injustice, hardship, and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperiled; and an improvement of those conditions is urgently required: as, for example, by the regulations of the hours of work, including the establishment of a maximum working day and week, the regulation of the labor supply, the prevention of unemployment, the provision of an adequate living wage, the protection of the worker against sickness, disease, and injury arising out of his employment, the protection of the children, young persons, and women, provision for old age and injury, protection of the interests of workers when employed in countries other than their own, recognition of the principle of freedom of association, the organization of vocational and technical education, and other measures: whereas also the failure of any nation to adopt humane conditions of labor is an obstacle in the way of other nations which desire to improve the conditions in their own countries; the high contracting parties, moved by sentiments of justice and humanity as well as by the desire to secure the permanent peace of the world, agree to the following. chapter i.--organization =article 387.=--a permanent organization is hereby established for the promotion of the objects set forth in the preamble. the original members of the league of nations shall be the original members of this organization, and hereafter membership of the league of nations shall carry with it membership of the said organization. =article 388.=--the permanent organization shall consist of: (i) a general conference of representatives of the members, and, (ii) an international labor office controlled by the governing body described in article 393. =article 389.=--the meetings of the general conference of representatives of the members shall be held from time to time as occasion may require, and at least once in every year. it shall be composed of four representatives of each of the members, of whom two shall be government delegates and the two others shall be delegates representing respectively the employers and the workpeople of each of the members. each delegate may be accompanied by advisers, who shall not exceed two in number for each item on the agenda of the meeting. when questions specially affecting women are to be considered by the conference, one at least of the advisers should be a woman. the members undertake to nominate non-government delegates and advisers chosen in agreement with the industrial organizations, if such organizations exist, which are most representative of employers or workpeople, as the case may be, in their respective countries. advisers shall not speak except on a request made by the delegate whom they accompany and by special authorization of the president of the conference, and may not vote. a delegate may by notice in writing addressed to the president appoint one of his advisers to act as his deputy, and the adviser, while so acting, shall be allowed to speak and vote. the names of the delegates and their advisers will be communicated to the international labor office by the government of each of the members. the credentials of delegates and their advisers shall be subject to scrutiny by the conference, which may, by two-thirds of the votes cast by the delegates present, refuse to admit any delegate or adviser whom it deems not to have been nominated in accordance with this article. =article 390.=--every delegate shall be entitled to vote individually on all matters which are taken into consideration by the conference. if one of the members fails to nominate one of the non-government delegates whom it is entitled to nominate, the other non-government delegates shall be allowed to sit and speak at the conference, but not to vote. if, in accordance with article 389, the conference refuses admission to a delegate of one of the members, the provisions of the present article shall apply as if that delegate had not been nominated. =article 391.=--the meetings of the conference shall be held at the seat of the league of nations, or at such other place as may be decided by the conference at a previous meeting by two-thirds of the votes cast by the delegates present. =article 392.=--the international labor office shall be established at the seat of the league of nations as part of the organization of the league. =article 393.=--the international labor office shall be under the control of a governing body consisting of twenty-four persons, appointed in accordance with the following provisions: the governing body of the international labor office shall be constituted as follows: twelve persons representing the governments: six persons elected by the delegates to the conference representing the employers: six persons elected by the delegates to the conference representing the workers. of the twelve persons representing the governments, eight shall be nominated by the members which are of the chief industrial importance, and four shall be nominated by the members selected for the purpose by the government delegates to the conference, excluding the delegates of the eight members mentioned above. any question as to which are the members of the chief industrial importance shall be decided by the council of the league of nations. the period of office of the members of the governing body will be three years. the method of filling vacancies and other similar questions may be determined by the governing body, subject to the approval of the conference. the governing body shall, from time to time, elect one of its members to act as its chairman, shall regulate its own procedure, and shall fix its own times of meeting. a special meeting shall be held if a written request to that effect is made by at least ten members of the governing body. =article 394.=--there shall be a director of the international labor office, who shall be appointed by the governing body, and, subject to the instructions of the governing body, shall be responsible for the efficient conduct of the international labor office and for such other duties as may be assigned to him. the director or his deputy shall attend all meetings of the governing body. =article 395.=--the staff of the international labor office shall be appointed by the director, who shall, as far as is possible with due regard to the efficiency of the work of the office, select persons of different nationalities. a certain number of these persons shall be women. =article 396.=--the functions of the international labor office shall include the collection and distribution of information on all subjects relating to the international adjustment of conditions of industrial life and labor, and particularly the examination of subjects which it is proposed to bring before the conference with a view to the conclusion of international conventions, and the conduct of such special investigations as may be ordered by the conference. it will prepare the agenda for the meetings of the conference. it will carry out the duties required of it by the provisions of this part of the present treaty in connection with international disputes. it will edit and publish in french and english, and in such other languages as the governing body may think desirable, a periodical paper dealing with problems of industry and employment of international interest. generally, in addition to the functions set out in this article, it shall have such other powers and duties as may be assigned to it by the conference. =article 397.=--the government departments of any of the members which deal with questions of industry and employment may communicate directly with the director through the representative of their government on the governing body of the international labor office, or, failing any such representative, through such other qualified official as the government may nominate for the purpose. =article 398.=--the international labor office shall be entitled to the assistance of the secretary-general of the league of nations in any matter in which it can be given. =article 399.=--each of the members will pay the traveling and subsistence expenses of its delegates and their advisers and of its representatives attending the meetings of the conference or governing body, as the case may be. all the other expenses of the international labor office and of the meetings of the conference or governing body shall be paid to the director by the secretary-general of the league of nations out of the general funds of the league. the director shall be responsible to the secretary-general of the league for the proper expenditure of all moneys paid to him in pursuance of this article. chapter ii.--procedure =article 400.=--the agenda of all meetings of the conference will be settled by the governing body, who shall consider any suggestion as to the agenda that may be made by the government of any of the members or by any representative organization recognized for the purpose of article 389. =article 401.=--the director shall act as the secretary of the conference, and shall transmit the agenda so as to reach the members four months before the meeting of the conference, and, through them, the non-government delegates when appointed. =article 402.=--any of the governments of the members may formally object to the inclusion of any item or items in the agenda. the grounds for such objection shall be set forth in a reasoned statement addressed to the director, who shall circulate it to all the members of the permanent organization. items to which such objection has been made shall not, however, be excluded from the agenda if at the conference a majority of two-thirds of the votes cast by delegates present is in favor of considering them. if the conference decides (otherwise than under the preceding paragraph) by two-thirds of the votes cast by the delegates present that any subject shall be considered by the conference, that subject shall be included in the agenda for the following meeting. =article 403.=--the conference shall regulate its own procedure, shall elect its own president, and may appoint committees to consider and report on any matter. except as otherwise expressly provided in this part of the present treaty, all matters shall be decided by a simple majority of the votes cast by the delegates present. the voting is void unless the total number of votes cast is equal to half the number of the delegates attending the conference. =article 404.=--the conference may add to any committees which it appoints technical experts, who shall be assessors without power to vote. =article 405.=--when the conference has decided on the adoption of proposals with regard to an item in the agenda, it will rest with the conference to determine whether these proposals should take the form: (a) of a recommendation to be submitted to the members for consideration with a view to effect being given to it by national legislation or otherwise, or (b) of a draft international convention for ratification by the members. in either case a majority of two-thirds of the votes cast by the delegates present shall be necessary on the final vote for the adoption of the recommendation or draft convention, as the case may be, by the conference. in framing any recommendation or draft convention of general application the conference shall have due regard to those countries in which climatic conditions, the imperfect development of industrial organization or other special circumstances make the industrial conditions substantially different and shall suggest the modifications, if any, which it considers may be required to meet the case of such countries. a copy of the recommendation or draft convention shall be authenticated by the signature of the president of the conference and of the director and shall be deposited with the secretary-general of the league of nations. the secretary-general will communicate a certified copy of the recommendation or draft convention to each of the members. each of the members undertakes that it will, within the period of one year at most from the closing of the session of the conference, or if it is impossible owing to exceptional circumstances to do so within the period of one year, then at the earliest practicable moment and in no case later than eighteen months from the closing of the session of the conference, bring the recommendation or draft convention before the authority or authorities within whose competence the matter lies, for the enactment of legislation or other action. in the case of a recommendation the members will inform the secretary-general of the action taken. in the case of a draft convention, the member will, if it obtains the consent of the authority or authorities within whose competence the matter lies, communicate the formal ratification of the convention to the secretary-general and will take such action as may be necessary to make effective the provisions of such convention. if on a recommendation no legislative or other action is taken to make a recommendation effective, or if the draft convention fails to obtain the consent of the authority or authorities within whose competence the matter lies, no further obligation shall rest upon the member. in the case of a federal state, the power of which to enter into conventions on labor matters is subject to limitations, it shall be in the discretion of that government to treat a draft convention to which such limitations apply as a recommendation only, and the provisions of this article with respect to recommendations shall apply in such case. the above article shall be interpreted in accordance with the following principle: in no case shall any member be asked or required, as a result of the adoption of any recommendation or draft convention by the conference to lessen the protection afforded by its existing legislation to the workers concerned. =article 406.=--any convention so ratified shall be registered by the secretary-general of the league of nations, but shall only be binding upon the members which ratify it. [illustration: copyright underwood & underwood paris in war time a wonderful photograph made from the top platform of the eiffel tower. hovering over the city is a french dirigible, a guardian against the dreaded zeppelins. paris in war time pursued the even tenor of its way, but it was a saddened city where frivolous tourists were not wanted.] =article 407.=--if any convention coming before the conference for final consideration fails to secure the support of two-thirds of the votes cast by the delegates present, it shall nevertheless be within the right of any of the members of the permanent organization to agree to such convention among themselves. any convention so agreed to shall be communicated by the governments concerned to the secretary-general of the league of nations, who shall register it. =article 408.=--each of the members agrees to make an annual report to the international labor office on the measures which it has taken to give effect to the provisions of conventions to which it is a party. these reports shall be made in such form and shall contain such particulars as the governing body may request. the directors shall lay a summary of these reports before the next meeting of the conference. =article 409.=--in the event of any representation being made to the international labor office by an industrial association of employers or of workers that any of the members has failed to secure in any respect the effective observance within its jurisdiction of any convention to which it is a party, the governing body may communicate this representation to the government against which it is made and may invite that government to make such statement on the subject as it may think fit. =article 410.=--if no statement is received within a reasonable time from the government in question, or if the statement when received is not deemed to be satisfactory by the governing body, the latter shall have the right to publish the representation and the statement, if any, made in reply to it. =article 411.=--any of the members shall have the right to file a complaint with the international labor office if it is not satisfied that any other member is securing the effective observance of any convention which both have ratified in accordance with the foregoing articles. the governing body may, if it thinks fit, before referring such a complaint to a commission of inquiry, as hereinafter provided for, communicate with the government in question in the manner described in article 409. if the governing body does not think it necessary to communicate the complaint to the government in question, or if, when they have made such communication, no statement in reply has been received within a reasonable time which the governing body considers to be satisfactory, the governing body may apply for the appointment of a commission of inquiry to consider the complaint and to report thereon. the governing body may adopt the same procedure either of its own motion or on receipt of a complaint from a delegate to the conference. when any matter arising out of articles 410 or 411 is being considered by the governing body, the government in question shall, if not already represented thereon, be entitled to send a representative to take part in the proceedings of the governing body while the matter is under consideration. adequate notice of the date on which the matter will be considered shall be given to the government in question. =article 412.=--the commission of inquiry shall be constituted in accordance with the following provisions: each of the members agrees to nominate within six months of the date on which the present treaty comes into force three persons of industrial experience, of whom one shall be a representative of employers, one a representative of workers, and one a person of independent standing, who shall together form a panel from which the members of the commission of inquiry shall be drawn. the qualifications of the persons so nominated shall be subject to scrutiny by the governing body, which may by two-thirds of the votes cast by the representatives present refuse to accept the nomination of any person whose qualifications do not in its opinion comply with the requirements of the present article. upon the application of the governing body, the secretary-general of the league of nations shall nominate three persons, one from each section of this panel, to constitute the commission of inquiry, and shall designate one of them as the president of the commission. none of these three persons shall be a person nominated to the panel by any member directly concerned in the complaint. =article 413.=--the members agree that, in the event of the reference of a complaint to a commission of inquiry under article 411, they will each, whether directly concerned in the complaint or not, place at the disposal of the commission all the information in their possession which bears upon the subject-matter of the complaint. =article 414.=--when the commission of inquiry has fully considered the complaint, it shall prepare a report embodying its findings on all questions of fact relevant to determining the issue between the parties and containing such recommendations as it may think proper as to the steps which should be taken to meet the complaint and the time within which they should be taken. it shall also indicate in this report the measures, if any, of an economic character against a defaulting government which it considers to be appropriate, and which it considers other governments would be justified in adopting. =article 415.=--the secretary-general of the league of nations shall communicate the report of the commission of inquiry to each of the governments concerned in the complaint, and shall cause it to be published. each of these governments shall within one month inform the secretary-general of the league of nations whether or not it accepts the recommendations contained in the report of the commission; and if not, whether it proposes to refer the complaint to the permanent court of international justice of the league of nations. =article 416.=--in the event of any member failing to take the action required by article 405, with regard to a recommendation or draft convention, any other member shall be entitled to refer the matter to the permanent court of international justice. =article 417.=--the decision of the permanent court of international justice in regard to a complaint or matter which has been referred to it in pursuance of article 415 or article 416 shall be final. =article 418.=--the permanent court of international justice may affirm, vary or reverse any of the findings or recommendations of the commission of inquiry, if any, and shall in its decision indicate the measures, if any, of an economic character which it considers to be appropriate, and which other governments would be justified in adopting against a defaulting government. =article 419.=--in the event of any member failing to carry out within the time specified the recommendations, if any, contained in the report of the commission of inquiry, or in the decision of the permanent court of international justice, as the case may be, any other member may take against that member the measures of an economic character indicated in the report of the commission or in the decision of the court as appropriate to the case. =article 420.=--the defaulting government may at any time inform the governing body that it has taken the steps necessary to comply with the recommendations of the commission of inquiry or with those in the decision of the permanent court of international justice, as the case may be, and may request it to apply to the secretary-general of the league to constitute a commission of inquiry to verify its contention. in this case the provisions of articles 412, 413, 414, 415, 417 and 418 shall apply, and if the report of the commission of inquiry or the decision of the permanent court of international justice is in favor of the defaulting government, the other governments shall forthwith discontinue the measures of an economic character that they have taken against the defaulting government. chapter iii.--general =article 421.=--the members engage to apply conventions which they have ratified in accordance with the provisions of this part of the present treaty to their colonies, protectorates, and possessions which are not fully self-governing: 1. except where owing to the local conditions the convention is inapplicable, or 2. subject to such modifications as may be necessary to adapt the convention to local conditions. and each of the members shall notify to the international labor office the action taken in respect of each of its colonies, protectorates, and possessions which are not fully self-governing. =article 422.=--amendments to this part of the present treaty which are adopted by the conference by a majority of two-thirds of the votes cast by the delegates present shall take effect when ratified by the states whose representatives compose the council of the league of nations and by three-fourths of the members. =article 423.=--any question or dispute relating to the interpretation of this part of the present treaty or of any subsequent convention concluded by the members in pursuance of the provisions of this part of the present treaty shall be referred for decision to the permanent court of international justice. chapter iv.--transitory provisions =article 424.=--the first meeting of the conference shall take place in october, 1919. the place and agenda for this meeting shall be as specified in the annex hereto. arrangements for the convening and the organization of the first meeting of the conference will be made by the government designated for the purpose in the said annex. that government shall be assisted in the preparation of the documents for submission to the conference by an international committee constituted as provided in the said annex. the expenses of the first meeting and of all subsequent meetings held before the league of nations has been able to establish a general fund, other than the expenses of delegates and their advisers, will be borne by the members in accordance with the apportionment of the expenses of the international bureau of the universal postal union. =article 425.=--until the league of nations has been constituted all communications which under the provisions of the foregoing articles should be addressed to the secretary-general of the league will be preserved by the director of the international labor office, who will transmit them to the secretary-general of the league. =article 426.=--pending the creation of a permanent court of international justice, disputes which in accordance with this part of the present treaty would be submitted to it for decision will be referred to a tribunal of three persons appointed by the council of the league of nations. annex _first meeting of annual labor conference, 1919_ the place of meeting will be washington. the government of the united states of america is requested to convene the conference. the international organizing committee will consist of seven members, appointed by the united states of america, great britain, france, italy, japan, belgium, and switzerland. the committee may, if it thinks necessary, invite other members to appoint representatives. agenda: 1. application of principle of the 8-hours day or of the 48-hours week. 2. question of preventing or providing against unemployment. 3. women's employment. (a) before and after childbirth, including the question of maternity benefit. (b) during the night. (c) in unhealthy processes. 4. employment of children: (a) minimum age of employment. (b) during the night. (c) in unhealthy processes. 5. extension and application of the international conventions adopted at berne in 1906 on the prohibition of night work for women employed in industry and the prohibition of the use of white phosphorus in the manufacture of matches. section ii.--_general principles_ =article 427.=--the high contracting parties, recognizing that the well-being, physical, moral, and intellectual, of industrial wage earners is of supreme international importance, have framed, in order to further this great end, the permanent machinery provided for in section i, and associated with that of the league of nations. they recognize that differences of climate, habits, and customs, of economic opportunity and industrial tradition, make strict uniformity in the conditions of labor difficult of immediate attainment. but, holding as they do, that labor should not be regarded merely as an article of commerce, they think that there are methods and principles for regulating labor conditions which all industrial communities should endeavor to apply, so far as their special circumstances will permit. among these methods and principles, the following seem to the high contracting parties to be of special and urgent importance: first--the guiding principle above enunciated that labor should not be regarded merely as a commodity or article of commerce. second--the right of association for all lawful purposes by the employed as well as by the employers. third--the payment to the employed of a wage adequate to maintain a reasonable standard of life as this is understood in their time and country. fourth--the adoption of an eight hours day or a forty-eight hours week as the standard to be aimed at where it has not already been attained. fifth--the adoption of a weekly rest of at least twenty-four hours, which should include sunday wherever practicable. sixth--the abolition of child labor and the imposition of such limitations on the labor of young persons as shall permit the continuation of their education and assure their proper physical development. seventh--the principle that men and women should receive equal remuneration for work of equal value. eighth--the standard set by law in each country with respect to the conditions of labor should have due regard to the equitable economic treatment of all workers lawfully resident therein. ninth--each state should make provision for a system of inspection in which women should take part in order to insure the enforcement of the laws and regulations for the protection of the employed. without claiming that these methods and principles are either complete or final, the high contracting parties are of opinion that they are well fitted to guide the policy of the league of nations; and that, if adopted by the industrial communities who are members of the league, and safeguarded in practice by an adequate system of such inspection, they will confer lasting benefits upon the wage earners of the world. part xiv guarantees section i.--_western europe_ =article 428.=--as a guarantee for the execution of the present treaty by germany, the german territory situated to the west of the rhine, together with the bridgeheads, will be occupied by allied and associated troops for a period of fifteen years from the coming into force of the present treaty. =article 429.=--if the conditions of the present treaty are faithfully carried out by germany, the occupation referred to in article 428 will be successively restricted as follows: (i) at the expiration of five years there will be evacuated:--the bridgehead of cologne and the territories north of a line running along the ruhr, then along the railway jülich, duren, euskirchen, rheinbach, thence along the road rheinbach to sinzig, and reaching the rhine at the confluence with the ahr; the roads, railways and places mentioned above being excluded from the area evacuated. (ii) at the expiration of ten years, there will be evacuated:--the bridgehead of coblenz and the territories north of a line to be drawn from the intersection between the frontiers of belgium, germany and holland, running about 4 kilometers south of aix-la-chapelle, then to and following the crest of forst gremünd, then east of the railway of the urft valley, then along blankenheim, valdorf, dreis, ulmen to and following the moselle from bremm to nehren, then passing by kappel and simmern, then following the ridge of the heights between simmern and the rhine and reaching this river at bacharach; all the places, valleys, roads and railways mentioned above being excluded from the area evacuated. (iii) at the expiration of fifteen years there will be evacuated:--the bridgehead of mainz, the bridgehead of kehl and the remainder of the german territory under occupation. if at that date the guarantees against unprovoked aggression by germany are not considered sufficient by the allied and associated governments the evacuation of the occupying troops may be delayed to the extent regarded as necessary for the purpose of obtaining the required guarantees. =article 430.=--in case either during the occupation or after the expiration of the fifteen years referred to above, the reparation commission finds that germany refuses to observe the whole or part of her obligations under the present treaty with regard to reparation, the whole or part of the areas specified in article 429 will be re-occupied immediately by the allied of the employed. =article 431.=--if before the expiration of the period of fifteen years germany complies with all the undertakings resulting from the present treaty, the occupying forces will be withdrawn immediately. =article 432.=--all matters relating to the occupation and not provided for by the present treaty shall be regulated by subsequent agreements, which germany hereby undertakes to observe. section ii.--_eastern europe_ =article 433.=--as a guarantee for the execution of the provisions of the present treaty, by which germany accepts definitely the abrogation of the brest-litovsk treaty, and of all treaties, conventions and agreements entered into by her with the maximalist government in russia, and in order to insure the restoration of peace and good government in the baltic provinces and lithuania, all german troops at present in the said territories shall return to within the frontiers of germany as soon as the governments of the principal allied and associated powers shall think the moment suitable, having regard to the internal situation of these territories. these troops shall abstain from all requisitions and seizures and from any other coercive measures, with a view to obtaining supplies intended for germany, and shall in no way interfere with such measures for national defense as may be adopted by the provisional governments of esthonia, letvia, and lithuania. no other german troops shall, pending the evacuation or after the evacuation is complete, be admitted to the said territories. part xv miscellaneous provisions =article 434.=--germany undertakes to recognize the full force of the treaties of peace and additional conventions which may be concluded by the allied and associated powers with the powers who fought on the side of germany, and to recognize whatever disposition may be made concerning the territories of the former austro-hungarian monarchy, of the kingdom of bulgaria, and of the ottoman empire, and to recognize the new states within their frontiers as there laid down. =article 435.=--the high contracting parties, while they recognize the guarantees stipulated by the treaties of 1815, and especially by the act of 20th november, 1815, in favor of switzerland, the said guarantees constituting international obligations for the maintenance of peace, declare nevertheless that the provisions of these treaties, conventions, declarations and other supplementary acts concerning the neutralized zone of savoy, as laid down in paragraph 1 of article 92 of the final act of the congress of vienna, and in paragraph 2 of article 3 of the treaty of paris of 20th november, 1815, are no longer consistent with present conditions. for this reason the high contracting parties take note of the agreement reached between the french government and the swiss government for the abrogation of the stipulations relating to this zone which are and remain abrogated. the high contracting parties also agree that the stipulations of the treaties of 1815 and of the other supplementary acts concerning the free zones of upper savoy and the gex district are no longer consistent with present conditions, and that it is for france and switzerland to come to an agreement together with a view to settling between themselves the status of these territories under such conditions as shall be considered suitable by both countries. annex 1. the swiss federal council has informed the french government on the 5th may, 1919, that after examining the provisions of article 435 in a like spirit of sincere friendship it has happily reached the conclusion that it was possible to acquiesce in it under the following conditions and reservations: first--the neutralized zone of haute-savoie: (a) it will be understood that as long as the federal chambers have not ratified the agreement come to between the two governments concerning the abrogation of the stipulations in respect of the neutralized zone of savoy nothing will be definitely settled, on one side or the other, in regard to this subject. (b) the assent given by the swiss government to the abrogation of the above-mentioned stipulations presupposes, in conformity with the text adopted, the recognition of the guarantees formulated in favor of switzerland by the treaties of 1815 and particularly by the declaration of 20th november, 1815. (c) the agreement between the governments of france and switzerland for the abrogation of the above-mentioned stipulations will only be considered as valid if the treaty of peace contains this article in its present wording. in addition, the parties to the treaty of peace should endeavor to obtain the assent of the signatory powers of the treaties of 1815 and of the declaration of 20th november, 1815, which are not signatories of the present treaty of peace. second--free zone of haute-savoie and the district of gex. (a) the federal council makes the most express reservations to the interpretation to be given to the statement mentioned in the last paragraph of the above article for insertion in the treaty of peace, which provides that "the stipulations of the treaties of 1815 and other supplementary acts concerning the free zones of haute-savoie and the gex district are no longer consistent with the present conditions." the federal council would not wish that its acceptance of the above wording should lead to the conclusion that it would agree to the suppression of a system intended to give neighboring territory the benefit of a special régime which is appropriate to the geographical and economical situation and which has been well tested. in the opinion of the federal council the question is not the modification of the customs system of the zones as set up by the treaties mentioned above, but only the regulation in a manner more appropriate to the economic conditions of the present day of the terms of the exchange of goods between the regions in question. the federal council has been led to make the preceding observations by the perusal of the draft convention concerning the future constitution of the zones, which was annexed to the note of april 26 from the french government. while making the above reservations the federal council declares its readiness to examine in the most friendly spirit any proposals which the french government may deem it convenient to make on the subject. (b) it is conceded that the stipulations of the treaties of 1815 and other supplementary acts relative to the free zones will remain in force until a new arrangement is come to between france and switzerland to regulate matters in this territory. 2. the french government have addressed to the swiss government, on may 18, 1919, the following note in reply to the communication set out in the preceding paragraph: in a note dated may 5 the swiss legation in paris was good enough to inform the government of the french republic that the federal government adhered to the proposed article to be inserted in the treaty of peace between the allied and associated governments and germany. the french government have taken note with much pleasure of the agreement thus reached, and, at their request, the proposed article, which had been accepted by the allied and associated governments, has been inserted under no. 435 in the peace conditions presented to the german plenipotentiaries. the swiss government, in their note of may 5, on this subject, have expressed various views and reservations. concerning the observations relating to the free zones of haute-savoie and the gex district, the french government have the honor to observe that the provisions of the last paragraph of article 435 are so clear that their purport cannot be misapprehended, especially where it implies that no other power but france and switzerland will in future be interested in that question. the french government, on their part, are anxious to protect the interests of the french territories concerned, and, with that object, having their special situation in view, they bear in mind the desirability of assuring them a suitable customs régime and determining, in a manner better suited to present conditions, the methods of exchanges between these territories and the adjacent swiss territories, while taking into account the reciprocal interests of both regions. it is understood that this must in no way prejudice the right of france to adjust her customs line in this region in conformity with her political frontier, as is done on the other portions of her territorial boundaries, and as was done by switzerland long ago on her own boundaries in this region. the french government are pleased to note on this subject in what a friendly disposition the swiss government take this opportunity of declaring their willingness to consider any french proposal dealing with the system to be substituted for the present régime of the said free zones, which the french government intend to formulate in the same friendly spirit. moreover, the french government have no doubt that the provisional maintenance of the régime of 1815 as to the free zones referred to in the above-mentioned paragraph of the note from the swiss legation of may 5, whose object is to provide for the passage from the present régime to the conventional régime, will cause no delay whatsoever in the establishment of the new situation which has been found necessary by the two governments. this remark applies also to the ratification by the federal chambers, dealt with in paragraph 1 (a), of the swiss note of may 5, under the heading "neutralized zone of haute-savoie." =article 436.=--the high contracting parties declare and place on record that they have taken note of the treaty signed by the government of the french republic on july 17th, 1918, with his serene highness the prince of monaco defining the relations between france and the principality. =article 437.=--the high contracting parties agree that, in the absence of a subsequent agreement to the contrary, the chairman of any commission established by the present treaty shall, in the event of an equality of votes, be entitled to a second vote. =article 438.=--the allied and associated powers agree that where christian religious missions were being maintained by german societies or persons in territory belonging to them, or of which the government is intrusted to them in accordance with the present treaty, the property which these missions or missionary societies possessed, including that of trading societies whose profits were devoted to the support of missions, shall continue to be devoted to missionary purposes. in order to insure the due execution of this undertaking the allied and associated governments will hand over such property to boards of trustees appointed by or approved by the governments and composed of persons holding the faith of the mission whose property is involved. the allied and associated governments, while continuing to maintain full control as to the individuals by whom the missions are conducted, will safeguard the interests of such missions. germany, taking note of the above undertaking, agrees to accept all arrangements made or to be made by the allied or associated government concerned for carrying on the work of the said missions or trading societies and waives all claims on their behalf. =article 439.=--without prejudice to the provisions of the present treaty, germany undertakes not to put forward directly or indirectly against any allied or associated power, signatory of the present treaty, including those which without having declared war, have broken off diplomatic relations with the german empire, any pecuniary claim based on events which occurred at any time before the coming into force of the present treaty. the present stipulation will bar completely and finally all claims of this nature, which will be thenceforward extinguished, whoever may be the parties in interest. =article 440.=--germany accepts and recognizes as valid and binding all decrees and orders concerning german ships and goods and all orders relating to the payment of costs made by any prize court of any of the allied or associated powers, and undertakes not to put forward any claim arising out of such decrees or orders on behalf of any german national. the allied and associated powers reserve the right to examine in such manner as they may determine all decisions and orders of german prize courts, whether affecting the property rights of nationals of those powers or of neutral powers. germany agrees to furnish copies of all the documents constituting the record of the cases, including the decisions and orders made, and to accept and give effect to the recommendations made after such examination of the cases. the present treaty, of which the french and english texts are both authentic, shall be ratified. the deposit of ratifications shall be made at paris as soon as possible. powers of which the seat of the government is outside europe will be entitled merely to inform the government of the french republic through their diplomatic representative at paris that their ratification has been given; in that case they must transmit the instrument of ratification as soon as possible. a first procès-verbal of the deposit of ratifications will be drawn up as soon as the treaty has been ratified by germany on the one hand, and by three of the principal allied and associated powers on the other hand. from the date of the first procès-verbal the treaty will come into force between the high contracting parties who have ratified it. for the determination of all periods of time provided for in the present treaty this date will be the date of the coming into force of the treaty. in all other respects the treaty will enter into force for each power at the date of the deposit of its ratification. the french government will transmit to all the signatory powers a certified copy of the procès-verbaux of the deposit of ratifications. in faith whereof the above-named plenipotentiaries (1) except as indicated in the footnotes to the preamble, have signed the present treaty. done at versailles, in a single copy which will remain deposited in the archives of the french republic, and of which authenticated copies will be transmitted to each of the signatory powers. rejection of the peace treaty the senate fails to ratify the treaty of versailles with the revised lodge reservations by a vote of 49 to 35 the treaty of versailles with the covenant of the league of nations was signed on june 28, 1919, by germany and by the representatives of the allied and associated powers, with the exception of china. it was ratified by the german national assembly on july 10th; by the british parliament on july 25th, and by king george on july 31st, by the king of italy on october 7th, by france on october 13th and by japan on october 27th. on the day the treaty was signed president wilson sailed for new york, and on july 10th he addressed the senate and submitted the treaty to that body, which under the constitution is empowered to give its "advice and consent" to treaties negotiated by the chief executive. opposition to the covenant of the league of nations had previously developed in the senate, especially on the part of the republican majority. the foreign affairs committee, of which senator lodge of massachusetts was chairman, was from the start unalterably opposed to the treaty unless it contained as amendments or as reservations clauses which, it was claimed, would safeguard american interests and institutions. in february the president, who had made a hurried trip from paris in order to acquaint the american people with the details of the treaty as it affected this country, conferred at the white house with the foreign relations committee of the senate and the foreign affairs committee of the house, on which occasion there was a frank and comprehensive discussion, a complete stenographic report of which was published in the press. on march 3rd senator lodge presented a resolution signed by 39 republican senators and senators-elect protesting against the covenant of the league of nations, as it stood. as it required a two-thirds vote of the senate to ratify, these 39 opponents of the treaty would be sufficient to reject it, and the virtual effect of this resolution was to give warning to the president that the treaty unless it were to be "americanized" would fail of ratification. the president on march 5th sailed from new york and returned to paris to take up his work at the peace conference, remaining there until the treaty was signed. on july 15th, the foreign relations committee took the treaty under consideration and conducted hearings on it. one of these, continuing for several days, was for the purpose of exposing what the committee regarded as the unjust treatment of china in respect of the cession to japan, under the treaty, of the german rights in shantung (kiauchau). on august 19th, the foreign relations committee again conferred at the white house with the president, and on september 3rd the president started on a tour of the country to win support for the treaty and the league of nations. on september 10th the foreign relations committee reported the treaty to the senate with 45 amendments and four reservations. on september 26th, owing to a nervous breakdown, the president at wichita, kansas, gave up his tour of the country and returned to washington. what were known as the fall amendments to the treaty were defeated in the senate on october 2nd by 58 to 30, and as this vote indicated the unlikelihood of amendments being passed, the republicans of the foreign relations committee changed their tactics, abandoning amendments and considering reservations instead. it had been pointed out that american amendments to the treaty would require ratification by germany and that this might nullify the whole treaty and necessitate the re-opening of negotiations, thereby delaying peace indefinitely. on october 4th the massachusetts republican state convention, before which senator lodge spoke in defense of his attitude on the treaty, urged prompt ratification of the peace treaty with "reasonable and effective" reservations. on october 15th by a vote of 55 to 35 the senate rejected a proposed amendment of the foreign relations committee to the clause affecting the german rights in shantung by virtue of which these would be transferred to china. the deadlock in the senate had meanwhile aroused widespread criticism throughout the country, the attitude of the republican majority being vigorously objected to by influential members of that party. public opinion both in and out of the republican party was generally in favor of ratification with reservations, as was repeatedly indicated by "straw" votes among the people. ratification, with original lodge reservations, defeated nov. 19, 1919. on november 6th senator lodge presented 14 reservations which had been agreed to by the majority members of the foreign relations committee. on november 19th, they were voted on by the senate, being coupled with the following resolution of ratification: _resolved (two-thirds of the senators present concurring therein)_, that the senate advise and consent to the ratification of the treaty of peace with germany concluded at versailles on the 28th day of june, 1919 subject to the following reservations and understandings, which are hereby made a part and condition to this resolution of ratification, which ratification is not to take effect or bind the united states until the said reservations and understandings adopted by the senate have been accepted by an exchange of notes as a part and a condition of this resolution of ratification by at least three of the four principal allied and associated powers, to wit, great britain, france, italy, and japan. 1. the united states so understands and construes article i that in case of notice of withdrawal from the league of nations, as provided in said article, the united states shall be the sole judge as to whether all its international obligations and all its obligations under the said covenant have been fulfilled, and notice of withdrawal by the united states may be given by a concurrent resolution of the congress of the united states. 2. the united states assumes no obligation to preserve the territorial integrity or political independence of any other country or to interfere in controversies between nations--whether members of the league or not--under the provisions of article 10, or to employ the military or naval forces of the united states under any article of the treaty for any purpose, unless in any particular case the congress, which, under the constitution, has the sole power to declare war or authorize the employment of the military or naval forces of the united states, shall by act or joint resolution so provide. 3. no mandate shall be accepted by the united states under article 22, part 1, or any other provision of the treaty of peace with germany, except by action of the congress of the united states. 4. the united states reserves to itself exclusively the right to decide what questions are within its domestic jurisdiction and declares that all domestic and political questions relating wholly or in part to its internal affairs, including immigration, labor, coastwise traffic, the tariff, commerce, the suppression of traffic in women and children, and in opium and other dangerous drugs, and all other domestic questions, are solely within the jurisdiction of the united states and are not under this treaty to be submitted in any way either to arbitration or to the consideration of the council or of the assembly of the league of nations, or any agency thereof, or to the decision or recommendation of any other power. 5. the united states will not submit to arbitration or to inquiry by the assembly or by the council of the league of nations, provided for in said treaty of peace, any questions which in the judgment of the united states depend upon or relate to its long-established policy, commonly known as the monroe doctrine; said doctrine is to be interpreted by the united states alone and is hereby declared to be wholly outside the jurisdiction of said league of nations and entirely unaffected by any provision contained in the said treaty of peace with germany. 6. the united states withholds its assent to articles 156, 157, and 158, and reserves full liberty of action with respect to any controversy which may arise under said articles between the republic of china and the empire of japan. 7. the congress of the united states will provide by law for the appointment of the representatives of the united states in the assembly and the council of the league of nations, and may in its discretion provide for the participation of the united states in any commission, committee, tribunal, court, council, or conference, or in the selection of any members thereof and for the appointment of members of said commissions, committees, tribunals, courts, councils, or conferences, or any other representatives under the treaty of peace, or in carrying out its provisions, and until such participation and appointment have been so provided for and the powers and duties of such representatives have been defined by law, no person shall represent the united states under either said league of nations or the treaty of peace with germany, or be authorized to perform any act for or on behalf of the united states thereunder, and no citizen of the united states shall be selected or appointed as a member of said commissions, committees, tribunals, courts, councils, or conferences except with the approval of the senate of the united states. 8. the united states understands that the reparation commission will regulate or interfere with exports from the united states to germany, or from germany to the united states, only when the united states by act or joint resolution of congress approves such regulation or interference. 9. the united states shall not be obligated to contribute to any expenses of the league of nations, or of the secretariat, or of any commission, or committee, or conference, or other agency, organized under the league of nations or under the treaty or for the purpose of carrying out the treaty provisions, unless and until an appropriation of funds available for such expenses shall have been made by the congress of the united states. 10. if the united states shall at any time adopt any plan for the limitation of armaments proposed by the council of the league of nations, under the provisions of article 8, it reserves the right to increase such armaments without the consent of the council whenever the united states is threatened with invasion or engaged in war. 11. the united states reserves the right to permit, in its discretion, the nationals of a covenant-breaking state, as defined in article 16 of the covenant of the league of nations, residing within the united states or in countries other than that violating said article 16, to continue their commercial, financial, and personal relations with the nationals of the united states. 12. nothing in articles 296, 297, or in any of the annexes thereto or in any other article, section, or annex of the treaty of peace with germany shall, as against citizens of the united states, be taken to mean any confirmation, ratification, or approval of any act otherwise illegal or in contravention of the right of citizens of the united states. 13. the united states withholds its assent to part xiii. (articles 387 to 427, inclusive) unless congress by act or joint resolution shall hereafter make provision for representation in the organization established by said part xiii, and in such event the participation of the united states will be governed and conditioned by the provisions of such act or joint resolution. 14. the united states assumes no obligation to be bound by any election, decision, report, or finding of the council, or assembly in which any member of the league and its self-governing dominions, colonies, or parts of empire, in the aggregate have cast more than one vote, and assumes no obligation to be bound by any decision, report, or finding of the council or assembly arising out of any dispute between the united states and any member of the league if such member, or any self-governing dominion, colony, empire, or part of empire united with it politically has voted. ratification of the above resolution required a two-thirds vote. the resolution was lost 55 to 39, the votes of 13 republican "irreconcilables" being cast against the resolution. on a motion to reconsider, the resolution was again voted on, this time the vote being 51 to 41. senator underwood's motion for unconditional ratification of the treaty without reservation was then lost 53 to 38. the crux of the opposition to the treaty was article x. in president wilson's view, the lodge reservation to this article cut the heart out of the league of nations, and nullified its whole structure and practical operation. for a time it looked as if the peace treaty was dead. public opinion, however, insisted that the treaty must not be allowed to die and that the united states was morally obligated to the rest of the world to take its place in the family of nations as a signatory to the treaty with such interpretative reservations as would protect america's interests, and at the same time not antagonize other nations. early in january, 1920, the president in a letter to senator hitchcock declared against "strong" reservations, and on january 15th, with a view to reaching a compromise, there began a series of bi-partisan conferences among senators at which were discussed the various reservations that had been a stumbling block, but no agreement could be reached. as before, the phraseology and intent of article x was the principal bone of contention. the treaty again before the senate on february 10th senator lodge reported the treaty a second time to the senate, and with the original set of reservations. after another month of debate and of organized efforts on the part of public spirited citizens to exert pressure on the senators to settle their differences and give the nation what it demanded--a treaty of peace--the lines were again drawn preparatory to another vote. the senate, sitting in committee of the whole, took up the lodge reservations, one after another, accepting some virtually without change, modifying or amplifying others, until all but article x had been agreed upon. various new drafts of this reservation were suggested, both by senators and by private citizens; some of these were voted on, but none could muster the votes necessary for adoption. early in march a compromise reservation was worked out by republicans and democrats, and this was made the occasion of an effort to induce the president to give his views on article x. for convenience in comparison, article x of the league of nations, the original lodge reservation, and the proposed compromise reservation, are reproduced herewith: article x of the league the members of the league undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all members of the league. in case of any such aggression the council shall advise upon the means by which this obligation shall be fulfilled. the original lodge reservation the united states assumes no obligation to preserve the territorial integrity or political independence of any other country or to interfere in controversies between nations--whether members of the league or not--under the provision of article x., or to employ the military or naval forces of the united states under any article of the treaty for any purpose, unless in any particular case the congress, which under the constitution has the sole power to declare war or authorize the employment of the military or naval forces of the united states, shall by act or joint resolution so provide. the proposed compromise reservation the united states assumes no obligation to employ its military or naval forces, its resources, or the economic boycott to preserve the territorial integrity or political independence of any other country under the provisions of article x., or to employ the military or naval forces of the united states under any other article of the treaty for any purpose, unless in any particular case the congress, which, under the constitution, has the sole power to declare war, shall, by act or joint resolution, so provide. article x, says wilson, nullifies a sacred obligation the president expressed his views on article x and the proposed reservations to it in a letter to senator hitchcock under date of march 8th, in which he said: "there is no escaping the moral obligations which are expressed in positive terms in this article of the covenant. we won a moral victory over germany, far greater even than the military victory won on the field of battle, because the opinion of the whole world swung to our support and the support of the nations associated with us in the great struggle. it did so because of our common profession and promise that we meant to establish 'an organization of peace which should make it certain that the combined power of free nations would check every invasion of right, and serve to make peace and justice the more secure by affording a definite tribunal of opinion to which all must submit and by which every international readjustment that cannot be amicably agreed upon by the peoples directly concerned shall be sanctioned.' "this promise and assurance were written into the preliminaries of the armistice and into the preliminaries of the peace itself and constitute one of the most sacred obligations ever assumed by any nation or body of nations. it is unthinkable that america should set the example of ignoring such a solemn moral engagement. "for myself, i feel that i could not look the soldiers of our gallant armies in the face again if i did not do everything in my power to remove every obstacle that lies in the way of the adoption of this particular article of the covenant, because we made these pledges to them as well as to the rest of the world, and it was to this cause they deemed themselves devoted in a spirit of crusaders. i should be forever unfaithful to them if i did not do my utmost to fulfill the high purpose for which they fought." "a new doctrine in the world's affairs" the president said he regarded the stipulations as to constitutional methods required by the proposed compromise reservation as superfluous, because it was understood at paris that whatever duties any nation undertook under the treaty would as a matter of course "have to be fulfilled by its usual and established constitutional methods of action." he said further: "any reservation which seeks to deprive the league of nations of the force of article x. cuts at the very heart and life of the covenant itself. any league of nations which does not guarantee as a matter of incontestable right the political independence and integrity of each of its members might be hardly more than a futile scrap of paper, as ineffective in operation as the agreement between belgium and germany which the germans violated in 1914. "article x. as written into the treaty of versailles represents the renunciation by great britain and japan, which before the war had begun to find so many interests in common in the pacific; by france, by italy, by all the great fighting powers of the world, of the old pretensions of political conquest and territorial aggrandisement. it is a new doctrine in the world's affairs and must be recognized or there is no secure basis for the peace which the whole world so desperately needs. "if article x. is not adopted and acted upon, the governments which reject it will, i think, be guilty of bad faith to their people, whom they induced to make the infinite sacrifices of the war by the pledge that they would be fighting to redeem the world from the old order of force and aggression. they will be acting also in bad faith to the opinion of the world at large, to which they appealed for support in a concerted stand against the aggressions and pretensions of germany. "if we were to reject article x. or so to weaken it as to take its full force out of it, it would mark us as desiring to return to the old world of jealous rivalry and misunderstandings from which our gallant soldiers have rescued us and would leave us without any vision or new conception of justice and peace. we would have learned no lesson from the war, but gained only the regret that it had involved us in its maelstrom of suffering. if america has awakened, as the rest of the world has, to the vision of a new day in which the mistakes of the past are to be corrected, it will welcome the opportunity to share the responsibilities of article x. "it must not be forgotten, senator, that the article constitutes a renunciation of all ambition on the part of powerful nations with whom we were associated in the war. it is by no means certain that without this article any such renunciation will take place. militaristic ambitions and imperialistic policies are by no means dead, even in counsels of the nations whom we most trust and with whom we most desire to be associated in the tasks of peace. democracy versus imperialism "the choice is between two ideals; on the one hand, the ideal of democracy, which represents the rights of free peoples everywhere to govern themselves, and on the other hand the ideal of imperialism which seeks to dominate by force and unjust power, an ideal which is by no means dead and which is earnestly held in many quarters still. "every imperialistic influence in europe was hostile to the embodiment of article x. in the covenant of the league of nations, and its defeat now would mark the complete consummation of their efforts to nullify the treaty. i hold the doctrine of article x. as the essence of americanism. we cannot repudiate it or weaken it without at the same time repudiating our own principles. "the imperialist wants no league of nations, but if, in response to the universal cry of the masses everywhere, there is to be one, he is interested to secure one suited to his own purposes, one that will permit him to continue the historic game of pawns and peoples--the juggling of provinces, the old balances of power, and the inevitable wars attendant upon these things. "the reservation proposed would perpetuate the old order. does any one really want to see the old game played again? can any one really venture to take part in reviving the old order? the enemies of a league of nations have by every true instinct centered their efforts against article x., for it is undoubtedly the foundation of the whole structure. it is the bulwark, and the only bulwark, of the rising democracy of the world against the forces of imperialism and reaction. "either we should enter the league fearlessly, accepting the responsibility and not fearing the rôle of leadership, which we now enjoy, contributing our efforts toward establishing a just and permanent peace, or we should retire as gracefully as possible from the great concert of powers, by which the world was saved. for my own part, i am not willing to trust to the counsel of diplomats the working out of any salvation of the world from the things which it has suffered." article x as finally adopted the article x reservation was again rewritten and when finally adopted on march 15 by a vote of 56 to 26, read as follows: the united states assumes no obligation to preserve the territorial integrity or political independence of any other country by the employment of its military or naval forces, its resources, or any form of economic discrimination, or to interfere in any way in controversies between nations, including all controversies relating to territorial integrity or political independence, whether members of the league or not, under the provisions of article x., or to employ the military or naval forces of the united states, under any article of the treaty for any purpose, unless in any particular case the congress, which, under the constitution, has the sole power to declare war or authorize the employment of the military or naval forces of the united states, shall, in the exercise of full liberty of action, by act or joint resolution so provide. the treaty again rejected all of the 14 reservations having been debated and adopted in the senate, sitting in committee of the whole, a fifteenth reservation expressing sympathy with the aspirations of the irish people having been added, the resolution of ratification was introduced by senator lodge on march 19th. the vote stood: in favor of ratification, 49; against, 35. by this vote, the treaty of versailles was for the second time rejected. the resolution was supported by 28 republicans and 21 democrats, and opposed by 23 democrats and 12 republicans. the resolution lacked seven votes of the necessary two-thirds, and although it was a republican measure, the opposition of the republican "irreconcilables" or "bitter-enders" was sufficient to defeat it. the reservations which failed text of the preamble and fifteen reservations as adopted by the senate before the final vote on ratification resolved (two-thirds of the senators present concurring therein), that the senate advise and consent to the ratification of the treaty of peace with germany concluded at versailles on the 28th day of june, 1919, subject to the following reservations and understandings, which are hereby made a part and condition of this resolution of ratification, which ratification is not to take effect or bind the united states until the said reservations and understandings adopted by the senate have been accepted as a part and a condition of this resolution of ratification by the allied and associated powers, and a failure on the part of the allied and associated powers to make objection to said reservations and understandings prior to the deposit of ratification by the united states shall be taken as a full and final acceptance of such reservations and understandings by said powers: 1. the united states so understands and construes article i. that in case of notice of withdrawal from the league of nations, as provided in said article, the united states shall be the sole judge as to whether all its international obligations and all its obligations under the said covenant have been fulfilled, and notice of withdrawal by the united states may be given by a concurrent resolution of the congress of the united states. 2. the united states assumes no obligation to preserve the territorial integrity or political independence of any other country by the employment of its military or naval forces, its resources, or any form of economic discrimination, or to interfere in any way in controversies between nations, including all controversies relating to territorial integrity or political independence, whether members of the league or not, under the provisions of article x., or to employ the military or naval forces of the united states, under any article of the treaty for any purpose, unless in any particular case the congress, which under the constitution has the sole power to declare war or authorize the employment of the military or naval forces of the united states, shall, in the exercise of full liberty of action, by act or joint resolution so provide. 3. no mandate shall be accepted by the united states under article xxii., part 1, or any other provision of the treaty of peace with germany, except by action of the congress of the united states. 4. the united states reserves to itself exclusively the right to decide what questions are within its domestic jurisdiction and declares that all domestic and political questions relating wholly or in part to its internal affairs, including immigration, labor, coastwise traffic, the tariff, commerce, the suppression of traffic in women and children and in opium and other dangerous drugs, and all other domestic questions, are solely within the jurisdiction of the united states and are not under this treaty to be submitted in any way either to arbitration or to the consideration of the council or of the assembly of the league of nations, or any agency thereof, or to the decision or recommendation of any other power. 5. the united states will not submit to arbitration or to inquiry by the assembly or by the council of the league of nations, provided for in said treaty of peace, any questions which in the judgment of the united states depend upon or relate to its long established policy, commonly known as the monroe doctrine; said doctrine is to be interpreted by the united states alone and is hereby declared to be wholly outside the jurisdiction of said league of nations and entirely unaffected by any provision contained in the said treaty of peace with germany. 6. the united states withholds its assent to articles 156, 157, and 158, and reserves full liberty of action with respect to any controversy which may arise under said articles. 7. no person is or shall be authorized to represent the united states, nor shall any citizen of the united states be eligible, as a member of any body or agency established or authorized by said treaty of peace with germany except pursuant to an act of the congress of the united states providing for his appointment and defining his powers and duties. 8. the united states understands that the reparation commission will regulate or interfere with exports from the united states to germany, or from germany to the united states, only when the united states by act or joint resolution of congress approves such regulation or interference. 9. the united states shall not be obligated to contribute to any expenses of the league of nations, or of the secretariat or of any commission, or committee, or conference, or other agency, organized under the league of nations or under the treaty or for the purpose of carrying out the treaty provisions, unless and until an appropriation of funds available for such expenses shall have been made by the congress of the united states; provided, that the foregoing limitation shall not apply to the united states' proportionate share of the expense of the office force and salary of the secretary general. 10. no plan for the limitation of armaments as reported by the council of the league of nations under the provisions of article 8 shall be held as binding the united states until the same shall have been accepted by congress, and the united states reserves the right to increase its armament without the consent of the council whenever the united states is threatened with invasion or engaged in war. 11. the united states reserves the right to permit, in its discretion, the nationals of a covenant-breaking state as defined in article xvi. of the covenant of the league of nations, residing within the united states or in countries other than such covenant-breaking state, to continue their commercial, financial and personal relations with the nationals of the united states. 12. nothing in articles 296, 297, or in any of the annexes thereto or in any other article, section, or annex of the treaty of peace with germany shall, as against citizens of the united states be taken to mean any confirmation, ratification or approval of any act otherwise illegal or in contravention of the rights of citizens of the united states. 13. the united states withholds its assent to part xiii. (articles 337 to 427 inclusive), unless congress by act or joint resolution shall hereafter make provision for representation in the organization established by said part xiii., and in such event the participation of the united states will be governed and conditioned by the provisions of such act or joint resolution. 14. until part 1, being the covenant of the league of nations, shall be so amended as to provide that the united states shall be entitled to cast a number of votes equal to that which any member of the league and its self-governing dominions, colonies or parts of empire, in the aggregate, shall be entitled to cast, the united states assumes no obligation to be bound, except in cases where congress has previously given its consent, by any election, decision, report, or finding of the council or assembly in which any member of the league and its self-governing dominions, colonies, or parts of empire, in the aggregate, have cast more than one vote. the united states assumes no obligation to be bound by any decision, report, or finding of the council or assembly arising out of any dispute between the united states and any member of the league if such member or any self-governing dominion, colony, empire, or part of empire united with it politically has voted. 15. in consenting to the ratification of the treaty with germany the united states adheres to the principle of self-determination and to the resolution of sympathy with the aspirations of the irish people for a government of their own choice adopted by the senate june 6, 1919, and declares that when such government is attained by ireland, a consummation which it is hoped is at hand, it should promptly be admitted as a member of the league of nations. the first meeting of the council of the league of nations representatives of france, great britain, italy, greece, belgium, spain, japan and brazil, members of the council of the league of nations, met on january 16, 1920, in the "cloak room" of the french foreign office for the first meeting in the history of the league. the council organized by electing leon bourgeois chairman and confirming the choice of sir eric drummond of great britain as general secretary. the first official act of the league council was the appointment of a commission to trace upon the spot the frontiers of the territory of the saar basin. all the members of the council called for by the covenant of the league, with the exception of the representative of the united states, were present. beside m. bourgeois, the members were earl curzon, the british foreign secretary, for great britain; premier venizelos, for greece; carlo ferraris, italian minister of industry, commerce, labor and food, for italy; paul hymans, the belgian foreign minister, for belgium; baron matsui, ambassador to france, for japan; dr. gastoa da cunha, ambassador to france, for brazil; count quinones de leon, ambassador to france, for spain. peace by congressional enactment fails president wilson vetoes knox resolution declaring state of war ended the failure of the peace treaty of ratification for the second time on march 19, 1920, with the lodge reservations attached, and the determined refusal of the republican majority to ratify it in the form desired by president wilson, showed quite conclusively that under existing political alignment no peace might be expected for the country through the treaty of versailles. the republicans, therefore, turned their efforts in a new direction to bring about peace without yielding to the president. on april 1st the foreign affairs committee of the house of representatives reported favorably a joint resolution declaring the state of war between germany and the united states at an end and terminating the operation of all congressional acts and presidential proclamations dependent for their duration on the termination of the war or of the "present or existing emergency." it gave germany forty-five days in which similarly to declare the ending of the war with the united states, and to waive all claims against this country, which she would not have had the right to assert had the united states ratified the treaty of versailles. for failure to comply with this provision, all commercial intercourse and the furnishing of loans and other financial assistance by this country to germany were prohibited, except by license of the president. in answer to democratic criticisms that the resolution was not only insincere, but also unconstitutional in arrogating to congress the treaty-making power of the president, the republican leaders conceded that, while the negotiation of peace terms rested with the president, the declaration of a status of peace was quite within the proper functions of congress. text of house resolution the original resolution, as introduced in the house, read as follows: whereas the president of the united states, in the performance of his constitutional duty to give to congress information of the state of the union, has advised congress that the war with the imperial german government has ended; _resolved_, by the senate and the house of representatives of the united states of america in congress assembled, that the state of war declared to exist between the imperial german government and the people of the united states by a joint resolution of congress, approved april 6, 1917, is hereby declared at an end. section 2--that in the interpretation of any provision relating to the date of the termination of the present war, or of the present or existing emergency in any acts of congress, joint resolutions or proclamations of the president containing provisions contingent upon the date of the termination of the war, or of the present or existing emergency, the date when this resolution becomes effective shall be construed and treated as the date of the termination of the war, or of the present or existing emergency, notwithstanding any provision in any act of congress or joint resolution providing any other mode of determination of the date of the termination of the war, or of the present or existing emergency. section 3--that, with a view to securing reciprocal trade with the german government and its nationals, and for this purpose, it is hereby provided that unless within forty-five days from the date when this resolution becomes effective the german government shall duly notify the president of the united states that it has declared a termination of the war with the united states and that it waives and renounces on behalf of itself and its nationals any claim, demand, right or benefit against the united states, or its nationals, that it or they would not have the right to assert had the united states ratified the treaty of versailles, the president of the united states shall have the power, and it shall be his duty, to proclaim the fact that the german government has not given the notification hereinbefore mentioned, and thereupon, and until the president shall have proclaimed the receipt of such notification, commercial intercourse between the united states and germany and the making of loans or credits, and the furnishing of financial assistance or supplies to the german government or the inhabitants of germany, directly or indirectly, by the government or the inhabitants of the united states, shall, except with the license of the president, be prohibited. section 4--that whoever shall willfully violate the foregoing prohibition, whenever the same shall be in force, shall upon conviction be fined not more than $10,000, or, if a natural person, imprisoned for not more than two years, or both; and the officer, director or agent of any corporation who knowingly participates in such violation shall be punished by a like fine, imprisonment, or both, and any property, funds, securities, papers, or other articles or documents, or any vessel, together with her tackle, apparel, furniture, and equipment, concerned in such violation, shall be forfeited to the united states. section 5--that nothing herein contained shall be construed as a waiver by the united states of its rights, privileges, indemnities, reparations or advantages to which the united states has become entitled under the terms of the armistice signed november 11, 1918, or which were acquired by or are in the possession of the united states by reason of its participation in the war or otherwise; and all fines, forfeitures, penalties, and seizures imposed or made by the united states are hereby ratified, confirmed, and maintained. minority opposition the democratic members of the foreign affairs committee presented a minority report severely arraigning the republican majority both for the spirit and the provisions of the resolution, which, the report contended, "outrageously surrendered" american rights and, by the spirit in which it was conceived, laid open its authors to the charge of "sharp practice." the chief points made in the minority report were: "the preamble states that the president of the united states, in the performance of his constitutional duty to give to congress information of the state of the union, has advised congress that the war with the imperial german government has ended. at no time and under no circumstances has the president made any such assertion. "it is true that, on the signing of the armistice, the president, in the course of an address to congress, used the words, 'the war thus comes to an end.' but he spoke of actual hostilities, as every one knew, and not of the technical state of war. "it takes a treaty to end a war. hostilities had ceased, but the war had not ended, and will not end until it is terminated in a constitutional manner. the drafters of the resolution and the members of the committee on foreign affairs who voted for it knew that this was the case. "by quoting this statement of the president as the basis for this resolution the authors of the resolution lay themselves open to the charge of insincerity and sharp practice. the president never declared that the technical state of war which this resolution undertakes to declare at an end had come to an end, and the supreme court of the united states has recently declared that what the president had done did not announce the termination of the war.[32] [32] the reference is to the supreme court decision on the question of war-time prohibition in the kentucky distilleries case. "this resolution contains some provisions that are within the power of congress, and others that are not. so far as it seeks to declare peace, and so far as it seeks to direct the president to issue a proclamation to the german government, it trenches upon the treaty-making powers and is not within the power of congress. "so far as it prohibits the united states citizens and residents from commercial intercourse with germany or its nationals, and provides penalties for the violation of such restriction, it is valid. so far as it attempts to repeal war legislation, it is, of course, within the power of congress." with regard to section 2, which fixed the date of the termination of the war as the date when the resolution shall become effective, the report said: "there is much war and emergency legislation that should be repealed. this section does not repeal this legislation, however, and it gives no relief from the burdens, inconveniences, extravagances and losses which come from the existence of this legislation. much of this legislation is burdensome, and oppressive in time of peace. "congress has the power to repeal it, and it should address itself to this task instead of frittering away its time in attempting to pass unconstitutional legislation for the purpose of embarrassing the executive department of the government, or for some other political purpose." objection was raised against section 3 for not adequately protecting american rights. the report, which was presented by representative flood, observed on this subject: "the first thought which comes to one's mind in connection with this section is that it gives to germany and her nationals all the rights they would have had if the united states had ratified the treaty of versailles. without the provisions of the treaty great uncertainty prevails as to the title to and right to use german ships. the versailles treaty contains germany's assent to the use of the property seized by the alien property custodian, amounting to more than $500,000,000, to pay claims of the united states against germany. this resolution does not pretend to accomplish this result. "if we are dependent for a status of peace upon this resolution, i fail to see how we could be able to demand reimbursement for the cost of our army of occupation. "under the treaty germany can become a league of nations member, and, having under this resolution all the rights it would have had under the treaty when it became a member of the league, it would be entitled to assert against the united states the same rights which any other nation could assert, had our country ratified the treaty. we would thus be in the position of being compelled to protect the independence and territorial integrity of germany against the aggressions of any or all of our allies. "section 5 is an attempt to preserve something out of the wreck of american rights which have been so outrageously surrendered in former sections of the resolution." resolution passes house, 242 to 150 the first test of strength between the supporters and the opponents of the resolution came on april 8th, when a rule limiting debate was adopted by a nearly strict party vote of 214 to 155, the republicans, as were to be expected, supporting, and the democrats opposing the rule. the vote on the resolution itself came next day, april 9th, when, after a flow of oratory characterized chiefly by bitterly partisan attacks from both sides of the house, the resolution was adopted by a vote of 242 to 150. twenty-two democrats joined the republicans in voting for it, and two republicans broke party lines in opposing it. despite the comfortable majority, however, the result showed that without the president's approval efforts to declare peace by congressional action would prove futile, since the vote lacked twenty of the two-thirds majority necessary to override a veto. senate takes up fight to force peace the scene now shifted to the senate. here the fortunes of the resolution were placed in the hands of senator philander c. knox, of pennsylvania, secretary of state in president taft's cabinet and a recognized authority on international law. senator knox redrafted the house resolution so as to repeal specifically the joint resolutions of war against germany on april 6, 1917, and against austria-hungary on december 7, 1917, and thus, by annulling congressional action declaring a state of war, to re-establish _status quo ante bellum_. such a solution of the problem, it was felt, did not encroach at all upon the president's right of making treaties. in fact, the resolution specifically requested the president to open negotiations for the purpose of establishing friendly relations and commercial intercourse between the united states and germany, and the united states and the successors of the austro-hungarian government. the resolution also provided for the retention by the united states government of all enemy property seized during the war until all american claims against enemy governments had been settled, and declared further that, although the united states had not ratified the treaty of versailles, nevertheless it did not waive any of the "rights, privileges, indemnities, reparations or advantages" stipulated for its benefit in the terms of that document. text of original knox resolution the text of the knox resolution, as favorably reported to the senate on april 30th by the senate foreign relations committee, read: joint resolution repealing the joint resolution of april 6, 1917, declaring a state of war to exist between the united states and germany, and the joint resolution of december 7, 1917, declaring that a state of war exists between the united states and the austro-hungarian government. _resolved_ by the senate and house of representatives of the united states of america, in congress assembled, that the joint resolution of congress passed april 6, 1917, declaring a state of war to exist between the imperial german government and the government and people of the united states, and making provisions to prosecute the same, be, and the same is hereby declared at an end. provided, however, that all property of the imperial german government or its successor or successors, and of all german nationalists which was on april 6, 1917, in or has since that date come into the possession or under control of the government of the united states or of any of its officers, agents, or employees, from any source or by any agency whatsoever, shall be retained by the united states and no disposition thereof made, except as shall specifically be hereafter provided by congress, until such time as the german government has by treaty with the united states, ratification whereof is to be made by and with the advice and consent of the senate, made suitable provisions for the satisfaction of all claims against the german government of all persons wheresoever domiciled, who owe permanent allegiance to the united states, whether such persons have suffered through the acts of the german government or its agents since july 31, 1914, loss, damage or injury to persons or property, directly or indirectly, through the ownership of shares of stock in german, american, or other corporations, or otherwise, and until the german government has given further undertakings and made provisions by treaty, to be ratified by and with the advice and consent of the senate, for granting to persons owing permanent allegiance to the united states, most favored nation treatment, whether the same be national or otherwise, in all matters affecting residence, business, profession, trade, navigation, commerce, and industrial property rights, and confirming to the united states all fines, forfeitures, penalties, and seizures imposed or made by the united states during the war, whether in respect to the property of the german government or german nationalists, and waiving any pecuniary claim based on events which occurred at any time before the coming into force of such treaty, any existing treaty between the united states and germany to the contrary notwithstanding. to these ends, and for the purpose of establishing fully friendly relations and commercial intercourse between the united states and germany, the president is hereby requested immediately to open negotiations with the government of germany. section 2--that in the interpretation of any provision relating to the date of the termination of the present war or of the present or existing emergency in any acts of congress, joint resolutions or proclamations of the president containing provisions contingent upon the date of the termination of the war or of the present or existing emergency, the date when this resolution becomes effective, shall be construed and treated as the date of the termination of the war or of the present or existing emergency, notwithstanding any provision in any act of congress or joint resolution providing any other mode of determining the date of the termination of the war or of the present or existing emergency. section 3--that until by treaty or act or joint resolution of congress it shall be determined otherwise, the united states, although it has not ratified the treaty of versailles, does not waive any of the rights, privileges, indemnities, reparations, or advantages to which it and its nationals have become entitled under the terms of the armistice signed november 11, 1918, or any extensions or modifications thereof or which, under the treaty of versailles, have been stipulated for its benefit as one of the principal allied and associated powers and to which it is entitled. section 4--that the joint resolution of congress, approved december 7, 1917, declaring that a state of war exists between the imperial and royal austro-hungarian government and the government and people of the united states, and making provisions to prosecute the same, be and the same is hereby repealed, and said state of war is hereby declared at an end, and the president is hereby requested immediately to open negotiations with the successor or successors of said government for the purpose of establishing fully friendly relations and commercial intercourse between the united states and the governments and peoples of austria and hungary. a democrat pays his respects to republicans the attitude of leaders of the democratic party on republican maneuvers to force peace by congressional action was indicated by a statement issued by homer s. cummings, chairman of the democratic national committee, in which the knox resolution was characterized as "renewed evidence of the moral leprosy which is eating out the heart of the republican party," and which, according to mr. cummings, proposed dishonor in the name of peace. as reported in the press, the statement said: "the so-called knox peace resolution, which has just been reported by the senate committee on foreign relations, is renewed evidence of the moral leprosy which is eating out the heart of the republican party. in the name of peace it proposes dishonor. "an analysis of the resolution discloses that: "first, it recognizes the defect in the recent house resolution, which attempted to make a separate treaty with germany by act of congress. [illustration: senator philander c. knox of pennsylvania a former united states attorney-general and secretary of state, and one of the "irreconcilable" opponents of the league of nations and treaty of versailles. he was the author of the peace resolution declaring war with germany ended which was passed by congress but vetoed by president wilson.] "second, as an alternative proposition, it requests the president to commence negotiations for a separate peace with germany. "third, it seeks to terminate, by a paper resolution, a state of war without protecting american rights. "fourth, it attempts to take advantage of the provisions of the treaty of versailles without becoming a party to that treaty and, "fifth, it requests the president to negotiate a separate peace with austria. "these are the outstanding features of the resolution. if any group of leaders a year ago had dared to suggest that we should abandon our allies and negotiate a separate treaty of peace, they would have found themselves isolated and discredited. republican leaders have lost their moral sense in their mad lust for power. "there has not been one moment since november, 1918, during which america has not suffered in honor, prestige, and power, as the result of the elections of that year. since that time everything has been in confusion, and the frantic attempt of republican leaders to find a legal method in which to do the dishonorable thing merely adds to the confusion. there is but one clear path of duty. it is likewise the path of honor and of peace and of permanent security. "the path lies straight before us, and consists simply in ratifying the treaty of peace which our companions in arms have already ratified. the more the matter is debated the more it will become apparent that there are no substitutes for the requirements of plain duty and american honor." knox urges separate peace with germany on may 5th the debate on the resolution was opened in the senate with a carefully prepared speech by senator knox, which outlined in detail arguments not only for the propriety and validity of the resolution, but for the absolute necessity of its adoption. senator knox contended that the war had ended, in fact and in law; that the objects for which the united states had entered the struggle had been achieved; that a "power-maddened administration" was continuing the technical state of war solely for the purpose of coercing the senate into ratifying the versailles treaty, which had been universally discredited in all its parts; and that, since there was no hope of co-operation from the president, congress must find means of ending the technical state of war independently of him. said senator knox: "the welfare and safety of the nation imperatively demands that we know we have peace. the whole world seethes with revolution. our own nation is in ferment and turmoil. force and strife are rampant and threaten the destruction not only of our property, but of our free institutions and even of our very lives. and yet we stand, and have stood for months, as a rudderless ship foundering in the trough of tremendous seas. we must not dare longer to delay a return to the ordered government of peace. as a preliminary step, the executive must be returned to his peace-time powers and prerogatives. need, propriety, wisdom, cannot question this. the resolution before us is designed to bring us to this. wilson to blame "the course of the president ever since he cruised to europe to participate in the peace conference leaves no chance for doubt that he will continue hereafter as heretofore to thwart, so far as he is able, every attempt on the part of the senate, the congress, or the people, to take any action immediately or remotely affecting, in however slight a degree, through change or modification, the provisions of the treaty of versailles as it came to us fresh from his signature. he preferred to keep the country in an alleged state of war for now almost a year rather than abate one jot or tittle of the full measure his isolated will had set for the nation. constitutional order, lawful functions, rights and duties of position, oaths of office as affecting the members of this body, he has noticed only to bring into contempt. he has conjured up every power within the whole vast executive domain in his efforts to compel this senate to surrender its will and judgment to him, to become mere automatons to register his mandate--to approve this treaty in its last minutiæ of detail as he sent it to us. "now, in the face of this situation, it will be idle for us to pass any resolution looking to the immediate establishment of peace that does not contemplate the unqualified acceptance of the treaty, if that resolution requires from the president the performance of any act or duty in order to secure peace, because if we do, he will, if the statements of his representatives are accepted, so delay or ignore that act or duty as to defeat the end and purpose of our action, for in his opinion wisdom lies only in following the behests of his will. therefore, if the resolution is to be effective, it must be self-operative. nothing necessary to the bringing of peace must be left for his accomplishment. why united states went to war "our purposes, as stated by the president, were three-fold: "first, the defeat and elimination of the imperial german government and prussian autocracy; "next, the liberation from their yoke of despotism of the germans themselves--for whom we had nothing but sympathy and friendship--to the end that they might be masters of their own fates and fortunes; and "lastly, the establishment, as sincere friends of the german people, of intimate relations of mutual advantage between them and us. "in so far as my information goes, the german government never declared war against the united states. they merely accepted the status which this declaration recognized and probably created; for it must be remembered that while we interpreted, and rightly so, that german submarine warfare, as directed against the united states, was illegal, constituting acts of war, the german government never acquiesced in that view and, on the contrary, maintained the legality of all general measures taken. "the imperial german government, against whom we declared war, did cease to exist at the time of the signing of the armistice, leaving us from thence on without any titular enemy against which to wage a war unless we were warring with the german people, and we have clearly estopped ourselves to make such a contention. "thus from this point of view also the armistice brought us not alone the end of hostilities, but the actual peace. there remained only the making of arrangements covering the ordinary peace-time intercourse. war at end, in fact and in law "as a matter of law and of fact we are at peace with germany; first, because of the terms of the armistice of november 11, 1918, its amendments and renewals; second, because of the 'silent ceasing' of hostilities; third, because of the disappearance, the extinction of the government against which we declared war, and fourth, because of the negotiation by us and our allies or associates in the war with the people who were lately our enemies, and the ratification by our allies or associates and our enemies, of a treaty of peace which specifically provides both for the termination of hostilities to be followed by a resumption of diplomatic relations, and also for the status that should exist during our future peace-time intercourse; which treaty is now in force and observed everywhere except in the united states, and has in fact and in international law brought peace to the whole world, including ourselves. "having thus in law and in fact international peace, having nothing left but a domestic status of war created by a legislative declaration of war, with no hostilities heretofore or now existent or possible in the territory over which this paper-war status exists, it is not only legally sound, but economically, morally, and patriotically necessary and indispensable that we at once repeal the declaration of war and so immediately end the despotic war powers with which a power-maddened administration continues to misrule this great people. versailles treaty impossible "to what end has all this juggling with obvious facts and universally recognized principles been maintained? the answer is easy and known to all. the purpose has been to coerce the senate to approve the treaty of versailles--a treaty that is almost universally discredited in all its parts. the majority of its negotiators concede this. its economic terms are impossible; its league of nations is an aggravated imitation of the worst features of the ill-fated and foolish holy alliance of a century ago. it promises little but mischief unless recast on such radical lines as will entirely obliterate its identity. "wisdom requires the negotiation of a separate treaty between the united states and germany, which should provide reciprocal rights and obligations between us and that country alone." knox resolution passes both houses in the course of its consideration in the senate, the provision of the resolution requesting the president to negotiate a separate treaty with germany was eliminated, but the request for a treaty with the successors of the austro-hungarian government was retained. in its amended form the resolution was brought to a decision in the senate on may 15th, and adopted by a vote of 43 to 38, three democrats voting with its supporters and one republican with the opposition. as the text of the knox resolution adopted by the senate differed from the measure which had been passed by the house of representatives on april 9th, the house, to expedite matters, dropped its own resolution, and passed, on may 21st, the senate draft by a vote of 228 to 139, seventeen short of the two-thirds majority necessary to override the expected presidential veto. text of amended resolution the text of the peace resolution as passed by the senate and later concurred in by the house of representatives, read as follows: the joint resolution of congress, passed april 6, 1917, declaring a state of war to exist between the imperial german government and the government and people of the united states, and making provisions to prosecute the same, be, and the same is hereby repealed and said state of war is hereby declared at an end. provided, however, that all property of the imperial german government, or its successor or successors, and of all german nationals which was on april 6, 1917, is or has since that date come into the possession or under control of the government of the united states or any of its officers, agents or employees from any source or by any agency whatsoever, shall be retained by the united states and no disposition thereof made, except as shall specifically be hereafter provided by congress, until such time as the german government has, by treaty with the united states, ratification whereof is to be made by and with the advice and consent of the senate, made suitable provisions for the satisfaction of all claims against the german government of all persons, wheresoever domiciled, who owe permanent allegiance to the united states, whether such persons have suffered through the acts of the german government or its agents since july 31, 1914, loss, damage, or injury to their persons or property, directly or indirectly, through the ownership of shares of stock in german, american, or other corporations, or have suffered damage directly in consequence of hostilities or any operations of war, or otherwise, or until the german government has given further undertakings and made provisions by treaty, to be ratified by and with the advice and consent of the senate, for granting to persons owing permanent allegiance to the united states, most favored nation treatment, whether the same be national or otherwise, in all matters affecting residence, business, profession, trade, navigation, commerce and industrial property rights, and confirming to the united states all fines, forfeitures, penalties, and seizures imposed or made by the united states during the war, whether in respect to the property of the german government or german nationals, and waiving any pecuniary claim based on events which occurred at any time before the coming into force of such treaty, any existing treaty between the united states and germany to the contrary notwithstanding. that in the interpretation of any provision relating to the date of the termination of the war or of the present or existing emergency in any acts of congress, joint resolutions or proclamations of the president containing provisions contingent upon the date of the termination of the war or of the present or existing emergency, the date when this resolution becomes effective shall be construed and treated as the date of the termination of the war or of the present or existing emergency, notwithstanding any provision in any act of congress or joint resolution, providing any other mode of determining the date of the termination of the war or of the present or existing emergency. that until by treaty or act or joint resolution of congress it shall be determined otherwise, the united states, although it has not ratified the treaty of versailles, does not waive any of the rights, privileges, indemnities, reparations or advantages to which it and its nationals have become entitled under the terms of the armistice signed november 11, 1918, or any extensions or modifications thereof or which under the treaty of versailles have been stipulated for its benefit as one of the principal allied and associated powers and to which it is entitled. that the joint resolution of congress approved december 7, 1917, declaring that a state of war exists between the imperial and royal austro-hungarian government and the government and the people of the united states and making provisions to prosecute the same, be, and the same is hereby repealed, and said state of war is hereby declared at an end, and the president is hereby requested immediately to open negotiations with the successor or successors of said government for the purpose of establishing fully friendly relations and commercial intercourse between the united states and the governments and peoples of austria and hungary. president's veto the resolution now came before the president for his signature. on may 27th he returned it to the house without his approval, and in an accompanying message explained the reasons for his veto. the president did not touch upon the question of constitutionality which had been raised frequently during the debates, but gave as his chief reason refusal to become party to an action which, he felt, would place "ineffaceable stain upon the gallantry and honor of the united states." following is the text of president wilson's message vetoing the peace resolution: "_to the house of representatives:_ "i return herewith, without my signature, house joint resolution 327, intended to repeal the joint resolution of april 6, 1917, declaring a state of war to exist between the united states and germany, and the joint resolution of december 7, 1917, declaring a state of war to exist between the united states and the austro-hungarian government, and to declare a state of peace. i have not felt at liberty to sign this resolution because i cannot bring myself to become party to an action which would place ineffaceable stain upon the gallantry and honor of the united states. "the resolution seeks to establish peace with the german empire without exacting from the german government any action by way of setting right the infinite wrongs which it did to the peoples whom it attacked and whom we professed it our purpose to assist when we entered the war. have we sacrificed the lives of more than one hundred thousand americans and ruined the lives of thousands of others and brought upon thousands of american families an unhappiness that can never end for purposes which we do not now care to state or take further steps to attain? "the attainment of these purposes is provided for in the treaty of versailles by terms deemed adequate by the leading statesmen and experts of all the great peoples who were associated in the war against germany. do we now not care to join in the effort to secure them? "we entered the war most reluctantly. our people were profoundly disinclined to take part in a european war, and at last did so, only because they became convinced that it could not in truth be regarded as only a european war, but must be regarded as a war in which civilization itself was involved and human rights of every kind as against a belligerent government. moreover, when we entered the war we set forth very definitely the purposes for which we entered, partly because we did not wish to be considered as merely taking part in a european contest. this joint resolution which i return does not seek to accomplish any of these objects, but in effect makes a complete surrender of the rights of the united states so far as the german government is concerned. "a treaty of peace was signed at versailles on the twenty-eighth of june last which did seek to accomplish the objects which we had declared to be in our minds, because all the great governments and peoples which united against germany had adopted our declarations of purpose as their own and had in solemn form embodied them in communications to the german government preliminary to the armistice of november 11, 1918. but the treaty, as signed at versailles, has been rejected by the senate of the united states, though it has been ratified by germany. by that rejection and by its methods we had in effect declared that we wish to draw apart and pursue objects and interests of our own, unhampered by any connections of interest or of purpose with other governments and peoples. "notwithstanding the fact that upon our entrance into the war we professed to be seeking to assist in the maintenance of common interests, nothing is said in this resolution about the freedom of navigation upon the seas, or the reduction of armaments, or the vindication of the rights of belgium, or the rectification of wrongs done to france, or the release of the christian populations of the ottoman empire from the intolerable subjugation which they have had for so many generations to endure, or the establishment of an independent polish state, or the continued maintenance of any kind of understanding among the great powers of the world which would be calculated to prevent in the future such outrages as germany attempted and in part consummated. "we have now, in effect, declared that we do not care to take any further risks or to assume any further responsibilities with regard to the freedom of nations or the sacredness of international obligations or the safety of independent peoples. such a peace with germany--a peace in which none of the essential interests which we had at heart when we entered the war is safeguarded--_is_, or ought to be, inconceivable, as inconsistent with the dignity of the united states, with the rights and liberties of her citizens, and with the very fundamental conditions of civilization. "i hope that in these statements i have sufficiently set forth the reasons why i have felt it incumbent upon me to withhold my signature. woodrow wilson. the white house, _may 27, 1920._" next day, may 28th, the resolution was brought before the house in an attempt to repass it over the veto, but the vote, 219 to 152, lacked twenty-nine of the necessary two-thirds majority. on the original house resolution, passed april 9th, the vote had been 242 to 150, and on the knox resolution, passed by the house on may 21st, 228 to 139. a few days later congress adjourned until the winter session in december. the map of europe remade proposed form of government, countries from which formed and ethnic or racial stock of newly established political units resulting from the world war. (from a paper prepared in january, 1920, by o. p. austin, statistical department, national city bank.) ========================================================================= |[33]area | [33] | date |form of |countries |ethnic or | |population|estab-|govern |from which | racial | | |lished|ment |formed | stock ------------+---------+----------+------+----------+-----------+-------- poland | 141,854|36,000,000|nov., |republic |russia, | slavic, | | | 1916 | |germany, | semitic | | | | |austria | | | | | |hungary | ------------+---------+----------+------+----------+-----------+-------- czecho | 60,000|13,000,000|oct., |republic |austria | slavic slovakia | | | 1918 | |hungary | ------------+---------+----------+------+----------+-----------+-------- jugo-slavia | 85,000|10,500,000|oct., |kingdom |hung, | slavic, | | | 1918 | |serbia, | serbs, | | | | |bosnia, | croats | | | | |herzegovina, | | | | |mont. | ------------+---------+----------+------+----------+-----------+-------- ukrainia | 215,000|30,000,000|nov., |republic |russia, | slavic | | | 1917 | |austria | | | | | |hungary | ------------+---------+----------+------+----------+-----------+-------- esthonia | 7,300| 1,750,000|apr., |republic |russia | slavic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- livonia | 17,000| 1,650,000|apr., |republic |russia | slavic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- courland | 10,000| 600,000|apr., |republic |russia | slavic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- letvia | 9,000| 1,500,000|apr., |republic |russia | letts | | | 1918 | | | (balto | | | | | | slavs) ------------+---------+----------+------+----------+-----------+-------- lithuania | 90,000|10,000,000|apr., |republic |russia | slavic, | | | 1918 | | |germania ------------+---------+----------+------+----------+-----------+-------- white russia| 140,000| 5,000,000| may, |republic |russia | slavic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- north russia| 275,000| 400,000|nov., |military |russia | slavic, | | | 1918 |gov | | finns ------------+---------+----------+------+----------+-----------+-------- rus. fed. | undet'd | undet'd |nov., |soviet rep|russia | slavic soviet rep | | | 1917 | | | ------------+---------+----------+------+----------+-----------+-------- don rep | 63,000| 4,000,000|jan., |military |russia | slavic, | | | 1918 |gov | | cossack ------------+---------+----------+------+----------+-----------+-------- kuban rep | 36,000| 3,000,000|nov., |republic |russia | slavic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- tauride rep | 23,000| 1,800,000|mar., |republic |russia | slavic, | | | 1918 | | | tartar ------------+---------+----------+------+----------+-----------+-------- terek rep | 28,000| 1,300,000|sept.,|republic |russia | turko | | | 1918 | | | tartar ------------+---------+----------+------+----------+-----------+-------- tatar | 175,000| 9,000,000|oct., |military |russia | turko bashkir rep | | | 1918 | | | tartar ------------+---------+----------+------+----------+-----------+-------- yakutsk rep |1,000,000| 400,000| may, |military |siberian | yakuts, | | | 1918 | |russia | cossack ------------+---------+----------+------+----------+-----------+-------- rep. of | undet'd | undet'd |dec., |military |siberian | slav, siberia | | 1917 | |russia | mongol, | | | | | | tartar ------------+---------+----------+------+----------+-----------+-------- rep. of | 40,000| 2,500,000|jan., |republic |russia, |georgian, georgia | | | 1918 | |turkey | armenian ------------+---------+----------+------+----------+-----------+-------- rep. of | 400,000| 6,500,000|jan., |military |russia | turko turkestan | | | 1918 | | | tartar ------------+---------+----------+------+----------+-----------+-------- eastern | 68,000| 250,000| may, |military |russia | balto karelia | | | 1919 | | | slavic ------------+---------+----------+------+----------+-----------+-------- finland | 125,000| 3,500,000|dec., |republic |russia | finns | | | 1917 | | | ------------+---------+----------+------+----------+-----------+-------- murman | 35,000| 100,000|july, |military |russian | finns region | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- german rep | 175,000|60,000,000|nov., |republic |germany | germanic | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- rep of | 28,000|10,000,000|oct., |republic |austria | germanic german | | | 1918 | | | austria | | | | | | ------------+---------+----------+------+----------+-----------+-------- hungarian | 32,000| 9,000,000|nov., |soviet |hungary | magyar rep | | | 1918 |rep. | | ------------+---------+----------+------+----------+-----------+-------- [34]rumania | 110,000|12,500,000| |kingdom |rumania, |rumanian, | | | 1919 | |hungary, | magyar | | | | |bessarabia | ------------+---------+----------+------+----------+-----------+-------- turkey in | 10,000| 1,900,000| |undet'd |turkey | turkish europe | | | | | | ------------+---------+----------+------+----------+-----------+-------- anatolia, | 145,000| 5,000,000| |undet'd |turkey | turkish asia minor | | | | | | ------------+---------+----------+------+----------+-----------+-------- armenia, | 75,000| 2,500,000|aug., |undet'd |turkey |armenians asia minor | | | 1918 | | | ------------+---------+----------+------+----------+-----------+-------- mesopotamia,| 143,000| 2,000,000| 1917 |british |turkey | turks, asia minor | | | |admin. | | arabs, | | | | | | persian ------------+---------+----------+------+----------+-----------+-------- syria, asia | 37,000| 1,000,000| 1919 |undet'd |turkey | syrian, minor | | | | | | turkish ------------+---------+----------+------+----------+-----------+-------- palestine, | 16,000| 500,000| 1917 |british |turkey | turks, asia minor | | | |admin. | | arabs, | | | | | | jews ------------+---------+----------+------+----------+-----------+-------- kingdom of | 96,500| 300,000|june, |kingdom |turkey | arabs, hejaz | | | 1916 | | | turks ------------+---------+----------+------+----------+-----------+-------- nejd & hasa,| no data | no data | 1913 |emirate |turkey | arabs arabia | | | | | | ------------+---------+----------+------+----------+-----------+-------- jebel | no data | no data | 1918 |emirate |turkey | bedouin shammar, | | | | | | arabia | | | | | | ------------+---------+----------+------+----------+-----------+-------- asir, arabia| no data | no data | 1918 |principate|turkey | arabs ------------+---------+----------+------+----------+-----------+-------- yemen, | no data | no data | 1918 |imamate |turkey | arabs arabia | | | | | | ------------+---------+----------+------+----------+-----------+-------- koweit, | no data | no data | 1918 |sultanate |turkey | arabs arabia | | | | | | ------------+---------+----------+------+----------+-----------+-------- oman, arabia| 82,000| 500,000| 1913 |g. brit & |turkey | arabs | | | |france | | ------------+---------+----------+------+----------+-----------+-------- egypt | 350,000|12,000,000| 1914 |great |turkey | egyptian | | | |britain | | ------------+---------+----------+------+----------+-----------+-------- german east | 384,000| 8,000,000| 1918 |great |german | bantu africa | | | |britain |colony | ------------+---------+----------+------+----------+-----------+-------- german s. w.| 322,000| 200,000| 1915 |british s.|german hottentots africa | | | |africa |colony | ------------+---------+----------+------+----------+-----------+-------- kamerun | 191,000| 2,500,000| 1916 |british & |german | sudanese | | | |french |colony | ------------+---------+----------+------+----------+-----------+-------- togo | 33,000| 1,000,000| 1914 |allied mil|german | hamitic | | | | |colony | ------------+---------+----------+------+----------+-----------+-------- kaiser | 70,000| 250,000| 1918 |australia |german | malay wilhelm land| | | | |colony | ------------+---------+----------+------+----------+-----------+-------- ger. samoan | 1,200| 40,000| 1918 |australia |german | samoan islands | | | | |colony | ------------+---------+----------+------+----------+-----------+-------- nauru | [35] | | 1918 |mandate-|german | samoan islands | | | |british |colony | ------------+---------+----------+------+----------+-----------+-------- ger. s. | 15,000| 350,000| 1918 |australia |german | malay pacific | | | |japan |colony | islands | | | | | | ------------+---------+----------+------+----------+-----------+-------- ger. n. | 5,000| 600,000| 1918 |mandate-|german | malay pacific | | | |japan |colony | islands | | | | | | ------------+---------+----------+------+----------+-----------+-------- kiau chau | 200| 200,000| 1918 |mandate-|german | chinese | | | |japan |colony | ========================================================================= [33] latest available estimate. [34] enlarged by absorption of hungarian territory. [35] a small island in the marshall group occupied as a wireless station; also known as pleasant island. our part in winning the war official figures that reveal the enormous contribution of this country in men, money and supplies figures of american participation in the war[36] revised to august 1, 1919 total armed forces, including army, navy, marine corps, etc. 4,800,000 total men in the army 4,000,000 men who went overseas 2,086,000 men who fought in france 1,390,000 greatest number sent in one month 306,000 greatest number returning in one month 333,000 tons of supplies shipped from america to france 7,500,000 total registered in draft 24,234,021 total draft inductions 2,810,296 greatest number inducted in one month 400,000 graduates of line officers' training schools 80,568 cost of war to april 30, 1919 $21,850,000,000 cost of army to april 30, 1919 $13,930,000,000 battles fought by american troops 13 months of american participation in the war 19 days of battle 200 days of duration of meuse-argonne battle 47 americans in meuse-argonne battle 1,200,000 american casualties in meuse-argonne battle 120,000 american battle deaths in war 50,300 american wounded in war 205,690 american deaths from disease 57,500 total deaths in the army 115,500 [36] from the _war with germany_--a statistical summary, by leonard p. ayres, colonel, general staff, u. s. a. (for statistics of american casualties revised to the end of 1919, see vol. iii, pp. 403-6.) the part played by the united states in the war is statistically and graphically summarized in a compact little book prepared by colonel leonard p. ayres of the statistical staff of the war department. attentively as the public may have followed the published reports of the many progressive steps and stages of our preparation for and participation in the war, much of the matter in _the war with germany--a statistical summary_ will have surprising interest. it is the first time a comprehensive view of the character and magnitude of our war activities has been made possible through anything so concrete and authoritative. the data were obtained from official reports, during the war, to the president, secretary of war and chief-of-staff from the american peace commission in paris, from the files of the supreme war council in versailles, and other sources; and though, as colonel ayres states, it was still impossible to get final figures on some points or wholly reliable ones on others, care was taken to insure the degree of reliability reasonably practicable. the diagrams, figures and other information presented here and elsewhere in this volume are reproduced from colonel ayres' _summary_, second edition, revised to august 1, 1919. [illustration: official government statistics. male population registered and not registered] the selective service "the willingness," colonel ayres says, "with which the american people accepted the universal draft was the most remarkable feature in the history of our preparation for war. it is a noteworthy evidence of the enthusiastic support given the war program that, despite the previous hostility to the principle of universal liability for military service, a few months after the selective service law was passed, the standing of the drafted soldier was fully as honorable in the estimation of his companions and of the country in general as was that of the man who enlisted voluntarily. moreover, the record of desertions from the army shows that the total was smaller than in previous wars and a smaller percentage occurred among drafted men than among those who volunteered. the selective service law was passed on may 19, 1917, and as subsequently amended, it mobilized all the man power of the nation from the ages of 18 to 45 inclusive. under this act, 24,234,021 men were registered and slightly more than 2,800,000 were inducted into the military service on the first draft. but during the war, from april 6, 1917, to november 11, 1918, about 4,000,000 served in the army of the united states." the total number serving the armed forces of the country, including army, navy, marine corps and other services, amounted to 4,800,000. approximately five men out of every 100 citizens were in arms. of these, 2,086,000, constituting the american expeditionary force, were in service on the western front. those who saw actual fighting were 1,390,000. it is interesting in this connection to record the fact that in our greatest previous war, the civil war, 2,400,000 men served in the northern armies and in the navy. in that struggle 10 men in each 100 inhabitants of the northern states served as soldiers or sailors. the fact is pointed out by colonel ayres that though the british sent to france more men in their first year than we did in our first year, it took england three years to reach a strength of 2,000,000 men in france whereas the united states reached that strength in france in a year and a half. but as an offset, it must be borne in mind that the british had to use men from the beginning to fill terrible casualty gaps, which was not the case with the american steadily building forces, and that the british also were sending men to several other battle fronts than those of france. how the draft was made up under the draft, registrants were subjected to a preliminary examination by the local boards to determine who were not of sufficient soundness and vigor for military life. those accepted as qualified for service were sent to training camps where they underwent a second examination and rejections were made of those in any serious way defective. the not surprising result of the examinations was the demonstration that men representing the highest order of physical condition came from agricultural districts, the country bred boys far excelling those reared in the city. taken by states it is noteworthy that men from the middle west and those from kentucky and arkansas of the southern states had the highest record, their physical condition enabling 70 to 80 percent. to pass the two examinations. the lowest percentage was in the new england states, in new york, in michigan and in western states that have for years been health resorts, where subnormal persons from all over the country resort. the percentage of men from those states who passed the two examinations was but 50 to 59. the intermediate ranges were 60 to 69. under the two examinations not only did country boys make a better showing than city boys (100,000 country boys would furnish for military service 4,700 more soldiers than would an equal number of city boys), but the white registrants were better than the colored, the native-born better than the alien-born. under the analysis 100,000 whites would furnish 1,240 more soldiers than would an equal number of colored; and 100,000 native-born would yield 3,500 more soldiers than would the like number of foreign-born. as 3,500 men are equivalent to an infantry regiment at full war strength, the value of these differences can be appreciated. [illustration: official government statistics. comparative losses of merchant shipping during the war] about 200,000 commissioned officers were required for the army. less than 9,000 were in the federal service at the beginning of the war,--5,791 were regulars and 3,199 were officers of the national guard in federal service. thus out of every six officers one had had previous training in the army, guard or ranks; three trained for their commissions in officers' training camps; two went from civil life into the army with little or no military training--the latter being in the majority physicians, ministers or technical men. camps and training shelter was constructed in a few months for the accommodation of 1,800,000 men under training. for the national guard and national army divisions there were 16 camps and 16 cantonments, chiefly in the north. for national guard units organized during the summer of 1917 there were canvas camps in the south. one division, the rainbow, required no training field, as it was assembled directly at camp mills for early transportation to france. the average american soldier who went to france received six months' training before he sailed and two months more in a quiet sector after reaching france, before entering the battle line. the infantry soldier was trained in the division, the american typical unit, composed of about 1,000 officers and 27,000 men. before the signing of the armistice there had been trained and sent overseas 42 divisions, the training of 12 more was well advanced and 4 others were being organized. had the war continued this country would have had 80 divisions overseas before july, 1919, and 100 by the end of that year. this country had the benefit in its training camps of 547 of the ablest french and english officers who had seen service on the western front and were sent over to bring to the training of our men the approved methods developed in the experiences of the war. there were besides 226 non-commissioned british officers detailed as instructors. colonel ayres says they rendered services out of all proportion to their number, being a significant contribution to our training program. getting the troops over especially impressive are the figures dealing with troop movements: "during our nineteen months of war more than 2,000,000 american soldiers were carried to france. half a million of these went over in the first thirteen months, the others in the last six months. "the highest troop-carrying records are those of july, 1918, when 306,000 soldiers were carried to europe, and june, 1919, when 364,000 were brought home to america. "most of the troops who sailed for france left from new york. half of them landed in england and the other half landed in france. "among every 100 americans who went over forty-nine went in british ships, forty-five in american ships, three in italian, two in french, and one in russian shipping under english control. "our cargo ships averaged one complete trip every seventy days and our troopships one complete trip every thirty-five days. "the cargo fleet was almost exclusively american. it reached the size of 2,700,000 dead-weight tons and carried to europe about 7,500,000 tons of cargo. "the greatest troopship among all the ships has been the _leviathan_, which landed 12,000 men (the equivalent of a german division) in france every month. "the fastest transports have been the _great northern_ and the _northern pacific_, which have made complete turn-arounds, taken on new troops and started back again in nineteen days." transportation extraordinary _apropos_ of the rapid transportation colonel ayres says: "in june (1918) with the german drives in full swing, the allies called on us to continue the extraordinary transportation of troops begun in april. the early movement had been met by filling up the divisions that sailed with the best trained men wherever they could be found. divisions embarked after july 1 had to meet shortages with men called to the colors in the spring. by november the average period of training in the united states had been shortened to close to four months, and the average for the period july 1 to nov. 11 was probably five months. "in the last months of the war, the induction of men was carried forward at top speed and every device was used for hastening training. the result fully justified the effort. into the great meuse-argonne offensive we were able to throw a force of 1,200,000 men, while we had many thousands of troops engaged in other parts of the line. our training camp officers stood up to the test; our men with their intensive drilling in open-order fighting, which has characterized american training, routed the best of the german divisions from the argonne forest and the valley of the meuse." feeding and clothing problems when an army is 3,000 or 4,000 miles from its sources of supply the amounts of supplies in reserve and in transit are enormous as compared with the quantities actually consumed each month. as an example the army purchases of blankets in 1918 were two and one-quarter times as great as the entire american production in 1914. put differently, the blankets bought in one year for the use of 4,000,000 or 5,000,000 soldiers would have been sufficient to make good the normal consumption of blankets by 100,000,000 american civilians for two and a quarter years. so proportionately with other things, the rule for clothing was that for every man at the front there must be a three months' reserve in france, another two or three months' reserve in the united states and a third three months' supply continuously in transit. the same thing was true of other supplies and munitions. the need for reserves and the time required for transportation called for the supply of enormous quantities and called for it at once. an indication of the quartermaster problem may be obtained from the fact that between april 6, 1917, and may 31, 1918, there was delivered to the army 131,800,000 pairs of wool stockings, 85,000,000 undershirts, 83,600,000 drawers, 30,700,000 pairs of shoes, 26,500,000 flannel shirts, 21,700,000 blankets, 21,700,000 wool breeches, 13,900,000 wool coats, and 8,300,000 overcoats. when the troop movement was speeded up in 1918 colonel ayres states that the margin of woolen clothing was dangerously narrow, and to secure these and other articles in sufficient quantity it was found necessary to take control of all states of the manufacturing process, from assembling the raw material to inspecting the finished product. at no time was there a shortage of food in the expeditionary forces. soldiers sometimes went hungry in this as in all other wars, but the condition was local and temporary. it occurred because of transportation difficulties during periods of active fighting or rapid movement when the units outran their rolling kitchens. in france american engineers built seventeen new ship berths and 1,000 miles of standard and 125 miles of narrow gauge railroads. the signal corps strung 100,000 miles of telephone wires, and 40,000 american made motor trucks were shipped overseas. in this country army construction projects cost twice as much as the panama canal and were on nearly as large a scale overseas. the storage space constructed in france was more than nine-tenths as large as that built at home. the amount of food on hand from the time the american troops entered active fighting never fell below a 45 days' supply, and at the time of the submarine scare, was kept at 59 to 72 days' supply. likewise the supply of clothing arose to the emergency of combat. "the records of the quartermaster show that during the six months of hard fighting, from june to november, the enlisted man in the a. e. f. received on the average: "slicker and overcoat, every 5 months; blanket, flannel shirt, and breeches, every 2 months; coat, every 79 days; shoes and puttees, every 51 days; drawers and undershirt, every 34 days; woolen socks, every 23 days." guns and munitions when war was declared we had on hand nearly 600,000 springfield rifles. the american enfield rifle was designed and manufactured. the total production of the two up to the signing of the armistice was over 2,500,000. the production of rifle ammunition amounted to 3,500,000,000, of which half was shipped overseas, in addition to the 200,000,000 rounds secured from the french and british. during the war the browning automatic rifle and the browning machine gun were developed, put into quantity production and used in large numbers in the final battles in france. before the war the allowance of machine guns in the american army was four guns to a regiment; the allowance now is 336 to a regiment, testimony to the demonstrated importance in war of that effective weapon. the browning machine guns are believed to be more effective than the corresponding weapons used in any other army. the total number of machine guns produced in america up to the end of 1918 was 226,557, of these 69,960 being of the light browning and 56,612 of the heavy browning type. the vickers field machine guns produced totaled 12,125, the other field guns 6,366, the lewis aircraft guns, 39,200, the browning aircraft 580, the marlin aircraft 38,000, and the vickers aircraft 3,714. before nov. 1, 1918, 29,000 light brownings, 27,000 heavy brownings, and 1,500,000,000 rounds of rifle and machine-gun ammunition were shipped. when war was declared the united states had sufficient light artillery to equip an army of 500,000 men, and shortly found itself confronted with the problem of preparing to equip 5,000,000 men. to meet the situation, it was decided in june, 1917, to allot our guns to training purposes and to equip our forces in france with artillery conforming to the french and british standard calibers. it was arranged that we should purchase from the french and british the artillery needed for our first divisions and ship them in return equivalent amounts of steel, copper and other raw materials so that they could either manufacture guns for us in their own factories or give us guns out of their stocks and replace them by new ones made from our materials. up to the end of april, 1919, the number of complete artillery units produced in american plants was more than 3,000, or equal to all those purchased from the french and british during the war. the number of rounds of complete artillery ammunition produced in american plants was in excess of 20,000,000, as compared with 10,000,000 rounds secured from the french and british. in the first twenty months after the declaration of war by each country, the british did better than we did in the production of light artillery, and we excelled them in producing heavy artillery and both light and heavy shells. the artillery supply colonel ayres says: "the most important single fact about our artillery in france is that we always had a sufficient supply of light artillery for the combat divisions that were ready for front-line service. this does not mean that when the divisions went into the battle line they always had their artillery with them, for in a number of cases they did not. "the result of the compilation is to show that in every 100 days that our combat divisions were in line they were supported by their own artillery for seventy-five days, by british artillery for five days, by french for one and one-half days, and were without artillery for eighteen and one-half days out of the 100. of these eighteen and one-half days, however, eighteen days were in quiet sectors and only one-half of one day in each hundred was in active sectors. there are only three records of american divisions being in an active sector without artillery support. the total of these three cases amounts to one-half of 1 per cent., or about fourteen hours out of the typical 100 days just analyzed. "the facts can be summarized in round numbers with approximate accuracy by saying that we had in france 3,500 pieces of artillery of which nearly 500 were made in america, and we used on the firing line 2,250, of which over 100 were made in america." the campaign of 1919 at the conclusion of his chapter on rifles and machine guns colonel ayres has an interesting bit of semi-critical comment on the question of foresight, of which some desk-experts have been inclined to doubt the united states authorities were possessed. he says: "at this point it is appropriate to comment on the fact that there are many articles of munitions in which american production reached great amounts by the fall of 1918 but which were not used in large quantities at the front because the armistice was signed before big supplies of them reached france. in the main, these munitions are articles of ordnance and aviation equipment, involving such technical difficulties of manufacture that their production could not be improvised or even greatly abbreviated in time. "as the production figures are scrutinized in retrospect, and it is realized that many millions of dollars were spent on army equipment that was never used at the front, it seems fair to question whether prudent foresight could not have avoided some of this expense. "perhaps the best answer to the question is to be found in the record of a conference that took place in the little french town of trois fontaines on october 4, 1918, between marshal foch and the american secretary of war. "in that conference the allied commander-in-chief made final arrangements with the american secretary as to the shipment of american troops and munitions in great numbers during the fall and winter preparatory for the campaign of 1919. "this was one day before the first german peace note and 38 days before the end of the war, but marshal foch was then calling upon america to make her great shipments of munitions and her supreme contribution of man-power for the campaign of the following year." gas and explosives one of the striking contributions to the cause of the allies was the enormous quantity of smokeless powder and high explosives produced. from april 1, 1917, to november 11, 1918, the production of smokeless powder in the united states was 632,000,000 pounds, which was almost equal to the combined production of france and great britain. but by the time the war ended the production of smokeless powder in this country was 45 per cent. greater than that of france and great britain combined. the output of high explosives, t.n.t. and others, increased rapidly from its pre-war status to a quantity 40 percent. greater than that of great britain, and nearly double the french production at the close of the war. "the result of the high rate of production of both smokeless powder and high explosives was that the artillery ammunition program was never held up for lack of either the powder which hurls the bullet or the shell from the gun, or the high explosive which makes the shell effective when it reaches its destination." colonel ayres says of toxic gases: "when the clouds of chlorine suddenly enveloped the british and french lines in the ypres salient, early in 1915, a new weapon was introduced into the war. that it was a powerful weapon is evidenced by the fact that during the year 1918 from 20 to 30 percent. of all our battle casualties were due to gas. "at the time we entered the war we had practically no experience in manufacturing toxic gases, and no existing facilities which could be readily converted to such use. at the signing of the armistice we were equipped to produce gas at a more rapid rate than france, england, or germany." the air service "on the declaration of war the united states had fifty-five training airplanes, of which fifty-one were classified as obsolete and the other four as obsolescent. when we entered the war the allies made the designs of their planes available to us and before the end of hostilities furnished us from their own manufacture 3,800 service planes. "aviation training schools in the united states graduated 8,602 men from elementary courses and 4,028 from advanced courses. more than 5,000 pilots and observers were sent overseas. the total personnel of the air service, officers, students, and enlisted men, increased from 1,200 at the outbreak of the war to nearly 200,000 at its close. "there were produced in the united states to nov. 30, 1918, more than 8,000 training planes and more than 16,000 training engines. "the de haviland-4 observation and day bombing plane was the only plane the united states put into quantity production. before the signing of the armistice 3,227 had been completed and 1,885 shipped overseas. the plane was successfully used at the front for three months. "the production of the 12-cylinder liberty engine was america's chief contribution to aviation. before the armistice 13,574 had been completed, 4,435 shipped to the expeditionary forces, and 1,025 delivered to the allies. "the first fliers in action wearing the american uniforms were members of the lafayette escadrille, who were transferred to the american service in december, 1917. "the american air force at the front grew from 3 squadrons in april to 45 in november, 1918. on nov. 11 the 45 squadrons had an equipment of 740 planes. "of 2,698 planes sent to the zone of the advance for american aviators 667, or nearly one-fourth, were of american manufacture. "american air squadrons played important rôles in the battles of château-thierry, st. mihiel, and the meuse-argonne. they brought down in combat 755 enemy planes, while their own losses of planes numbered only 357." "the squadrons were of four types: observation squadrons, whose business it is to make observations, take photographs, and direct artillery fire; pursuit squadrons, using light fighting planes to protect the observation planes at their work, to drive the enemy from the air, or to _strafe_ marching columns by machine-gun fire; the day bombers, whose work was the dropping of bombs on railways or roads; and the night bombers, carrying heavier bomb loads for the destruction of strategic enemy works." [illustration: _official government statistics_ production of training planes and engines to the end of each month] at the armistice there were on the front 20 pursuit squadrons, 18 observation squadrons and 7 bomber squadrons with 1,238 flying officers and 740 service planes, in addition to which there were 23 balloon companies. cargo shipments altogether, from our entrance into the war through april, 1919, the army shipped from this side of the atlantic nearly seven and a half million tons (7,500,000) of cargo. included in the cargo shipment were 1,791 consolidation locomotives of the 100-ton type. of these, 650 were shipped, set up on their own wheels so that they could be unloaded in france and run off in a few hours under their own steam. the army also shipped 26,994 standard-gauge freight cars; motor car trucks to the number of 47,018, and rails and fittings for the reinforcing of french railways and for the construction of our own lines of communications to the aggregate of 423,000 tons. the army also shipped 68,694 horses and mules. signal corps statistics in order to operate the transportation of supplies in france the signal corps strung its wires over nearly every part of that country. at the end of the war the signal corps was operating 282 telephone exchanges and 133 complete telegraph stations. the telephone lines numbered 14,956, reaching 8,959 stations. more than 100,000 miles of wire had been strung. the peak load of operation reached was 47,555 telegrams a day, averaging 60 words each. [illustration: _official government statistics_ number of battle aeroplanes in each army at the date of the armistice] construction statistics in building factories and storage warehouses for supplies as well as housing for troops, 200,000 workmen in the united states were kept continuously occupied for the period of the war. the operations of the construction division constituted what was probably the largest contracting business ever handled in one office. the total expenditures in this enterprise to november 11, 1918, were about $800,000,000. construction projects were conducted in france by the corps of engineers under the services of supplies. up to the signing of the armistice these projects had been undertaken to the number of 831, distributed all over france. to economize tonnage, materials were obtained in europe as far as possible. the engineer corps ran its own quarries, and its own logging camps and saw-mills. the labor force consisted largely of american soldiers and german prisoners, though french and english civilians and chinese coolies were used wherever available. two hundred days of battle of our combat forces colonel ayres says: "two out of every three american soldiers who reached france took part in battle. the number who reached france was 2,086,000, and of these 1,390,000 saw active service in the front line. "american combat forces were organized into divisions, which consisted of some 28,000 officers and men. these divisions were the largest on the western front, since the british division numbered about 15,000 and those of the french and germans about 12,000 each. there were sent overseas 42 american divisions and several hundred thousand supplementary artillery and service of supply troops. "of the 42 divisions that reached france 29 took part in active combat service, while the others were used for replacements or were just arriving during the last month of hostilities. the battle record of the united states army in this war is largely the history of these 29 combat divisions. seven of them were regular army divisions, 11 were organized from the national guard, and 11 were made up of national army troops. "american combat divisions were in battle for 200 days, from the 25th of april, 1918, when the first regular division after long training in quiet sectors, entered an active sector on the picardy front, until the signing of the armistice. during these 200 days they were engaged in 13 major operations, of which 11 were joint enterprises with the french, british, and italians, and 2 were distinctively american. "at the time of their greatest activity in the second week of october all 29 american divisions were in action. they then held 101 miles of front, or 23 percent. of the entire allied battle line. from the middle of august until the end of the war they held, during the greater part of the time a front longer than that held by the british. their strength tipped the balance of man-power in favor of the allies, so that from the middle of june, 1918, to the end of the war the allied forces were superior in numbers to those of the enemy." [illustration: our flag in alsace a scene in alsace after the armistice when american doughboys occupied a small town. they were welcomed there by the inhabitants.] the total battle advances of the american divisions amounted to 782 kilometers, or 485 miles, an average advance for each division of 17 miles, nearly all of it against desperate enemy resistance. they captured 63,000 prisoners, 1,378 pieces of artillery, 708 trench mortars, and 9,650 machine guns. in june and july they helped to shatter the enemy advance toward paris, and to turn retreat into a triumphant offensive. it is stated in reference to the part played by the american divisions in the argonne-meuse that it was the 77th division of new york selective draft men that achieved the greatest advance against the enemy--71½ kilometers, or nearly 45 miles. in that battle the american army captured 16,059 prisoners, liberated 150 french towns and villages, and as an army penetrated 34 miles into territory previously held by the germans. the deadliest war in his chapter on "health and casualties," colonel ayres reminds us that "the war was undoubtedly the bloodiest that has ever been fought." the total battle deaths is given as 7,450,200. russia led the death list with 1,700,000; germany came next with 1,600,000; france next with 1,385,300; great britain next with 900,000; austria, 800,000; italy, 364,000; turkey, 250,000; serbia and montenegro, 125,000; belgium, 102,000; rumania and bulgaria 100,000 each; the united states, 50,300; greece, 7,000; portugal, 2,000. of every 100 american soldiers and sailors who took part, 2 were killed or died of disease during the period of hostilities. among the other nations between 20 and 25 in every 100 were killed or died. the total deaths were greater than all the deaths in all wars for more than one hundred years previous. in the above figures only deaths resulting directly from action are included. the total deaths from all causes is very much larger. some of the armies lost more heavily through disease and privation than from battle. with regard to civilians' deaths due to the war, see volume xii. [illustration: secretary of war baker drawing registration numbers the head of the war department is drawing for the first capsule after the registration of young men who have become of age in the past year. all told 24,000,000 names were registered in the draft. national service magazine] index a abbas hilmi, khédive of egypt, pro-turkish attitude, vi: 68. abbatiale farm, captured by 28th div., oct. 4, '18, v: 239. abbeville agreement, on u. s. military participation in war, v: 128, 284; text, v: 378. abi dinas, sudanese leader, defeated at eli tasher, iii: 191. abo, occupied by germans, mar. 16, '18, i: 395. _aboukir_, british cruiser, sunk by _u-9_, sept. 22, '14, iv: 205, x: 274-280, xi: 234. absinthe, sale forbidden in france, jan. 7, '15, i: 378. acceleration, in projectiles, viii: 111. achi baba, key to southern gallipoli, iii: 170; _see also_ gallipoli campaign. acre, taken by british, sept. 23, '18, iii: 199. activism, swedish pro-german movement, vi: 394. adana, british objective in turkish campaigns, ii: 90. adler, friedrich, kills austrian premier, count carl stürgkh, oct. 21, '16, vi: 312. adkinson, sgt. joseph b., gets congressional medal of honor, x: 395. _admiral charner_, french cruiser torpedoed, feb. 13, '16, i: 384. ador, gustave, becomes head of swiss foreign office, vi: 380. adramyti, gulf of, british bombard turks, mar. 3, '15, iv: 44. adrian barracks, description, v: 8. adriatic coast, disputed territory between latin and slav, vi: 359. advisory labor council, u. s., activities, xii: 71. a. e. g. bombing airplanes, viii: 221. aerial photography, in range-finding, ii: 126, viii: 14; gun cameras, description, viii: 216; value, viii: 226, 331; difficulties, viii: 228; u. s. photographers in war, viii: 228-235; future, viii: 234; _see also_ photography. aeronautics: airplanes, conditions for effectiveness, ii: 123; use of depth bombs by, iv: 332; torpedo planes, iv: 335; number shot down by u. s. pilots, v: 309; as war weapon, viii: _intro._, xi: 214; detection by sound-rangers, viii: 20; machine-gun mountings on, types, viii: 86, 189-192, 196, 208-216; allied and german equipment at start of war, viii: 189; farman plane, viii: 189; utility in scouting, viii: 189; albatross pursuit planes, viii: 192; nieuport scout planes, viii: 192; allied and german types compared, viii: 194; spad biplanes, viii: 194; general utility planes, viii: 196; gotha biplanes, viii: 196; handley-page bombers, viii: 196, 204, 223; aero engines, development of, viii: 198-200; liberty motor, viii: 199; construction, essentials in, viii: 200; maneuvering, types of, viii: 200; allied strength at end of war, viii: 201; french types, viii: 202, 206; british types, viii: 203-206; british planes, viii: 203; d. h. 10 british bombers, viii: 204; german equipment, viii: 206; pre-war record flights, viii: 206; national supremacy, viii: 207; machine-gun fire synchronizer, viii: 208; aerial marksmanship, viii: 210; "c. c. gear," for timing gunfire through propeller blades, viii: 214-216; navigating instruments, viii: 217-221; bombing planes, types, viii: 221-224; a. e. g. bombing planes, viii: 221; gotha bombers, viii: 221; lizenz bombing planes, viii: 222; caproni triplanes, viii: 223; caudron bombers, viii: 223; letord bombers, viii: 223; voisin bombers, viii: 223; breguet bombers, viii: 224; spruce in aircraft construction, viii: 308; signals for landing in dark, viii: 335; value in directing artillery fire, viii: 337, xi: 277; ambulance planes, viii: 379; u. s., in war, xi: 218; development, xi: 219; use against submarines, xi: 239; commercial uses, xii: 103. aviators, duties, iii: 392; kinds of patrol, iii: 392; fitness test by orientator, viii: 356-358; qualifications, xi: 215. balloons, development for war use, iv: 288; in naval operations, iv: 289; number shot down by u. s. pilots, v: 309; functions and handling of captive balloons, viii: 257-264; parachutes, use by military balloonists, viii: 260-263; hydrogen, use in inflation of, viii: 263. dirigibles, use in coast patrol, iv: 290; compared with airplanes, viii: 241-245; in long-distance transportation, viii: 243-245; british types, viii: 245; _r-34_, description, viii: 245, 254; _r-34_, crosses atlantic, viii: 245; u. s. types, viii: 245, 255-257; u. s. "blimps," viii: 245, 255-257; u. s. c-class, viii: 245, 255-257; mooring masts, viii: 245; development in different countries, viii: 254; _r-33_, sister ship of _r-34_, viii: 254; zeppelins, _see below_ under aeronautics. navigation, rules for, peace treaty provisions, xii: 246. observation, in range-finding, ii: 126, viii: 13, 337, xi: 277; uses of captive balloons, viii: 257-264; utility in war, xi: 216. seaplanes, in battle of jutland, iv: 107; for submarine spotting, iv: 285; u. s. _n-c-4_ first to cross atlantic, iv: 288, viii: 240; n-c flying boats, description, viii: 236-240. zeppelins, progress in construction, '14--'18, viii: 241; use during war, viii: 246-248; description, viii: 248-254; number in crew, viii: 254. _see also_ under each country. aeroplane, see aeronautics, airplane. afghanistan, put outside russian sphere by anglo-russian agreement, '07, i: 104; friendly to england during war, vi: 78; changed attitude toward british, '19, vi: 80; border warfare with india, '19, vi: 81. africa, dark continent, i: 10; european penetration, i: 48; "spheres of influence," i: 96. african campaigns, iii: 250-256; tropical peculiarities, iii: 250; german handicaps, iii: 252; operations in cameroons (kamerun), iii: 252; in togoland, iii: 252; in german southwest africa, iii: 253; in german east africa, iii: 255. agadir incident, germany creates moroccan crisis, july, '11, i: 104, 203. _agamemnon_, british battleship at gallipoli, iv: 31; hit by gunfire, iv: 43. agram, suppression of jugoslav national congress at, mar., '18, vi: 363. ahmed fevzi, turkish commander at erzerum, iii: 262. aincreville, captured by 90th div., nov. 1, '18, v: 262. air raids, ludendorff's plan to burn allied capitals, ii: 333; use of zeppelins in, viii: 246; success of, xi: 216; on: england, aug. 9, '15, i: 381; aug. 17, '15, i: 381; sept. 8, '15, i: 381; oct. 13, '15, i: 382; jan. 31, '16, i: 384; mar. 1, '16, i: 384; mar. 5, '16, i: 384; mar. 19, '16, i: 384; apr. 1--3, '16, i: 385; apr. 24, '16, i: 385; aug. 9, '16, i: 386; sept. 23, '16, i: 388; sept. 25, '16, i: 388; oct. 1, '16, i: 388; attacks on undefended coast towns, ii: 266, vi: 4; first attack on london, iii: 41. paris, jan. 30, '16, i: 384; mar. 11, '18, i: 395. air speed indicator, for airplanes, viii: 220. aircraft, _see_ aeronautics. aire valley, description, v: 73; scene of action in meuse-argonne offensive, v: 225. airships, _see_ aeronautics. aisne, battles of: sept., '14, i: 375, 376, iii: 36. apr.--nov., '17, iii: 73-76; french start offensive, iii: 73; early french success, iii: 73; battle for chemin des dames, iii: 73; germans driven from chemin des dames, iii: 76. may 27--june 5, '18, iii: 92-95, v: 129-135; situation before german offensive, iii: 92; soissons-rheims salient, iii: 93; germans cross vesle river, iii: 93; soissons captured by germans, may 29, iii: 93; château-thierry captured by germans, june 1, iii: 93; germans reach marne, iii: 93; american troops check enemy, iii: 94. aisne-marne offensive, v: 130, 158-183; artillery, important feature, v: 171; a. e. f. casualties, v: 179, 181. aisne-meuse sector, franco-american offensive, nov, 1--11, '18, iii: 103. aisne-ourcq sector, struck by foch, '18, ii: 84. aix-les-bains, a. e. f. leave area, "y" work in, vii: 269. akabah, occupied by british, nov. 3, '14, i: 376. ala, captured by italians, may 29, '15, iii: 234. aland island, occupied by germans, nov. 9, '17, i: 392. alaska, acquisition by u. s., i: 52. albania, primitiveness of people, i: 92; william of wied becomes ruler, i: 206; allied offensive in, july, '18, i: 397; serbians retreat into, iii: 160; italy takes possession, dec. '14, vi: 120; promised to italy, '15, vi: 361. albatross pursuit planes, viii: 192. albert, captured by british, ii: 157, iii: 98; captured by germans in second somme battle, iii: 89. albert, dr. heinrich, german propagandist in u. s., i: 133, x: 327. albert, king of belgians, biography, ix: 385-391, xi: 128-131. _albert of belgium_, poem by dana burnet, i: 228; by dorothy s. phillips, ix: 391. _albion_, british battleship at gallipoli, iv: 31. albrecht, grand duke of württemberg, army commands, ii: 184, iii: 10. _alcantara_, british armed liner, sinks german _greif_, iv: 200. _alcedo_, american ship torpedoed, nov. 6, '17, i: 392. aldis optical sight, use in aerial marksmanship, viii: 211. aleppo, captured by british, oct. 25, '18, iii: 200. alexander, crown prince of serbia, re-enters belgrade, dec. 15, '14, iii: 397; foreign policy, vi: 355; head of united jugoslavs, vi: 366. alexanderson alternator, for generation of radio waves, viii: 316-318. alexandria, captured by germans, nov., '16, i: 389, iii: 222. alexieff, gen. michael vassilivitch, commands russian forces in poland, iii: 140; biography, ix: 238. algeciras conference, '06, i: 86, 99, 203. algeria, french occupation of, i: 37. _algonquin_, american steamer sunk by u-boat, mar. 2, '17, i: 349. all-american (82nd) division, _see_ u. s., army. all-russian congress of workmen's and soldiers' delegates, convention of, '17, vi: 164. all-russian government of siberia, formation, vi: 191; collapse, vi: 193. allen, corp. jake, gets congressional medal of honor, x: 396. allen, maj.-gen. henry t., commands 90th div., v: 196; in st. mihiel drive, v: 202. allenby, gen. sir edmund h. h., british commander in palestine, ii: 90, iii: 193; defeats turks, ii: 92, 218, v: 213; captures jerusalem, ii: 92, iii: 322, xi: 48; strategy of palestine campaign, ii: 93; at first battle of ypres, ii: 171; commands british cavalry at mons retreat, iii: 25; biography, ix: 194-199. allenstein, russians defeated at, aug. 26, '14, i: 375; occupied by russians, iii: 111. alliances, holy alliance, formation, i: 33; conflict of european, i: 93-101; three emperors' league, i: 95; triple alliance, i: 95, 208, 255, ii: 4, 48, vi: 115; entente cordiale, between france and russia, i: 98; triple entente, i: 98, 103, 106, 146, 218, 220, ii: 2; anglo-japanese, '05, '11, i: 104, 107; balkan league, i: 204; _see also_ under name of alliance. allied home for munition workers, vii: 108. allies, superiority in inventiveness, i: _intro. ix_; agree not to make separate peace, i: 146; defensive policy compared with german aggression, ii: 1; lack unity of command, ii: 22, 40, 58, 230, iii: 55; unsuccessful in all theaters of war during '15, ii: 36, 50; unite command under foch, ii: 40, 218, v: 120, 214; man-power, ii: 82, 115, 154, iii: 403; "will to win" _vs._ german efficiency, ii: 100; underestimate german strength, ii: 101; propaganda among german troops, ii: 321; plan of campaign against german invasion of france, iii: 8; balkan blunder, iii: 156; fail to support rumania, iii: 214; casualties, iii: 404; prisoners of war, iii: 404; war aims, iv: 6; military position, '17, iv: 10; lack aggressive plan in mediterranean, iv: 13; gain superiority in air for first time, sept., '18, v: 206; make simultaneous attacks on all fronts, sept., '18, v: 213; appeal for u. s. troops, v: 373-375, 378; secret treaty with italy, apr., '15, vi: 122, 361; send troops to russia, vi: 187; intervene in siberia, vi: 192; intervene in austria, '19, vi: 320; occupy hungary, '19, vi: 325; secret treaties, '16--'17, dispose of asiatic turkey, vi: 334; overcome german superiority in artillery, viii: 36; war cost, xii: 27, 107; plan of economic boycott against germany, xii: 102; rise in national debts, xii: 114; list of "allied and associated powers" against germany, xii: 179. allworth, capt. edward s., gets congressional medal of honor, x: 391. almereyda, traitorous editor of _bonnet rouge_, vi: 105. _alnwick castle_, british ship sunk without warning, mar. 19, '17, iv: 230. alpini, description, ii: 242. alsace-lorraine, early history, i: 210-212; annexed by germany, 1871, i: 212; formed into _reichsland_, i: 213; german dictatorship in, i: 213; fidelity to france during war, i: 215; german immigration into, i: 215; german constitution for, '11, i: 215; french invasion of, during war, i: 375, 376, iii: 14-21; peace treaty provisions for return to france, xii: 194-197; exempt from share in german national debt, xii: 226. altimeter, airplane altitude indicator, viii: 220. altkirch, taken by french aug. 7, '14, iii: 16. alvensleben, g. c. a. von, german financier and spy, sensational career, x: 363-368. _amalfi_, italian cruiser sunk by austrian u-boat, july 7, '15, i: 380, iv: 369. amara, taken by british, may, '15, iii: 181. ambrine, use in treatment of burns, viii: 290. ambulance, first use, vii: 9; red cross companies, location, vii: 30-31; difficulties of transporting wounded, viii: 376; improved types of stretchers, viii: 377; drawn by dogs, viii: 379; airplane ambulances, viii: 379; hospital trains, viii: 380; perils of driving, x: 92. american committee for armenian and syrian relief, vii: 92. american committee for devastated france, vii: 92. american committee for relief of belgian prisoners in germany, vii: 88. american escadrille, _see_ lafayette escadrille. a. e. f., _see_ u. s., army. american fund for french wounded, vii: 89. american jewish committee, relief for belgium, vii: 350; relief for palestine, vii: 350; organization, vii: 354. american relief administration, for feeding newly liberated peoples, xii: 141; herbert hoover director-general, xii: 141. american students' committee of école des beaux arts, vii: 108. american women's war relief fund, vii: 89, 91. amerongen, residence of kaiser after abdication, vi: 278. ames, winthrop, helps start over-there theater league, vii: 339. amiens, strategic importance, ii: 69; german attacks on, unsuccessful, apr., '18, ii: 152, 314, iii: 389; british offensive, aug. 8, '18, ii: 281. aminullah khan, murders father and succeeds to throne of afghanistan, vi: 81. ammunition: bullets, component parts, viii: 1; steel-piercing, viii: 60-64; clay armor-piercing, description, viii: 60-63; advantages of sharp-nosed, viii: 93; types used in aerial fighting, viii: 211-214; u. s. war output of rifle ammunition, xii: 284. explosives, function, viii: 1; detonation compared with explosion, viii: 1; explosive _compound_ and explosive _mixture_ compared, viii: 2; black powder, viii: 2; guncotton, viii: 2; nitrogen necessary in, viii: 2; driving power of gunpowder, viii: 2; smokeless powder, viii: 4; primers, viii: 6; composition and properties of different kinds, viii: 6; cordite, viii: 6; trinitrotoluol (t.n.t.), viii: 6; ballistic tests, viii: 7; muzzle flash, viii: 7; manufacture, xi: 282-284; u. s. war production of smokeless powder, xii: 285; of high explosives, xii: 285; of t.n.t., xii: 285. shells, high explosive, compared with shrapnel, ii: 288; non-ricochet, iv: 333; star, iv: 334, viii: 77; gas, u. s. production, v: 324; kinds, viii: 8; used by u. s. 3-in. field guns, viii: 23; structure of "big bertha" shells, viii: 46; illuminating shells and bombs, viii: 74; rifle lights, viii: 75; reason for rotating motion in flight, viii: 110; forces determining path of flight, viii: 111-112; computation of air resistance, viii: 113; u. s. war production of artillery ammunition, xii: 284; shrapnel, _see below_. shrapnel, compared with high explosive shell, ii: 287; invention, viii: 72; description, viii: 72; manufacture, viii: 72-74. amputation, new method of, viii: 367. anatolia, area, xii: 279; population, xii: 279. anatolian railway co., gets concessions in turkey, 1888, ii: 292. _ancona_, austria-hungary promises reparation for sinking, i: 326, 384; controversy between u. s. and austria-hungary over sinking, summary, i: 361; torpedoed by austrian u-boat, i: 382, iv: 223. ancre sector, british offensive, ii: 212, iii: 64, 66. anderson, sgt. johannes s., gets congressional medal of honor, x: 396. andrassy, count julius, member hungarian independence party, vii: 311; statement on communist government, vii: 328. andrews, brig.-gen. avery d., chief of g-1, g. h. q., a. e. f., sept., '17, v: 102. anglo-french loan, floated in u. s., xii: 111. annunzio, gabriele d', _see_ d'annunzio. anti-aircraft guns, range, ii: 264; effectiveness, v: 308. anti-din compound, amount issued by u. s. army, v: 324. _antilles_, u. s. transport torpedoed, oct. 17, '17, i: 392, iv: 337; eye-witness account, iv: 337. antioch, captured by british, jan. 30, '18, i: 393. antivari, surrender to austrians, jan. 20, '16, i: 384. antwerp, belgian government moves to, aug. 17, '14, i: 375; captured by germans, oct. 8, '14, i: 376, ii: 143, 168, iii: 15; strategic value controlled by dutch, vi: 375. anzac cove, landing place of british troops at gallipoli, ii: 30, iii: 170. anzacs, _see_ gallipoli campaign. apponyi, count albert, advocates war, vi: 307; leader of hungarian independence party, vi: 311. aprémont, location in st. mihiel salient, v: 199; captured by 28th div., sept. 28, '18, v: 229. arabia, revolt against turkey, iii: 196, vi: 333. _arabia_, british steamer sunk by u-boat, nov. 6, '16, i: 334. _arabic_, british steamer sunk by u-boat, aug. 19, '15, i: 323, 381, iv: 223, xi: 20; loss of life in sinking, i: 323; controversy between u. s. and germany on sinking, summary, i: 361. arabs, with turkish forces invading egypt, iii: 190. arbitration, tribunal established by first hague conference, i: 94; international treaties of, i: 103. archangel, allies land forces at, apr. 21, '18, i: 395; limited value as port, iii: 161; a. e. f. sent to fight bolsheviki, v: 394, vi: 187. archangel, mt., french attack bulgars, nov. 9--19, '15, iii: 204. ardahan, turks defeated by russians at, jan. 3--4, '15, i: 378. ardennes, strategic importance, ii: 6; topography, ii: 87, v: 73; french retire from, aug., '14, iii: 20. arditi, description, ii: 240. _arethusa_, british cruiser sunk by mine, feb. 14, '16, i: 384; in battle of heligoland bight, iv: 240; sinks german _blücher_ at dogger bank, iv: 247. argentine, german population of, i: 79; ultimatum to germany, sept. 22, '17, i: 390; neutrality, vi: 389; soviet riots, '19, vi: 389. arges river, rumanian stand at, iii: 222. argonne forest, military topography, v: 73, 217, 234; battle of, _see_ meuse-argonne offensive. _ariadne_, german cruiser in battle of heligoland bight, iv: 240; sunk, iv: 241. arietal farm, taken by 26th inf., oct. 5, '18, v: 240. _ark royal_, mother-ship for british aircraft at gallipoli, iv: 43. armaments, international movement for reduction, i: _intro. xi_; battleships, xi: 280-282. armenia, military operations in, iii: 260-263; massacres in, by turks, iii: 405, vi: 331; early history, vi: 231; fate under secret treaties of '16--'17, vi: 334; independent government established. aug., '18, xii: 279; area, xii: 279; population, xii: 279. armenian and syrian relief, american committee for, vii: 92. armentières, occupied by germans, apr., '18, i: 395, ii: 75, iii: 359; recaptured by british, oct. 2, 18, i: 399, iii: 101. armies, _see under_ name of country. armies of occupation, allied, expense to be paid by germany, xii: 226; conditions for withdrawal, xii: 261. armistice, with bulgaria, sept. 30, '18, i: 399, vi: 347; with germany, nov. 11, '18, i: 399, iii: 402, iv: 142-144, v: 391, vi: 271, xi: 54; false report in u. s., of signing, nov. 7, i: 399, iii: 400; terms extended, dec. 11, '18, i: 399; with austria-hungary, nov. 3, '18, iii: 400; celebrations, iii: 402; with turkey, oct. 31, '18, vi: 334. armor, use in modern warfare, viii: 59, 69. army educational commission, american y. m. c. a., vii: 282. army of occupation, _see_ u. s., army. army schools, u. s., _see_ u. s., army. arnim, gen. von, commander 6th german army corps, iii: 14; launches last attack on ypres, iii: 360. arras, battle of, apr., '17, ii: 341, iii: 70-72; vimy ridge captured by canadians, iii: 70; british capture "oppy line," iii: 72; german casualties, iii: 72; results, iii: 72. arras-roye sector, british offensive, mar., '17, iii: 68. arsiero, captured by austrians, may 28, '16, i: 385, iii: 238; retaken by italians, june 27, '16, i: 386. artificial eyes, for war blind, viii: 391. artificial limbs, for war cripples, viii: 384-390. artillery: anti-aircraft, v: 308. bore, explained, viii: 7, 111; bore pressure in modern guns, viii: 7; rifling, viii: 7, 111. durability, viii: 7, 26, xi: 280. field, french 75-mm. gun, ii: 287; german and austrian, viii: 22; structure and operation, viii: 22; u. s. pre-war equipment, viii: 22-25; u. s. 3-in. gun, viii: 23; u. s. 2.95-in. mountain gun, viii: 24; u. s. 4.7-in. gun, viii: 24; development of light guns to accompany infantry, viii: 140; french 37-mm. quick firers, viii: 140. heavy, mobile german guns, ii: 287; german superiority, ii: 288; u. s. naval batteries on western front, iv: 323, viii: 42-45; use in offensive, v: 304; french 155-mm. g. p. f. gun, v: 308; u. s. railway-mount guns, viii: 36-39; u. s. caterpillar-mount guns, viii: 39; long-range bombardment of paris, viii: 45-47, xi: 271-274; structure of shells hitting paris, viii: 46; super-range guns impractical, viii: 47; u. s. 121-mile range super-gun, viii: 48-51; british naval super-guns, viii: 53; manufacture of big guns, viii: 54-58; shell velocity of, viii: 314; destructive power of 16-in. gun, viii: 336; kinds used during war, xi: 274; naval, xi: 280-282. howitzers, skoda, viii: 22, xi: 278; u. s. pre-war types, viii: 24; u. s. railway-mount types, viii, 38, 39; french 520-mm. (21-in.) gun, viii: 51-53; use against forts and trench systems, xi: 274. importance, field marshal haig's report on, ii: 123-131. mortars, limitations, viii: 30; range of latest u. s. types, viii: 31; german 11-in. siege mortars, viii: 34-36; absence of rifling in bore, viii: 112; device for rotating shell during flight, viii: 112; functions, viii: 118; stokes mortar, viii: 141; trench mortars captured by a. e. f., xii: 288. range-finding, muzzle velocity, viii: 7; by sight, viii: 8-14; telescopic range-finder, viii: 9; problem of marksmanship, viii: 10-13; use of aircraft in, viii: 13; by sound, viii: 14-16; use of photography in, viii: 14; direct and indirect fire, viii: 28; zones of fire, viii: 32; altering range by change of projectile and powder charge, viii: 32; air-resistance to flying projectile, viii: 113. _see also_ under each country. artistic rights, peace treaty provisions for re-establishment of, xii: 244-246. artois, allied offensive in, '15, ii: 148, iii: 46; battle of, may, '14, iii: 42. asiago, austrians reach, may 28, '16, i: 385, iii: 238. asir, principate of, established, '18, xii: 279. _askold_, russian cruiser at gallipoli, iv: 41. asquith, herbert henry, responsibility for gallipoli disaster, ii: 198, 200, 202, 204; biography, ix: 30-35. association of highland societies of edinburgh, viii: 95. astor, mrs. vincent, "y" worker in paris, vii: 267. _asturias_, british hospital ship torpedoed, mar. 20, '17, iv: 232. athletics, for a. e. f., _see_ sports. atkins, tommy, nickname for british soldier, origin of, vi: 230; fighting qualities, xi: 181-189. atrocities, german, summary of crimes, i: 400; ludendorff's explanation, ii: 346; burning of louvain, iii: 273-277; in marne district, iii: 297-300; at senlis, iii: 334-337; in belgium, vi: 84; destruction of rheims cathedral, vi: 97. aubers ridge, battle of, iii: 42. _audacious_, british battleship sunk by u-boat, oct. 27, '14, i: 376. audenarde, taken by 91st div., nov. 2, '18, v: 279. auffenberg, gen. von, commands austrian army invading poland, iii: 118. augustovo, battle of, german defeat at, iii: 118. australia, war casualties, iii: 404, 405; army strength, iii: 405; naval strength, iv: 58; history prior to '14, vi: 37; area and population, vi: 37; pro-war platform of liberal party, vi: 39; recruiting opposed by socialists, vi: 40; conscription opposed by labor party, vii: 41, 42; conscription defeated by referendum, oct., '16, vi: 41; labor unrest, '16, vi: 42; labor party split on conscription, vi: 42; coalition government formed, feb., '17, vi: 42; "commonwealth war government" takes office, feb., '17, vi: 42; australian workers' union, similar to american federation of labor, vi: 45; "one big union" movement, vi: 45; labor vote defeats conscription referendum second time, '17, vi: 45; war legislation by nationalists, vi: 45; soviet government favored by labor, vi: 46; war cost, aug., '14--mar., '19, xii: 107; rise in public debt, xii: 114; peace conference delegates, xii: 179. austria, republic established, nov. 13, '18, vi: 318; germany acknowledges independence of, '19, xii: 197; area and population, xii: 279. austria-hungary: army, german estimate of effectiveness, ii: 4; pre-war organization, iii: 7, 105; requirements reduced, '15, vi: 311; for military operations, _see_ name of campaign. blockade of, vi: 253; food shortage due to, vi: 312. casualties, total in war, ii: 116, iii: 404; battle deaths, v: 363; aug., '14--aug., '15, vi: 311; money equivalent of manpower lost, xii: 25. coal, production, '13--'17, xii: 48. cost of living, per cent. rise during war, xii: _intro. x._ declarations of war, ultimatum to serbia, july 23, '14, i: 112, 375, vi: 306, 357, xi: 4; on serbia, july 28, '14, 1: 115, 375; reasons for war on serbia, i: 243; on russia, aug. 6, '14, i: 375; by great britain, aug. 12, '14, i: 375; on belgium, aug. 28, '14, 1: 375; by rumania, aug. 27, '16, 1: 386; diplomatic relations broken with u. s., apr. 8, '17, i: 389; by china, aug. 14, '17, i: 390; by u. s., dec. 7, '17, i: 393. food shortage, vi: 312, 314, 317, 321; forces demand for peace, vi: 314, 317; cause of revolt, apr., '19, vi: 321. foreign policy, german foreknowledge of ultimatum to serbia, i: 8, 133-136, 252; not a colonizing nation, i: 37; austro-prussian war, 1866, i: 41; world position in 1871, i: 47; gets control of bosnia-herzegovina, i: 50; subservience to germany, i: 79, 133; joins triple alliance, i: 95; annexes bosnia-herzegovina, i: 109; ultimatum to serbia, july 23, '14, i: 112, 375, vi: 306, 357, xi: 4; during last days before war, i: 126; unity of austro-german interests, i: 208; reasons for war on serbia, i: 243; antagonism to russia, vi: 306; antagonism to italy, vi: 308; ambition to incorporate jugoslavs in empire, vi: 355; opposition to serbian aspirations, vi: 356; anti-slav policy, vi: 360; suppression of czechoslovak nationalism, vi: 396. internal conditions, race rivalries, i: 21, ii: 63, vi: 306; loyalty of german elements, vi: 307; revolution suppressed, '14, vi: 308; effect of italian declaration of war, vi: 309; parliamentary disturbances, '15--'16, vi: 311; labor troubles, vi: 311, 314; revolution threatened, '16, vi: 313; revolution breaks out, '18, vi: 317; republic established, nov. 13, '18, vi: 318; bolshevism, vi: 319. national anthem, xi: 332. navy, development, iv: 364; surrender to jugoslavs, vi: 364; _monarch_ sunk, x: 290; _wien_ sunk, x: 290; _viribus unitis_ sunk by italians in pola harbor, x: 297-303. peace negotiations, proposal to u. s. through swedish minister, sept. 16, '18, i: 397; appeal to u. s., oct. 7, '18, i: 399; asks u. s. for armistice, oct. 27--29, '18, i: 399; emperor charles' secret peace offer, '17, ii: 63, vi: 315; asks italy for armistice, ii: 252; armistice signed, nov. 3, '18, iii: 400, vi: 271, xi: 52; peace treaty terms, vi: 321; armistice terms, vi: 364. population, in 1860, i: 40; german, i: 79, vi: 306; hungarian, i: 79; slav, i: 79. press, _tageblatt_ demands war, '14, vi: 306; attack on italy, '15, vi: 310; attitude on labor strikes, '18, vi: 314; _arbeiter zeitung_ preaches radicalism, vi: 315; comment on peace terms, vi: 322. prisoners of war, iii: 404. war cost, money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; average daily war cost, xii: 106; total war cost, july, '14--oct., '19, xii: 107; rise in national debt, xii: 114. authe, seized by 79th div., nov. 4, '18, v: 266. autocracy, destruction of, by war, i: _intro. x._ autrecourt, captured by 77th div., nov. 6, '18, v: 269. averescu, gen., rumanian commander in wallachia, iii: 222. aviators, _see_ aeronautics. avlona, occupied by italy, dec., '14, vi: 120. avocourt woods, french retire from, mar. 21, '16, i: 384; scene of fierce battle at verdun, iii: 51. _ayesha, s. s._, _emden's_ landing party escapes from keeling island in, iv: 186, 191; abandoned, iv: 192. aylmer, gen., commands british force sent to relieve kut-el-amara, iii: 184. ayres, col. leonard p., extracts from _the war with germany--a statistical summary_, by, xii: 280-289. b babtie, surg.-gen. responsibility for lack of medical service in mesopotamia, iii: 367. "babushka," pet name of catherine breshkovsky, q.v., ix: 348. baccarat sector, assigned to a. e. f., v: 11; training area for 42nd div., v: 118. bacteriology, in disease prevention, vii: 253. badonviller, german attack at, v: 21, 28. bagdad, captured by british, mar. 11, '17, i: 389, ii: 92, iii: 187, xi: 29, 48; description, iii: 332. bagdad railway, german plan for connecting berlin with bagdad, i: 80; anglo-german agreement for joint control, '14, i: 200, ii: 13, 295; menaced by serbia, ii: 33; "largest single factor in bringing on the war," ii: 290; beginnings, 1871, ii: 291; anatolian railway co. gets concessions in turkey, 1888, ii: 292; germans get concession to build road from haidar pasha to angora, 1888, ii: 292; british oppose german concessions, ii: 292; german emperor visits sultan, 1898, ii: 292; _la société impériale ottomane du chemin de fer de bagdad_, terms of concession to, ii: 292; germans get privilege to extend line to bagdad, ii: 292; clash of european interests, ii: 292; compromise of clashing interests, ii: 294; sections finished, aug., '14, ii: 294; pan-german policy, ii: 296; internationalization, ii: 297; cut by fall of nish, oct., '18, iii: 213; opened, '15, vi: 258; route, xi: 4. bagley, lieut.-com. david w., commander of u. s. destroyer _jacob jones_, sunk by u-boat, iv: 346. bailey, maj.-gen. charles j., commands 81st div., v: 197. bailleul, captured by germans, iii: 360. bainsizza plateau, italian offensive, aug., '17, ii: 58, iii: 240. baker, newton d., biography, ix: 323-326; conference with marshal foch at trois fontaines, xii: 285. bakeries, constructed by a. e. f. in france, v: 333, 400. bakhireff, vice-adm., commands russians in battle of riga gulf, iv: 366. balance of power, early wars for, i: 28. balfour, rt. hon. arthur james, biography, ix: 40-44; visits america, ix: 44. balkan league, i: 204. balkan wars, '12--'13, i: 109, 204; unsatisfactory peace settlement, i: 110; sir edward grey's efforts to prevent general european war, i: 198; london ambassadorial conference, i: 204; london peace conference, i: 204; war between bulgaria and rest of balkan allies, i: 206; rumanian intervention, i: 206; peace terms, i: 206; german incitement, i: 207, ii: 27. balkans, conflagration center of world war, i: 1, 89; international position in '14, i: 62; area, i: 90, 92; independent states in, i: 92; population in '14, i: 92; racial mixtures, i: 92; policy of great powers, i: 92, 114; german dynasties in, i: 96; german designs on, ii: 27; civilian deaths from disease and famine, iii: 405. ball, capt., air duel with capt. immelmann, x: 209-211, xi: 228. ballin, herr, head of hamburg-american line, i: 264. ballistics, computation of air resistance to flying projectile, viii: 113. balloons, _see_ aeronautics. ballou, maj.-gen. charles c., commander 92nd div., v: 145. baltic provinces, early history, vi: 226; russian duplicity in, vi: 226; under domination of german landlords, vi: 226; revolt, '05, vi: 227; form lettish legion, vi: 227; bolshevik propaganda in, vi: 228; overrun by germans, vi: 230; ask recognition by peace conference, vi: 238. _baltimore_, u. s. cruiser used in laying north sea mine barrage, iv: 326. bamberg, seat of bavarian government during spartacide revolution, mar.--may, '19, vi: 300. bamford, brig.-gen., commander 1st div., v: 250; of 26th div., v: 252. banitza, occupied by bulgars, aug. 19, '16, iii: 208. banking indicator, on airplanes, viii: 221. bantheville, captured by 90th div., oct. 22, '18, v: 252. bapaume, taken by british, aug. 28,'18, i: 397, ii: 157; british objective in somme battle, iii: 55; captured by british, mar. 17, '17, iii: 68. bar-sur-aube, rest area for 26th div., v: 118. barbed wire, french use in trench defense, v: 13; impenetrable cloth as protection against, viii: 68; value as defensive barrier, viii: 136, 152; french devices for destruction of, viii: 152-155; breton-prepot cutter, viii: 152; gabet-aubriot electric torpedo for destruction of, viii: 154. barger, pvt. charles d., gets congressional medal of honor, x: 400. barkeley, pvt. david b., gets congressional medal of honor, x: 401. barkley, pvt. john l., gets congressional medal of honor, x: 390. barracks, adrian type, v: 8; constructed in france by a. e. f., v: 332, 400. barrage, north sea, allied mine, iv: _intro. xi_, 324-330, viii: 274; artillery, viii: 136-140, x: 162. barrett, sir arthur, commands british troops in mesopotamia, iii: 180. barricourt wood, taken by 89th div., nov. 1, '18, v: 262; heights captured by fifth corps, v: 391. barrow, sir edmund, responsibility for mesopotamian failure, iii: 364. bart, pvt. frank j., gets congressional medal of honor, x: 388. barth, brig.-gen. charles h., commander 81st div., v: 197. bartlett, brig.-gen., commander, expeditionary brigade, coast artillery corps, v: 305. barton, clara, mother of american red cross, vii: 12. baruch, bernard m., chairman, u. s. war industries board, xii: 72; member advisory commission, u. s. council of national defense, xii: 116. base hospitals, _see_ hospitals; red cross. bases, german, in france, ii: 86. basra, occupied by british nov. 21, '14, i: 376, iii: 180; british base for mesopotamian expedition, ii: 91, iii: 330. battalion of death, russian women's, x: 183-185, xi: 205. battles: aisne, sept., '14, i: 375, 376, iii: 36; apr.--nov., '17, iii: 73-76; may 27--june 5, '18, iii: 92-95, 129-135. allenstein, aug. 26, '14, i: 375. amiens, ii: 152, 281, 314, iii: 389. ardahan, jan. 3--4, '15, i: 378. argonne, _see_ meuse-argonne offensive. arras, apr. 9, '17, ii: 341, iii: 70-72. artois, may 9, '14, iii: 42. augustovo, iii: 118. "battle of france," sept.--nov., '18, iii: 100-103. belleau wood, iii: 94, v: 135-139, 192, 382, xi: 43. cambrai, nov., '17, i: 392, 393, ii: 280, iii: 80-82, 337-340, viii: 142, 156; sept.--oct., '18, ii: 281, iii: 101, v: 213, xi: 52. cantigny, may 28, '18, i: 395; '18, iii: 94, v: 31-34, 122, 124-128, 141, 380. champagne, sept., '15, i: 382, ii: 25, iii: 46; july 15--17, '18, v: 47, 129, 148-158. château-thierry, may 31--june 3, '18, v: 35, 130, 134-135, 381-382, xi: 43. chemin des dames, may 27, '18, i: 395, ii: 76, 154, v: 132. coronel, '14, i: 376, iv: 64-68, ix: 308. ctesiphon, iii: 182, 367, 384. dogger bank, jan. 24, '15, iv: 246-253. falkland islands, dec. 8, '14, i: 376, iv: 69-85, ix: 308. flanders, june--july, '17, ii: 56, 343, iii: 38, 40, viii: 299; _see also_ yser. heligoland bight, i: 375, iv: 240-243, xii: 205. isonzo, _see_ italian front. jadar, '14, ii: 32, iii: 152. jutland, may 31, '16, iv: 99-136, 144-156, 256, 258, xi: 29. kars, '15, iii: 260. kut-el-amara, i: 382, 385, 389, iii: 181-183, 318-320, 364, xi: 29. le cateau, '14, ii: 162, 174, 176-182, iii: 23. liége, i: 143, 375, ii: 348, iii: 10, xi: 9. lys, iii: 91. marne, sept., '14, i: 375, ii: 9, 82, 103, 138, 140-142, 182-184, 220, 227, 258, iii: 30-34, xi: 12; july--aug., '18, ii: 77, 154, 322-324, 326, iii: 95, v: 47-61, 129, 148-183, 382, viii: 148, x: 381-387. mazurian lakes, i: 378, iii: 113-116, 130. messines ridge, i: 395, ii: 56, iii: 74, 76, 77, 360. mons-charleroi, aug. 21--23, '14, i: 375, ii: 162, iii: 277-281, xi: 10. neuve chapelle, mar., '15, iii: 41, 375. passchendaele ridge, i: 392, 395, ii: 56, iii: 79, 360, v: 377. passenheim, aug., '14, iii: 116. ravaruska, sept. 4--10, '14, iii: 122. riga, oct. 18, '17, i: 392. st. mihiel, sept. 20, '14, iii: 37; sept. 12, '18, ii: 84, iii: 99, v: 65-72, 199-212, 309, 384-386, xi: 46. san, may 15--17, '15, i: 380, iii: 136. sarre, aug., '14, iii: 18. somme, july, '16, i: 386, ii: 44-47, 126, 148, iii: 55-68, 314; mar., '18, iii: 86-90, xi: 24; aug., '18, ii: 331, xi: 46. tannenberg, aug. 26, '14, i: 375, ii: 24, 228, 353, iii: 112-116. vaux, i: 385, ii: 189, iii: 52, 54, 62, 306, 313, 327-329; _see also_ verdun. verdun, i: 268, 376, 384, 388, 390, ii: 36-39, 47, 67, 186-189, iii: 46-55, 61, 62, 79, 302-315, 327-329, viii: 289-291, xi: 22. vimy ridge, i: 46, 47, 70, iii: 343-349. ypres, nov., '14, i: 376, ii: 144, 170, iii: 41; apr., '15, ii: 170, 222, iii: 42, 320; july--sept., '17, ii: 128; apr., '18, ii: 153, iii: 359-363. yser, oct., 14, i: 376, ii: 220, iii: 40; july, '17, iii: 77. _see also_ under name of engagement. bauer, herr gustav, chosen head of german cabinet, june, '19, vi: 304. bauer, otto, leader of austrian maximalists, vi: 314; activities, '18, vi: 318; becomes minister of foreign affairs, '19, vi: 319. baulny, captured by 35th div., sept. 28, '18, v: 227. bavaria, socialist republic proclaimed, nov., '18, vi: 273, 280; revolt against kurt eisner, feb., '19, vi: 298; soviet republic proclaimed, feb., '19, vi: 298, 300; revolutionary tribunals in control of munich, mar., '19, vi: 300; peasants' union declares food blockade against munich, mar., '19, vi: 300. bavarian digging song, xi: 339. bayonet fighting, use in modern warfare, viii: 105-110. bayonville, captured by 2nd div., nov. 1, '18, v: 263. beatty, adm. sir david, at battle of jutland, iv: 99; british commander at battle of heligoland bight, iv: 240; at battle of dogger bank, iv: 246; arranges for surrender of german fleet, iv: 383; biography, ix: 283-287. beauclaire, captured by 89th div., nov. 3, '18, v: 265. beaucourt, captured by british, nov. 14, '16, i: 388; british gain control of valley, jan., '17, iii: 64. beaufort, taken by 89th div., nov. 4, '18, v: 266. beaulencourt-loupart line, captured by british, mar., '17, iii: 64. beaumont, taken by germans, feb. 23, '16, iii: 48; germans driven from, by british, iii: 64; captured by 2nd and 80th divs., nov. 5, '18, v: 266. beaune, a. e. f. university at, v: 106, vii: 282. beauquesne, training area for 27th div., v: 290. bebel, herr, personal sketch, vi: _intro. ix._ bedouins, join turks invading egypt, iii: 190. beersheba, captured by british, oct. 31, '17, iii: 194. beirut, taken by french, oct. 10, '18, iii: 199. beit lekia, taken by british nov. 19, '17, iii: 194. bela kun, hungarian bolshevik leader, activities, vi: 324-326. belfort, defenses of, iii: 2, v: 215; bombarded by germans, jan., '16, iii: 48. belgian relief, _see_ belgium; war relief. _belgian prince, s. s._, sunk by u-boat, july 31, '17, iv: 232. _belgium, 1918_, poem by sheril schell, xi: 84. belgium: army, increase in, '09--'12, i: 144; dependence on germany for munition supply, i: 234; german estimate of effectiveness, ii: 4; escapes from antwerp, oct. 9, '14, ii: 143; pre-war organization, iii: 4; mobilized, june 28, '14, iii: 378; strength of air service at end of war, viii: 202; for military operations, _see under_ name of campaign. casualties, total in war, iii: 404; money equivalent of manpower lost, xii: 25; battle deaths, xii: 289. coal production '13--'15, xii: 48. food, _see_ relief, below. neutrality, guaranteed by european powers, 1831, 1839, i: 141, 229; british policy, history of, i: 141, 222, 224; defense arrangement with british, '06, i: 143; german violation, aug. 4, '14, i: 144, 223, ii: 8, iii: 8-16, 380, xi: 4; bethmann-hollweg's "scrap of paper" statement, i: 146; france pledges to respect, aug., '14, i: 223, iii: 380; king albert appeals to england, i: 223; violation menace to great britain, i: 224; sir edward grey urges british intervention, aug. 3, '14, i: 224; german ultimatum, aug. 2, '14, i: 227, iii: 380; german reasons for violation, i: 229, 231, xi: 9; bismarck's pledge of guarantee, i: 229; german admission of injustice of violation, i: 230; german ultimatum rejected, i: 230. iii: 378-381; german charge of secret anglo-belgian agreement, i: 231; british offer of help, i: 232; appeal to england, aug. 4, '14, i: 233; german charge of unneutral conduct denied, i: 234; evidences of trust in german good faith, i: 234; lloyd george denounces violation, i: 236; german disregard of, in planning campaign against france, ii: 4; military topography of german border, ii: 6; french consider german invasion improbable, ii: 8; effect of invasion on result of war, ii: 206; ludendorff's justification of violation, ii: 346; composition of invading forces, iii: 10; french defenders retire, aug., '14, iii: 20; invasion creates national unity, vi: 84; bryce report on atrocities, vi: 84; deportation of civilian population, vi: 84; for invasion and military operations, _see_ name of engagement. peace conference, delegates, xii: 180. peace treaty, claims against holland, vi: 89; acquires moresnet, xii: 188; acquires eupen, xii: 188; acquires malmédy, xii: 188; reparation by germany, xii: 218. prisoners of war, iii: 404. relief, commission for, in belgium, vii: 116-144; famine conditions, vii: 117; early relief organization, vii: 118; herbert hoover's activities, vii: 119, 124, 136; _comité nationale belge, de secours et d'alimentation_, vii: 120; overcoming blockade difficulties, vii: 120-127; care of children, vii: 134; american contributions, vii: 139-144; dependence on imports for existence, xii: 136. royal family, ix: 388, xi: 143-145. war cost, debt to u.s., xii: 18; money equivalent of manpower lost, xii: 25; value of property loss, xii: 26; war cost, aug., '14--oct., '18, xii: 107; rise in national debt, xii: 114. belgrade, captured by austrians, dec. 2, '14, i: 376, vi: 357; recaptured by serbians, dec. 15, '14, iii: 155, 394, 397; retaken by austrians, oct. 6--8, '15, i: 382, vi: 357. belikamen, serbs rout austrians at, ii: 32. bell, maj.-gen. george, jr., commander 33rd div., v: 144; in meuse-argonne offensive, v: 219. belleau wood, battle of, june, '18, 2nd div. at, iii: 94, v: 135-139, 382, xi: 43; strategic importance, v: 138; renamed "bois de la brigade marine," v: 139; gen. degoutte's praise of a. e. f. at, v: 192. bellicourt, position on hindenburg line, v: 290. below, gen. otto von, commands 17th german army, ii: 149. benedict xv, pope, makes peace plea, aug. 15, '17, i: 390; offer accepted by germany, sept. 21, '17, i: 390; biography, ix: 405. benes, edward, seeks allied aid for bohemia, vi: 397; member of czechoslovak provisional government, vi: 399. benet-mercier machine gun, description, viii: 80. benson, admiral william s., biography, ix: 296-298. bentinck, count, kaiser's host after abdication, nov., '18, vi: 278. berat, occupied by italians, july 11, '18, i: 397. berbers, with turkish forces invading egypt, iii: 190. berchtold, count a. j. s. j. k., biography, ix: 143. berehaven, ireland, u. s. naval base, iv: 356. bergson, henri, french philosopher, on german doctrine of force, i: 152. berlin, revolution, nov., '18, vi: 273-276, 284; spartacide uprising, jan., '19, vi: 287; spartacides suppressed by ebert, vi: 289; second spartacide revolution, mar., '19, vi: 299. berlin-bagdad railroad, _see_ bagdad railway. berlin conference, '85, divides africa into "spheres of influence," i: 96. berlin, congress of, 1878, russian ambitions in near east checked, i: 48, 93; terms of settlement at, i: 93; defects of settlement, i: 93. bernhardi, gen. friedrich von, expounds german kultur in _germany and the next war_, i: 67; on desirability of a european war, i: 131; striking quotations from, i: 179. bernstein, herr, german socialist leader, opposes war, vi: _intro. xii._ bernstorff, count johann von, activities as head of german spy system in u. s., i: 8, x: 326; biography, ix: 133. berny, taken by french, sept. 17, '16, i: 388. bersaglieri, description, ii: 240. berthelot, gen., drives germans from vesles to aisne, '18, ii: 214. berzy-le-sec, captured by 1st div., july 21, '18, v: 55, 179, 383. bessarabia, russian offensive in, starts, dec. 24, '15, i: 382; invaded by bolsheviki, vi: 350. béthincourt, captured by germans, mar. 6, '16, i: 384. bethmann-hollweg, dr. theobold von, german chancellor, justification of germany, i: 117; "scrap of paper" statement on belgian neutrality, i: 146; statement of reasons for unrestricted submarine warfare, i: 344; proposes compromise peace, '17, vi: 262; resigns as chancellor, july, '17, vi: 266; biography, ix: 121-126; admission of german guilt, ix: 121; opposition to ruthless warfare, ix: 126. "big bertha," german long-range gun, bombards paris, viii: 45-47, xi: 271-274. birdwood, lieut.-gen. sir william, personality, iii: 375. births, decrease due to war, statistics, iii: 406. bishop, col. wm. a., british ace, story of, x: 215-221, xi: 229. bismarck, prince otto von, builder of german empire, i: 41; near east policy, i: 48; forced to resign chancellorship, 1890, i: 73, 97, ix: 359; forms triple alliance, i: 95; colonial policy, i: 97; representative of junker class, i: 258; plan for universal empire, ii: 2; publishes von moltke's views on german strategy, ii: 14. bismarck, major von, german military attaché in switzerland, vi: 380. bissell, lieut., commands detachment defending bridge at château-thierry, may 31, '18, v: 134. bissolati, signor, italian political leader, advocates jugoslav conciliation, vi: 362; against policy of aggrandizement, vi: 366. bistritz, taken by rumanians, sept. 4, '16, iii: 218. bitlis, captured by russians, mar. 2, '16, iii: 263; evacuated by russians, aug. 8, '16, i: 386; recaptured by russians, aug. 26, '16, i: 386. bitur, taken by british, nov., '17, iii: 194. "black cobra bill," nickname of "anarchical and revolutionary crimes act of india," vi: 78. _black prince_, british warship lost at battle of jutland, iv: 121. black sea, russia gains freedom of action in, 1871, i: 47; turkish bombardment of ports, oct. 28, '14, i: 376. blackwell, pvt. robert l., gets congressional medal of honor, x: 395. blanc mont, captured by french and americans, oct. 5, '18, v: 241, 255, 257. blankets, for u. s. army, v: 358. bligny, german repulse at, july 15, '18, v: 51. "blimps," u. s., scout dirigibles, viii: 245, 255. blind, committee for men blinded in battle, activities, vii: 99; permanent relief war fund, activities, vii: 255-259; red cross institute for, vii: 259; number blinded in war, vii: 260. blinkers, use of, in action, v: 319. bliss, gen. tasker h., u. s. representative on supreme war council, iii: 84. blockade, of allies by germany, _see_ submarine warfare; of germany by allies, _see_ germany, blockade of. _blücher_, german cruiser sunk at dogger bank, eye-witness account, iv: 247. blue and gray (29th) division, _see_ u. s., army. blue ridge (80th) division, _see_ u. s., army. bobo, capt. stephen n., story of his band of "rough-neck" weaklings, x: 49. boehm-ermolli, gen., commands austrians relieving przemysl, iii: 132. boers, rebel against british, '14, vi: 49; gen. hertzog leader of rebellion, vi: 49; aid germans in southwest africa, '14, vi: 50; _see_ also south africa, union of. bohemia, diet suppressed by austria-hungary, '15, vi: 311; early history, vi: 396; oppression by austria-hungary, vi: 396; press comment on czech loyalty, '14, vi: 396; formation of army, '17, vi: 398; national council, vi: 399; _see also_ czechoslovakia. boirault tank, viii, 153. boiselles, taken by french, jan. 17--18, '15, i: 378. bolivia, severs diplomatic relations with germany, apr. 13, '17, i: 389; peace conference, delegate to, xii: 180. bolo pasha, french traitor, pro-german plots, vi: 105, x: 340-344. bolshevism, fallacy of, i: _intro. xi._; doctrines, vi: 148, ix: 112, xi: 33; as product of high cost of living, xii: _intro. xiii_; in: australia, revolutionary spirit among labor, vi: 45. austria, rise and overthrow, '19, vi: 319. bulgaria, outbreak in, vi: 346. czechoslovakia, anti-bolshevik feeling, vi: 400. finland, provisional government established, nov., '17, vi: 198; suppressed by mannerheim, '18, vi: 200. germany, _see_ spartacides. hungary, riots, jan.--feb., '19, vi: 324; success, mar., '19, vi: 325. india, propaganda stirs unrest, vi: 77. poland, spread in, vi: 223. russia, peace of brest-litovsk with germany, mar. 3, '18, ii: 272, vi: 183; propaganda among german troops, '18, ii: 322; russian troops incited to desert and revolt, iii: 269, vi: 155, 164; doctrines, vi: 148, ix: 112, xi: 33; navy demoralized, vi: 155, 164; kornilov rebellion defeated, vi: 169; movement against kerensky spreads, oct., '17, vi: 173; arguments used to win populace, vi: 175; bolsheviki call on soviets to seize government, nov. 2, '17, vi: 175; increasing power of movement, oct., '17, vi: 177; overthrow kerensky and seize government, vi: 177-183; lenin announces platform, nov. 8, '17, vi: 179; dictatorship of proletariat, vi: 181; bolshevik land program, vi: 181; opposition of middle class functionaries, vi: 181; russian secret treaties made public, vi: 183; constituent assembly dissolved, jan. 18, vi: 185; red army raised, vi: 185; reign of terror, vi: 187; state of war declared with entente, vi: 187; princes' island conference proposed by peace conference, vi: 188; finland used as base of operations. '15, vi: 198; progress in letvia, vi: 228; financing german spartacides, vi: 281; connection with maximalists, vi: 314; lenin's defense of tyrannical methods, ix: 115; currency inflation, xii: _intro. xiii._ siberia, opposition in, vi: 189. bombs: aerial, viii: 221-225. depth, evolution of, iv: 307; for combating u-boats, iv: 317; development by u. s. navy, iv: 330; launching mechanism, iv: 331; invention of "y" gun, iv: 332; description, viii: 281, xi: 239. illuminating, drop bombs, viii: 76. bona, bombarded by _breslau_, aug. 4, '14, iv: 14. bone, fl.-com. r. j., battle with german planes invading england, x: 237. _bonnet rouge_, traitorous french newspaper, vi: 105. books, demand for, in a. e. f. schools, vii: 282. bordeaux, french government moves to, sept. 3, '14, i: 375; embarkation port for returning a. e. f., v: 395. borden, sir robert, premier of canada, vi: 24; urges increase of foreign service army, jan., '16, vi: 27. "bore" of gun, defined, viii: 111. boris, czar of bulgaria, succeeds to throne following abdication of ferdinand, '18, vi: 347. boselli, signor, forms coalition italian cabinet, june, '16, vi: 127. bosnia-herzegovina, annexed by austria, '08, i: 109, vi: 356; devastated, '18, vi: 363. bosphorus, bombarded by russian warships, mar. 28, '15, i: 378. botchkareva (butchkareff), ensign vera, commander of battalion of death, x: 183-185, xi: 205. botha, gen. louis, commander of british south african troops, iii: 253; policy as prime minister of union of south africa, vi: 47; biography, ix: 191-193. bott, capt. alan, british ace, experiences as turkish prisoner, x: 235-237. bourassa, henri, canadian nationalist leader, vi: 30; opposition to canadian participation in war, vi: 30. bouresches, objective in belleau wood action, v: 37, 133, 137. bourgeois, leon, advocate of league of nations, xii: 155. bourmont, training area for 2nd div., v: 6. _bouvet_, french battleship at gallipoli, iv: 31; sunk by mine, mar. 18, '15, iv: 35, 47, 375. bovington, u. s. tank school at, v: 314. boy-ed, capt. karl, german naval attaché in u. s., dismissed, i: 276; share in passport frauds, i: 315; german arch-spy in u. s., x: 329. boy scouts, war-time activities, british, xi: 94; belgian, xi: 98; french, xi: 98; american, xi: 100-116. boycott, anti-german, allied proposals for, xii: 102. boyemia river, french withdraw to, in salonika campaign, iii: 204. boyle, lieut.-com. e. c., commander of british submarine _e-14_, iv: 209. boyon wood, taken by 18th and 28th inf., oct. 5, '18, v: 240. _brabançonne, la_, belgian national hymn, xi: 327. brabant, a. e. f. engineers bridge meuse at, oct. 8, '18, v: 245. bradley, brig.-gen. alfred e., chief surgeon, a. e. f., v: 345. brady, father john j., heroic chaplain of u. s. marines, x: 100. brandeville, occupied by 5th div., nov. 7, '18, v: 271. brazil, german population of, i: 79; severs diplomatic relations with germany, apr. 11, '17, i: 389; declares war on germany, oct. 26, '17, i: 392, vi: 390; peace conference delegates, xii: 180. bread, daily consumption by a. e. f., v: 330. breguet bombing airplanes, viii: 224. breheville, taken by 5th div., nov. 8, '18, v: 272. _bremen_, german cruiser sunk by british submarine, dec. 18, '15, i: 382. bremen, spartacide uprising in, feb., '19, vi: 294. breshkovsky, catherine, leader of russian socialist-revolutionary party, vi: 148; prophecy on russia, ix: 231; biography, ix: 348. _breslau_, german cruiser, outwits allied fleets and escapes to bosphorus, aug., '14, i: 375, iv: 13; sunk, jan. 20, '18, i: 393. brest, embarkation port for returning a. e. f., v: 396. brest-litovsk, captured by germans, aug. 25, '15, i: 381, iii: 138. brest-litovsk, treaty of, between russia and germany, a dictated "german peace," ii: 63, vi: 183, vi: 268; effect of austro-hungarian demands for peace on, vi: 314; abrogated by treaty of versailles, '19, xii: 205. _bretelle_, definition of, v: 16. breton, j. l., inventor of armored barbed-wire cutter, viii: 152. briand, aristide, forms french cabinet, oct., '15, vi: 100. bridges, pontoons, viii: 299; portable steel, viii: 301. brieulles-sur-bar, captured by 78th div., nov. 4, '18, v: 266. brieuvilles-sur-meuse, action in meuse-argonne battle at, sept. 27, '18, v: 226. briey, iron area coveted by germans, ii: 6. _brilliant_, british cruiser in zeebrugge raid, iv: 262. briquenay, captured by 78th div., nov. 2, '18, v: 91. _bristol_, british warship in battle of falkland islands, iv: 70. bristol airplanes, viii: 203. _britannia_, british battleship torpedoed, nov. 9, '18, i: 399. _britannic_, british hospital ship sunk by mine, nov. 21, '16, i: 389. british american war relief fund, vii: 99. brody, captured by russians, july 28, '16, i: 386, iii: 120, 145. _broke_, british destroyer, night battle with german destroyers, x: 293-295. browning, vice-adm. sir montague e., head of british delegation to u. s., iv: 157. browning machine-guns, description, viii: 84-87; u. s. production figures, xii: 284. brunehilde position, location, v: 84. brusiloff, gen. alexei alexeievitch, commands russian invasion of galicia, '16, ii: 42, 235, iii: 119; biography, ix: 232-235. brussels, occupied by germans, aug. 20, '14, iii: 14; german entry described by richard harding davis, iii: 271-273. _brussels_, capt. fryatt's ship, x: 265. bryan, william jennings, policy on german submarine warfare, i: 321; resigns as secretary of state, i: 321. buchan, john, description of mons retreat, iii: 277-281. bucharest, captured by germans, dec. 6, '16, iii: 222. bucharest, treaty of, between rumania and central powers, may 6, '18, i: 395, vi: 352; bulgarian attitude on, vi: 339. buck, maj.-gen. beaumont b., cited for gallantry at berzy-le-sec, v: 180; promoted to major-general, v: 182; commands 3rd div. at st. mihiel, sept. 12, '18, v: 202. buckeye (37th) division, _see_ u. s., army. budapest, bolshevik riots in, '18--'19, vi:323. buenz, dr. karl, german secret agent in u. s., x: 331. buffaloes (92nd division), _see_ u. s., army. bukovina, occupied by russians, iii: 122. bulair lines, gallipoli defenses, iv: 24. bulgaria, german ruler of, i: 96; defeat and surrender to allies, sept. 30, '18, i: 399, ii: 94, 96, 216, iii: 213, vi: 347, xi: 48; key to balkan situation, ii: 28; tool of germany, ii: 28; enmity for serbia, ii: 32; reasons for siding with germany, ii: 32; enters war, oct. 14, '15, ii: 33, vi: 343; ludendorff's reasons for collapse of, ii: 329; mobilizes against serbia, iii: 156, vi: 342; invades rumania, sept. 2, '16, iii: 218; prisoners of war, iii: 404; casualties, iii: 404, xii: 289; effect of surrender on german morale, vi: 270; racial characteristics, vi: 338; desire for balkan supremacy, vi: 339; geographical position, vi: 341; attitude toward allies, vi: 341; proclaims neutrality, '14, vi: 341; terms for entering war, vi: 341; antagonism toward russia, vi: 342; agrarian party against war, vi: 343; result of teutonic alliance, vi: 344; cession of demotika to, by turkey, vi: 344; friction with germany, vi: 344; attitude toward russian revolution, vi: 344; dispute with turkey, '18, vi: 345; bolshevism in, vi: 346; terms of armistice with allies, vi: 347; money equivalent of man-power lost, xii: 25; war cost, oct., '15--oct., '19, xii: 107; rise in national debt, xii: 114; for military operations, _see_ name of campaign. bullard, lieut.-gen. robert lee, in command of third army corps, a. e. f., aug., '18, v: 62,167, 189, 383; of second army, oct., '18, v: 83, 246, 390; of toul sector, jan., '18, v: 115; in meuse-argonne offensive, v: 219, 388; biography, ix: 218-221. bullets, _see_ ammunition. bülow, gen. von, commands german army in first marne battle, ii: 184, iii: 10; on italian front, iii: 247. bülow, prince bernhard von, biography, ix: 128-131. bulson, captured by 42nd div., nov. 6, '18, v: 269. _bulwark_, british battleship blows up, nov. 26, '14, i: 376. bundesrat, german, composition and powers, i: 71, 156. bundy, maj.-gen. omar, commander, 2nd div., v: 109, 132; biography, ix: 223-226. burat, captured by bulgars, jan. 23, '16, i: 384. burdick, "ma," salvation army mother in france, vii: 384. bures, training area for 1st div., v: 6. _buresk, s. s._, _emden's_ collier, iv: 188. burney, vice-adm. sir cecil, commands british channel fleet, iv: 89. burnham, gen., commands 82nd div. at st. mihiel, sept. 12, '18, v: 202. burns, use of ambrine in treatment of, viii: 390. bushnell, david, revolutionary war inventor of submarine, iv: 201. buzancy, captured by 80th div., nov. 2, '18, v: 91, 217, 264. buzzer phone, use of, in action, v: 318. byng, gen. sir julian, commander of british third army, ii: 214, iii: 371; fights battle of cambrai, nov., '17, iii: 82, 337-340, viii: 142; personal traits, iii: 376. bzura, scene of fighting in german attack on warsaw, iii: 129. c _cabinga, s. s._, prize of german raider _emden_, iv: 172. cables, german submarine surrendered to allies under peace treaty, xii: 225. cableways, italian aerial, viii: 303-306. cadets, russian political party, aims of, vi: 148. cadorna, gen. luigi, member of inter-allied general staff, iii: 84; italian commander in isonzo campaign, iii: 241; biography, ix: 225-229. caillaux, joseph, arrested on charge of treason, jan. 13, '18, i: 393; accused of traitorous activities, vi: 106. caillette wood, taken by french oct. 24, '16, i: 388. calais, german drive for, iii: 40; calais to persia, germany's goal in world control plan, '13, ii: 2. call, 2nd lieut. donald m., gets congressional medal of honor, x: 402. callaghan, adm. sir george, commander of british grand fleet, relieved by jellicoe, aug. 5, '14, iv: 88. cambrai, german base in france, ii: 86; first battle of, nov., '17, maj.-gen. swinton on work of british tanks at, ii: 280; byng's surprise attack, iii: 80, 337-340 (philip gibbs's description), viii: 142, 156; american engineers at, iii: 82; german prisoners captured, iii: 82; german counter-offensive, iii: 82; "best-kept secret of war," iii: 337; adventures of a tank pilot, iii: 338; order of the day for tank corps, nov. 20, '17, iii: 340; second battle of, sept. 27--oct. 10, '18, ii: 281, v: 213; captured by allies, oct. 9, '18, xi: 52. cambrai-st. quentin sector, allies smash hindenburg line, '18, iii: 101. cameron, maj.-gen. george h., commands 4th div., may, '18, v: 128; commands fifth corps, st. mihiel, sept., '18, v: 65, 202, 386; commands fifth corps in meuse-argonne, sept., '18, v: 219, 388. cameroons (kamerun) conquered by allies, aug., '14--feb., '16, iii: 252, xii: 279; area, xii: 279; population, '16, xii: 279. _camilla, s. s._, belgian relief ship sunk by u-boat, iv: 230. camouflage, use in outwitting u-boats, iv: 311, viii: 343, xi: 241; for masking machine-guns, v: 287; development, viii: 136; in nature, viii: 336; war uses, viii: 336-344, xi: 277, 291-295. camp des romains fort, location in st. mihiel salient, v: 199. _campbells are coming_, scotch patriotic air, xi: 334. canada, becomes self-governing dominion, 1867, i: 43; army in europe, july, '16, iii: 343; characteristics of fighting forces, iii: 343; war casualties, iii: 404, 405; prisoners of war, iii: 404; strength of army, iii: 405; political conditions, prior to '14, vi: 23; enthusiastic response to declaration of war, vi: 24; political situation, aug., '14, vi: 25; war donations by provinces, vi: 25; conservatives advocate close imperial federation, vi: 25; premier borden's view of canada as a "participating nation" of british empire, vi: 25; liberal view of imperial federation, vi: 26; voluntary enlistments, vi: 26; increase in land under cultivation, '15, vi: 26; increase in food exports, '15, vi: 26; bilingual schools issue creates race antagonism, vi: 27-28; bourassa, nationalist leader, opposes war, vi: 30; failure of recruiting among french-canadians, vi: 31-36; conscription, problems of, vi: 31-36; anglo-saxons indorse conscription, vi: 31; labor against conscription, vi: 32; liberals support conscription, vi: 32; conscription bill announced, june, '17, vi: 32; conscription bill passed, aug., '17, vi: 33; war franchise bill, '17, vi: 34; catholic church opposes conscription, vi: 34; results of election, '17, vi: 35; pro-conscriptionists form "unionist" coalition, vi: 35; secessionist talk, vi: 36; quebec draft riots, mar., '18, vi: 36; loans floated in u. s., aug., '14--jan., '17, xii: 2; coal production, '13--'17, xii: 48; nationalization plans for railroads, xii: 90; war cost, aug., '14--aug., '19, xii: 107; rise in public debt, xii: 114; peace conference delegates, xii: 179; _see also_ great britain. canadian sector on western front, '17, iii: 343. _canadians_, poem by w. h. ogilvie, x: 318. canal du nord, crossed by allies, sept. 25, '18, i: 397. canal sector, ypres to voormezeele, v: 300. canary birds, as gas detectors, xi: 324. cannon, _see_ artillery. _canopus_, british battleship at gallipoli, iv: 33; in cradock's fleet off coronel, iv: 64; in battle of falklands, iv: 70. cantigny, captured by 1st div., may 28, '18, i: 395, iii: 94, v: 31, 124; american casualties at, v: 33, 128, 141; significance of capture, v: 34; pershing's report on capture, v: 380. cantonments, u. s., description, xi: 155; soldiers' life at, xi: 159; construction of, xii: 125. _cap trafalgar_, armed german liner, battle with british _carmania_, sept. 14, '14, iv: 199, x: 318-321. cape helles, turkish fortification at, iv: 42. cape yeni shehr, turkish fortifications at, iv: 42. caporetto, italian disaster at, oct. 21--nov. 1, '17, effect on western front, ii: _intro. xx_; italian rout before austrian advance, ii: 246; wholesale italian surrenders, ii: 246; army demoralized, iii: 247; causes of rout, ii: 248, vi: 129; retreat checked at the piave, ii: 250; effect on italo-slav unity, vi: 362. caproni triplanes, viii: 223. carabinieri, italian military police, ii: 242. carbon dioxide, asphyxiating properties of, viii: 166; monoxide, poisonous properties of, viii: 166-168. carbonyl chloride, _see_ phosgene. carden, vice-adm., commands british naval forces in mediterranean,'15, iv: 28; at gallipoli, iv: 31; resigns, mar. 16, '15, iv: 32. carency, french attack at, may 11--12, '15, i: 380. carignan-sedan-mézières railroad, vital importance to germans, v: 387; threatened by meuse-argonne offensive, v: 387. _carmania_, armed british liner, battle with german _cap trafalgar_, sept. 14, '14, iv: 199, x: 318-321. _carnarvon_, british cruiser at falklands, armament of, iv: 70. _carnetta, s. s._, belgian relief ship sunk by u-boat, iv: 230. carniola, clash of italians and jugoslavs in, vi: 364. carpathian mts., russian attempts to cross, '15, ii: 26; ludendorff's account of campaigns, ii: 360; topography, iii: 108; russians occupy passes, sept., '14, iii: 124; austrian attacks, jan.--mar., '15, iii: 132; _see also_ russian front. carpenter, capt., commander of _vindictive_ at zeebrugge raid, iv: 263; account of zeebrugge raid, iv: 266. carrel, dr. alexis, invents carrel-dakin treatment for infected wounds, viii: 369, ix: 312, xi: 289; wins nobel prize, '12, ix: 310; biography, ix: 310-313. carrel-dakin treatment, description, viii: 369-372, ix: 312, xi: 289. carso plateau, description, ii: 244, iii: 239; italian advance across, june, '15--oct., '17, ii: 245; _see also_ italian front. carson, sir edward, leader of ulster opposition to irish home rule, vi: 53, 60; biography, ix: 50-53. cary, gen. langle de, commands a french army at first marne battle, ii: 184. casement, sir roger, hanged for treason, aug. 3, '16, i: 386, vi: 60, ix: 53; negotiations with germany, vi: 57; captured, vi: 58. _cassin_, u. s. destroyer torpedoed, account of, iv: 343. castelletto, mined by italians, viii: 311. castelnau, gen., commands french forces in lorraine, iii: 16; stops germans at roye, sept., '14, iii: 38; appointed chief of staff, dec., '14, iii: 46; at verdun, iii: 304. casualties, among troops attacking with tanks, ii: 284; total in war, iii: 403; classified by belligerents, iii: 404; civilian deaths due to war, iii: 405; per cent. of head wounds, viii: 64; in world war compared with all other wars, 1800--1913, xii: 25; money equivalent of man-power lost, military and civilian, xii: 25; total battle deaths, by countries, xii: 288; _see also_ under campaign, battle, and country. cattaro, bombarded by french and british, aug. 24, '14, i: 375. caucasus, military operations in, oct., '14--jan., '15, ii: 91-92; iii: 260-263, xi: 29; early history, vi: 231; conflict of racial interests, vi: 231; russian misrule in, vi: 231; demand for self-government, '05, vi: 231; effect of russian revolution, vi: 232; rise of new nations under russian revolution, vi: 233. caudron bombing airplanes, viii: 223. causes, of war, summarized by dr. chas. w. eliot, i: _intro. vii_; complexity of, i: 2; conflict of political systems, i: 4; conflict of nationalistic aspirations, i: 5; element of individual responsibility, i: 5; german desire for war, i: 8; colonial rivalry, i: 14; anglo-german economic rivalry, i: 78, 121; german ambitions for world power, i: 83; murder of archduke francis ferdinand, i: iii; chancellor von bethmann-hollweg's statement of, i: 117; vice-chancellor helfferich's statement of, i: 119; dr. dernburg's statement of, i: 120; statement of german "intellectuals" on, i: 120; racial element in, i: 120; german territorial ambitions, i: 122; german excuse of russian menace, i: 137, 139; german statement of english responsibility, i: 193; prince lichnowsky denies anglo-german commercial jealousy, i: 193; ludendorff's analysis of, ii: 346; _see also_ germany, responsibility for war. cavalry, function in palestine campaign, ii: 93; field-marshal haig on value of, ii: 120; german military critic on importance of, ii: 260; use in st. mihiel drive, v: 206; _see also_ under armies of each country. cavell, edith, executed oct. 12, '15, i: 382; story of, x: 172; betrayed by gaston quien, x: 352. "c. c. gear," for timing machine-gun fire through airplane propeller blades, viii: 214-216. cecil, lord robert, advocate of league of nations, xii: 155. cemeteries for a. e. f. dead in france, v: 331, 400. central committee for relief of jews suffering through the war, vii: 352; _see also_ jews. central council of delegates meets in berlin, dec. 16, '18, vi: 283. central powers, unity of command established, ii: 330; general strategic plan on eastern front, iii: 110; mobilized strength, iii: 430; war casualties, iii: 404; prisoners of war, iii: 404; peace proposals, dec. 12, '16, vi: 313; anti-slav policy, vi: 360; war cost, xii: 27, 107; rise in national debts, xii: 114; _see also_ austria-hungary; bulgaria; germany; turkey. central records office, a. e. f., v: 402. cereals, shipped to europe by u. s., '16--'18, xii: 37. cerna river, serb attack on bulgars at, sept. 15, '18, iii: 213. cernavoda, captured by teutons, oct. 25, '16, i: 388, iii: 221. cernavoda-constanza railway, teutons gain control of, iii: 221. cettinje, captured by austrians, jan. 13, '16, i: 384. châlons, abandoned by allies, aug. 28, '14, i: 375; taken by french, sept. 11, '14, i: 375; system of trench defenses, v: 44. chamberlain, austen, responsibility for mesopotamian failure, iii: 364. chamberlaine, brig.-gen. wm., commands railway reserve, first army, a. e. f., v: 305. champagne, french offensive in, sept., '15, ii: 25, iii: 46; as possible sector for german spring drive, '18, ii: 67; german offensive checked, july 15--17, '18, v: 47, 129, 155, viii: 146-148; a. e. f. participation in allied defensive, july 15--17, '18, v: 148-158. champigneulle, attacked by 77th div., nov. 1, '18, v: 263. champneuville, captured by germans, feb. 27, '16, i: 384. chanak, town on dardanelles, iv: 24; bombarded by allies, mar. 6, '15, iv: 45. channel ports, importance to allies, ii: _intro. viii_; german drive for, '18, ii: 75, iii: 38, 359; opposing views of viscount french and joffre on importance of, ii: 172; belgian coast evacuated by germans, oct., '18, ii: 214. _chant du départ, le_, french patriotic song, xi: 333. chapman, victor, member of lafayette escadrille, killed at verdun, iii: 391. charcoal, use in gas masks, viii: 176. _charge of the tank brigade_, poem by vilda sauvage owens, xi: 267. _charlemagne_, french battleship at gallipoli, iv: 31. charleroi, captured by germans, aug. 21--23, '14, i: 375. charles francis, emperor of austria-hungary, ascends throne, nov. 21, '16, i: 388; secret letter to prince sixtus asking for peace, mar., '17, ii: 63, 315; conciliatory policy, vi: 313; overthrown by socialist revolution, '18, vi: 317; letter of appeal to king ferdinand of rumania, vi: 317; leaves austria, mar. 23, '19, vi: 319; biography, ix: 371-373. charpentry, captured by 35th div., sept. 27, '18, v: 227. chartèves, captured by 3rd div., v: 383. chasseurs, description, xi: 189. château-thierry captured by germans, june 1, '18, ii: 154, iii: 93; ludendorff on a. e. f. fighting at, ii: 320; re-occupied by a. e. f. and french, july 21, '18, iii: 96, v: 184; german attempts to cross marne at, repulsed by a. e. f., may 31--june 3, '18, v: 35, 130, 134-135, 381-382, xi: 43; location and importance, v: 133; _see also_ marne, battles of, july, '18. châteauroux, u. s. gas-mask factory at, v: 324. châtel-chehery, captured by 28th div., oct. 7, '18, v: 243. châtillon, germans force bridgehead at, july 15, '18, v. 51. châtillon wood, taken by 60th inf., nov. 5, '18, v: 271. chaulnes, captured by british, mar. 17, '17, iii: 68. chaumont, a. e. f. general headquarters, v: 100. chaumont-en-vixen, training area for 1st div., v: 121. chelsea war refugees fund, vii: 106. chemery, captured by 42nd div., nov. 6, '18, v: 269. chemical warfare, poison gas first used by germans at battle of ypres, apr., '15, iii: 42, 288, 320, xi: 316, xii: 285; first use against russians, iii: 288-292; pierre loti's description of gassed, iii: 320-322; german projector batteries, v: 28; u. s. chemical warfare service, activities, v: 321-327, 401; gas warfare development, v: 321; kinds of poison gases used, v: 321, viii: 166-172; mustard gas, v: 321, viii: 171, xi: 321; phosgene (carbonyl chloride), v: 321, viii: 168-170; u. s. production of gas shells, v: 324, 325; invention in u. s. of super-poisonous gas, viii: _intro. ix_; methods of gas attack, viii: 162-165; gas clouds, viii: 162-164, xi: 316; gas shells, description and use, viii: 164, xi: 320; poisoning and asphyxiation, differences, viii: 166-167; carbon dioxide, asphyxiating properties, 166; nitrogen, asphyxiating properties, viii: 166; carbon monoxide, poisonous properties, viii: 166, 167, 168; chlorine, use in gas attacks, viii: 168-170; vaporous liquid poisons, use in gas attacks, viii: 170-172; diphosgene, use in gas attacks, viii: 170; xylyl bromide (tear gas), use in gas attacks, viii: 170; chlorpicrin, use in gas attacks, viii: 171; sneezing gas, use in gas attacks, viii: 171; lewisite, new american poison gas, deadliest of all, viii: 172; methods of defense against gas attacks, viii: 173-179; oxygen helmets, viii: 173; gas masks, viii: 174-178; use of charcoal in gas masks, viii: 176; fans for blowing away poison gases, viii: 178; use of neutralizing reagents, viii: 178; wet blankets as air-locks, viii: 178; u. s. poison-gas production at edgewood arsenal, viii: 179-187, xii: 285; gas gangrene, xi: 287; international law on, xi: 313; general description, xi: 313-323. chemin des dames, battle and capture of, by germans, may 27, '18, i: 395, ii: 76, 154, v: 132; germans driven from, '17, iii: 73-76; training area for 26th div., v: 117. _chemung, s. s._, american steamer torpedoed, nov. 26, '16, i: 389. chennery, captured by 2nd div., nov. 1, '18, v: 263. cheppy, captured by 35th div., sept. 26, '18, v: 225. chiapovano valley, italian objective in '17 drive, ii: 58. children in the war, xi: _intro. ix-xiii_, 56-84; letters of, xi: 60, 74-84; brave belgian boys run off to war, xi: 67; prudent marius, the boy dispatch rider, xi: 69; "the little serbian sergeant," xi: 69; american relief for european, xi: 84-93. chile, neutral during war, vi: 390; tacna-arica dispute with peru, vi: 390. chiles, capt. marcellus h., gets congressional medal of honor, x: 401. chilly, taken by french, sept. 4, '16, i: 386. china, under foreigners' yoke, i: 18; defeated by japan in war of 1894, i: 20; forced to accept "open door" policy, i: 38; u. s. policy of "open door" in, i: 57; special japanese interests in, recognized by lansing-ishii note, '17, i: 58; international position of, '14, i: 63; severs diplomatic relations with germany, mar. 14, '17, i: 389; declares war on teutonic allies, aug. 14, '17, i: 390; coolie labor in france, ii: 377, xii: 80, 85; siege of tsing tau, iii: 257; tsing tau seized by germans, 1897, iii: 259; origin of phrase "yellow peril," vi: 248; japanese demands on, '15, vi: 385; coal production, '13--'15, xii: 48; refuses to sign peace treaty with germany, xii: 167; delegates to peace conference, xii: 180; german rights in, surrendered under peace treaty, xii: 206; kiao-chau (shantung) transferred to japan under peace treaty, xii: 209; _see also_ kiau-chau; shantung. "chinese citizen boy," letter from, xi: 179. chipilly ridge, 33rd div. breaks german line at, 'aug. 1, '18, v: 260. chloride of lime, amount issued by u. s. army, v: 324. chlorine, first used by germans in gas attack at ypres, apr., '15, iii: 42, 288, 320, xi: 316, xii: 285; poisonous properties of, viii: 166, 168; use in chemical warfare, viii: 168-170; manufacture of, at u. s. edgewood arsenal, viii: 183. chlorpicrin, description of, v: 321; use in chemical warfare, viii: 171; manufacture of, at u. s. edgewood arsenal, viii: 185. _choising, s. s._, _emdens's_ survivors transfer from _ayesha_ to, iv: 192. cholm, claimed by poland and ukraine, vi: 248. chronoscope, for measuring reaction times, viii: 352. chunuk bair, turk stronghold at gallipoli, iii: 172; anzac attack on, iii: 173, 356-358; _see also_ gallipoli campaign. churchill, winston spencer, advocates dardanelles attack, ii: _intro. x, xiv._, 29, 200; responsibility for gallipoli disaster, ii: 198, 200; member of british cabinet war council, ii: 198; defends dardanelles campaign, ii: 205, iv: 56; biography, ix: 44-47. cierges, attacked by 37th div., sept. 28, '18, v: 229. ciezkowice, captured by germans, may 2, '15, i: 380. cimone, mt., taken by italians, july 25, '16, i: 386. citizenship, bureau of, educational work among a. e. f., vii: 282. cividale, taken by germans, oct. 28, '17, iii: 247. civil war, gen. maurice on strategy of, compared with world war, ii: _intro. xiii._ civilian deaths, due to war, iii: 405; money value of, xii: 25. clam-martinitz, premier of austria-hungary, appointment as, vi: 313. clarkson, grosvenor b., director of u. s. council of national defense, xii: 115; on causes of high cost of living, xii: 142-148. clausewitz, gen. karl von, influence on development of german militarism, i: 166. clay, capt. w. l., inventor of armor-piercing bullet, viii: 60. clayton-bulwer treaty, between u. s. and great britain on panama canal, i: 86. clemenceau, georges, makes _bonnet rouge_ disclosures, vi: 105; forms new war cabinet, nov., '17, vi: 106; disagrees with pres. wilson's peace aims, vi: 108; publishes letter of emperor charles to prince sixtus offering to make peace, vi: 315; biography, ix: 1-13, xi: 125; record as premier, ix: 12; view of "fourteen points," ix: 13; bibliography, ix: 13; faith in foch, ix: 151; at the peace conference, xii: 149-163; excludes germans from, xii: 162. clermont-ferrand, u. s. air-service training school at, v: 313. cléry-le-grand, taken by 60th inf., nov. 1, '18, v: 262. cléry-le-petit, captured by 5th div., nov. 2, '18. v: 264. clifford, rev. j. h., "doc of the fifth," chaplain of u. s. marines, x: 32-35. clocks, for airplanes, viii: 220. cloth, anti-gas, amount issued by u. s. army, v: 324. coal, abundance secret of german power, i: 267; german production, 1880--1913, i: 267; seizure of french mines by germany, ii: 20; consumption of, by a. e. f., v: 331; dutch supply from germany, vi: 377; u. s. production, '18--'19, xii: 46; production by chief countries, '13--'17, xii: 47; war-time price of, xii: 48; peace treaty requirements for german deliveries to france, belgium, italy, xii: 224. coast guard, boy scouts in, xi: 104. "coastals," type of u. s. dirigibles, viii: 245, 256. coblenz, bombed by allied airmen, oct. 1, '17, i: 392; bridgehead at, occupied by a. e. f., dec. 8, '18, i: 400, v: 394; conditions for allied withdrawal from, xii: 261. cochin, lieut., french submarine commander, feat in clearing minefield, iv: 375. codes, detection of, v: 319. coetquidan, artillery training camp in brittany, v: 6. coffin, h. e., chairman of committee on industrial preparedness, xii: 69; views on industrial preparedness, xii: 69; member of advisory commission, u. s. council of national defense, xii: 116. cohalan, justice, leads irish-american movement for irish republic, vi: 65. cold storage plants, use by a. e. f., v: 331. colmar, french advance toward, aug., '14, iii: 16. cologne, bridgehead at, occupied by british, dec. 6, '18, i: 400; conditions for allied withdrawal from, xii: 261. colombia, pro-german attitude of, vi: 392. colonies, important share of british, in winning war, i: 13; loss of german, i: 13; german miscalculation of loyalty of british, i: 14; share of french, in final victory, i: 14; european rivalries for, a chief cause of war, i: 14; era of colonization by european nations, i: 26; influence on development of naval power, i: 28; colonization during 19th century, i: 37; in far east, i: 38; expansion important motive in german war policy, ii: 13. _columbia, s. s._, american steamer sunk by u-boat, nov. 7, '16, i: 388. colyer, sgt. wilbur e., gets congressional medal of honor, x: 388. combles, captured by allies, sept. 26, '16, i: 388, iii: 58, 59; recaptured by allies, aug. 30, '18, ii: 158. _comité nationale belge de secours et d'alimentation_, organization, vii: 120. commerce, national rivalries, i: 262; english blockade threatens ruin of german, vi: 253; _see also_ trade, under name of country. commerce raiders, german, exploits of _emden_, iv: 166-194; _königsberg_, career in indian ocean, iv: 195; _karlsruhe_, activities in atlantic, iv: 196; _königin luise_, operations in english channel, iv: 197; _meteor_, activities in baltic, iv: 197; _moewe_, converted merchantman, iv: 197; _seeadler_, iv: 198; _wolf_, seaplane carrier, iv: 198. commissaries, political, in russia, demoralize army, iii: 268; council of people's, dictatorship of, vi: 181; _see also_ russia. commission for relief in belgium, vii: 116-144. committee, of mercy, vii: 87; for fatherless children of france, vii: 105. communication, lines of, french railways available for a. e. f. use, '18, v: 110; between france and germany, v: 214. compass, for airplanes, viii: 220; sperry gyro-compass, viii: 348. comrades in service, vii: 284. _conduct of war, the_, by marshal foch, ix: 152. _confédération générale du travail_, french labor union, political activities, vi: 110. congo, belgian exploitation of, i: 50; creation of congo free state, i: 50. congo conference, '84--'85, i: 16. congress of berlin, 1878, i: 16. congressional medal of honor, list and deeds of recipients during war, x: 388-402. conner, brig.-gen. fox, chief of operations, a. e. f. general staff, v: 102. connolly, james, sinn fein leader, wounded during dublin rioting, apr., '16, vi: 60; commandant-general of "irish republic," ix: 53. conscientious objectors, treatment of, in great britain, vi: 8. conscription, _see under_ name of country. consevoie, u. s. engineers bridge meuse at, oct. 8, '18, v: 245. constantine, king of greece, abdicates throne, june 12, '17, i: 390; opposed to allied cause, iii: 202; biography, ix: 380-382. constantinesco, m., inventor of "c. c. gear" for regulating airplane fire, viii: 215. constantinople, russian ambitions for, i: 63; captured by turks, 1453, i: 90; gallipoli base of defense of, ii: 27; key to early ending of war, ii: 29; early history, iv: 18; _see also_ gallipoli campaign; turkey. constantinople convention, 1888, suez canal neutralized, i: 15. constanza, captured by teuton forces, oct. 23, '16, i: 388, iii: 221; bombarded by russian fleet, nov. 11, '16, i: 388. constituent assembly, russian, dissolved by bolsheviki, jan., '18, vi: 185. contraband, _see_ germany, blockade. contracts, between german and allied nationals, peace treaty provisions on status and methods of discharge, xii: 240-243. convoy service, difficulties of, iv: 317. cook, lieut. s. w., co-inventor of depth-bomb launching device, iv: 331. co-operative societies, siberia, organization of landowning peasants, vi: 191. cordite, composition and explosive properties, viii: 6. corfu, seat of serbian government transferred to, iii: 160; meeting of jugoslav representatives at, aug., '17, vi: 359. _cormoran, s. s._, converted into auxiliary cruiser by _emden's_ crew, vi: 169. _cornwall_, british cruiser at falklands, iv: 70. cornwall, jack, heroic british boy scout, xi: 98. _cornwallis_, british battleship sunk, jan. 9, '17, i: 389; at gallipoli, iv: 33. coronel, battle of, nov. 1, '14, iv: 64-68, ix: 308; comparison of opposing fleets, iv: 64, 65; von spee's account of, iv: 66; british account of, iv: 67; losses, iv: 68; sir henry newbolt on strategy of, iv: 68. corps, compared with division, v: 109. cossacks, origin, vi: 146; fight against bolsheviki, vi: 192. cost of living, _see_ prices; _also_ under each country. cost of war, capitalized value of lives lost, iii: 406, xii: 25; importance of money as war weapon, xii: 1; compared with previous wars, xii: 24; value of property destroyed, xii: 24, 25; economic loss in man-power, xii: 25; value of production loss, xii: 26; value of tonnage sunk, xii: 26; cost to allies and central powers, xii: 27, 107; meaning of "cost of war," xii: 105; difficulties of computing money equivalent, xii: 105; range of expenditures, xii: 105; expenditures of different belligerents, xii: 106-107; methods used to raise war funds, xii: 107-114; taxation _vs._ borrowing, xii: 107; rise in national debts of belligerents, xii: 114; _see also_ under each belligerent. costin, pvt. henry g., gets congressional medal of honor, x: 394. côte de châtillon, capture of, by 42nd div., oct. 16, '18, v: 84, 250, 252. côtes-de-meuse, taken in st. mihiel drive, sept. 12--13, '18, v: 69. cotton, not on british contraband list, ii: 21. coulommiers, germans beaten back at, in first battle of the marne, iii: 32. council of national defense, u. s., _see_ united states, council of national defense. courcelette, taken by allies, sept. 15, '16, i: 388. courland, early history, vi: 226; republic of, established apr., '18, xii: 279; area, xii: 279; population, apr., '18, xii: 279; _see also_ baltic provinces. courtu, stormed by french in first battle of the somme, '16, iii: 58. _covington_, u. s. transport sunk, july 1, '18, i: 397, iv: 337. cracow, russian operations against, '14, iii: 127. cradock, adm. sir christopher, commander of defeated british fleet in battle of coronel, iv: 63, ix: 308. crandell, miss marion g., american "y" worker with french, killed vii: 313. _cressy_, british cruiser, sunk by _u-9_, sept. 22, '14, iv: 205, x: 274-280, xi: 234. crile, col. george w., first demonstrator of nitrous oxide as anæsthetic, vii: 68. croats, early history, vi: 354; antagonism to italy, vi: 362. croix de guerre, awards to american "y" workers, vii: 275, 313. cromarty, as british naval base, iv: 94. cromer, lord, chairman of commission to investigate gallipoli disaster, ii: 197. cronkhite, gen. adelbert, commander 80th div., v: 144; in meuse-argonne offensive, v: 219. crothers, rachel, starts stage women's war relief, vii: 343. crown prince of germany, _see_ frederick william. crown prince of prussia, _see_ frederick william. ctesiphon, british defeated at, by turks, jan. 3, '16, i: 384, iii: 182; description of arch of, iii: 331; collapse of british medical service at battle of, iii: 367. cuba, revolt against spain, i: 56; declares war on germany, apr. 7, '17, i: 389; debt to u. s., xii: 18; peace conference delegate, xii: 180. cuisy wood, captured by 79th div., sept. 26, '18, v: 224. cukela, 1st lieut. louis, gets congressional medal of honor, x: 388. cumières, captured and lost by germans, may 23--27, '16, iii: 54, 312. cunel, captured by 5th div., oct. 14, '18, v: 250. curlu, captured by british, july 2, '16, i: 386. _cushing_, american ship attacked by german airplane, apr. 28, '15, iv: 218. custace, capt. frank m., war services, x: 322. custer (85th) division, _see_ u. s. army. customs duties, german, regulation of, by peace treaty, xii: 229. cuxhaven, bombarded by british airmen, dec. 25, '14, i: 378. _cyclops_, u. s. collier, mysterious disappearance, iv: 356. cyprus, acquired by great britain, i: 93. cyrenaica, base of turkish forces invading western egypt, iii: 190. czar of russia, _see_ nicholas ii. czechoslovakia, anti-bolshevist forces in russia, vi: 187, 192; capture of vladivostok, june, '18, vi: 192; attack on hungary, april--may, '19, vi: 326; antagonism to italy, vi: 362; independence recognized, vi: 399; german elements rebel against new government, vi: 399; socialist movement in, '19, vi: 400; against bolshevism, vi: 400; claims teschen at peace conference, vi: 400; debt to u. s., xii: 18; peace conference delegates, xii: 180; peace treaty provisions for independence of, xii: 197; use of german ports, peace treaty provisions for, xii: 253; republic established, oct., '18, xii: 279; area, xii: 279; population, oct., '18, xii: 279; _see also_ bohemia. czernin, count, austro-hungarian minister of foreign affairs, appointment as, vi: 313; peace statement, july, '17, vi: 314; resigns as foreign minister, vi: 315. czernowitz, taken by russians, nov. 29, '14, i: 376, iii: 122; abandoned by russians, jan. 5, '16, i: 384; recaptured by russians, june 17--18, '16, i: 385, iii: 144; occupied by teutons, aug. 3, '17, i: 390. d _daffodil_, british ferryboat in zeebrugge raid, iv: 262. daghestan, republic of, formed by caucasian mountaineers, vi: 234. dalmatia, italian claims for, vi: 361; conflict between italians and jugoslavs for possession of, vi: 365. d'amade, gen., commander of french forces at gallipoli, iii: 167. damascus, captured by british and arabs, oct. 1, '18, i: 399, iii: 199. damloup, scene of fighting at verdun, iii: 55. dammartin, 1st div. headquarters, june, '18, v: 143. "danger zone," in rifle fire, viii: 93. daniels, josephus, biography, ix: 326-329. dankl, gen., commands austrian army invading russian poland, '14, iii: 118. dannevoux, scene of fighting in meuse-argonne offensive, sept. 26, '18, v: 224. d'annunzio, gabriele, pro-ally propaganda during italian neutrality, ii: 239, vi: 119, 124, ix: 343; manifesto on italian claims for eastern adriatic coast, vi: 368; claims fiume, vi: 369; seizes fiume, vi: 370; biography, ix: 343-345; author of _song of the dardanelles_, ix: 343; message to america, ix: 344. _danton_, french battleship torpedoed, mar. 19, '17, iv: 376. danube river, as barrier against invasion, iii: 151, 214; bridge across, blown up by rumanians, iii: 221; internationalized by peace treaty, xii: 248. danzig, demanded by poland, vi: 225; made free city under peace treaty, vi: 226, xii: 203. dardanelles, russian gateway to the sea, ii: 28, iii: 161; closed by turkey, sept., '14, ii: 28; strategic importance, ii: 29; narrows, critical point, ii: 29; topography of shores, iii: 165, iv: 21, 23; modern defenses, iii: 165, iv: 23, 27, 45; early history, iv: 18-22; early fortifications, iv: 19; closed by turkey to warships of other nations, iv: 20; forced in 1807 by adm. duckworth, iv: 20; fortified by allies in crimean war, iv: 20; forced in 1878, by adm. hornby, iv: 21; importance to turkey, iv: 23; importance of combining land and naval attacks in forcing, iv: 26; description, xi: 14; _see also_ gallipoli campaign. dardanelles expedition, _see_ gallipoli campaign. dardanos fort, bombarded by british, feb. 19, '15, iv: 43. dar-es-salam, captured by british, iii: 255. davis, richard harding, description of german entry into brussels, iii: 271-273; description of burning of louvain, iii: 273-277. davison, henry p., chairman, war council american red cross, vii: i; biography, ix: 339. de ram automatic camera for aerial photography, viii: 228, 333. de valera, prof. eamonn, elected to parliament, vi: 62; arrest and escape from jail, vi: 65; elected president of irish republic, ix: 55; address to america, ix: 55. dead man's hill, at verdun, battle of, may, '16, iii: 51, 53, 306, 308, 310, xi: 22. debeney, gen., commander of french first army, ii: 212. debts, national, of belligerents, xii: 111-114; between german and allied nationals, peace treaty provisions for settlement of, xii: 232-236. decorations, congressional medal of honor, list and deeds of recipients during war, x: 388-402. _deductions from the world war_, by gen. baron von freytag-loringhoven, summary of, ii: 254. _defender_, british destroyer in battle of heligoland bight, iv: 240. _defense_, british ship sunk at jutland, iv: 121. defense, elements in, iv: 4; french trench system of, v: 12; gouraud's method of, against infiltration, v: 46, 155, viii: 146-148; _see also_ tactics. defense of the realm act, british, as weapon against war-time labor strikes, vi: 14; used to prevent electricians' strike, feb., '19, vi: 20. definitions, of popular war terms, xi: 359-362. delcassé, théophile, dismissed as french minister through german pressure, i: 99; resignation from viviani government, oct., '15, vi: 100. delousing, by salvage service of a. e. f., v: 331. demir-hissar, occupied by bulgars, iii: 207. demir-kapu, taken by french, oct. 20, '15, iii: 204. democracy, in europe, as result of the war, i: _intro. x_; rise of, during 19th century, i: 29; among american colonists, i: 29; development in france, i: 30; european reaction, 1814--40, i: 32; failure of movement of 1848 in germany, i: 32; growth of national sentiment for, in u. s., '04--'14, i: 293. demotika, ceded to bulgaria by turkey, vi: 344; turkey demands return of, vi: 345. denikin, gen., report on collapse of russian armies, iii: 267-270; leads fight on bolsheviki, vi: 192, 248. denmark, war with prussia, 1864, i: _intro. vii_; neutral during war, vi: 393; popular sentiment pro-ally, vi: 393; war-time increase in shipping, xii: 101. depth bomb, evolution of, iv: 307; use in fighting submarines, iv: 317; development by u. s. navy, iv: 330; launching mechanism, iv: 331; invention of "y" gun, iv: 332; for discharge from airplanes, iv: 332; description, viii: 281, xi: 239. _der kampf_, maximalist publication, vi: 314. _der tag_, the german "millennium," xi: 195. _derflinger_, german cruiser in battle of dogger bank, iv: 246. dernburg, dr. bernhard, justifies german war policy, i: 120; heads german propaganda in u. s., i: 274, 316; character sketch of, ix: 353. _derrière chez mon père_, french soldiers' song, xi: 339. d'esperey, gen. franchet, commands french troops at first marne battle, ii: 184, iii: 31; commands allied troops on balkan front, ii: 218, iii: 212, vi: 347; signs armistice with hungary, vi: 323. destroyers, effectiveness against submarines, viii: _intro. viii._ detonation, of explosives compared with explosion, viii: 1. _deutschland_, german merchant submarine, arrives at baltimore, july 9, '16, i: 334, iv: 214; capt. koenig's account of trip, iv: 215; feat in crossing atlantic, x: 271-274. devastation of france, by germans in retreat to hindenburg line, iii: 67; french protest to neutrals, iii: 68; german excuses for, iii: 68. _devoir, le_, canadian nationalist newspaper, vi: 30. d'eyncourt, sir e., share in development of tank, viii: 155. d. h. 10, british bombing planes, viii: 204. _dhair hissar_, turkish torpedo-boat in ægean, iv: 49. diaz, gen., succeeds cadorna as italian commander-in-chief, iii: 248. dickebusch sector, a. e. f. in, v: 286, 289. dickinson, prof. g. lowes, defense of british conscientious objectors, vi: 8. dickman, maj.-gen. joseph t., commands 3rd div. at mezy-moulins, v: 51; commands fourth corps at st. mihiel, v: 65, 202, 386; commands first corps in meuse-argonne, v: 83, 132; commands 3rd div. at château-thierry, v: 132; commands army of occupation, v: 395. dilboy, pvt. george, gets congressional medal of honor, x: 391. dimethyl-trithiocarbonate (skunk gas), use in chemical warfare, v: 322. dinant, germans checked at, in march through belgium, aug., '14, iii: 12. diphenylchlorarsine, use in chemical warfare, v: 322. diphosgene, use in chemical warfare, viii: 170. dirigibles, _see_ aeronautics. disarmament, anglo-german negotiations, '12, i: 106, 194; german answer to british proposals, i: 195. disease, statistics for u. s. army, v: 402, vii: 179, 193-196, 208-209; early handicaps in prevention, vii: 177; preventive methods in u. s. army, vii: 193, 245-248; results of preventive methods, statistics for u. s. army, vii: 195; sanitation, vii: 253; inoculation against, vii: 253; prevention of infections among troops, viii: 392-397; anti-typhoid immunization, viii: 393; _see also_ infection; medical science; sanitation. distinguished service cross, awards of, to "y" workers, vii: 272. "divine right of kings," kaiser's conception of, i: 68. dixmude, occupied by germans, nov. 10, '14, i: 376; evacuated by germans, dec. 20, '14, i: 376; occupied by belgians, sept. 29--30, '18, i: 397; german repulse at, in march through belgium, '14, iii: 40. dixmude-ypres sector, allied offensive, sept. 28--oct. 3, '18, iii: 100. djemal pasha, commander of turkish forces operating against suez, iii: 190. dmitrieff, gen., biography, iii: 119. dmowski, roman, leader of polish reactionary parties, vi: 220. dniester river, germans defeated at, in galician campaign, '15, iii: 136. dobrudja, german conquest of, sept.--oct., '16, ii: 60, iii: 218-221; description of, iii: 215; disastrous rumanian counter-offensive, oct., '16, iii: 220; dispute between germany and bulgaria over, vi: 344; overrun by bulgarians, vi: 344. docks, constructed by a. e. f. in france, v: 332, 400. dogger bank, battle of, british defeat fleet of german raiders, jan. 24, '15, iv: 246-253; eye-witness accounts, iv: 247-250; adm. beatty's official report, iv: 250. dogs in war, as ambulance drawers, viii: 379; varied activities, xi: 340-347; story of "cap," the red cross dog, xi: 362-367; story of "pat," liberty bonds salesman, xi: 396-402; effect of food shortage on, xii: 40. dommartin-la-montagne, captured by 26th div., sept. 12--13, '18, v: 69, 212. don republic, established jan., '18, xii: 279; area, xii: 279; population, xii: 279. dormans, 28th div. holds german line at, july 15, '18, v: 53; location, v: 133. douai, german base in france, ii: 86. douaumont fort, at verdun, captured by germans, feb. 25--26, '16, i: 384, ii: 189, iii: 48, 305; french recapture and lose, may 22--25, '16, i: 385, iii: 310; retaken by french, oct. 24, '16, i: 388, iii: 61. doughboys, spirit of self-assurance of, i: 370; _see also_ u. s., army. doughnuts, salvation army specialty, vii: 399. doulcon, captured by 5th div., nov. 2, '18, v: 92, 264. dozier, 1st lieut. james c., gets congressional medal of honor, x: 395. draft, _see_ conscription under name of country. _drake_, british cruiser torpedoed, oct. 1, '17, i: 392. _dresden_, german cruiser in battle off coronel, armament, iv: 65; in battle of falkland islands, iv: 70; sunk by british near juan fernandez, mar. 14, '15, iv: 70. drina river, crossed by austrians invading serbia, iii: 151. drop bombs, viii: 76. drummond, sir james eric, first secretary-general of league of nations, xii: 186. dubilier, wm., inventor of anti-submarine listening device, iv: 308. dublin, bloody fighting at, during irish rebellion, vi: 60. dubno, captured by russians, june 11, '16, i: 385, iii: 144. duck-boards, use in mud fields of flanders, viii: 300. duds, deloading of, v: 326. dueidar, turks defeated at, apr., '16, iii: 191. duff, sir beauchamp, responsibility for mesopotamian failure, iii: 364, 370. dugouts, subterranean system of, in hindenburg line, v: 301. dukla pass, occupied by russians, dec., '14, iii: 127. duma, russian, reconvened, feb. 22, '16, vi: 140; struggle against reactionary government, vi: 140, 142, 144; forces dismissal of stürmer as premier, vi: 142; czar issues undated decree ordering dismissal, vi: 144; refuses to be dismissed, mar. 10, '17, vi: 146; activities during revolution, mar., '17, vi: 150-155; establishes provisional government under prince lvov, vi: 155; _see also_ russia. dumba, dr. constantin, austro-hungarian ambassador at washington, i: 275; dismissed from u. s. for instigating labor strikes, i: 275. dun-sur-meuse, captured by 61st inf., nov. 5, '18, v: 94, 271, 391; bombed by u. s. airmen, v: 311. dunant, henri, influence in organization of international red cross, vii: 12. duncan, maj.-gen. george b., brigade commander in toul sector, jan., '18, v: 115; commands 77th div., may, '18, v: 141. dunkirk, bombarded by germans, apr. 30,'15, i: 380; bombarded by germans, june, 22, '15, i: 380; german drive for, '14, iii: 40. dunn, rear-adm. herbert o., biography, ix: 295. dunne, edw. f., member of irish-american delegation to peace conference, vi: 66. durazzo, occupied by austrians, feb. 26, '16, i: 384; naval base at, destroyed by allied warships, oct. 1, '18, i: 399; occupied by italians, oct. 13, '18, i: 399; retreating serbs embark for corfu from, '16, iii: 286. dushkin, alexander, visits europe for jewish relief, vii: 360. dutov, gen., commands anti-bolshevik troops in siberia, vi: 192. duval, traitorous owner of _bonnet rouge_, vi: 105; found guilty and shot, vi: 106. dwyer, lance corp. edward, wins victoria cross, x: 128. dyestuffs, german deliveries to allies, peace treaty demands, xii: 224. e _e-7_, british submarine, exploit in sea of marmora, iv: 211. _e-9_, british submarine, in german waters, iv: 207. _e-11_, british submarine, daring in sea of marmora, iv: 210. _e-14_, british submarine, activities in dardanelles, iv: 209. _e-50_, british submarine, rams u-boat, iv: 214. _e-54_, british submarine, sinks u-boat, iv: 212. eagle hut, american "y" center in london, vii: 288, 300. east, maj.-gen. maurice on strategic value of campaigns in, ii: _intro. vii-xxiv._ east africa, german, conquered by allies, iii: 255; acquired by great britain, '18, xii: 271; area and population, xii: 271. east prussia, russian invasion of, aug., '14, ii: 24, 227, iii: 110-116; battle of tannenberg, aug., '14, ii: 24, iii: 112-116; effect of russian invasion on first battle of the marne, ii: 227; german campaigns against russia, '14, ludendorff's account, ii: 353-357; plan of russian invasion, iii: 110; importance, iii: 112; hindenburg's strategy, iii: 113; strength of hindenburg's forces, iii: 113; decisive german victory at mazurian lakes, iii: 113; russian withdrawal, iii: 116; plebiscite provisions of peace treaty, xii: 200. eastern front, fortifications of, iii: 109; strategic aspects, iii: 110; austrian strategic plans, iii: 118; _see also_ east prussia; galicia; mazurian lakes; poland. eastern karelia, military government established, may, '19, xii: 279; area, xii: 279; population, xii: 279. ebert, friedrich, elected president of germany, feb., '19, vi: _intro. xiii_, 292; appointed chancellor, nov., '18, vi: 273; establishes new democratic government, nov., '18, vi: 277; states government's determination to put down spartacides, jan. 8, '19, vi: 287; outlines policies of provisional government, feb., '19, vi: 292; german press comment on personality, vi: 293; biography, ix: 135-138. economic strategy, in war, theory and example of, ii: 16; allied proposals for anti-german boycott, xii: 102. ecuador, proletarian unrest, vi: 392; delegates to peace conference, xii: 180. ecurey, captured by 5th div., nov. 8, '18, v: 272. edgewood arsenal, great u. s. poison-gas plant, viii: 179-187. education, bilingual schools discontinued in canada, vi: 29; a. e. f. becomes "college in khaki," vii: 280; a. p. stokes makes survey for a. e. f., vii: 281; y. m. c. a. hut classes, vii: 281; demand for text-books in a. e. f. schools, vii: 282; a. e. f. post schools, vii: 282; work of bureau of citizenship among a. e. f., vii: 282; u. s. soldier students at french and british universities, vii: 282, 290; army educational committee, vii: 282; a. e. f. university at beaune, vii: 282; y. m. c. a. work for prisoners of war, vii: 306. edward vii promotes anglo-french good will, i: 98. edwards, maj.-gen., commands 26th div. at st. mihiel, sept., '18, v: 202; relieved of command, oct. 24, '18, v: 252. effects depot, s. o. s., for care of effects of deceased men, v: 331. eggers, sgt. alan louis, gets congressional medal of honor, x: 392. eggs, imports of, by germany, ii: 18. egli, col., head of swiss intelligence service, tried for unneutral communication with germans, vi: 380. egypt, british establish themselves in, 1882, i: 48; british control recognized by france, '04, i: 99; anti-british german propaganda, iii: 188; political unrest, iii: 188; operations against suez canal, iii: 189; turks start offensive in western egypt, iii: 190; turks driven out, '16, iii: 191; tribesmen suppressed, '16--'17, iii: 191; resentment against british domination, vi: 67; popular pro-turkish sympathy, vi: 68, 330; nationalist cry against "british oppression," vi: 69; great britain declares protectorate over, dec. 19, '14, vi: 69, xii: 279; nationalist movement for independence, '18, vi: 70; insurrection, '19, vi: 71; german rights in, surrendered under peace treaty, xii: 208; area, xii: 279; population, '14, xii: 279. eichhorn, chief of berlin police, deposed, jan. 5, '19, vi: 287. eichorn, marshal von, assassinated by ukrainian, vi: 187, 248. eisner, kurt, becomes head of bavarian socialist republic, nov., '18, vi: 273, 280; appeals to german national government on behalf of berlin spartacides, vi: 288; assassinated, feb. 21, '19, vi: 298. el arish, occupied by turks, jan., '15, iii: 189; taken by british, dec. 22, '16, iii: 192. el kubri, turks engage british in vicinity of, iii: 190. el tasher, british defeat sudanese at, may, '16, iii: 191. elbe, internationalized by peace treaty, rules of navigation, xii: 248. electric drive, description and advantages of, iv: 322; successfully applied in _u. s. s. new mexico_, iv: 322. electric welding, use in repairing interned german liners, iv: 319; use in u. s. in construction of ships, iv: 322. elles, gen., commander of british tank corps, iii: 377. elliott, col., leader of british marines, killed in zeebrugge raid, iv: 264. ellis, sgt. michael b., wins congressional medal of honor, x: 388. ely, maj.-gen., hanson e., as colonel, commands 28th inf. at cantigny, may 28, '18, v: 124; assigned to command of 5th div., oct. 21, '18, v: 252. _emden_, german commerce raider, exploits of, iv: 166-194; method of sinking captured ships, iv: 173; bombards madras, sept. 18, '14, iv: 174; attacks penang harbor, oct. 28, '14, iv: 178; lands force on keeling island, nov. 9, '14, iv: 184; attacked by _sydney_ off keeling island, nov. 9, '14, iv: 185; destruction of, report of captain of _sydney_, iv: 187; summary of raiding activities, iv: 189; landing force at keeling escapes on _ayesha_, iv: 190-194. emmich, gen. von, commands german attack on liége, iii: 10. emont wood, cleared by 37th div., sept. 28, '18, v: 229; 37th div. retreats from, sept. 29, '18, v: 230. emplacements, duplicate, permitting rotation of artillery in trenches, v: 14. _empress maria_, russian dreadnought, blown up in black sea, iv: 366. enfield rifle, facilities for manufacture in u. s., v: 347; standard british service rifle, viii: 95; u. s. production figures, xii: 284. engineering, development in u. s. navy, iv: 319; relation of, to war, viii: 298-302. engines, shipment of american locomotives to france, xii: 286. england, _see_ great britain. entente cordiale, established between france and russia, 1891, i: 98. entertainment, 27th div. theatrical troupe, v: 299; over-there theater league, activities, vii: 277, 339-343; for a. e. f., by y. m. c. a., vii: 277; at winchester camp, vii: 287; for army of occupation, vii: 292; for a. e. f. in siberia, vii: 295; "y" program for navy, vii: 299; by stage women's war relief, vii: 346, 348. enver pasha, leader of young turks, i: 109, ix: 270; commander of turkish army, iii: 164; in caucasus campaign, iii: 260; biography, ix: 270-274. eperlecques, training area for 30th div., v: 300. epieds, german stand at, in retreat from marne, july 21, '18, v: 184; general degouette commends americans for service at, v: 192. epionville, taken by 91st div., sept. 26, '18, v: 225. ersatz, german, i: 72. erskine, prof. john, member of army educational commission, vii: 282; educational director of a. e. f. university at beaune, vii: 283. erwin, brig.-gen. james b., commands 6th div., aug., '18, v: 197. erzberger, leader of german center party, vi: _intro. xiii_; becomes minister of finance, july, '19, vi: _intro. xiii._ erzerum, captured by russians, feb. 15, '16, i: 384, ii: 91, iii: 262. erzingan, captured by russians, july 25, '16, i: 386, iii: 263. eseka, captured by french, oct. 30, '15, i: 382. esnes, location of, v: 217; 4th engineers build road from, to malancourt, sept., '18, v: 226. essen, bombarded by belgian airplanes, nov. 19, '15, i: 382. essen trench, captured and reversed by french, oct. 1--3, '18, v: 254. essey, captured by 42nd div., sept. 12, '18, v: 211. essomes-sur-marne, location of, v: 133. estaires, occupied by germans, apr. 10--11, '18, i: 395. esternay, destruction by germans, iii: 297. esthonia, early history, vi: 226; independent republic established, apr., '18, vi: 230, xii: 279; area, xii: 279; population, '18, xii: 279; _see also_ baltic provinces. estrayes wood, captured by 29th div., oct. 23, '18, v: 252. etraye, threatened by 33rd div., oct. 7, '18, v: 82; ridge taken by 29th div., oct. 23, '18, v: 86; captured by 79th div., nov. 9, '18, v: 272. eupen, ceded to belgium, under peace treaty, vi: 89, xii: 188. europe, area of greatest nationalistic development, i: 9; race rivalries in, i: 21; alignment of nations at outbreak of war, ii: 2; general conditions, winter '17--'18, v: 1, 113; military situation in, nov. 1, '18, v: 253. evan-thomas, rear-adm. hugh, commands british 5th battle squadron at battle of jutland, iv: 110. everts, gen., commander of russian army of the bug, iii: 119. exermont valley, slopes taken by 182nd brig., sept. 28, '18, v: 229; heavy a. e. f. casualties at, oct. 5, '18, v: 240. explosion, compared with detonation, viii: 1. explosive shell, compared with shrapnel, ii: 288. explosives, _see_ ammunition. extraterritoriality, explained, i: 17; japan withdraws rights of, i: 18; turkey withdraws rights of, i: 18. f _falaba, s. s._, british steamer, sunk by german submarine, mar., '15, i: 319, 378, iv: 218. falkenhayn, gen. erich g. a. s. von, sent to regain bagdad, ii: _intro. xx_, iii: 196; invades rumania, ii: 60, iii: 218; replaced as chief of german general staff by von hindenburg, iii: 61; biography, ix: 262. falkland islands, battle of, british defeat german fleet, dec. 8, '14, i: 376, iv: 69-85, ix: 308; strength of opposing fleets, iv: 70; von spee's strategy, criticism of, iv: 70; sturdee's tactics, iv: 71; german cruiser _dresden_ escapes, iv: 74; british casualties, iv: 74; german loss in men and ships, iv: 74; importance of victory, iv: 74; admiral sturdee's official report, iv: 75-79; eye-witness accounts, iv: 80-85. fallon, capt. david, brave tank commander, x: 165. _falmouth_, british cruiser sunk, aug. 19, '16, i: 386; at battle of heligoland bight, iv: 241. falzarego pass, limit of italian advance in cadore, iii: 234. _fanning_, u. s. destroyer, captures german submarine, iv: 350. fanning island, germans destroy wireless station at, sept. 7, '14, iv: 62. fao, british land at, nov. 7, '14, iii: 180. _farewell_, poem by lieut. robert nichols, r. f. a., vii: 389. farman airplane, viii: 189. farnsworth, maj.-gen. charles s., commands 37th div., june, '18, v: 145; in marne-aisne offensive, sept., '18, v: 219. fay, robert, german agent, plots to blow up ships, x: 369-377. fay-en-haye, location in st. mihiel salient, v: 199. fayolle, gen., commands allied forces opposing german drive on paris, '18, ii: 152; decorated for somme campaign, iii: 60. _fearless_, british cruiser in battle of heligoland bight, iv: 240. federalism, development in america and europe, i: 30. ferdinand, archduke francis, _see_ francis ferdinand, archduke of austria. ferdinand, czar of bulgaria, abdicates, oct. 5, '18, i: 399, vi: 347; proclamation to army, vi: 340; appeals to germany, vi: 347; character, ix: 378; biography, ix: 378-380. _ferdinand of bulgaria_, poem by d. s. p., ix: 376. ferdinand, king of rumania, biography, ix: 399-401. fère forest captured by 42nd div., july 26, '18, v: 58. ferrero, guglielmo, italian historian, comparison of german militarism with roman imperialism, ii: 365-372; sympathy with allies, '14, vi: 119. fertilizers, shortage in germany during blockade, ii: 18. field glasses for a. e. f., viii: 326. finland, signs peace with germany, mar. 7, '18, i: 393; political history, 1809--1914, vi: 196; granted autonomy, 1809, vi: 196; autonomy revoked, 1899, vi: 196; threatened with class revolution, '05, vi: 196; socialist tendency in diet, '05, vi: 196; nationalism assailed by russian bureaucracy, '14, vi: 196; german aid against russification, vi: 196; declares independence, mar., '17, vi: 198; base for russian revolutionary activities, '17, vi: 198; bolshevik revolution, nov., '17, vi: 198; russia recognizes bolshevik government, '17, vi: 198; socialists demand union with russian soviet, nov. '17, vi: 198; white guards recalled from germany to quell civil war, vi: 198; general von der goltz sent to aid whites, vi: 199; republic established by moderate socialists, '18, vi: 200; new government recognized by great britain and u. s., '18, vi:200; bolshevism stamped out by mannerheim, '18, vi: 200; origin of inhabitants, vi: 200; area and population, xii: 279. _finland_, u. s. transport sunk by u-boat, nov. 2, '17, i: 392; torpedoed, oct. 27, '17, iv: 337. _firedrake_, british destroyer in battle of heligoland bight, iv: 241. first aid, importance in treatment of wounded, vii: 178. fisher, adm. lord john, responsibility for gallipoli disaster, ii: 198, 200; views on advisability of dardanelles expedition, ii: 203; biography, ix: 288-290. fisher, prof. irving, analysis of high cost of living, xii: _intro._ fiske, rear-adm. bradley t., invents torpedo plane, iv: 335. fiske, brig.-gen. h. b., chief of training, a. e. f., sept., '17, v: 102. fismes, captured by 32nd div., aug. 6, '18, v: 61; taken and retaken by u. s. divisions, july--aug., '18, v: 189; general degoutte commends americans for services at, sept. 9, '18, v: 192. fismette, captured by 28th div., aug., '18, v: 62. fiume, conflict of italians and jugoslavs for, vi: 365; arrival of u. s. troops at, vi: 366; italian delegates withdraw from peace conference in controversy over, vi: 368-370, xii: 159; occupied by d'annunzio, vi: 370; awarded to italy conditionally, vi: 370. _five souls_, poem by w. n. ewer, xi: 93. flabas, captured by 26th div., nov. 8, '18, v: 271. flanders, battles of: oct., '14, nature of terrain, iii: 38, viii: 299; extent of battle line, iii: 38; foch cuts dikes of yser, iii: 40; germans repulsed, iii: 40. aug., '17, failure of british offensive, ii: 56; ludendorff's criticism of, ii: 343; description of, iii: 78-80; duration, iii: 78; objects, iii: 78; allied offensive checked by rains, iii: 79; passchendaele ridge captured by canadians, iii: 79; allied gains, sept.--oct., '17, iii: 79; results, iii: 79. sept., '18, belgians and british renew offensive, v: 213. flemings, failure of german propaganda among, vi: 86. flers, captured by allies, sept. 15, '16, i: 388. fleury, at verdun, captured by french, aug. 3, '16, i: 386; captured by germans, '16, iii: 313. fleville, captured by 16th inf., oct. 5, '18, v: 240. _florence h._, cargo-carrier, heroism of crew, iv: 354. florina, occupied by allies, sept. 18, '16, i: 388, iii: 208; occupied by bulgars, aug. 17, '16, iii: 207, 208. "flying dutchman," name applied to _emden_, iv: 187. foch, marshal ferdinand, strategy of, in allied offensive, '18, ii: 76-98, 212, v: 213; at second marne battle, ii: 77, 154; theories on strategy, ii: 80, 81, 103, 137; takes initiative of attack from germans, ii: 84, v: 130; as lieut.-col., professor of general tactics at école de guerre, ii: 103, 137, 220; share in victory at first marne battle, ii: 103, 138-142, 182, 184, 220; author of _principles of war_, summary, ii: 104; conception of _mind_ as determining factor in victory, ii: 138; on functions of a general, ii: 138; theories on battle tactics, ii: 138; commands 20th corps at nancy, '14, ii: 138; organizes new french army, '14, ii: 138; famous despatch during first marne battle, ii: 141, iii: 33; given command of french army of the north, oct., '14, ii: 143, iii: 38; floods belgium as defense against germans, '14, ii: 145; stops british retreat at ypres, '14, ii: 145, 220; commands french at somme battle, july, '16, ii: 148; appointed co-ordinator of allied operations, dec., '16, ii: 148; appointed chief of staff, french army, mar., '17, ii: 148; sends reinforcements to check italian rout, ii: 149; french representative on allied war council, ii: 149; appointed allied commander-in-chief on western front, mar. 28, '18, ii: 151, iii: 89, v: 120, 380, xi: 41; analysis of weakness of german drive, '18, ii: 154; made marshal of france, ii: 156, iii: 97; viscount french's eulogy of, ii: 170; general malleterre's eulogy of, ii: 220; commands 20th corps at battle of the selle, '14, iii: 18; repulses germans at mondement, '14, iii: 33; member inter-allied general staff, iii: 84; text of appointment as allied commander-in-chief, v: 380; biography, ix: 148-153; clemenceau's estimate of, ix: 151; pronunciation of name, ix: 151; bibliography, ix: 153; members of family killed in war, ix: 153; military commandments, xi: 55; conference with secretary baker, at trois fontaines, oct. 4, '18, xii: 277. focsani, captured by germans, jan. 8, '17, i: 389. fogaras, captured by rumanians, iii: 218. fokker airplane, machine-gun mounting on, viii: 192, 208-210. foltz, brig.-gen. f. s., commands 91st div., july, '18, v: 196. food, sent to europe from u. s., '16--'18, xii: 36; importance in winning war, xii: 40, 135; war's effect on neutrals, xii: 42; european relief by u. s., hoover's report, xii, 42; situation in europe after armistice, xii: 43; world's requirements and supply, '19, xii: 44; use of potatoes as, xii: 47; u. s. exports to europe, before and during war, xii: 135; problem of national self-sufficiency, xii: 135; war-time sugar shortage, xii: 138; national tastes in, xii: 138; scientific rations _vs._ personal taste, xii: 139; scientific rations as conservation measure, xii: 139; inter-allied scientific food commission, functions, xii: 139; war-time government control, xii: 140; u. s. wheat exports to allies, july 1, '17--july 1, '18, xii: 141; _see also_ under each country. foreign legion, american enlistments in, '14--'17, iii: 391; in aisne-marne offensive, july 18, '18, v: 168; heroic story of, x: 27-32; history, xi: 193. forestry, a. e. f. operations, v: 334, 400. forests, french, chief source of allied lumber supply, viii: 307. forêt wood, captured by 4th div., oct. 11, '18, v: 248. forges, captured by germans, mar. 6, '16, iii: 51, 306; captured by 33rd div., sept. 26, '18, v: 224. _formidable_, british battleship sunk by u-boat, jan. 1, '15, i: 378. formosa, acquired by japan, 1895, i: 20. forrest, sgt. arthur j., wins congressional medal of honor, x: 401. forstner, lieut. von, share in zabern incident, i: 73. fortescue, granville, description of scenes behind turkish lines at gallipoli, iii: 340. foster, sgt. gary evans, wins congressional medal of honor, x: 395. "fourteen points," president wilson's basis for peace, xii: 163-165. "foyers du marin," "y" huts for french sailors, vii: 313. "foyers du soldats," comfort huts for french soldiers, vii: 310; number, vii: 311; locations, vii: 313. fractures, treatment of, viii: 367. france: air service, strength at end of war, viii: 201; personnel and equipment, viii: 202, 206. army, increase in, for '14, i: 132; german estimate of military effectiveness, '14, ii: 4; military resources, aug. 1, '14, ii: 12; german military critic on, ii: 256; uniform, ii: 286; pre-war organization, iii: 3; morale, '17, iv: 10; relations with a. e. f., v: 22; type of service rifle, viii: 95; medical service, viii: 362-365; chasseurs, xi: 189; spahi, xi: 189; zouaves, xi: 189; tirailleurs, xi: 191; foreign legion, xi: 193; _see also_ foreign legion; for military operations, _see_ name of campaign. artillery, famous "75's," efficiency of, ii: 287; plan of rotating in trenches, v: 14; 520-mm. (21-inch) howitzers, viii: 51-53. casualties, total in war, ii: 116, iii: 404; money equivalent of man-power lost, xii: 25; total battle deaths, xii: 288. cost of living, per cent. rise during war, xii: _intro. x._ declarations of war, by germany on, aug. 3, '14, i: 140; on austria-hungary, aug. 10, '14, i: 375; on turkey, nov. 5, '14, i: 376; on bulgaria, oct. 16, '15, i: 382; popular reception of, '14, vi: 95. food, potato crop, xii: 47; war-time sugar shortage, xii: 138. foreign policy, occupation of algeria, i: 37; world position, 1871, i: 47; world position, '14, i: 59; triple entente among france, russia, great britain, i: 98, 103, 106, 107, 218, 220, ii: 2; entente cordiale with russia, 1891, i: 98; anglo-french treaty of, '04, i: 99; franco-russian treaty of july, '12, i: 107; anglo-french agreement for united action against "third power," '12, i: 107, 220; russian alliance cause of entry into war, i: 220; pledge to respect belgian neutrality, i: 223; french complaints of british shirking of war duty, iii: 382; austro-hungarian attempts to make peace with, '17, vi: 315; claims to asiatic turkey under secret treaties, '16--'17, vi: 334; turkish policy announced, nov. 7, '18, vi: 334. forests, chief source of allied lumber supply, viii: 307. frontiers, topography of german border, ii: 6; defenses, iii: 2; natural gateways on, v: 214. industries, war-time disorganization, xii: 79; economic value of a. e. f. to, xii: 86; german destruction in invaded territory, xii: 87. internal politics, development of democracy, i: 30; organization of war cabinet by viviani, vi: 97; fall of viviani government, oct. 28, '15, vi: 100; nation united in war aims, vi: 101; mixed reception of wilson's peace proposals, vi: 102; socialists advocate peace by negotiation, vi: 102, 103; fall of briand ministry, '17, vi: 103; effect of russian revolution, vi: 103; stockholm conference causes crisis, vi: 103; _bonnet rouge_ disclosures wreck ribot cabinet, '17, vi: 104; painlevé forms new cabinet, vi: 105; painlevé ministry falls, nov., '17, vi: 106; clemenceau succeeds as premier, vi: 106; clemenceau overcomes pacifist opposition, vi: 106; growth of labor movement in politics, vi: 109; class war, '19, vi: 110; jaurès parade, '19, vi: 110; significance of attempt to kill clemenceau, vi: 110; french peace aims, vi: 111; may day riots, '19, vi: 111; class war intensified, vi: 113. labor, war achievements, ii: 373-382; shortage due to mobilization, ii: 373; skilled workers recalled from army, ii: 374; women as munition workers, ii: 376; foreigners recruited for war work, ii: 377; importation of chinese laborers, ii: 377; use of colonials, ii: 377; use of prisoners of war, ii: 377; size of labor army, ii: 377; housing of war workers, ii: 377; co-operative societies for provisioning of war workers, ii: 378; protection for women workers, ii: 379; war-time abandonment of strike and sabotage, ii: 379; state intervention in industrial disputes, ii: 380; growth of syndicalism, ii: 381; demand for share in management, ii: 381; selective assignment to industries, xii: 79. minerals, german plans for seizure of iron mines, i: 122, 267, ii: 15, 20; coal production, '13--'17, xii: 48. morale, of people during war, i: _intro. xiii_, ii: 383-392; war-time unity, ii: 385; factors in war-time unity, ii: 392; depression, '17--'18, v: 2. munitions, statistics on ordnance production, ii: 373; immensity of need unforeseen, ii: 373. navy, strength in '06, i: 101; increase in, for '14, i: 132; entrusted control of mediterranean by allies, iv: 12; strength at outbreak of war, iv: 13, 373; war record in mediterranean, iv: 373; work in dardanelles, iv: 375; _fusiliers marins_, french naval gunners, on western front, iv: 376; protection of french coast, iv: 377; anti-submarine activities, iv: 378. peace conference, delegates to, xii: 179; _see also_ peace conference. peace treaty, ratified, oct. 13, '19, xii: 264; _see also_ peace treaty. population, in 1860, i: 40; in 1874, compared with that of germany, i: 61; in '14, compared with that of germany, i: 61; growth since 1870 compared with that of germany, i: 262. prisoners of war, iii: 404. railroads, unprecedented war-time demands on, xii: 91; equipment shipped to france by u. s., xii: 95, 286. reconstruction, material needs, xii: 87. shipping, war losses, xii: 87. war cost, loans floated in u. s., aug., '14--jan., '17, xii: 2; income-tax rates compared with british and u. s., xii: 4; debt to u. s., xii: 18, 31; money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; andré tardieu's estimate, xii: 86; average daily war cost, xii: 106; total war cost, aug., '14--mar., '19, xii: 107; taxation, xii: 109; loans, xii: 111; rise in national debt, xii: 111-113, 114. war relief, _see_ war relief. francis ferdinand, archduke, heir to austrian throne, i: 111; murdered with consort at sarajevo, june 28, '14, i: 111, 375, vi: 306, xi: 4; responsibility of serbian government for murder, i: 112; responsibility disclaimed, i: 246; causes and results of murder, vi: 135; national policy, vi: 356. francis joseph, emperor of austria-hungary, dies, nov. 21, '16, i: 388, vi: 313; tragedies of reign, vi: 305; proclamation against italy, vi: 310; biography, ix: 370-373. franco-american committee for protection of children of frontier, vii: 101. francois, gen. von, german commander in east prussia, iii: 111. frankenau, russians defeat germans near, aug. 22, '14, iii: 111. frankfurt, bombed by allied airmen, oct. 1, '17, i: 392. frantz, gen. von, protest against allies' peace terms, may, '19, vi: 302. _frauenlob_, german cruiser, torpedoed in baltic by british, nov. 7, '15, i: 382. frederick william, german crown prince, moving spirit for campaign in west, '14, ii: 13; commands an army at first marne battle, ii: 184; renounces succession, nov. 9, '18, ii: 340; commands one of armies of invasion, '14, iii: 10; commands german armies at verdun, '16, iii: 303; detained at wieringen by dutch, nov., '18, vi: 278; biography, ix: 367-369. free milk for france, fund started, vii: 376; object, vii: 376; french testimonials, vii: 379. freedom of the seas, u. s. note to germany on, i: 324; maurice revai, austro-hungarian deputy, on teutonic conception of, ii: 27; definition, xi: 18. french heroes' lafayette memorial fund, vii: 90, 110-116. french, field-marshal sir john, viscount of ypres, report on events leading to first marne battle, ii: 9; first british commander-in-chief in france, ii: 159, iii: 22, ix: 180; publishes _1914_, account of military operations of year, ii: 159; summary of _1914_, ii: 160-174; arrival in france, ii: 161; dispute with kitchener on british military policy in france, ii: 164, 169; exposé of british shell shortage, ii: 173; overruled by joffre on plan for offensive against channel ports, ii: 174; commands british at first marne battle, ii: 184; official despatch on mons retreat, iii: 24; relieved as commander-in-chief, iii: 46, ix: 52; biography, ix: 177-181; lord-lieutenant of ireland, '18, ix: 181. french-swiss, characteristics of, vi: 380. french wounded emergency fund, vii: 91. fresne, captured by germans, mar. 7, '16, i: 384. fresnes-en-woevre, taken by 4th div. in st. mihiel drive, sept. 13, '18, v: 69. freyberg, colonel, new zealander, wins victoria cross, x: 131. freytag-loringhoven, gen. baron von, german military critic, view on german tactics at start of war, ii: 10; summary of his _deductions from the world war_, ii: 254; exposition of german war philosophy, ii: 260. fricourt, captured by allies in somme battle, iii: 58. friedrichshaven, bombarded by british airmen, nov. 21, '14, i: 376. frise, captured by germans, jan., '16, iii: 47. fryatt, capt. chas., executed by germans, july 27, '16, i: 386, x: 265-269; attempts to ram _u-33_, mar. 20, '15, x: 265; ambassador gerard's intervention for, fails, x: 265. fuchs, lieut.-gen., german commander in st. mihiel salient, sept., '18, v: 201. funk, pvt. jesse n., gets congressional medal of honor, x: 401. furlong, 1st lieut. richard a., gets congressional medal of honor, x: 401. fyfe, hamilton, defense of general gough in defeat of british fifth army, ii: 190. g _g-13_, british submarine, sinks u-boat, iv: 213. g. c.'s, explanation of, v: 12. gaba tepe. _see_ gallipoli campaign. gabet-aubriot electric torpedo, for destroying barbed wire, viii: 154. gädke, col., german military writer, views on the war, ii: 270. gaffney, pvt. frank, wins congressional medal of honor, x: 393. galicia, german offensive in, '15, ii: 233, 360 (ludendorff's account), iii: 135-138; russian invasion of, '14, iii: 118-124; general russky crosses border, sept., '14, iii: 120; lemberg captured by russians, sept. 3, '14, iii: 121; rout of auffenberg's army, iii: 121; last russian offensive, '17, iii: 146, 147; russian attempts at russification of, vi: 243. galliéni, gen. joseph-simon, prepares paris for siege by germans, iii: 28; biography, ix: 161-164; military governor of paris, ix: 163. gallipoli campaign, winston churchill advocates forcing dardanelles, ii: _intro. x, xii_, 29, 200; reasons for, ii: _intro. xii_, 27-31, 198, iii: 161-164, iv: 51-57; failure of initial naval attack, ii: _intro. xv_; reasons for land attack after naval failure, ii: _intro. xv_; weakness, ii: _intro. xvi_; strategy, ii: 27-31; feb.--dec., '15, ii: 27-31; viscount french's condemnation, ii: 173; commission of inquiry into responsibility for failure, appointment and personnel, ii: 197; persons named as responsible, ii: 198; summary of commission's report on responsibility, ii: 200; british war council, responsibility of, for disaster, ii: 200; campaign sanctioned without expert study, ii: 200; lord fisher disapproves expedition, ii: 203; premier asquith's defense, ii: 204, iv: 53; winston churchill's defense, ii: 205, iv: 56; military operations, apr. 25, '15--jan. 9, '16, iii: 161-177; allies assemble troops in egypt for expedition, apr., '15, iii: 162; composition of allied forces, iii: 162; gen. sir ian hamilton commander of allied troops, iii: 162, iv: 32; enver bey commands turkish defenders, iii: 164; composition of turkish forces, iii: 164; topography of peninsula, iii: 165, iv: 21, 23; defenses, iii: 165, iv: 23, 27, 45; british plans for landing attack, iii: 167; allied landing, apr. 25, '15, iii: 167-170, 352, iv: 36-42 (adm. de robeck's official report), x: 35-40; anzacs scale cliffs near gaba tepe, apr. 25, iii: 167, 352 (masefield's description), iv: 36 (official report); achi baba, key to southern gallipoli, iii: 170, 355; pasha dagh, australian objective, iii: 170; krithia, objective of allied attack, may--june, '15, iii: 170; "war of attrition" on anzac sector, iii: 171; allies' revised strategy, july, '15, iii: 171-173; turkish positions, july, '15, iii: 171; anzac reinforcements land for final attack, aug., '15, iii: 173; last allied offensives fail, aug., '15, iii: 173, 355-358. (masefield's description); last attack on chunuk bair, aug., '15, iii: 173, 355; last attack on koja chemen tepe, aug., '15, iii: 173, 355, 357; last attack on krithia, aug., '15, iii: 173; obstacles to success of last allied offensive, iii: 173; gen. monro succeeds hamilton, iii: 174; evacuation, nov., '15--jan., '16, iii: 174-177, 358; casualties, allied and turkish, iii: 177, 355, 357, iv: 51; reasons for failure, iii: 177; bibliography, iii: 177; fortescue's description, iii: 340-343; turkish camp scenes behind the lines, iii: 341; masefield's description of british embarkation for, iii: 350; soldier's life on gallipoli, described by masefield, iii: 353; gen. hamilton's report on lone pine fighting, iii: 356; adm. carden favors naval attack, iv: 28; initial allied bombardment, nov. 3, '14, iv: 28; british plan of operations, iv: 30; preliminaries to attack, jan. 15--feb. 19, '15, iv: 30; bombardment by allied fleet, feb. 19, '15, iv: 30, 42; allied fleet enters straits, mar. 1, '15, iv: 32; vice-adm. de roebeck succeeds to command of allied fleet, mar., '15, iv: 32; allies decide to combine naval and land operations, iv: 32, 35, 49; number and description of allied warships participating, iv: 33; allied bombardment, mar. 18, '15, iv: 34 (official report), 47; hamilton's delay fatal mistake of campaign, iv: 34; french land troops at kum kale, apr. 25, '15, iv: 41; heroic minesweeping, iv: 43; narrows forts bombarded, mar. 5, 7, '15, iv: 45; analogy to opening of mississippi by farragut during civil war, iv: 51; cost of expedition, iv: 51; lessons of, iv: 52; mistakes in plan and execution, iv: 56; turkish joy over allied failure, vi: 330; y. m. c. a. with british at, vii: 321; _see also_ dardanelles. gallowitz, gen. von, military career, v: 203. gangrene, treatment for gas gangrene, viii: 367, xi: 287. garda, lake, naval operations on, iii: 232. gardens, cultivated in france by british soldiers, ii: 131; by a. e. f., v: 330. gardiner, j. b. w., on strategy of the war, ii: 1. garibaldi, descendants of liberator, in war, x: 62-65. _garibaldi_, italian cruiser sunk by u-boat, iv: 369. _garibaldi hymn_, italian national anthem, xi: 328. garrisons, use of small _groupes de combat_ by french, v: 13. garua, taken by allies, june 11, '15, i: 380. gas, _see_ chemical warfare. gas gangrene, _see_ gangrene. gas masks, v: 324, viii: 174-178, xi: 317. gasoline, consumption by a. e. f., v: 331. _gaulois_, french battleship at gallipoli, iv: 31; damaged in attack, mar. 18, '15, iv: 35. gaza, turks defeated by british at, mar. 26--27, '17, iii: 192; captured by british, nov. 6, '17, iii: 194. geddes, sir eric, biography, ix: 313-316. generalship, british, in the war, analyzed by philip gibbs, iii: 370-378; physical characteristics of british leaders, iii: 371; mostly of cavalry training, iii: 371; personal gallantry, iii: 371; as great "english gentlemen," iii: 371; mental characteristics, iii: 371; mostly conservative men, iii: 372; no leader of magnetism, iii: 372, 374; personal traits of sir douglas haig, iii: 373; ill feeling against staff by men in ranks, iii: 373; faulty tactics in battles of the somme, iii: 374; desire to gain worthless ground, iii: 374; efficiency of administrative organization, iii: 374; sir herbert plumer, great military chief, iii: 375; faults at battles of neuve chapelle and loos, iii: 375; gen. birdwood's popularity, iii: 375; tragedy of second army, iii: 375; final victory not due to generalship, iii: 378; success of unprofessional soldier as leader, iii: 378; inefficiency of staff college, iii: 378; chief shortcoming, iii: 378. geneva, designated capital of league of nations, vi: 382, xii: 183. geologists, war services, v: 327, viii: 311. geophone, description and use for sound locating, viii: 312-314. george v, king of england, receives general pershing, june, '17, v: 97; biography, ix: 392-395. georgia, early history of people, vi: 231; republic established, jan., '18, xii: 279; area and population, xii: 279. gerache wood, taken by 80th div., nov. 4, '18, v: 266. gerard, james w., leaves germany as u. s. ambassador, i: 346. german-americans, distribution and characteristics, i: 278; bernhardi's views on political importance, i: 279. german-swiss, characteristics, vi: 380. _germania, to_, bulgarian ode, vi: 342. germany: air service, passing of supremacy, vii: 201; strength at end of war, viii: 202; pre-war record flights, viii: 206; equipment and strength, viii: 206; supremacy over allies, viii: 207; bombing planes, viii: 221-222; a. e. g. bombers, viii: 221; gotha bombers, viii: 221; lizenz bombers, viii: 222; zeppelins during war, viii: 246-248; zeppelins described, viii: 248-254; military service abolished under peace treaty, xii: 214; surrendered to allies, xii: 215. area, of republic, xii: 279. army, aristocratic character, i: 69; system of organization, i: 71, iii: 4-6; tradition of efficiency, i: 72; conception of duties, i: 72; increase in peace strength, '14, i: 131; dependence on imports for munitions, ii: 21; loss of morale in somme battle, '16, ii: 47; manpower on western front, mar., '18, ii: 65; loss of morale under allied offensive, '18, ii: 86, v: 87, vi: 270; german critic's opinion of, ii: 257; machine-gun equipment, ii: 275; heroism of machine-gunners, ii: 282; invisibility of uniform, ii: 286; recruiting situation, '18, ii: 308-310, 318; desertions, ii: 309; punishments not severe enough, ludendorff's view, ii: 318; ludendorff on causes of demoralization, ii: 320, 333; agitators undermine morale, ii: 320; reorganized after somme battle, '16, iii: 61; best equipped, iii: 272; infiltration method of attack, iii: 386, v: 17; construction of machine-gun nests, v: 37; sympathy with revolution, '18, vi: 274; return to berlin, dec. 10, '18, vi: 282; machine gun corps, viii: 79; trench systems, viii: 124-129; adopt trench defense after marne defeat, '14, viii: 134; machine-gun equipment compared with allied, aug., '14, viii: 134; method of attack, viii: 137; "holding" troops, viii: 144; "shock" troops, viii: 144; training, xi: 195-204; cavalry, xi: 196; discipline, xi: 202; reduction in strength under peace treaty, xii: 209, 211; reduction in equipment under peace treaty, xii: 210, 212; table of organization imposed by peace treaty, xii: 212; for military operations, _see_ western front; _also_ name of campaign or engagement. artillery, superiority over allies, ii: 128, 288, viii: 36; guns captured by allies, july--nov., '18, iii: 103; development of heavy field howitzers, viii: 22; 11-in. siege mortars described, viii: 34-36; long-range bombardment of paris, viii: 45-47; structure of long-range shells hitting paris, viii: 46. bagdad railway, interest in, _see_ bagdad railway. belgian neutrality, violation of, _see_ belgium, neutrality. blockade of, effectiveness, i: 280, vi: 253, xii: 97 (german view); allied regulation of neutral commerce, i: 280, vi: 377; controversy between u. s. and great britain on seizure of neutral cargoes, i: 312, 318, 339; british order in council, mar. 15, '15, i: 318; allied trade blacklist, i: 335; controversy between u. s. and great britain on seizure of neutral mail, i: 335; measures to starve germany, i: 358; objects of british orders in council, ii: 16; food shortage, ii: 17, vi: 253-255, 260, 261, 266, 285, 294; report of german scientists on, ii: 17; estimate of minimum food requirements, ii: 17; meat production self-sufficient, ii: 18; statistics on pre-war food imports, ii: 18; shortage of fertilizers, ii: 18; increased production as offset against blockade, ii: 18; reduction of waste, ii: 18, vi: 254; increase in tilled land, ii: 19; international law on, ii: 21; difficulties of enforcement, ii: 21, iv: 86; german isolation, ii: 21; value of, ii: 22; effect on civilian population, ii: 99; use of dog flesh as food, xii: 41; after-war food conditions, xii: 45; u. s. export license system, xii: 99; german trade with neutrals, xii: 100; smuggling, xii: 100; allied plan of after-war economic boycott, xii: 102; pre-war food production, xii: 136-138; war-time food problems, xii: 136. boundaries, under peace treaty, xii: 186. casualties, total in war, ii: 116, iii: 404; princes killed in battle, ix: 237; money equivalent of man-power lost, xii: 25; total battle deaths, xii: 288. china, rights in, surrendered under peace treaty, xii: 206. coal, production, 1880--1913, i: 267; secret of power, i: 267; production, '13--'15, xii: 48. colonies, loss of, i: 13; acquisition of african, i: 50, 95; acquisition of pacific islands, i: 81; acquisition of kiau-chau, i: 82; south american settlements, i: 84; area and population of african, i: 96, xii: 279; understanding with british on african expansion, i: 200; necessity as outlet for population, i: 262; important motive in war policy, ii: 13; conquest of african, by allies, iii: 252-256; new guinea conquered by australians, vi: 38; samoa conquered by new zealanders, vi: 38; surrendered to allies under peace treaty, xii: 206; kiau-chau transferred to japan, xii: 209, 279; distribution among allies, xii: 279; area and population, xii: 279; _see also_ name of colony. cost of living, per cent. rise during war, xii: _intro. x._ declarations of war, on russia, aug. 1, '14, i: 115, 139, 375; on france, aug. 3, '14, i: 140, 375; by great britain, aug. 4, '14, i: 145, 375; on belgium, aug. 4, '14, i: 375; by italy, aug. 27, '16, i: 386; on rumania, aug. 28, '16, i: 386; by u. s., apr. 6, '17, i: 389, ii: 53, xi: 35; diplomatic relations with brazil severed, apr. 11, '17, i: 389; diplomatic relations with bolivia severed, apr. 13, '17, i: 389; greece breaks off diplomatic relations, june, 29, '17, i: 390; by china, aug. 14, '17, i: 390. defeat, causes of, underestimate of allied inventive capacity, i: _intro. ix_; underestimate of british, ii: _intro, viii_; strategic, ii: 15; faulty psychology, ii: 53, 78, 221; collapse of germanic allies, ii: 89, 98, 329; analysis of, ii: 99; german efficiency _vs._ allies' "will to win," ii: 100; field-marshal haig on, ii: 120; failure to take channel ports in '14, ii: 221; russian campaigns, ii: 221; adoption of trench warfare, ii: 222; forcing u. s. into war, ii: 222; miscalculation of german endurance, ii: 224; launching of '18 offensive, ii: 225; failure to learn from american civil war, ii: 255; not in position for war of exhaustion, ii: 304; ludendorff ascribes to incompetent civil government, ii: 301-304, 310; allied superiority too great, ludendorff's view, ii: 227; _see also_ under germany, strategy; for military operations, _see_ western front, _also_ campaign or engagement. egypt, rights in, surrendered under peace treaty, xii: 208. food, _see_ blockade. foreign policy, world position, 1871, i: 44; influence of industrialism on, i: 77; domination over austria-hungary, i: 79, 133; near east policy, i: 80, 207, ii: 89; ambition for world power, i: 83, 170, ii: 2, 13; expansion in south america, i: 84; venezuelan controversy with u. s., i: 86; jealousy of u. s. strength, i: 87; plans for subjugation of u. s., i: 87-88; ambition for "place in the sun," i: 95, ii: 27; enters triple alliance, i: 95; dynastic relations in balkans, i: 96; sympathy with boers, i: 96, 192; turkish policy, i: 98, 207, ii: 28, vi: 330; kaiser's statement of moroccan policy, mar., '05, i: 99, 202; hatred of great britain, i: 101, 167, 190-194, ii: 14, vi: 251-252, 264; moroccan crisis forced by sending gunboat _panther_ to agadir, july, '11, i: 104, 203; negotiations with british for curbing naval program, '12, i: 106, 194-197; dream of central european federation under herself, 171, vi: 258; von bülow's statement of policy, i: 173; bernhardi's view of british as declining nation, i: 190; ill feeling against kaiser's english mother, i: 192; _hymn of hate_, i: 194; negotiations with british for mutual neutrality, '12, i: 194-197; prince lichnowsky on moroccan policy, i: 204; kaiser visits turkey, 1889, 1898, i: 207; unity of austro-german interests, i: 208; austria as buffer against slavs, i: 209; hatred of france, i: 215; sir edward grey's statement of events, july 23--aug. 3, '14, i: 218-227; refusal to pledge respect of belgian neutrality, '14, i: 223; bismarck's pledge to respect belgian neutrality, 1870, i: 229; russian policy, i: 239; statement of war aims by chancellor michaelis, '16, ii: 14; plans for annexation of russian territories, ii: 15; anti-british plans in east, ii: 27; "gott strafe england," vi: 251; russo-british alliance rouses hatred, '14, vi: 251; desire to include austria in republic, vi: 322; friction with bulgaria, vi: 344; attitude on dutch neutrality, vi: 376; relations with japan, vi: 382; _see also_ under germany, militarism, pan-germanism. fortifications, demolition under peace treaty terms, xii: 189, 205, 211, 214. health, effect of war on, iii: 406. industries, rise as industrial power, i: 75-78; state aid, i: 76; influence on foreign policy, i: 77; industrial mobilization, xii: 80; effects of war-time shortage of raw materials, xii: 97; use of potash boycott against u. s., xii: 98. internal politics, political organization, 1648 to french revolution, i: 26; failure of democratic movement, 1848, i: 32; unification under bismarck, i: 40-44, ii: 1; political organization of empire, i: 70, 156; strength of social-democrats, i: 71, vi: _intro. xi, xv_; powers of imperial chancellor, i: 71, 156; william ii becomes emperor, 1888, i: 97; professor lamprecht's defense of german system, i: 155; composition and powers of bundesrat, i: 156; composition and powers of reichstag, i: 156; powers of emperor, i: 156; dominance of prussia, i: 156, 258; social classes, i: 258; bismarck representative of junker class, i: 258; change from agricultural into industrial state, i: 259-260; struggle between old aristocracy and new capitalists, i: 260; basis of national strength, i: 260; social legislation, i: 264; sir thomas barclay on german political parties, vi: _intro. ix-xvi_; party principles compared, vi: _intro. ix, xii_; social-democratic leaders, vi: _intro. ix_; sir thomas barclay on revolution of '18, vi: _intro. x_; leaders of the revolution, vi: _intro. x_; strength of center party, vi: _intro. xi, xv_; strength of conservatives, vi: _intro. xi, xiv, xv_; conservative principles, vi: _intro. xii_; principles of social-democrats, vi: _intro. xii_; principles of national-liberals, vi: _intro. xii_; policies of center party, vi: _intro. xiii_; national-liberal strength, vi: _intro. xv_; strength of democratic party, vi: _intro. xv_; germany politically undeveloped, vi: _intro. xv_; city governments non-partisan, vi: _intro. xvi_; public sentiment on war, '14, vi: 250; anti-war protest by social revolutionists, '14, vi: 250; socialist peace agitation, '15, vi: 258, 262; socialist split on war policy, '15, vi: 260; beginnings of spartacide group, vi: 260; "preventive arrests" for suppressing pacifists, '16, vi: 262; socialists demand peace without annexations, '17, vi: 266; socialists demand liberal terms for russians at brest-litovsk, vi: 268; labor strikes during brest-litovsk peace negotiations,'17, vi: 268; strikes suppressed by armed force, vi: 260; reduction in munition output, '18, vi: 270; germany faces defeat, vi: 270; prince maximilian of baden succeeds count von hertling as chancellor, oct. 3, '18, vi: 270; prince max proposes liberal-socialist coalition government, vi: 270; kaiser's last appeals fail, vi: 270, 271; ludendorff's régime ends, oct., '18, vi: 271; revolutionary threats, oct., '18, vi: 271; revolution starts, nov. 7, '18, vi: 272; kaiser abdicates, nov. 9, '18, vi: 272; establishment of german republics, vi: 273, 280; revolutionary scenes in berlin, vi: 273-277; ebert, as chancellor, establishes provisional government, nov. 9, '18, vi: 277; kaiser flees to holland, vi: 277; radical socialists oppose ebert government, vi: 278; spartacides urge bolshevik revolution, vi: 279; spread of bolshevism, vi: 280; independents demand immediate social reconstruction before political reform, vi: 280; ebert government appeals for bourgeois support, vi: 280; spartacides allied with russian bolsheviki, vi: 280; return of "victorious" army to berlin strengthens provisional government, vi: 282; central council of delegates convened by ebert, dec. 16, '18, vi: 283; central council votes for election of national assembly, dec. 19, '18, vi: 283; central executive committee created, dec., '18, vi: 283; majority socialists in absolute control of government, vi: 283; soldiers' and workmen's councils ordered dissolved, dec., '18, vi: 283; spartacides and independents threaten proletarian revolution, dec., '18, vi: 283; count zu reventlow on germany under socialist régime, vi: 284; hunger and unemployment, vi: 285-287, 294-298; spartacide insurrection, jan., '19, vi: 287-290; bavarian government supports berlin spartacides, vi: 288; liebknecht and rosa luxemburg killed, jan. 14, '19, vi: 289; national assembly elections, jan. 19, '19, vi: 290; national assembly meets at weimar, feb. 6, '19, vi: 291; ebert's speech before national assembly on government's policies, vi: 292; ebert elected president of germany, feb., '19, vi: 292; scheidemann elected chancellor, feb., '19, vi: 292; composition of scheidemann cabinet, vi: 292; german press comment on ebert as president, vi: 293; middleclass "counter strikes" against extremists, vi: 294; kurt eisner assassinated, feb. 21, '19, vi: 298; soviet established in munich, feb. 19, vi: 298, 300; spartacides in control of saxony, feb., '19, vi: 299; second spartacide rising in berlin suppressed by noske, mar., '19, vi: 299; ebert government overthrows munich soviet, apr.--may, '19, vi: 300-301; forced to accept versailles peace treaty, vi: 302-305; press comment on peace terms, vi: 302-304; gustav bauer succeeds scheidemann as chancellor to sign peace treaty, vi: 304; national assembly votes to accept allies' terms, june 22, '19, vi: 305. international concessions, surrendered under peace treaty, xii: 228. iron, plans for annexation of french ore lands, i: 122, 267, ii: 13, 15; importance of lorraine ore deposits, i: 267; seizure of french and belgian mines, '14, ii: 20. kultur, bernhardi on, i: 64, 159, 160; great men of, i: 64; significance, i: 64; manifestations, i: 64; spokesmen of, i: 66; gospel of conquest, i: 66; educational program for dissemination of, i: 67; supremacy of state dominant idea, i: 68, 148; doctrine of "divine right of kings," i: 68; relation to militarism, i: 69; german social philosophy compared with british, i: 149; strength of state higher good than happiness of individuals, i: 149; bergson on german doctrine of force, i: 152; transition from idealism to materialism, i: 152; materialistic spirit of german students, i: 154; national egoism, i: 154; contributions to world culture, i: 154; definition and exposition of, i: 158; compared with _culture_, i: 158; bernhardi's belief in supremacy of german brain, i: 160; right to conquest, i: 161; _see also_ under germany, militarism. liberia, rights in, surrendered under peace treaty, xii: 208. luxemburg, violation of neutrality, _see_ luxemburg. militarism, war as national policy, i: _intro. vii_, 70; basic conception, i: 69; glorification of doctrine of force, i: 69; henri bergson on, i: 152; professor lamprecht's defense, i: 155; bernhardi on universal military training, i: 162; bernhardi on necessity of war to progress, i: 162; bernhardi condemns love of peace, i: 162, 171; german pride in, i: 163; compared with christianity, i: 165; compared with british policy, i: 165; force in place of diplomacy, i: 166; "world power or downfall," i: 170; von der goltz's plea against peace, i: 171; german statement of policy, i: 171-173; striking quotations from bernhardi, i: 179; bernhardi on conqueror's right to annex territory, i: 181; german denial of, i: 182; compared with allies' defensive policy, '14, ii: 1; statement of war aims by chancellor michaelis, ii: 14; explained by baron von freytag-loringhoven, ii: 260; compared with roman imperialism, by professor ferrero, ii: 365-372; pre-war preparedness, vi: 249; _see also_ under germany, foreign policy, kultur, pan-germanism. morale, demands of war on nation, ii: 302; fighting spirit waning, '18, ii: 309-311; change between '17 and '18, v: 2. morocco, rights in, surrendered under peace treaty, xii: 208. navy, strength in '06, i: 101; negotiations with british for curbing naval program, i: 106, 194-197; increase in "peace strength" for '14, i: 131; strength threat to british security, i: 196; surrendered to allies, nov. 21, '18, i: 400, iv: 142-144, 383-384 (list and description of major units), 385-387 (german eye-witness account), 387-390 (american eye-witness account), 390-394 (british eye-witness account), xii: 213 (peace treaty terms); hemmed in by british, ii: _intro. viii_; efforts to break blockade by use of submarines, iv: 7, 256; strength of china squadron, iv: 58; operations in pacific, iv: 60; strategy of defense, iv: 86; operations of high sea fleet in north sea, iv: 91; superior to british in destroyers, iv: 94; use of fleet criticized by jellicoe, iv: 94; high sea fleet compared with british grand fleet, iv: 96; north sea raids, iv: 136; mission during war, iv: 138; development, iv: 362; bolshevik propaganda in, iv: 380; revolts, nov., '18, iv: 380-383, vi: 272, 283; morale, iv: 294; mutiny suppressed, '17, vi: 266; peace treaty conditions for reduction, xii: 212-214; _see also_ submarine warfare. occupation by allies, expense to be paid by germany, xii: 226; conditions for withdrawal, xii: 261. pan-germanism, ideal of unification of all teuton elements in europe, i: 78, xi: 4; pan-german league, objects, i: 79; propaganda in u. s., i: 79; policy in south america, i: 84; bernhardi's statement of principles, i: 152; bismarck's plan for world empire, ii: 2; first steps toward under william ii, ii: 2; goal of calais to bagdad, ii: 13; bagdad railway important factor in, ii: 296; compared with roman imperialism, by professor ferrero, ii: 365-372; expounded by friedrich naumann in _mitteleuropa_, vi: 258; _see also_ under germany, foreign policy, militarism. peace negotiations, prince max asks wilson to intercede, oct. 6, '18, i: 399, vi: 271; armistice, nov. 11, '18, i: 399, iii: 402, v: 391, vi: 271, xi: 54; war aims expressed in secret memorandum to austria, '16, ii: 14; condemned by ludendorff, ii: 303; allies reject, prior to spring offensive, '18, ii: 316; kaiser orders proposals through queen of holland, ii: 331; ludendorff convinced germany can't win, sept., '18, ii: 333, 335; drive for "mental armistice," ii: 387-390; armistice with russia, dec. 6, '17, v: 113; brest-litovsk treaty with russia, mar. 3, '18, vi: 183; socialists present peace manifesto, nov., '15, vi: 258; bethmann-hollweg rejects socialist peace demands, vi: 260; bethmann-hollweg proposes "peace of compromise," '17, vi: 262-264; socialists support peace without annexations, '17. vi: 266; reichstag passes resolution for peace without annexations, '17, vi: 266; forced to accept versailles peace treaty, vi: 302-305; allies' peace terms received, may 7, '19, vi: 302; press comment on peace terms, vi: 302-304; national assembly votes to sign peace treaty, june 22, '19, vi: 304; peace conference delegates, xii: 179, 182; peace treaty ratified, july 10, '19, xii: 264; _see also_ peace, moves for. population, in 1860, i: 40; compared with france, 1874--1914, i: 61; emigration to u. s., i: 75, 79, 277; emigration to south america, i: 79; growth since 1870 compared with that of france, i: 262; relation of growth to colonial expansion, i: 262; rapid increase, i: 277; of republic, xii: 279. prisoners of war, iii: 404. propaganda, in u. s. before war, i: 79; activities of dr. albert, i: 133; artificial nature of public opinion, i: 149; preparing german mind for war, i: 171, 181; appeal to americans, aug., '14, i: 268; von jagow's defense against american criticisms, i: 273; activities of german agents in u. s., i: 274, 302, 314, x: 326-348; dr. dernburg's activities in u. s., i: 274; instigating hindu revolutions, i: 317; mexican plot-against u. s., i: 347; on italian front, iii: 247, vi: 128; following capture of americans at seicheprey, v: 123; in spain, xii: 101. railroads, war-time deterioration, viii: 283; efficiency under war conditions, viii: 284-285; peace treaty regulations, xii: 253. reparation, views of u. s. press on, xii: 24; estimates of capacity to pay, xii: 159; cession of sarre coalfields to france, xii: 189; peace treaty provisions, xii: 217-225. responsibility for war, german manipulations to force war, i: 8, 129-138; unwillingness to coöperate to prevent world war, i: 115, 124-126, 246, 250; responsibility denied, i: 116-120; bethmann-hollweg's statement, i: 117; hellferich's justification, i: 119; statement by german "intellectuals," i: 120; dr. dernburg's defense, i: 120; german case against great britain, i: 121; evidences of anticipating the war, i: 131; complicity in austrian ultimatum to serbia, i: 133-136, 252; potsdam conference, july 5, '14, i: 136, 250; statement of allied infractions of international law, i: 139; sir edward grey's statement of events leading to war, july 23--aug. 3, '14, i: 218-227; prince lichnowsky's account of events leading to war, i: 246, 250; dr. mühlon's disclosures, i: 250-254; peace treaty provisions for trial of guilty, xii: 217; _see also_ causes of the war. royal family, xi: 149; _see also_ william ii; frederick william. shipping, increase in tonnage, 1880--1913, compared with british, i: 77; increase in tonnage, '00--'04, i: 263; kaiser's personal interest in, i: 264; german resourcefulness, i: 264; tonnage and capital of north german lloyd line, i: 264; tonnage and earnings of hamburg-american line, i: 264; tonnage and earnings of hansa line, i: 264; tonnage of hamburg-south american line, i: 264. siam, rights in, surrendered under peace treaty, xii: 208. strategy, seizure of french coal and iron mines, i: 122, 267, ii: 13, 15, 20; general war plans, ii: 1-8, iii: 8, iv: 4-8; estimate of european military alignments, ii: 2-4; conquest of france first objective, ii: 4-8, iii: 2, 10; topography of german western frontier, ii: 6; invasion of belgium and northern france, ii: 8, xi: 9; mistake of striking first at france instead of russia, '14, ii: 11; probable results of a vigorous offensive against russia in '14, ii: 13; reasons for striking at france first, ii: 13; destructiveness as war policy, ii: 15, xi: 20, xii: 23; defensive attitude toward russia, '14, ii: 22; east prussian campaigns, ii: 24; invasion of russian poland, ii: 25; failure to operate against suez canal, ii: 31; military plans for '17, ii: 53; necessity for military strokes of '18, ii: 65; at strategic advantage, mar., '18, ii: 66; selection of front for spring offensive, '18, ii: 67; plans for '18 campaign, ii: 70, 149; retreat under blows of foch, ii: 86; causes of failure, ii: 99; faced with military disaster, nov., '18, ii: 215; russia overwhelmed, '15, ii: 233; col. gädke on german war plans and results, ii: 270; underestimate of u. s. strength, ii: 272; fortified lines of retreat behind western front, ii: 304; gen. von schlieffen responsible for plan of invasion through belgium, ii: 345; ludendorff's defense of war policy, ii: 346; alternatives facing germany, winter, '17--'18, v: 3; general strategy on western front, viii: 133; _see also_ under germany, defeat, causes of; _also_ western front; campaign or engagement. submarine warfare, _see_ submarine warfare. trade, 1880--1914, compared with british, i: 77; tariff policy, i: 78; production and import of grains, ii: 17; dependence on imports for war materials, ii: 20; war trade with neutrals, ii: 21, xii: 100; anti-german toy boycott in new york, xii: 99; allied proposals for after-war economic boycott, xii: 102; customs regulations imposed by peace treaty, xii: 229; suppression of unfair competition by peace treaty, xii: 230. treaties, pre-war agreements with allies revived by peace treaty, xii: 231; with germanic allies, abrogated by peace treaty, xii: 232; with russia, abrogated by peace treaty, xii: 232; with rumania, abrogated by peace treaty, xii: 232; _see also_ brest-litovsk treaty; bucharest, treaty of; peace treaty; triple alliance. war booty, value, xii: 22. war cost, financial mobilization, ii: 265, xii: 21; gold reserves, june 30, '14, i: 265; loans floated in u. s., aug., '14--jan., '17, xii: 2; method of raising war funds, xii: 21; system of loans, xii: 21, 113; estimate of expenditures, xii: 21; currency inflation, xii: 22; war finance system compared with british, xii: 22; money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; average daily war cost, xii: 106; total war cost, aug., '14--oct. '19, xii: 107; taxation, xii: 109; rise in national debt, xii: 113, 114. wireless stations, peace treaty regulations for, xii: 214. _germany and the next war_, book by general von bernhardi, striking quotations from, i: 179. germont, seized by 79th div., nov. 3, '18, v: 266. gesnes, location, v: 217; captured by 32nd div., oct. 5, '18, v: 240. ghent, belgians re-enter, iii: 103. gibbons, floyd, account of _laconia_ sinking, iv: 226-229. gibbs, philip, analysis of german war blunders, ii: 221; account of cambrai battle, nov., '17, iii: 337; description of german spring offensive, '18, iii: 360; analysis of british generalship, iii: 370-378. gibercy, taken by 79th div., nov. 9, '18, v: 272. gifford, walter s., director u. s. council of national defense, xii: 116. ginchy, objective in somme battle, iii: 58; description of battle, x: 147-155. giolitti, italian political leader, opposes entry into war, ii: 236, vi: 123. girba, turks routed at, feb., '17, iii: 191. glasgow, labor riots in, jan., '19, vi: 19. _glasgow_, british cruiser, in battle off coronel, iv: 65; hit by gunfire, iv: 68; in battle of falklands, iv: 70. gleaves, adm., convoys first u. s. troops to france, june 26, '17, iv:160, v: 106. _glenart castle_, british hospital ship, sunk feb. 26, '18, i: 393. glenn, maj.-gen. edwin f., commands 83rd div., june, '18, v: 146. _glory of war, the_, poem by dana burnet, ix: 261. glossop, capt. john c. t., commands _sydney_ in engagement with _emden_, iv: 187. _gloucester castle_, british hospital-ship torpedoed without warning, iv: 232. gloves, anti-gas, number issued by u. s. army, v: 324. _gneisenau_, german cruiser, in battle off coronel, iv: 65, 66; sunk at battle of falklands, iv: 70, ix: 308; eye-witness account of sinking, iv: 82. _god save the king_, english national anthem, xi: 326. godfrey, dr. hollis, member, advisory commission, u. s. council of national defense, xii: 116. _goeben_, german battle cruiser, eludes allied fleet in mediterranean and escapes to turkish waters, aug., '14, iv: 13-16; far-reaching effects of escape, iv: 16; sold to turkey, iv: 16; damaged by mine in black sea, nov. 18, '15, iv: 50, 365. gold, peace treaty restriction on german export of, xii: 226; deliveries of, by germany to allies under peace treaty, xii: 228. goldschmidt alternator, for generating radio waves, viii: 316. _goliath_, british battleship at gallipoli, iv: 33; sunk by turks, may 13, '15, iv: 50. golice, captured by germans, may 2, '15, i: 380. goltz, field-marshal baron von der, heads german mission to turkey, iii: 164; commands german troops in finland, vi: 199; biography, ix: 268. goltz, horst von der, plots to blow up welland canal, x: 333. golytsin, russian prime minister, reactionary government of, vi: 143; gets undated order from czar dismissing duma, '17, vi: 144; issues czar's order dismissing duma, mar. 10, '17, vi: 146. gompers, samuel, member advisory commission, u. s. council of national defense, xii: 116. gondrecourt, training area for 1st div., v: 6. _good-by-ee_, english soldiers' song, xi: 338. _good hope_, admiral cradock's flagship at battle off coronel, iv: 64; hit by gunfire, iv: 66; sunk by explosion, iv: 67, ix: 308. goremykin, deposed as russian prime minister, '15, vi: 140. gorizia, italian attacks fail, '15, ii: 50, 240, iii: 244; captured by italians, aug., '16, ii: 51, 242, iii: 246; life in, under italian occupation, ii: 244; key to isonzo, iii: 239. _goshawk_, british destroyer, in battle of heligoland bight, iv: 240. gotha airplanes, description, viii: 196, 221. goto, baron, biography, ix: 92. göttingen prison camp, y. m. c. a. work in, vii: 303. gough, gen. sir hubert, at first ypres battle, ii: 171; responsibility for defeat of british fifth army, mar., '18, ii: 190-197; decorated for somme campaign, iii: 60. gouraud, gen., defensive tactics against german advance, july, '18, ii: 209, v: 46, 155, viii: 146-148; famous appeal to troops, july, '18, v: 45; qualities as leader, v: 46. gourko, gen. basil, chief of russian general staff, ii: 225; exposition of russian strategy, ii: 225. gradisca, captured by italians, june 9, '15, iii: 244. grado, bombarded by austrian airplanes, nov. 19, '15, i: 382. granatieri, description of, ii: 242. grandcourt, taken by british, nov. 18, '16, i: 388. grand fleet, british, _see_ great britain, navy. grand pré, captured by a. e. f., oct., '18. v: 85, 218, 252, xi: 53. granger, dr. amédée, invents x-ray apparatus for locating bullets in flesh, viii: 374. graves, war, a. e. f. registration service, v: 331, 400; peace treaty provisions for care of, xii: 217. great britain: air service, formation of royal air force, viii: 202; strength at end of war, viii: 202; types of airplanes, viii: 203-206; bristol planes, viii: 203; handley-page bombers, viii: 204, 223; d. h.-10 bombers, viii: 204; types of dirigibles, viii: 245; dirigible _r-34_ crosses atlantic, viii: 245; dirigibles _r-33_ and _r-34_, description, viii: 254. army, german contempt for, i: 191; lands in france, aug. 6, '14, i: 375; ammunition shortage, '14, ii: _intro. xiii_, 173 (viscount french's exposé); deficiency in trained men, ii: 113; deficiency in material, ii: 114; field-marshal haig on value of cavalry, ii: 120; machine-gun equipment, ii: 125, 275; artillery equipment, ii: 125; haig on effects of growth in artillery service, ii: 125; artillery at somme battle, '16, ii: 126; ammunition used on western front, aug.--nov., '18, ii: 130; military hospitals in france, ii: 131; total strength in france, ii: 131; service of supply behind the lines, ii: 131-132; haig's opinion of british officer, ii: 133; haig's opinion on present organization, ii: 134; changing civilians into soldiers described by haig, ii: 135; haig's tribute to regular army, ii: 136; opinion of a german military critic, ii: 256; pre-war organization, iii: 3; intelligence service, iii: 383; strength, '14--'18, iii: 404, 405; strength in italy, iii: 405; strength in mesopotamia, iii: 405; "pal" regiments, vi: 6; slackers driven into service, vi: 6; origin of nickname "tommy," vi: 230; types of rifles used, viii: 95; indian winners of victoria cross, x: 85; senegalese troops, x: 116; british soldier as fighter, xi: 181-189; for military operations, _see_ campaign or engagement. blockade by germany, _see_ submarine warfare. blockade of germany, _see_ germany, blockade of. casualties, total in war, ii: 116, iii: 404, 405; causes for extent of, analyzed by field-marshal haig, ii: 118; at gallipoli, iii: 177; in attempts to relieve kut-el-amara, iii: 364; in '17, iii: 382; in german spring offensive, '18, iii: 390; money equivalent of man-power lost, xii: 25; total battle deaths, xii: 288; _see also_ campaign or engagement. coal, production, '13--'17, xii: 47; war-time fuel control, xii: 51. cost of living, increase in, by reduction of imports, ii: _intro. xxii_; price movements in england and u. s. since 1780, xii: _intro. viii-x_; criticism of government policy, xii: 28. declarations of war, on germany, aug. 4, '14, circumstances of, i: 145, 218-227 (sir edward grey's statement), 375; on austria-hungary, aug. 12, '14, i: 375; on turkey, nov. 5, '14, i: 376; on bulgaria, oct. 15, '15, i: 382. food, effect of submarine warfare, vi: 10; police prevent hoarding, vi: 11; government control of, xii: 34, 59; food control committee established, xii: 34; sugar shortage, xii: 34, 138; meat control, xii: 34; war-time fish supply, xii: 34; wheat control, xii: 35; increase in crop production, '16--'18, xii: 40; work of women in production of, xii: 40; effect of food shortage on dogs, xii: 40; potato crop, xii: 47; war-time problems, xii: 138. foreign policy, value of u. s. good-will, i: 35; world position, 1871, i: 44; turkish policy at congress of berlin, i: 48; acquires control of egypt, i: 48; extent of colonial empire, i: 59; international position, '14, i: 59; policy of conciliation, i: 59, 107, 218; anglo-french good-will, i: 98; treaty with france, '04, i: 99; agreement with russia for control of persia, '07, i: 104; anglo-japanese alliance, i: 104; negotiations with germany for curbing naval program, '12, i: 106, 194-197; statement of policy by asquith, nov., '11, i: 106; agreement with france for united action against "third power," '12, i: 107, 220; negotiations to prevent world war, july--aug., '14, i: 115, 124, 218-227 (sir edward grey's account), 247-249 (prince lichnowsky's account); policy on belgian neutrality, i: 141, 222, 224; arrangement with belgium for defense of neutrality, '06, i: 143, 231; promise to defend french coast, aug. 2, '14, i: 146, 220; statement of war aims by lloyd george, i: 189; negotiations with germany for mutual neutrality, '12, i: 194-197; sir edward grey's efforts to establish anglo-german good-will, i: 198; agreement with germany on african expansion, i: 200; agreement for settling rivalries in turkey, '14, i: 200; question of armed intervention in moroccan crisis, i: 218; freedom from secret obligations in event of war, i: 218; sir edward grey urges intervention in defense of belgian neutrality, i: 224; offer of help to belgium, aug. 4, '14, i: 232; influence in the east, ii: 27; claims to turkey under secret treaties, '16--'17, vi: 334; turkish policy, announced nov. 7, '18, vi: 334; _see also_ triple entente. industries during war, peace and war productivity compared, xii: 19, 77-79; women in, xiii: 25; bonuses to labor, xii: 28; provisions for settlement of labor disputes, xii: 79. internal politics, imperial unity through war, i: _intro. xiv_; political philosophy compared with german, i: 165; members of war council, nov., '14, ii: 198; political conditions, aug., '14, vi: 1; industrial and social unrest, '15, vi: 2; labor opposition to conscription, vi: 6; conscription bill passed, apr., '16, vi: 6; treatment of conscientious objectors, vi: 8; pacifists indorse soviet peace aims, '17, vi: 12; lord lansdowne's peace letter, vi: 13; defense of the realm act inadequate to prevent strikes, vi: 14; labor party platform, '17, vi: 14; conditions at close of war, vi: 15; general elections, '18, vi: 16-17; industrial strikes spread, jan., '19, vi: 17; ship-builders' strike, vi: 19; glasgow riots, vi: 19; strike in electrical trades prevented by defense of the realm act, feb., '19, vi: 20; lloyd george calls labor peace conference, feb., '19, vi: 20; commission of inquiry into mining conditions appointed, feb., '19, vi: 20; truce in labor war till completion of peace treaty, vi: 22; after-war problems, vi: 23. munitions, exposé of shell shortage by viscount french, ii: 173; production compared with that of central empires, xii: 78; work of ministry of munitions, xii: 78. navy, protector of lines of supply, i: 15; rise to world supremacy, i: 28; strength in '06, i: 101; negotiations with germany for curbing naval program, i: 106, 194-197; general strategy during war, ii: _intro. vii_, iv: 85-93; ships in mediterranean at outbreak of war, iv: 13; squadrons in eastern waters, iv: 58; ships in west atlantic, iv: 58; problem of maintaining allied supremacy, iv: 86; admiral jellicoe appointed to command of grand fleet, aug. 4, '14, iv: 88; minesweeping operations, iv: 91; convoy of troopships, iv: 92; bases, iv: 92; extracts from jellicoe's _the grand fleet, 1914--1916_, iv: 93-97; unpreparedness, '14, iv: 93; lack of destroyers, iv: 94; grand fleet compared with german high sea fleet, iv: 96; jellicoe's reasons for not attacking germans, iv: 96; make-up of grand fleet, aug., '14, iv: 97; make-up of grand fleet at battle of jutland, iv: 119; lord fisher's views on share in allied victory, iv: 140; statistics on transport of troops, '15--'18, iv: 239; 18-in. super naval guns, viii: 53; _see also_ battle or engagement; gallipoli campaign. peace conference, delegates, xii: 179; _see also_ peace conference. peace treaty, press views, vi: 22; ratified, july 25--31, '19, xii: 264; _see also_ peace treaty with germany. prisoners of war, iii: 404. railroads, system of war-time government control, xii: 89. royal family, xi: 150-152; _see also_ george v. shipping, tonnage, 1880--1913, compared with german, i: 77; government control of ship-building, xii: 95; tonnage in '14, xii: 95; yearly tonnage production, '14--'17, xii: 96; war-time shortage of, xii: 96. strategy, analyzed by maj.-gen. maurice, ii: _intro. vii-xxiv_; naval, iv: 85-93. trade, 1880--1913, compared with german, i: 77; pre-war position, xii: 18-19; pre-war and war-time compared, xii: 78. war cost, financial position at start of war, xii: 1, 18; loans floated in u. s., aug., '14--jan., '17, xii: 2; income tax rates, compared with u. s. and french rates, xii: 4; debt to u. s., xii: 18; exchange rates with u. s., xii: 19; extravagance in expenditure of war funds, xii: 19-20; taxes, xii: 20, 107, 108, 111; money equivalent of manpower lost, xii: 25; value of property loss, xii: 26; currency inflation, xii: 27-28; average daily war cost, xii: 105; total war cost, aug., '14--mar., '19, xii: 107; war loans, xii: 111; rise in national debt, xii: 111, 114. _great northern, s. s._, speed record as army transport, v: 358. greece, revolts against turkey, 1825, i: 34; breaks off diplomatic relations with central powers, june 29, '17, i: 390, vi: 345; anti-allied attitude at salonika, iii: 206; venizelos establishes revolutionary government, sept., '16, iii: 210; venizelos government recognized by allies, jan., '17, iii: 210; king constantine deposed by allies, iii: 210, vi: 245; war casualties, iii: 404, xii: 289; prisoners of war, iii: 404; debt to u. s., xii: 18; money equivalent of man-power lost, xii: 25; peace conference delegates, xii: 180; _see also_ salonika campaign. greek fire, composition of, xi: 314. gregory, sgt. earl d., gets congressional medal of honor, x: 395. _greif_, german armed liner, sunk in fight with british _alcantara_, iv: 200. grenades, number of u. s., at front, nov. 11, '18, v: 350; ancient method of throwing weapons by hand revived, viii: 119; germans first to use, viii: 119; allied unpreparedness at start of war, viii: 119; nature, viii: 119; technique of throwing, viii: 120; kinds, viii: 120, xi: 211. grenfell, capt. francis o., first winner of victoria cross in war, x: 10. gresham, pvt., one of first of a. e. f. to be killed in france, xi: 173. grey, edward, viscount of fallodon, efforts to prevent the war, i: 124-126, 247; mediation in balkan wars, i: 198; efforts to establish anglo-german good-will, i: 198; negotiations to settle anglo-german rivalry in mesopotamia, '12--'14, i: 200; speech before parliament summarizing events leading to world war, aug. 3, '14, i: 218-227; biography, ix: 35-40; bibliography, ix: 40; advocate of league of nations, xii: 155. grierson, gen. sir james, commander of british second corps, death in france, ii: 176. grimancourt, taken by 322nd inf., nov. 10, '18, v: 277. grimm, swiss socialist, expelled by russian provisional government, vi: 380. grissinger, col. j. w., chief surgeon, third army, a. e. f., v: 346. grodno, captured by germans, sept. 2, '15, i: 381, iii: 140. _groupes de combat_, function in french defensive, v: 12. guatemala, severs diplomatic relations with germany, apr. 28, '17, i: 390; delegate to peace conference, xii: 180. guedecourt, taken by british, sept. 26, '16, i: 388. guépratte, rear-adm., commands french fleet at gallipoli, iv: 31. guillaumat, gen., drives germans from vesles to aisne, ii: 214. _guillaume, empereur d'allemagne_, french soldiers' song, xi: 339. guillemont, taken by allies, sept. 3, '16, i: 386. guillemont farm, strong point on hindenburg line, v: 290. _gulflight_, first american ship sunk by u-boat, may 1, '15, i: 319, 380, iv: 218. gumbinnen, russians defeat germans at, aug. 16--24, '14, iii: 111; retaken by germans, iii: 116. gumpertz, sgt. sydney g., gets congressional medal of honor, x: 396. guncotton, composition and detonating properties, viii: 2; _see also_ ammunition. gunpowder, black, composition and explosive properties, viii: 2; smokeless, composition and action, viii: 4; muzzle flash, viii: 7; _see also_ ammunition. gunpowder neck, u. s. poison-gas plant at, viii: 179-187. guns, _see_ artillery. _guns of verdun_, poem by patrick r. chalmers, vi: 91. guthrie, col. percy, first canadian to enlist, x: 44. guynemer, capt. georges, french "miracle ace," x: 202, xi: 231. gyles, midshipman donald, heroic fight against german destroyers, x: 293-295. gyroscope, war uses, viii: 348. h haase, herr, leader german social-democratic minority, vi: _intro. xii_; in ebert ministry, nov., '18, vi: 278; advocates bolshevik principles, vi: 299. habibullah khan, emir of afghanistan, assassinated, feb., '19, vi: 80. hagen position, location in argonne, v: 218. hague conference, establishes arbitration tribunal, 1899, i: 94; convened for second time at suggestion of roosevelt, '07, i: 103; accomplishments, i: 103. hahn, maj.-gen. w. g., commander 32nd div., feb., '18, v: 119. hai river, near kut-el-amara, iii: 186. haifa, captured by british, sept. 23, '18, iii: 199. haig, field-marshal sir douglas, analysis of western front campaigns, ii: 112-136; theories on warfare, ii: 118; on causes of german military collapse, ii: 120; on functions of cavalry in the war, ii: 120; on importance of infantry in the war, ii: 123; on importance of artillery in the war, with statistics, ii: 123, 126; on efficiency of british army officers, ii: 133; on british military organization, ii: 134; appointed commander-in-chief of british expeditionary force, dec. 15, '15, iii: 46; famous "our backs to the wall" appeal, mar., '18, iii: 359, v: 120; personal traits, iii: 373; biography, ix: 181-184. haiti, delegate to peace conference, xii: 180. halahan, capt., killed at zeebrugge raid, iv: 264. haldane, gen., commander of british sixth army, iii: 371; personal traits, iii: 377. haldane, lord, mission to germany, '12, i: 106, 194. halicz, russians retire from, june 27, '15, i: 380; captured by russians, '14, iii: 121; recaptured by russians, july, '17, iii: 146. hall, richard nelville, brave ambulance driver, story of, x: 95. hall, sgt. thomas lee, gets congressional medal of honor, x: 395. haller, gen., leads revolt of polish "iron brigade" against austria, vi: 216. hamburg-american line, tonnage and earnings, i: 264. hamburg-persian gulf railway, _see_ bagdad railway. hamburg-south american line, tonnage, i: 264. hamel, captured by germans, apr. 7, '18, i: 395; work of tanks at allied attack, july 4, '18, ii: 281; share of 33rd div. in recapture of, july, '18, v: 260. hamidieh ii, turkish battery at gallipoli, armament of, iv: 45. hamilton, gen. sir ian, allied commander-in-chief at gallipoli, iii: 162, iv: 32; succeeded by gen. monro, iii: 174; despatches to war office, iv: 35-36. _hampshire_, british cruiser, sunk june 5, '16, with kitchener and staff, i: 385. handley-page bombing planes, viii: 196, 204, 223. hankey, sir maurice, secretary, supreme peace council, xii: 152. hanotaux, gabriel, on u. s. neutrality, i: 290. hansa line, tonnage and earnings, i: 264. hapsburgs, rise and downfall, vi: 305; _see also_ austria-hungary; charles francis; francis joseph. hara, japanese prime minister, _see_ kei hara. harbin, bourgeois government set up by general horvath at, vi: 192. harbord, maj.-gen. james g., chief of staff, a. e. f., sept., '17, v: 101, 403; commands 2nd div. in aisne-marne offensive, july, '18, v: 167; commander, services of supply, v: 401. hardaumont, captured by germans, mar. 8, '16, i: 384. harden, maximilian, on sordid nature of world war, i: 123; on relations between u. s. and germany, i: 274; on american war prosperity, i: 311; optimistic view of german food situation, '14, vi: 254; on allied peace terms, vi: 303. hardinge, lord, responsibility for mesopotamian failure, iii: 364, 370. harington, sir john, "brain of british armies in the field," iii: 375. harper, harry, description of zeppelins by, ii: 262. harper, gen., of british fourth corps, personal traits, iii: 377. hart, prof. albert b., summary of u. s. official correspondence on submarine sinkings, i: 358-362. hartlepool, bombarded by germans, dec. 16, '14, i: 376, iv: 245. hartmannsweilerkopf, captured by french, mar. 25, '15, i: 378; dec., '15, iii: 46. hartwell, william, first officer of _s. s. brussels_, report on fryatt case, x: 266-269. harvey, lieut. f. u. w., wins victoria cross at vimy ridge, iii: 349. hassein, king of hedjaz, joins forces with british, iii: 199. hatler, sgt. m. waldo, gets congressional medal of honor, x: 401. haucourt, taken by germans, apr. 5, '16, i: 384, iii: 51. haudromont quarries, taken by french, oct. 24, '16, i: 388. hausen, gen. von, commander of a german army at first marne battle, ii: 184. hauts de meuse, location, v: 199. havre, belgian government moved to, oct. 13, '14, i: 376; embarkation port for returning a. e. f., v: 395. _hawke_, british cruiser, torpedoed oct. 13, '14, i: 376. hay, maj.-gen. wm. h., commander 28th div., v: 278. hay, pvt., one of first of a. e. f. to be killed, xi: 173. hays, 1st lieut. george price, gets congressional medal of honor, x: 391. hayward, col. wm. d., account by, of his colored regiment of "bell-hops and waiters," x: 135-137. hazois wood, taken by 2nd div., nov. 1, '18, v: 263. hebron, occupied by british, dec. 7, '17, i: 393, iii: 196. hedjaz, arabs aid british in palestine operations, iii: 196, 199; kingdom established under secret treaties, '16--'17, vi: 334, xii: 279; delegate to peace conference, xii: 180; area and population, xii: 279. heeringen, gen. von, commands german sixth army of invasion, aug., '14, iii: 10. _hela_, german cruiser torpedoed off heligoland, sept. 13, '14, iv: 207. helfferich, karl, on justification of germany's part in war, i: 119; director of deutsche bank, i: 133, 252; german vice-chancellor, i: 133, 252; biography, ix: 353. _helgoland_, german battleship, mutiny of crew starts revolution, oct. 31, '18, iv: 381. heligoland, peace treaty provisions for destruction of fortifications on, xii: 205. heligoland bight, naval battle of, british victory, aug. 28, '14, i: 375, iv: 240-243; admiral beatty's official report on, iv: 241. helmets, steel, devised by french, viii: 64; process of manufacture of french type, viii: 64; rate of production, viii: 65; efficiency as protection, viii: 65; process of manufacture of u. s. army type, viii: 66-68; bullet-resisting tests, viii: 69-72. hem, stormed by french in battle of the somme, july, '16, iii: 58. henderson, arthur, biography, ix: 47-50. _henri iv_, french battleship at gallipoli, iv: 33. henry, prince, of prussia, visits u. s., '02, i: 80; escapes from mutiny of german fleet, nov. 7, '18, vi: 272. herbebois, taken by germans, feb. 21, '16, iii: 48. heriot, corp. james d., gets congressional medal of honor, x: 395. hermannstadt, captured by rumanians, sept. 2, '16, i: 386; rumanians defeated at, sept. 29--30, '16, i: 388. hertling, count von, german chancellor, comment on failure of champagne-marne offensive, july 15--18, '18, v: 158; retires as chancellor, oct. 3, '18, vi: 270. hertzog, gen., anti-british nationalist leader in south africa, vi: 49, 50; heads nationalist delegation to peace conference, jan., '19, vi: 52. herzegovina, annexed by austria, '08, i: 109, vi: 356; _see also_ bosnia-herzegovina. _hesperian, s. s._, torpedoed by german submarine, sept. 4, '15, i: 326. hickey, gen., commander of 16th irish div., iii: 377. hickory (30th) division, _see_ u. s., army. high sea fleet, _see_ germany, navy. hill, corp. ralyn, gets congressional medal of honor, x: 397. hill 60, at ypres, captured by british, apr, 17, '15, i: 378, iii: 42; captured by germans, may 5, '15, i: 380. hill 70, at loos, captured by british, sept., '15, iii: 46. hill 140, near souchez, captured by french, sept., '15, iii: 46. hill 180, captured by 327th inf. in meuse-argonne offensive, oct. 7, '18, v: 242. hill 190, near ronchères, captured by 3rd div., july 27, '18, v: 187. hill 204, near château-thierry, captured by 26th div., july 20, '18, v: 56; dominating situation, v: 133; captured by french and a. e. f., june 6, '18, v: 135. hill 223, near châtel chehery, captured by 28th div., oct. 7, '18, v: 243. hill 240, captured by 18th and 28th infs. in meuse-argonne offensive, oct. 5, '18, v: 240. hill 242, near côte de châtillon, captured by 168th inf., oct. 15, '18, v: 84. hill 244, near châtel chehery, captured by 28th div., oct. 7, '18, v: 243. hill 258, captured by 127th div. in meuse-argonne offensive, oct. 14, '18, v: 250. hill 263, captured by 28th div. in meuse-argonne offensive, sept. 26, '18, v: 225. hill 269, captured by 26th inf. in meuse-argonne offensive, oct. 5, '18, v: 240; held by 1st engineers against german attacks, v: 246. hill 288, near côte de châtillon, captured by 168th inf., oct. 14, '18, v: 84. hill 304, at verdun, battle for, iii: 51. hill 378, stormed by 79th div. troops in meuse-argonne offensive, nov. 5, '18, v: 270. hilton, sgt. richmond h., gets congressional medal of honor, x: 395. hindenburg, field-marshal paul von, put in command of german armies in east prussia, aug., '14, ii: 24, 353, iii: 112; destroys russian army at battle of tannenberg, aug. 26--31, '14, ii: 24, 353 (ludendorff's account), iii: 112-116, ix: 242; campaigns in russian poland, ii: 25, iii: 116-118, ix: 245; ludendorff's tribute to, ii: 300; appointed chief of german general staff, aug. 29, '16, ii: 326, iii: 61; made chief of general staff of central powers, ii: 331; proclamation against "unconditional surrender," oct. 24, '18, ii: 335; first meeting with ludendorff, aug. 23, '14, ii: 353; biography, ix: 242-249; nicknamed "old man of the swamps," ix: 242; decorated for valor, ix: 246; popularity, ix: 249. hindenburg line, german strategic retreat to, '17, ii: 53, iii: 66-70; germans driven to, sept., '18, ii: 157, iii: 98, 100; extent and description, iii: 66, v: 216, 301; strategic purpose, iii: 66; devastation of french territory in retreat to, '17, iii: 67; reasons for strategic retreat of '17, iii: 70; 27th and 30th divs., a. e. f., attacking with british, break through in cambrai-st. quentin sector, sept.--oct., '18, iii: 101, v: 290-295, 301, 393; michel position on st. mihiel front, v: 69; kriemhilde position on meuse-argonne front, v: 74, 218; first army breaks through in meuse-argonne offensive, v: 390. hines, maj.-gen, john l., promotion, v: 182; commands 4th div. at st. mihiel, sept., '18, v: 202; commands 4th div. in meuse-argonne offensive, v: 219; commands third corps in meuse-argonne offensive, v: 83, 390. hintzmann, korvettenkapitan, german delegate to arrange for surrender of german fleet, iv: 384. hipper, rear-adm. von, commands german squadron at battle of dogger bank, jan. 24, '15, iv: 246; commands german advance fleet at battle of jutland, may 31, '16, iv: 99, 103, 108, 113. hirson, captured by allies, nov., '18, iii: 103. hodges, maj.-gen. h. f., commander 76th div., july, '18, v: 196. hoffman, sgt. chas. f., gets congressional medal of honor, x: 389. hoffman, conrad, executive secretary, american y. m. c. a., work for prisoners in germany, vii: 309. _hogue_, british cruiser, torpedoed by _u-9_, sept. 22, '14, eye-witness accounts, iv: 205, x: 274-280; as told by u-boat commander, x: 279. holbrook, lieut.-com. norman d., blows up turk warship in dardanelles, x: 317. "holding" troops, german, viii: 144. holland, _see_ netherlands. _holland no. 9_, first u. s. navy submarine, iv: 205. holy alliance, formation of, i: 33; defects of, i: 35. holy war, declared by turks, nov. 17, '14, i: 376, vi: 330; to destroy british control in east, ii: 27; failure of, ii: 31; response to, in india, vi: 74. home rule, irish, _see_ ireland. home service, red cross, activities of, vii: 35. homs, taken by allies, oct., '18, iii: 199. honduras, delegate to peace conference, xii: 180. hood, rear-adm. horace l. a., commands 3rd british battle cruiser squadron at battle of jutland, iv: 117; lost with sinking of _invincible_, iv: 120. hoofien, s., dutch representative in palestine, report on american relief work, vii: 366. hoover, herbert c., appointed u. s. food administrator, may 19, '17, i: 390; pioneer of american relief in europe, vii: 85; organizes american relief committee, vii: 119; organizes american commission for relief in belgium, vii: 119, xii: 136; account of interview with lloyd george on belgian relief, vii: 124; biography, ix: 316-323; bibliography, ix: 323; work as u. s. food administrator, xii: 35; report on u. s. food exports for relief of europe, xii: 42; director-general of american relief administration, xii: 141. horn, lieut. werner, german spy, tries to blow up bridge on canadian border, i: 316, x: 368. hornby, sir geoffrey phipps, forces dardanelles, 1878, iv: 21. horne, gen., commands british first army in offensive against cambrai, sept., '18, ii: 214, v: 213; characterization by philip gibbs, iii: 371. horns, for gas alarm, number issued by u. s. army, v: 324. horses, utility in the war, viii: 397; hospitals for, viii: 398; number shipped to france by u. s., xii: 95, 278. horton, lieut.-com. max, exploit in command of submarine _e-9_, iv: 207. horvath, gen., sets up bourgeois government in siberia, vi: 192; resigns from government, vi: 193. hospitals: british, in france, ii: 131. french, medical service for wounded, viii: 362-365. united states, _see_ u. s. army, medical service. hotchkiss machine-gun, viii: 87. house, col. e. m., u. s. representative on supreme war council, iii: 84; biography, ix: 70-76. howitzers, _see_ artillery. hughes, w. m., premier of australia, advocate of closer union within british empire, vi: 40; for vigorous war policy, vi: 40; delegate to allied economic conference, june, '16, vi: 40; forms "hughesite" liberal government supporting conscription, vi: 42. hulloch, british enter, sept. 26, '14, iii: 46. _humber_, british monitor, description, iv: 281. humbert, charles, french senator, implicated in bolo pasha plots, x: 344. hungary, war sentiment, '14, vi: 306; parliamentary struggle, '16, vi: 311; independence party, leaders and aims of, vi: 311; "independence and 1848" party, formation and aims of, '16, vi: 311; socialist demands for peace, '16, vi: 312; effects of rumanian invasion, '16, vi: 313; "bloodless" revolution overthrows hapsburg rule, oct., '18, vi: 322; national council, governing body during revolution, vi: 322; republic established, nov., '18, vi: 323, ix: 146, xii: 279; count karolyi, provisional head of republic, vi: 323; armistice signed with allies, vi: 323; ironworkers' party, conflict with government, vi: 324; bolshevists under bela kun seize control, mar., '19, vi: 324-328; military occupation by allies, mar., '19, vi: 325; allies' peace terms rejected, vi: 326; the red army, vi: 326; area and population, xii: 279; _see also_ austria-hungary. _hunley_, confederate submarine in american civil war, iv: 203. hurley, edward, biography, ix: 335-337. "hush" ships, description of, iv: 303. hussein kamil pasha, made khédive of egypt by british, vi: 69. hutier, gen. von, commands eighteenth german army, ii: 149; new method of surprise attack, general plan and tactics of, v: 41, viii: 143-145. hutton, col. p. c., chief surgeon, "paris group," a. e. f., v: 346. hydrogen, use for inflating balloons, viii: 263. hydrophones, use in detection of u-boats, viii: 17-20, 279-281. hydroplanes, _see_ aeronautics. _hymn of hate_, german, against england, i: 194, vi: 253. _hymn of the lusitania_, german, i: 365. i _i want to be an angel_, aviators' song, xi: 338. igel, wolf von, german arch-spy in u. s., x: 337; imecourt, captured by 319th inf., nov. 1, '18, v: 263. immelmann, capt., german ace, death in air duel with capt. ball, x: 209-211, xi: 216. immigration, to u. s. from europe, i: 37. _imperatritsa_, russian battleship, burns and sinks in black sea, oct. 20, '16, i: 388. _implacable_, british battleship, at gallipoli, iv: 33. _in flanders fields_, poem by lieut.-col. john mccrae, xi: 54. incendiary bullets, viii: 214. _indefatigable_, british battle cruiser, sunk at battle of jutland, iv: 108. indemnity, _see_ reparation. index numbers, for measuring price changes, xii: _intro. vii._ india, troops in palestine and salonika campaigns, ii: _intro._ _xxiii_; suez canal gateway to, ii: 27; response to appeal of holy war, ii: 27, vi: 74; casualties, total in war, iii: 404, 405; strength of army, iii: 405; agitation for autonomy, vi: 72; response to british war needs, vi: 72; reasons for loyalty, vi: 73; nationalist claims for independence, vi: 74; political demands on great britain, vi: 75; caste system, description of, vi: 75; influenza epidemic, '18, vi: 76; suffering from famine, '18--'19, vi: 76; defense of india act, for suppressing sedition, vi: 77; bolshevism in, vi: 77; "black cobra bill," for suppressing radicalism, vi: 78; coal production, '13--'16, xii: 48; war cost, aug., '14--mar. '19, xii: 106; peace conference delegates, xii: 179. indian, american, as fighter, xi: 175-179. indo-china, french, japan's desire for, vi: 386. _indomitable_, british cruiser in battle of dogger bank, iv: 246. industrial rights, peace treaty provisions for re-establishment of, xii: 244-246. infantry, field-marshal haig's estimate of importance, ii: 123. infection, in shell wounds, viii: 362, 367; causes, viii: 369; carrel-dakin treatment, viii: 369-372, ix: 312, xi: 288-289; prevention among troops, viii: 392-397, xi: 286-289; _see also_ disease; medical science; sanitation. "infiltration," new german method of attack, iii: 386, v: 17, 19; gen. gouraud's method of defense against, v: 46, 155, viii: 146-148. _inflexible_, british battle cruiser at gallipoli, iv: 31; damaged by gunfire in gallipoli attack, mar. 18, '15, iv: 35; at battle of falklands, iv: 70. influenza, deaths from, in '18, iii: 405. insterburg, important junction on petrograd-berlin railroad, iii: 111. insurance, social, in territories ceded by germany, funds to be transferred to allies, xii: 246. intelligence tests for soldiers, viii: 349-351. inter-allied commissions of control, to supervise execution of military terms of peace treaty, xii: 215. inter-allied conference, mar., '16, decides on somme offensive, iii: 55. inter-allied games, at pershing stadium, vii: 313. inter-allied general staff, created, iii: 84. inter-allied scientific food commission, functions, xii: 139. inter-allied war council, _see_ supreme war council. international law, formulation of, by grotius, i: 26; german statement of allied infractions, i: 139; lansing's proposal for regulation of u-boat war, i: 281, 328; comment of london _times_ on lansing proposal, i: 282; german protest against u. s. position on armed merchantmen, i: 282; u. s. position on status of armed merchantmen, i: 283; controversy between u. s. and great britain on right of seizure of neutral cargoes, i: 312, 318, 339; controversy between u. s. and germany on submarine warfare, i: 317-326, 329-335, 339, 357-361 (chronological summary); u. s. note to germany on "freedom of the seas," july 21, '15, i: 323; controversy between u. s. and austria-hungary on submarine warfare, i: 326; president wilson opposed to principle of mclemore resolution, i: 327; controversy between u. s. and great britain on seizure of neutral mail, i: 335; on blockades, ii: 21; _see also_ germany, blockade of; submarine warfare. international rivalries, factors in, 1890--1914, i: 58-63. international sanitary commission, for serbian typhus relief, iii: 398. _intrepid_, british cruiser in zeebrugge raid, iv: 262; sunk in channel at zeebrugge, iv: 265. inventions, displace importance of strategy in war, viii: _intro. vii._ _invincible_, british battle cruiser, armament, iv: 70; blown up at jutland, iv: 119; at heligoland bight, iv: 241. ipek, occupied by french, oct. 16, '18, i: 399. _iphigenia_, british cruiser in zeebrugge raid, iv: 262; sunk in channel at zeebrugge, iv: 265. ireland, history of home rule movement, vi: 53; ulster, led by carson, opposes home rule, vi: 53, 60, ix: 50; situation at outbreak of war, vi: 53; loyalty to british in early days of war, vi: 55; sinn feiners start separatist propaganda, vi: 55; spread of sinn fein movement, vi: 57; sir roger casement's negotiations with germans, vi: 57; sinn feiners organize armed opposition, vi: 57; irish volunteers, vi: 57; sympathy with germany, vi: 57; german arms for sinn feiners captured by british, vi: 58; sir roger casement captured, vi: 58, ix: 53; easter rebellion, apr., '16, vi: 58; proclamation of republic, apr., '16, vi: 60; padraic pearse, provisional president, vi: 60, ix: 53; collapse of rebellion, may, '16, vi: 60; leaders executed for treason, may 3, '16, vi: 60, ix: 53; lloyd george's proposal for home rule settlement, '17, vi: 61; irish convention meets to discover way for settlement, '18, vi: 61-63; de valera, leader of sinn feiners, vi: 61; de valera elected to parliament, vi: 62; sinn feiners' attitude toward convention, vi: 62; government's new home rule bill, '18, outline of, vi: 64; struggle over conscription, vi: 64; sinn feiners carry parliamentary elections, '18, vi: 64; irish republic proclaimed by national assembly at dublin, '18, vi: 64; delegates to peace conference appointed, vi: 64; movement in u. s. in support of irish freedom, vi: 65; irish-american mission to peace conference, vi: 65; peace conference refuses hearing to irish cause, vi: 66; sinn fein platform, ix: 52; de valera elected president of irish republic, ix: 55. ireland, maj.-gen. m. w., surgeon-general, u. s. army, v: 346. _iris_, british ferryboat in zeebrugge raid, iv: 262. irish-americans, support for cause of irish freedom, vi: 65; irish race in america convention, feb., '19, vi: 65; delegation to peace conference, vi: 65. irkutsk, captured by czechoslovaks, july 13, '18, i: 397. iron, importance of lorraine deposits, i: 267; importance in war, i: 268; french mines coveted by germany, ii: 13, 15; french mines seized by germany, ii: 20. _irresistible_, british battleship at gallipoli, iv: 31; sunk in gallipoli attack, mar. 18, '15, iv: 35, 48. isherwood, lieut.-com., co-inventor of launching device for depth bombs, iv: 331. ishii, viscount, biography, ix: 90. ishtib, occupied by allies, sept. 26, '18, i: 397. isonzo front, _see_ italian front. isonzo river, course, ii: 48. is-sur-tille, center of american lines of supply, iii: 83, v: 11, 330. istria, given by allies to italy under secret treaty, '15, vi: 361. _italia irredenta_, definition, xi: 18. italian front, lloyd george advocates strong offensive on, ii: _intro. xx_; most difficult theater of war, ii: 48; general military topography, ii: 48, 49, 236, 244, iii: 226-230, xi: 25; general strategy at start of war, ii: 48, 49, iii: 228-231, 239-241; topography of isonzo front, ii: 48, iii: 239; isonzo campaigns, ii: 49-52, 56-58, 240, 242-250, iii: 239-248; topography of trentino front, ii: 49, iii: 230; trentino campaigns, ii: 49, 51, iii: 230-239; italian attacks on gorizia fail, '15, ii: 50, 240; results of '15 campaign, ii: 51; gorizia captured by italians, aug., 16, ii: 51, 242, iii: 246; caporetto disaster and italian rout, oct.--dec., '17, ii: 56-58, 246-250, iii: 80, 246-248, vi: 129, xi: 37; italian retreat checked by stand at the piave, nov., '17, ii: 58, 250, iii: 80, 248; last austrian offensive, june, '18, ii: 94-96, 250-252, iii: 249; victorious final offensive by italy, oct., '18, ii: 96, 252-254, iii: 249; carso plateau, description of, ii: 244; gradisca captured by italians, june 9, '15, iii: 244; monfalcone captured by italians, june, '15, iii: 244; casualties and prisoners of war, austrian and italian, during isonzo campaigns, iii: 244, 246, 248; cividale captured by austro-germans, oct. 28, '17, iii: 247; udine captured by austro-germans, oct., '17, iii: 247; italian losses in men and territory in great retreat, oct.--dec., '17, ii: 248; jugoslavs in austrian army desert to italians, iii: 249; american reinforcements arrive, july, '18, iii: 249, v: 394; bibliography, iii: 249; aerial cableways across the alps, viii: 303-306. _italian front, on the_, poem by g. e. woodbury, vi: 114. italy: army, german estimate of effectiveness, '14, ii: 4; arditi, description of, ii: 240; bersaglieri, description of, ii: 240; alpini, description of, ii: 242; carabinieri, as military police, ii: 242; granatieri, description of, ii: 242; pre-war organization and equipment, iii: 224-226; effect of enemy propaganda on morale, iii: 247, vi: 128; for military operations, _see_ italian front. casualties, total in war, ii: 116, iii: 404, vi: 130; money equivalent of man-power lost, xii: 25; total battle deaths, xii: 288. declarations of war, on austria, may 23, '15, i: 380, ii: 48, 236, vi: 126, 309, xi: 18; on turkey, aug. 21, '15, i: 381; on bulgaria, oct. 19, '15, i: 382; on germany, aug. 27, '16, i: 386; belligerency condemned as traitorous by austrian press, vi: 310. foreign policy, international position, '14, i: 61; ambition for mediterranean supremacy, i: 61; member of triple alliance, i: 95, 255, ii: 48, vi: 114; war with turkey for tripoli, '12, i: 109, vi: 114; neglected by germany, i: 255; bissolati's explanation of neutrality, i: 256; refusal to enter war as german ally, ii: 48, xi: 6; central powers bargain for neutrality, ii: 48; parliamentary struggle between neutralists and interventionists, ii: 236, vi: 123-126; salandra and sonino advocate war on side of allies, ii: 236, vi: 123; giolitti advocates continued neutrality, ii: 236, vi: 123; attitude toward u. s., ii: 245; public opinion for neutrality in early days of war, vi: 116; pro-german sentiment, vi: 118; pro-ally sentiment grows, vi: 119; territorial demands on austria, '14, vi: 120; avlona occupied, dec., '14, vi: 120; secret treaty with allies, apr., '15, price of entry into war, vi: 122, 361; occupation of austrian territories following armistice, vi: 129, 364; unpopularity of austrian alliance, vi: 308; claims to asiatic turkey under secret treaties, '16--'17, vi: 334; hostility to jugoslav expansion, vi: 360-362, 364-370; adriatic aspirations, vi: 361; fiume dispute, vi: 365-370. imports, dependence on, ii: 236, vi: 127. internal politics, unification, i: 39; parliamentary struggle between neutralists and war party, ii: 236, vi: 123-126; salandra and sonnino advocate war on side of allies, ii: 236, vi: 120, 123; giolitti for continued neutrality, ii: 236, vi: 123; d'annunzio rouses people to side with allies, ii: 239, vi: 124; strikes instigated by bolshevik propaganda, iii: 247, vi: 128; political situation preceding entry into war, vi: 114; popular sentiment for neutrality, vi: 116; pro-ally sentiment, vi: 116, 119; attitude of political parties on neutrality, vi: 117; pro-german sympathies, vi: 118; king victor takes decisive step for war, vi: 125; obstructionist policy of catholics and socialists, vi: 126; fall of salandra cabinet, june, '16, vi: 127; coalition government under boselli takes office, june, '16, vi: 127; pacifist propaganda and riots, vi: 128; fall of boselli government, oct., '17, vi: 129; orlando heads new cabinet, vi: 129; cabinet crisis on fiume question, '18, vi: 369. navy, strength at outbreak of war, iv: 368; war record, iv: 368; blockade of jugoslav ports, vi: 369. peace conference, delegates to, xii: 179. peace treaty, ratified, oct. 7, '19, xii: 264. prisoners of war, iii: 404. royal family, xi: 141-143; _see also_ victor emmanuel. war cost, luzzati's statement on, vi: 130; relatively largest of all belligerents, vi: 131; financial position at start of war, xii: 1; debt to u. s., xii: 18; value of man-power lost, xii: 25; value of property destroyed, xii: 26; average daily war cost, xii: 106; total war cost, may, '15--oct., '18, xii: 107; taxation, xii: 107, 109; loans, xii: 113; rise in national debt, xii: 113, 114. j jablonitza, captured by russians, aug. 15, '16, i: 386. _jacob jones_, u. s. destroyer sunk by u-boat, dec. 6, '17, i: 393; report of lieut.-com. bagley, iv: 346-349. jador, battle of, austrians driven from serbia, '14, ii: 32, iii: 152. jaffa, captured by british, iii: 194. jagow, gottlieb von, german foreign secretary, ix: 127-128. jametz, captured by 5th div., nov. 10, '18, v: 272. japan, abrogates extraterritorial rights, i: 18; acquires formosa, 1894, i: 20; acquires port arthur and korea in russo-japanese war, i: 20; rise as world power, '05, i: 20; adopts "open door" policy, 1854, i: 38; root-takahira agreement on "open door" in china, '08, i: 57; lansing-ishii note recognizes special japanese interest in china, '17, i: 58; international position in '14, i: 63; anglo-japanese alliance, terms of, i: 104, 107; ludendorff's comment on entry into war, ii: 357; siege and capture of kiau-chau (tsing tau), aug. 23--nov. 7, '14, iii: 257-259, iv: 367, vi: 382-383; total casualties, iii: 404; prisoners of war, iii: 404; naval strength, iv: 58; naval service to allies, iv: 367; motive in siding with allies, iv: 367, vi: 382; sends troops to vladivostok against soviet government, vi: 193; the "yellow peril," origin of phrase, vi: 248; ultimatum to germany demanding surrender of kiau-chau, aug. 17, '14, vi: 382; declares war on germany, aug. 23, '14, vi: 382; internal politics during war, vi: 384; forces china to accede to "group demands," '15, vi: 385; summary of concessions obtained under "group demands," vi: 385; ambition for domination in far east, vi: 386; treaty with russia, '16, vi: 386; imperialists advocate intervention in siberia, '17, vi: 386; terauchi cabinet opposed by liberals, vi: 386-388; kei hara succeeds terauchi as premier, '18, vi: 388; opposition by conservatives to hara government, vi: 388; separatist movement in korea, vi: 388; money equivalent of man-power lost, xii: 25; coal production, '13--'16, xii: 48; delegates to peace conference, xii: 180; shantung (kiau-chau) transferred to, by peace treaty, xii: 209; ratifies peace treaty, oct. 27, '19, xii: 264; _see also_ kiau-chau; shantung. jaroslav, fortress on san, captured by russians, sept. 21, '14, i: 376, iii: 123; retaken by germans, may 17, '15, iii: 136. jassy, rumanian government moved to, nov. 28, '16, i: 389. jastrow, prof. morris, jr., discussion of bagdad railway problem, ii: 290-297. jaulgonne, location, v: 133; captured by 3rd div., july, '18, v: 383. _jauréguiberry_, french battleship at gallipoli, iv: 33. jaurès, jean, french anti-militarist, assassinated, vi: 95. jebel shammar, emirate of, established, '18, xii: 279. jellicoe, adm. sir john, appointed commander-in-chief of british grand fleet, aug. 4, '14, iv: 88; analysis of british and german fleets at start of war, iv: 93-97; biography, ix: 275-282; bibliography, ix: 282. jericho, captured by british, feb. 22, '18, i: 393, ii: 196. jerusalem, captured by gen. allenby, dec. 11, '17, ii: 92, iii: 196, 322-326; allenby's proclamation to people of, iii: 325; work of y. m. c. a. in, vii: 323. _jeszcze polska_, polish national anthem, xi: 331. jews, distress in war areas, vii: 349; number in russian poland, vii: 349, 358, 361, 376; number in galicia, vii: 349, 376; number in germany, vii: 349; number in turkey, vii: 349, 368 (outside palestine), 376; number in palestine, vii: 349, 366, 376; number in serbia, vii: 349, 369, 376; american aid for needy in palestine, vii: 350, 358, 365-368; american aid for needy in belgium, vii: 350; organization of war relief agencies in u. s., vii: 351-354; american jewish relief committee formed, vii: 354; funds raised in u. s. for overseas war relief, '16--'17, vii: 355-356; american relief for destitute in russian poland, vii: 356-358, 360-363; refugees in interior of russia, relief activities for, vii: 356, 363-365; conditions in galicia, vii: 358; number dependent on war relief, by countries, vii: 358, 361, 362, 363, 366, 367, 369, 376; work of relief commission sent to europe from u. s., vii: 359-360; american relief for needy in constantinople, vii: 368; contributions to destitute in serbia and greece, vii: 368; aid for war refugees in spain, vii: 369; relief funds raised in u. s. during '18, vii: 370-374; reports, on after-war distress in europe, vii: 375-376; extent of relief work in vilna, vii: 375; number in lithuania, vii: 376; number in baltic provinces, vii: 376; number in russia, vii: 376; number in serbia, vii: 376; number in rumania, vii: 376; number in bulgaria, vii: 376; number in greece, vii: 376; number in hungary, vii: 376; number in persia, vii: 376. jihad, _see_ holy war. joffre, marshal josef jacques césar, fights first battle of the marne, sept., '14, ii: 9, 182, iii: 30; controversy with viscount french on importance of channel ports, ii: 172; _general joffre and his battles_, book by raymond recouly, summary of, ii: 182-189; appointed commander-in-chief of french armies, iii: 46; technical adviser to french war council, iii: 62; biography, ix: 154-161; visit to u.s., ix: 161; bibliography, ix: 161; intimate anecdote of, ix: 269. johnston, sgt. harold i., gets congressional medal of honor, x: 401. johnston, maj.-gen. w. h., in command of 91st div., aug., '18, v: 196; at marne-aisne offensive, sept., '18, v: 220. joint distribution committee, for jewish war relief, formation of, vii: 354. jonc de mer ridge, germans driven back at, by a. e. f., oct. 18, '18, v: 296. jordan river, military operations along, iii: 197. joseph ferdinand, archduke of austria, commands austrian forces to invade poland, iii: 119. jugoslavs, in austrian army desert to italians, '18, iii: 249; austrian and russian policies toward, vi: 306; attack hungarian republic, april--may, '19, vi: 326; racial groups among, with early history, vi: 354; serbian ambition for unification, vi: 355, 363; clash with austrian interests, vi: 355-359; meeting of jugoslav representatives in corfu plans for united nation, aug.,'17, vi: 359; conflict with italy over eastern adriatic coast, vi: 359-363, 364-370; hungarian government suppresses jugoslav congress at agram, mar., '18, vi: 363; establish united provisional government, nov., '18, vi: 364; seize austrian navy and merchant marine, nov., '18, vi: 364; armed opposition to italian advance in carniola, nov., '18, vi: 364; struggle with italy for possession of fiume and dalmatia, vi: 365-370; establish united kingdom under prince alexander of serbia, dec. 21, '18, vi: 366; recognized by u. s., feb. '19, vi: 366; president wilson's note supporting jugoslav claim for fiume, vi: 369; claims for independence recognized by austria-hungary in agreeing to armistice, vi: 399; area and population of united kingdom, xii: 279; _see also_ serbia. junior american red cross, activities, xi: 90. justh, julius, leader of hungarian independence party, vi: 311. jutland, battle of, may 31, '16, description in full, with official reports, iv: 99-136; outline in brief, iv: 99-104; opposing commanders, iv: 99; british ships and men lost, iv: 100; german ships and men lost, iv: 100; moral victory for germans, iv: 100; criticism of jellicoe's tactics, iv: 101; greatest naval engagement in history, iv: 102; conditions influencing, iv: 102; strength and composition of fleets engaged, iv: 103-104, 112, 114, 119; disposition of british forces, iv: 104; first phase, iv: 106-113; beatty's report on first phase, iv: 106-110; jellicoe's account of first phase, iv: 108; accuracy of german fire, iv: 108; _indefatigable_ sunk, iv: 108; fight between destroyer flotillas, iv: 109; _queen mary_ blown up, iv: 110; critical analysis of first phase, iv: 110-113; second phase, beatty's report on, iv: 113-115; weather conditions, iv: 113; critical analysis of second phase, iv: 115; third phase, iv: 115-130; jellicoe's account of third phase, iv: 117-120, 121-129; third battle cruiser squadron under hood reinforces beatty, iv: 117; british miscalculate position, iv: 117; hood gets into action with enemy, iv: 119; beatty's report on third phase, iv: 119, 120-121, 129; _invincible_ blows up, iv: 119; adm. hood lost with _invincible_, iv: 119-120; _shark_, _defence_, and _black prince_ sunk, iv: 121; low visibility, iv: 121-123; british alter course to avoid torpedo attack, iv: 125; german destroyers sunk, iv: 126; germans retire under cover of smoke screen, iv: 126; jellicoe pursues enemy, iv: 127; critical analysis of third phase, iv: 129; fourth phase, iv: 131-136; night fighting and torpedo attacks, iv: 131; jellicoe abandons pursuit, iv: 133; critical analysis of fourth phase, iv: 133-136; effect of battle on military situation, iv: 135; lessons taught by, iv: 135; account and analysis of, by arthur pollen, iv: 144-156; authoritative information incomplete, iv: 146; british lose chance for decisive victory, iv: 152, 156; german eye-witness account, iv: 256; british eye-witness account, iv: 258. juvigny, captured by french and 32nd div., a. e. f., aug., '18, i: 397, v: 62, 258, 384; 32nd div. casualties at, v: 259. k _k-13_, british submarine, account of sinking, and rescue of crew, x: 304-315. "kahkos," description, viii: 257. kaiser, _see_ william ii. kaiser wilhelm land, acquired by australia, '18, xii: 279; area and population, xii: 279. kakali, captured by allies, oct., '15, iii: 204. kale-i-sultanie, fort on the dardanelles, ii: 29. kaledin, gen., commands russian army at rovno, iii: 142; leads cossacks in siberia, vi: 192. _kambana_, bulgarian newspaper, statement against russia, june, '15, vi: 342. kamerun, _see_ cameroons. kamio, gen., japanese commander at siege of tsing tau (kiau-chau), iii: 257. karaburnu, greek fort occupied by allies, iii: 206. karaurgan, russians defeat turks at, jan. 16, '15, i: 378. karlsruhe, allied air raid on, june 15, '15, i: 380. _karlsruhe_, german sea-raider, battle with british cruiser _bristol_, aug. 6, '14, iv: 63; career in atlantic, iv: 196. karnes, sgt. james e., gets congressional medal of honor, x: 396. karolyi, count michael, pleads hungary's cause in u. s., '14, vi: 307; leader of hungarian independence party, vi: 311; forms "independence and 1848" party, '16, vi: 311; appointed premier of hungary, nov., '18, vi: 323; resigns as premier, mar., '19, vi: 325; biography, ix: 144-147. kars, russians defeat turks at, jan. 1, '15, iii: 260. katia, battle between turks and british at, apr., '16, iii: 191. katz, sgt. philip c., gets congressional medal of honor, x: 401. kaufman, sgt. benjamin, gets congressional medal of honor, x: 399. kautsky, herr, german social-democratic leader, opposes war, vi: _intro. xii._ kavala, bombarded by british warships, aug. 27, '16, i: 386; occupied by bulgars, '16, iii: 207, vi: 344. _kawachi_, japanese battleship blows up, july 12, '18, i: 397. keeling island, destruction on, by landing party from _emden_, nov. 9, '14, iv: 184, 190. _keep the home fires burning_, american soldiers' song, xi: 336. _keep your head down, fritzie boy_, american soldiers' song, xi: 337. kei hara, heads liberal japanese cabinet, vi: 388. keirsbilk, alois van, belgian hero, executed for plotting death of kaiser, x: 357-360. kellermann, bernhard, german novelist, description of conditions at front, iii: 286. kelley, col., british commander against sudanese, iii: 191. kelly, pvt. john joseph, gets congressional medal of honor, x: 389. kem, captured by anglo-american forces, july 15, '18, i: 397. kemmel, mount, stormed and captured by germans, apr., '18, i: 395, iii: 91, 360; occupied by anglo-american troops, aug. 19, '18, i: 397; key-point in defense of channel ports, iii: 381; 27th and 30th divs. in sector, v: 286. kennedy, maj.-gen. c. w., commands 85th div., aug., '18, v: 197. _kent_, british cruiser at battle of falklands, armament, iv: 70; sinks _nürnberg_, iv: 74. kerensky, alexander feodorovitch, speech in duma predicting revolution, vi: 144; leader of socialist-revolutionary party, vi: 148; pacifies revolting petrograd troops, mar. 12, '17, vi: 151; minister of justice in prince lvov's cabinet, vi: 155; character sketch, vi: 155; abolishes death penalty, vi: 157; minister of war in lvov's coalition cabinet, vi: 160; member of "group of toil," vi: 160; becomes premier and dictator of russia, vi: 165; struggle with kornilov for supreme power, vi: 167-171; declares himself commander-in-chief, vi: 171; struggle with soviets, vi: 175-179; overthrown by bolsheviki, vi: 179-181; biography, ix: 104-109; bibliography, ix: 109. kermanshah, captured by russians, feb. 25, '16, i: 384. kerosene, amount used by a. e. f., v: 331. kessler, count, expelled from poland, vi: 220. kessler, george a., starts blind relief war fund, vii: 255. keystone (28th) division, _see_ u. s., army. kharga, british base in libyan desert, iii: 191. _kheyr-ed-din-barbarossa_, turkish battleship sunk by british submarine, aug. 9, '15, i: 381. khvostov, russian minister of interior, removed from office, feb., '16, vi: 140. kiau-chau (kiao-chau), seized by germany, 1897, i: 15, 82; siege and conquest of tsing tau by japanese, aug. 24--nov. 7, '14, iii: 257-259, iv: 367, vi: 382-383; german rights transferred to japan under peace treaty, xii: 209; area and population, xii: 279; _see also_ shantung. kiel canal, peace treaty provisions for navigation of, xii: 255. kienzle, herbert, in german plot to blow up ships at sea, x: 372. kiev, captured by germans, mar. 2, '18, i: 393. kilid-bahr, fortification of, on gallipoli, ii: 29, iv: 24, 45; objective of british landing forces, iii: 167; bombarded, mar. 5, '15, iv: 45; _see also_ gallipoli campaign. killingholme, england, u. s. seaplane station at, iv: 359. _kimigayo_, japanese national anthem, xi: 328. _king edward vii_, british battleship sunk by mine, jan. 10, '16, i: 384. kiribaba pass, seized by russians, jan. 16, '15, i: 378. kitchener, field-marshal lord horatio herbert, drowned in sinking of cruiser _hampshire_, june 5, '16, i: 385, ix: 168; attitude on dardanelles campaign, ii: _intro. xv_; dispute with field-marshal french, ii: 164-169; member of british cabinet war council, ii: 198; responsibility for dardanelles disaster, ii: 198, 202; influence in war council described by winston churchill, ii: 202; biography, ix: 168-176; bibliography, ix: 176; military commandments, xi: 55. _k-k-k-katy_, american soldiers' song, xi: 335. kluck, gen. alexander von, leads invasion of belgium and france, aug., '14, ii: 8, iii: 10, xi: 10; occupies brussels, aug. 20, '14, ii: 8, iii: 21; defeated at first marne battle and forced to retreat, sept., '14, ii: 9, 184, iii: 30-34; strategy of aug., '14 advance, criticism of, by field-marshal french, ii: 168; avoids paris and crosses the marne, iii: 28; biography, ix: 266-268. knights of columbus, war-time activities of, vii: 328-339; organizing for war work, vii: 330; funds raised, vii: 331; war work expenditures, vii: 332; war activities committee, vii: 334; employment bureaus for discharged service men, vii: 338. knotty ash camp, liverpool, american y. m. c. a. at, vii: 287. knox peace resolution, declaring war between u. s. and germany at end, passed by congress in substitution for treaty of versailles, xii: 273-277; text of original resolution asking the president to make separate peace, xii: 273-274; text of amended resolution, xii: 277; vetoed by president wilson, xii: 277; president's veto message, xii: 278. kocak, sgt. matej, gets congressional medal of honor, x: 389. koenig, paul, head of hamburg-american line secret service, i: 317; german spy in u. s., x: 347. koenig, capt. paul, commander of german commerce submarine _deutschland_, personal account of trans-atlantic trip, iv: 214-216, x: 271-274. koja chemen tepe, at gallipoli, dominates anzac positions, iii: 172; anzac assault on, iii: 173; _see also_ gallipoli campaign. kolchak, adm. aleksandr vasiliyevich, siberian government of, recognized by allies, vi: 188; declares himself dictator of siberia, vi: 194; leader of anti-bolshevik forces in russia, vi: 194; biography, ix: 239-241. kollontai, mme., member of bolshevik presidium, vi: 179. _köln_, german cruiser sunk at battle of heligoland bight, iv: 241. _königin luise_, german raider in english channel, iv: 197. königsberg, in east prussia, russian objective, iii: 111. _königsberg_, german sea-raider, sunk by british monitors, july 11, '15, i: 381, iv: 195. koran of caliph othwan, peace treaty provision for return of, by germany to king of hedjaz, xii: 225. korea, acquired by japan, i: 20; struggle for independence, vi: 388. kornilov, gen. laurus, appointed commander-in-chief of russian armies by kerensky, vi: 164; rebellion against kerensky, vi: 167-171; imprisoned, vi: 171; leads cossacks against bolsheviki, vi: 192; biography, ix: 235-237. kossaima, occupied by turks, jan., '15, iii: 189. kovel, military importance, ii: 42. kovno, captured by germans, aug. 17, '15, i: 381, ii: 363, iii: 138. koweit, sultanate of, established, '18, xii: 279. kriemhilde position, german line of defense, extent and description, v: 74, 218, 234; a. e. f. breakthrough in meuse-argonne offensive, oct.--nov., '18, v: 80-88, 240, 245, 262; _see also_ meuse-argonne offensive. krithia, at gallipoli, allied attacks on, iii: 169-173; _see also_ gallipoli campaign. _kronprinz wilhelm_, comes into newport news harbor, apr. 11, '15, i: 378; interned, apr. 26, '15, i: 380. kronstadt, captured by rumanians, sept., '16, iii: 218; recaptured by teutons, oct., '16, iii: 220; military headquarters of bolsheviki, vi: 164. krovno, occupied by austrians, feb. 4, '16, i: 384. krupp, bertha, owner of largest german munition plant, ix: 352. krupp von bohlen und halbach, dr. gustave, head of krupp works, visit to england, june, '14, i: 265; husband of bertha krupp, ix: 352. kuban republic, established, nov., '18, xii: 279; area and population, xii: 279. kucharzewski, premier of poland under german jurisdiction, vi: 214. kuhn, maj.-gen. joseph e., commands 79th div., aug., '18, v: 197; in meuse-argonne offensive, v: 219. kultur, german, _see_ germany, kultur. kum kale, french land troops at, for gallipoli campaign, apr. 25, '15, iv: 41; turkish fortifications at, iv: 42; allied bombardment of, mar. 4, '15, iv: 44. kurnah, taken by british, dec. 9, '14, i: 376, iii: 180. kuryet-el-enad, taken by british, nov. 19, '17, iii: 194. kusmanek, gen. von, austrian commander defending przemysl, iii: 134. kut-el-amara, captured by british, sept., '15, iii: 181; siege and surrender of british at, dec. 7, '15--apr. 29, '16, iii: 183, 318-320; number of british surrendered, iii: 318; conditions in, during siege, iii: 364. l la bassée, captured by british, jan. 23, '15, i: 378. la boisselle, captured by allies in somme battle, '16, iii: 58. labor, anti-war spirit, xii: 65; importance in winning the war, xii: 68; floating, xii: 68; women in war industries, xii: 83-85; peace treaty charter for international organization, xii: 255-261; _see also_ under each country. labor peace conference, british, feb. 27, '19, vi: 20. "labyrinth," captured by french, june 22, '15, i: 380; designation for german trenches between arras and neuville st. vaast, iii: 42. _laconia, s. s._, cunard liner torpedoed, feb. 25, '17, i: 389; eye-witness account, iv: 225-229. ladd, anna coleman, makes copper face masks for mutilated, vii: 68. _lafayette_, poem by r. a. purdy, xi: 18. lafayette escadrille, formation, iii: 391; first members, iii: 391; capt. thenault appointed commander, iii: 391; first casualties, iii: 391; equipment of fliers, iii: 392; propaganda among germans, iii: 392; total casualties, iii: 392; story of, x: 196-202. lafayette fund, first american war relief organizations vii: 85. la fère, british driven from, aug. 26, '14, i: 375; captured by germans, aug. 29, '14, i: 375; recaptured by allies, oct. 13, '18, i: 399, xi: 52; german base in france, ii: 86; french attacks on, '17, iii: 68. la-ferte-sous-jouarre, headquarters of first army, a. e. f., v: 384. lamarch, captured by 42nd div., sept. 12, '18, v: 211. lamont, thomas w., financial adviser to u. s. delegation to peace conference, xii: 149; account of peace conference at work, xii: 149-163; member of reparations commission, xii: 158. lamprecht, prof. karl, german historian, defense of german system of government, i: 155. landres-st. georges, captured by 2nd div., nov. 1, '18, v: 90, 263; bombed by a. e. f. airmen, v: 311. landreville, captured by 2nd div., nov. 1, '18, v: 263. landsberg, herr, member of ebert government, nov. 9, '18, vi: 277. landsturm, german, i: 72. landwehr, german, i: 72. lane, franklin k., on meaning of the war to america, i: 367. langfitt, maj.-gen. wm. c., chief engineer, a. e. f., v: 336. langres, a. e. f. training schools at, v: 106, 314. lanrezac, gen., viscount french's criticism of, ii: 162. lansdowne, lord, letter calling on allies to state war aims, vi: 12. lansing-ishii note, '17, recognizes japan's special interests in china, i: 58, vi: 386. laon, captured by germans, aug. 29, '14, i: 375; german base in france, ii: 86; captured by gen. mangin, oct. 12, '18, ii: 214, xi: 52. la peyrère, adm., commander-in-chief of french navy, '14, iv: 12. la pultière wood, captured by 5th div., oct. 14, '18, v: 250. _lars kruse_, belgian relief ship sunk by u-boat, iv: 230. la rue farm, captured by 27th div., v: 296. _la société impériale ottomane du chemin de fer de bagdad_, formation, ii: 292; terms of concession to, ii: 292. _last long mile, the_, british soldiers' song, xi: 337. latham, sgt. john c., gets congressional medal of honor, x: 393. latin america, participation in war, vi: 389. launeville, taken by 89th div., nov. 4, '18, v: 266. laurier, sir wilfrid, canadian liberal leader, vi: 24; speech pledging war support, aug., '14, vi: 24; against imperial federation, vi: 26; declines to form coalition cabinet, vi: 33. league of nations, charles w. eliot on, i: _intro. xiii_; international co-operation during war, i: _intro. xiii_; summary of provisions, i: _intro. xiv_; proposal to place fiume under, vi: 369; spirit of, xii: 155; prominent advocates, xii: 155; drafting of covenant described by thos. w. lamont, xii: 155; analysis by geo. w. wickersham, xii: 170-178; text of covenant in full, xii: 182-185; countries invited to join, xii: 186; original members, xii: 186; sir james eric drummond, first secretary-general, xii: 186; u. s. senate opposition to, xii: 264-270; first meeting of council, jan. 20, '20, xii: 270. leather, war-time conservation in shoemaking, xii: 53. leave areas, "y" service at, vii: 269; _see also_ y. m. c. a. lebanon, disposal under secret treaties, '16--'17, vi: 334. le cateau, battle of, aug. 26, '14, criticism of smith-dorrien's strategy at, by field-marshal french, ii: 162, 174; account of battle, ii: 174-182, iii: 23. le charmel, german stand at, july 21, '18, v: 185; gen. degoutte's commendation of a. e. f. at, v: 192. le chêne tondu, german defense of, against 56th brig., sept. 28, '18, v: 229; captured by 28th div., oct. 4, '18, v: 239. lee service rifle, viii: 95. _leelanaw, s. s._, american steamship sunk by u-boat, july 25. '15, i: 381. _leipzig_, german cruiser in battle off coronel, armament, iv: 65; sunk in battle of falklands, iv: 70, ix: 308; eye-witness account of sinking, iv: 80. lejeune, gen., commander of 2nd div. at st. mihiel, sept. 12, '18, v: 202. leman, gen., defender of liége, iii: 11. le mans, embarkation center for returning a. e. f., v: 395. lemberg, battle of, and capture by russians, sept. 1--3, '14, i: 375, ii: 23, iii: 121, xi: 16; recaptured by austrians, june 22, '15, i: 380, iii: 137; military importance, ii: 42; seized by poles, nov., '18, vi: 217. lemert, sgt. milo, gets congressional medal of honor, x: 396. lemordant, french painter-soldier, x: 169. lenin, nicolai, urges defeat of russia, '14, '15, vi: 140; leader of bolsheviki, vi: 161-163; overthrows kerensky, nov., '17, vi: 179-181; becomes president of council of people's commissaries, nov. 8, '17, vi: 181; policies of government, vi: 181; biography, ix: 109-115; bibliography, ix: 115. lens, allied objective in battle of artois, may, '15, iii: 42; objective in battle of arras, apr., '17, iii: 70; held by germans against allied attacks in arras battle, iii: 72. _léon gambetta_, french cruiser torpedoed, apr. 27, '15, iv: 373. _leonardo da vinci_, italian dreadnought blown up, aug. 2, '16, i: 386. leopold, prince, commands bavarians entering warsaw, iii: 138. l'epasse wood, captured by 2nd div., nov. 1, '18, v: 263. le prêtre wood, captured by 180 inf. brig., sept. 13, '18, v: 209. lescarboura, austin c., on trench warfare, viii: 133; opinion on efficiency of tanks, xi: 251; on use of dogs in war, xi: 340. le selle river, german stand at, oct., '18, v: 295. les eparges, location in st. mihiel salient, v: 199; captured by french, sept. 12, '18, v: 212. les petites armoises, captured by 78th div., nov. 4, '18, v: 266. letord bombing airplanes, viii: 223. letts, peasant inhabitants of baltic provinces, vi: 226; early history, vi: 226; rebellion of '05, vi: 227; form lettish legion to fight in war, '15, vi: 227; join bolsheviki, vi: 228. letvia, republic of, established, apr., '18, xii: 279; area and population, xii: 279. _leviathan_, work as u. s. transport, xii: 275. levicu, dr., leader in movement for soviet government in munich, mar., '19, vi: 300. lewis machine-gun, description, viii: 81; rejected by u. s. government, viii: 82; use on airplanes, viii: 87; u. s. production figures for aircraft, xii: 284. liberty loans, u. s., popularity, xii: 10; selection of drive periods, xii: 11; influence on national thrift, xii: 11-16; subscription figures by federal reserve districts, xii: 12; new york city subscriptions, by borough, xii: 12; compared with amount of other u. s. indebtedness, xii: 16; amounts raised, xii: 113; effect on german morale, xii: 126; number of subscribers, xii: 127; methods used in selling campaigns, xii: 127-134; sales psychology, xii: 132; victory way, xii: 133; number of persons engaged in drives, xii: 134; statistics, xii: 134; _see also_ u. s., war cost. liberty motor, description, viii: 199; production figures, xii: 285. liberty truck, development and description, viii: 291-294. libyan desert, military operations in '16--'17, iii: 191. lichnowsky, prince karl maximilian, german ambassador to england, negotiations for settlement of anglo-german rivalries, '12--'14, i: 196, 250; account of events leading to world war, i: 246; author of _memorandum_, account of diplomatic experiences in england, i: 250; biography, ix: 131-133. liebau, hans, german propagandist in u. s., x: 338. "liebau employment agency," center of german propaganda in u. s., x: 338. liebknecht, karl, german radical leader, sketch of, by sir thomas barclay, vi: _intro. x_; votes against war credits, vi: _intro. xii_; protest against war, '14, vi: 249; imprisoned, '16, vi: 262, ix: 140, 141; freed from prison, oct., '18, vi: 272; leads spartacides, nov., '18, vi: 278, ix: 142; organizes spartacide demonstrations, dec., '18, vi: 283; killed during spartacide uprising, jan. 15, '19, vi: 289, ix: 142; biography, ix: 138-143; elected to prussian assembly while in prison, ix: 140; expelled from socialist party, ix: 141; bibliography, ix: 142. liége, forts constructed, 1890, i: 143; captured by germans, aug. 7, '14, i: 375, ii: 348 (ludendorff's account), iii: 10, xi: 9. liggett, lieut.-gen. hunter, commands first corps, a. e. f., in marne defensive, july, '18, v: 56; commands first corps in st. mihiel drive, v: 65, 202, 386; appointed commander of first army, oct. 16, '18, v: 83, 246, 390; in command of 41st div., '17, v: 109; commands first corps in meuse-argonne offensive, v: 220, 388, 390; commands first army in meuse-argonne, v: 390; biography, ix: 218. lightning (78th) division, _see_ u. s., army. lille, abandoned by allies, aug. 28, '14, i: 375; death-rate during german occupation, iii: 406. _lille, laon and st. dié_, poem by john finley, vi: 82. limburg, claimed by belgium, vi: 91. limey, location in st. mihiel salient, v: 199. liners, interned german, in u. s. ports, injuries to, iv: 319. linsingen, gen. von, commands austrians operating against lemberg, iii: 132. liny-devant-dun, captured by 11th inf., nov. 5, '18, v: 271. _lion_, british battle cruiser, beatty's flagship in battle of jutland, iv: 105; in battle of heligoland bight, iv: 241; disabled in battle of dogger bank, iv: 246. liquid fire, first use by germans in belgium, july 30, '15, i: 381; how used, viii: 120; story of germans caught in own trap, x: 18. lisle, gen. de, at first battle of ypres, ii: 171. lissey, captured by 5th div., nov. 8, '18, v: 272. listening device, for detecting submarines, description, iv: 308; _see also_ hydrophones; microphone. literary rights, peace treaty provisions for re-establishment of, xii: 244-246. lithuania, struggle for independence, vi: 234-236; opposed by polish aspirations, vi: 234; fight against bolshevism, vi: 236; cabinet of '18, vi: 236; fight against polish aggression, vi: 236; republic established, apr., '18, xii: 279; area and population, xii: 279. little russia, _see_ ukraine. livonia, early history, vi: 226; republic established, apr., '18, xii: 279; area and population, xii: 279; _see also_ baltic provinces. lizenz bombing airplanes, viii: 222. _llandovery castle_, torpedoed, june 22, '18, i: 395. lloyd george, david, advocates aggressive campaign against austria, ii: _intro. x, xx_; becomes british prime minister, ii: _intro. xx_, vi: 10, ix: 28; military policy, ii: _intro, xxi_; becomes minister of munitions, may, '15, vi: 5, xii: 78; appeal to munition workers, vi: 5, ix: 27; speeds up british war efforts, vi: 10; statement of allied war aims, vi: 12; indorses president wilson's fourteen points, vi: 14; conciliatory policy between labor and capital, vi: 20; biography, ix: 21-30; bibliography, ix: 30; _see also_ peace conference. loans, raised by belligerents for conduct of war, xii: 111. locomotives, number shipped to france from u. s., xii: 95, 286; _see also_ railroads. lodge, senator henry cabot, leads opposition to peace treaty, xii: 264; original reservations to peace treaty, text, xii: 265; revised reservations to peace treaty, text, xii: 269. lodz, occupied by germans, nov. 27, '14, iii: 129. logan, col. james a., chief of administration (g-1), g. h. q., a. e. f., v: 101. loman, pvt. berger, gets congressional medal of honor, x: 397. lome, surrender to british, aug., '14, iii: 252. london, air raids on, aug. 17, '15, i: 381; sept. 8, '15, i: 381; oct. 13, '15, i: 382; dec. 24, '14, iii: 41; welcome to pershing, june, '17, v: 97; american y. m. c. a. in, vii: 288. _london_, british battleship at gallipoli, iv: 33. london volunteer motor corps, vii: 107. _long, long trail_, american soldiers' song, xi: 335. longueval, objective in somme battle, iii: 58. longwy, abandoned by allies, aug. 28, '14, i: 375; iron area coveted by germans, '14, ii: 6. loos, british attempt to pierce german lines at, '15, ii: 25; captured by british, sept. 26, '15, iii: 46; faulty british generalship in battle of, iii: 375. _lord nelson_, british battleship at gallipoli, iv: 31. lorraine, value of iron deposits, i: 267; french offensive in, aug., '14, iii: 16. losnitza, austrians cross drina at, iii: 151. losses, _see_ casualties; prisoners of war. "lost battalion," under major whittlesey cut off from 77th div., oct. 2, '18, v: 231, 239; attempts at relief of, fail, v: 241, 242; rescued, oct. 7, '18, v: 243; units composing, v: 363. loti, pierre, description of gas victims, iii: 320-322. lough foyle, ireland, u. s. naval air station at, iv: 357. louppy, captured by 5th div., nov. 10, '18, v: 272. "lousy champagne," location, v: 43. louvain, captured by germans, aug. 19, '14, i: 375, iii: 14; burned by germans, aug. 26, '14, i: 375, iii: 14; description of burning by richard harding davis, iii: 273-277. louvain, university of, peace treaty provisions for restoration by germany of books destroyed, xii: 225. lowenstein, milton b., boy scout in air service, xi: 116. lowestoft, attacked by german battle cruiser squadron, apr. 25, '16, i: 385. lowicz, occupied by germans, dec. 18, '14, i: 376. lublin, occupied by austrians, july 30, '15, i: 381. lublin-cholm railway, cut by germans in '15 offensive, iii: 138. lubomirsky, prince, appointed by germany to regency council of poland, vi: 214. "lucky bag," explanation of term, iv: 171. lucy-la-bocage, important point near château-thierry, v: 132. ludendorff, gen. erich von, war account, ii: 298-365; estimate of own importance to german victories, ii: 298, 300; appointed first quartermaster-general, aug. 29, '16, ii: 326, iii: 61; denies being germany's dictator, ii: 333; resignation forced, oct. 26, '18, ii: 336, vi: 271; opinion of a. e. f., ii: 337; war attitude, explained by himself, ii: 344; brigade commander at start of war, ii: 345; share in capture of liége, ii: 348; appointed chief of staff to hindenburg in east prussia, aug., '14, ii: 351; account of first meeting with hindenburg, aug. 23, '14, ii: 353; appointed chief of staff for operations on southeastern front, sept., '14, ii: 357; failure of "spring drive" loses war, '18, vi: 270; biography, ix: 250-257. luderitz bay, captured by british, iii: 254. lufberry, maj. raoul, american ace, story of, x: 191-196. luke, lieut. frank, jr., american aviator, story of, x: 211-214; gets congressional medal of honor, x: 393. lukin, gen., heads expedition against sollum, iii: 191. _lullaby for a baby tank_, poem by h. t. craven, xi: 270. lumber, uses in war, viii: 306-309. lunacharsky, member of bolshevik presidium, vi: 179. lunéville, captured by germans, aug. 21--23, '14, i: 375, iii: 20; retaken by french, sept. 11, '14, i: 375. lupkow pass, occupied by russians, dec., '14, iii: 127. _lurcher_, british destroyer at battle of heligoland bight, iv: 241. _lusitania, s. s._, german warning against travelling on, may 1, '15, i: 319; sunk by german submarine, may 7, '15, i: 319, 358, 362-365 (lord mersey's official report), 380, xi: 20, 237; loss of life, i: 319, 362; u. s. note to germany on sinking, may 13, '15, i: 320; roosevelt's statement on, i: 320; taft's view of action by u. s. over sinking, i: 320; u. s. demands disavowal of sinking by germany, i: 323; summary of controversy between u. s. and germany over sinking, i: 358; dimensions, i: 362; number and nationality of passengers on last trip, i: 362; number in crew, i: 362; not armed, i: 363; german hymn of glory over sinking of, i: 365; eye-witness accounts of sinking, iv: 220-222; capt. turner's account, iv: 222; germans celebrate destruction as naval victory, iv: 223. lutsk, captured by germans, sept. 1, '15, i: 381; recaptured by russians, sept. 23, '15, i: 382; recaptured by germans, sept. 27, '15, i: 382; captured by russians, june 6, '16, i: 385, iii: 142. _lützow_, german battle cruiser sunk at jutland, eye-witness account, iv: 256. luxemburg, duchess of, _see_ marie adelaide. luxemburg, grand duchy of, invaded by germans, aug. 2, '14, i: 144, iii: 10, vi: 93, xi: 10; annexation sought by belgium and france, '19, vi: 94; peace treaty provisions concerning, xii: 189. luxemburg, rosa, german radical leader, protest against war, '14, vi: 249; imprisoned, '16, vi: 262; leads spartacides, nov., '18, vi: 278; killed during spartacide uprising, jan. 14, '19, vi: 289; views on social revolution, ix: 147. lvov, prince george e., premier under russian provisional government, mar. 14, '17, vi: 155; manifesto on war aims, apr. 9, '17, vi: 159; forms coalition cabinet, vi: 160; biography, ix: 100-102; president of all-russian union of provincial councils, xii: 82. lynch, george, inventer of impenetrable cloth against barbed wire, viii: 68. lys, battle of, apr., '18, ii: 153, iii: 91; portuguese troops flee under german attack, ii: 153, iii: 91, vi: 374; allied lines broken, ii: 153, iii: 91; germans turn attack to channel ports, iii: 91. lysk, germans defeat russians at '14, iii: 116. _lynx_, british destroyer blown up in baltic, iv: 197. m ma'an, seized by arabs, sept., '18, iii: 199. maastricht salient, claimed by belgium, vi: 91. macarthur, brig.-gen. douglas, leads pursuit of germans to vesle river, aug. 2--3, '18, v: 61; commands 84th inf. brig., oct. 14--16, '18, v: 84; biography, ix: 213-217. macao, purchase of portuguese interests at, by japan, vi: 386. macdonald, ramsay, endorses bolshevist peace aims, vi: 12; defeated in parliamentary elections, '18, vi: 17. macdowell, major t. w., wins victoria cross for gallantry at vimy ridge, iii: 349. macedonia, promised to bulgaria by germany, ii: 32; occupation of, by bulgarians, vi: 343-344; military operations in, _see_ salonika campaign. machine-guns, use of, in british army, ii: 125; british and german equipments, aug., '14, ii: 275; utility in trench warfare, ii: 288, viii: 134-136; nests, construction of, v: 37; pits, v: 287; number on a. e. f. front, nov. 11, '18, v: 350; predecessors of modern types, viii: 78; hiram maxim's invention, 1883, viii: 78; german pre-war preparedness, viii: 78; effectiveness, viii: 79, 136; usefulness compared with rifle, viii: 79; german machine-gun corps, viii: 79; principal types, viii: 80-87; maxim gun, viii: 80, 87; benet-mercier gun, viii: 80; lewis gun, viii: 81-82; browning gun, viii: 84-87; on airplanes, viii: 86-87, 189-192, 196, 208-216; hotchkiss gun, viii: 87; german and allied equipments compared, aug., '14, viii: 134; tank _vs._ machine-gun, viii: 150-151; u. s. production figures, xii: 284; number captured by americans, xii: 288. mackensen, field-marshal august von, commander of teuton forces conquering serbia, ii: 34, iii: 156; leads invasion of rumania, ii: 60, iii: 222; leader of offensive through galicia and poland, ii: 233, iii: 128; commands bulgarian forces, iii: 218; biography, ix: 257-261. madeline farm, germans resist attacks on, by 80th and 3rd divs., oct. 6, '18, v: 241; captured by americans, oct. 9, '18, v: 245. _madelon, le_, french soldiers' song, xi: 339. madras, bombarded by german raider _emden_, sept. 18, '14, iv: 174. _magdeburg_, german cruiser sunk by russians, aug., '14, iv: 365. maghdaba, british defeat turks at, iii: 192. magnes, dr. judah l., visits europe for jewish war relief, vii: 356, 360. _magpies in picardy_, poem by "tipcuca," xi: 224. magyars, predominance in austria-hungary, vi: 306; loyalty to empire, vi: 306; rebel against new czechoslovak government, vi: 399; _see also_ austria-hungary; hungary. mahon, gen., commands british at salonika, iii: 202. maidos, defenses of gallipoli at, iv: 24. _mainz_, german cruiser, sunk in battle of heligoland bight, iv: 241. mainz, occupation by allies and conditions for withdrawal from, xii: 261. maize, imports of, by germany, ii: 17. _majestic_, british battleship at gallipoli, iv: 31; sunk by submarine at gallipoli, may 27, '15, iv: 50. malancourt, captured by germans, mar., '16, iii: 51; location, v: 217; 4th engrs. build artillery road from, to esnes, sept., '18, v: 226. malborghetto, captured by italians, iii: 244. _mali journal_, serbian newspaper, on antagonism to austria-hungary, vi: 356. malingering, devices for detection of, viii: 358-361. malinov, succeeds radoslavov as bulgarian premier, vi: 346; statement on circumstances of bulgarian surrender, vi: 347. malleterre, gen., discussion of allied victory, ii: 206; professor of military geography at école de guerre, ii: 220; eulogy of foch and pétain, ii: 220. mallon, capt. george h., gets congressional medal of honor, x: 397. malmédy, ceded to belgium under peace treaty, vi: 89, xii: 188. malmö, meeting of scandinavian rulers at, and pledge of mutual neutrality, vi: 393. malvy, french minister of interior, tried for criminal neglect, iv: 10; implicated in _bonnet rouge_ case, vi: 105; exiled from france, vi: 106. mametz, captured by british in somme battle, iii: 58. manchuria, japanese penetration of, i: 20. mangin, gen., attacks germans on villers-cotterets and soissons line, july, '18, ii: 210, v: 159; appointed commander of verdun sector, iii: 62; successful attack at verdun, dec., '16, iii: 62. mann, maj.-gen. william a., relieved of command of 42nd div., '17, v: 109. mannerheim, gen., commands finnish white guards, vi: 198; dictator of finnish de facto republic, '18, vi: 200. manning, corp. sidney e., gets congressional medal of honor, x: 399. manoury, gen., commands a french army at first marne battle, ii: 182, 184. mantou, prof., interpreter to supreme peace council, xii: 152. _maple leaf forever, the_, canadian national hymn, xi: 330. march, gen. peyton c., chief of staff, u. s. army, biography, ix: 210-212. margate, bombed by german airmen, oct. 22, '16, i: 388. marie, queen of rumania, appeal for american aid, vi: 349. marie adelaide, grand duchess of luxemburg, resigns in favor of sister, vi: 94; biography, ix: 383-384. _marina, s. s._, british freighter sunk by german submarine, oct. 28, '16, i: 335, 388. marines, u. s., _see_ u. s., marines. maritz, col., rebel boer leader, joins germans in southwest africa, '14, iii: 254, vi: 50. _markomannia_, auxiliary to german raider _emden_, iv: 170, 172. marlin aircraft guns, u. s. production figures, xii: 284; _see also_ machine-guns. marne, allied retreat to the, aug.--sept., '14, iii: 20-30; topography of salient, v: 42, 133. marne, battles of: sept., '14, report of field-marshal french on preliminary action, ii: 9; outline of maneuvers, ii: 9; foch's generalship at, ii: 103, 138-142, 182, 220, iii: 31-34; described by french participant, ii: 182; gen. manoury's share in victory, ii: 182; military situation preceding, ii: 183; allied generals under joffre at, ii: 184; german commanders at, ii: 184; effect of russian invasion of east prussia on, ii: 227; analysis of, by a german military critic, ii: 258; detailed account of, iii: 30-36; casualties at, iii: 35. july, '18, foch's strategy, ii: 77, ii: 154; ludendorff's account, ii: 322-324; ludendorff's comment on casualties, ii: 326; ludendorff's comment on a. e. f. fighting, ii: 326; general account of battle, iii: 95-97, v: 129; detailed account of a. e. f. participation, v: 47-61, 148-192, 382; reasons for failure of german offensive, v: 54; german artillery captured by americans, v: 56; stand of 38th inf. against german attempts to cross marne, july 15, '18, v: 150-153, x: 381-387; pershing's message to troops, v: 191; gen. degoutte's praise of a. e. f. at, v: 192; work of tanks at, viii: 148; _see also_ aisne-marne offensive; champagne. marne district, german destruction in, iii: 297-300. marne (3rd) division, _see_ u. s., army. mars, a. e. f. base hospital at, v: 400. _marseillaise_, french national anthem, an alsatian song, i: 211; effect on french audience, i: 211; words, xi: 326. marseilles, embarkation port for returning a. e. f., v: 395. marshal, gen., commander of british capturing bagdad, xi: 48. marshall, louis, president american jewish relief committee, vii: 354. martin, miss winona c., american "y" worker killed in france, vii: 313. martin, dr. franklin, member of advisory commission, u. s. council of national defense, xii: 116. martinpuich, captured by allies, sept. 15, '16, i: 388. mary, queen of england, biography, ix: 392-395. masaryk, t. g., leader of movement for czech independence, vi: 397. masefield, john, description of british embarkation for gallipoli, iii: 350; account of gallipoli fighting, iii: 352, 355-358; description of soldier's life at gallipoli, iii: 353. mata-hari, woman spy, executed by french, oct. 15, '17, i: 392; discloses tank secret to germans, x: 360. matz valley, german attacks during '18 offensive, ii: 76. maubeuge, allied objective in final drive, nov., '18, iii: 103. maude, gen. sir frederick stanley, mesopotamian successes, '16--'17, ii: _intro. xviii_, 90, iii: 185; biography, ix: 194-199. maurepas, captured by french during battle of the somme, iii: 58. maurice, maj.-gen. sir frederick, on general strategy of the war, ii: _intro. vii-xxiv._ mauser rifle, description, viii: 95. max, burgomaster of brussels, demand of concessions from germans, iii: 14. maxim, hiram, invents machine-gun, 1883, viii: 78. maxim machine-gun, description, viii: 80; modified type used by germans and austrians, viii: 87. maximilian of baden, prince, appointed german chancellor, oct. 3, '18, vi: 270; appeals to wilson for armistice, vi: 270. mayo, adm. henry thomas, biography, ix: 296. mazurian lakes, topography of district, iii: 108; difficulty of military operations in, iii: 113; russian armies annihilated by hindenburg, aug., '14, iii: 113-116; second battle, feb., '15, iii: 130; _see also_ tannenberg, battle of. mcadoo, william g., biography, ix: 329-331; director general, u. s. railroad administration, xii: 88. mcalexander, brig.-gen. u. g., as colonel commands 38th inf. regt. in second battle of the marne, july, '18, v: 152; commands 180th inf. brig, at st. mihiel, sept. 12--15, '18, v: 209; biography, ix: 216. mcandrew, maj.-gen. james w., succeeds gen. harbord as chief of staff, a. e. f., aug., '17, v: 102; pershing's appreciation, v: 403-404; biography, ix: 216. mccaw, brig.-gen. walter d., chief surgeon, a. e. f., v: 346. mclemore resolution, warning to americans not to travel on belligerent ships, i: 327; president wilson opposes, i: 327; defeated, i: 328. mcleod, marguerite gertrude zelle, german spy, discloses tank secret, x: 360. mcmahon, maj.-gen. james e., in command of 5th div., may, '18, v: 128; at st. mihiel, sept. 12, '18, v: 202; relieved of command of 5th div., oct., '18, v: 252. mcmurtry, capt. george c., gets congressional medal of honor, x: 399. mcrae, maj.-gen. james h., in command of 78th div., june, '18, v: 144; at st. mihiel, sept. 12, '18, v: 202. meat packers, profits before and during war, xii: 56. mecca, captured by arabs, july 15, '16, i: 386. medeah farm, captured by 67th french div., oct. 3, '18, v: 256. medical corps, u. s., _see_ u. s., army. medical science, use of x-ray, vii: 221, viii: 373-376; development under war needs, viii: 361-365, xi: 286-291; rifle and shell wounds, relative dangers of, viii: 361; french medical service for wounded, viii: 362-365; danger of infection in shell wounds, viii: 362, 367; treatment of head wounds, viii: 365; treatment of face wounds, viii: 366; treatment of body wounds, viii: 366; treatment of blood vessel lesions, viii: 366; treatment of nerve cord lesions, viii: 366; treatment of fractures, viii: 367; new method of amputation, viii: 367; prevention of tetanus infection, viii: 367, xi: 287; prevention of gas gangrene, viii: 367, xi: 287-288; treatment of shell shock, viii: 368; causes of infection, viii: 369; carrel-dakin treatment, viii: 369-372, xi: 288-289; mechanical treatments for injured limbs, viii: 381-384; artificial arms for war cripples, viii: 384-388; artificial legs for war cripples, viii: 388-390; reconstructing mutilated faces, viii: 390; use of ambrine in treatment of burns, viii: 390; artificial eyes for war blind, viii: 391; prevention of infectious diseases among troops, viii: 392-397; anti-typhoid immunization, viii: 393; making drinking water safe for army, viii: 394-396; _see also:_ disease; infection; reconstruction of disabled; sanitation; surgery. medwa, turks defeated at, by british, jan., '16, iii: 191. mehun, u. s. ordnance repair shop at, v: 350. memel, captured by russians, mar. 19, '15, i: 378; evacuated by russians, mar. 21, '15, i: 378; raided by russian fleet, mar., '15, iv: 365; peace treaty provisions concerning, xii: 203. _men of harlech_, welsh national hymn, xi: 330. menoher, maj.-gen. charles t., commander 42nd div., '17, v: 109; at st. mihiel, sept., '18, v: 202. mensheviki, russian political party, doctrines of, vi: 148. menshikov, russian imperialist, outlines plan of conquest, '14, vi: 134. merchant marine, _see_ shipping. mercier, cardinal désiré, biography and war-time activities, ix: 341-343. _mersey_, british monitor, in flanders and east africa, iv: 281. mersey, lord, official report on _lusitania_ sinking, i: 362-365. merville salient, evacuation of, by germans, iii: 98. mesopotamia, german dream of acquisition, ii: 27; british irrigation schemes in, ii: 295; terrain and climate, iii: 178; historic background of modern battlefields, iii: 329-334; disposition under secret treaties of '16--'17, vi: 334; area and population, xii: 279. mesopotamian campaign, strategic importance and allied plan of operations, ii: _intro. xvi_, 87-91, iii: 178-180; british land troops at fao to protect oil fields, nov., '14, ii: _intro. xvi_, iii: 180; gen. nixon pursues turks and threatens bagdad, '15, ii: _intro. xvi_, 91, iii: 180-182; british defeated at ctesiphon and driven into kut-el-amara, dec., '15, ii: _intro. xvi_, 91, 182-183; siege of kut and gen. townshend's surrender, dec. 7, '15--apr. 29, '16, ii: _intro. xvii_, 91, iii: 183-185, 363, 364; british reorganize campaign after kut disaster, ii: _intro. xviii_, 92, iii: 185; british capture bagdad, mar. 11, '17, ii: _intro. xviii_, 92, iii: 187; british landing force advances to basra and kurna, dec., '14, iii: 180; british capture kut-el-amara, sept., '15, iii: 181; unsuccessful attempts to relieve siege of kut, iii: 184-185; gen. maude placed in command of british, '16, iii: 185; causes of and responsibility for british disaster, report of royal commission, iii: 185, 363-370; battle of sannyat, iii: 185-187; bibliography, iii: 187; personnel of commission of inquiry, iii: 363; conditions in kut during siege, iii: 364; casualties in attempts to relieve kut, iii: 364. messines ridge, british mine and blow up german positions, june, '17, ii: 56, iii: 74, 76-77, viii: 310; nature of german defenses, iii: 77; casualties, british and german, iii: 77; recaptured by germans, apr., '18, iii: 360. _messudiyeh_, turkish warship blown up in dardanelles, dec. 13, '14, i: 376, x: 317. mestrovitch, sgt. james i., gets congressional medal of honor, x: 393. _meteor_, german raider in baltic, iv: 197. metternich, prince, theory of government, i: 33. metz, bombarded by british airmen, jan. 14, '18, i: 393; entered by french, nov. 19, '18, i: 400; allied plan for capture of, nov., '18, v: 274. meurer, vice-adm., german delegate to arrange for surrender of german fleet, iv: 384. meurthe river, line of defense before nancy, iii: 19. meuse river, french forced to retire from, aug., '14, iii: 20; german attempt to invade france through valley of, '14, v: 199. meuse-argonne offensive, concentration of a. e. f. for, sept., '18, ii: 84, v: 75, 218, 388; objectives, ii: 84, 214, 387; topography of battleground, ii: 214, v: 73-74, 90, 217-218; strategic importance, ii: 215, v: 214-216, 387; breakdown of a. e. f. supply service, ii: 215; ludendorff's comment on, ii: 334; detailed account of battle, sept. 25--nov. 11. '18, iii: 100, v: 72-95, 213-253, 260-279; extent of a. e. f. front, v: 72-73, 217, 390; allied plan of campaign, v: 73, 75, 216, 218; a. e. f. divisions participating, with positions in line, v: 74, 219-222, 388; german defenses, position and strength, v: 74, 217-218, 388; a. e. f. advance to kriemhilde position, v: 78-82; allies break through kriemhilde line, v: 83-88; germans dislodged and thrown across the meuse, nov., '18, v: 88-95; number of french troops participating, v: 220, 388; german strength, v: 220, 388; day by day account of operations, sept. 25--oct. 3, v: 222-233; number of allied airplanes, v: 223, 388; day by day account, oct. 4--31, v: 234-253; day by day account of last phase, nov. 1--11, v: 260-279; argonne forest cleared of germans, nov. 3, '18, v: 266; number of allied tanks used, v: 315, 388; sector assigned to a. e. f., v: 385; pershing's official report, v: 386-393; allies' artillery strength, v: 388; strength of first army, a. e. f., v: 390, xii: 280; desperate nature of fighting, v: 390-391; germans appeal for armistice, nov. 6, '18, v: 391; german guns captured, v: 393; german prisoners captured, v: 393; casualties of first army, v: 393, xii: 280; magnitude of operations, v: 393. mexico, german plot to involve in war with u. s., i: 347. meyer-waldeck, capt., german governor of tsing-tau, iii: 257. mézières, captured by germans, aug. 27, '14, i: 375; allied objective in final drive, nov., '18, iii: 103; captured by french, nov. 9,. '18, iii: 103; fortified french frontier town, v: 215. mézières-sedan railroad, key to german lines of communication on western front, v: 216, 387. mezy, germans force passage of marne at, july 15, '18, v: 150. mice, uses in war, vii: 229. michael, grand duke, designated as successor by czar on abdication, vi: 156; renounces succession to russian throne mar., '17, vi: 156. michaelis, georg, statement of german war aims, ii: 14; appointment as german chancellor, july, '17, vi: 266. michel position, section of hindenburg line on st. mihiel front, v: 69. michitch, gen., serbian commander, stops advance of austrian invaders, dec., '14, iii: 394. michler, gen., decorated for somme campaign, iii: 60. microphone, instrument for detection of u-boats, iv: 308, xi: 241; _see also_ hydrophones. milan, bombarded by austrian airmen, feb. 14, '16, i: 384. miles, capt. wardlaw l., gets congressional medal of honor, x: 399. militarism, german, _see_ germany, militarism. military commandments, by kitchener and foch, xi: 55. military training, universal, advocated by dr. chas. w. eliot, i: _intro. xii_; german system of, i: 71; bernhardi's defense of, i: 162; roosevelt's advocacy of, for u. s., i: 326; abolition of, in germany under peace treaty, xii: 211. milk supply, german, ii: 18. miller, lieut. john q., observation pilot, story of, x: 232-235. miller, major oscar f., gets congressional medal of honor, x: 402. millicent sutherland ambulance, vii: 107. milne, adm., commander of british fleet in mediterranean, aug., '14, iv: 13. milne, pvt. w. j., awarded victoria cross for gallantry at vimy ridge, iii: 349. milyukov, paul m., russian statesman, exposes treachery of stürmer, nov., '16, vi: 142; assails government distribution of food, feb., '17, vi: 144; minister of foreign affairs in provisional government, mar., '17, vi: 158; statement of loyalty to allied cause, vi: 158, 159; biography, ix: 102-103. mines, submarine, north sea mine barrage, iv: _intro. xi_, 324, viii: 274; use of trawlers for sweeping, iv: 292; use in fighting u-boats, iv: 312; use of paravanes as protection against, iv: 313; methods of laying, iv: 326. mining, in land operations, blowing up of messines ridge by british, iii: 74, 76-77, viii: 310; of austrian positions in alps by italians, viii: 311. minkler, c. t., inventor of depth bomb, iv: 330. miraumont, evacuated by germans, iii: 64. mirbach, count von, assassinated by bolsheviki, vi: 187. missionaries, european, as colonial pioneers in east, i: 17. missions, german christian, continuity guaranteed by peace treaty, xii: 263. missy, scene of hard fighting by 1st div., july, '18, v: 55; 1st div. makes first capture of german guns by a. e. f., v: 174. mitau, captured by germans, aug. 2, '15, i: 381. mitrovitza, captured by germans, nov. 23, '15, i: 382. mixed arbitral tribunal, establishment and functions under peace treaty, xii: 243. mkwawa, sultan, skull of, peace treaty provision for return of, by germany, xii: 225. mobile ordnance repair shops, description and functions, v: 350, viii: 294-298. _moewe_, german raider, activities, iv: 197. moffat, john, systematizes american war relief, vii: 87; decorated for relief work, vii: 87. moffett, capt. wm. a., commander of great lakes naval training station, iv: 318. _moltke_, german cruiser in battle of dogger bank, iv: 246. moltke, field-marshal von, views on german strategy, ii: 14. moltke, lieut.-gen. helmuth von, biography, ix: 264. _monarch_, austrian battleship torpedoed by italians at trieste, x: 290. monastir, evacuated by serbs, dec. 3, '15, i: 382; retaken by allies, nov. 19, '16, i: 388, iii: 208. moncy wood, captured by 26th inf., oct. 5, '18, v: 240. mondement, germans driven back at, in first marne battle, iii: 33. mondragon, gen., of mexico, designer of self-loading rifle, viii: 90. money, effect of unsecured paper money on prices, xii: _intro. viii_; inflation chief cause of high prices, xii: _intro. xii_, 27; war-time inflation in u. s., xii: _intro. xii_; inflation throughout world, xii: _intro. xiii_; functions, xii: _intro. xv_; standardized dollar as remedy for fluctuating cost of living, xii: _intro. xv_; inflation defined, xii: 28; effects of inflation, xii: 29; revaluation of gold standard, xii: 31; _see also_ prices. monfalcone, captured by italians, june 9, '15, iii: 244. _monge_, french submarine, rammed by austrian warship, x: 295. monitors, revival of discarded naval type, iv: 280; description of british type, iv: 281; service at dardanelles, iv: 282; service at trieste, iv: 283; service in serbia, iv: 283; construction of, iv: 284. _monmouth_, british cruiser in battle off coronel, armament, iv: 65; struck during battle, iv: 66; sunk by _nürnberg_, iv: 67, ix: 308. monneaux, location, v: 133. monro, gen., sir charles, sent to india to develop military resources, ii: _intro. xviii_; succeeds gen. hamilton at gallipoli, iii: 174; conducts evacuation of gallipoli, iii: 174. monroe doctrine, barrier against european expansion in america, i:37; interpretation under roosevelt, i: 84; upheld by roosevelt against german coercion of venezuela, i: 86. mons, captured by germans, aug. 21--23, '14, i: 375; british retreat from, aug., '14, ii: 162 (viscount french's account), iii: 277-281 (john buchan's description); british gallantry at, xi: 10. monsard, taken by fourth corps, sept. 12, '18, v: 206. mont blanc, captured by 2nd div., v: 393. mont mare wood, passage by 89th div., sept. 12, '18, v: 210. mont st. père-chartèves, location, v: 133. mont st. quentin, captured by british, mar. 18, '17, iii: 68. mont sec, dominating position on st. mihiel sector, v: 65, 116, 199. mont wood, captured by 90th div., nov. 2, '18, v: 264. montauban, captured by british in somme battle, iii: 58. montblainville, captured by 28th div., sept. 26, '18, v: 325. montdidier, captured by french, aug. 11, '18, i: 397; 1st div. relieves french near, v: 29. montdidier-noyon defensive, by allies, june 9--15, '18, iii: 94, v: 129, 139-141; conditions leading to german attack, v: 139; allied use of artillery during, v: 139. monte nero, captured by italians, iii: 244. montecuccoli, adm., responsible for development of austrian navy, iv: 364. montenegro, declares war on austria, aug. 7, '14, i: 375; declares war on germany, aug. 10, '14, i: 375; forced to surrender to austria, feb., '16, vi: 358-359; joins jugoslav union, vi: 366; battle deaths, xii: 288. montfaucon, german stronghold in meuse-argonne sector, v: 78, 218; captured by 79th div., sept. 27, '18, v: 224-225. montfaucon wood, captured by 37th div., sept. 26, '18, v: 224. montmédy, captured by germans, aug. 27, '14, i: 375. montmirail, german objective in last drive on paris, v: 36; headquarters of 28th div., june, '18, v: 143. montrebeau wood, captured by 1st div., oct. 4, '18, v: 237. montrieul-aux-lions, headquarters of 2nd div., june, '18, v: 143. moore, rear-adm. sir archibald, second in command of british in battle of dogger bank, iv: 246. morale, allied and german during winter, '17--'18, v: 1; german, weakened by failure of great offensive, july, '18, v: 53; american, under hardships of meuse-argonne offensive, v: 87, 232; allied and german, sept., '18, v: 213. moranville, taken by 322nd inf., nov. 9, '18, v: 277. morava-maritza valley, approach to constantinople through serbia, iii: 150. moravia, early history, vi: 396; nationalistic aspirations, vi: 396. moresnet, ceded to belgium under peace treaty, vi: 89, xii: 188. moreuil salient, military operations in, aug.--sept., '18, iii: 98; allied attack on albert-montdidier line, iii: 98; albert captured by british, aug., '18, iii: 98; british attack on the scarpe, sept., '18, iii: 98. morgan, miss anne, war relief activities, vii: 92. morine wood, captured by 32nd div., oct. 5, '18, v: 240. morocco, french control of, recognized by great britain, '04, i: 99, 202; kaiser's famous speech at tangier on german policy, mar., '05, i: 99, 202; european crisis on dispatch of german gunboat _panther_ to agadir, july, '11, i: 104, 203; storm center of european diplomacy, i: 202; prince lichnowsky's views on german policy, i: 204; german rights in, surrendered under peace treaty, xii: 208. mort homme, _see_ dead man's hill; verdun. mortars, _see_ artillery. morton, maj.-gen. charles g., commands 29th div., june, '18, v: 146; takes command of sector on right bank of meuse, oct. 10, '18, v: 246. moscow, municipal elections annulled by reactionary protopopov, '17, vi: 143; conference called by kerensky, '17, vi: 167; meeting of soviet congress, mar., '18, vi: 185. moselle river, german attempt to enter france through valley of, '14, v: 199. mosley, brig.-gen. g. van h., chief of co-ordination, g. h. q., a. e. f., sept., '17, v: 102. motors, airplane, production in u. s., xii: 285; liberty, production figures, xii: 285. motor transport corps, u. s., _see_ u. s., army. motor trucks, important function in verdun defense, iii: 50, viii: 289-291; mobile ordnance repair shops, description and functions, v: 350, v: 294-298; armored cars, viii: 286; paris buses as war transports, viii: 286; use as ambulances, viii: 287; number in use by belligerents, aug., '14, viii: 288; number in use at front, june, '15, viii: 288; number shipped to france from u. s., viii: 288, xii: 95, 286; liberty truck, development and description, viii: 291-294. mott, dr. john r., general secretary, y. m. c. a. war work council, vii: 261. _mount vernon_, u. s. transport torpedoed, sept. 5, '17, iv: 337. _mousquet_, french destroyer sunk by _emden_, oct. 28, '14, iv: 181. mouzay, captured by 5th div., nov. 9, '18, v: 94, 272. mücke, lieut. hellmuth von, account of exploits of german raider _emden_, iv: 167-187, 190-194. mudros, british advance base for gallipoli campaign, iii: 164, iv: 30. mühlon, dr. william, disclosures of german complicity in forcing war, i: 133-136, 250-254. muir, maj.-gen. charles h., commands 28th div., may, '18, v: 128; in meuse-argonne offensive, sept., '18, v: 220. mules, number shipped to france by u. s., xii: 95, 286. mülhausen, captured by french, aug. 8, '14, iii: 16. müller, capt. karl von, commander of german raider _emden_, iv: 166. munich, murder of kurt eisner and spartacide uprising in, feb., '19, vi: 298; spartacides establish soviet, vi: 300; soviet overthrown by noske, may, '19, vi: 301. münsterberg, prof. hugo, on "russian peril," vi: 250. murfin, capt. o. g., in charge of u. s. navy mine bases, iv: 325. murman region, military government of, established, july, '18, xii: 279; area and population, xii: 279. murmansk, fighting between allies and bolsheviki at, vi: 187. murray, gen., commands british troops defending suez, iii: 191. mush, captured by russians, feb. 18, '16, i: 384, iii: 263; evacuated by russians, aug. 8, '16, i: 386. mushi, captured by british, mar. 13, '16, i: 384. mustard gas, use in chemical warfare, v: 321, viii: 171-172, xi: 321; use of "sag paste," as protection against, v: 324; manufacture of, at u. s. edgewood arsenal, viii: 186. n namazieh battery, at gallipoli, iv: 45. namur, forts of, constructed, 1890, i: 143; captured by germans, aug., '14, i: 375, iii: 14-15. nancy, german advance on, checked, aug., '14, iii: 19; important frontier fortress, v: 199, 215. nantillois, captured by 315th inf., sept. 28, '18, v: 228. napier, rear-adm. t. d. w., commander of british 3rd light cruiser squadron at jutland, iv: 120. naples, bombed by german aviators, mar. 11, '18, i: 395. napoleon, fort, at gallipoli, bombarded by french battleship _gaulois_, mar. 2, '15, iv: 43. narew, russian army of the, invades east prussia, iii: 111. _narodna odbrana_, serbian patriotic society, accused of responsibility for murder of archduke francis ferdinand, i: 112. _narodni savetz_, bulgarian patriotic organization, vi: 341. narrows, at dardanelles, defenses of bombarded by allies, mar. 5, '15, iv: 45. narva, captured by germans, mar. 5, '18, i: 393. nasarie, taken by british, '15, iii: 181. nasmith, lieut.-com., captain of british submarine _e-11_ in sea of marmora, iv: 210. nasrullah khan, instigator of habibullah khan's assassination, vi: 80. national allied relief committee, vii: 87; _see also_ war relief. national anthems, words and histories of, xi: 325-332. national council of austrian women, peace appeals, '17, vi: 314. national guard, u. s., federalized, aug. 5, '17, i: 390; _see also_ u. s., army. national volunteers, irish organization enlisted to aid british, vi: 57. national war work council, of american y. m. c. a., formation, vii: 262; _see also_ y. m. c. a. nationalism, problems of, i: 23; development in europe since 1648, i: 26; factor in racial unification, v: _intro. viii_; growth during 19th century, v: _intro. ix_; _see also_ under name of country. nations of the world, political positions in 1871, i: 44-60. naumann, friedrich, author of _mittel europa_, statement of german war aims, vi: 258; views on trench frontiers, viii: 126. _nautilus_, submarine invented by robert fulton, 1800, iv: 202. naval batteries, u. s., on western front, v: 306, viii: 42-45. naval power, influence on result of war, i: 13; function as protector of supply routes, i: 15; development as adjunct to colonization, i: 28. naval raids, german bombardment of english coast towns, iv: 244-246. naval stations, british, around the world, i: 15. navarino, battle of, 1827, i: 34. navies, _see_ under each country. navigation, freedom of, for allies, over german waterways, peace treaty provisions, xii: 247-253; elbe, oder, niemen, and danube internationalized under peace treaty, xii: 248. "navy hut," american "y" center at brest, vii: 302. nazareth, captured by british, sept. 21, '18, iii: 198. n-c flying boats, development and description, viii: 236-240; _n-c-4_ first airplane to cross atlantic, iv: 288, viii: 240. near east, european rivalries in, i: 38; german policy, i: 80, 207, ii: 89; _see also_ balkans; germany, foreign policy. "near victories," of the war, ii: 206. _nebraskan, s. s._, american steamer attacked by german submarine, may 25, '15, i: 320. neibaur, pvt. thomas c., gets congressional medal of honor, x: 399. _nembo_, italian destroyer, battle with austrian u-boat, oct. 16, '16, iv: 369. nesle, occupied by french cavalry mar., '17, iii: 68. netherlands, international position in '14, i: 61; refuses to cede dutch flanders to belgium, vi: 89; strength of army, '14, vi: 375, 378; maintains armed neutrality, vi: 375-377; neutrality condemned by british press, vi: 376; effect of submarine warfare on, vi: 377-378; merchant marine seized by allies, mar., '18, vi: 378; claims scheldt and maastricht area, '18, vi: 378; generous host to belgian refugees, vii: 168-175; war-time increase in shipping, xii: 101. "netherlands overseas trust," vi: 377. neufchateau, training area for 26th and 42nd divs., v: 6. neutrals, increase in shipping, xii: 100; trade with germany, xii: 100. neuve chapelle, captured by british, mar. 9--10, '15, i: 378, iii: 41; faulty british generalship at, iii: 375. neuve eglise, captured by british, sept. 2, '18, i: 397. newbolt, sir henry, account of smith-dorrien's battle at le cateau, aug. 26, '14, ii: 176-182. new guinea, german, captured by australians, '14, vi: 38. _new mexico_, u. s. battleship, propelled by electricity, iv: 322. new zealand, war casualties, iii: 404, 405; strength of army, iii: 405; area and population, vi: 37; loyalty to great britain, vi: 46; war cost, aug., '14--mar., '19, xii: 107, 114; peace conference delegates, xii: 179. _new zealand_, british cruiser in battle of heligoland bight, iv 241; in battle of dogger bank, iv: 246. niblack, rear-adm. albert p., biography, ix: 295. nicaragua, delegate to peace conference, xii: 180. nicholas, grand duke, commander-in-chief of russian armies, iii: 119; removed as commander-in-chief and sent to caucasus, sept., '15, iii: 140, 262; biography, ix: 229-231. nicholas, king of montenegro, surrenders to austrians, feb., '16, vi: 359; deposed, vi: 366. nicholas ii, czar of russia, takes personal command of army, sept., '15, iii: 140, vi: 141; influence of rasputin over court, vi: 141; issues undated order for dismissal of duma, '17, vi: 144; abdicates, mar. 15, '17, vi: 156; biography, ix: 374-376. _nicholson_ u. s. destroyer, captures german submarine, iv: 350. niemen, russian army of the, invades east prussia, iii: 110. niemen river, internationalized by peace treaty, xii: 248. nietzsche, friedrich, german apostle of gospel of force, i: 67, ii: 2; striking quotations from, i: 179-180. nieuport, captured by germans, oct. 24, '14, i: 376. nieuport scout planes, viii: 192. nightingale, florence, pioneer army nurse, vii: 11. _1914_, by viscount french, account of military operations of year, summary with extracts, ii: 159-174. nish, captured by bulgars, nov. 5, '15, i: 382, iii: 158; retaken by allies, oct. 13, '18, iii: 213. nish-salonika railroad, cut by bulgarians, iii: 158. nitrogen, asphyxiating properties, viii: 166. nitti, francesco s., italian minister, opposes policy of aggrandizement, vi: 366. nivelle, gen. robert, succeeds joffre as french commander-in-chief, ii: _intro. xx_, iii: 62; in supreme command of allied forces on western front, '16, ii: 54; plans campaign of '17, ii: 54; defends verdun, '16, iii: 54, 61, 310; biography, ix: 167-168. nixon, gen. sir john, commands british troops in mesopotamia, iii: 182; responsibility for mesopotamian failure, iii: 364, 367. "no man's land," definition, v: 17. nolan, brig.-gen. d. e., chief of intelligence (g-2), g. h. q., a. e. f., sept., '17, v: 101; in meuse-argonne offensive, sept., '18, v: 221. nonsard, captured by 1st div., sept. 12, '18, v: 211. norman compensating foresight, use in range-finding, viii: 211. north german confederation, formation, i: 43, ii: 1. north german lloyd line, tonnage and capital, i: 264. north pacific islands, german, acquired by japan, xii: 279; area and population, xii: 279. north sea, allied mine barrage, iv: _intro. xi_, 324-330, viii: 274; problem of belligerents in, iv: 86, 91; german naval raids, iv: 136. _northern pacific, s. s._, speed record as transport, v: 358. norway, pro-ally sympathies, vi: 394. noske, gen., suppresses berlin spartacides, vi: 289; overthrows munich soviet, vi: 300-301. _nottingham_, british cruiser sunk, aug. 19, '16, i: 386; in battle of heligoland bight, iv: 241. nouart, captured by 89th div., nov. 2, '18, v: 264. novo georgievsk, russian attack at, oct., '14, iii: 126; captured by germans, aug., '15, iii: 138. noyon, captured by french, aug. 28, '18, i: 397, ii: 158; occupied by french, march 18, '17, iii: 68; _see also_ montdidier-noyon defensive. nugent, gen., commander of 36th ulster div., iii: 377. _nur-el-bahr_, british cruiser sunk off sollum, nov. 6, '15, ii: 190. _nürnberg_, german cruiser in battle off coronel, iv: 65; sunk in battle of falkland islands, iv: 70, 74. nurses, u. s. army nurse corps, vii: 203; _see also_ red cross; war relief. o _o patria, o rei, o povo_, portuguese national hymn, xi: 329. obrenovatz, captured by austrians, oct. 18, '15, i: 382. o'brien, lieut. pat, escape from german prison, x: 257. observation balloons, _see_ aeronautics. _ocean_, british battleship at gallipoli, iv: 31, 35, 48. oches, taken by 77th div., nov. 4, '18, v: 266. oder river, internationalized by peace treaty, xii: 248. odessa, importance as military base, iii: 161. ogons wood, captured by a. e. f., oct. 5, '18, v: 230, 237, 239. _oh, how i hate to get up in the morning_, american soldiers' song, xi: 337. o'kelly, j. t., irish representative to peace conference, vi: 65. okuma, count, influence on japanese foreign policy, vi: 384; biography, ix: 87. "old dutch cleansers," nickname for 9.2-in. british howitzers, v: 308. old hickory (30th) division, _see_ u. s., army. o'leary, jeremiah, pro-german propagandist in u. s., x: 345. o'leary, sgt. michael, wins victoria cross, x: 71. oman, acquired by allies, '13, xii: 279; area and population, xii: 279. omsk, capital of all-russian government, vi: 191. _onslow_, british destroyer at battle of jutland, iv: 121. "open door" policy in china, i: 57; _see also_ china. opium convention, jan. 23, '12, put into force by peace treaty, xii: 232. opium war, against china, 1840, i: 38. "oppy line," captured by british in arras battle, iii: 72. optical glasses, for a. e. f., viii: 326. orange free state, becomes part of union of south africa, 1899, vi: 47; opposition to great britain, vi: 50-52; _see also_ south africa, union of. orders in council, british, establish blockade of germany, i: 312, 318, ii: 16, 21; _see also_ germany, blockade of. orientator, for testing aviators, viii: 356-358. orlando, vittorio emanuele, italian statesman, forms coalition cabinet, oct., '17, vi: 129; foreign policy, vi: 362, 366; demands fiume for italy, vi: 368; withdraws from peace conference on fiume crisis, vi: 368; biography, ix: 85-87. orly, u. s., aircraft factory at, v: 313. ornes, captured by germans, '16, iii: 48. orphans, _see_ war relief. orsova, captured by rumanians, sept. 7, '16, i: 386, iii: 218; evacuated by rumanians, nov. 24, '16, i: 389, iii: 222. orsova railway, captured by germans in wallachian campaign, iii: 221. o'ryan, maj.-gen. john f., commander, 27th div., v: 196, 281; account of history of 27th div., v: 281-300. o'shea, corp. thomas e., gets congressional medal of honor, x: 393. ossowetz, besieged by germans, iii: 118, 130; captured, aug., '15, iii: 138. ostend, seat of belgian government moved to, oct. 5, '14, i: 376; occupied by germans, oct. 13, '14, i: 376, iii: 38; raided by british may, '18, iv: 279; evacuated by germans, xi: 52. ostrovo, lake, allied counter-attack against bulgars at, sept., '16, iii: 208. _otranto_, british auxiliary cruiser in battle off coronel, iv: 65. ourcq river, crossed by 42nd div. in pursuit of germans, july, '18, v: 50, 187; course and topography of region, v: 133; a. e. f. fighting at, commended by gen. degoutte, v: 192. _over there_, american soldier song, xi: 336. over-there theater league, organization and activities, vii: 277, 339-342. ovillers, captured by allies in somme battle, iii: 58. oxygen, for gas victims, iii: 320. oxygen helmets as defense against poison gas, viii: 173. p paderewski, ignace jan, returns to poland as popular hero, vi: 220; becomes prime minister, vi: 223; defeated for presidency, vi: 225; biography, ix: 95-98. paës, dr. sidonio, president of portugal, assassinated, dec., '18, vi: 374. paget, sir ralph, chairman, international sanitary commission for serbian typhus relief, iii: 398. painlevé, paul, succeeds ribot as french premier, '17, vi: 105. "pal" regiments, british recruiting device, vi: 6. palestine, strategic importance, ii: _intro. xviii, xxi_, 87-90; conquered by gen. allenby, ii: _intro. xx_, 92-94, 218, iii: 192-200, 322-326; capture of gaza, mar. 26--27, '17, ii: 92, iii: 192; capture of jerusalem, dec. 11, '17, ii: 92, iii: 193-196, 322-326 (description of allenby's entry); british and turkish manpower, ii: 93, iii: 200; destruction of turkish army, sept., '18, ii: 94, 218, iii: 198; damascus captured, oct. 1, '18, iii: 199; aleppo captured, oct. 25, '18, iii: 200; bibliography, iii: 200; disposition under secret treaties, '16--'17, vi: 334; y. m. c. a. in, vii: 322; area and population, xii: 279. palmer, frederick, comment on marne fighting, july, '18, v: 158; tribute to 1st div., v: 234. pan-germanism, _see_ germany. pan-slavism, aspirations, i: 244; "greater serbia" propaganda, i: 244; fight for control of ukraine by russia, vi: 241; russia aims at annexation of ruthenia, '14, vi: 241; bulgaria's attitude toward, vi: 340; _see also_ slavs. panama, declares war on germany, apr, 7. '17, i: 389; peace conference delegate, xii: 180. panama canal, u. s. gains control of, i: 84. pannes, captured by 42nd div., v: 211. _panther_, german gunboat sent to agadir, july, '11, i: 104, 203. paolucci, dr., helps lieut.-col. rossetti to sink austrian warship _viribus unitis_, x: 297-303. papacy, relation to italian government, i: 61. papeete, bombarded by german fleet, sept. 22, '14, iv: 62. papen, capt. franz von, german military attaché in u. s., dismissed for unneutral conduct, i: 276; share in passport frauds, i: 314; activities as arch-spy in u. s., x: 328-329. parachutes, use by military balloonists, viii: 260-263. parades, first american troops in paris, july 4, '17, v: 107; allied troops on bastille day in paris, july 14, '18, v: 147; 27th div. in new york city, mar. 25, '19, v: 299. parajd, captured by rumanians, oct. 5, '16, i: 388. paravane, protective device against submarine mine, iv: 313. paris, air raids on, jan. 29--30, '16, i: 384; mar. 11, '18, i: 395; german advance on, '14, ii: 6, iii: 28, vi: 97; bombarded by long-range gun from st. gobain forest, ii: 154, iii: 88, viii: 45-47; welcome to gen. pershing, june 13, '17, v: 97; german drive on, may 27--aug. 6, '18, battles in marne salient, v: 129-139, 141, 147; parade of allies, july 14, '18, v: 147; panic in, during german drive, '18, v: 378; may day rioting, may, '19, vi: 111. paris conference, 1856, guarantees turkish power in europe, i: 39. "paris group," organization of, medical department, a. e. f., v: 346. pasha dagh, australian objective in gallipoli attack, iii: 170; _see also_ gallipoli campaign. pashitch, nicholas, premier of serbia, negotiations with italy for settling adriatic rivalry, vi: 362; biography, ix: 120. passchendaele ridge, captured by british, oct.--nov., '17, ii: 56, 79; recaptured by germans, apr., '18, iii: 377. passenheim, russians defeated at, aug. 28, '14, i: 375, iii: 116. passport frauds, german activities in u. s., i: 314, x: 333. patriotic songs, xi: 332-335. patrol boats, work in combating submarines, iv: 292. patrolling, training a. e. f. in, v: 117. patrols, german system of, in the vosges, v: 26. patterson, miss hannah j., awarded d. s. m. for work on woman's committee, council of national defense, xii: 125. pau, gen. paul, commands french forces invading alsace, aug. 14, '14, iii: 16. peace conference, paris, u. s. delegates sail for, dec. 4, '18, i: 400; conciliatory attitude of austrian delegates, vi: 321; negotiation with hungarian soviet, apr., '19, vi: 326; fiume crisis, vi: 366-370, xii: 159; prestige of japanese delegation, vi: 388; dispute over teschen district, vi: 400; inside story of, by thos. w. lamont, financial adviser to u. s. delegation, xii: 149-163; complexity of task, xii: 149; rapidity of work, xii: 149; open diplomacy, xii: 149; supreme council, members and method of evolving peace treaty, xii: 150-153; "big four," xii: 150, 152; "big three," xii: 150; conference procedure, xii: 156; commissions, xii: 156; delays, xii: 156; language difficulties, xii: 157; reparations commission, organization and work, xii: 158, 219-221; shantung controversy, xii: 160; germans excluded from negotiation, xii: 161; belgian demands, xii: 161; signing of peace treaty with germany, ceremonies, xii: 165-169; list of delegates, xii: 179-182; _see also_ peace treaty with germany, versailles, '19. peace moves, president wilson asks belligerents to state war aims, dec. 18, '16, i: 335; response to wilson's note, i: 336; wilson's "peace without victory" speech, i: 336; pope benedict's appeal, aug. 15, '17, i: 390, ix: 405; germany accepts pope's offer, sept. 21, '17, i: 390; text of letter from emperor charles of austria-hungary to prince sixtus making secret offer of peace, mar., '17, ii: 63; german attempts in '16 and '17 fail, ii: 270, 316, vi: 263; german moves condemned by ludendorff, ii: 303; kaiser orders proposals through queen of holland, ii: 331; russian provisional government urges allies to revise peace aims, may, '17, vi: 161; german socialists demand peace without annexations, '15, vi: 258; bethmann-hollweg proposes peace of understanding, '16--'17, vi: 262; german popular demand for "peace without annexations or indemnities," vi: 266-268; emperor charles forces offer by teutonic allies, dec. 12, '16, vi: 313; demonstrations in sofia, vi: 346; _see also_ armistice; and under each country. peace treaty with germany, versailles, '19, criticism by british liberal press, vi: 22; terms presented to germans, may 7, '19, vi: 302, xii: 161; condemned by german press, vi: 302-304; germany consents to sign, june 22, '19, vi: 304, xii: 163; how drafted, described by thos. w. lamont, financial adviser to u. s. delegation, xii: 149-161; text, work of technicians, xii: 150; french demands, xii: 153; evolution of covenant of league of nations, xii: 155; belgian demands, xii: 161; ceremonies of signing, xii: 165-169; analysis by geo. w. wickersham, xii: 170-178; signed june 28, '19, xii: 179; text in full, xii: 179-263; preamble, giving list of nations allied against germany, and their delegates to peace conference, xii: 179-182; league of nations, text of covenant, xii: 182-185; boundaries of germany, xii: 186; provisions concerning luxemburg, xii: 189; demolition of german fortifications, xii: 189, 205, 211, 214; sarre basin settlement, xii: 189-194; alsace-lorraine, provisions for return to france, xii: 194-197; germany acknowledges independence of austria, xii: 197; provisions for independence of czechoslovak state, xii: 197; independence and boundaries of poland, xii: 198-200; plebiscite for east prussia, xii: 200; provisions concerning memel, xii: 203; danzig made free city, xii: 203; plebiscite provisions for schleswig, xii: 204; heligoland, destruction of fortifications on, xii: 205; provisions concerning russo-german relations, xii: 205; brest-litovsk treaties abrogated, xii: 205; german colonies surrendered to allies, xii: 206; german rights in china surrendered, xii: 206; german rights in siam surrendered, xii: 208; german rights in liberia surrendered, xii: 208; german rights in morocco surrendered, xii: 208; german rights in egypt surrendered, xii: 208; shantung (kiau-chau) transferred to japan, xii: 209; reduction of german army and military equipment, xii: 209, 210, 211, 212; universal military service abolished in germany, xii: 211; new german army, table of organization for, xii: 212; german navy, surrender and reduction, xii: 212-214; german wireless stations, regulation by allies, xii: 214; german military air service abolished, xii: 214; existing german air service surrendered to allies, xii: 215; interallied commissions of control to supervise execution of military terms, xii: 215; repatriation of prisoners of war, xii: 216; war graves, care of, xii: 217; punishment of germans guilty of war crimes, xii: 217; reparation terms imposed on germany, xii: 217-225; reparation commission, formation and functions, xii: 219-221; shipping, restitution for allied shipping sunk, xii: 222; reconstruction, german obligations, xii: 223; coal, german deliveries to france, belgium, italy, xii: 224; dyestuffs, german deliveries to allies, xii: 224; submarine cables, german, surrendered to allies, xii: 225; trophies of war, return of, to france by germany, xii: 225; koran of caliph othman, return of, by germany to king of hedjaz, xii: 225; sultan mkwawa, skull of, return by germany to great britain, xii: 225; louvain, university of, restoration by germany of books destroyed, xii: 225; art objects, carried by germans from belgium, restoration of, xii: 225; gold, restriction on german export of, xii: 226; armies of occupation, allied, in germany, expense to be borne by germany, xii: 226; ceded territories, share in german national debt, xii: 226; alsace-lorraine, exempt from share in german national debt, xii: 226; poland, share in german national debt, xii: 227; international concessions, surrender by germany of rights in, xii: 228; gold, deliveries of, by germany to allies, xii: 228; customs duties, regulations imposed on germany, xii: 229; privileges for allied shipping to be granted by germany, xii: 230; trade competition, germany to suppress unfair methods, xii: 230; allied nationals, treatment of, by germany, xii: 230; pre-war treaties between allies and germany revived, xii: 231; treaties among teutonic allies abrogated, xii: 232; treaties between germany and russia abrogated, xii: 232; treaties between germany and rumania abrogated, xii: 232; opium convention, jan, 23, '12, put into force, xii: 232; debts, between german and allied nationals, methods of payment, xii: 232-236; property rights of allied nationals confiscated by germany, methods of restitution, xii: 236-240; contracts, between german and allied nationals, status and methods of discharge, xii: 240-243; mixed arbitral tribunal, establishment and functions, xii: 243; literary rights, provisions for re-establishment of, xii: 244-246; artistic rights, provisions for re-establishment of, xii: 244-246; industrial rights, provisions for re-establishment of, xii: 244-246; ceded territories, social insurance funds of, to be transferred to allies by germany, xii: 246; aerial navigation, rules for, xii: 246; freedom of transit, for allied goods and nationals through germany, xii: 247, 253; ports, allied, discrimination against, by germany forbidden, xii: 247; navigation, allied, over german waterways, xii: 247-253; elbe, internationalized, xii: 248; oder, internationalized, xii: 248; niemen, internationalized, xii: 248; danube, internationalized, xii: 248; rhine, international control and rules for navigation, xii: 250-253; use of northern german ports by czechoslovak state, xii: 253; german railways, provisions relating to, xii: 253; kiel canal, rules of navigation through, xii: 255; labor, international organization for improving conditions of, xii: 255-261; guarantees for execution, exacted from germany, xii: 261; armies of occupation, conditions for withdrawal, xii: 261; savoy, neutralized zone of, provisions concerning, xii: 262; german christian missions, continuity guaranteed, xii: 263; prize courts, provision concerning decisions of, xii: 263; signed, june 28, '19, xii: 264; ratified by germany, july 10, '19, xii: 264; ratified by great britain, july 25--31, '19, xii: 264; ratified by king of italy, oct. 7, '19, xii: 264; ratified by france, oct. 13, '19, xii: 264; ratified by japan, oct. 27, '19, xii: 264; u. s. senate opposition to, xii: 264-278; fall amendments to, defeated in u. s. senate, oct. 2, '19, xii: 264; original lodge reservations defeated in u. s. senate, nov. 19, '19, xii: 265-266; original lodge reservations, text, xii: 265; defeated in u. s. senate for second time, mar. 19, '20, xii: 266-269; pres. wilson's opinion on lodge reservations, xii: 267; revised lodge reservations, text, xii: 269; efforts of congress to declare peace by joint resolution in substitution for, xii: 271-278; knox resolution, xii: 273, 277; president wilson's message vetoing knox resolution, xii: 278. pearce, padraic, provisional president of irish republic, vi: 60, ix: 53. peck, pvt. archie a., gets congressional medal of honor, x: 400. penang harbor, attacked by _emden_, oct. 28, '14, iv: 178. people's relief committee, for jewish relief, formation, vii: 354. pepper hill, at verdun, attacked by germans, apr. 18, '16, iii: 52, 304. periscope, description, viii: 165, xi: 245. perkins, pvt. michael j., gets congressional medal of honor, x: 391. permanent blind relief war fund, organization and activities, vii: 255-259. péronne, french objective in somme battle, iii: 55; captured by british, mar. 18, '17, iii: 68. péronne-ham sector, allied drive on, sept., '18, ii: 158. pershing, gen. john j., offers a. e. f. to foch, mar. 28, '18, v: 30, 120, 380, ix: 153; sails for europe, may, '17, v: 97; reception in england, june, '17, v: 97; reception in france, june, '17, v: 97; reasons for selection of american army zone, '18, v: 110; farewell speech to 1st div., chaumont-en-vixen, apr., '18, v: 121; urges attack with a. e. f., july, '18, v: 158; extract from report on aisne-marne offensive, july, '18, v: 182; assumes tactical command of american forces in battle area, v: 192, 384, ix: 205; extract from report on st. mihiel attack, v: 212; starts meuse-argonne offensive, sept., '18, v: 213; extract from report on preparation for meuse-argonne attack, v: 218; divides a. e. f. combat units into two armies, oct. 9, '18, v: 246, 390; personal message to each soldier in a. e. f., v: 353; official report on a. e. f., v: 373-404; appeal to war dept. for troops, dec., '17, v: 373; insists on independent american army in france, v: 385; alsatian ancestry, ix: 166; origin of name, ix: 166; biography, ix: 199-210. pershing stadium, vii: 313. persia, divided into "spheres of influence" by anglo-russian agreement, '07, i: 104, vi: 335; sympathy with turkey, vi: 330; pro-german sentiment, vi: 336-337; great britain in control, '19, vi: 338. _persia, s. s._, british merchantman sunk in mediterranean, dec. 30, '15, i: 384; eye-witness account, iv: 224. peru, dispute with chile over tacna-arica district, vi: 390; delegate to peace conference, xii: 180. pétain, marshal henri philippe, defender of verdun, ii: 189, iii: 50, 54, 304, xi: 22; eulogy of, by gen. malleterre, ii: 220; biography, ix: 164-166. peter i, king of serbia, accompanies his nation in retreat, iii: 281, 284; reënters belgrade, dec. 15, '14, iii: 397; foreign policy, vi: 355; biography, ix. 398-399. petrograd, food shortage in, vi: 141; workmen's delegates on war industrial committee arrested, vi: 143; during the revolution, vi: 144-153. petroseny, captured by rumanians, sept. 1, '16, i: 386. peuvillers, captured by 128th inf. regt., nov. 10, '18, v: 272. peyton, maj.-gen., british commander in western egypt, iii: 191. pflanzer, gen. von, austrian commander in bukovina, iii: 132. philippines, acquired by u. s., i: 56. phillipeville, bombarded by _goeben_, aug. 4, '14, iv: 14. phonotelemeter, description of, viii: 20. phosgene (carbonyl chloride), use in chemical warfare, v: 321, viii: 168-170; manufacture of, at u. s. edgewood arsenal, viii: 184. photography in war, work of u. s. signal corps, v: 319; use in artillery range-finding, viii: 14; value of aerial photography, viii: 226, 331; types of aerial cameras, viii: 228, 332-334; de ram automatic camera for aerial photography, viii: 228, 333; work of u. s. aerial photographers, viii: 228, 235; personnel of photographic section, u. s. air service, viii: 234; future, viii: 234; making pictorial history of war, viii: 329-331; production of photographic supplies by u. s., viii: 355; mobile developing laboratories, viii: 335; _see also_ aerial photography. piave river, italian stand at, after caporetto rout, ii: 58, 250, iii: 248. picardy front, german choice for final drive, '18, ii: 69; advantages of, for german offensive, '18, ii: 69. pichon, stephen, french foreign minister, speech before chamber of deputies on secret entente agreements of '16--'17, vi: 334. pigeons, war uses, v: 239, 319, viii: 328. pike, lieut.-col. emory j., gets congressional medal of honor, x: 400. pill-boxes, description, iii: 79, viii: 130; battle tactics in use of, viii: 130-133. pilsudski, gen. joseph, leads polish troops against russia, vi: 202; jailed by germans, vi: 214; assumes dictatorship of poland, vi: 219; dictatorship not recognized by allies, vi: 222; minister of foreign affairs in paderewski cabinet, vi: 223; becomes president of polish republic, vi: 225; biography, ix: 92-95. pirot, occupied by bulgars, oct. 28, '15, i: 382. pistols, schwarzlose automatic pistol, mechanism, viii: 90; use as military weapon, viii: 116-117. "place in the sun," speech by kaiser, '01, i: 95; definition of phrase, ii: 27; german control of balkans as means of attaining, ii: 27. plava, captured by italians june 10, '15, i: 380, iii: 244. _players, the_, poem by francis bickley, ix: 290. pleinchamps farm, captured by 28th div., oct. 4, '18, v: 239. ploechti, captured by germans, dec. 6, '16, iii: 222. plumer, gen. sir herbert, commander of british second army, ii: 214; a great military chief, iii: 375; offensive in flanders, sept., '18, v: 213. plunkett, rear-adm. chas. p., commander of u. s. naval railway batteries on western front, v: 306, viii: 45. plunkett, sir horace, irish leader, chairman of irish convention, '18, vi: 62. plymouth, england, u. s. subchaser base, iv: 359. poincaré, raymond, president of french republic, biography, ix: 14-19; bibliography, ix: 19. _points d'appui_, definition, v: 13. pola, italian naval raid on, nov. 2, '16, iv: 369; italians sink austrian dreadnought at, may 14, '18, iv: 372; austrian dreadnought _viribus unitis_ blown up by italians at, nov. 1, '18, x: 297-303. poland, topography, iii: 106-108; german invasion of, and unsuccessful attacks on warsaw, sept., '14--feb., '15, iii: 116-118, 124-127, 128-132; austrian invasion of, iii: 118-120; conquered by austro-german forces, july--sept., '15, iii: 137-141, vi: 311; battle of the salients, july, '15, iii: 138; warsaw captured by germans, aug. 4, '15, iii: 138; civilian deaths due to war-time privation, iii: 406; early history and pre-war condition, vi: 201; russian promise of autonomy, '14, vi: 201; austrian poles support central powers, vi: 202; poles under pilsudski fight against russia, vi: 202; war-time destitution in, vi: 204-210; german reforms in, vi: 208; german policy, vi: 210-213; germany promises reëstablishment of polish kingdom, nov. 5, '16, vi: 210; germany demands polish troops, vi: 213; freed by russian revolution, vi: 213; germany sets up regency, vi: 214; denied representation at brest-litovsk by germany, vi: 214; revolt against teuton domination, '18, vi: 216; capture of lemberg from ruthenians, nov. 5, '18, vi: 217; proclamation of republic, vi: 218-219; pilsudski becomes dictator, nov., '18, vi: 219; germans expelled, dec., '18, vi: 220; political struggle between classes, vi: 220; conservatives support paderewski, vi: 220; warsaw revolt against pilsudski fails, vi: 220-222; war against bolsheviki, vi: 222-224; war with ukraine over cholm, vi: 222, 248; dispute with czechs over teschen, vi: 222, 400; compromise cabinet of paderewski and pilsudski, feb. 9, '19, vi: 223; provisional government recognized by allies, feb., '19, vi: 225; pilsudski elected president, vi: 225; claims for danzig, vi: 225; peace treaty provisions for independence and boundaries of, vi: 226, xii: 18-200; american war relief for jews in, vii: 356-358, 360-363, 375; value of property loss, xii: 26; peace conference delegates, xii: 180; share in german national debt, peace treaty provisions, xii: 227; area and population, xii: 279. political parties, _see_ under countries. _pommern_, german battleship torpedoed by british submarine _e-9_, july 2, '15, iv: 208. pont-à-mousson, on toul-st. mihiel sector, v: 65, 116, 119. pontoons, viii: 299-300. _pontoporros_, auxiliary to german raider _emden_, iv: 172. pope, _see_ benedict xv. pope, corp. thomas a., gets congressional medal of honor, x: 397; poperinghe line, british-american line of defense in flanders, v: 287, 289. population, decrease in births due to war, iii: 406; effects of war on, xii: 25. port arthur, seized by russia from china, i: 20; acquired by japan, i: 20; 11-in. siege guns first used by japanese at, viii: 34. ports, french, selected for a. e. f. use, '18, v: 110; allied, peace treaty provisions against discrimination by germany, xii: 247. portugal, international position in '14, i: 62; rout of army before german offensive, apr., '18, ii: 153, iii: 91, vi: 374; war casualties, iii: 404, v: 364; prisoners of war, iii: 404; internal strife, vi: 372-375; enters war as british ally, vi: 373; president paës assassinated, dec. '18, vi: 374; royalist uprising suppressed, '19, vi: 375; money equivalent of man-power lost, xii: 25; peace conference delegates, xii: 180. posen, revolt of polish population against germany, vi: 225; awarded to poland by peace conference, vi: 226. potash, german boycott of u. s., xii: 98. potatoes, world production by countries, xii: 47; as food, xii: 47; german system of drying and crushing, xii: 47. potsdam conference of german war leaders, july 5, '14, i: 136; decision for war, i: 249. potts, pvt. frederick, wins victoria cross at gallipoli, x: 138. powder, _see_ ammunition. power plants, built by a. e. f. engineer corps, v: 333. pozières, captured by british in somme battle, iii: 58. prague, meeting of czechoslovak representatives at, apr. 2, '18, vi: 398. prauthory, haute-marne, headquarters, 32nd div., feb., '18, v: 119. _president lincoln_, u. s. transport sunk, may 31, '18, i: 395, iv: 337; eye-witness account, iv: 340. press: austria-hungary, _tageblatt_ demands war, '14, vi: 306; hungarian journals support war, vi: 307; _pester lloyd_ for war, '14, vi: 308; _oesterreichische rundschau_ attacks italy, '15, vi: 310; _vossische zeitung_ on strikes, jan., '18, vi: 314; _arbeiter zeitung_, radical organ, vi: 315; _arbeiter zeitung_ on peace terms, vi: 322; _has haroda_ on czech loyalty, '14, vi: 396. bulgaria, statement against russia by _kambana_, june, '15, vi: 342. germany, _militärische rundschau_ advocates immediate war, '14, vi: 249; socialist organ _vorwärts_ supports kaiser, vi: 249; _liller kriegszeitung_ preaches hate of england, vi: 252; optimistic attitude of _frankfurter zeitung_, nov., '14, vi: 253; maximilian harden ridicules in _zukunft_ talk of german starvation, vi: 254; alarm over prospects of starvation, '15, vi: 255; submarine warfare urged, vi: 256, 265; on german successes, '15, vi: 258; _vorwärts_ demands statement of peace aims, vi: 258; _frankfurter zeitung_ on seriousness of allied blockade, '15--'16, vi: 261; _vorwärts_ on food shortage, vi: 261; demand war to finish, '17, vi: 264; gospel of hate against england, vi: 264-265; _taglische rundschau_ on german demoralization, dec., '18, vi: 284; _vorwärts_ on industrial unrest, dec., '18, vi: 286; comments on ebert as president, vi: 293; on peace terms, vi: 302-304; maximilian harden on peace terms, vi: 303. great britain, condemns dutch neutrality, vi: 376. italy, _corriere della sera_ and _secolo_ advocate conciliation with jugoslavs, vi: 362. serbia, expressions of hatred for austria-hungary by _politika_, _mali journal_, _balkan_, _zastava_, vi: 356; _samouprava_ denounces italian treaty, '15, vi: 361. turkey, _ikdam_ for war, vi: 330; _tanine_ on dardanelles expedition vi: 330; _hillal_ acclaims victory, '15, vi: 331. united states, attitude on u. s. neutrality, i: 308; on _lusitania_ sinking, i: 319; on _arabic_ torpedoing, i: 322; on german indemnity, xii: 24. pressel, dr. wilhelm von, builds first spur of bagdad railway, 1871, ii: 291. pressure gauges, on airplanes, viii: 220. "preventive arrests," for suppressing pacifist agitation in germany, vi: 262. prices, analysis of, by prof. irving fisher, xii: _intro. vii-xvii_; high cost of living as result of war, xii: _intro. vii_, 143; index numbers, xii: _intro. vii_; rise in u. s., '13--'19, xii: _intro. vii-viii_; influence of unsecured paper money on, xii: _intro. viii_; chart of price movements in u. s. and england since 1780, xii: _intro. viii_; before and after great wars of history, xii: _intro. ix_; percent. rise in warring countries, xii: _intro. x_; present high level not due to scarcity, xii: _intro. x_; inflation as cause of high prices, xii: _intro. xii_, 27; countries arranged in order of high prices, xii: _intro. xii-xiii_; extent of currency inflation, xii: _intro. xiii_; high cost of living as breeder of bolshevism, xii: _intro. xiii-xiv_; purchasing power of wages, '13--'18, xii: _intro. xiv_; remedies for high cost of living, xii: _intro. xiv-xv_; standardized dollar as remedy for fluctuation in, xii: _intro. xv_; effect of wars on, xii: 27; reduced production as cause of high prices, xii: 27, 38-40; "fair price" lists, xii: 54; rise in u. s., '14--'18, xii: 56-59; present, compared with civil war days, xii: 57, 75; effects of government control in great britain, xii: 59; government control in u. s., xii: 59; _see also_ cost of living, under name of country. prilep, captured by bulgars, nov. 17, '15, i: 382; occupied by allies, sept. 26, '18, i: 397. primers, composition and explosive properties, viii: 6. _prince george_, british battleship at gallipoli, iv: 33. prince, norman, member lafayette escadrille, death, iii: 391. princes' island, conference of russian factions at, fails, vi: 188. _princess royal_, british cruiser, in battle of jutland, iv: 108; in battle of dogger bank, iv: 246. _principles of war_, treatise by marshal foch, ii: 80, 104, ix: 152. _prinz eitel friedrich_, german raider, puts into hampton roads for repairs, mar. 10, '15, i: 378; interned by u. s., apr. 7, '15, i: 378. priority system, among u. s. industries during war, xii: 73-75. pripet marshes, russian offensive against austria, june, '16, ii: 42; description, iii: 108. prisoners of war, classified by countries, iii: 404; work of swiss red cross for, vi: 380; work of american y. m. c. a. for, vii: 302-310; crown princess of sweden's work for, vii: 308; peace treaty provisions for repatriation of, xii: 216. austria-hungary, captured by serbs, description of, iii: 395; humane treatment by serbs, iii: 400; total lost in war, iii: 404. french, diary describing life in german prison, iii: 300; total lost in war, iii: 404. german, captured in somme battle, iii: 60; in battle of cambrai, iii: 82; in st. mihiel drive, iii: 99, v: 71, 207; during allied drive, july--nov., '18, iii: 103; total in war, iii: 404; at cantigny, v: 33; taken by a. e. f. in marne salient, july, '18, v: 56; first capture by a. e. f., v: 113; clothed by u. s. salvage service, v: 331; captured in meuse-argonne offensive, v: 394; total captured by a. e. f., xii: 288. russian, sufferings of, in german prison camp, iii: 300; total lost in war, iii: 404. turkish, captured by british in palestine campaign, ii: 94, iii: 199; total lost in war, iii: 404. united states, first captured by germans, iii: 84; total lost in war, iii: 404; work of american red cross for, vii: 37-39, 71. _see also_ under battle or campaign; countries. prize courts, peace treaty provision for decisions of, xii: 263. profiteering, xii: 55; u. s. meat-packers' profits before and during war, xii: 56. prohibition, u. s. war-time act passed, july 7, '17, i: 390; russian government forbids sale of vodka, iii: 265, vi: 135; voluntary abstention urged in england by lloyd george, '14, vi: 2-3; use of vodka substitutes in russia, vi: 138; imposed by bela kun's government in hungary, vi: 325. propaganda, _see_ allies; germany. property rights, of allied nationals confiscated by germany, peace treaty provisions for restitution of, xii: 236-240. protopopoff, russian minister of interior, in german employ, ii: 59, vi: 143; causes rumanian entry into war for german interest, ii: 59; gains power at court through rasputin, vi: 143; reactionary policy, vi: 143; surrenders to duma during revolution, march, '17, vi: 153. _provence ii_, french cruiser sunk by u-boat, feb. 26, '16, iv: 376. pruitt, corp. john h., gets congressional medal of honor, x: 390. prussia, war with denmark, 1864, i: _intro. vii_, 41; autocratic form of government, i: 29; assumes leadership of german states under bismarck, i: 40; population in 1860, i: 40; seven weeks' war against austria, 1866, i: 41; representation in imperial bundesrat, ii: 71; traditional policy of force, i: 150; controlling share in government of german empire, i: 156; king of, powers as german emperor, i: 156; relations with great britain, stages in evolution of, i: 168; prussianization of germany, i: 258; plan of imperial development, ii: 1; _see also_ germany. przasnyz, captured by germans, feb. 24, '15, i: 378, iii: 131; recaptured by russians, feb. 27, '15, i: 378. przemysl, invested by russians, sept. 16, '14, i: 376, iii: 123-124; russians forced to raise siege, oct. 12, '14, i: 376, iii: 125; reinvested by russians, nov. 12, '14, i: 376, iii: 127, xi: 16; captured by russians, mar. 22--23, '15, i: 378, iii: 134, 292-293, xi: 16; number of austrians surrendering, i: 378, iii: 134, 293; recaptured by austro-german forces, june 1--2, '15, i: 380, ii: 234, iii: 136. pskov, captured by germans, feb. 24, '18, i: 393. psychological tests, for gauging intelligence of army recruits, vii: 216, viii: 349-351. psycho-physiological tests, for determining fitness of recruits for specific duties, viii: 351-356. putnik, field-marshal, commander-in-chief of serbian army, iii: 150. pys, evacuated by germans, feb. 24, '17, iii: 64. q "q" ships, british decoys for u-boats, iv: 296. quebec, not enthusiastic for war, vi: 26; failure of recruiting among french-canadians, vi: 30; move for secession from dominion, vi: 33, 36; draft boards defeat conscription by blanket exemptions, vi: 36; draft riots, vi: 36; _see also_ canada. _queen_, british battleship at dardanelles, iv: 33. _queen elizabeth_, british dreadnought at dardanelles, ii: _intro. xv_, iv: 31. _queen mary_, british cruiser blown up at jutland, iv: 110, 258; in battle of heligoland bight, iv: 241. queenstown, ireland, base for u. s. destroyer and subchaser detachment, iv: 357. quennemont farm, strong point on hindenburg line, v: 290. quien, gaston, betrayer of edith cavell, x: 352. quinn, jim, citation for d. s. c., july 18, '18, v: 171. r _r-34_, british dirigible, crosses atlantic, viii: 245; similarity to zeppelin, viii: 254. races, european rivalries, i: 21. rada, central council of ukraine, formed after russian revolution, vi: 243. radio, _see_ wireless. radoslavov, vassil, bulgarian premier, heads patriotic organization, _narodni savetz_, vi: 341; statement of bulgarian war demands, vi: 341; german sympathies, vi: 343; resigns, june 17, '18, vi: 346. raemakers, louis, dutch cartoonist of the war, ix: 190. rafa, turks defeated by british at, jan., '17, iii: 192. raids, _see_ air raids; naval raids. raikes, lieut.-com. robert h. t., commander of british submarine _e-54_, battle with german u-boats, iv: 212. railroads, german ambition for calais-persia route, ii: 2; russian military, iii: 105; petrograd-berlin, iii: 111; transylvanian, cut by rumanians, iii: 218; orsova, taken by germans in wallachian campaign, iii: 221; cernavoda-constanza, captured by teuton allies, oct., '16, iii, 221; in trentino, iii: 230; in isonzo sector, iii: 239; in uganda, iii: 255; in transcaucasia, iii: 260; number of troop trains needed to move a u. s. division, v: 20; french, available for a. e. f. use, v: 110; st. mihiel-metz, cut, sept. 12, '18, v: 206; german lines of communication in occupied territory, v: 215; mézières-sedan, key to german lines of communication on western front, v: 216, 387; built by engineer corps, a. e. f., in france, v: 333, 334, 403, xii: 283; equipment sent to france from u. s., v: 403, xii: 95, 286; war functions, viii: 283; collapse of russian system, under war stress, viii: 283; work of german railroads during war, viii: 283-285; narrow-gauge, at the front, viii: 302; _see also_ bagdad railway. railway artillery reserve, u. s., formation, v: 305; units composing, v: 305; engagements on western front, v: 306-308; _see also_ u. s. army, artillery. rainbow (42nd) division, _see_ u. s., army. rambucourt, on toul sector, v: 116. ramscappelle, german success at, oct. 30, '14, iii: 40. _ramsey_, british patrol boat, sunk by german auxiliary cruiser _meteor_, iv, 197. ramsgate, bombarded by german destroyers, nov. 25, '16, i: 389. range-finder, telescopic, structure and use of, viii: 9. range-finding, _see_ artillery; hydrophones; microphone; phonotelemeter. rapallo conference, iii: 84. rappes, bois des, captured by 3rd div., oct., '18, v: 85. rasputin, gregory, influence over czarina and russian court, vi: 141; assassinated, '16, vi: 141; influence places protopopov in power, vi: 143; biography, ix: 345-347. ravaruska, russian success in battle of, sept. 4--10, '14, iii: 122; captured by austro-german forces, june 20, '15, iii: 136. rawlinson, gen., commander of british fourth army, ii: 214, iii: 371. raynal, major, defender of fort vaux, iii: 55, 313. read, maj.-gen. george w., commander, 30th div., june, '18, v: 146; commands 2nd corps, v: 290, 382, 394; biography, ix: 223-224. read, lieut.-com., pilots _n-c-4_, first airplane across atlantic, viii: 240. rebais, germans beaten back at, in first marne battle, iii: 32. reconstruction of devastated war areas, german obligations under peace treaty, xii: 223. reconstruction of disabled, american help for vocational training of french disabled, vii: 79, 92-95; program of european belligerents, vii: 175; in u. s. army, vii: 175-186, 210-216, 222, 233-239; importance of first aid, vii: 178; treatment of shell-shock, vii: 179; percent. of injured returned to service, vii: 180; system of vocational training for u. s. service men, vii: 180-182, 210-216, 236-239; educational personnel for training of u. s. service men, vii: 180, 185; care of blinded u. s. service men, vii: 182, 213; correcting speech defects in u. s. military hospitals, vii: 182, 213; work of u. s. dental officers, vii: 210; in civilian industries, vii: 240-245; mechanical treatments for injured limbs, viii: 381-384; artificial arms for war cripples, viii: 384-388; artificial legs for war cripples, viii: 388-390; remaking shell-torn faces, viii: 390; artificial eyes for war blind, viii: 391; _see also_ medical science; surgery. recouly, raymond, account of first marne battle, ii: 182-186; account of verdun battle, ii: 186-189. recreation, for service men, _see_ entertainment; sports. recruiting, _see_ under country. red army, in russia, organized by trotzky, vi: 185; in munich, raised by munich soviet, vi: 300; in hungary, under communist government, vi: 326. red cross: american, relief work in italy, ii: 250, vii: 42, 82; henry p. davison, chairman of war council, vii: 1; war-time activities, summary, vii: 1; amount of contributions to, vii: 1; increase in membership, vii: 1; personnel in france, vii: 1; clara barton, mother of, vii: 12; peace time activities, vii: 14; war organization, vii: 15-27; raising war funds, vii: 15-27; total relief expenditures, vii: 27; range of activities, vii: 29; location of base hospitals, vii: 30; location of ambulance companies, vii: 30-31; sanitary service, vii: 31-32; nursing personnel, vii: 33; canteen service, vii: 33, 42, 47-49, 54, 57; auxiliary activities for service men's comfort, vii: 34; recruiting services of nation's womanhood, vii: 34; home service work, vii: 35; services abroad, vii: 35-40; hospital work in france, vii: 37, 45; work for american prisoners in germany, vii: 37-39, 71; relief activities in england, vii: 40, 45; with the navy, vii: 41; relief work among belligerents during u. s. neutrality, vii: 43-46; hospital work in germany, vii: 45; hospital work in austria-hungary, vii: 45; relief for serbia, vii: 45, 84; stories of overseas service with fighting men, vii: 47-72; work for wounded, vii: 49-54, 56, 60-64; ambulance service at the front, vii: 49-51; tales of wounded, vii: 51-54; hotels for service men in paris, vii: 54; supplying delicacies to wounded, vii: 56; huts, vii: 59; entertainment, vii: 60; as bureau of information, vii: 62-64; helping doughboys shop in france, vii: 64; department store for overseas service men, vii: 66; production of surgical dressings, vii: 67; production of nitrous oxide, vii: 68; baths and laundries behind the lines, vii: 70; children's bureau, activities for welfare of child war sufferers, vii: 72, 76-79, xi: 85-90; relief among allied civilians, vii: 73-85; relief among french refugees, vii: 73; fight against tuberculosis in france, vii: 75; education of french disabled, vii: 79; relief for belgian refugees, vii: 82; relief in rumania, vii: 84; work in palestine, vii: 84; institute for the blind, vii: 259; letters of appreciation from refugee children, xi: 60; junior american red cross, activities, xi: 90-93; help by boy scouts, xi: 108; letter from "chinese citizen boy," xi: 179. international, in switzerland, vi: 380; world league of, vii: 3; history of development, vii: 4-14; florence nightingale, first field nurse, vii: 11; u. s. becomes member, vii: 14. _red cross nurse_, poem by edith thomas, vii: 279. "red monday," during russian revolution, mar. 12, '17, vi: 150. "red week," rioting during, in italy, june, '14, vi: 114. "reds," _see_ bolshevism. reeves, col. ira l., military superintendent, a. e. f. university at beaune, vii: 283. refrigerating plants, constructed by a. e. f. in france, v: 403. refugees, _see_ war relief. regan, 2nd lieut. patrick, gets congressional medal of honor, x: 395. reichstag, german, limitations as legislative body, i: 71; composition and powers, i: 156. reims (rheims), abandoned by allies, aug. 28, '14, i: 375; re-occupied by french, sept. 15, '14, i: 376; cathedral bombarded by germans, iii: 74, vi: 97; attacked by crown prince, june, '18, iii: 95; description of surrounding country, v: 43; gateway between germany and france, v: 215. _reiter's morganlied_, german air, xi: 335. relief, _see_ war relief. religion, diversity of, obstacle to world federation, i: 25; work of y. m. c. a. with troops overseas, vii: 283-285. remington self-loading rifle, description, viii: 89; _see also_ rifles. remonville, location, v: 217; captured by 89th div., nov. 1, '18, v: 262. remounts, construction of depots for, by a. e. f., v: 333; procuring of, for a. e. f., v: 399. renault tank, description, viii: 156; _see also_ tanks. rennenkampf, gen., commander of russian forces invading east prussia, '14, ii: 24, 227, iii: 110; driven out of east prussia by hindenburg, ii: 25, 229, iii: 116; ludendorff's account of retreat, ii: 355; _see also_ east prussia; tannenberg, battle of. renner, dr., becomes austrian chancellor, '19, vi: 319; bolshevik uprising against, vi: 321; conciliatory attitude at peace conference, vi: 321. renwick, george, description of munich under red terror, vi: 301. repair shops, u. s. ordnance, in france, v: 350. reparation, by germany, peace treaty provisions, xii: 217-225. reparation commission, formation and functions, xii: 158, 219-221. repatriés, returned french exiles, xi: 75. repington, colonel, military correspondent of _london times_, exposes british shell shortage, may, '15, ii: 174. replacement system, plan for a. e. f., '17, v: 102, 399. respirators, number issued by u. s. army, v: 324; utility as defense against poison gas, viii: 174-178; _see also_ chemical warfare. responsibility for the war, _see_ germany, responsibility for war. retreats, famous examples of, in history, iii: 280. _return, the_, poem by john freeman, ix: 331. reval, seized by germans, feb. 24, '18, i: 393. reventlow, count ernst zu, condemnation of democratic rule in germany, vi: 284. reville, taken by 5th div., nov. 8, '18, v: 272. revolver, use as military weapon, viii: 117. reynolds, col. c. r., chief surgeon, second army, v: 346. rheims, _see_ reims. rhine river, french strategy in regard to, ii: 8; german fortifications on, peace treaty provisions concerning, xii: 189; peace treaty provisions for international control and navigation, xii: 250-253. ribot, alexandre, succeeds briand as french premier, '17, vi: 103. rice, brig.-gen. john h., chief ordnance officer, a. e. f., v: 350. richthofen, capt. baron manfred freiherr von, career as aviator, x: 253-255. rickenbacker, capt. eddie, career as aviator, x: 259-264. rieka, slav name of fiume, vi: 365. rifles, type used by a. e. f., description and reasons for adoption, v: 347, viii: 96, 102-105; u. s. production figures, v: 347, xii: 284; types, viii: 84, 88-105; browning automatic, viii: 84; automatic, difference from machine-gun, viii: 88; importance of rapid fire, viii: 88; self-loading, compared with machine-gun, viii: 88; principal self-loading types, viii: 89-91; remington, viii: 89; sjorgen, viii: 89; winchester, viii: 89; rifle fire and artillery compared, viii: 92; range of military rifle, viii: 92; "danger zone" in rifle fire, viii: 93; advantages of sharp-nosed bullet, viii: 93; comparison to gas engine, viii: 94; british service rifles, description, viii: 95; lee type, viii: 95; enfield-m type, viii: 95; french service rifle, description, viii: 95; german mauser, description, viii: 95; sighting devices, viii: 96-102; definition of "bore," viii: 111; definition and purpose of "rifling," viii: 111. rifle lights, viii: 75. "rifling" of gun, definition and purpose, viii: 111-112. riga, occupied by germans, sept. 3, '17, i: 390, iii: 147, iv: 136. riga, gulf of, description, iv: 136-137; german naval operations in, '15--'17, iv: 137-138; battle of, and capture of dominating islands by germans, oct. 12--18, '17, iv: 137-138. rintelen, capt. franz von, german agent in u. s., i: 315. ritchings, lieut.-col. arthur, rise from constable to lieutenant-colonel, x: 378. _river clyde_, british transport at gallipoli, iii: 168, iv: 39. riviera, a. e. f. leave area, y. m. c. a. work in, vii: 269. rizzo, commander luigi, sinks austrian battleships in motor-boat attack, iv: 370; sinks austrian battleships, _wien_ and _monarch_, in trieste harbor, x: 290. _road to france, the_, poem by daniel m. henderson, vi: 131. roads, construction by a. e. f. in france, v: 334, 403. robb, 1st lieut. george s., gets congressional medal of honor, x: 402. robeck, vice-adm. de, succeeds vice-adm. carden in command of allied fleet at gallipoli, iv: 32. roberts, lieut. e. m., record as aviator, x: 249-252. roberts, corp. harold w., american tank driver, wins congressional medal of honor, x: 402, xi: 386. robertson, gen. sir william, appointed british chief of general staff, ii: _intro. xviii_; biography, ix: 184-186. rockenbach, brig.-gen. samuel d., commander u. s. tank corps, v: 314. rockwell, kiffin, member of lafayette escadrille, killed in vosges, iii: 391. rodman, admiral, biography, ix: 293-295. rodzianko, michael v., president of russian duma, vi: 150. rogers, maj.-gen. h. l., chief quartermaster of a. e. f., v: 332. rohrbach, paul, german publicist, on anglo-german rivalry, vi: 251. romagne, captured by 32nd div., oct. 14, '18. v: 250. romagne-sous-montfaucon, american cemetery at, v: 403. romani, turks defeated by british at, aug., '16, iii: 192. romanoffs, _see_ nicholas ii; russia, royal family. romorantin, u. s., aircraft plant at, v: 313. ronchères, captured by 3rd div., july 28, '18, v: 188. roosevelt, capt. archie, war record, x: 238. roosevelt, capt. kermit, war record, x: 241. roosevelt, lieut. quentin, record as aviator, x: 241-249; killed in air fight, x: 245-249. roosevelt, theodore, fight against "big business," i: 293; against u. s. neutrality, i: 299; temperament contrasted with that of pres. wilson, i: 299; probable course of action if president during war, i: 302; pro-german sentiments in '14, i: 309; statement on _lusitania_ sinking, i: 320; statement on universal military training, nov., '15, i: 326; attacks pres. wilson's note asking belligerents for statement of war aims, i: 337. roosevelt, lieut.-col. theodore, jr., commands 26th inf. at cantigny, may 28, '18, v: 126; at sedan, nov. 7, '18, v: 269; war record, x: 241. roosevelt, mrs. theodore, jr., "y" worker in bordeaux, vii: 267; in charge of aix-les-bains leave area, vii: 269. root-takahira agreement, '08, i: 57. rosenwald, julius, member, advisory commission of u. s. council of national defense, xii: 116. rossetti, lieut.-col. r., sinks austrian warship _viribus unitis_ in pola harbor, x: 297-303. rosyth, advance base for british battle cruisers, iv: 91, 94; meeting place for arranging surrender of german fleet, iv: 384. roulers, german base in france, ii: 86. rowlatt, justice, author of "black cobra bill" of india, '18, vi: 78. royal air force, british, _see_ great britain, air service. _royal edward_, british transport sunk, aug. 13, '15, i: 381. royal families, _see_ country. roye, captured by allies, aug. 27, '18, i: 397, ii: 157. rozyshche, captured by russians, june, '16, iii: 144. rue, training area for 27th div., '18, v: 286. ruggles orientator, for testing aviators, viii: 356-358. ruhleben, german prison camp, american "y" work at, vii: 303. _rule britannia_, british patriotic song, xi: 333. rumania, gains independence from turkey, i: 92; intervention in second balkan war, '13, i: 206; declares war on austria-hungary, aug. 27, '16, i: 386; germany declares war on, aug. 28, '16, i: 386; turkey declares war on, aug. 29, '16, i: 386; bulgaria declares war on, sept. 1, '16, i: 386; reasons for entry into war, ii: 59, iii: 214, vi: 348-349; betrayed by russia, ii: 59, iii: 221, vi: 349; natural resources, ii: 59; invades transylvania, ii: 60, iii: 217, vi: 313, xi: 28; conquered by teuton forces under mackensen and falkenhayn, ii: 60, iii: 218-224, vi: 349, xi: 29; topography, iii, 214; failure of allied support, iii: 214; army, training and equipment, iii: 215; strategy of campaigns, iii: 216; bucharest captured by germans, dec. 6, '16, iii: 222; government moved to jassy, nov., '16, iii: 223, vi: 349; prisoners of war, iii: 404; total casualties, iii: 404, vi: 353, xii: 289; civilian deaths from disease and famine, iii: 405; attacks hungarian republic, '19, vi: 326; race problems, vi: 348; policy of neutrality, vi: 348; secret treaty with allies as war price, iii: 349; suffering under teuton invasion, vi: 349, 353; struggle with russian bolsheviki in bessarabia, vi: 350-352; signs peace treaty with central powers, may 7, '17, vi: 352; peace terms imposed by germany, vi: 352; conditions after armistice, nov., '18, vi: 353; royal family, ix: 399-402; debt to u. s., xii: 18; money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; war cost, aug., '16--oct., '18, xii: 107; rise in national debt, xii: 114; peace conference delegates, xii: 180; former treaties with germany abrogated by treaty of versailles, xii: 232; area, '19, xii: 279; population, '19, xii: 279. _rumania_, poem by george edward woodberry, vi: 347. rumanian national hymn, xi: 329. rumanian relief committee of america, vii: 109. rumeli medjidieh battery, fort at gallipoli, iv: 45; bombarded by allied fleet, iv: 45. rupel, greek fortress, seized by bulgars, may, '16, iii: 207. _rupert brooke_, poem by moray dalton, vii: 285. rupprecht, crown prince of bavaria, army commands, iii: 10, 61. ruroede, carl, leader in german passport frauds in u. s., x: 333. russell, bertrand, british philosopher, dismissed from cambridge university for supporting conscientious objectors, vi: 8; on effects of war, vi: 11. _russell_, british battleship sunk in mediterranean, apr. 27, '16, i: 385. russia: army, mobilization, july 31, '14, i: 375, iii: 264; german estimate of effectiveness, ii: 4; man-power available, ii: 27; lack of resources to equip manpower, ii: 27-28; shortage of ammunition, ii: 231, iii: 264; machine-gun equipment, ii: 232; artillery equipment deficient, ii: 232; collapse of, ii: 340 (ludendorff on), iii: 146, 267-270 (gen. denikin's report), v: 113, vi: 157, 164; organization and strength, iii: 104; weaknesses, iii: 105; czar takes personal command, sept. 8, '16, iii: 140; leading commanders pledge support to republican government, mar., '17, iii: 145; vice in, iii: 267; causes of demoralization, iii: 268; balloting substituted for fighting, iii: 268; desertions, iii: 269, vi: 157, 164; bolshevist propaganda in, iii: 269, vi: 157, 164; cossack cavalry, strength, vi: 146; fraternization with enemy, vi: 157, 161; kerensky abolishes death penalty, vi: 157; red army raised by trotzky, vi: 185; for military operations, _see_ russian front; battle or campaign. casualties, total in war, iii: 404; civilian deaths from disease and famine, iii: 406; money equivalent of man-power lost, xii: 25; battle deaths, xii: 288. coal, production, '13--'17, xii: 48. cost of living, percent. rise during war, xii: _intro. x._ declarations of war, pledge of aid to serbia against austria, july 27, '14, i: 114; by germany against, aug. 1, '14, i: 115, 139, 375; by austria against, aug. 6, '14, i: 375; on bulgaria by, oct. 19, '15, i: 382; on turkey by, oct. 30, '14, i: 376; reception by populace, iii: 264, vi: 134-135; ultimatum to bulgaria, oct. 4, '15, vi: 343. food, shortage, vi: 141, 144, 145; potato crop, xii: 47. foreign policy, asiatic expansion, i: 20; seizure of port arthur from china, i: 20; gains freedom of action in black sea, 1871, i: 47; world position in '14, i: 62; ambitions in near east checked by congress of berlin, i: 93; german influence, i: 95, 240; entente cordiale with france, 1891, i: 98; member of triple entente, i: 98, 103, 106; settlement of persian question with great britain, '07, i: 104; franco-russian treaty of july, '12, i: 107; balkan policy, i: 114; pledge of aid to serbia against austria, july 27, '14, i: 114; negotiations in attempt to prevent the war, i: 126-129; hatred of germany, i: 242; german view of, i: 242; betrayal of rumania by german agents in government, ii: 59, iii: 221, vi: 349; imperialistic ambitions, vi: 132; treachery of government exposed by milyukov, nov., '16, vi: 142; secret treaties made public by trotzky, vi: 183; soviet government makes peace with germany, vi: 183-185; relations of soviet with allies, vi: 187-188; hostility to ukrainian nationalistic aspirations, vi: 241; treaty with japan, '16, vi: 386; for relations with finland, _see_ finland. industries, inadequate for war needs, ii: 27-28; hampered by lack of port facilities, iii: 161; chaotic condition during war, xii: 82. internal politics, war enthusiasm, aug., '14, iii: 264, vi: 134-135; prohibition of vodka, iii: 265, vi: 135; revolutionary outbreaks before war, vi: 132-134; socialists oppose war, vi: 134; attack of duma on war office for inefficiency, aug., '15, vi: 136; minister of war sukhomlinov arrested and disgraced, vi: 136; request for new ministry refused by czar, '15, vi: 136; duma dissolved, sept., '15, vi: 136; peace sentiment, '15, vi: 138; lenin advocates defeat of russia, vi: 140; stürmer succeeds goremykin as prime minister, vi: 140; duma reconvenes, feb. 22, '16, vi: 140; attack of socialist cheidze on government, vi: 140; influence of rasputin at court, vi: 141; rasputin murdered, vi: 141; stürmer becomes foreign minister, july, '16, vi: 142; stürmer dismissed under accusations of corruption and treachery, vi: 142; repressive policy of protopopov, minister of interior, '17, vi: 143; golytsin succeeds to premiership, '17, vi: 143; threats of revolt in duma, feb., '17, vi: 144; revolution starts in petrograd, mar., '17, vi: 145; duma disobeys czar's order of dismissal, mar., '17, vi: 146; leaders and policies at start of revolution, vi: 148; revolutionary scenes in petrograd, mar. 11--15, '17, vi: 148-156; czar disregards appeals for liberal ministry, vi: 150, 151; red monday, mar. 12, '17, vi: 150-153; arrest of ministers of old régime, vi: 153; reform _vs._ revolution, mar., '17, vi: 153-157; council of workmen's and soldiers' delegates formed, mar. 12, '17, vi: 155; provisional government under prince lvov formed by duma, mar. 14, '17, vi: 155; czar abdicates, mar. 15, '17, vi: 156; struggle between provisional government and soviet on war policy, vi: 158-160; fall of liberal ministry and formation of coalition cabinet, vi: 160; peasant societies, vi: 160; statement of policy by coalition government, vi: 161; bolshevist uprising suppressed, july, '17, vi: 161-165; kerensky becomes virtual dictator, vi: 165; rivalry between kerensky and kornilov for power, vi: 167-171; moscow conference, vi: 167; kornilov rebellion fails, vi: 169; kerensky declares russia a republic, sept. 15, '17, vi: 171; bolshevist revolution overthrows kerensky, nov., '17, vi: 171-181; lenin becomes president of council of people's commissaries, vi: 181; trotzky becomes commissary of foreign affairs, vi: 181; bolshevist program, vi: 181; opposition of middle classes to bolshevik rule, vi: 181; constituent assembly dissolved by bolsheviki, jan., '18, vi: 185; congress of soviets substituted for constituent assembly, vi: 185; reign of terror under bolshevist régime, vi: 187. navy, black sea fleet bombards bosphorus forts, iv: 49; strength of black sea fleet, iv: 50; development, iv: 364; strength of baltic fleet, iv: 364; war record, iv: 364-366; part in revolution, iv: 366, vi: 164. peace negotiations, brest-litovsk treaty ends war with central powers, mar., '18, ii: 63, 273, vi: 183; armistice with germany signed, dec. 6, '17, v: 113; movement for peace by radicals and conservatives, '15, vi: 138; soviet demands immediate socialist peace conference, vi: 161; nature of bolshevik peace propaganda, vi: 171-175; versailles treaty, provisions on, russo-german relations, xii: 205; treaties with germany abrogated by versailles treaty, xii: 232. prisoners of war, iii: 404. railroads, military, iii: 105; petrograd-berlin line, iii: 111; importance of warsaw as junction, iii: 138; brest-litovsk line, military importance, iii: 138; collapse under war stress, viii: 283. royal family, xi: 145-149; _see also_ nicholas ii. war cost, currency inflation by bolsheviki, xii: _intro. xiii_; financial position at start of war, xii: 1; loans floated in u. s., aug., '14--jan., '17, xii: 2; debt to u. s., xii: 18; money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; average daily cost, xii: 106; total cost, aug., '14--oct., '17, xii: 107; taxation, xii: 109; loans, xii: 113; rise in national debt, xii: 113, 114. russian front, german analysis of strength and strategic importance, aug., '14, ii: 12-16; strategic plans of russia and central powers, ii: 22, 225 (gen. gourko's explanation), iii: 109-110; russian invasion of galicia, '14--'15, ii: 22-24, 26, iii: 118-124, 127, 132-134; lemberg captured by russians, sept. 3, '14, ii: 23, iii: 121; operations in east prussia, '14, ii: 24, 227-229 (gen. gourko's account), 353-357 (ludendorff's account), iii: 110-116; battle of tannenberg, aug., '14, ii: 24, iii: 112-116; campaigns in poland, ii: 25, 26, 229, 361-365 (ludendorff's account), iii: 116-120, 124-127, 128-132, 137-141; przemysl, siege and capture by russians, ii: 26, iii: 123, 125, 127, 134, 292, xi: 16; successful teuton counter-offensive in galicia under mackensen, may, '15, ii: 26, 233, 360 (ludendorff's account), iii: 135-137, 294-296, vi: 258, 311; warsaw, german attacks on and capture, ii: 26, iii: 128-130, 131, 138; brusiloff's offensive in galicia, '16, ii: 42-44, 235, iii: 141-145; russian collapse, '17, ii: 54, 340 (ludendorff on), iii: 146, 267-270 (gen. denikin's report), v: 113, vi: 157, 164; campaigns in caucasus and armenia, ii: 91-92, iii: 260-263, vi: 331, xi: 29; capture of erzerum, feb. 16, '16, ii: 91, iii: 262-263; effect of invasion of east prussia on first marne battle, ii: 227; reasons for weakness of russian fortresses, ii: 230; przemysl recaptured by teuton forces, june 1--2, '15, ii: 234, iii: 136; lemberg recaptured by austrians, june 22, '15, ii: 234, iii: 137; topography, iii: 106-109; last russian offensive in galicia, july, '17, iii: 146; battle experiences on, iii: 316; activities of a. e. f. against bolsheviki, v: 394, vi: 187, 193; description of russian trenches, viii: 123; _see also_ east prussia; galicia; mazurian lakes; poland. russky, gen., commander of russian forces invading galicia, iii: 119. ruthenians, clash with poles for control of eastern galicia, vi: 217, 248; cultural freedom under austrian rule, vi: 241; attempts at forced russification during russian occupation of galicia, vi: 243. ryan, michael j., irish-american delegate to peace conference vi: 66. s saarbrücken, british air raid on, oct. 25, '17, i: 392. saarburg, occupied by french, aug. 17, '14, i: 375. "sacred egoism," italian foreign policy of, vi: 120. "sacred way, the," highway to verdun, iii: 50. sag paste, developed by u. s. chemical warfare service as protection against mustard gas, v: 324. saïd pasha zagloul, egyptian nationalist leader, vi: 70. sailly-saillisel, objective in somme battle, '16, iii: 58. st. benoit, captured by 42nd div., sept. 13, '18, v: 211. st. dunstan's home for british blind, vii: 259. st. etienne, captured by 71st brig., oct. 8, '18, v: 257. st. gobain, german defensive system captured by allies in last drive, '18, ii: 214, xi: 52; germans bombard paris from forest of, iii: 88, viii: 45-47. _st. louis_, french battleship at gallipoli, iv: 33. st. maurice ridge, captured by 27th div., v: 296. st. mihiel, occupied by germans, sept. 26, '14, i: 376, iii: 37, v: 199; recaptured and salient wiped out by a. e. f., sept. 12--15, '18, ii: 84, iii: 99, v: 65-72, 199-212, 384-386 (pershing's report), xi: 46; strategic importance of a. e. f. operations, ii: 84, v: 200, 208, 384, 385-386; strength of a. e. f, and french troops attacking, sept., '18, iii: 99, v: 203, 385, 386; german prisoners captured in operations against, sept., '18, iii: 99, v: 71, 207, 208, 212, 386; german artillery captured at, sept., '18, iii: 99, v: 71, 207, 212, 386; allied casualties in reduction of salient, iii: 99, v: 71, 212, 386; topography of salient, v: 65, 199; list and disposition of a. e. f. and french divisions in drive against, sept., '18, v: 65, 202, 386; strength of german troops defending sector, sept., '18, v: 201, 208; strength and activities of allied air service in drive against, sept., '18, v: 206, 309, 386; effect of victory on a. e. f. morale, v: 386. st. nazaire, debarkation and embarkation port for a. e. f., v: 339, 396. st. pierremont, captured by 77th div., nov. 3, '18, v: 265. st. quentin, german base in france, ii: 86; germans break through british lines at, mar., '18, ii: 70-74, 150-151, 190-197, iii: 86-91, 381-390 (philip gibbs's account); unsuccessful french attacks on, mar., '17, iii: 68; captured by british, iii: 101. st. quentin canal, part of hindenburg line defenses, v: 292, 301. st. remy, captured by 26th div. in st. mihiel drive, sept. 12, '18, v: 69, 212. saionji, marquis, japanese statesman, causes fall of terauchi cabinet, vi: 388; personal sketch, ix: 92. sakharoff, gen., russian commander on galician front, iii: 142; sent to defend rumania against german invasion, '16, iii: 221, 223. salandra, antonio, italian premier, pro-ally policy brings italy into war against germany, ii: 236-239, vi: 123-126; cabinet of, forced to resign, june, '16, vi: 127. salonika campaign, maj.-gen. maurice on general military aspects of, ii: _intro. xix_; allies fail to defend rumania, ii: 62; allies' reasons for undertaking, iii: 201-202; attitude of greece on allied occupation of greek territory, iii: 202, 206; strategy and military operations, iii: 202-213; allies land first troops, oct. 3, '15, iii: 202; allied strength, oct., '15, iii: 202; allies driven by bulgars across greek frontier, oct.--nov., '15, iii: 204-205; uskub captured by bulgars, oct. 9, '15, iii: 204; allies fortify salonika position, iii: 205; bulgars occupy greek territory, may, '16, iii: 207; gen. sarrail proclaims martial law in salonika, iii: 207; allies increase forces, may--aug., '16, iii: 207; monastir captured by allies, nov. 19, '16, iii: 208-210; gen. d'esperey succeeds gen. sarrail in command of allied armies, iii: 212; allied and bulgarian strengths, sept., '18, iii: 212; final allied offensive crushes bulgaria and forces surrender, sept.--oct., '18, iii: 212-213. salvage service, british, activities of, ii: 131; a. e. f., activities of, v: 331, viii: 345-348; general functions, xi: 308-313. salvation army, war work, vii: 379-400; tales of experiences in war service, vii: 379-393; "ma" burdick, soldiers' friend, vii: 384; care of soldiers' graves in france, vii: 391; home service, vii: 393; huts and hostel service, vii: 395; clothing bureau, vii: 397; work with a. e. f., vii: 397; as soldiers' forwarding agency, vii: 399; employment bureaus, vii: 399; finances, vii: 400. samoa, german, captured by new zealanders, vi: 38; area and population, xii: 279. samogneux, captured by germans, feb. 23, '16, iii: 48. _samouprava_, serbian journal, denounces terms of italian secret treaty with allies, vi: 361. sampler, sgt. samuel h., gets congressional medal of honor, x: 397. samsonoff, gen., commander of russian forces invading east prussia, defeated and killed in battle of tannenberg, aug., '14, ii: 24, 228, iii: 111-116; gen. gourko's account of fate, ii: 228; ludendorff's account of fate, ii: 355; _see also_ tannenberg, battle of. san, battle of the, may 15--17, '15, iii: 136. _san diego_, u. s. cruiser sunk by mine, iv: 216. _san francisco_, u. s. cruiser used in laying north sea mine barrage, iv: 326. san giovanni di medua, concentration of serbian refugees at, iii: 284. sanders, gen. liman von, head of german mission in turkey, iii: 164. sandlin, pvt. willie, gets congressional medal of honor, x: 397. sanitation, red cross sanitary service, vii: 31-32; division of sanitation, u. s. army medical corps, war-time activities, vii: 191, 253; prevention of infectious diseases among troops, viii: 392-397; making drinking water safe for army, viii: 394-396; taught by movies in war zone, xi: 89; _see also_ disease; infection. sanniyat, british repulsed at, in attempt to relieve kut-el-amara, iii: 185. santos-dumont, development of aircraft by, xi: 221-223. sapieha, prince eustace, attempted _coup d'état_ against pilsudski fails, vi: 222. sarajevo, _see_ serajevo. sarrail, gen., commands a french army at first marne battle, ii: 184; defender of verdun, '14, ii: 188, iii: 303; commander of french forces at salonika, iii: 62, 202. sarre, battle of the, aug. 18, '14, iii: 18. sarre basin, peace treaty provisions concerning, xii: 189-194. save river, austrians cross in invading serbia, aug. 12, '14, iii: 151. savoy, neutralized zone of, peace treaty provisions concerning, xii: 262. sawelson, sgt. william, gets congressional medal of honor, x: 400. saxony, spartacide revolt in, feb., '19, vi: 299. sayville wireless station, taken over by u. s. govt., july 8, '15, i: 381. sazonov, serge, resigns as russian minister of foreign affairs, july 23, '16, vi: 142; biography, ix: 98-99. scandinavia, neutrality, vi: 392. scapa flow, british naval base, iv: 93; german warships interned at, iv: 143. scarborough, bombarded by germans, dec. 16, '14, i: 376, iv: 245. scarpe sector, british drive on, aug., '18, ii: 158. _scharnhorst_, german cruiser in battle off coronel, iv: 65, 66; sunk in battle of falkland islands, iv: 70, 72, 82 (eye-witness account), xi: 308. scheidemann, philip, leader of german social-democratic majority, vi: _intro. xii_; member of ebert government, nov., '18, vi: 277; elected chancellor, feb., '19, vi: 292; biography, ix: 135-138. scheldt river, belgian claims to dutch territory at mouth of, vi: 89; strategic position, vi: 375. schleswig, danish attitude toward, vi: 393; plebiscite provisions of peace treaty for, vi: 394, xii: 204. schlieffen, gen. count von, author of plan of german campaigns, aug., '14, ii: 345. schmidt, adm., german commander in battle of riga gulf, iv: 366. scholz, walter, accomplice in german plot to blow up allied ships, x: 371. school of the soldier, xi: 159; of the squad, xi: 161. schools, general educational program for a. e. f. at army centers and european universities, v: 106, vii: 281-283, 290; for children in war zones, xi: 65-66; u. s. army training schools, _see_ u. s., army. schwab, charles m., biography and war service, ix: 332-334. science, in the war, field-marshal haig's tribute, ii: 124; displaces importance of military strategy, viii: _intro. vii._ _scots wha hae wi' wallace bled_, scottish national song, xi: 331. scottish women's hospitals for home and foreign service, vii: 101. "scrap of paper," chancellor von bethmann-hollweg's statement on belgian neutrality, i: 146. seaplanes, _see_ aeronautics. sea scouts, british, coast guard duty, xi: 94. sea tanks, italian, description, iv: 272. sebastopol, importance as seaport, ii: 28. secours national, american committee of the, organization and activities, vii: 105; _see also_ war relief. sector, defined, v: 14. sedan, key-point in german lines of supply, ii: 87; a. e. f. advance on, nov., '18, iii: 103, v: 92, 269, 391, xi: 53; _see also_ mézières-sedan railroad. sedd-el-bahr, fort on gallipoli, ii: 30, iv: 24, 42; _see also_ gallipoli campaign. _seeadler_, career as german raider, iv: 198. _seed-time_, poem by josephine preston peabody, vii: 283. seeger, alan, poet-soldier, x: 142. seibert, sgt. lloyd m., gets congressional medal of honor, x: 402. seicheprey, german raid on a. e. f. lines at, apr. 20, '18, v: 28, 122, xi: 43. seitz, karl, austrian president, advocates union with germany, vi: 322. seleucia, ruins of ancient greek capital, in mesopotamia, iii: 331. "self-determination," not recognized in europe before war, i: 16. seligman, prof. edwin r. a., on the cost of the war, xii: 105-114. selivanoff, gen., commands russians besieging przemysl, iii: 132. selle, battle of the, aug. 19, '14, iii: 18. semenoff, gen., cossack commander under kolchak, vi: 192. semmer, marcelle, french heroine, story of, x: 181. _send out the army_, british soldiers' song, xi: 337. senegalese, description as fighters, x: 116. senlis, german atrocities at, iii: 334-337. senussi, moslem league, invades egypt, nov., '15, iii: 190. septsarges wood, fighting at, in meuse-argonne offensive, sept. 26, '18, v: 224. serajevo, archduke francis ferdinand and consort murdered at, i: 111, vi: 306, xi: 4; attacked by serbians, sept., '14, iii: 153. serapeum, turkish attack near, in advance on suez, iii: 190. serbia, balkan ambitions in conflict with austrian interests, i: 110, vi: 306, 354-357, 363; austria charges with responsibility for murder of archduke francis ferdinand, i: 112, 246; austrian ultimatum to, july 23, '14, i: 112, 375; conciliatory reply to austrian ultimatum, i: 113; russian pledge of aid against austria, july 27, '14, i: 114; austria declares war on, july 28, '14, i: 115, 243, 375; austrian reasons for war against, i: 243, ii: 27, 33; anti-austrian societies, i: 244; declares war on germany, aug. 9, '14, i: 375; bulgaria declares war on, oct. 14, '15, i: 382; conquest of, by teutonic allies, ii: 32-36, iii: 148-160, 281-286, 393-400, vi: 357-358, xi: 18; allies refuse aid against conquest by central powers, ii: 35, iii: 156, 393, 400; allies prevent attack by, on bulgaria, ii: 36, iii: 156; unprepared for war, iii: 148, vii: 146; lack of artillery and ammunition, iii: 148, 393; size, organization, and fighting qualities of army, iii: 148, vii: 144; topography, iii: 150; generalship during war, iii: 150; typhus epidemics, iii: 155, 398-400, vi: 357, vii: 148; retreat into albania, '15, iii: 158-160, 281-286, 400, vi: 357-358, vii: 151-158; army and government take refuge at corfu, iii: 160, 286; effect of defeat on allied cause, iii: 160; casualties during retreat into albania, iii: 284, vi: 358; american and allied relief work in, iii: 398, vii: 109, 144-168; prisoners of war, iii: 404; total war casualties, iii: 404, xii: 288; early history, vi: 354; austrophile policy, vi: 355; russophile policy, vi: 355; anti-austrian expressions by press, vi: 356; clash with italy over fiume and eastern adriatic coast, vi: 360-363, 364-370; statement of war aims, vi: 363; letters of appreciation for american relief, vii: 158-166; debt to u. s., xii: 18; money equivalent of man-power lost, xii: 25; value of property loss, xii: 26; war cost, july, '14--oct., '18, xii: 107; rise in national debt, xii: 114; delegates to peace conference, xii: 180; _see also_ jugoslavs. _serbia_, poem by florence earle coates, vi: 353. sergy, captured by 42nd div., july, '18, v: 59, 188; gen. degoutte commends a. e. f. for services at, v: 192. serieux farm, captured by 181st brig., sept. 28, '18, v: 229. seringes-et-nesles, captured by 42nd div., v: 59, 188; gen. degoutte commends a. e. f. for services at, v: 192. serre, evacuated by germans, feb. 24, '17, iii: 64. services of supply (s. o. s.), _see_ u. s., army. seven weeks' war, between prussia and austria, 1866, i: 41. _severn_, british monitor, in attack on german cruiser _königsberg_, iv: 195, 282; description, iv: 281. _seydlitz_, german cruiser in battle of dogger bank, iv: 246. shabatz, austrians cross into serbia at, aug., '14, iii: 151. shantung, germany gains forced concessions in, 1897, i: 82; japan's desire for, iv: 367, vi: 382, 385; japanese demands for, at peace conference, xii: 160; german rights in, transferred to japan by peace treaty, xii: 209; _see also_ kiau-chau. shell-shock, treatment, vii: 179, viii: 368-369. shells, _see_ ammunition. shipping, british position on status of armed merchantmen, i: 282; german position on status of armed merchantmen, i: 282; u. s. position on status of armed merchantmen, i: 283; controversy between u. s. and great britain on seizure of neutral cargoes, i: 312, 318, 339; list of american ships attacked by german u-boats, i: 356; list of ships sunk with loss of american lives, i: 357; list of sinkings by german raider _emden_, iv: 189; tales of heroic captains of merchant ships, x: 322-324; value of tonnage sunk, xii: 26; statistics on world tonnage, aug., '14--dec., '17, xii: 91; statistics on losses, aug., 14--dec., '17, xii: 92; neutral, chartered by u. s. for war service, xii: 98; war-time increase in neutral, xii: 100; peace treaty provisions for replacement by germany of allied shipping destroyed, xii: 222; peace treaty provisions on privileges to be granted to allied shipping by germany, xii: 230; _see also_ germany, blockade of; submarine warfare. "shock" troops, german, viii: 144. shotgun, use in modern warfare, viii: 114-116. shrapnel, compared with high explosive shell, ii: 287, viii: 8; invention, viii: 72; description, viii: 72; manufacture, viii: 72-74; _see also_ ammunition. siam, delegates to peace conference, xii: 180; german rights in, surrendered under peace treaty, xii: 208. siberia, russian expansion in, i: 20; early history, vi: 189; relations with russia, vi: 189; movement for autonomy, vi: 189; bolsheviki suppress duma, vi: 189; anti-bolshevik elements form all-russian government at omsk, vi: 191; "coöperatives," nature of, vi: 191; gen. horvath sets up bourgeois government at harbin, vi: 192; czecho-slovak prisoners in, form anti-bolshevik army, vi: 192; vladivostok captured by czecho-slovaks, june, '18, vi: 192; unofficial allied intervention, vi: 192; intervention in, by u. s. troops, vi: 192-193; reactionary factions gain control, vi: 193; kolchak makes himself dictator, vi: 194; anarchy and civil war, vi: 194; japanese policy in regard to, vi: 386; american y.m.c.a. in, vii: 293. sibert, maj.-gen. william l., commander of first american forces in france, june, '17, v: 106. sidi ahmed, heads moslem forces invading egypt, nov., '15, iii: 190. sidi barrani, occupied by british, feb., '16, iii: 191. siebs, paul, share in german plot to blow up ships at sea, x: 373. siegfried line, _see_ hindenburg line. signalling, means of, viii: 322; work of u. s. army signal corps in france, viii: 322-329; use of pigeons in, viii: 328; _see also_ u. s. army, signal corps. silesia, upper, awarded to poland by peace conference pending plebiscite, vi: 226. silistria, retaken by bulgaria, vi: 344. silver, rise in value, due to war, xii: 32. sims, adm. william snowden, biography, ix: 291-293. sinai desert, turkish advance through, against suez, iii: 191. sinn fein, _see_ ireland. _sirius_, british cruiser in zeebrugge raid, iv: 262. siwa, captured by british, feb. 5, '17, iii: 191. sixtus, prince, of bourbon-parma, letter of emperor charles to, making peace offer to allies, mar., '17, ii: 63, vi: 315. sjorgen self-loading rifle, description, viii: 89. skinker, capt. alexander r., gets congressional medal of honor, x: 397. skobelev, minister of labor in prince lvov's coalition cabinet, vi: 160. skoda howitzers, viii: 22; _see also_ artillery. skoropadski, gen., cossack dictator in ukraine, vi: 247. slack, pvt. clayton k., gets congressional medal of honor, x: 396. slang, soldiers', expressions of, xi: 362. slavs, distribution and culture, i: 238; in austro-hungarian empire, vi: 306-307; antagonism to latins, vi: 359; antagonism to teutons, vi: 360; _see also_ jugoslavs; pan-slavism; russia; serbia. slovaks, _see_ bohemia; czechoslovakia. _smile, smile, smile_, american soldiers' song, xi: 335. smith, lieut.-col. frederick e., gets congressional medal of honor, x: 400. smith, maj.-gen. w. r., commander, 36th div., july, '18, v: 196. smith-dorrien, gen. sir horace, commander of british second corps, ii: 162, 174; viscount french's criticism of, for fighting le cateau battle, aug. 26, '14, ii: 162-164, 174; sir henry newbolt's account of stand at le cateau, ii: 174-182; viscount french's praise of, for stand at le cateau, iii: 28. smoke screen, uses in naval warfare, iv: 311. smoke shells, use in covering infantry advance, ii: 126. smokeless powder, _see_ ammunition. smuggling of war supplies into germany, xii: 100. smuts, gen. jan christaan, sent by peace conference on mission to hungary, vi: 326; biography, ix: 187-190; advocate of league of nations, ix: 190, xii: 155. sneezing gas, use in chemical warfare, viii: 171. snowden, philip, british labor party leader, indorses bolshevist peace aims, vi: 12; defeated in parliamentary elections, '18, vi: 17. socialism, fallacy of, i: _intro. xi_; socialists, _see_ under country. soissons, occupied by germans, may 29, '18, ii: 154, iii: 93; allied drive against, in aisne-marne counter-offensive, july 18--21, '18, v: 130, 158-183; recaptured by french, aug. 2, '18, v: 188. soldau, captured by russians, aug., '14, iii: 111; recaptured by germans, aug., '14, iii: 114. _soldier, the_, poem by rupert brooke, x: _facing p_. 1. soldiers' and workmen's councils, in germany, rise, vi: 280, 283; dissolution ordered by central council of delegates, dec., '18, vi: 283. soldiers' committees, in russia, cause of army demoralization, iii: 268. soldiers' councils, of austria, vote against soviet form of government, apr. 10, '19, vi: 320; seize control of vienna, apr. 18, '19, vi: 321. soldier's creed, xi: 170. soldiers' songs, xi: 335-339. somme, battles of: july--sept., '16, ii: 44-47, 148, iii: 55-62, 63, 64, xi: 24; allies' aims, ii: 44, iii: 55; battle line at start, ii: 46; results, ii: 46-47 (haig's report), iii: 56, 61, 63; loss of german morale, ii: 47; effect on battle of verdun, ii: 47, iii: 61, 63, 314; british artillery at, ii: 126; foch in command of french, ii: 148; inter-allied conference decides on unified offensive, mar., '16, iii: 55; allied man-power, iii: 55; amount of ammunition used, iii: 56; description of initial bombardment by john buchan, july 1, '16, iii: 57; allies' first objectives, iii: 58; maurepas captured by french, iii: 58; pozières captured by british, iii: 59; thiepval stormed by british, iii: 59; combles evacuated by germans, iii: 59; works of tanks at, iii: 59, 64; germans captured, iii: 60; extent of battle area, iii: 61; casualties, german and allied, iii: 61; a "blood-bath" for germans, iii: 63; effect on germany, iii: 63; importance, iii: 63. mar.--apr., '18, ii: 70-74, 150-151, 190-197, iii: 86-91, 381-390 (philip gibbs's account of german break through british lines); german method of attack, iii: 88; albert captured by germans, iii: 89; results in establishment of allied unity of command under foch, iii: 89; british casualties, iii: 390. sommerance, captured by 1st div., oct. 11, '18, v: 248. sommerville sector, held by americans, '17, v: 111. _song of the dardanelles_, poem by d'annunzio, ix: 343. sonnino, baron sidney, advocates italy's entry into war on side of allies, ii: 236, vi: 120, 123; becomes italian foreign minister, vi: 120; insists on fulfillment of secret treaty with allies, vi: 362, 366; policy at peace conference, vi: 369; biography, ix: 82-85. sothern, e. h., helps organize over-there theater league, vii: 339. souchez, captured by french, sept. 26, '15, iii: 46. souchon, adm., commander of german cruisers _goeben_ and _breslau_, iv: 14. south africa, union of, forces under gen. botha conquer german southwest africa, '14--'15, iii: 253-255, vi: 50; strength of army, iii: 405; war casualties, iii: 405; formation after boer war, vi: 47; british policy in, vi: 47; political parties and policies, vi: 47-49; gen. botha leader of loyal afrikander party, vi: 47; unionists, vi: 47; gen. hertzog organizes nationalist party, vi: 47-49; nationalists oppose participation in war, vi: 49; boer rebellion under maritz and de wet suppressed by botha, '14, vi: 49-50; parliamentary elections of '15 show strong anti-british sentiment, vi: 50-52; nationalists' attitude prevents conscription, vi: 52; nationalists send delegation to peace conference to plead for independence, vi: 52; war cost, aug., '14--mar., '19, xii: 107; rise in public debt, xii: 114; delegates to peace conference, xii: 179. south pacific islands, german, acquired by australia, '18, xii: 279; area and population, xii: 279. southwest africa, german, conquered by allies, iii: 253-255, vi: 50; area and population, xii: 279. soviet, _see_ bavaria; bolshevism; hungary; russia; saxony; spartacides. spad biplane, viii: 194. spahis, description, xi: 189. spain, as a naval power, i: 28; loss of colonial empire, i: 35; international position in '14, i: 62; policy of neutrality during war, vi: 370; growing dislike for germans, vi: 371; war-time prosperity, vi: 372; german propaganda in, xii: 101. spartacides, german, beginnings, vi: 260; leaders, vi: 278; excluded by ebert from provisional government, nov., '18, vi: 278; urge social revolution, vi: 279; allied with russian bolsheviki, vi: 280-281; program rejected by central council of delegates, dec., '18, vi: 283; plan revolution against government of majority socialists, vi: 283; insurrection of jan., '19, vi: 287-290; karl liebknecht and rosa luxemburg killed, vi: 289; defeated in elections for national assembly, jan., '19, vi: 290; instigate labor strikes, vi: 294; establish soviet in munich, feb., '19, vi: 298, 300-301; establish soviet in leipzig, feb., '19, vi: 299; second berlin insurrection suppressed by noske, mar., '19, vi: 299-300; _see also_ germany, internal politics. spee, adm. count maximilian, commander of german far east squadron, strategy of operations, iv: 59-62; defeats british in battle off coronel, nov. 1, '14, iv: 64-69; biography, ix: 306-309. sperry gyro-compass, viii: 348. spheres of influence, of great powers, i: 18. spies, german, in united states, x: 326-348, 350; in england, x: 348; the "spy mill," x: 355; disclosure of tank secret by mata-hari, x: 360; dynamiting of canadian railroad bridge, x: 368; plot to blow up allied ships, x: 369-377; within french lines, x: 379. _spires of oxford_, poem by winifred m. letts, xi: 210. spitaals-bosschen, captured by 91st div., oct. 31, '18, v: 279. sports, in a. e. f., at winchester camp, vii: 288; in army of occupation, vii: 293; general athletic program under y. m. c. a., vii: 313-317. springfield rifle, standard arm of u. s. troops before war, v: 347; reason for abandonment during war and adoption of british type, v: 347, viii: 96; comparison of new u. s. type with, viii: 102-105; _see also_ rifles. spruce, use in aircraft construction, viii: 308. _srpska narodna himna_, serbian national anthem, xi: 328. stage women's war relief, organization and activities, vii: 343-349. stanislau, captured by austrians, feb., '15, iii: 132; recaptured by russians, mar., '15, iii: 132; recaptured by austrians, june, '15, iii: 136. star shells, iv: 334, viii: 334. _star-spangled banner_, american national anthem, xi: 325. stark, col. alexander, chief surgeon, first army, v: 346. stefanik, gen., member of czechoslovak provisional government, vi: 399. stenay, captured by 90th div., nov. 10, '18, v: 272. stern, lieut.-col. sir a. g., share in development of tanks, viii: 155. stock exchange, new york, effect of war on, xii: 32. stokes, anson phelps, secretary of yale university, educational survey of a. e. f., vii: 281. stokes mortar, use as "artillery of accompaniment," viii: 141. stone, lieut.-com. a. j., inventor of "y" gun for launching depth bombs, iv: 332. stonne, captured by 77th div., nov. 5, '18, v: 268. storage tanks built by a. e. f. engineers in france, v: 334. _storstad, s. s._, belgian relief ship sunk by u-boat, mar. 8, '17, iv: 229. _strassburg_, german cruiser in battle of heligoland bight, iv: 240. strategy, of the war, maj.-gen. maurice on, ii: _intro. vii-xxiv_; allied miscalculation of german strength, aug., '14, ii: _intro. vii_; british policy of combined land and naval attack, ii: _intro. viii_; factors in formation of british military policy, ii: _intro. viii_; importance of eastern and western theaters of war compared, ii: _intro. x-xxiii_, 11-14, 87-90, 171-172 (field-marshal french's opinion); lloyd george favors aggressive campaign against austria, ii: _intro. x, xx_; comparative advantages for allies of dardanelles and austrian campaigns, ii: _intro. xii_; advantageous position of central powers, ii: _intro. xiii_; comparison of, in world war with that of civil war, ii: _intro. xiii_; value of mesopotamian campaign, ii: _intro. xvi_, 87-90; reasons for british campaign in palestine, ii: _intro. xviii, xxi_, 87-90; british position in secondary theaters of war, '17, ii: _intro. xix_; advisability of salonika expedition, ii: _intro. xix_; allies' problem, ii: _intro. xxi_; allies at strategical advantage, aug., '18, ii: _intro. xxiii_; general german war plans, '14, ii: 1-6, iv: 4-6, viii: 133; french plans, '14, ii: 6-11; german mistake in attacking france instead of russia first, aug., '14, ii: 11-16; probable results of a vigorous german offensive against russia in '14, ii: 13; economic strategy, allied blockade and german u-boat warfare, ii: 16-22; absence of unified allied plan prior to '16, ii: 40; german battle positions compared with allied, ii: 41; allied plan for overcoming german advantage of position, ii: 41; german plans for '17, ii: 53; allied plans for '17, ii: 54; reasons for german offensive of '18 and choice of front, ii: 63-69, 288; object of war, ii: 68; choice of picardy front by germans for final drive, '18, ii: 69; importance of amiens, ii: 69; german operations in final drive, spring, '18, ii: 70-80, 97; foch's defense against german drive, spring, '18, ii: 76, 77; theories of foch on, ii: 80-82, 103-110, 137; destruction of opposing army the essential, ii: 80; of foch, in allied counter-offensive, july--nov., '18, ii: 82-87, 97, v: 213; allied, in turkey, ii: 87-94; causes for failure of german war plans, ii: 99; german in '14, compared with that in wars of 1866 and 1870, ii: 115; necessity of frontal attacks on western front, ii: 116; field-marshal haig's theories on, ii: 118-120; war of position on western front, ii: 148; task of allied reserves during german offensive, '18, ii: 151; russian war plans, explained by chief of staff gen. gourko, ii: 225; germans defeated in open warfare, '18, ii: 288-290; importance of bagdad railway, ii: 290; defined, iv: 1; relation of naval, to land, iv: 2; offensive defined, iv: 4; essentials of naval, iv: 4; criticism of allied lack of action in mediterranean, iv: 13; british and german aims in north sea, iv: 86; lord fisher's criticism of british, iv: 140; german alternatives, '17--'18, v: 3; old-fashioned studies useless in present war, v: 40; _see also_ campaign, engagement, or front; foch; germany; tactics. strauss, rear-adm. joseph, in command of u. s. mine laying operations, iv: 328. stretchers, improved types, viii: 377. strong, maj.-gen. frederick s., commander 40th div., aug., '18, v: 197. strong, dr. richard p., in charge of u. s. typhus relief in serbia, iii: 398, vii: 148. strumnitza, french headquarters established at, oct., '15, iii: 204. stryj, captured by germans june 1, '15, iii: 136. strypa river, crossed by russians june 8, '16, iii: 144. sturdee, vice-adm. sir frederick, british commander at battle of falklands, iv: 69, ix: 308. stürgkh, carl, austrian premier, killed, oct. 21, '14, vi: 312. stürmer, boris, russian cabinet member, german agent, ii: 59; succeeds goremykin as premier, vi: 140; becomes foreign minister, vi: 142; dismissed from office under charges of treason, vi: 142. stuttgart, bombed by french airmen, sept. 22, '15, i: 382; oct. 1, '17, i: 392. sub-chaser _no. 28_, experiences when disabled at sea, iv: 352-354. sublime porte, name for turkish foreign office, i: 90. submarines, development and early history, iv: 201-205, xi: 241-245; voyage of german commerce submarine _deutschland_ across atlantic, iv: 214, x: 271-274; life aboard, iv: 235-239; greatest achievement of war, viii: _intro. viii_; description, viii: 264-266; _see also_ name of submarine. submarine warfare, lansing's proposal for regulation of, i: 281, 327; comment of london _times_ on lansing proposal, i: 282; german protest against u. s. position on armed merchantmen, i: 282; germany announces blockade of great britain, effective feb. 18, '15, i: 314, 358, ii: 21, iv: 217, vi: 256; controversy between u. s. and germany over, i: 317-326, 328-335, 339, 357-361 (chronological summary, with list of ships sunk, aug., '14--apr., '16), iv: 223; president wilson's "strict accountability" note, i: 317; american ship _william p. frye_ sunk, jan. 28, '15, i: 319; _falaba_ sunk, mar. 28, '15, i: 319, 358, iv: 218; american tanker _gulflight_ torpedoed, may 1, '15, i: 319, 358, iv: 218; german warning to neutrals to keep off allied ships, may 1, '15, i: 319; _lusitania_ sunk, may 7, '15, i: 319, 358, 362-365 (lord mersey's official report), iv: 220; controversy between u. s. and germany on _lusitania_ sinking, i: 320, 323, 325, 326, 327, 358-361; american steamer _nebraskan_ attacked, may 25, '15, i: 320; _arabic_ sunk, aug. 19, '15, i: 323, 360, iv: 223; germany pledges to warn before sinking, i: 325, 361; _hesperian_ torpedoed, sept. 4, '15, i: 325; controversy between u. s. and austria-hungary over sinking of _ancona_, nov. 8, '15, i: 326, 361, iv: 223; germany to sink armed merchantmen without warning, mar. 1, '16, i: 327; british passenger steamer _sussex_ sunk, mar. 24, '16, i: 328, 361, iv: 223, x: 281-288 (survivor's description), xi: 20; u. s. threatens to sever relations with germany over _sussex_ sinking, i: 329-331, 361; german apology for _sussex_ sinking, i: 333; activities of _u-53_ off u. s. coast, oct., '16, i: 334; freighter _marina_ sunk, oct. 28, '16, i: 334; _arabia_ sunk, nov. 6, '16, i: 334; germany declares unrestricted warfare, feb. 1, '17, i: 339, 344, ii: 22, 272, 306-307 (ludendorff's account of decision), iv: 223, vi: 265, xi: 35; bethmann-hollweg's statement of reasons for unrestricted warfare, i: 344; u. s. severs diplomatic relations with germany over, feb. 3, '17, i: 344-345; u. s. merchantmen ordered armed, i: 347; american steamer _algonquin_ sunk without warning, mar. 2, '17, i: 348; influence of unrestricted warfare in forcing u. s. into war, i, 348, 368, ii: 53; president wilson's speech before congress, stating case against germany and asking for declaration of war, apr. 2, '17, i: 348-355; list of american ships attacked, i: 356; list of ships sunk with loss of american lives, i: 357; _persia_ sunk, dec. 30, '15, i: 361, iv: 224; effectiveness, ii: _intro. xvii_, 22, 54, iv: 239; german purpose in, ii: 22, 53, iv: 7-8, 140; british drive against german submarine bases, '17, ii: 56; ludendorff on failure of ruthlessness, ii: 308; efforts to sink u. s. troopships, ii: 318; methods of combating, iv: _intro. xi_, 284-287, 304-317, 324-334, viii: 17-20, 266-282, 343-344, xi: 239; north sea mine barrage, iv, _intro. xi_, 324-330, viii: 274; _aboukir_, _cressy_, and _hogue_ sunk by _u-9_, sept. 22, '14, iv: 205, x: 274-280; exploits of british submarine _e-9_, iv: 207; exploits of british submarines in dardanelles, iv: 209-212; _laconia_ sunk, feb. 25, '17, iv: 225; belgian relief ship _storstad_ torpedoed, mar. 8, '17, iv: 229; _alnwick castle_ sunk without warning, mar. 19, '17, iv: 230; hospital ships sunk without warning, iv: 232; _belgian prince_ sunk july 31, '17, iv: 232; use of airand sea-planes for detecting u-boats, iv: 284-287; net traps, iv: 305-307, 308, viii: 274; torpedoes, description and method of use by u-boats, iv: 307, viii: 266, xi: 245-248; depth-bombs as anti-submarine weapon, iv: 307, 312, 317, 330-332, viii: 281-282, xi: 239; nets across british channel, iv: 307, viii: 274; use and description of sound-detecting devices for locating u-boats, iv: 308-310, viii: 17-20, 279-281; zigzagging, iv: 310; smoke screen, iv: 311; camouflaging ships, iv, 311, viii: 343; arming merchant ships, iv: 314, viii: 278; u. s. transport _tuscania_ torpedoed, iv: 336; u. s. transport _covington_ sunk, july, '17, iv: 337; u. s. transport _mount vernon_ torpedoed, sept. 5, '17, iv: 337; u. s. transport _antilles_ torpedoed, oct. 17, '17, iv: 337; u. s. transport _finland_ torpedoed, oct. 27, '17, iv: 337; u. s. transport _president lincoln_ sunk, may 31, '18, iv: 337, 340; u. s. destroyer _cassin_ torpedoed, iv: 343; u. s. destroyer _jacob jones_ sunk, dec. 6, '17, iv: 346; italian cruisers _amalfi_ and _garibaldi_ sunk, iv: 369; french cruiser _léon gambetta_ sunk by austrian u-boat, iv: 373; french cruiser _provence ii_ sunk, feb. 26, '16, iv: 376; french battleship _danton_ sunk, mar. 19, '17, iv: 376; french anti-submarine campaign, iv: 378; first attack on american convoy, june 22, '17, v: 107; effect on british food supply, vi: 10; effectiveness of destroyers in combating, viii: _intro. viii_; fantastic proposals for fighting u-boats, viii: 266-274, 276-278; account of experiences by survivor of a rammed u-boat, x: 295-297; value of tonnage sunk, xii: 26; _see also_ germany, blockade of; shipping. sudanese, defeated by british, may, '16, iii: 191. suez canal, neutralized, 1888, i: 16; construction of, by french, 1869, i: 48; great britain gains control, 1875, i: 48; importance, ii: 27; german designs on, ii: 27; turkish operations against, ii: 31, iii: 189-192. _suffolk_, adm. craddock's flagship in west atlantic, iv: 63. _suffren_, french battleship at gallipoli, iv: 31; mysterious disappearance, iv: 376. sugar, shortage in england, xii: 34; method of war-time distribution in u. s., xii: 46; war-time shortage, xii: 138. sugar equalization board, u. s., functions, xii: 46. sukhomlinov, russian minister of war, arrested and disgraced, '15, vi: 136. summerall, maj.-gen. charles p., placed in command of fifth corps, oct. 12, '18, v: 83, 250, 391; as brigadier-general commands 1st div. at soissons, july, '18, v: 167; at st. mihiel, sept., 318, v: 202; tribute to, by frederick palmer, v: 235; in meuse-argonne offensive, v: 391. sunshine (40th) division, _see_ u. s., army. supplies, lines of, to field armies, ii: 69. support, line of, definition and description, v: 12. supreme naval council, allied, formed, dec. 4, '17, i: 393. supreme war council, allied, formed, nov. 9, '17, i: 392, iii: 84. surgery, early history, vii: 4-6; in u. s. army, vii: 219-224; use of x-ray in war surgery, vii: 221, viii: 373-376; war-time evolution in methods, viii: 361-365; treatment of head wounds, viii: 365; treatment of face wounds, viii: 366; treatment of body wounds, viii: 366; treatment of blood vessel lesions, viii: 366; treatment of nerve-cord lesions, viii: 366; treatment of fractures, viii: 367; new method of amputation, viii: 367; prevention of gas gangrene, viii: 367; prevention of tetanus infection, viii: 367; carrel-dakin treatment, viii: 369-372, xi: 289; artificial arms, viii: 384-388; artificial legs, viii: 388-390; use of ambrine in treatment of burns, viii: 390; reconstructing mutilated faces, viii: 390; artificial eyes for war blind, viii: 391; _see also_ infection; medical science; reconstruction of disabled; u. s. army, medical service. surveillance, line of, definition and description, v: 12. _sussex_, british passenger steamer sunk by u-boat, mar. 24, '16, i: 328, 361, iv: 223, x: 281-288 (survivor's description), xi: 20; u. s. threatens to sever diplomatic relations with germany over sinking of, i: 329-331, 361; german apology for sinking, i: 333. suvla bay, at gallipoli, allied landing at, aug. 7, '15, i: 381, iii: 173; _see also_ gallipoli campaign. suwalki, russians cross into east prussia near, iii: 111; captured by germans, iii: 116; evacuated by germans, oct. 9, '14, iii: 118. schwarzlose automatic pistol, description, viii: 90. sweden, international position in, '14, i: 62; policy of neutrality, vi: 394; relations with finland, vi: 395; crown princess of, work for war prisoners, vii: 395. swierzynski, joseph, forms polish cabinet, vi: 219; declares poland republic, vi: 219. _swift_, british destroyer, account of night battle with german destroyers, x: 293-295. swift, maj.-gen. eben, commands 82nd div., june, '18, v: 143. _swiftsure_, british battleship at gallipoli, iv: 33. swinton, maj.-gen. e. d., on development and war functions of tanks, ii: 273-290; conceives idea of tank as war weapon, oct., '14, ii: 276, viii: 155, xi: 256. switch position, defined, v: 16. switzerland, system of citizen army, i: _intro. xii_; international position, '14, i: 62; policy of armed neutrality during war, i: 140, vi: 379; antagonism between french and german elements, vi: 379-380; implication of intelligence dept. of general staff in unneutral conduct, vi: 380; foreign minister hoffman forced out of office by neutralist sentiment, vi: 380; gustave ador heads foreign office, vi: 380; red cross activities, vi: 380; geneva designated as seat of league of nations, vi: 382, xii: 183. _sydney_, australian cruiser, destroys german raider _emden_, nov. 9, '14, iv: 185-190. synchronizers, for timing machine-gun fire through airplane propeller blades, viii: 86, 190-192, 208-210, 214. syria, placed under french control by secret treaties of '16--'17, vi: 334; area and population, xii: 279. t tachometer, aero engine revolution counter, viii: 218. tactics, battle of maneuver and of line compared by foch, ii: 108; new french plan of defense, june, '18, ii: 208; trench warfare and "war of movement," compared by german military critic, ii: 259; german method of attack by infiltration, iii: 386, v: 17-19; french trench defensive organization, v: 12-17; parallel of resistance, v: 12; line of resistance, v: 12; line of surveillance, v: 12; line of support, v: 12; center of resistance, v: 14; adaptation of american divisional organization to french scheme of defense, v: 19-21; elements of limitation in offensives, v: 23; american patrolling activities, v: 27, 117; use of gas-projector batteries by germans, v: 28; value of villages in stabilized warfare, v: 31; method of overcoming machine-gun nests, v: 39; von hutier's method of surprise attack, v: 41, viii: 143-145; gen. gouraud's system of defense against attack by infiltration, v: 46, 155, viii: 146-148; a. e. f. training for open warfare, v: 114; new german tactics in drive of mar., '18, v: 161; use of masked machine-gun fire in defensive, v: 287; _see also_ strategy; trench warfare; battle or campaign. taft, william howard, statement on u. s. action on _lusitania_ sinking, i: 320. tagliamento river, reached by austro-germans in invasion of italy, nov., '17, ii: 58, iii: 248; _see also_ italian front. tailly, captured by 89th div., nov. 2, '18, v: 264. talaat bey, turkish minister of interior, responsibility for armenian massacres, vi: 332. talley, sgt. edward r., gets congressional medal of honor, x: 396. _tanine_, turkish newspaper, comment on dardanelles expedition, vi: 330. tanks, field-marshal haig on effectiveness, ii: 123-124; use in allied counter-offensive, july 18, '18, ii: 210, 281; development, description, and battle uses, ii: 273-290 (maj.-gen. swinton on), v: 314, viii: 140-143, 148-161, xi: 251-264; german opinion of value, ii: 273-274; invention suggested by american farm tractors, ii: 274, xi: 256; purpose in development of, ii: 275, viii: 140-141, xi: 253-256; maj.-gen. swinton conceives idea for, ii: 276, viii: 155, xi: 256; fore-runners of idea, ii: 276; british experimentation, '15--'16, ii: 277, viii: 155, xi: 257; origin of word "tank," ii: 277; first quantity production begun by british, feb., '16, ii: 277; first use in action at battle of the somme, sept., '16, ii: 277, iii: 59, viii: 141, xi: 251-253; successful surprise attack at battle of cambrai, nov. 20, '17, ii: 280, 283, iii: 80, 337-340 (philip gibbs's description), viii: 142,156; use in allied retreat, mar.--june, '18, ii: 280; british "whippets," ii: 280, viii: 148, xi: 262; use in allied attack at hamel, july 4, '18, ii: 281, 282; lead in allied surprise attack at amiens, aug. 8, '18, ii: 281; use by allies in second battle of cambrai, sept. 27--oct. 10, '18, ii: 281; first time manned by americans, sept. 29, '18, ii: 281; development by french, ii: 282, viii: 152-155, xi: 257; german type, ii: 282, viii: 159; effectiveness compared with field artillery, ii: 283; saving of war material in use, ii: 284; casualty rate among troops attacking with, ii: 284; in drive against soissons, july, '18, v: 177; number in meuse-argonne offensive, sept. 26, '18, v: 223, 388; number of u. s. tanks in france, v: 350; value as infantry support, viii: 141-143; tank _vs._ machine gun, viii: 150-151; decisive factor in smashing german trench system, viii: 150-152, xi: 261; uses in peace times, viii: 151; french invention for crushing barbed-wire entanglements, viii: 153; boirault machine, viii: 153; french electric tank, viii: 155; french "baby" renaults, viii: 156, xi: 260; british and french types compared, viii: 156; u. s. types, viii: 158; requirements for successful tank, viii: 158; future possibilities, viii: 160; account of an american tank-man, x: 58-62; german method of defense against, xi: 264; account of battle between, xi: 265-266; sensation of riding in, xi: 269-270; for u. s. tank corps, _see_ u. s., army. tannay, captured by 78th div., nov. 5, '18, v: 268. tannenberg, battle of, hindenburg crushes russian armies invading east prussia, aug., '18, ii: 24-25, 228-229 (gen. gourko's account), 353-354 (ludendorff's comments on), iii: 112-116. tardenois salient, strategic aspects, with description of terrain, ii: 210-212, v: 42-43, 58; _see also_ marne, battles of, july, '18. tarnopol, captured by russians, sept. 27, '14, iii: 120. tatarli, captured by allies, oct., 15, iii: 204. taube airplanes, record flights by, viii: 206. taxation, in paying for cost of war, xii: 108-114; _see also_ under each country. tchitcherin, russian soviet commissary for foreign affairs, vi: 187. tear gas, _see_ chemical warfare; chlorpicrin; zylyl bromide. teleferica, italian aerial cableway in the alps, viii: 303-306. telegraphy, development and use of wireless, in the war, viii: 315-318, 320-322; u. s. army system in france, viii: 323, 325. telephones, development and use of wireless, in the war, viii: 316-320; u. s. army system in france, viii: 323-326. terauchi, count, japanese prime minister, militarist policy, vi: 386-388; biography, ix: 90. tereschenko, russian minister of foreign affairs in prince lvov's coalition cabinet, vi: 160. teschen, dispute between poland and czechoslovakia for possession of, vi: 400. tetanus, causes and treatment of, in army, vii: 253, viii: 367, xi: 287. teutonic allies, _see_ central powers. thann, captured by french, aug. 7, '14, iii: 16. theatricals, for service men, _see_ entertainment. thenault, capt., french commander of lafayette escadrille, iii: 391. _there will come soft rains_, poem by sara teasdale, ix: 274. _these be the days that call for men_, poem by john trotwood moore, iii: _intro. x._ _thetis_, british cruiser blown up at zeebrugge raid, iv: 262, 264. "they shall not pass," french watchword at verdun, ii: 189, iii: 304, xi: 21. thiaucourt, captured by 2nd div., sept. 12, '18, v: 68, 206, 210; american cemetery at, v: 400. thiaumont, captured by germans, june 23, '16, i: 386, iii: 55, 313; recaptured by french, oct. 24, '16, i: 388, iii: 61. thiepval, allied objective in somme battle, iii: 58; stormed by british, sept, 26, '16, iii: 59. thomas, albert, french socialist leader, on french labor during war, ii: 373-382. thomas, j. h., british labor leader, conference with lloyd george on strike by "triple alliance," vi: 22. thrasher, leon, u. s. citizen killed in sinking of _falaba_ by u-boat, mar. 28, '15, i: 319. three emperors' league, 1872, i: 95. _thuringen_, german battleship, crew first to mutiny, oct. 31, '18, iv: 381. _tiger_, british cruiser, hit at battle of jutland, iv: 108; in battle of dogger bank, iv: 246. tilsit, occupied by russians, aug. 24, '14, iii: 111. timber, war uses, viii: 306-309. tirailleurs, description, xi: 191. tirgu-jiuly, rumanians defeated at, by germans, iii: 221. tirpitz, adm. alfred von, share in developing german navy, iv: 363, ix: 301; biography, ix: 298-306; submarine policy, ix: 302. tisza, count stephan, hungarian premier, attitude on war, vi: 306; political opposition to, '16, vi: 311; rumanian policy assailed in parliament, vi: 313; biography, ix: 144-147. t. n. t., _see_ trinitrotoluol. togoland, conquered by allies, aug.,'14, iii: 252; area and population, xii: 279. "tommy atkins," nickname for british soldier, origin, vi: 230; description as fighting-man, xi: 181-189. torcy, location, v: 37, 133; gen. degoutte's commendation of a. e. f. fighting at, v: 192; captured by first corps, july 18, '18, v: 383. torpedoes, description and use, iv: 307, viii: 266, xi: 245-258; device for launching from air, iv: 335. toul, headquarters of first army, aug., '18, v: 193; important fortified city, v: 199. toul sector, taken over by a. e. f., jan. 19, '18, v: 115. tours, a. e. f. air service training school at, v: 313; headquarters of s. o. s., v: 332. towers, commander, in command of n-c flying boats on trans-atlantic flight, viii: 240. townshend, gen. sir charles, besieged in kut-el-amara by turks, iii: 183, 318-320, xi: 29; forced to surrender apr. 29, '16, iii: 183, 319, xi: 29; biography, ix: 194. tracer bullets, viii: 211. tractors, artillery, u. s., number in use in france, v: 350; supplant horses, viii: 40. transloy-loupart line, captured by british, mar.,'17, iii: 66. transports, ludendorff's account of german efforts to sink u. s. troopships, ii: 317-318; account by adm. gleaves of first expedition of u. s. troops to france, june,'17, iv: 157-162; list of ships carrying u. s. troops across atlantic for first time, june,'17, iv: 160; equipment and escort of, by u. s. navy, iv: 160, 165; transportation of a. e. f. overseas, with statistics on number of troops carried and number and nationality of troopships and convoys used, iv: 162-165, v: 285, 379, xii: 94-95, 283; british, statistics on troops carried, iv: 239; u. s., attacked by submarines, accounts of, iv: 335-343. transvaal, _see_ south africa, union of. transylvania, invasion of, by rumanians, aug.,'16, ii: 60, iii: 217-218; desire for possession cause of rumania's entry into war, iii: 214, vi: 349; topography of frontier, iii: 214; rumanians defeated and expelled from, by falkenhayn, sept.--oct.,'16, iii: 220; attitude of inhabitants to rumanian invasion, vi: 313. trawlers, use in patrol and minesweeping, iv: 292; battle with submarine, iv: 294. treaties, allied agreement not to make separate peace, i: 146; treaty of brest-litovsk between russia and germany, mar.,' 18, ii: 63, 273, vi: 183, 268; quadruple treaty (treaty of london) between italy and allies, price for italian participation in war, apr., '15, vi: 122, 361; trotzky publishes russian secret treaties, vi: 183, ix: 118; secret agreements among allies for partition of turkey, '16--'17, vi: 334; agreement between rumania and allies as price for rumanian entry into war, '16, vi: 349; treaty of bucharest between rumania and central powers, may,'17, vi: 352; pre-war agreements between germany and allies revived by treaty of versailles, xii: 231; agreements among central powers abrogated by treaty of versailles, xii: 232; treaties between germany and rumania abrogated by treaty of versailles, xii: 232; treaties between germany and russia abrogated by treaty of versailles, xii: 232; _see also_ alliances; peace treaty with germany, versailles, '19. trebizond, captured by russians, apr. 18,'16, ii: 92, iii: 263. treitschke, heinrich von, german historian, exposition of kultur, i: 66; theory of supremacy of state, i: 148; biography, i: 174; philosophy compared with carlyle's, i: 175; theory of german greatness, i: 175; hatred for england, i: 175; summary of political philosophy, i: 177; american student's recollection of, i: 178. _trench duty_, poem by siegfried sassoon, ix: 282. trench feet, viii: 396. trench warfare, adoption by germans after retreat from marne, sept., '14, ii: _intro. vii_, 11, iii: 37, viii: 134, xi: 12, 253; opposed by field-marshal french, ii: 171; compared with "war of movement" by german military critic, ii: 259; description of german trench system, ii: 275, viii: 124-130; use of barbed wire as defensive barrier, ii: 276, viii: 136, 152; value of tanks in, ii: 276, viii: 140-143, 150, 161; use of machine guns in, ii: 288, viii: 134-136; life in, iii: 286, x: 65-71, xi: 171-173; french defensive system, v: 12-17; night fighting, viii: 74; reasons for adoption in place of open warfare, viii: 123; kinds of trenches, viii: 123; description of russian trenches, viii: 123; disadvantages of trenches as defensive system, viii: 129; "pill-boxes," viii: 130-132; use of artillery in, viii: 132-133, 136-141; _see also_ barbed wire; machine gun; tanks. trentino, _see_ italian front. trepov, russian premier, forced to resign, '17, vi: 143. treves, bombed by french airmen, sept. 13, '15, i: 382; oct. 1, '17, i: 392. _trevier_, belgian relief ship sunk by u-boat, iv: 230. trieste, unsuccessful italian offensives against,' 16--'17, ii: 52, 246, iii: 246, xi: 26; promised by allies to italy as war prize, vi: 122, 361; american troops landed at, to preserve peace between italians and jugoslavs, vi: 366; sinking of austrian battleships _wien_ and _monarch_ in harbor of, by italians, x: 290. trinitrotoluol (t. n. t.), composition and explosive properties, viii: 6; american output of, xii: 285. triple alliance, of germany, austria-hungary, and italy, formation, 1882, i: 95; terms, i: 95; military strength, i: 95; solidity of union between germany and austria, i: 208; italian position in, i: 255; french estimate of, ii: 4; repudiated by italy, ii: 48, vi: 115; _see also_ foreign policy, under name of country. triple entente, of france, russia, and great britain, formation, i: 98, 106; not a treaty-bound alliance, i: 103, 218; franco-russian treaty of july,'12, i: 107; anglo-french agreement for united action against "third power," nov., '12, i: 107, 220; attitude to outbreak of war, i: 129; agreement not to make separate peace, aug. 4,'14, i: 146; german estimate of military effectiveness, ii: 2; _see also_ foreign policy, under name of country. tripoli, turkish territory in north africa, seized by italy, i: 109; town in syria, captured by allies, oct.,'18, iii: 199. tritton, sir william, share in developing tank as fighting machine, viii: 155, xi: 257. _triumph_, british battleship at gallipoli, iv: 31; sunk by u-boat, may 26, '15, iv: 50. trois fontaines, conference between marshal foch and secretary baker at, oct. 4, '18, xii: 285. tronsol farm, captured by 182nd brig., sept. 28, '18, v: 229. trophies of war, peace treaty provisions for return of, by germany, to france, xii: 225. trotzky, leon, becomes commissary of foreign affairs of soviet russia, nov., '17, vi: 181; publishes russian secret treaties, vi: 183; as minister of war raises red army, vi: 185; biography, ix: 116-119; bibliography, ix: 119. troubridge, adm., takes charge of serb refugees at medua, iii: 284; in command of british naval forces in mediterranean, aug., '14, iv: 13. trugny wood, evacuated by germans, july 24, '18, v: 186. tsing tau, _see_ kiau-chau. tuilerie farm, captured by 42nd div., oct., 15, '18, v: 252. turkestan, republic of, established, jan., '18, xii: 279; area and population, xii: 279. turkey: army, germanization under von der goltz, i: 207; organization, iii: 164; liman von sanders appointed to reorganize, vi: 330; for military operations, _see_ caucasus; gallipoli campaign; mesopotamian campaign; palestine; suez canal. casualties, total in war, iii: 404; money equivalent of manpower lost, xii: 25; battle deaths, xii: 288. declarations of war, renewal of age-old struggle between europe and asia, i: 11; by russia against, oct. 30, '14, i: 376; by france and great britain against, nov. 5, '14, i: 378; holy war declared against allies, nov. 17, '14, i: 376, ii: 31, vi: 330, xi: 14; by italy against, aug. 21, '15, i: 381; on rumania, aug. 29, '16, i: 386; diplomatic relations with u. s. severed, apr. 20, '17, i: 390; strategic victory for germany, ii: _intro. viii_, 27-28; welcomed by russia, vi: 134; welcomed by turkish press, vi: 330. foreign relations, extraterritorial rights for foreigners withdrawn, i: 18; continuance as european power assured by paris conference, 1856, i: 39; international position, '14, i: 63; subjugation and misrule of christian races, i: 89-93, iv: 17-18; settlement of congress of berlin, 1878, i: 93; pre-war relations with germany, i: 98, 207, vi: 328-330; strategic importance as germanic ally, ii: _intro. viii_, 27-28, 87-90; dardanelles closed, sept.,'14, ii: 28; escape of german cruisers _goeben_ and _breslau_ into turkish waters and their purchase by turkey, iv: 14-17, vi: 330; allied agreements for partition, vi: 334; demotika ceded to bulgaria, vi: 344; dispute with bulgaria, '18, vi: 345. internal affairs, form of government, i: 90; constitution proclaimed, 1839, i: 92; young turk revolution, '08, i: 109; armenian massacres, iii: 405, vi: 331-333; war sentiment, vi: 330; arab revolt, '16, vi: 333. navy, purchase of german cruisers _goeben_ and _breslau_, iv: 16-17, vi: 330; strength, iv: 50. peace negotiations, capitulation, and armistice with allies, oct. 31, '18, ii: 94, vi: 334. prisoners of war, iii: 404. war cost, nov., '14--oct., '19, xii: 107; rise in national debt, xii: 114. turner, corp. harold l., gets congressional medal of honor, x: 397. turner, 1st lieut. william s., gets congressional medal of honor, x: 393. turner, william thomas, captain of torpedoed _lusitania_, i: 362. _turtle_, submarine used in american revolution, iv: 201. _tuscania_, u. s. transport torpedoed, feb. 5, '18, i: 393, iv: 336. tutrakan, captured by bulgarians, sept. 6, '16, iii: 218. typhoid, u. s. army statistics, vii: 195; immunization against, vii: 246, 253, viii: 393; manufacture of anti-typhoid vaccine, viii: 393. typhus, epidemic of, in serbia, iii: 155, 398-400, vi: 357, vii: 148. _tyulen_, russian submarine, captures turkish transport in black sea, iv: 366. u _u-9_, german submarine, sinks british cruisers _aboukir_, _cressy_, _hogue_, sept. 22, '14, iv: 205. _u-15_, first german submarine sunk in war, iv: 305. _u-29_, german submarine, rammed by british battleship _dreadnought_, mar., '15, iv: 305. _u-53_, german submarine, activities off u. s. coast, oct., '16, i: 334, iv: 216. _u-58_, german submarine, captured by u. s. destroyers _fanning_ and _nicholson_, iv: 349. _u-117_, german submarine, activities off u. s. coast, '18, iv: 216. u-boats, _see_ submarines; submarine warfare. udine, bombed by austrian airmen, nov. 19, '15, i: 382; captured by austro-germans, oct., '17, iii: 247. uhlans, german cavalry, description, xi: 196. ukraine, early history, vi: 239-241; pre-war movement for independence, vi: 241-243; russian attempts at suppression of nationalist feeling, vi: 243; autonomy proclaimed, june 24, '17, vi: 243; movement for establishment of federal russia, vi: 244; struggle with bolsheviki, vi: 244-246, 248; conclusion of separate peace with germans at brest-litovsk, vi: 246-247; revolt against german domination, '18, vi: 247-248; war with poland for possession of cholm, vi: 248; population and area, xii: 279. ulianov, vladimir, _see_ lenin, nicolai. ulster, _see_ ireland. uniforms, military, invisibility of french, ii: 286; invisibility of german, ii: 286, iii: 272 (description by richard harding davis). united kingdom, _see_ great britain. united states: army, morale, i: 369, v: _intro. xii_, 9, 71-72; national army ordered mobilized, aug. 13, '17, i: 390; strength in france, mar., '18, ii: 66, v: 380; nearing end of offensive force at armistice, ii: 98; a. e. f. put at disposal of foch by pershing, mar. 28, '18, ii: 152, v: 120, 380; transportation overseas, with statistics on rate and means of, ii: 317 (ludendorff's comment on), iv: 10-12, 157-165 (adm. gleaves' account of first convoy across atlantic), v: 106, 128, 284, 373-379 (pershing's report), xii: 94-95, 283, ludendorff's opinion of fighting qualities, ii: 326; first contingent arrives in france, june 26, '17, iii: 83, iv: 162, v: 106; first shot fired against germans, oct. 23, '17, iii: 84, v: 112; first american prisoners captured by germans, nov. 3, '17, iii: 84, v: 112; on italian front, iii: 249, v: 394; total strength, iii: 403, xii: 280-281, 282; strength overseas, iii: 403, 405, v: 128, xii: 280-281, 282, 287; combat value, v: 4; training in france, v: 6-12, 100, 102-106, 107-108, 111-113, 114-119, 233, 312, 314, 325, 327, 373-378 (pershing's report on arrangements with french and british), xi: 171-173, _see also_ under each division; living conditions in france, v: 8; first divisions enter front lines, jan., '18, v: 10; supplies for, with statistics on quantity consumed and methods of procurement, v: 11, 110, 115, 285, 328-332, 396-398, 400, xii: 283-284, _see also_ under u. s. army, services of supply; size and organization of division, v: 19-21, 108, xii, 282, 287; size and organization of regiment, v: 20, 108, 281, xi: 163; adaptation of american divisional organization to french system of trench warfare, v: 21; offensive spirit, v: 22, 26, 29; patrolling activities at the front, v: 27, 117; distribution of a. e. f. divisions in battle area, june, '18, v: 41, 141-147; combat units in france organized into first army under tactical command of pershing, aug., '18, v: 64, 192, 384; pershing arrives overseas, june, '17, v: 97; general staff, a. e. f., organization and personnel, v: 98-102; training of officers, with statistics, v: 100, 102-104, 108, 312, 325, xii: 280, 282; general educational program for a. e. f. at army centers and european universities, v: 106, vii: 281-283, 290; organization of corps, v: 109; number and distribution of a. e. f. combat divisions, sept., '18, v: 197; number and distribution of a. e. f. combat divisions, nov. 1, '18, v: 253; divisions serving in allied armies, v: 254, 279, 373-379, 393; american soldier's attitude towards british soldier, v: 288; air service training schools, in u. s. and overseas, v: 312, xii: 285; tank schools, v: 314; gas warfare training, v: 325, 327; statistics on health and disease in, v: 344, 402, vii: 179, 193-195, _see also_ under u. s. army, medical service; rifle equipment, description and reasons for adoption of type, v: 347, viii: 96, 102-105; pershing's message to each member of a. e. f., v: 353; list of a. e. f. divisions, with histories, v: 354-372; replacement (depot) divisions, v: 368-372, 399; pershing's official report on a. e. f. operations, v: 373-404; on russian front against bolsheviki, v: 394, vi: 187, 193; return of a. e. f. to u. s., v: 395; procuring of remounts, v: 399; a. e. f. mail service, v: 402; system of keeping records of a. e. f., v: 402; military justice in, v: 403; punishments in, v: 403; intelligence tests for recruits, vii: 216, viii: 349-351; training camps in u. s., number and system of instruction, xi: 155-165, xii: 282; soldier's equipment, xi: 167-168; pay, xi: 168; cantonment construction, xii: 125, 282; statistics on participation in war, xii: 280-289; total battles fought by a. e. f., xii: 280, 287; total days in battle, xii: 280, 287; number of troops in battle, xii: 280, 287; total of ordnance and prisoners captured, xii: 288; for branches and units, _see_ below; for detail of military operations, _see_ name of battle or campaign. adjutant general's department, functions, v: 402. air service, record in france, v: 309-313, xii: 285-286; losses, v: 309; number of enemy planes and balloons shot down by, v: 309; strength at the front, nov. 11, '18, v: 309, xii: 285, 286; strength and activities of balloon companies, v: 311-312; growth, v: 312, xii: 285; total personnel, v: 312, xii: 285; training schools, v: 312, xii: 285; dependence on allies, v: 401 (pershing's report); types of aerial navigating instruments, viii: 217-221; work of aerial photographers, viii: 228-235; airplane production, xii: 285; types of aero squadrons, xii: 286; for n-c flying boats and dirigibles, _see_ u. s., navy. artillery, first shot of war fired by a. e. f., oct.27, '17, i: 392, iii: 84, v: 112; dependence of a. e. f. on french and british for, v: 111, 348, 401, xii: 284; heavy artillery (coast artillery corps), battle activities in france, v: 303-308; organization and units of railway artillery reserve, v: 305; naval batteries on western front, v: 306, viii: 42-45; anti-aircraft batteries, v: 308; trench mortar battalions, v: 308; number of cannon and trench mortars at the front, nov. 11, '18, v: 350; description of types of field guns, viii: 22-28; description of types of heavy guns, viii: 36-42; description of prospective 121-mile range gun, viii: 48-51; production figures, xii: 284; captured by a. e. f., xii: 288. chemical warfare service, organization and activities, v: 321-327, 401 (pershing's report), viii: 179-187; poison gases used, v: 321-322; experimentation and development, v: 323-324; gas masks and other defense equipment issued to a. e. f., v: 324; gas shell production, v: 325, viii: 186; gas defense training, v: 325; duties of gas officer, v: 325; deloading and examination of unexploded german shells, v: 325-326; use of poison gas by artillery and infantry, v: 326; activities of a. e. f. gas troops, v: 327; invention of lewisite, deadliest poison gas, viii: 172; poison gas production at edgewood arsenal, viii: 179-187; daily output compared with german, french, british, viii: 179. dental corps, organization and activities, vii: 209-210. engineer corps, heroic stand by a. e. f. engineer troops against german break through british lines, mar., '18, iii: 89, v: 123; organization and activities overseas, v: 332-336, 399-400, xii: 283, 287; construction of barracks, v: 332, 400; construction of hospitals, v: 332, 400; construction of docks, v: 332, 400, xii: 283; railroad construction, v: 333, 334, 400, xii: 283; insuring clean water supply for a. e. f., v: 333; construction of refrigerating plants, v: 333, 400; construction of bakeries, v: 333, 400; activities of forestry division, v: 334, 400, xii: 287; work with combat troops, v: 335; pershing's tribute to, v: 336; road construction in france, v: 400. graves registration service, _see_ u. s. army, quartermaster corps. inspector general's department, functions of, v: 402-403. judge advocate general's department, functions of, v: 403. medical service, war-time organization and activities, v: 336-347, 402, vii: 175-239, 245-254; field hospitals and medical work at the front, v: 337-338, vii: 178, 230-233, 249-254; evacuation hospitals, v: 338, vii: 178, 251; hospital trains, v: 339, vii: 199, 251, viii: 380; hospital construction in france, 340-342; a. e. f. base hospitals, v: 340, 400; "hospital centers," v: 341, 400; capacity of a. e. f. hospitals, v: 342; statistics on patients treated in a. e. f. hospitals, v: 342, 352, 402; statistics on personnel, v: 343-344, vii: 177, 201-203; statistics on disease and wounded, v: 344, 402, vii: 179, 193-196, 208-209; procurement of supplies for use overseas, v: 344, vii: 222-224; volunteer organizations co-operating with, v: 344, vii: 187-189, 219, _see also_ red cross; organization in france, v: 345-346; letter of commendation from pershing, v: 346; total number of hospital patients treated during war, v: 352; number of hospitals and patients treated in u. s., v: 352, vii: 201; venereal disease, statistics on, and methods of combating, v: 402, vii: 208-209; physical reconstruction of disabled and mutilated, vii: 175-176, 180-186, 210-216, 233-239, _see also_ reconstruction of disabled; war-time mobilization of medical profession of u. s., vii: 187-189, 203, 219-222; medical reserve corps and volunteer medical service corps, vii: 187, 203; work of women physicians, vii: 188; system of war-time organization, vii: 191, 203; activities of division of sanitation, vii: 191-196; construction of hospitals in u. s., vii: 196-198; number of patients returned from overseas for treatment in u. s., vii: 200; army nurses, number and organization, vii: 203; work of division of laboratories and infectious diseases in control of communicable diseases, vii: 203-209; functions of division of medicine, vii: 216-219; testing mentality of recruits, vii: 216, viii: 349-351; classification of soldiers by vocations, vii: 216-217; physical examination of drafted men, vii: 217, xii: 281; treatment of special diseases and injuries, vii: 218, 222; training of personnel, vii: 222, 225. military police, _see_ u. s. army, provost marshal general's department. motor transport corps, organization and functions, v: 328, 351, 401. nurse corps, organization and personnel, vii: 203. ordnance department, functions and war-time activities, v.: 347-351, 401 xii: 284-285; size of personnel at start of war, v: 347; reasons for adoption of type of rifle used by a. e. f., v: 347, viii: 96, 102; rifle production figures, v: 347, xii: 284; statistics of ammunition and explosive production, v: 350, xii: 284, 285; artillery production figures, v: 350, xii: 284, _see also_ under u. s. army, artillery; machine-gun production, v: 350, xii: 284; number of tanks sent to the front, v: 350; mobile repair shops, v: 350, viii: 294-298; supply bases and workshops, v: 350; strength of a. e. f. personnel, v: 350; letter of praise from pershing, v: 351. provost marshal general's department, functions, v: 403. quartermaster corps, organization and functions, v: 328-332, 400, xii: 283; growth of personnel in france, june, '17--dec., '18, v: 328; scope of duties, v: 328, 400; methods of procuring supplies, v: 328; supply depots in france, v: 329-330; amount of bread consumed by a. e. f., v: 330; statistics on oil and fuel for a. e. f., v: 331; salvage service, activities of, v: 331, 400, viii: 345-348; delousing facilities for a. e. f., v: 331; acquisition of burial grounds for a. e. f. dead and care of graves (graves registration service), v: 331, 400; a. e. f. expenditures, v: 332; statistics on issue of blankets and clothing, xii: 283. salvage service, _see_ u. s. army, quartermaster corps. services of supply (s. o. s.), establishment and functions, iii: 83, v: 328-352, 396-401 (pershing's report on); coördination of procurement and distribution of supplies for a. e. f., v: 396-397; purchasing activities overseas, v: 397; reclassification system for a. e. f., v: 399; personnel, nov. 11, '18 v: 401; _see also_ under u. s. army, engineer corps, motor transport corps, ordnance department, quartermaster corps, transportation corps. signal corps, activities in france, v: 317-320, 401, viii: 322-331, xi: 303-308, xii: 283, 286-287; a. e. f. telephone and telegraph system at the front and behind the lines, with statistics on number of exchanges, miles of wire, etc., v: 317, 318, 320, 401, viii: 322-326, xii: 283, 287; statistics on personnel, v: 317; american women operators with a. e. f., v: 317; organization of field signal battalions, v: 317; devices for communication used at the front, v: 318, viii: 322; "listening-in" and detection of enemy codes, v: 319; work of photographic division in making moving-pictures of war, v: 319-320, viii: 329-331; laying of cable across english channel, v: 320, 401; supplying a. e. f. with field glasses, viii: 326; supplying a. e. f. with wrist-watches, viii: 327; use of pigeons as messengers, viii: 328-329. tank corps, man british tanks in action for first time, sept. 29, '18, ii: 281; organization, v: 314; tank schools overseas, v: 314; american tanks in action, v: 315-316, 401; number of tanks sent to the front, v: 350; dependence on french and british, v: 401. transportation corps, functions, v: 400. veterinary corps, activities, vii: 225-227. first army, formation, aug. 10, '18, v: 64, 192-195, 384; reorganized and divided into first and second armies, oct. 9, '18, v: 83, 246, 274; drive against and reduction of st. mihiel salient, sept. 12--15, _see_ st. mihiel; meuse-argonne drive, _see_ meuse-argonne offensive. second army, formation, oct., '18, v: 83, 246, 274; operations in direction of briey iron basin and metz, v: 274-279, 390, 393; casualties, v: 279. third army (army of occupation), formation, nov. 14, '18, v: 280, 395; occupation of coblenz bridgehead, v: 394-395. first corps, operations in allied counter-offensive in marne salient, july, '18, v: 56, 191-192 (commendations from pershing and degoutte), 383; shifted to toul sector, aug. 13, '18, v: 62; in st. mihiel drive, sept. 12--15, '18, v: 65, 202, 386; in meuse-argonne offensive, sept.--nov., '18, v: 74, 78, 90, 91, 92, 220, 388, 390, 391; reaches heights opposite sedan, nov. 6, '18, v: 92; formation, jan., '18, v: 109. second corps, breaks through hindenburg line in co-operation with british, sept.--oct., '18, v: 87, 393; prisoners captured, v: 87, 393; formation, v: 382. third corps, operations in valley of the vesle in allied counter-offensive, aug., '18, v: 62, 191-192 (commendations from pershing and degoutte), 383; transferred to verdun region, sept., '18, v: 62, 384; in meuse-argonne offensive, sept.--nov., '18, v: 74, 78, 90, 219, 260, 388, 390, 391; in army of occupation, v: 395. fourth corps, in st. mihiel drive, sept., '18, v: 65, 68, 202, 206, 386; co-operation in meuse-argonne attack, sept., '18, v: 220; forms part of second army, v: 275; in army of occupation, v: 395. fifth corps, in st. mihiel drive, sept., '18, v: 65, 68, 69, 202, 386; in meuse-argonne offensive, sept.--nov., '18, v: 74, 90, 92, 219, 388, 390, 391. sixth corps, part of second army, v: 275. seventh corps, in army of occupation, v: 395. 1st division, training in france, v: 6-12, 106-108, 111-117; transferred from lorraine to relieve french on montdidier front, apr., '18, v: 29, 121, 380; captures cantigny, may 28, '18, v: 31-34, 124-128, 380; in drive on soissons flank in allied counter-offensive on marne salient, july 18--22, '18, v: 53-56, 130, 158-182, 191 (pershing's commendation), 382; casualties during operations in marne salient, july, '18, v: 55, 181; captures berzy-le-sec, july 21, '18, v: 55, 180, 383; in st. mihiel drive, sept. 12--15, '18, v: 65-70, 202, 211, 386; in meuse-argonne offensive, sept.--nov., '18, v: 74, 80-81, 83, 88, 91-92, 231, 234, 237, 240-246, 248-250, 268-270; relieved in meuse-argonne by 42nd div., oct. 12, '18, v: 83, 248; record march for relief of 80th div. and advance on sedan, nov. 5--7, '18, v: 91, 92, 269; arrival and organization in france, v: 106-108, 109; enters front-line trenches for first time, oct., '17, v: 111; artillery unit fires first shot of war for a. e. f., oct. 23, '17, v: 112; casualties in cantigny sector, apr. 25--july 7, '18, v: 128, 141; in support of french in montdidier-noyon defensive, june, '18, v: 129, 139; makes first capture of german guns by a. e. f., july 18, '18, v: 174; casualties in st. mihiel drive, sept., '18, v: 211; tribute to bravery from a german colonel, v: 246; captures sommerance, oct. 11, '18, v:248; casualties in meuse-argonne offensive, sept.--oct., '18, v: 248; citation for record in meuse-argonne by pershing, v: 248; summary of history, v: 355; units composing, v: 355; total casualties, v: 355; prisoners and war material captured, v: 355; in army of occupation, v: 395. 2nd division, training in france, v: 6-12, 119; goes into front line position on marne salient, june 4, '18, v: 37, 132, 136; in battle of belleau wood, june 6--26, '18, v: 39, 129, 135-139, 192, 382, x: 1-10 (account of marines in action); captures bouresches, june 6, '18, v: 39, 138, x: 8-9; in allied counter-offensive on marne salient, july 18--22, '18, v: 55, 130, 158-182, 191 (pershing's commendation), 382; captures vierzy, july 18, '18, v: 55, 174; in st. mihiel drive, sept. 12--15, '18, v: 65-70, 202, 210, 386; operations in champagne as part of gouraud's french fourth army, oct. 1--6, '18, v: 79, 241, 254-258, 393; captures blanc mont, oct. 5, '18, v: 79, 241, 257, 393; in meuse-argonne offensive, nov., '18, v: 88, 90, 92, 95, 262-270, 274, 391; capture of and drive through landres-st. george, nov. 1, '18, v: 90, 262-263; arrival and organization in france, v: 108; captures vaux, july 1, '18, v: 138, 382; casualties in marne offensive, july, '18, v: 179; prisoners and guns captured in marne offensive, v: 179; captures beaumont, v: 266; summary of history, v: 355; units composing, v: 355; total casualties, v: 355; prisoners and guns captured, v: 355; in army of occupation, v: 395. 3rd division, repulses german attempts to cross marne at château-thierry, may 31--june 3, '18, v: 35, 132-135, 381, xi: 43; in second battle of the marne, july 15--29, '18, v: 52-53, 56, 143, 148-153, 183-186, 187-188, 191-192 (tributes of pershing and degoutte), 382, 383, x: 381-387; stand of 38th inf. regt. against german attempts to cross marne, july 15, '18, v: 2, 150-153, x: 381-387; captures jaulgonne and chartèves during second marne battle, july, '18, v: 56, 383; in reserve in st. mihiel drive, sept., '18, v: 65, 202, 211; in meuse-argonne offensive, sept.--oct., '18, v: 74, 80, 81, 83, 85, 231, 233, 234, 237, 239, 241, 245, 247, 248, 250, 251, 252, 389; arrival in france, v: 128; occupies château-thierry, july 21, '18, v, 184; casualties during battles in marne salient, june--july, '18, v: 188; summary of history, v: 356; units composing, v: 356; total casualties, v: 356; prisoners and guns captured, v: 356; in army of occupation, v: 395. 4th division, in aisne-marne allied counter-offensive, july 18--aug. 12, '18, v: 60, 61-62, 130, 168, 183, 184, 191, 383; in st. mihiel drive, sept., '18, v: 65, 69, 202, 212, 386; reaches vesle river in pursuit of germans, aug., '18, v: 62, 191; in meuse-argonne offensive, sept.--oct., '18, v: 74, 78, 219, 220, 224, 226, 228, 236, 239, 245, 246, 248, 250, 252, 388; arrival in france, v: 128; training in france, v: 143; casualties during aisne-marne offensive, july--aug., '18, v: 191; summary of history, v: 356; units composing, v: 356; total casualties, v: 356; prisoners and guns captured, v: 356; in army of occupation, v: 395. 5th division, in st. mihiel drive, sept., '18, v: 65, 68, 202, 210, 386; in meuse-argonne offensive, oct.--nov., '18, v: 85, 90, 92, 93-95, 248, 250, 262, 264, 270, 271, 272, 391; captures cléry-le-grand, nov. i, '18, v: 90, 262; captures cléry-le-petit and doulcon, nov. 2, '18, v: 92, 264; forces crossing of meuse in meuse-argonne battle, nov. 3--5, '18, v: 92, 93-94, 264, 270; captures mouzay, nov. 9, '18, v: 94, 272; captures dun-sur-meuse, nov. 5, '18, v: 94, 271, 391; arrival and training in france, v: 128; enters trenches in the vosges, june, '18, v: 128, 381; casualties in st. mihiel drive, sept., '18, v: 210; captures cunel and clears bois de la pultière, oct. 14, '18, v: 250; position at armistice, nov. 11, '18, v: 272; summary of history, v: 357; units composing, v: 357; total casualties, v: 357; prisoners and guns captured, v: 357; in army of occupation, v: 395. 6th division, arrival and training overseas, v: 197; summary of history, v: 357; units composing, v: 357; casualties, v: 357. 7th division, arrival and training in france, v: 198; starts first offensive as part of second army, nov. 10, '18, v: 277, 279; summary of history, v: 357; casualties, v: 357; units composing, v: 358. 8th division, summary of history, v: 368; in siberia, v: 368; in germany, v: 368; units composing, v: 368. 26th division, arrival and training in france, v: 6-12, 108, 117-118; raided by germans at seicheprey, apr. 20, '18, v: 28, 122; goes into position on marne sector, july 9, '18, v: 46, 138; in second battle of the marne, july 15--24, '18, v: 56, 58, 130, 155, 168, 183, 184, 185, 186, 191-192 (tributes from pershing and degoutte), x: 76-78; in st. mihiel drive, sept., '18, v: 65, 68, 202, 211, 386; in meuse-argonne offensive, oct.--nov., '18, v: 86-87, 220, 252, 270, 271, 272, x: 78-79; goes into toul sector, apr., '18, v: 120; casualties in second marne battle, july, '18, v: 186; summary of history, v: 358; units composing, v: 358; total casualties, v: 358; prisoners and guns captured, v: 358. 27th division, organization and training in u. s., v: 196, 281-284, 358; arrival and training in france, v: 196, 284-286; war record, v: 281-300 (by maj.-gen. o'ryan), 358, 393; with gen. byng's third british army, july, '18, v: 286; operations with british in flanders, july--aug., '18, v: 286-290; breaks through hindenburg line with british fourth army, sept.--oct., '18, v: 290-297, 393; casualties in assault of hindenburg line, v: 295; return to u. s., v: 299; commendation from field-marshal haig, v: 299; total casualties, v: 358; prisoners and guns captured, v: 358. 28th division, in second battle of the marne and pursuit of germans across vesle river, july--aug., '18, v: 53, 56, 60, 62, 130, 153-154, 183-184, 188, 190, 191-192, (praise by pershing and degoutte), 383; drives germans from the vesle to the aisne, aug.--sept., '18, v: 62, 260, 383-384; in meuse-argonne offensive, sept.--oct., '18, v: 74, 78, 218, 220-221, 225, 227, 229, 231, 237-239, 241, 243, 388; arrival in france, v: 128; training in france, v: 143; sent to marne sector as reserve to french army defending road to paris, june, '18, v: 143, 153; casualties in second marne battle, july 15--21, '18, v: 184; captures aprémont, sept. 28, '18, v: 229; captures le chêne tondu, oct. 4, '18, v: 239; captures châtel chehery, oct. 7, '18, v: 243; operations as part of second army in direction of metz and briey, nov., '18, v: 274-279; summary of history, v: 358; units composing, v: 359; total casualties, v: 359; prisoners and guns captured, v: 359. 29th division, in meuse-argonne offensive, sept.--oct. '18, v: 74, 86, 244, 246, 252; captures etraye ridge, oct. 23, '18, v: 86, 252; organization and arrival in france, v: 146, 359; casualties in meuse-argonne battles, v: 253; summary of history, v: 359; units composing, v: 359; total casualties, v: 359; prisoners and guns captured, v: 359. 30th division, arrival and training in france, v: 146, 300; with british in belgium, july--aug., '18, v: 286, 300; summary of organization, v: 300, 359; breaks through st. quentin tunnel sector of hindenburg line, sept.--oct., '18, v: 301-303, 393; casualties, v: 359; units composing, v: 360; prisoners and guns captured, v: 360. 31st division, history, v: 368; units composing, v: 368. 32nd division, drives germans to vesle in allied counter-offensive on marne salient, july--aug., '18, v: 60-61, 62, 130, 188-190, 191-192 (praise by pershing and degoutte), 383; captures cierges, july 31, '18, v: 60, 188; captures fismes, aug. 6, '18, v: 61, 189; captures juvigny, aug. 30, '18, v: 62, 258-259, 384; in meuse-argonne offensive, sept.--oct., '18, v: 74, 80, 83, 84-85, 231, 237, 240, 241, 245, 247, 248, 250, 252, 389; captures gesnes, oct. 5, '18, v: 81, 240; captures bantheville, oct. 18, '18, v: 84-85, 252; arrival in france, v: 119, 360; casualties in marne offensive, july--aug., '18, v: 190; captures romagne, oct. 14, '18, v: 250; summary of history, v: 360; units composing, casualties, v: 360; in army of occupation, 360, 395. 33rd division, in meuse-argonne offensive, sept.--oct., '18, v: 74, 78, 83, 219, 224, 225, 228, 230, 234, 236, 244, 246, 388; arrival and training in france under british, v: 144, 260; attack on hamel with australians, july 4, '18, v: 144, 260; with british in attack near amiens, aug., '18, v: 260; summary of history, v: 360; units composing, v: 360; casualties, v: 360; prisoners and guns captured, v: 360. 34th division, summary of history, v: 368; units composing, v: 369. 35th division, in first army reserve in st. mihiel drive, sept., '18, v: 66, 203; in meuse-argonne offensive, sept., '18, v: 74, 220, 225, 227, 229, 231, 388; arrival and training in france, v: 128, 197; captures charpentry and baulny, sept. 27, '18, v: 227; unsuccessful attack on exermont, sept. 29, '18, v: 231; summary of history, v: 361; units composing, v: 361; casualties, v: 361; prisoners and guns captured, v: 361. 36th division, arrival in france, v: 196; operations with french fourth army in champagne, oct., '18, v: 254, 257, 258, 393; casualties in champagne, v: 258; summary of history, v: 361; units composing, v: 361; total casualties, v: 361; prisoners and guns captured, v: 361. 37th division, in meuse-argonne offensive, sept., '18, v: 74, 78-79, 219, 224, 227, 229, 230, 231, 388; operations in belgium, oct.--nov., '18, v: 83, 279-280, 393; arrival in france, v: 145; casualties in belgian campaign, v: 280; summary of history, v: 361; units composing, v: 362; total casualties, v: 362; prisoners and guns captured, v: 362. 38th division, organization and summary of history, v: 369; units composing, v: 369. 39th division (5th depot), organization and summary of history, v: 198, 369; units composing, v: 369. 40th division (6th depot), organization and summary of history, v: 197, 369; units composing, v: 370. 41st division (1st depot), organization and summary of history, v: 109, 370; units composing, v: 370. 42nd division, arrival and training in france, v: 6-12, 21, 109, 118, 142; in the vosges (baccarat) sector, v: 21, 28, 118, 142; joins french fourth army in champagne defensive, july, '18, v: 44-51, 129-130, 142-143, 155-158; in allied counter-offensive on marne salient, july 25--aug. 2, '18, v: 56, 58-61, 130, 186-187, 188-189, 191-192 (praise by pershing and degoutte), 383; takes forêt de fère and crosses ourcq in pursuit of germans, july 26--28, '18, v: 58-59, 187, 383; captures sergy, seringes-et-nesles, and hill 212, july 28, '18, v: 59, 188; in st. mihiel drive, sept., '18, v: 65, 68, 202, 211, 386; in meuse-argonne offensive, oct.--nov., '18, v: 83, 84, 88, 91, 92, 220, 248, 250-252, 262, 269, 390; capture of côte de châtillon, oct. 14--16, '18, v: 84, 250-252; reaches heights opposite sedan, nov. 6, '18, v: 92, 269; casualties in marne offensive, july--aug., '18, v: 189; summary of history, v: 362; units composing, v: 362; total casualties, v: 362; prisoners and guns captured, v: 362; in army of occupation, v: 395. 76th division, summary of history, v: 196, 370; units composing, v: 370. 77th division, drives germans from the vesle to the aisne after second marne battle, aug.--sept., '18, v: 62, 190, 260, 383-384; in meuse-argonne offensive, sept. 26--nov. 11, '18, v: 74, 78, 79, 81, 85, 88, 90-91, 92, 95, 220, 225, 227, 229, 231-232, 234, 239, 241, 242, 243, 246, 247, 250, 252, 262, 263, 264, 265, 266, 268, 269, 270, 388, 391, xii: 288; outflanks german positions at champigneulle in meuse-argonne drive, nov. 1--2, '18, v: 88, 263; arrival and training in france, v: 141; isolation and rescue of "lost battalion," oct. 2--7, '18, v: 231, 239, 241, 242, 243; capture of st. juvin, oct. 12, '18, v: 250; attack on grand pré, oct. 16, '18, v: 252; summary of history, v: 362; units composing, v: 363; prisoners and guns captured, v: 363; casualties, v: 363. 78th division, as reserve in st. mihiel drive, sept., '18, v: 65, 202, 210; in meuse-argonne offensive, oct.--nov., '18, v: 85, 91, 220, 252, 262, 264, 266, 268, 391; captures briquenay, nov. 2, '18, v: 91, 264; arrival and training in france, v: 144; casualties in meuse-argonne drive, v: 268; summary of history, v: 363; units composing, v: 363; total casualties, v: 363; prisoners and guns captured, v: 363. 79th division, in meuse-argonne offensive, sept.--nov., '18, v: 74, 78-79, 80, 219, 224, 225, 226, 228, 230, 231, 262, 265, 270-272, 388; captures stronghold of montfaucon, sept. 27, '18, v: 78-79, 225; organization and arrival in france, v: 196, 363; captures nantillois, sept. 28, '18, v: 228; summary of history, v: 363, casualties, v: 363; units composing, v: 364; prisoners and guns captured, v: 364. 80th division, in meuse-argonne offensive, sept.--nov., '18, v: 74, 78, 83, 88, 91, 219, 224, 226, 227, 230, 234, 237, 239, 241, 245, 246, 248, 262, 263, 264, 265, 266-268, 388, 391; captures buzancy, nov. 2, '18, v: 91, 264; arrival and training in france, v: 144; battle for brieulles-sur-meuse, sept. 27--28, '18, v: 226, 227; capture of bois des ogons, oct. 4--5, '18, v: 237, 239; repulsed in attacks on madeleine farm, oct. 6, '18, v: 241; madeleine farm captured, oct. 9, '18, v: 245; unsuccessful attacks on cunel, oct. 10--11, '18, v: 246, 248; captures beaumont with 2nd div., nov. 5, '18, v: 266; casualties in meuse-argonne drive, v: 268; summary of history, v: 364; units composing, v: 364; total casualties, v: 364; prisoners and guns captured, v: 364. 81st division, arrival and training in france, v: 197; operations in direction of briey and metz as part of second army, v: 274-278; captures grimancourt, nov. 10, '18, v: 277; position at armistice, nov. 11, '18, v: 278; summary of history, v: 364; units composing, v: 364; casualties, v: 364; prisoners captured, v: 364. 82nd division, in st. mihiel drive, sept. '18, v: 65, 68, 71, 202, 208, 386; in meuse-argonne offensive, sept.--oct., '18, v: 74, 83, 241, 242, 246, 247, 248, 251, 252, 390; arrival and training in france, v: 143; composite character, v: 143; summary of history, v: 143, 365; units composing, v: 365; casualties, v: 365; prisoners and guns captured, v: 365. 83rd division, summary of history, v: 146, 371, 399; units composing, v: 371. 84th division, summary of history, v: 198, 371, 399; units composing, v: 371. 85th division, summary of history, v: 197, 371; units composing, v: 371. 86th division, summary of history, v: 372; units composing, v: 372. 87th division, summary of history, v: 198, 372; units composing, v: 372. 88th division, summary of history, v: 198, 365; units composing, v: 365; casualties, v: 365. 89th division, in st. mihiel drive, sept., '18, v: 65, 68, 70, 202, 210, 386; in meuse-argonne offensive, oct.--nov., '18, v: 90, 92, 95, 220, 252, 262, 264, 266, 268, 270, 274, 391; organization and arrival in france, v: 146, 365; in army of occupation, v: 274, 366, 395; summary of history, v: 365; units composing, v: 366; casualties, v: 366; prisoners and guns captured, v: 366. 90th division, in st. mihiel drive, sept., '18, v: 65, 68, 202, 208-210, 386; in meuse-argonne offensive, oct.--nov., '18, v: 90, 92, 95, 220, 252, 262, 264, 272, 274, 391; arrival and training in france, v: 196; casualties in st. mihiel drive, v: 210; captures stenay, nov. 10, '18, v: 272; in army of occupation, v: 274, 366, 395; summary of history, v: 366; units composing, v: 366; total casualties, v: 366; prisoners and guns captured, v: 366. 91st division, as reserve in st. mihiel drive, sept., '18, v: 66, 203; in meuse-argonne offensive, sept.--oct., '18, v: 74, 78, 220, 225, 227, 229, 231, 232, 246, 388; transferred to belgium under french sixth army, oct., '18, v: 83, 279, 393; operations in belgium, oct.--nov., '18, v: 83, 279, 393; organization and arrival in france, v: 196, 366; captures spitaals-bosschen, oct. 31, '18, v: 279; captures audenarde, nov. 2, '18, v: 279; summary of history, v: 366; units composing, 367; casualties, v: 367; prisoners and guns captured, v: 367. 92nd division (colored), in meuse-argonne offensive, sept., '18, v: 74, 233; organization and arrival in france, v: 145, 367; summary of history, v: 367; units composing, v: 367; casualties, v: 367. 93rd division (colored), summary of history, v: 367; units composing, v: 367; casualties, v: 368. casualties, in submarine warfare during neutrality, i: 357; first time in war, nov., '17, i: 392, v: 113; total in war, iii: 404; total dead, iii: 404, xii: 280; number wounded, iii: 404, v: 344, xii: 280; prisoners or missing, iii: 404; in st. mihiel drive, sept., '18, v: 71, 212, 386; in meuse-argonne offensive, sept. 26--nov. 11, '18, v: 393, xii: 280; on russian front, v: 394; total deaths overseas, classified according to cause, v: 402; battle deaths, v: 402, xii: 280, 289; deaths from disease, v: 402, vii: 179, 195, xii: 280; money equivalent of manpower lost, xii: 25; _see also_ u. s. army, medical service. coal, production, '13--'17, xii: 47; war-time shortage, xii: 48; conservation measures under fuel administration, xii: 48-50; extent of mining operations, xii: 50; production compared with other staples, xii: 50; waste in use, xii: 51; fuel administration priority list, xii: 75; production for '18--'19, xii: 146. conscription, franklin lane on lessons taught by, i: 370; conscription act passed, apr. 28--may 18, '17, i: 390, iii: 83, xii: 280-281; health statistics of drafted men, vii: 217, xii: 281-282; total number of registrants, xii: 280, 281; number inducted into service, xii: 280, 281. cost of living, high prices most striking economic effect of war, xii: _intro. vii_; "index numbers" as measure of price changes, xii: _intro. vii_; comparison of index numbers, '13--'19, xii: _intro. vii-viii_; chart of price movements in u. s. and england since 1780, xii: _intro. viii-x_; rise in, '14--'18, xii: _intro. x_, 56-59; existing high prices not due to scarcity, xii: _intro. x-xi_; currency inflation, xii: _intro. xiii_, 143; chart showing relation of, to money in circulation, '14--'18, xii: _intro. xiii_; high prices as breeder of bolshevism, xii: _intro. xiii-xiv_; purchasing power of wages, '13--'18, xii: _intro. xiv_; remedies proposed for reducing high cost of living, xii: _intro. xiv-xv_, 147; standardized dollar as remedy for fluctuations in, xii: _intro. xv_; scarcity as cause of high prices, xii: 39, 142; "fair price" lists, xii: 54; profiteering, xii: 55, 143; meat-packers' profits before and during war, xii: 56; present, compared with civil war prices, xii: 57, 75; rise in clothing prices, xii: 58, 142, 145; government price-fixing, xii: 59; monthly price changes, '12--'18, xii: 60; analysis of, by council of national defense, xii: 142-148; relation between wages and prices in estimating, xii: 142; housing problem, xii: 142; curtailed production since armistice, xii: 142; food consumption statistics, xii: 142; influence of war on prices, xii: 143; food supply statistics, '18--'19, xii: 143-144; reasons for high food prices, xii: 144; reduction in shoe output for '19, xii: 146; coal production, '18--'19, xii: 146; reduction in iron and steel production, '19, xii: 147; reasons for high cost of living, summarized by council of national defense, xii: 147; _see also_ prices; u. s., food. council of national defense, activities of general medical board of, vii: 187-189; creation by congress, '16, xii: 115; duties, xii: 116; members, xii: 116; advisory commission of, pre-war activities, xii: 117; committees, xii: 122; distinguished membership of committees, xii: 122; non-partisanship of, xii: 124; expenses, xii: 124; work of field division, xii: 124; results of activities, xii: 124; war industries board established, xii: 125; cantonment construction, xii: 125; share in victory, xii: 126; analysis of causes of and remedies for high cost of living, xii: 142-148. declarations of war, transition from neutral to belligerent, i: 300-308; impelling causes for, i: 301, 341, 348, 368, ii: 53; effect of '16 presidential campaign on, i: 305; diplomatic relations with germany severed, feb. 3, '17, i: 344-345, 389; text of president wilson's speech before congress asking for declaration of war with germany, apr. 2, '17, i: 348-355; text of declaration of war with germany, apr. 6, '17, i: 355; franklin lane on effects of entry into war on american life, i: 366-373; diplomatic relations with austria-hungary severed, apr. 8, '17, i: 389; diplomatic relations with turkey severed, apr. 20, '17, i: 390; declaration of war on austria-hungary, dec. 7, '17, i: 393; effect on final result of war, ii: 220, 273 (a german military critic's view), iii: 83; ludendorff's comments on, ii: 341; effect on french, ii: 387; effect on british, vi: 11; _see also_ under submarine warfare. employment service, war-time activities, xii: 67. food, herbert hoover appointed food administrator, may 19, '17, i: 390; position of u. s. as producer, '17, xii: 35; wheat production _vs._ consumption, 1890--1914, xii: 35; corn production _vs._ consumption, 1890--1914, xii: 35; voluntary rationing, xii: 35; exports to europe before and during war, xii: 36, 135; conservation, xii: 37, 40, 141; war-time increase in production, statistics, xii: 37; increased production more important than conservation, xii: 38; crop acreage, '10--'18, xii: 38; crop yields, '10--'18, xii: 39; hoover's report on european relief, xii: 42; war-time government control, xii: 46, 59, 140; sugar equalization board, functions, xii: 46; war-time sugar distribution, xii: 46; potato crop, xii: 47; "fair price" lists, xii: 54; functions of food administration, xii: 59, 140; statistics on quantity and prices, june, '18--june, '19, xii: 61-65; price comparisons, '13--'19, xii: 64; wheat exports to allies, july 1, '17--july 1, '18, xii: 141; consumption statistics, xii: 142; production statistics, '18--'19, xii: 143; wheat production, '18--'19, xii: 143; meat production, '18--'19, xii: 144; corn crop, '18, xii: 144; reasons for high prices, xii: 144; _see also_ under u. s., cost of living. food administration, _see_ under u. s., food. foreign relations, policy of isolation, i: 50; abandonment of policy of isolation, i: 52-58; early relations with china and japan, i: 53; african interests, i: 54; congo policy, i: 54; armed expeditions sent beyond borders, 1836--1861, i: 54; intervention in cuba, i: 56; "open door" policy in china, i: 57; root-takahira agreement, '08, i: 57; lansing-ishii note, '17, i: 58; policy in venezuelan controversy with germany, '02, i: 86; participation in european conferences, i: 86; participation in algeciras conference, '06, i: 86; german plans for subjugation of u. s., i: 87-88; arbitration treaties, i: 103; emergence from war as world power, i: 371; after-war mission, i: 372. fuel administration, _see_ under u. s., coal. german-owned property, extent, xii: 33-34. industries during war, regulations for conservation of leather by war industries board, xii: 53; duties and powers of war industries board, xii: 72; priority system, xii: 73-75; distribution of war contracts, xii: 74; response to war needs, xii: 115; creation of council of national defense, xii: 115; duties of council of national defense, xii: 116; pre-war movement for industrial preparedness, xii: 117; pre-war activities of advisory commission, council of national defense, xii: 118; committees of council of national defense, xii: 122; organization and personnel of war industries board, xii: 125; share in final victory, xii: 126; _see also_ under u. s., council of national defense, labor. labor, women in war industries, xii: 25; war-time safeguards for workers, xii: 66; organizing for war production, xii: 67; employment service of department of labor, war-time activities, xii: 67; war-time strikes, xii: 68; importance in winning war, xii: 68-69; size of working population, xii: 71; immigration as source of labor supply, xii: 71; war-time dislocation, xii: 71; mediation commission for settling labor unrest, xii: 71; activities of advisory labor council, xii: 71; gen. crowder's "work or fight" order, xii: 72; women as railway workers during war, xii: 84; settlement of war-time disputes in shipyards, xii: 94; attitude to war, xii: 121. marine corps, strength, nov. 11, '18, iii: 403; in battle of belleau wood, june 6--26, '18, v: 39, 130, 135-139, 382, x: 1-10; capture of bouresches, june 6, '18, v: 39, 138, x: 8-9; in second battle of the marne, july 18--19, '18, v: 55, 130, 159, 167-170, 174-175, 178-179; capture of vierzy, july 18, '18, v: 55, 174-175; in champagne as part of gouraud's french fourth army, oct., '18, v: 79, 241, 255-257; capture of blanc mont, oct. 5, '18, v: 79-80, 241, 257; in meuse-argonne offensive, nov., '18, v: 95, 262-263, 266, 270, 274; arrival in france, v: 106, 108; incorporated in 2nd div., v: 108; not in château-thierry battle of may 31--june 3, '18, as popularly supposed, v: 130, 135; casualties at belleau wood, june, '18, v: 139; name of belleau wood changed by french to _bois de la brigade de marine_, v: 139; casualties in second marne battle, july, '18, v: 179; in st. mihiel drive, sept. '18, v: 210; in drive through landres-st. george, nov. 1, '18, v: 262-263; force crossing of meuse, nov. 10, '18, v: 270, 274; _see also_ under u. s. army, 2nd division. navy, rear-adm. mayo on war-time accomplishments of, iv: _intro. vii-xiii_; supplying guns and gun crews for merchant ships, iv: _intro. viii_, 314; laying of north sea mine barrage, iv: _intro. xi_, 324-330; anti-submarine coast patrol, iv: _intro. xii_; naval gunners on western front, iv: _intro. xii_, 323, v: 306, viii: 42-45; transportation of a. e. f. to france, iv: _intro. xii_, 157-165 (account of first expedition across atlantic, june, '17, by adm. gleaves), xii: 94-95, 283; lessons of the war, iv: _intro. xiii_; destroyer flotilla on anti-submarine patrol duty in war zone, iv: 157, 315-317, 343; development of depth bomb by, iv: 307, 330; strength of personnel before war and at armistice, iv: 317; training of new personnel, iv: 317; war-time expansion in ships and equipment, iv: 318-319; repair of damaged interned german liners, iv: 319-321; laying of oil pipe line across scotland, iv: 322; invention of "y" gun for discharge of depth bombs, iv: 331; development of aerial bombs for use by seaplanes against u-boats, iv: 332; development of star shells for illuminating enemy positions in dark, iv: 334; invention of torpedo plane, iv: 335; adventures of transports in war zone, iv: 335-343; capture of german submarine _u-58_, nov. 18, '17, iv: 349; secretary daniels' report on activities in european waters, iv: 356-359; co-operation with british, iv: 356 (secretary daniels on), 359-361 (tributes by sir eric geddes and adm. beatty); development and description of n-c flying boats, viii: 236-240; _n-c-4_ first airplane to cross atlantic, viii: 240; types of dirigibles used by, viii: 245, 255-257. neutrality, dr. eliot's summary of reasons for proand anti-german feeling, i: 270-273; von jagow's defense against anti-german criticisms, i: 273; maximilian harden's views on, i: 274; german protest against u. s. position on armed merchantmen, i: 282; position on status of armed merchantmen, i: 283; french opinion of, i: 287; unpopular with all belligerents, i: 288; british opinion of, i: 289; gabriel hanotaux's views on, i: 290; conflict of sympathies, i: 297; psychology of, i: 297; increasing pro-ally sentiment, i: 299; attitudes of wilson and roosevelt compared, i: 299, 302; german violations against, i: 300; transition from neutral to belligerent, i: 300-308; effect of '16 presidential campaign on, i: 305; attitude of press, i: 309; austro-hungarian protest of unfairness of, i: 309; maximilian harden's views on american war prosperity, i: 310; bryan's statement on, jan. 20, '15, i: 311; controversy with great britain over british seizure of neutral cargoes, i: 312, 318, 339; controversy with germany on submarine warfare, i: 317-326, 328-335, 339, 357-361 (chronological summary with list of ships sunk); president wilson's "strict accountability" note to germany, i: 317; president wilson's "too proud to fight" statement, i: 320, v: 372; controversy with germany on _lusitania_ sinking, i: 320, 323, 325, 326, 327, 358-361; statements of taft and roosevelt on _lusitania_ sinking, i: 320; note to germany on "freedom of the seas," july 21, '15, i: 322; attitude of press on torpedoing of _arabic_, i: 323; controversy with austria-hungary on torpedoing of _ancona_, i: 326, 361; mclemore resolution warning americans not to travel on belligerent ships, i: 327; mclemore resolution defeated, i: 328; note threatening severance of diplomatic relations with germany over sinking of _sussex_, apr. 18, '16, i: 329-331; issues of '16 presidential campaign, i: 334; controversy with great britain over british seizure of neutral mail, i: 335; president wilson asks belligerents to state war aims, dec. 18, '16, i: 336; lansing's statement of problems of, i: 339; diplomatic relations with germany severed, feb. 3, '17, i: 344-345, 389; president wilson orders u. s. merchantmen armed, i: 347; american casualties from submarine warfare during, i: 357; president wilson issues proclamation of, aug. 4, '14, i: 375; _see also_ germany, blockade of; submarine warfare. peace conference, delegates sail for, dec. 4, '18, i: 400; list of delegates, xii: 179; for work of delegates at, _see_ peace conference; _also_ under name of delegate. peace treaty, fight against, in senate, xii: 264-278; fall amendments to, defeated, oct. 2, '19, xii: 264; ratification with original lodge reservations defeated, nov. 19, '19, xii: 265-266; text of original lodge reservations, xii: 265; defeated in senate for second time, mar. 19, '20, xii: 266-269; president wilson's opinion of lodge reservations, xii: 267; text of revised lodge reservations, xii: 269; efforts to declare peace by congressional resolution, xii: 271-278; text of peace resolution introduced in house of representatives, apr. 1, '20, xii: 271; knox resolution declaring peace with germany passed by congress, may 15--21, '20, xii: 273-277; text of original knox resolution proposing separate peace with germany and successors of austria-hungary, xii: 273; text of amended knox resolution, xii: 277; president wilson vetoes knox resolution, xii: 277; text of president wilson's veto message, xii: 278. population, european immigration, i: 37; german immigration in 1882 and 1910, i: 75; size, characteristics, and distribution of german element in, i: 79, 277-279; ratio of increase in urban and rural, 1890--1910, xii: 35. press, attitude on neutrality, i: 309; attitude on _lusitania_ sinking, i: 320; attitude on torpedoing of _arabic_, i: 323; views on german indemnity, xii: 24. prisoners of war, first captured by germans, nov. 3, '17, iii: 84, v: 112; total lost in war, iii: 404. railroads, war-time operation under government control, xii: 87-90; reasons for government control, xii: 88; defects in management, xii: 89; equipment sent to france, xii: 95; pledge of maximum war-time service by, xii: 121. shipping, war-time building program, with statistics, xii: 92-94; war losses, xii: 94; neutral tonnage chartered for war service, xii: 98; war-time cargo fleet, statistics on tonnage and shipments, xii: 283, 286. trade, with germany through neutrals, ii: 21; increase in exports, '12--'17, xii: 1; luxury imports, xii: 8-9; decrease in luxury imports, '14--'18, xii: 58; hostility to trade with germany, xii: 99; war trade board export license system, xii: 99. war cost, currency inflation, xii: _intro. xiii_, 28-31, 143; loans floated in u. s. by foreign countries, aug., '14--jan., '17, xii: 2; sources and amounts of war-time taxation, xii: 2-9, 109-111; income taxes, with comparison of rates in england and france, xii: 2-6; criticisms of war tax law, xii: 5-6; president wilson's tax program, xii: 6-7; luxury taxes, xii: 7-9; war-time prosperity, xii: 9-10; loans in early u. s. history, xii: 10; liberty loans, floating of, with statistics on amounts raised and number of subscribers, xii: 10-16, 113, 126-135; repayment of loans made to allies, xii: 11; liberty loan subscriptions by federal reserve districts, xii: 12; liberty loan subscriptions in new york city, xii: 12; comparison of war debt with pre-war national debt, xii: 16, 113, 114; hourly war expenditures, xii: 16; comparison of war cost with previous expenditures, xii: 16; distribution of war expenditures, xii: 16; amount of loans to allies, xii: 16, 18, 31; short-term certificates of indebtedness, xii: 16; war savings stamps, amount raised by, xii: 18,134; problem of liquidating national debt, xii: 18; accumulation of europe's gold supply in u. s., xii: 29; credit expansion, xii: 30; pre-war cash reserves, xii: 30; transition from debtor to creditor nation, with statistics, xii: 31; daily, monthly, and total war cost, apr., 17--june, '19, xii: 106-108. war industries board, _see_ under u. s., industries during war. uruguay, failure of soviet plot in, vi: 392; delegate to peace conference, xii: 180. uskub, captured by bulgarians, oct., '15, i: 382, iii: 158, 204; recaptured by allies, sept., '18, iii: 213. v _v-187_, german destroyer sunk at battle of heligoland bight, iv: 240. vaccine, manufacture of anti-typhoid, viii: 393; _see also_ disease. vacuum tubes, in wireless telephony, viii: 318-320. valenciennes, germans use as gateway into france, v: 215. valley, count arco, assassin of kurt eisner, vi: 298. van, occupied by russians, may 23, '15, iii: 262. van iersal, sgt. louis, gets congressional medal of honor, x: 389. vanquois, captured by 35th div., sept. 26, '18, v: 225. varennes, captured by 35th div., sept. 26, '18, v: 225. vaux, town in marne salient, location, v: 133; captured by 2nd div., july 1, '18, v: 138, 382. vaux, fort, at verdun, captured by germans, june 7, '16, i: 385, iii: 54, 313; evacuated by germans, nov. 2, '16, i: 388, iii: 62; german efforts at capture repulsed, mar., '16, ii: 189, iii: 52, 306, 327-329 (description by french officer participating in defense); major raynal, defender of, awarded legion of honor, iii: 313; _see also_ verdun. veles, captured by bulgarians, oct. 28--29, '15, i: 382, iii: 158, 204; recaptured by allies, sept. 26, '18, i: 397. velocity of projectiles, viii: 111. vencheres wood, captured by 179th inf. brig., sept. 13, '18, v: 209. vendieres, captured by a. e. f., sept. 14, '18, v: 210. venereal diseases, statistics on, and methods of combating in u. s. army, v: 402, vii: 208-209. venezuela, pro-german attitude during war, vi: 392. _vengeance_, british battleship at gallipoli, iv: 31. venizelos, eleutherios, pro-ally policy during greek neutrality, iii: 202; establishes revolutionary government in crete, sept., '16, iii: 210; biography, ix: 76-82; bibliography, ix: 81. verdun, strategic value and reasons for german campaigns against, i: 268, ii: 6, 13, 36-39, 188, 189, iii: 46, 302, v: 199, 215, xi: 21; effect of battle of the somme on german offensive against, ii: 47, iii: 61, 63, 314; eliminated by germans as scene of '18 offensive, ii: 67; battles of, feb., '16--sept., '17, ii: 186-189, iii: 46-55, 61-62, 79, 302-315, 327-329, viii: 289-291, xi: 21-22; comparison of german attack, feb., '16, with tactics at first battle of the marne, ii: 186; "they shall not pass," french watchword of defense at, ii: 189, iii: 304, xi: 21; pétain commands defenders, feb.--may, '16, ii: 189, iii: 50, 304; germans capture fort douaumont, feb. 25, '16, ii: 189, iii: 48, 304-305; german attacks on fort vaux repulsed, mar., '16, ii: 189, iii: 52, 306, 327-329 (described by french officer taking part in defense); german crown prince in command of attacking forces, iii: 47, 48, 303; use of motor transports in defense of, iii: 50, viii: 289-291; battles for dead man's hill (le mort homme), mar.--may, '16, iii: 51, 53-54, 306-307, 308, 310-313; cumières captured and lost by germans, may, '16, iii: 54, 312; gen. nivelle appointed to command of french defenders, may, '16, iii: 54, 310; fort vaux captured by germans, june 7, '16, iii: 54, 313; german efforts to capture fort souville defeated, iii: 55; thiaumont captured by germans, june 23--24, '16, and recaptured by french, iii: 55, 313; nivelle's surprise attack, oct., '16, iii: 61; fort douaumont recaptured by french, oct., '16, iii: 61; fort vaux evacuated by germans, nov. 2, '16, iii: 62; gen. mangin succeeds nivelle as french commander at, dec., '16, iii: 62; mangin launches successful offensive, dec., '16, iii: 62; final french victories regain all important positions, aug.--sept., '17, iii: 79; ludendorff's comment on german blunder at, iii: 302; description of intensity of fighting at, by french participant, iii: 308; major raynal, defender of fort vaux, awarded legion of honor, iii: 313; freed from threat of further german attacks by suppression of st. mihiel salient, sept., '18, v: 208. verrieres, captured by 78th div., nov. 4, '18, v: 266. versailles treaty, _see_ peace treaty with germany. very, captured by 35th div., sept. 26, '18, v: 225. very pistol, use in signalling, v: 319. vesle river, germans driven across, in allied counter-offensive on marne salient, july--aug., '18, v: 60-62, 188-191, 383; germans driven from, to the aisne, aug.--sept., '18, v: 62, 260, 383-384. vesnitch, dr. m. r., serbian diplomat, statement of jugoslav attitude toward italian aggrandizement, vi: 366. veterinary, treatment of sick and injured animals in war, vii: 225-227, viii: 397-399. vickers machine-gun, use on airplanes, viii: 87; u. s. production figures, xii: 284. victor emanuel, king of italy, biography, ix: 395-398. victory way, in new york city, xii: 133. vienna, war-time privation in, vi: 312; riots, '18, vi: 316; after-war distress, vi: 318; bolshevik uprising suppressed, apr., '19, vi: 320-321. vierstaat ridge, captured by british and 27th div., a. e. f., sept. 1--2, '18, v: 290. vierzy, captured by 2nd div., july 18, '18, v: 55, 174. vigneulles, junction of 1st and 26th divs. at, closes st. mihiel salient, sept., '18, v: 69, 211, 212. ville-devant-chaumont, captured by 26th div., nov. 10, '18, v: 272. villepigue, corp. john c., gets congressional medal of honor, x: 396. villers wood, captured by a. e. f., sept. 15, '18, v: 210. villers-cotterets, concentration of allied forces near, for marne counter-offensive, july, '18, ii: 154, v: 161. villers-devant-dun, captured by 90th div., nov. 2, '18, v: 92, 264. villers-sous-preney, captured by a. e. f., sept. 14, '18, v: 210. vilna, captured by germans, sept., '15, iii: 141. vilosnes-sur-meuse captured by 60th inf., nov. 5, '18, v: 94, 271. vimy ridge, captured by canadians, apr. 9, '17, iii: 70, 343-349; strategic importance, iii: 343; london _times'_ account of battle, iii: 346-348; decorations for gallantry at, iii: 349. _vindictive_, british cruiser at zeebrugge raid, iv: 262; sunk in ostend channel, iv: 279; _see also_ zeebrugge raid. _viribus unitis_, austrian battleship sunk by italians in pola harbor, may 15, '18, i: 395, x: 297-303. _vive la france!_ poem by charlotte h. crawford, vi: 94. viviani, rené, french statesman, biography, ix: 19-21. vladivostok, seized by czechoslovak troops, june, '18, vi: 192; allies send troops to, vi: 193; _see also_ siberia. vocational training, for war cripples, american help for french disabled, vii: 79, 92-95; for american disabled, vii: 180-182, 210-216, 236-239; modern attitude on, viii: 387; _see also_ reconstruction of disabled. vodka, war-time prohibition of, in russia, iii: 265, vi: 135; use of harmful substitutes for, vi: 138. voisin bombing planes, viii: 223. voldemaras, prof., forms first independent lithuanian cabinet, vi: 236. vologodsky, peter, head of liberal siberian government at omsk, vi: 191. voormezeele, captured by 30th div., aug. 31--sept. 1, '18, v: 300. vosges mountains, military importance, ii: 6; place in scheme of general french strategy, ii: 9; french occupy passes of, aug., '14, iii: 16; french offensive in, dec., '15, iii: 46; as training area for a. e. f., v: 118, 197, _see also_ under each division. w waalker, sgt. reider, gets congressional medal of honor, x: 393. _wacht am rhine, die_, german national song, xi: 332. wales, prince of, personal sketch, ix: 395, xi: 150-152. walker, col. william h., head of u. s. poison-gas plant at edgewood arsenal, viii: 181. wallace, gen., british commander in western egypt, iii: 191. wallachia, german offensive in, iii: 221. walsh, frank p., member of irish-american delegation to peace conference, vi: 66; biography, ix: 337-339. war, as a simple art, iii: 137; definition of, iv: 1; desirability, v: _intro. x_; extent of modern, v: _intro. x_; german policy of, _see_ germany, kultur, militarism. war babies' cradle, organization and relief activities of, vii: 107, xi: 56. war committee (or council) of british cabinet, members, nov., '14, ii: 198; responsibility for gallipoli disaster, ii: 200; responsibility for mesopotamian failure, iii: 364. war industries board, u. s., _see_ u. s., industries during war. war relief: american, plan of _stars and stripes_ for adoption of french orphans, vii: 72, xi: 80; children's bureau of american red cross, relief activities for allied children, vii: 72, 76-79, xi: 85-90; vocational training for french war cripples, vii: 79, 92-95; beginnings of american relief work, vii: 85; herbert hoover's activities, vii: 85, 119, xii: 136, 141; lafayette fund, vii: 85; committee of mercy, vii: 87; american women's war relief fund, vii: 87, 91; national allied relief committee, vii: 87-90; john moffat's activities in early development of, vii: 87; american committee for relief of belgian prisoners in germany, vii: 88, 96; allied home for munition workers, vii: 88, 108; french heroes lafayette memorial fund, vii: 90, 110-116; benefit bazaars, vii: 90; "hero land" bazaar, vii: 90; american fund for french wounded, vii: 91, xi: 85; american committee for devastated france, vii: 92; american committee for armenian and syrian relief, vii: 92; war relief clearing house for france and her allies, vii: 95; le bien-être du blessé, vii: 96; french tuberculosis war victims' fund, vii: 97; american committee of the charities of the queen of the belgians, vii: 98; for war blind, vii: 99, 255-260 (permanent blind relief war fund); franco-american committee for the protection of children of the frontier, vii: 101, xi: 85; american committee of the secours national, vii: 105; committee for fatherless children of france, vii: 105, xi: 84; aid for french victims of shell-shock and nervous derangements, vii: 106; war babies' cradle, vii: 107, xi: 56; relief work of american alumni of école des beaux arts, vii: 108; relief for serbia, vii: 109, 144-168; relief for rumania, vii: 109; commission for relief in belgium, organization and activities, vii: 116-144; millard shaler, early organizer of belgian relief, vii: 119; stage women's war relief, vii: 343-349; for jewish war sufferers, vii: 349-376; free milk for france fund, vii: 376-379; american relief administration for feeding newly liberated peoples, xii: 141. belgian, charities of the queen of the belgians, vii: 98. british, in serbia, iii: 398; association of highland societies of edinburgh, vii: 95; british and canadian patriotic fund, vii: 99; british american war relief fund, vii: 99; scottish women's hospitals for home and foreign service, vii: 101; chelsea war refugees fund for belgian refugees in england, vii: 106; london volunteer motor corps, vii: 107; st. dunstan's home for blind, vii: 259. dutch, for belgian refugees and interned soldiers, vii: 168-175. french, vocational training for disabled, vii: 92-95; le bien-être du blessé, vii: 96; secours national, vii: 105; committee for fatherless children of france, vii: 105, xi: 84; relief for victims of shell-shock and nervous derangement, vii: 106; war babies' cradle, vii: 107, xi: 56. _see also_ knights of columbus; red cross; salvation army; young men's christian association. war risk insurance, bureau of, for u. s. fighting men, vii: 176. war savings stamps, u. s., amount sold, xii: 18, 134. war terms and soldier slang, definitions of, xi: 359-362. war trade board, u. s., _see_ u. s., trade. war zone, _see_ germany, blockade of; submarine warfare. warburg, felix m., treasurer american jewish relief committee, vii: 354. ward, pvt. calvin, gets congressional medal of honor, x: 396. warehouses, location of great a. e. f. supply depots in france, v: 330; construction of, by a. e. f. in france, v: 333, 400. warfare, _see_ strategy; tactics; trench warfare. warneford, flight sub-lieut. r. a. j., brings down first zeppelin, ii: 269, x: 223. _warrior_, british cruiser sunk at jutland, iv: 260. warsaw, german attacks on and capture of, aug. 5, '15, i: 381, ii: 26, iii: 128-130, 131, 138. _warspite_, british warship at battle of jutland, iv: 260. washington inn, for american officers in london, vii: 288. _wasted_, poem, xi: 100. watches, for a. e. f., viii: 327. water supply, for a. e. f., construction of facilities for, v: 333; modern methods for making safe for use of armies, viii: 394-396. _we are fred karno's army_, british soldiers' song, xi: 338. _wearing of the green_, irish patriotic air, xi: 334. weather forecasting, importance of, in war, xi: 296-303. weddigen, lieut.-com. otto, commander of _u-9_, sinks british cruisers _aboukir, cressy_, and _hogue_, iv: 205, x: 274-280. wedell, hans von, leader in german passport frauds in u. s., x: 333. weimar, meeting place of german national assembly, feb., '19, vi: 291. wekerle, dr., succeeds count tisza as premier of hungary, vi: 314; suppresses jugoslav congress at agram, mar., '18, vi: 363. welland canal, german plot for destruction of, i: 318. wellborn, col., director of u. s. tank corps, v: 314. wemyss, sir rosslyn, succeeds jellicoe as british first sea lord, dec. 26, '17, i: 393. west, sgt. chester h., gets congressional medal of honor, x: 402. west prussia, award to poland by peace conference, vi: 226. western front, establishment by germans of trench lines from north sea to swiss border following first marne battle, sept., '14, ii: _intro. vii_, 11, iii: 37, viii: 134, xi: 12, 253; relative importance compared with eastern theatre of war, ii: _intro. x-xxiv_ (gen. maurice on), 11-14, 87-89, 171 (opinion of field-marshal french); the _vital_ front, ii: _intro. xxiii_; allied retreat to the marne, aug.--sept., '18, ii: 9, 166, 183, iii: 20-30; german "strategic" retreat to hindenburg line, '17, ii: 53, iii: 66-70; reasons for german offensive of mar.--july, '18, ii: 65-67; german strength, mar., '18, ii: 65, 75, iii: 383, v: 120; allied strength mar., '18, ii: 66; choice of sector by germans for great offensive of mar., '18, ii: 67-69, 311, iii: 86; great german offensive begun, mar. 21, '18, ii: 70, 150, 308-316 (ludendorff's account), iii: 86, 359, v: 23, 120, 130, 380, vi: 270; break through allied line and rout of british fifth army near st. quentin in great german drive, mar., '18, ii: 70-74, 150-152, 190-197, iii: 86-91, 381-390 (account by philip gibbs), v: 373; german drive against channel ports, apr., '18, ii: 75, 153, iii: 91, 359-363; german casualties in offensive of mar.--apr., '18, ii, 75; german drive to the marne, may--july, '18, ii: 76-79, 154, 320, iii: 92-96, v: 35, 41-53, 129, 130; allied counter-offensive and retreat of germans out of france and belgium, july 18--nov. 11, '18, ii: 80-87, 154, 156-159, 209-216 (résume by gen. malleterre), 324-326 (ludendorff's account), 331-340 (ludendorff's account), iii: 96-104, v: 72, 192, 213; battle line, july 18, '18, ii: 82; german bases in france captured in allied counter-offensive, july--nov., '18, ii: 86; campaigns on, first phase, maneuvering for position, ii: 112; second phase, war of attrition, ii: 112; third phase, final stroke, ii: 113; necessity for frontal attack on, ii: 116; foch's analysis of weakness of german position, july, '18, ii: 154; allied and german man-power, oct., '18, ii: 159; british man-power, aug., '18, ii: 214; british shell supply, aug., '18, ii: 214; military situation, nov., '18, ii: 215; general topography, iii: 2; battle line, jan., '15, iii: 41; german prisoners and guns captured by allies, july--nov., '18, iii: 104; a. e. f. deciding factor in last campaigns on, v: 23-25; first american sector established, aug., '18, v: 64, 192-193, 384; american front, nov. 11, '18, v: 95; five major german offensives on, v: 96; effect of russian withdrawal from war on, v: 113; german lines of defense and communications, v: 214-216; for details of engagements or sectors, _see_ name of battle, campaign, or sector. wet, gen. christian de, leader of boer rebellion against british, '14, vi: 50. wettig, carl, discloses german plot to blow up ships, x: 374. wexford, ireland, u. s. naval air station at, iv: 357. wheat, production and imports by germany, ii: 17; government price-fixing in u. s., xii: 59; u. s. exports to allies, july, '17--july,'18, xii: 141; statistics on production in u. s., '18--'19, xii: 143; _see also_ food. _where do we go from here, boys?_, american soldiers' song, xi: 337. whiddy island, ireland, u. s. naval air station at, iv: 357. whippets, british baby tanks, ii: 280, viii: 148, xi: 262; _see also_ tanks. whitby, bombarded by german fleet, dec. 16, '14, i: 376, iv: 245. white russia, republic of, established, may, '18, xii: 279; area and population, xii: 279. whittlesey, major charles w., commander of "lost battalion," isolation and rescue in meuse-argonne offensive, oct. 2--7, '18, v: 231, 239, 241, 242, 243; gets congressional medal of honor, x: 400. _why did we join the army?_, british soldiers' song, xi: 337. wickersham, geo. w., analysis of peace treaty with germany, xii: 170-178. wickersham, 2nd lieut. j. hunter, gets congressional medal of honor, x: 401. _wien_, austrian battleship torpedoed by italians in trieste harbor, i: 393, x: 290. wieringen, german crown prince's home at, after flight from germany, vi: 278. wilhelm, kaiser, _see_ william ii. wilhelmina, queen of netherlands, biography, ix: 401-405. wilhelmshaven, revolt of german navy at, oct. 31, '18, iv: 381. willard, daniel, chairman of advisory commission, u. s. council of national defense, xii: 116. william i, becomes first german emperor, jan. 18, 1871, i: 44. william ii, of germany, abdicates throne, nov. 9, '18, i: 399, ii: 340, vi: 273; conception of powers as emperor, i: 73; becomes emperor, 1888, i: 97, 185, ix: 358; arrogance, i: 97; visits turkey, i: 98, 207; famous speech at tangier, mar., '05, i: 99; complicity in austrian ultimatum to serbia, july, '14, i: 133-136, 252; interview in london _daily telegraph_ declaring friendship for england, oct. 28, '18, i: 186; advice to troops to be "terrible as huns," i: 186; reprimanded by reichstag and bundesrat for _daily telegraph_ interview, i: 189; lloyd george's opinion of, i: 189; kruger telegram supporting cause of boers against great britain, jan. 3, 1898, i: 192; statement about "sharpness of german sword," ii: 161; ludendorff's estimate of weakness, ii: 317; supreme war lord, ii: 331; author of phrase "yellow peril," vi: 248; retirement to amerongen after abdication, nov., '18, vi: 277; biography and sketch of personality, ix: 355-367, xi: 139-141; bibliography, ix: 367; peace treaty provisions for trial for war guilt, xii: 217. william of wied, becomes ruler of albania, i: 206. _william p. frye_, american ship sunk by germans, jan. 28, '15, i: 319, 378. wilson, adm. henry b., biography, ix: 295-296. wilson, gen., british representative on inter-allied general staff, iii: 84. wilson, major, develops idea of tank as fighting machine, viii: 155. wilson, william b., u. s. secretary of labor, on anti-war spirit of laboring classes, xii: 65. wilson, woodrow, assumes leadership of liberal democrats, i: 295; temperament contrasted with roosevelt's, i: 299; "strict accountability" note to germany on u-boat warfare, i: 317; "too proud to fight" statement, i: 320, v: 372, ix: 62; opposition to mclemore resolution, i: 327; note to belligerents to state war aims, dec. 18,. '16, i: 336; "peace without victory" speech, jan., '17, i: 337, ix: 64; speech before congress asking for declaration of war with germany, apr. 2, '17, i: 348-355; effects of diplomacy, ii: 390; position in fiume dispute, vi: 369; biography and personal sketch, ix: 55-69, xi: 131-135; "fourteen points," ix: 67, xii: 163-165; bibliography, ix: 69; stricken ill during tour for ratification of peace treaty, sept., '19, xii: 264; opinion of lodge reservations, xii: 267; message vetoing knox resolution, xii: 278; for relations with belligerents during neutrality, _see_ germany, blockade of; submarine warfare; for work at peace conference, _see_ peace conference. winchester self-loading rifle, description, viii: 89. windhoek, captured by british, may 12, '15, i: 380, iii: 255. wire entanglements, _see_ barbed wire. wireless, use by a. e. f. signal corps, v: 317, 318-319; development under war needs, viii: 315; apparatus for generation and transmission of radio waves, viii: 315-318; goldschmidt alternator, viii: 316; alexanderson alternator, viii: 316-318; use of vacuum tubes in wireless telephony, viii: 318-320; types of aerials, viii: 320; u. s. navy wireless stations, location and method of operation, viii: 320-322. wisloka river, battle between germans and russians on banks of, may, '15, iii: 136. woevre river, germans driven into plains of, by a. e. f. advance in meuse-argonne offensive, nov., '18, v: 94. wold, pvt. nels, gets congressional medal of honor, x: 397. _wolf_, seaplane-carrier german raider, activities, iv: 198. women in war, french munition workers, ii: 376; pershing's tribute, v: 404; as y. m. c. a. workers in europe, vii: 267-271; russian battalion of death, x: 183-185, xi: 205-210; british, in war industries, xii: 25; american, in war industries, xii: 26, 84-85; british, as farm laborers, xii: 40; effects of entry into industries on social organization, xii: 83-84; _see also_ nurses; red cross; salvation army; war relief; young men's christian association. wood, maj.-gen. leonard, on lessons of the war, iii: _intro. vii-x_; in command of 89th div., during training period, v: 146, 365. woodfill, 1st lieut. samuel, gets congressional medal of honor, x: 391. world empires, development toward, before war, i: 23; rivalry of ambitions for, i: 25. world federation, ideal of, i: 25; religious diversity an obstacle to, i: 25. world league of red cross societies, organization and objects, vii: 3. world war, results, i: _intro. ix-xiv_ (summary by dr. eliot), vii: _intro. ix_ (dr. manning on spiritual); areas involved, i: 9; effect on population, xii: 25; _see also_ causes of war; cost of war; germany, responsibility for war. wounded, _see_ ambulance; carrel-dakin treatment; hospitals; infection; medical science; reconstruction of disabled; surgery; u. s. army, medical service. wright, maj.-gen. william m., commander of 35th div., v: 128, 361; commander of 89th div., v: 146, 365; commander of seventh corps, v: 395; biography, ix: 221-223. württemberg, duke of, in command of german northern armies, iii: 61. wynne, mrs. hilda, experiences as ambulance driver, vii: 105, x: 186-188. x xivray, location in st. mihiel salient, v: 199. x-ray, use in war surgery, vii: 221, viii: 373-376. xylyl bromide (tear gas), use in chemical warfare, viii: 170. y "y" gun, for launching depth bombs, iv: 331. yachts, converted, work in anti-submarine patrol, iv: 292. yakutsk republic, established, may, '18, xii: 279; area and population, xii: 279. yankee (26th) division, _see_ u. s., army. yarmouth, bombarded by german raiders, nov. 3, '14, iv: 244. yemen, imamate of, established, '18, xii: 279. york, sgt. alvin c., account of exploits as fighter, x: 13-18; gets congressional medal of honor, x: 400. young, lt.-com. e. hilton, account of zeebrugge raid, iv: 269-279. young, lieut. i. e. r., account of air battle against german raiders over london, x: 215. young men's christian association: american, organization for war work and program of activities, vii: 261-266; recognition by war department as welfare agency, vii: 262; personnel, number and character, vii: 266; casualties in overseas service, vii: 267; women's work with, overseas, vii: 267-271; work in a. e. f. leave areas, vii: 269; at the front with combat troops, vii: 271-277; award of distinguished service crosses to workers, vii: 272; with the "lost battalion," vii: 273; huts used as targets by germans, vii: 274; awards of _croix de guerre_ to workers, vii: 275, 313; hotels for service men, vii: 277; entertainment for service men, vii: 277-279; educational work for a. e. f., vii: 280-283, 290; religious activities among troops, vii: 283-285; activities for a. e. f. in united kingdom, vii: 286-290; eagle hut in london, vii: 288, 300; in italy, vii: 290; with army of occupation, vii: 291-293; with a. e. f. in russia and siberia, vii: 293-298; navy service, vii: 298-302; navy hut at brest, vii: 302; work among prisoners of war, allied and teuton, vii: 302-310; care of american war prisoners in germany, vii: 309; _foyers du soldats_ for french soldiers, vii: 310-313; _foyers du marin_ for french sailors, vii: 313; athletics for a. e. f., vii: 313-317; work for russian army and civilians, vii: 318-319. british, in egypt, vii: 321, 322; at gallipoli, vii: 321; in sudan, vii: 322; in palestine and jerusalem, vii: 322-323; in mesopotamia, vii: 324. indian, welfare work in india, vii: 327. international, in egypt, vii: 322; in mesopotamia, vii: 324-327. young turks, force constitutional government in turkey, '08, i: 109. ypres, battles of: oct.--nov., '14, ii: 144, 170-171 (field-marshal french's account), iii: 41. apr., '15, first use of gas in warfare by germans, ii: 222, iii: 42, 288, 320, xi: 316. july--oct., '17, ii: 128 (haig's account of use of artillery in), iii: 78-79. apr., '18, ii: 153, iii: 360-363 (description by philip gibbs). yser, battles of, oct., '14, ii: 220, iii: 40; july, '17, iii: 77-78. yudenitch, gen., russian commander, campaign against and capture of erzerum, iii: 262-263. z zabern incident, i: 72. zeebrugge raid, british exploit in blocking german submarine base on belgian coast, apr., '18, iv: 261-279; ships participating, iv: 262; official admiralty report, iv: 262-265; capt. carpenter's account, iv: 266-268; british casualties, iv: 268; account of lieut.-com. young of _vindictive_, iv: 269-279. zemstvos, russian, congress of, prohibited by protopopov, vi: 143; succeeded by local "soviets," vi: 164; war-time activities, xii: 82. _zemtchug_, russian cruiser sunk by german raider _emden_, oct. 28, '14, iv: 179. zeppelin, count ferdinand von, inventor of zeppelin dirigible airships, biography, ix: 250-252. zeppelins, description of structural features, with discussion of utility during war and peace, ii: 262-269, viii: 241-254; raids on england, ii: 266, iii: 41, viii: 246, _see also_ air raids; exploit of sub-lieut. warneford in bringing down first zeppelin of war, ii: 269, x: 223-225; development in construction, '14--'18, viii: 241; compared with airplanes, viii: 241-245; flight of _l-59_ to egypt, viii: 243. zigzagging, as defense against u-boat attack, iv: 310. zimmermann, dr. alfred f. m., german foreign secretary, attempt to force from ambassador gerard guarantees for german-owned property in u. s., i: 345; text of note attempting to involve mexico and japan in war against u. s., i: 347. zouaves, description, xi: 189. illustrations i.--portraits a. adams, sgt, harry j., x: 42. ador, gustave, president of switzerland, with president poincaré of france, xii: 154. ahmed, sultan, shah of persia, i: 104. albert, king of the belgians, at the front, ii: 5; with queen elizabeth, ii: 157, vii: 140; inspecting british tank, ii: 278; equestrian statue, iii: 379; portrait studies, vii: 121, ix: 386; symbolic painting of, ix; _facing p._ 386 (in color); entry into bruges, ix: 390; inspecting u. s. sailors, xi: 129. albert, prince, of england, xi: 150, 151 (as aviator). alexander, king of greece, iii: 206. alexander i, czar of russia, i: 35. alexander, prince regent of serbia, vi: 357, vii: 147. alexander, maj.-gen. robert, v: 221. alexandra, former czarina of russia, ix: 377; with royal family, xi: 146. alexandra, dowager queen of england, ix: 394. alexandrina irene, princess, daughter of german crown prince, xi: 149. alexis, czarevitch, of russia, ii: 227, xi: 145, 146, 148 (last photograph). alfonso, king of spain, with son, vi: 371. allen, b. s., vii: 115. allen, maj.-gen. henry t., v: 201. allenby, gen. sir edmund h. h., ii: 89, 177, iii: 323 (entering jerusalem), ix: 197. allied food council, members of, ix: 322. ames, winthrop, vii: 340. anastasia, grand-duchess, of russia, xi: 146. andrews, brig.-gen. avery d., v: 93. aonzo, lieut., iv: 365. aosta, duke of, iii: 240. armenian patriarch, of jerusalem, vi.: 332. arnim, count von, ii: 222. arnim, gen. sixt von, iii: 88. arthur, julia, vii: 344. asquith, herbert h., ix: 31. astor, mrs. vincent, as y. m. c. a. canteen worker, vii: 270. atkinson, sgt. ralph m., x: 61. averescu, gen., iii: 216. b bailey, maj.-gen. c. j., v: 275. bain, h. f., vii: 115. baker, newton d., v: 39 (with gen. pershing), 375, ix: 324, xii: 117 (with members of council of national defense), xii: 289 (drawing first draft number). baldwin, dr. e. r., vii: 69. balfour, arthur james, ix: 41; at peace conference, xii: 160. barker, col. william, vii: 391. barton, clara, vii: 12. baruch, bernard m., xii: 117 (with members of u.s. council of national defense), 119. bates, blanche, vii: 344. bauer, gustav, vi: 304. beatty, adm. sir david, iv: 11 (coming on board u. s. battleship _new york_), 102, 149 (with king george), ix: 284. belgian royal children, xi: 130. bell, maj.-gen. george, jr., v: 219. belrose, l., vii: 115. benedict xv, pope, i: 164. benson, adm., with members of navy war council, iv: _intro. xi_; with secretary daniels and sir eric geddes, iv: 357. benson, 1st lieut. philip, x: 210. berchtold, count, i: 137, ix: 143. bergmann, gen., ix: 267. bernhardi, gen, frederick von, i: 169. bernstorff, count johann von, ix: 134, x: 327. bertle, sir francis l., ii: 131. bethel, brig.-gen. walter a., v: 38. bethmann-hollweg, theobald von, i: 130 (with kaiser and leading german generals), iii: 2, vi: 265, ix: 123. bigelow, member of lafayette escadrille, x: 197. biggs, dr. h. m., vii: 69. binkley, sgt. david u., x: 97. birdwood, lieut.-gen. sir william, iii: 375. bishop, col. william a., x: 216, 219. bismarck, prince otto von, i: 43; with napoleon iii, i: 44; at congress of berlin, i: 49; at proclamation of german empire, i: 55; dictating surrender of french in franco-prussian war, i: 163; dictating terms of peace to french after franco-prussian war, i: 212. bissing, gen. von, ii: 99. bliss, gen, tasker h., v: 110; at peace conference, xii: 160. bohlen, krupp von, i: 135. bonstelle, jessie, vii: 344. booth, miss evangeline, vii: 392. boothby, george, vii: 335. borden, sir robert, vi: 25. botchkareva, marie, x: 184. botha, gen. louis, vi: 49, ix: 192. brent, bishop, xi: 250. breshkovsky, catherine, vi: 150, ix: 348. briand, aristide, i: 398 (presiding at first allied conference, mar., '16), ii: 386. brockdorff-rantzau, count, ix: 137, xii: 169. brown, brig.-gen. preston, v: 86. brunswick, duke and duchess of, i: 168. brusiloff, gen. alexei, iii: 143, ix: 233. bullard, lieut.-gen. robert lee, v: _facing p._ 396 (in color), ix: 220, x: 17 (with staff). bülow, prince bernhard von, ix: 129. bunch, maj. henry e., x: 83. bundy, maj.-gen. omar, v: 249, ix: 226. bunsen, sir maurice de, i: 126. burdick, "mother," vii: 385. burr, sgt. george e., x: _facing p._ 102 (in color). butterfield, sgt. william m., x: 343. byng, sir julian, iii: 338. c cadorna, gen. luigi, iii: 229, 231, 233, ix: 228. caillaux, m., vi: 104. cambon, jules, i: 128. cambon, paul, ii: 384. cameron, pvt. charles, x: 144. campbell, capt. douglass, x: _facing p._ 152 (in color). canterbury, archbishop of, vii: 299. carden, vice-adm., iii: 174. carney, pvt. fred, x: 53. carpenter, capt., iv: 266, 267. carpentier, georges, as airman, x: 207. carranza, gen. venustiano, i: 320. carrel, dr. alexis, ix: 311, xi: 289. carson, sir edward, vi: 66, ix: 51. carty, col., x: 48. casement, sir roger, vi: 56, 57 (on trial for treason), ix: 54. castelnau, gen. de, with gen. d'esperey, ii: 141. castlereagh, lord, i: 29. cavour, count camillo, i: 43. cecil, lord robert, xii: 207. chamberlain, austen, ii: 90. chapman, victor, x: 170. charles i, emperor of austria-hungary, ii: 65, iii: 140 (in warsaw), ix: 373. charles theodore, prince, son of king albert of belgium, xi: 130. churchill, winston spencer, vi: 10, ix: 45 (with wife). churchill, mrs. winston spencer, ix: 45. clarkson, grosvenor b., with members of u. s. council of national defense, xii: 117. clausewitz, carl von, i: 166. clayburgh, mme., vii: 344. clemenceau, georges, near the front, iii: 35; decorating a priest, iii: 85; portrait study, ix: 3; leaving peace conference, ix: 6; in his study, ix: 11; in uniform of a poilu, ix: 12; visiting a liberated french village, xi: 126; at somme battle front, xi: 127; presiding at peace conference, xii: 160. clementel, french minister of commerce, xii: 106. clifford, rev. j. h., x: 33. coffin, howard e., with members of u. s. council of national defense, xii: 117. colmar, mayor of, i: 328. commission for relief in belgium, members of, vii: 115. connaught, duke of, with king george, i: 124; inspecting troops, vi: 33; with archbishop of canterbury at a y. m. c. a. hut, vii: 299. conner, brig.-gen. fox, v: 104. constantine, former king of greece, iii: 203, ix: 381 (with family). council of national defense, u. s., with advisory commission, members of, xii: 117. cozens, w. j., vii: 115. cradock, adm. sir christopher, iv: 63. craig, capt., vi: 66. craig, brig.-gen. malin, v: 80. crile, dr. george w., vii: 68. cronkhite, maj.-gen. adelbert, v: _facing p._ 146 (in color). currie, lieut.-gen. sir arthur, iii: 346 (with pershing), 377, vi: 28. czar of russia, _see_ nicholas ii. d d'amade, gen., ii: 163. daniels, josephus, with franklin roosevelt, i: 359; with members of navy war council, iv: _intro. xi_; with sir eric geddes and adm. benson, iv: 357; portrait study, x: 327; with members of u. s. council of national defense, xii: 117. danilo alexander, prince, of montenegro, iii: 153. d'annunzio, gabriele, vi: 121. dasch, pvt. carl w., x: 50. davis, brig.-gen. robt. c., v: 291. davison, henry p., vii: 3, 17. dawson, sgt. clarence w., x: 310. de la ray, gen., vi: 49. derby, dr. richard, x: 242. dernburg, dr. bernhard, vi: 297. d'esperey, gen., with gen. castelnau, ii: 141. devereaux, pvt. harold j., x: 134. de wet, gen. christian, vi: 49. diaz, gen., ii: 367. dickman, maj.-gen. joseph t., v: 52. disraeli, benjamin, i: 50. djavid bey, ii: 28. djevad bey, col., iii: 356. dmitrieff, gen. radko, iii: 136. dougherty, color sgt. hardy c, x: 110. doumergue, french minister of colonies, vi: 104, xii: 106. drummond, sir eric, xii: 202. dubail, gen. and madame, xi: 47. duffy, father, vii: 335. dugan, maj.-gen. thomas b., v: 226. dumba, dr. constantin, x: 328. dunant, henri, vii: 10. duncan, maj.-gen. george b., v: 10. e earle, rear-adm., with members of navy war council, iv: _intro. xi._ ebert, friedrich, vi: 293 (delivering speech of acceptance to election as german president), ix: 136. edward vii, of england, with kaiser, i: 188; with son (present king george v) and grandson (present prince of wales), ii: 3. edwards, maj.-gen. clarence r., v: 66 (with gen. liggett), 253. eggeman, judge, vii: 335. eggers, sgt., x: 105. einem, gen. von, with kaiser and other leading german generals, i: 130. eisner, kurt, vi: 289. eitel, prince, of prussia, i: 168. eitel friedrich, princess, of prussia, i: 168. elena, queen of italy, xi: 142. elizabeth, queen of belgium, ii: 157, vii: 140, ix: 389, xi: 130 (with her children). ellis, pvt. m. b., x: 119. eltinge, brig.-gen. leroy, x: 283. ely, maj.-gen. hanson e., v: 123. enver pasha, iii: 262, ix: 271. erzberger, mathias, meeting with foch to arrange armistice, v: 392. eugene, archduke, of austria, with staff, i: 139. f falkenhayn, gen. erich von, i: 130 (with other leading german generals), iii: 223, ix: 262. fallow, capt. thomas h., x: 161. feng kuo-chang, gen., i: 58. ferdinand, former czar of bulgaria, iii: 156, 211, ix: 379. ferdinand, king of rumania, iii: 219 (decorating troops), 221, ix: 400. ferguson, sgt. dugald e., x: 77. ferguson, elsie, vii: 341. fernandez, bijou, vii: 344. fisher, adm. lord john, ix: 289. fiske, brig.-gen. harold b., v: 103. fitzgerald, john, vii: 335. flagler, maj.-gen. clement a. f., v: 209. foch, marshal ferdinand, ii: 86 (inspecting rhine fortifications with gen. mangin), 139, 142 (reviewing guards at st. germain-en-laye), v: 392 (meeting german armistice delegates), ix: 148, 151 (an early portrait), xi: 47, 136. forstner, lieut. von, i: 73. foulois, brig.-gen benjamin d., v: 310. francis ferdinand, archduke, of austria, i: 3 (with family), 111, 113 (shortly before assassination), vi: 360 (with kaiser). francis joseph i, late emperor of austria-hungary, ix: 371. frederick, archduke, of austria, ii: 24. frederick, king of denmark, vi: 393. frederick the great, i: 22. frederick iii, german emperor, i: 183. frederick william, former crown prince of prussia and of germany, with crown princess, i: 117; with leading german generals, i: 130; with members of royal family, i: 168; bestowing decorations, ii: 38; portrait studies, ii: 311, 339, ix: 368 (with one of his children); on verdun front, iii: 48, 307; with staff, iii: 304; with father and son, vi: 263. frederick william iii, king of prussia, i: 34. french, field-marshal viscount john, iii: 24, ix: 178, xi: 360. french cabinet, members of, '13, vi: 304. freytag-loringhoven, baron von, ii: 255. fritz, pvt. albert, x: 80. g galliéni, gen. joseph simon, ix: 162. galopin, gen., xi: 47. garfield, harry a., xii: 49. garibaldi, capt., x: 64. garibaldi, gen., x: 64. gasette, miss grace, vii: 190. gaultney, corp. walter e., x: _facing p._ 200 (in color). gay, g. i., vii: 115. geddes, sir eric, iv: 357 (with josephus daniels and adm. benson), ix: 314. george, prince, of england, xi: 151. george v, king of england, with duke of connaught, i: 124; with father (edward vii) and prince of wales, ii: 3; aboard u. s. battleship _new york_, iv: 11, 85; with adm. beatty, iv: 149; inspecting gun on a u. s. battleship, iv: 346; decorating a u. s. soldier, v: 383; bust presented to american y. m. c. a. in london, vii: 286; with lloyd george, ix: 29; portrait study, ix: 393; at baseball game between u. s. service teams in london, xi: 153; on tour of inspection, xi: 314. gerard, james w., i: 303 (with embassy staff in berlin), 322. german crown princess, with crown prince, i: 117; with members of royal family, i: 168; with daughter and german empress, xi: 149. gibbons, cardinal james, vii: _intro. vi._ gibson, harvey d., vii: 103. gibson, hugh, vi: 88, vii: 115. gifford, walter s., with members of u. s. council of national defense, xii: 117. giovanna, princess, of italy, xi: 144. gleaves, vice-adm. albert, iv: 159. glossop, capt. john c. t., iv: 186. godfrey, dr. hollis, with members of u. s. council of national defense, xii: 117. goltz, field-marshal baron von der, ix: 269. gompers, samuel p., xii: 87. gordon, maj.-gen. walter h., v: 223. gorgas, surgeon-general william c., vii: 192. gori, lieut., with commander rizzo and lieut. aonzo, iv: 365. gortchakoff, prince, i: 181. goschen, sir edward, i: 125. gough, lieut.-gen. sir hubert de la poer, iii: 376. gouraud, gen. henri, ii: 122, 210, iii: 229, v: 44. gourko, gen. basil, ii: 226. graham, sgt. clyde, x: 166. grayson, rear-adm., xii: _intro. xvii._ greek delegates to paris peace conference, ix: 80. greek royal family, ix: 381. grey, sir edward, ix: 36. griffin, rear-adm., with members of navy war council, iv: _intro. xi._ grismer, mrs. joseph, vii: 344. grouitch, madame slavko, vii: 145. guendele, gen. von, with german armistice delegates, meeting foch, v: 392. gustav, king of sweden, vi: 395. guynemer, capt. georges, x: 203. h haakon vii, king of norway, i: 133. haan, maj.-gen. william g., v: 24. haeseler, gen. von, with kaiser and leading german generals, i: 130. haig, field-marshal sir douglas, ii: 113, 114, iii: 374, ix: 182. haldane, lord, i: 108. hall, capt. james norman, x: 201. hamill, dr. samuel m., vii: 69. hamilton, gen. sir ian, ii: 30, iii: 162. harbord, maj.-gen. james g., v: _facing p._ 36 (in color). harden, maximilian, vi: 303. hartman, sgt. william a., x: 167. hartz, gen. william w., v: 255. hay, maj.-gen. william h., v: 279. helfferich, dr. karl, iii: 2, ix: 354. helmick, maj.-gen. eli, v: 268. heming, violet, vii: 344. henderson, arthur, ix: 48. herren, sgt. william, x: 323. hertling, count von, i: 273, vi: 259 (addressing prussian chamber of deputies). hill, r. f., vii: 115. hindenburg, field-marshal paul von, i: 130 (with kaiser and other leading german generals), ii: 207, 299 (with ludendorff), 325 (with ludendorff), 361, iii: 113, vi: 291, ix: 243, 248 (wooden statue of), 364 (with kaiser and ludendorff). hinds, maj.-gen. ernest, v: 320. hines, maj.-gen. john l., v: 182. hines, walker d., xii: 90. hinkle, member of lafayette escadrille, x: 197. hohenberg, duchess of, i: 3 (with husband, archduke francis ferdinand of austria, and family), 111, 113 (with husband, shortly before assassination). holt, dr. l. emmett, vii: 69. honnold, w. l., vii: 115. hood, rear-adm. horace, iv: 120. hoover, sgt. charles s., x: 126. hoover, herbert c., vii: 115, 122, ix: 317. horton, lieut.-com. max k., iv: 207. house, col. edward m., ix: 71 (with mrs. house), 74, xii: 160 (at peace conference). houston, david f., with members of u. s. council of national defense, xii: 117. howe, capt. maurice w., x: 312. howze, maj.-gen. robert l., v: 185. hsaün tung, ex-emperor of china, i: 17. hughes, sir sam, vi: 35. hughes, william morris, vi: 39. hurley, edward n., with charles m. schwab, ix: 336. i ingenohl, vice-adm., iv: 68. ireland, maj.-gen. merritt a., vii: 194. ishii, viscount, ix: 89. italian royal children, xi: 142. italian war mission to united states, members of, vi: 118. ivanoff, gen., iii: 127. j jagow, gottliev von, iii: 2, ix: 127. janeway, dr. theodore c., vii: 250. janis, elsie, vii: 294. jellicoe, adm. sir john, v: 100, ix: 276. joan of arc, i: _frontispiece_ (in color). joffre, marshal joseph jacques césar, with gen. nivelle, ii: 12; in trenches with kitchener, ii: 164; examining german prisoners, ii: 173; at verdun, iii: 50; with gen. pershing, v: 57; painting in color, ix: _facing p._ 154; decorating french officer, ix: 158; at west point, ix: 160; at lafayette statue in brooklyn, xi: 7; portrait studies, xi: 11, 268; with other leading french generals and pershing, xi: 47. jones, r. h., vii: 115. jutta, princess, of montenegro, iii: 153. k kaiser, _see_ william ii. karolyi, count, ix: 146. kei hara, vi: 387. kenney, maj., with maj. whittlesey, v: 238. kerensky, alexander feodorovitch, vi: 145, ix: 105. key, francis scott, xi: 325. kitchener, field-marshal earl horatio herbert, ii: 164 (in trenches with joffre), 165, 203, ix: 169, 171. klotz, louis, at peace conference, xii: 160. kluck, gen. alexander von, i: 130 (with kaiser and group of german generals), 377, ii: 9, ix: 267 (with staff). koenig, capt. paul, iv: 214. kolchak, adm. aleksandr vasiliyevich, ix: 240. korniloff, gen., ii: 235, vi: 168. korth, sgt. herman, x: _facing p._ 254 (in color). krauss, gen. f. m. c., with archduke eugene of austria, i: 139. kreger, brig.-gen. edward a., v: 230. krobatin, austrian minister of war, with archduke eugene, i: 139. kropotkin, prince peter, vi: 136. kruger, oom paul, i: 192. krupp, alfred, i: 160. krupp, bertha, ix: 353. krupp von bohlen, i: 135. kuhl, gen. von, ix: 267. kuhn, maj.-gen. joseph e., v: 224. kuropatkin, gen., iii: 269. l lafayette, marquis de, xi: 6. lafayette escadrille, members, x: 197, 200. lane, franklin k., with members of u. s. council of national defense, xii: 117. langfitt, maj.-gen. w. c., v: 343. langham, pvt. george w., x: 99. lansing, robert, at peace conference, xii: 160. lassiter, maj.-gen. william, v: 145. latham, sgt., x: 105. lathrop, mrs. benjamin g., vii: 94. laurier, sir wilfred, vi: 26. law, andrew bonar, conferring with french cabinet members, xii: 106; at peace conference, xii: 160. le jeune, maj.-gen. john a., v: 256. leman, gen., i: 144. lenihan, brig.-gen. michael j., vii: 335. lenin, nicolai, ix: 111. leonard, benny, viii: 108. leopold, crown prince of belgium, xi: 130, 145. leopold, prince, of bavaria, i: 130 (with group of german generals), iii: 140 (in warsaw). lepley, sgt. james b., x: 251. lewis, sgt. stacy a., x: 302. lichnowsky, prince karl maximilian, i: 196, ix: 132. liebknecht, karl, ix: 139. liggett, lieut.-gen. hunter, v: _facing p._ 108 (in color), 66 (with maj.-gen. edwards), ix: 219. lincoln, tribitsch, x: 345. lipton, sir thomas, with duchess of westminster and her red cross nurses on board the yacht _erin_, vii: 136. li yuan-hung, gen., i: 57. lloyd george, david, addressing a crowd, vi: 5; return to london from peace conference, vi: 21; portrait studies, ix: 22, xii: 151; with king george, ix: 29; at peace conference, xii: 160. lloyd george, mrs. david, ix: 24. lloyd george, miss, xi: 121. lodge, senator henry cabot, xii: 239. lohvitsky, gen., vi: 144. londonderry, lord, vi: 66. lovett, judge robert s., vii: 90. ludendorff, gen. erich von, with kaiser and group of german generals, i: 130; with hindenburg, ii: 299, 325; portrait study, ix: 251; with wife, ix: 253; with kaiser and hindenburg, ix: 364. lufberry, maj. raoul, x: 192, 197, xi: 228, 229. luke, lieut. frank, x: 212. luxemburg, rosa, vi: 281. lvoff (lvov), prince george e., vi: 159, ix: 101. m macarthur, maj.-gen. douglas, v: _intro. viii_, ix: 213. macdonald, ramsay, vi: 3. mackensen, field-marshal august anton ludwig von, i: 130 (with kaiser and group of leading german generals), iii: 137, 222, ix: 258. mafalda, princess, of italy, xi: 144. maja vajiravudth, king of siam, vi: 80. malvy, m., vi: 104. mangin, gen., inspecting rhine fortifications with foch, ii: 86. manning, corp. sidney e., x: 122. manning, rev. dr. william t., vii: _intro. viii._ mapes, l. d., vii: 115. march, gen. peyton c., ix: 211. maria, princess, of italy, xi: 144. marie, grand-duchess, of russia, xi: 146. marie, queen of rumania, vii: 111, ix: 402. marie adelaide, grand-duchess of luxemburg, i: 78, ix: 383. marie josé, princess, of belgium, xi: 130, 144. marlborough, duchess of, vii: 131. marshall, lieut.-gen. sir william r., iii: 333. martin, dr. franklin, with members of u. s. council of national defense, xii: 117. mary, princess, of england, xi: 150. mary, queen of england, ix: 394. maude, gen. sir frederick stanley, iii: 184, ix: 195. maudhuy, gen. de, ii: 144. maurice, maj.-gen. sir frederick b., ii: _intro. ix._ max, burgomaster, of brussels, iii: 272. max, prince, of baden, vi: 302. mayhew, 2nd lieut. carl c., x: 136. mayo, adm. henry thomas, iv: _intro. ix_, ix: 297. mcadoo, eleanor, xi: 133. mcadoo, william g., ix: 330, xii: _intro. xi._ mcalexander, brig.-gen. ulysses g., v: 389, ix: 217. mcandrew, maj.-gen. james w., v: 101, ix: 215. mcglachlin, maj.-gen. edward f., v: 228. mcgowan, rear-adm., with members of navy war council, iv: _intro. xi._ mcintrye, miss gladys and irene, being decorated for distinguished service at the front, vii: 395; collecting funds for salvation army, vii: 398. mckaig, corp. f. h., x: 300. mckeogh, lieut. arthur, x: 140. mcrae, maj.-gen. james h., v: 251. meissner, maj. james a., x: 231. menoher, maj.-gen. charles j., v: 190. mercier, cardinal désiré, i: 235, ix: _facing p._ 340 (in color), 342. metternich, count von, i: 34. michaelis, georg, ii: 302. millerand, alexandre, i: 333, ii: 388. milyukov, paul, v: 158. minkiewicz, secretary of provisions for poland, vii: 355. mishich, gen. voivode, with staff, ii: 35. mitchel, col., vii: 335. moffat, john, vii: 86. mohammed v, sultan of turkey, iii: 357. moltke, field-marshal von, i: 48, 55. moltke, lieut.-gen. helmuth von, i: 130 (with kaiser and leading german generals), ix: 265. montenegro, royal family, iii: 153. moore, mast.-sig.-elect. e. j., x: _facing p._ 304 (in color). morgan, miss anne, vii: 93. morgan, john pierpont, xii: _intro. xiv._ mosley, brig.-gen. george v. h., v: 341. mueller, commander karl von, iv: 168, 173. muir, maj.-gen. charles h., v: 205. münsterberg, prof. hugo, vi: 268. n napoleon i, emperor of france, i: 7 (retreating after waterloo), ii: 88. napoleon iii, emperor of france, i: 36, 44. nash, j. a., vii: 115. nellmond, earl edler von, with archduke eugene of austria and staff, i: 139. netherlands, royal family, vii: 172. neville, gen., decorating colors of 6th marine regt., x: 199. nicholas, grand-duke, nicolaevitch, of russia, with czar, iii: 112, vi: 154; portrait studies, iii: 115, ix: 230. nicholas, former king of montenegro, i: 114, iii: 153 (with family). nicholas ii, former czar of russia, with grand-duke nicholas, iii: 112, vi: 154; inspecting red cross workers, vii: 359; portrait study, ix: 375; with royal family, xi: 146, 148 (last photograph). nightingale, florence, vii: 11. nivelle, gen., with marshal joffre, ii: 12. nolan, brig.-gen. dennis e., v: 105. northcliffe, lord, vi: 12. nourey bey, capt., iii: 356. nugent, sgt. john f., x: 23. o oberndorff, count von, german armistice delegate, meeting with foch, v: 392. o'brien, corp. john j., x: _facing p._ 354 (in color). o'brien, lieut. pat, x: 256. okuma, count, i: 19, vi: 385, ix: 88 (with wife). olga, grand-duchess, of russia, xi: 146. o'neil, peggy, vii: 342. orlando, vittorio emanuele, ix: 86. o'ryan, maj.-gen. john f., v: 282. oscar, prince, of prussia, i: 168, vi: 221. oshima, gen., vi: 385. owen, h., vii: 115. p paderewski, ignace, vi: 206 (with polish mission in new york), ix: 97. painlevé, paul, iii: 83. palmer, rear-adm., with members of navy war council, iv: _intro. xi._ papen, capt. franz von, x: 328. parrish, sgt. grady, x: 25. pashitch, n., iii: 151. passard, jean, xi: 74. patriquin, jean, vii: 344. pelltier, gen., xi: 47. pendleton, lieut. george h., x: 154. pershing, gen. john j., with gen. currie, iii: 346; painting in color, v: _frontispiece_; with secretary of war baker, v: 39; with joffre, v: 57, ix: 208; with marshal pétain, v: 98; at tomb of lafayette, v: 99; with u. s. nurses in france, vii: 78; portrait study, ix: 200; on mexican border, ix: 206; with group of french generals, xi: 47; as a boy, xi: 123; in the field, xi: 124. pétain, marshal henri philipp, ii: 149, 186 (on verdun front), iii: 52, v: 99 (with pershing), ix: 165. peter, king of serbia, iii: 149. pichon, stephen, xii: 160 (at peace conference), 233. pilsudski, gen. joseph, ix: 93, 95. pius x, pope, i: 27. plumer, gen. sir herbert. c. o., ii: 162. poincaré, raymond, visiting the front, ii: 218; portrait study, ix: 15; with president ador of switzerland, xii: 154. poincaré, mme. raymond, ix: 16. poland, w. b., vii: 15. polish military mission to u. s., vi: 206. politis, nicholas, ix: 80. popes, _see_ benedict xv; pius x. porro, gen., iii: 229. prince, norman, x: 170. princip, slayer of austrian archduke francis ferdinand, arrest following crime, i: 5. pringle, capt., with vice-adm. wemyss, iv: 323. prussian royal family, i: 168. puryear, 1st lieut. george w., x: 179. r rasputin, vi: 142 (surrounded by female admirers), ix: 346. rathenau, dr. walter, vi: 275. rawlinson, gen. sir henry, ii: 171, iii: 88. read, maj.-gen. george w., ix: 224. reading, lord rufus, xii: 110. rennenkampf, gen., ii: 25, iii: 110. rickard, e., vii: 115. rickenbacker, capt. "eddie," with mother and sister, x: 260. rizzo, com., with lieuts. aonzo and gori, iv: 365. robeck, vice-adm. de, iv: 35. roberts, field-marshal earl, i: 315, iii: 371, vi: 2. robertson, gen. sir william r., iii: 373, ix: 185. rockenbach, brig.-gen. samuel d., v: 315. rodman, rear-adm. hugh, welcoming king george on u. s. battleship _new york_, iv: 11; with adm. sims on _new york_, iv: 95; portrait study, ix: 294. romanos, athos, ix: 80. roosevelt, capt. archie, x: 245. roosevelt, franklin d., with josephus daniels, i: 359; with members of navy war council, iv: _intro. xi._ roosevelt, capt. kermit, x: 243. roosevelt, lieut. quentin, x: 244. roosevelt, theodore, i: 161 (with kaiser at military maneuvers), x: 239, 240 (with family), xi: 114 (reviewing boy scouts at sagamore hill), 400 (with grandchild). roosevelt, lieut.-col. theodore jr., x: 241, 247. root, elihu, in moscow, vi: 166. rosenfelt, henry h., vii: 350. rosenwald, julius, with members of u. s. council of national defense, xii: 117. rubinstein, madam ida, vii: 374. ruprecht, crown prince of bavaria, i: 130 (with kaiser and leading german generals), ii: 217, iii: 382. russell, brig.-gen. edgar, v: 318. russell, col. f. f., vii: 69. russian princesses, as war nurses, xi: 147. russian royal family, xi: 146, 148 (last photograph.). russian war mission to united states, members of, vi: 174. russky, gen., iii: 105. ryan, john d., xii: 125. s salisbury, lord, i: 56. samsonoff, gen., ii: 223, iii: 111. sanders, gen. liman von, vi: 286. sarrail, gen., iii: 207. sazonov, serge, i: 119, vi: 141. scheidemann, philipp, ix: 136, 137 (with members of cabinet). schurz, carl, i: 53. schwab, charles m., ix: 333, 336 (with edward n. hurley). seeger, alan, x: 142. sengier, e., vii: 115. shaler, m. k., vii: 115. sherman, corp. whitney d., x: 66. shimamura, adm., vi: 385. sims, adm. william s., i: 391, iv: _frontispiece_ (in color), 95 (on board battleship _new york_ with adm. rodman), ix: 292 (with family). skinner, mrs. otis, vii: 344. smith, brig.-gen. harry a., v: 45. smith, margaret, vii: 344. smith, capt. richard t., x: 69. smith, maj.-gen. william r., v: 207. smith-dorrien, gen. sir horace, ii: 175. smuts, gen. jan christiaan, iii: 256, ix: 188. snow, maj. william a., x: 320. sonnino, baron sidney, ix: 83. sothern, e. h., vii: 340. soukhomlinoff, gen., iii: 122. sparks, rear-adm., with members of navy war council, iv: _intro. xi._ sparrows, com., with members of navy war council, iv: _intro. xi._ spee, adm. count von, iv: 60, ix: 307. stage women's war relief committee, members of, vii: 344. stebbins, miss katherine, vii: 276. steidl, sgt. august, x: 93. stein, corp. fred c., x: 182. stewart, lieut.-col. john w., x: 163. stowers, sgt. joseph h., x: 90. sturdee, vice-adm. sir frederick c. d., iv: 79. sturgis, maj.-gen. samuel d., v: 194. sultans, of turkey, iii: 357, vi: 331. summerall, maj.-gen. charles p., v: 85. sutherland, duchess of, at her hospital in france, vii: 109. swinton, maj.-gen., ii: 274. symington, 1st lieut. james m., x: 88. t taft, william howard, xii: 175. talbot, dr. f. b., vii: 69. talleyrand, i: 32. tardieu, andré, i: 286, xii: 160 (at peace conference). tatiana, grand-duchess, of russia, xi: 146. taylor, rear-adm., with members of navy war council, iv: _intro. xi._ terauchi, count, ix: 91. thaw, maj. william, x: 197. thenault, capt., x: 197. tirpitz, adm. alfred von, i: 130 (with kaiser and leading german generals), ii: 261, iv: 2, 221, ix: 299. townshend, gen., iii: 365. treitschke, prof. heinrich von, i: 174. trotzky, leon, ii: 232, ix: 111. turkish crown prince, iii: 356. turkish sultans, iii: 357, vi: 331. turner, lieut. benjamin e., x: 159. turner, pvt. robert i., x: 159. tyrwhitt, commodore, iv: 251 (with officers of _arethusa_), 259. u uehara, gen., vi: 385. umberto, crown prince, of italy, xi: 143. usher, rear-adm. nathaniel r., iv: 320. v venizelos, eleutherios, iii: 202, ix: 77, 80. victor emanuel, king of italy, iii: 229, vi: 122, ix: 396, xi: 152 (with prince of wales). victoria, former empress of germany, i: 187, ix: 366, xi: 149. vincent, mrs. walter, vii: 344. viviani, rené, ii: 161, vi: 104, ix: 20. w wadehouse, british commissioner, at cyprus, i: 176. wales, prince of, ii: 3 (with father and grandfather), xi: 149, 150 (at age of sixteen), 152 (with king of italy). walker, brig.-gen. meriweather i., v: 353. wallace, maj.-gen., iii: 372. walsh, frank p., ix: 338. walsh, sgt. patrick, x: 101. watson, lieut.-col. george l., x: 151. watts, capt., with members of navy war council, iv: _intro. xi._ weddigen, lieut.-com. otto, iv: 305. weigel, maj.-gen. william, v: _facing p._ 308 (in color). welch, dr. w. h., vii: 69. wemyss, adm. sir rosslyn, on board a u. s. battleship, iv: 323; meeting german armistice delegates, v: 392. westminster, duchess of, with her nurses, vii: 136. weygand, gen., meeting german armistice delegates, v: 392. wharton, mrs. edith, vii: 100. wheeler, margaret, vii: 344. white, henry, xii: 160 (at peace conference), 167. white, j. b., vii: 115. whitlock, brand, vi: 83, vii: 117 (with wife), x: 175. whittlesey, maj. charles, with maj. kenney, v: 238. wilhelmina, queen of netherlands, vii: 172 (with heir and prince consort), ix: 404. willard, daniel, xii: 117 (with members of u. s. council of national defense), 122. william i, emperor of germany, portrait study, i: 45; entry into versailles, 1871, i: 46; being proclaimed german emperor, 1871, i: 55; triumphal return to berlin after franco-prussian war, i: 150. william ii, former emperor of germany, at age of nineteen, i: 70; entering jerusalem, 1898, i: 97; with leading german generals, i: 130; with theodore roosevelt, watching military maneuvers, i: 161; in coronation robes, i: 185; with edward vii of england, i: 188; statue as monk in metz cathedral, i: 211; watching troop movements in france, i: 217; parading with sons in berlin, ii: 258; on way to memorial service with family, ii: 261; portrait studies, ii: 306, ix: 359; on visit to the front, ii: 330; with gen. von einem, iii: 117; on eastern front, vi: 221, ix: 356; with crown prince and grandson, vi: 263; with six sons, vi: 298; with archduke ferdinand of austria, vi: 360; with hindenburg and ludendorff, ix: 364; in conversation with a german officer, ix: 365; with the empress, ix: 366; at age of six, xi: 140; at age of sixteen, xi: 141. wilson, gen. sir henry, ii: 71. wilson, william b., with members of u. s. council of national defense, xii: 117. wilson, woodrow, addressing congress, i: 329; portrait studies, ix; _frontispiece_ (in color), 57, 59, xi: 132, xii: 181; delivering speech of acceptance of renomination for presidency, '16, ix: 61; delivering second inaugural address, ix: 65; marching with service men, xi: 134; with adm. grayson in brussels, xii: _intro. xvii_; on board _george washington_ on way to peace conference, xii: 187. wilson, mrs. woodrow, ix: 63, xii: 187 (on board _george washington_ on way to france). wines, sgt. pearl j., x: 236. winn, maj.-gen. frank l., v: 187. winterfeld, gen. von, german armistice delegate, meeting with foch, v: 392. witenmeyer, maj.-gen. edmund, v: 215. wood, maj.-gen. leonard, iii: _intro. ix_, ix: 160 (at west point with joffre). woyrsch, gen. von, iii: 140. wright, maj.-gen. william m., v: 127, ix: 222. x xenia, princess, of montenegro, iii: 153. y yankoff, gen., vi: 341. yanushkevitch, gen., ii: 231. yolanda, princess, of italy, xi: 143. york, sgt. alvin c., x: 14, 15. yuan shih-k'ai, i: 57. z zeppelin, count von, ii: 263. ii.--general _aboukir_, british cruiser, iv: 206. aden, harbor of, vi: 330. aerial photographs, being assembled to form map of enemy country, viii: 235. aeronautics: airplanes, wright-martin reconnaissance plane, ii: 124; directing artillery fire, ii: 129; in palestine, ii: _facing p._ 220 (in color); target as seen from height, ii: 354; italian fighting plane, iii: 243; british airplanes in mass formation, iii: 383; attacking submarine, iv: 83, 198, 285; mechanism for launching from deck of battleship, iv: 141; construction of, iv: _facing p._ 286 (in color), viii: 218; torpedo-plane, iv: 306; aviator "true-ing" plane, v: 311; assembling liberty planes in france, v: 313; british flyer dropping wreath on comrade's grave inside german lines, vii: 188; aviator dropping bombs, viii: _frontispiece_ (in color), 219; plane starting flight, viii: _facing p._ 188 (in color); spad plane, viii: 190; richthofen's "traveling circus," viii: 191; de haviland-4, viii: 192, xi: 217; machine-gun mountings on, viii: 193, 209, 211; german armored plane, showing detail of construction, viii: 195; german night bomber, viii: 202; german hydroplane, viii: 203; handley-page bomber, viii: 204, 220; manufacture of propellers, viii: 205, 239; leoning monoplane, viii: 207; curtis triplane, viii: 210; british seaplanes, viii: 213, 237; camouflaged carrier-ship for, viii: 215; bomb-carrying devices on, viii: 219, 224, 227; german albatross, viii: 222; caproni triplane, viii: 223; martin bomber, viii: 234; a u. s. two-seater, viii: _facing p._ 348 (in color); airplane ambulance, viii: 368; a. e. f. hangar in france, x: 124; an air duel, x: 204; in battle formation, x: 217, 228; burgess tractor, x: 392; patrolling over a. e. f. sector, xi: 138; curtiss biplane, xi: 215; wright warplane, xi: 218; inspection before flight, xi: 220; testing engine before installation, xi: 221; circling above u. s. battleship _connecticut_, xi: 223; u. s. pursuit plane, xi: 225; skeleton of airplane body, xi: 227; planes used for carrying pershing's mail, xi: 348. balloons, french sausage type, iii: 305, viii: 260; operating with naval convoy, iv: 289; uses of hydrogen vs. helium for inflation of, viii: 244; u. s. sausage type, viii: 258; french spherical type, viii: 261; cable reel of kite balloon, viii: 262. dirigibles, zeppelin being guided by lighthouse, ii: 265; interior of a zeppelin, ii: 269; british dirigible convoying u. s. troopship, iv: 291; french type, viii: 242; repairing a french type, viii: 245; early type of zeppelin, viii: 247; zeppelin _l-49_ shot down by french, viii: 249; interior of british _r-34_, viii: 251; fuel tanks on zeppelin _l-49_, viii: 253; _r-34_ being filled with gas at mineola, viii: 255; u. s. type, viii: 256; pilot's gondola on a zeppelin, x: 226; zeppelin _l-15_ sinking, x: 361. aeroplanes, _see_ aeronautics, airplanes. africa, battle scene in, iii: 251; scene in german east africa, iii: 255; natives, vi: 48. agadir, i: 106. airplanes, _see_ aeronautics. air raids, funeral of english victims, ii: 300; london school children seeking shelter under desks, vii: 361; protection of french works of art against, x: 364. airships, _see_ aeronautics, balloons, dirigibles. aisne river, a. e. f. advance trenches near, v: 259; airplane view of french hospital on, vii: 63. albatross airplane, viii: 222. albert, ruins of, i: _facing p._ 300 (in color); ruins of church of notre dame, xi: 23. algeciras conference, i: 99. _alnwick castle_, british liner, iv: 231. alpini, iii: 228. alps, scene on austro-italian border, ii: 237; austrian stronghold on, ii: 241. alsace, a valley in, iii: 21; forest behind trenches, iii: 47; american troops entering, may 27, '18, v: 267. alsace-lorraine, german lookout tower, i: 221; reunion with france symbolized, ii: 391. ambulances, group of american drivers and cars, vii: 31, 213; french, mounted on auto trucks, vii: 202; american, at verdun, vii: 207, 251; improvised british, in mesopotamia, vii: 260; gathering wounded after battle, vii: 400, xi: 209; dog-drawn, viii: 378; woman driver, x: 186; _see also_ under country, army; hospitals; wounded. "america," painting by rené mal, v: 50. american fund for french wounded, a paris fête for, vii: 59; distributing clothing to refugees, vii: 102; surgical dressing department, vii: 221; packing kits for soldiers, vii: 246. american jewish war relief, bureau of information, vii: 351. amerongen, former german kaiser's residence at, after abdication, ix: 358. _amethyst_, british cruiser, iv: 255. amherst college, army training corps at drill, xi: 170. amiens, protecting art treasures from german bombardment, ii: 68. amsterdam, a food riot, vi: 377. _anglia_, british hospital ship, vii: 253. annapolis, u. s. naval academy students, xi: 165. anti-aircraft guns, v: 11, viii: 10, 13, 16, xi: 188. antwerp, town hall, ii: 169; barbed-wire entanglements in streets, ii: 345; red cross trains at, vii: 118. _arabic_, sinking of, iv: 224. arabs, iii: 332; gun dance, iii: 368. _arethusa_, british destroyer, officers of, iv: 251. argonne forest, territory lying before a. e. f. to advance through, v: 75; u. s. infantrymen advancing through, v: 82, 247; inside german trenches, v: 214; a. e. f. officers' headquarters, v: 217; captured german dugout, v: 235; men of 77th div. in, v: 244; concealed german artillery, xi: 53. _arkansas_, u. s. battleship, close-up, showing gun fire, iv: 361; cleared for action, iv: 392. armenians, murdered by turks, vii: 96. armentières, british clearing ruins of, i: 240. armies, _see_ name of country; _also_ battle scenes. armistice, german delegates passing through french lines on way to meet foch, ii: 390, xii: 251; first meeting of allied and german delegates, v: 392; paris celebration, vi: 107. armor, breast-plate for soldier as protection against bullet, viii: 68. armor plate, forging of, viii: 62, xii: 70. arras, town hall, ii: 85; ruins of cathedral, ii: 351, iii: 67; ruins of, iii: 279. artificial hands and arms for war cripples, eating with mechanical hands, vii: 234; doing farm work, vii: 235; doing carpenter work, viii: 383; manufacture of artificial arms and legs, viii: 385; doing mechanical work, xi: 290. artillery, manufacturing 16-in. guns at watervliet arsenal, i: 304; line of howitzer fire, ii: 129, iii: 159; heavy guns on way to front, ii: 147; ricochet and non-ricochet shells, i: 333; disappearing gun, v: 307; mortar battery, viii: 3; railway-mount guns, viii: 29, xi: 278; big gun in position for action, viii: 31; 8-in. howitzer with caterpillar mount, viii: 40; tractor for hauling, viii: 42; breech-block and bore of big gun, viii: 44; construction of long-range gun, viii: 47, 55; field guns, old and new types, viii: 56; manufacture of shells, viii: 73; path of shrapnel fire, viii: 74; huge naval gun, xi: 273; shrapnel exploding, xi: 275; heavy shells on way to front, xi: 279; camouflaged gun and gunners, xi: 292, 293; construction of howitzers, xii: 73; of different belligerents, _see_ name of country; in action, _see_ battle scenes; _also_ shells. assouan, vi: 78. astronomical instruments, chinese, carried by germans from peking, vi: 255. _asturias_, hospital ship, i: 293. athens, war-time crowds, iii: 155. australia, army, embarking for overseas, ii: 201, vi: 38, 40; landing at gallipoli, iii: 167, iv: 40; charging at gallipoli, iii: 353. austria-hungary, army, reservists in new york reporting for service, i: 281; alpine defenses, ii: 241; artillery captured by italians, ii: 287; cavalry entering polish village, iii: 123; in carpathian trenches, iii: 142; on isonzo front overlooking italian positions, iii: 236; resting, vi: 211; at field mass, vi: 308; in tyrol stronghold, vi: 309; siege gun, viii: 26. auteuil, tent hospital at, vii: 205, 206; hospital workers serving coffee to convalescents, vii: 243. _ayesha_, schooner used by crew of _emden_ to escape in, iv: 191. b _b-2_, british submarine, iv: 58. badges and medals of american red cross, vii: _facing p._ 50 (in color). badonville, raid on german trenches near, v: 232. bagdad, iii: 186; arabs in, iii: 332. bairnsfather, capt. bruce, cartoons by, ii: 116, iii: 22, 23, 26. balloons, _see_ aeronautics. _baltic_, life-boats, iv: 234. _baltimore_, u. s. cruiser, iv: 329. barbed-wire, as trench protection, ii: 284; entanglements of, in antwerp streets, ii: 345; in tsing-tau defenses, iv: 61; cutting device, viii: 154; cutting entanglements by hand, xi: 254. barcy, battlefield of, iii: 25. baseball, u. s. army men playing, vii: 315; king george at game between u. s. army and navy teams in london, xi: 153. battalion of death, russian women's, iii: 125, vi: 162, xi: 206, 208; polish women's, vi: 218. battle scenes, charge by prussian cuirassiers in franco-prussian war, i: 214; french soldiers in the vosges charging on skis, i: 216; belgians behind street barricades repulsing germans, i: 312; french machine gunners at mancourt, ii: 43; night bombardment by artillery, ii: 102; airplane view during action on western front, ii: 105; the dead after battle in flanders, ii: 117; british charge at montaubon, ii: 121; holes shot by shell fire, ii: 133, v: 236; fight for kemmel hill, ii: 152; poilus charging, ii: 185; allied dead on battlefield, ii: 194; highlanders attacking near ypres, ii: 213; belgians on skirmish duty, ii: 347; killed and debris on marne battlefield, iii: 27, 94; germans crossing marne river, iii: 32; flash-light photograph at night, iii: 44; british charging during battle of the somme, iii: 57; german charge at chemin des dames, iii: 73; british bombardment of passchendaele ridge, iii: 78; in meuse-argonne, iii: 101; on russo-german front, iii: 119; in african jungle, iii: 251; fight for erzerum, iii: 263; heap of serbian dead, iii: 283; cavalry charge, iii: 289; killed german outposts, iii: 291; directing battle by telephone, iii: 314; australians charging at gallipoli, iii: 353; at messines ridge, iii: 360; battle wreckage, iii: 361, vi: 367, xi: 302, 309; british blowing up ammunition dumps, iii: 384; wounded awaiting transportation, iii: 385; scots on outpost duty, iii: 389; naval action, iv: 17; warship struck by torpedo, iv: 55; british landing party at zeebrugge, iv: 265; u. s. marines at belleau wood, v: 137; russian retreat from galicia, vi: 180; russians charging through barbed wire, vi: 186; italian killed, vi: 310; vision of christ on battlefield, vii: 5; ambulance men gathering wounded, vii: 400, xi: 209; effect of howitzer fire on fort, viii: 135; british rifle brigade at neuve chapelle, x: 11; liquid fire attack, x: 19; attack with grenades, x: 21; night naval attack at dardanelles, x: 36; british meeting turk attack at gallipoli, x: 39; charge of london scottish at messines, x: 45; tanks advancing, x: 59; italians hard pressed by enemy, x: 63; winning a victoria cross, x: 72; british artillery in action, x: 107, 129; highlanders fighting through loos, x: 157; long-range bombardment of austrian positions by italians, x: 359; hand-to-hand fight on destroyer _broke_, x: 370; gurkhas capturing german trench, xi: 192; tanks in action, xi: 252, 256, 263; shrapnel explosion, xi: 275; gas attack, xi: 319; _see also_ dead; wounded. battleship in process of construction, iv: _facing p._ 126 (in color). _bayern_, german battleship, iv: 389. beersheba, iii: 199. belgium, triumphant, symbolic painting, iii: _facing p._ 380 (in color). army, cavalry troops after defense of liége, i: 208; at mess with french soldiers, i: 241; behind street barricade fighting germans, i: 312; cavalryman, ii: 160; scouting, ii: 286; on skirmish duty, ii: 347; a "fighting priest" in trenches, iii: 15; cavalry in trenches, iii: 19; a sentry, iii: 285; snipers, iii: 287; anti-aircraft gun, viii: 13; field gun, viii: 24. neutrality, facsimile of signatures to treaty of 1839 guaranteeing, i: 147. relief, supply ship on way from u. s., vii: 120; relief packages, vii: 126; making cradles for babies, vii: 141; warehouse full of supplies, vii: 143; relief workers in new york packing clothing for, vii: 165; home return of refugees, ix: _facing p._ 368 (in color); queen elizabeth medal for workers, ix: 391. benet-mercier machine gun, viii: 82. berlin, victorious entry of william i, 1871, i: 150; royal palace, i: 158; soldiers leaving for the front, i: 191; wreckage after food riots, vi: 256; a public square, nov., '18, vi: 257; brandenburger gate, vi: 272; reichstag building, vi: 277, xi: 3; proclamation of german republic, nov. 8, '18, vi: 277; barricaded streets during revolution, vi: 279; transporting food by tram, vi: 282; spartacan demonstration, feb., '19, vi: 290; fighting between government troops and radicals, vi: 299; demonstrations against peace treaty, vi: 301, xii: 214. berlin, congress of, 1878, i: 49; british caricature of, i: 51. bethlehem, pa., a steel plant at, xii: 67. bethune, airplane view of, ii: 127. bibles, for u. s. service men, vii: 284. "big bertha," german long-range gun, fragment of shell used in bombarding paris, viii: 46, 48, 58, 63, xi: 272; diagram of shell, viii: 53; prepared base for, viii: 61. black watch regiment, british, x: 56. blind, learning modelling in clay, vii: 256; benefit entertainment in new york for aid of, vii: 258; learning basketry, vii: 259. _blücher_, german cruiser, iv: 247; sinking of, in battle of dogger bank, iv: 249. blue cross, care of horses wounded in battle, vii: 227, 228. "blue devils," french, iii: 49, v: 151. bolsheviki, agitator addressing troops, vi: 165; madrid demonstration, vi: 372. bombs, bomb-room in a british fuse factory, ii: 119; illuminating bombs exploding, v: 133; aviator dropping, viii: _frontispiece_ (in color), 219 (apparatus for, on german plane); devices for carrying, on airplanes, viii: 224, 227; french women manufacturing, xi: 283; _see also_ depth charge. bosphorus, i: 12, iii: 369. bouillonville, street scene, v: 160. _bouvet_, french battleship, iv: 48. boy scouts, red cross men of future, xi: _frontispiece_ (in color); daily good turn, xi: _facing p._ 96 (in color); pledging allegiance to flag, xi: 97; at salute, xi: 98; wounded scout, xi: 99; as war gardeners, xi: 101, 115, 116; on visit to white house, xi: 102; bridging stream, xi: 103; learning coöperation, xi: 104; camping, xi: 105; as town cleaners, xi: 106; as wireless operators, xi: 107; in hiking outfit, xi: 108; third liberty loan poster, xi: 109; field map making, xi: 110; signalling, xi: 111, _facing p._ 224 (in color); encampment, xi: 112; emergency coast guards, xi: 113; on review before theodore roosevelt, xi: 114; as wood cutters, xi: 117; listening to scoutmaster around the camp-fire, xi: _facing p._ 118 (in color). brandenburger gate, berlin, vi: 272. bread tickets, german, vi: 261. brest, debarkation of a. e. f., v: 3. breton peasant, v: 160. breton-pretot machine, for cutting barbed wire, viii: 153. brialmont type of fort, ii: 350. _britannia_, british tank in u. s., viii: 137, 138, 142. brown university, army training corps, xi: 163. browning machine-gun, light type, viii: 85; heavy type, viii: 85. bruges, airplane view, viii: 232; entry of king albert into, ix: 390. brussels, town hall, i: 140; bird's-eye view, i: 201; during german occupation, i: 253; senate chamber used as church by germans, i: 311; german soldiers visiting art museum, ii: 344; palace of justice, iii: 271; king albert's palace, ix: 387. bucharest, royal palace, ii: 62; bird's-eye view, vi: 352. buckingham palace, london, i: 127; on night of declaration of war, i: 138. budapest, the quay, vi: 325. bulgaria, mountain village, vi: 339; peasant women, vi: 340; army, supply train behind the lines, vi: 343. bullets, diagram showing path of, viii: 93; types of, used by airmen, viii: 212. burgess tractor, in flight, x: 392. burmese troops, vi: 6. c cambrai, canadians in, iii: 80. camels, as cavalry mounts, iii: 192; caravan resting, iii: 367; use by british in egyptian campaign, vi: 68; for carrying wounded, vi: 71; as transport train in asia minor, vi: 333. cameroons, battle scene, iii: 251; native market, vi: 52. camouflage, concealed british guns, ii: 123, 128; wooden cannon, vi: 238; screened railroad tracks, vi: 247, viii: 337; over roadway, vi: 368; example of need for, viii: 338; soldier disguised by, viii: 339, 342; for railway-mount guns, viii: 343, 347; _mauretania_ in "dazzle" paint, viii: 344; protected gun and gunners, xi: 292; camouflaged mortar, xi: 293. canada, army recruiting by phonograph, i: 314; veterans of second battle of ypres, i: 379; being reviewed by field-marshal haig, ii: 114; forestry unit, ii: 130; presentation of colors, ii: 342; going over top at vimy ridge, iii: 69; in cambrai, iii: 80; in flanders, iii: 345; on hike, iii: 346; artillery at the front, iii: 348; 90th winnipeg rifles, vi: 24; 1st battalion, vi: 29; guarding international bridge, niagara falls, vi: 31, 34; encamped at toronto, viii: 305; digging trenches, viii: 140. canteens, for service men, scenes in, vii: 7, 56, _facing p._ 96 (in color), 268, 270, 394; red cross automobile canteen, vii: 248; group of y. m. c. a. women workers, vii: 269. cantigny, men of 1st div., a. e. f., advancing at, ii: 271; french flame throwers after the attack, v: 32; french sappers at ruins of, v: 33; french and american veterans of, v: 125. cape town, parade to aid recruiting, i: 383; bird's-eye view, vi: 50. caproni triplane, viii: 223. carbon monoxide producer, viii: 187. carrel-dakin treatment ward in a war hospital, xi: 288. cartoons: american, civilization obscured by war, i: 87; burning of american manufacturing plants, i: 275; response to europe's appeal for aid, i: 276; on preparedness, i: 280, 297, 335, iv: 315; german submarine warfare, i: 300, iv: 227; responsibility of rulers for war, i: 314; futility of diplomacy, i: 325, 326; german hatred of u. s., i: 330; barbarian's contempt for warring europe, i: 335; war debt for future generations, ii: 297; german intrigue with mexico, ii: 341; disregard of international law by belligerents, iv: 230; iron cross, v: 23; red cross, vii: 28; effect of u. s. loans to allies, xii: 10; europe's dependence on american food supply, xii: 144. austrian, conception of hatred, i: 149; zeppelin attacks on england, i: 302. belgian, on german brutality, vii: 129. british, kaiser's project of mittel-europa, i: 10; bismarck's resignation from chancellorship, from _punch_, i: 74; german hypocrisy, _punch_, sept. 9, '14, i: 90; u. s. indifference to german outrages, _punch_, sept. 23, '14, i: 91; kaiser as protector of islam, _punch_, apr. 5, '15, i: 100; germany's naval aspirations, _punch_, july 12, '05, i: 105; german advances to holland, _punch_, jan. 11, '11, i: 118; french desire to revenge 1870, i: 121; french alarm over austrian defeat, 1866, from _punch_, i: 123; frightfulness of war, i: 195; kaiser's eastern policy, _punch_, may 10, 1890, i: 203; german use of frightfulness, _punch_, feb. 17, '15, i: 284; kaiser world's enemy, _punch_, aug. 19, '14, i: 294; u. s. protests at british maritime acts, _punch_, jan. 6, '15, i: 298; kaiser's attitude on peace, _punch_, sept. 23, '18, i: 316; u. s. relations with germany, _punch_, apr. 21, '15, i: 324; german atrocities, i: 351; capt. bruce bairnsfather's caricatures of life at the front, ii: 116, iii: 22, 23, 26; belgium's defiance of germany, _punch_, oct. 21, '14, iii: 9, aug. 12, '14, iii: 275; german military failures, _punch_, nov. 4, '14, iii: 29; kaiser outcast from civilization, feb. 19, '15, iii: 299; kaiser's plan for invasion of england, _punch_, oct. 28, '14, iv: 3; german alliance with austria and bulgaria, iv: 6; germany's attempted blockade of england, _punch_, feb. 17, '15, iv: 9; loyalty of india, _punch_, sept. 9 '14, x: 341. dutch, raemaekers' conception of kultur, i: 222; reims cathedral as temple of war, i: 231; germany's decline in strength, '17, i: 307; raemaekers on german deportation of belgian workmen, i: 363; flemish "prosperity," raemaekers' view of, vi: 85; raemaekers' conception of kaiser haunted by sins, vi: 285. french, "they shall not pass," i: 230. german, british policy with regard to asiatics, i: 54; hague temple of peace, i: 94; british difficulties with india, i: 101; caricature of sir edward grey, i: 198; influences forcing u. s. into war, i: 289; injustice of u. s. war against germany, i: 290; japanese menace against u. s., i: 290; on allied somme offensive, '16, i: 301; u. s. munition trade, i: 307; british advances to bulgaria, i: 310; dr. karl helfferich, i: 318; u. s. difficulties with mexico, i: 323; mailed fist, ii: _intro. xix_; on british censorship, ii: 101; on british slackers, ii: 180; on spy scare in england, ii: 260; on u. s. neutrality, ii: 304; british failure to accomplish war aims, iv: 192; on submarine success, iv: 217; british indifference to american submarine losses, iv: 229; frightfulness of war, iv: 232; use of works of art as defense, v: 13. italian, extent of british empire, i: 122; on u. s. entry into war, i: 299; on italian neutrality, ii: 359; germany's invasion of belgium, iii: 274. japanese, german reverses, iv: 175. norwegian, german conception of freedom of the sea, i: 357. unidentified, intervention of powers to save turkey, 1878, i: 41. cartridges, kinds, viii: 60. casement, sir roger, german passport of, ix: 52. castle, vernon, flying, xi: 214. catapult, used for launching airplanes, iv: 141; use in hauling grenades, viii: 119. cavell, edith, funeral procession entering westminster abbey, x: 177; norwich memorial to, x: 180. chamber of deputies, french, xi: 2. chasseur alpin, ii: _frontispiece_ (in color). château-thierry, river front, ii: 82; bird's-eye view, ii: 156, v: 34: x. 4; ruins of, ii: 272; street barricade, v: 61; company of 26th div. going out of action at, v: 153. chaumont, pershing's headquarters at, vii: 317. chavaniac, château of, lafayette's birthplace, vii: 110, xi: 6; interior view, vii: 113. chemical warfare, gas mask adjusted for use, v: 140; filling tanks with phosgene, v: 322; filling shells with mustard gas, v: 323, viii: 165; testing an american gas mask, v: 325; american "model 1919" gas mask, v: 326; gas training for american troops, viii: 121; poison gas in iron drums, viii: 163; effect of gas on leather gloves, viii: 167; filling shells with phosgene, viii: 169; frozen cube of mustard gas, viii: 172; early types of gas masks, viii: 174, 175; french "model m-2" gas mask, viii: 175; american "model k. t." gas mask, viii: 176; types of gas masks used by different belligerents, viii: 177; diagram of gas mask, viii: 178; views of u. s. poison gas plant at edgewood arsenal, viii: 179, 180, 181, 182, 183, 184, 185, 186, 187; gas masks for horses, xi: 315; germans under gas attack, xi: 317; a gas attack before invention of masks, xi: 319. chemin des dames, soldiers exploring captured territory, ii: 78. children in war: american, cultivating war garden, ii: 17; new commander-in-chief, xi: _facing p._ 368 (in color). armenian, refugees from turkey at salonika, vii: 369. belgian, greeting british relief worker, vii: 134; wounded, vii: 242; under care of red cross, xi: 85; refugees in france, xi: 86. british, london school-children in air raid drill, vii: 361; as war gardeners, xi: 364, 367. french, making friends with american soldiers, v: 164, xi: 81; outfitted with clothing by american fund for french wounded, vii: 102; cared for by red cross, vii: 200, 201, 368; war nurseries, vii: 211, 217; going to school with gas masks, vii: 352; being photographed with mothers by germans for identification, xi: 59; school in war zone, xi: 66; little soldier asleep, xi: 70; repatriated war refugees, xi: 75; seeking safety in cellars, xi: 76; offering prayers of thanksgiving, xi: 78; treasuring presents of toys, xi: 79; american red cross worker with little refugee, xi: 87; red cross sketches used in educational campaign for proper care of, xi: 87-90; refugees at la jonchère sanatorium, xi: 91; playing at war, xi: 120, 374, 376, 379, 381, 383, 385; posing for doughboy, xi: _facing p._ 270 (in color); tribute to marching u.s. soldiers, xi: _facing p._ 324 (in color); school-girls waiting to welcome gen. pétain, xii: 114. german, day home for soldiers' children in berlin, xi: 64. italian, group of war refugees, xi: 67; young hero, xi: 68; in underground venetian school, xi: 69; refugees in london, xi: 92. russian, archangel school-children, xi: 379. serbian, war orphans, vii: 148; the little sergeant, xi: 71; war sufferers, xi: 73. _see also_ boy scouts; refugees. christmas card for kaiser from uncle sam, xi: _facing p._ 248 (in color). _city of portland_, u. s. motor ship, launching of, xii: 96. clemenceau, georges, boyhood home, ix: 4; scene of attempted assassination, ix: 9; pen with which signed peace treaty, ix: 13. cleveland, view of docks and shipping, xii: 148. colmar, iii: 66. cologne, bridge across rhine at, i: 157. colt machine-gun, viii: 80; mounted on motor cycle, viii: 81; use against air craft, viii: 83. committee of mercy, caring for belgian children, vii: 134; helping refugees from louvain, vii: 137. congress, u. s., president wilson addressing, i: 329. _connecticut_, u. s. battleship, xi: 222. constantinople, general view, i: 60, iii: 369, vi: 345; galata bridge, iii: 165; golden horn, iv: 29, vi: 337; mosque of st. sophia, vi: 232; imperial treasury, vi: 233. constanza, harbor of, i: 199. convoy system, allied, iv: 7. copenhagen, bird's-eye view, i: 132. cornell university, machine-gun squad, xi: 157. _cornwallis_, british, battleship in action at dardanelles, iv: 42. cossack troops, ii: 233, iii: 130, vi: 195. cracow, florian gate, vi: 203; cathedral, vi: 204. craonne, ruins of french church after bombardment, i: 396. crillon, hotel, headquarters of american peace delegation at paris, xii: 245. culebra cut, panama canal, i: 85. curtis triplane, viii: 210. curtiss biplane, xi: 215. cyprus, scene during ceremonies of british annexation of, i: 176. czechoslovak girls in native dress, vi: 398. d _daffodil_, british ferry boat, after zeebrugge raid, iv: 270. _danton_, french battleship, iv: 377. danube river, iii: 217. danzig, vi: 296. dardanelles, iv: 21, vi: 329; night bombardment at, by british warships, x: 36. dartmouth college, student regiment at drill, xi: 157. de haviland-4 airplane, viii: 192, xi: 217. de wet, gen., surrender to gen. botha, iii: 254. dead, after a battle in flanders, ii: 117; field strewn with allied dead, ii: 194; poilu saluting grave of comrade, iii: _facing p._ 100 (in color); serbians killed in defending belgrade, iii: 283; german outposts killed on galician front, iii: 291; loading trawlers with the killed in gallipoli fighting for burial at sea, iv: 52; italians killed in front of austrian positions, vi: 310; armenians murdered by turks, vii: 96; gravestones for a. e. f. buried in france, x: 115; cartload of, from battlefield, x: 349. decorations, german crown prince bestowing iron cross, ii: 39; first recipients of croix de guerre, iii: 12; clemenceau decorating a priest, iii: 85; rumanian king decorating troops, iii: 219; gen. helmick awarding d. s. c. to colored troops, v: 268; king george of england decorating u. s. soldier, v: 383; badges and medals of american red cross, vii: _facing p._ 50 (in color); salvation army girls being decorated by gen. edwards, vii: 395; marshal joffre decorating officers, ix: 158; honoring french war heroes, x: _frontispiece_ (in color); gen. neville decorating colors of 6th u. s. marine regt., x: 199. delhi, vi: 74. depth charge exploding, iv: 198, x: 307. detroit, automobiles ready for shipment, xii: 17. _deutschland_, german merchant submarine, iv: 215, xi: 236; at baltimore, x: 270; returning to bremen, x: 273. dinant, fortress and town of, i: 143, ii: 349; a château near, iii: 13. dixmude, destruction of, i: _facing p._ 198 (in color). dogs in war, drawing belgian artillery, ii: 196; searching for germans, iii: 18; as red cross workers, vii: 156, 222; pulling ambulance, viii: 378; french war dogs, xi: 341; dutch war dogs pulling machine gun, xi: 343; training french war dogs, xi: 345; italian despatch dogs, xi: 347; italian war dogs carrying supplies to front, xi: 363. douaumont, fort, view from air, viii: 228. dublin, ruins of sinn fein rebellion, '16, vi: 55, 61; street fighting, '16, vi: 58. duma, russian, meeting-place, vi: 173. dynamos, carried away by germans from french and belgian factories, vi: 250. e eagle hut, american y. m. c. a. honor for service men in london, vii: 264, 288, 320. eagle hut, y. m. c. a. house for service men in bryant park, new york city, vii: 265. east africa, german, hindu shop, vi: 51; native troops, vi: 253; rural scene, vi: 254. echternach, vi: 92. egypt, supply depot, vi: 67; native troops, vi: 69; laborers in france, vi: 70; northern, vi: 81. ehrenbreitstein, german fortress at, i: 156. eiffel tower, equipped with searchlight, ii: 267. _emden_, german cruiser, iv: 171; before the war, iv: 173; ashore on keeling island, nov. 9, '14, iv: 182. enfield rifle, viii: 98, 100, 103, 104. erzerum, fight for, iii: 263; general view of, iii: 268. essey, ruins of, v: 156. f _falaba_, sinking of, by u-boat, x: 287. "fantom of death," xi: 395. fère-en-tardenois, ruins of, ii: 323. _feuta_, austrian cruiser, iv: 283. fismes, hôtel de ville, ruins of, v: 191. fiume, vi: 315. flanders, german trenches, ii: 109; the killed after a battle, ii: 117; french and belgian ammunition trains on way to front, ii: 193; german artillery in, iii: 36. flirey, ruins of, v: 151. _florida_, u. s. battleship, guns of, iv: 350. food conservation, drying fruits and vegetables, xii: 52; municipal canning station, xii: 61; a community conference on, xii: 140. ford baby tank, xi: 262. foreign legion, vi: 229, x: 28, xi: 194. france: army, advancing in the vosges on skis, i: 216; at mess with belgian troops, i: 241; on guard on swiss border, i: 259; chasseur alpin ("blue devils"), ii: _frontispiece_ (in color), iii: 49, v: 151; machine gunners at mancourt, ii: 43; scouts on the meuse, ii: 45; sappers at work, ii: 73; poilu on guard in alsace, ii: _facing p._ 136 (in color); receiving instructions before going into trenches, ii: 153; poilus charging, ii: 185; grenadiers at chemin des dames, ii: 215; on march with american soldiers, ii: 219; soldiers' wives waiting in line to get government allowance, ii: 378; poilu, iii: _frontispiece_ (in color); first recipients of croix de guerre, iii: 12; clemenceau decorating a priest, iii: 85; field kitchen, iii: 311; flame throwers at cantigny, v: 32; sappers at cantigny, v: 33; wounded poilu being supported by doughboy, v: 50; sketches of poilu types, v: 156; supply train on way to front, v: 302; wounded soldier being brought in by american comrade, v: 386; north african trooper, vi: _facing p._ 378 (in color); wounded soldiers in switzerland, vi: 381; types of infantry equipment, viii: 71; soldiers watching bombardment in the vosges, viii: _facing p._ 122 (in color); testing fitness of soldiers, viii: 352, 353; marshal joffre decorating officers, ix: 158; decorating war heroes, x: _frontispiece_ (in color); brave wounded, x: 112; spahis, x: 117; group of airmen, x: 207; soldiers resting, x: 367, xi: 190; cavalry on march, xi: 49; sappers with tools, xi: 312; war-dogs, xi: 341, 345; _see also_ battle scenes. artillery, on champagne front, ii: 66; heavy guns on way to front, ii: iii, v: 349; bringing shells to advanced positions, iii: 59; big railway-mount guns, iii: 65, v: 166, viii: 35; famous "75's," iii: 93; supply of shells, iii: 312; 155-mm. guns, v: 172; biggest gun used in war, viii: 52; a big shell, viii: 57. industry, ruined machinery of a manufacturing plant, ii: 77; dynamos carried away by germans, vi: 250. navy, warship taking on provisions, iv: 177; device for detection of u-boats, iv: 308; battleships in battle order, iv: 374; naval guns on western front, viii: 341, 343; _see also_ name of war vessel. parliament, chamber of deputies, xi: 2. "france aroused," sculpture, i: 142. free milk for france, poster, vii: 377; american girls raising funds for, vii: 378. freiburg, vi: 288. fryatt, capt. charles, body being escorted through dover streets, x: 267; funeral cortege entering st. paul's cathedral, london, x: 268; grave, x: 269. _furious_, british floating aerodrome, iv: 287. g galicia, oil wells, iii: 144; ruined oil fields, iii: 265; german soldiers marching through, xi: 17. gallipoli, british troops landing, iii: 167, iv: 37, 40; wounded anzacs, iii: 169, 172; anzac trenches, iii: 170, 171, 342; sedd-ul bahr fortress, iii: 341; anzac camp, iii: 351; australians charging, iii: 353; loading trawlers with allied dead for burial at sea, iii: 354; bombardment of fortifications by allied warships, iv: 38; signaling by heliograph at, vi: 228; british meeting turkish attack, x: 39; scene behind anzac lines, xi: 15. gas masks, types of, v: 326, viii: 174, 175, 176, 177, 178. geneva, interior of victoria hall, xii: 172. _george washington_, u. s. transport used by president wilson for trip to france for peace conference, xii: 162; starting on first trip across with the president, xii: 187. germany: army, southwest african cavalry, i: 11; southwest african camel corps, i: 96; machine-gun abandoned in belgium, i: 237; reservists reporting to colors, i: 248; soldiers bivouacked in ballroom, i: 252; infantry marching to ostend, i: 349; firing from behind defensive shelter, ii: 29; signal corps at work, ii: 100; in trenches in flanders, ii: 109; in underground quarters, ii: 256; soldier surrendering, ii: 295, v: 48; group of airmen, ii: 336; at mess on eastern front, ii: 362; in poland, iii: 108, vi: 207; entrenched machine-gun battery, iii: 131; staff officers observing bombardment, iii: 134; field telephone station, iii. 295; struggling through serbian mud, iii: 399; in trenches in argonne, v: 214; in a russian forest, vi: 212; building trenches, vi: 245; war booty, vi: 250; soldier harvesting, vi: 251; east african troops, vi: 253; pay-day, vi: 267; wounded being gathered by ambulance men, vii: 208; plan of underground village for troops, viii: 126; first line trench shelters at pleimont, viii: 131; "pill-boxes," viii: 132; officer's underground bed-room, viii: 133; a trench, viii: 134; infantry resting, xi: 10, 199; in galicia, xi: 17; bridging a river, xi: 27; entering bombarded russian town, xi: 34; uhlans, xi: 196; troops returning to rear, xi: 197; troops on church parade, xi: 201; entering lemberg, xi: 203; _see also_ battle scenes. artillery, anti-aircraft gun, ii: 364; in flanders, iii: 36; howitzers, iii: 128, viii: 32; observation tower, viii: 15; fragment of long-range shell used in bombarding paris, viii: 46, 48, 58, 63, xi: 272; diagram of long-range shell, viii: 53; prepared position for "big bertha," viii: 61. national assembly, in session, vi: 274. navy, naval base at kiel, ii: 56; battle cruisers, iv: 146; submarine dry-dock in kiel canal, iv: 202; coat of arms on captured u-boat, iv: 212; interior of a u-boat, iv: 237; officers and men of captured u-boat, iv: 238; captured u-boats in brooklyn navy yard, iv: 297; surrender of fleet to allies at scapa flow, iv: 381, 382, 383, 386, 390; naval gun captured on western front, viii: 30; details of u-boats, viii: 265, 267; aboard a torpedo boat, x: 278; _see also_ submarines; _also_ name of vessel. reichstag building, vi: 277, xi: 3. ship-building yard, ii: 19. gibraltar, rock of, ii: _intro. xiv._ _gloucester castle_, british hospital ship, iv: 233. _goeben_, german cruiser, v: 15. gold $5,000,000 in kegs on way from u. s. to europe, i: 269. golden horn, constantinople, iv: 29, vi: 337. grand pré, ruins of, v: 263. "gratitude march," polish school-boy's tribute to american children, xi: 390, 392. great britain: army, in german east africa, i: 14, iii: 252; new guinea colonials, i: 81; railroad construction in france, ii: 44, v: 296; machine-gun unit on western front, ii: 125; regiment of highlanders, ii: 172; motor lorries on way to front, ii: 192, iii: 5; street barricade against germans in a french town, ii: 289; assisting in recruiting, ii: 310; descending mount of olives in palestine, ii: _facing p._ 332 (in color); cavalry in trenches, ii: 19; on italian front, iii: 241; in cameroons, iii: 251; supply train, iii: 317; advance medical station in palestine, iii: 326; cavalry resting, iii: 362; wounded awaiting transportation, iii: 385, vii: 196, 238; bringing up pontoons for use at front, iii: 387; "die hards," iii: 388; scots on outpost duty, iii: 389; on salonika front, iii: 397; going over the top, flash-light photo, v: 293; recruiting posters, vi: 6, 63, vii: 129, xi: 334; in trenches, vi: 62; on march, vi: _facing p._ 130 (in color); supplies at salonika, vi: 225; bandaging wounded on western front, vii: 97; "tommy" making friends with belgian children, vii: 134; sudanese troops in egypt, vii: 323; entering bagdad, vii: 326; troop train in france, vii: 388; field oven viii: 291; rifle brigade fighting way through neuve chapelle, x: 11; charge of london scottish at messines, x: 45; black watch regiment, x: 56; scots fighting through loos, x: 157; soldiers with captured souvenirs, xi: 182; cavalry camp, xi: 184; smiling tommies going to battle, xi: 185; wounded soldiers at neuve chapelle, xi: 187; awaiting inspection, xi: 297; highlander with doughboy, xi: 361; _see also_ australia; battle scenes; canada; india; new zealand; south africa. artillery, in action, ii: 128, 132, x: 107, 129; returning from front, ii: 158; big guns on way to front, vi: 65; hauling big gun into position, vi: 90; howitzer, viii: 33. navy, on board a battleship, iv: 25; on board a monitor, iv: 26; gun and gun crew of monitor, iv: 34, 281; mine-sweepers, iv: 51; patrol boat on duty, iv: 73; veterans of battle of jutland, iv: 122, 155; recruiting poster, iv: 139; battle cruisers, iv: 151; heroes of zeebrugge raid, iv: 155; submarine officer watching for target, iv: 236; monitor in action, iv: 282; destroyer on patrol duty, iv: 295; treating wounded in mesopotamia, vii: 327; shell of super gun, viii: 4; grand fleet, xi: 32; _see also_ name of war vessel. parliament, houses of, xi: 2. greek reservists in u. s. reporting for duty, i: 261. grenades, filling, viii: 171; throwing, x: 21. _grosser kurfürst_, german battleship surrendered at scapa flow, iv: 389. gurkhas, at english entertainment, vi: 17; at battle front, x: 87; capturing german trench, xi: 192; pipers, xi: 333. h hague, peace palace at, i: 102. hamburg, river front, vi: 269. _hamidieh_, turkish cruiser, officers and crew, iv: 46. handley-page bombing plane, viii: 204, 220. heligoland, harbor of, iv: 241; street scene, iv: 242. heliograph, signalling by, vi: 228. helmets, manufacture of, viii: 65; use by war photographers, viii: 67; helsingfors, market scene, vi: 197; general view, vi: 199. hermannstadt, iii: 220. herzegovina, town scene, vi: 361. _hindenburg_, german battleship, iv: 385, 389. hindenburg line, tunnel entrance, v: 294. hindu maharajah, vi: 79. hindu shop in east africa, vi: 51. hochoffen company's smelters, lübeck, germany, i: 364. hohenzollern, castle, i: 33; coat of arms, i: 153. "home from france," iii: _facing p._ 348 (in color). horses, treatment of, wounded in battle, vii: 227, 228. hospitals: american reading to sick and wounded, v: 339; an evacuation hospital, v: 345; at neuilly, vii: 38, 77, 199; on board battleship, vii: 41; hospital trains, vii: 58, 107, 252, viii: 380; walter reed hospital, washington, vii: 64; tent hospital at auteuil, vii: 205, 206, 243; debarkation hospital no. 5, new york city, vii: 347; gassed soldier at a field hospital, vii: 354; hospital ship _mercy_, viii: 370, 371, 374. british, american women's, in london, vii: 30; bombarded by germans, vii: 82; home of duke of westminster as, vii: 89; on astor estate at cliveden, vii: 106, 281; prince of wales hospital at tottenham, vii: 108; duchess of sutherland's, in france, vii: 109; university college, oxford, turned into, vii: 198; hospital trains, vii: 241, viii: 379; hospital ships, vii: 253, 396. dutch, german wounded being cared for at maastricht, vii: 174. french, barges converted as, vii: 49, 236, 244; near soissons, airplane view, vii: 63; box-car converted into, vii: 239. german, hospital train, vii: 220. rumanian, anti-typus bath and disinfectant train, vii: 212. russian, scenes in, vii: 363, xi: 147. salonikan, bombarded by germans, vii: 159. swiss, for treatment of tubercular patients, at leysin, vii: 247. howitzers, path of trajectory and effect of fire, ii: 129, iii: 159, viii: 135; german, iii: 128, viii: 32; british, viii: 33; 8-in., with caterpillar mount, viii: 40; construction of, xii: 73. hungary, celebrating establishment of republic, vi: 323. hydrophones, for detection of u-boats, viii: 17, 19. i _indefatigable_, british battle cruiser, iv: 148. india, army, behind the lines in france, i: 219; sepoys, iii: 182; at a listening post in the desert, iii: 190; gurkhas at english entertainment, vi: 17; detachment standing at attention, vi: 73; in desert trenches, vi: 75; hindu servants of british officers, vi: 77; gurkhas at battle front, x: 86; gurkhas capturing german trench, xi: 192; gurkha pipers, xi: 333. indians, american, in u. s. army, xi: 176, 177. _inflexible_, british battleship, iv: 44. international bridge, niagara falls, vi: 31, 34. _invincible_, british battle cruiser, iv: 72, 145. ireland, recruiting scene, vi: 54; ruins of dublin rebellion, '16, vi: 55, 61; street fighting in dublin, '16, vi: 58. _iris_, british ferry boat, returning after zeebrugge raid, iv: 270. isonzo valley, iii: 238. italy: army, group of italian and u. s. airmen, i: 257; at mass before battle, ii: 50; machine gunners at front, ii: 95, 238; in trenches, prepared to repulse attack, ii: 150; mountain sentinel, ii: 237, vi: 318; in first line trenches overlooking austrian position, ii: 243; arditi shock troops in action, ii: 247; climbing to mountain positions, ii: 251, iii: 242; first line troops under bombardment, ii: 253; digging trenches in the alps, iii: 225; alpini, iii: 228; an outpost visited by cadorna, iii: 233; sharpshooters on mount nero, iii: 237; entrenched, vi: 115; mobilization, vi: 125; recruits, vi: 126; directing artillery fire from a mountain crag, vi: 307; in mountain dugout, vi: 314; hard pressed in battle, x: 63; fording mountain torrent, xi: 28. artillery, big guns, ii: 249, iii: 245; hoisting guns up mountain, viii: 5; anti-aircraft, viii: 10, 16; a gun used against austrian offensive, viii: 38; long-range bombardment, x: 359; artillery crossing mountains, xi: 40. declaration of war, symbolized, iii: _facing p._ 230 (in color); crowds celebrating, vi: 116; anti-german demonstration in rome, vi: 117. navy, motor boat sinking austrian battleship, iv: 370; sea tank breaking through enemy harbor defense, iv: 371; mine layer, iv: 372. j japan, artillery advancing on tsing tao, ii: 358; torpedo boats off yokohama harbor, iv: 169; state procession, vi: 383. _jason_, in plymouth harbor, vii: 135. jerusalem, kaiser's entry, 1898, i: 97; british tank in streets of, ii: _facing p._ 280 (in color); walls, ii: _facing p._ 370 (in color); surrender of, iii: 195; gen. allenby's entry, iii: 323. jutland, battle of, british veterans of, iv: 122, 155; british warships shelling german cruiser, iv: 130; night action, iv: 132. juvigny, german machine gun nests at, v: 261. k kemmel hill, fight for, ii: 152; french post on, v: 289. kiel, harbor of, ii: 56; u-boat dry dock in canal, iv: 202. kiev, street scene, vi: 240; history museum, vi: 244. knights of columbus, serving members of "lost battalion" after rescue, vii: 329; group of secretaries at lafayette monument, paris, vii: 330; providing music for troops on leave, vii: 332; hut on broadway, new york city, vii: 333; group of workers in battle area, vii: 335; helping wounded, vii: 336; in verdun, vii: 337; in the argonne, vii: 338. knitting, in central park, new york, vii: 123; new york firemen doing their bit, vii: 125. königgrätz, defeat of austrians by prussians in battle of, i: 42; occupation by prussians, 1866, i: 47. königsberg, iii: 290. kremlin, the, moscow, ii: 234. _kronprinz wilhelm_, german sea raider, iv: 196. krupp works, essen, ii: 106. kut-el-amara, native bazaar, iii: 181; banks of tigris at, iii: 183; group of venerable inhabitants, iii: 318. l _l-15_, german zeppelin, sinking, x: 361. _l-49_, zeppelin, captured by french, viii: 249; fuel tanks on, viii: 253. lafayette, marquis de, tomb, pershing's visit to, v: 99; birthplace, vii: 110, xi: 7; paris monument, vii: 330; brooklyn monument, xi: 7. lafayette fund, soldier's kit, vii: 88. laundry, on wheels for army, viii: 288. le mans, y. w. c. a. hostess house at, vii: 272. _leipzig_, german cruiser, iv: 75. lemberg, iii: 121, vi: 160; german troops entering, xi: 203. leoning monoplane, viii: 207. _leviathan_, u.s. transport, bringing home 27th div., v: 298; entering n.y. harbor, vii: 382. lewis machine-gun, v: 240, viii: 86. liberty bell, vi: 227. liberty loan, posters, x: 339, 353, xi: 109, xii: 7, 14, 128, 131. liberty motor, viii: 194, 197, 198, 199. liége, bird's-eye view, i: 336; meuse bridge, iii: 6. ligny, battle of, in franco-prussian war, i: 65. lille, german troops in, i: 172; airplane view of, viii: 231. _lion_, flagship of adm. beatty, at battle of jutland, iv: 147; after battle off dogger bank, iv: 252. liquid fire, x: 19. lisbon, celebrating declaration of war, vi: 374. locomotives, u. s., ready for shipment overseas, v: 195; building of, viii: _facing p._ 282 (in color); being assembled in france x: 391. locust point, ruins of fire suspected of german incendiary origin, i: 279. london, buckingham palace and queen victoria's monument, i: 127; scene in front of buckingham palace on night of declaration of war, i: 138; crowd in front of royal exchange listening to king's reading of war proclamation, i: 145; night illumination for search of german air raiders, i: 151; mass meeting to urge internment of germans, ii: 259; view from westminster abbey, vi: 4; anti-conscription demonstration, vi: 7; recruiting scene, vi: 8; lord mayor's show, vi: 9; tower of, vi: 11; anti-german riot, x: 334. london scottish, charging at messines, x: 45. "lost battalion," members of, being fed at knights of columbus field kitchen, vii: 329. louvain, ruins of library, i: 239; refugees from, vii: _intro. xii._ lucy-le-bocage, ruins of, v: 134. luresnes, american cemetery at, vii: 224. _lusitania_, sinking of, i: 291; float representing sinking, i: 296; facsimile of german warning against sailing on, i: 319; attempt to save passengers while sinking, iv: 219; popular german postcard depicting torpedoing, iv: 221; german medal celebrating destruction, iv: 222; appeal to revenge sinking of, iv: _facing p._ 222 (in color); funeral procession of victims, iv: 225; on last voyage, iv: 226, xi: 20. luxemburg, city of, vi: 93. m machine-guns, lewis, v: 240, viii: 86; colt, viii: 80, 81, 83; benet-mercier, viii: 82; german, viii: 85; browning, viii: 85; on airplanes, viii: 193, 209, 211. madrid, bolshevik demonstration, vi: 372. mainz, vi: 295. _mainz_, german cruiser, sinking off heligoland, iv: 243. _majestic_, british battleship, ii: 204. matines, cathedral, vi: 102. malingering, tests for detection of, viii: 359, 363. malmaison, fort, german defenses at, ii: 41. mancourt, french machine gunners repulsing german attacks, ii: 43. marines, u. s., _see_ u. s., marines. _markgraf_, german battleship surrendered at scapa flow, iv: 389. marne, battles of, dead and debris on battlefield, iii: 25, 94; germans forcing crossing of river, iii: 32; french celebrating anniversary of, iii: 34. marne river, at château-thierry, ii: 82, x: 4; allied airplanes flying over, ii: 83; germans crossing, iii: 32; u. s. troops resting near, v: 42. _marseillaise_, singing of, xi: 327. marseilles, arrival of russian troops at, i: 251. martin bombing plane, viii: 234. mascots, lion mascots of maj. lufberry, xi: 229; baboon mascot of royal engineers, xi: 230. masks, for shell-torn faces, viii: 389, 391. maubeuge, ruin of fort at, ii: 11. maude, gen., grave of, iii: 187. mcpherson, fort, u. s. army student officers at, v: 301. melbourne, australian army embarking for gallipoli, ii: 201; alexandra gardens, vi: 43. _mercy_, u. s. hospital ship, view of a ward, viii: 370; operating room, viii: 371; x-ray apparatus, viii: 374. mesopotamia, new zealanders digging trenches, ii: 91; bridge across tigris, iii: 319; native silver-smiths, iii: 330; camel caravan, iii: 367; bridge across narin river destroyed by turks, vi: 222. messines, battle of, iii: 360. metz, i: 332. meuse river, ruins of bridge destroyed by germans, i: 313; at verdun, ii: 37, iii: 61, 303; french scouts reconnoitering on, ii: 45; at liége, iii: 6; near dinant, iii: 13; passing through country north of verdun, iii: 309; wreckage on banks, iii: 328. milan, pro-war demonstration, vi: 119, 124. mine-field, viii: 273, 275. mine-layers, iv: 200, 329, 372, viii: 267 (plan of german mine-laying submarine). mine-laying, iv: 324, 326, 331. mines, iv: 325, 327; floating, xi: 247. mine-sweepers, iv: 51, 260. mobile repair shop, viii: 295. _moltke_, german battle cruiser, with crew, iv: 257. monastir, vi: 355. monitors, _see_ great britain, navy. mortars, viii: 3, xi: 293. moscow, the kremlin, ii: 234; red square, vi: 167. moselle river, v: 81. "mothers of france," vi: _frontispiece_ (in color). motor truck, equipped with apparatus for crossing trenches, viii: 292. motor boats, construction of, in new jersey shipyard, xii: 102. mouilly, battlefield near, in st. mihiel salient, v: 204. mülhausen, street scene, ii: 183. murat, prince, palace of, president wilson's paris residence during peace conference, ix: 67, 68. mustard gas, filling shells with, v: 323, viii: 165; frozen cube of, viii: 172. n nancy, bird's-eye view, ii: 140. napoleon, tomb of, x: 233. _nautilus_, fulton's submarine, iv: 203. naval scenes, general, firing a salvo, iv: 77; lookout in crow's nest, iv: 163; destroyer on patrol, iv: 193; torpedo boat on patrol, x: 284; target practice, xi: 281; winter patrol, xi: 298; battleship in rough sea, xi: 300; _see also_ under name of country, navy; _also_ particular references such as submarines; etc. _n-c-i_, u. s. seaplane, viii: 238. _nebraska_, u. s. battleship, crew preparing to sow mine field, iv: 326. netherlands, mobilized soldiers reading war news, i: 263; military maneuvers, ii: 181; troops at machine-gun practice, vi: 376; war refugees in, vii: 169; red cross volunteers, vi: 170. neufmaisons, street scene, v: 54. neuilly, american hospital at, vii: 38, 77, 199. new guinea, native troops in british service, i: 81; native women as plantation workers, i: 82. new york, parade of german-americans, '14, i: 272; austrian reservists reporting at consulate at outbreak of war, i: 281; display of flags on armistice day, nov. 11, '18, iii: 401; victory parade, iv: 138; red cross parade, vii: 2; women of motor corps of america parading, vii: 57; victory way, xii: 133. _new york_, u. s. battleship, visited by king george and adm. beatty, iv: 11, 85, 345; airplane view, iv: 358; in a storm, iv: 395. new zealand, army, digging trenches in mesopotamia, ii: 91; in egypt, vi: 46. _north carolina_, u. s. battleship, crew visiting pyramids, iv: 353. _north dakota_, u. s. battleship, iv: 344. north sea allied patrol, x: 285, 294. notre dame, church of, at albert, after german bombardment, xi: 23. noyon, french entering, '18, iii: 102. nurses, french, vii: _frontispiece_ (in color); reading to convalescent, vii: 21; japanese, vii: 44; british, vii: 52; red cross, treating allied wounded, vii: 65; reading last rites over the dead, vii: 76; polish, recruited in america, vii: 353; russian, vii: 362; french sister of mercy, x: _facing p._ 48 (in color); writing letters for wounded, x: 380; _see also_ red cross. o observation tower, german collapsible type, viii: 15. oglethorpe, fort, u. s. army student officers at, ii: 319. olives, mount of, ii. _facing p._ 332 (in color). oppressed nations, representatives of, at independence hall, philadelphia, vi: 227. ostend, esplanade, ii: 224; bird's-eye view of harbor, iv: 275; british cruiser _vindictive_ being sunk at, iv: 276. p palestine, british troops with captured turkish plane, ii: 93; mount of olives, ii: _facing p._ 332 (in color); native market, iii: 194; dressing-station for british wounded, iii: 326; _see also_ name of towns in, as jerusalem, etc. parachute, french type, viii: 263. parades, german-americans in new york, '14, i: 272; in cape town, to help recruiting, i: 383; in london, recruits passing whitehall, i: 387; a. e. f. in paris, july 4, '17, ii: _intro. xxiv_; in petrograd celebrating capture of lemberg, ii: 230; in berlin, on birthday of kaiser, ii: 258; in new york, victory parade, iv: 138; recruits at chicago, v: 377; lord mayor's show, london, vi: 9; women's, in london, '15, vi: 18; dominion day in winnipeg, vi: 27; anzac day in sydney, '18, vi: 44; allies in vladivostok, vi: 193; red cross in new york, vii: 2; women of american motor corps, in new york, vii: 57; russian troops in paris on bastille day, x: 376; u. s. troops in paris, july 4, '19, x: 389. paris, group of americans stranded in, by outbreak of war, i: 277; congestion at railroad station on declaration of war, i: 278; interior of american embassy, i: 288; allied conference at french foreign ministry, march, '16, i: 398; eiffel tower, ii: 267; crowd outside bank of france on outbreak of war, ii: 382; bird's-eye view, v: 379, xii: 258; on watch for enemy with searchlights, vi: 97; bois de boulogne, vi: 100; armistice celebration, vi: 107; joan of arc anniversary celebration, vi: 108; bourse, vi: 109; may day riots, may 1, '19, vi: 111; poor getting coal allotment, vi: 112; theatre turned into relief warehouse, vii: 114; crowd in place de la concorde to greet president wilson, xii: 164; crowd at place de l'etoile welcoming wilson, xii: 193. parliament, british, houses of, xi: 2. passchendaele ridge, british bombardment of, iii: 78. peace treaty, clemenceau's pen in signing, ix: 13; table and chair used in signing, xii: 157. _pegasus_, british airplane carrier, iv: 81. _pennsylvania_, u. s. battleship, airplane view of, iv: 360. periscope, land use, ii: 179. permanent blind relief war fund, italian fiesta for, at new york public library, vii: 258. persia, christian inhabitants, vi: 336. petrograd, celebrating capture of lembery, ii: 230; war-time crowds, vi: 137; burning, vi: 146; celebrating kerensky revolution, vi: 152; along the canal, vi: 155; view from st. isaac's cathedral, vi: 163; street orators, vi: 165, 172; tauris palace, vi: 173; crowds awaiting food rations, vii: 372, 373. phosgene, filling shells with, viii: 169. pigeons, as military messengers, viii: 327, 328. pill-boxes, viii: 132, xi: 253. place de la concorde, paris, welcoming president wilson, xii: 164. place de l'etoile, paris crowds welcoming president wilson, xii: 193. plymouth, england, harbor, vii: 135. "poilu," iii: _frontispiece_ (in color). pola, harbor, iv: 369, vi: 312. poland, german trenches in, iii: 108; troops in warsaw, vi: 205; women's battalion of death, vi: 218; unloading food supplies from u. s. in warsaw, vii: 355; shipping kosher meat for jewish war sufferers in, vii: 357. pontoons, iii: 387. pope's palace, interior of, ix: 406. port said, i: 16, iii: 200. posters: american, for navy recruiting, iv: 316; for marine recruiting, v: 131, x: 316; for red cross, vii: 20, 21, 23, 26, 132, xi: 285; for free milk for france fund, vii: 377; for liberty loans, x: 339, 353, xi: 109, xii: 7, 14, 128, 131; war savings stamps, prize poster, x: 346. british, recruiting, vi: 6, 63, vii: 129, xi: 334; for women's land army, vi: 13; for belgian relief, vii: 128. french, war loan, vi: 96, 98; for soldiers' relief, vi: 99, 103; war exposition, vi: 113. italian, war loan, vi: 327. potsdam, throne room of royal palace at, i: 159. prague, vi: 397. _prinz eitel friedrich_, german sea raider, iv: 196. prisoners of war: austrian, in italy ii: 97; in serbia, iii: 154; captured by russians, iii: 293, vi: 182. belgian, snipers on way to execution by germans, i: 236. british, at göttingen, iii: 301; condition on being released from german prison camp, vii: 39. german, captured in first marne battle, ii: 143, 173; on way to prison camp, ii: 328; serving as stretcher bearers, ii: 334; captured at verdun, iii: 315; u-boat crew captured by americans, iv: 238; captured by russians, vi: 177; being searched for concealed weapons, vi: 284; group under british guard, vii: 104; in prison camp, vii: 303; at fort mcpherson, x: 373. russian, having mess, vi: 139; as street laborers, vi: 184, 217. serbian, on way to austria, vii: 154. turkish, on march, vi: 232. propaganda, dropped by british in german lines, ii: 320; device for releasing from aircraft, ii: 321. prussian chamber of deputies in session, vi: 259. przemysl, vi: 135. q _queen elizabeth_, british super-dreadnought, iii: 175, iv: 31. queen elizabeth medal, belgian, ix: 391. quirinal palace, rome, vi: 128. _quistconck_, launching of, at hog island, xii: 26. r _r-34_, british dirigible, viii: 251, 255. raemaekers, louis, cartoons by, i: 222, 363, vi: 85, 285. raines foundation schools, london, converting crates into baby cradles, vii: 141. ramsgate, after an air raid, ii: 268. red cross: american, new york parade, vii: 2; a large flag, vii: 13; national headquarters, washington, vii: 18; posters, vii: 20, 21, 23, 26, 132, xi: 285; reading to convalescents, vii: 21, 204; kaiser's trophy donated to, vii: 25; rolling kitchens, vii: 33; knitting for soldiers, vii: 34; paris headquarters, vii: 36; sightseeing with convalescent u. s. soldiers in london, vii: 40; hospital ship _red cross_, vii: 45; medal and badges of, vii: _facing p._ 50 (in color); preparing christmas packages for a. e. f., vii: 55, 279; hospital train, vii: 58; advance station in france, vii: 61; sightseeing with u. s. sailors on leave in london, vii: 62; distributing cigarettes to russian wounded, vii: 79; field canteen in france, vii: _facing p._ 96 (in color); looking after belgian refugees in paris, vii: 112; worker among refugees, vii: _facing p._ 158 (in color); supplies at brest, vii: 171; making bandages, vii: _facing p._ 198 (in color); caring for french children, vii: 200, 201; distributing gifts to french children, vii: 229; caring for wounded belgian boy, vii: 242; coffee and cakes for convalescent a. e. f. at auteuil hospital, vii: 243; loading supplies for overseas, vii: _facing p._ 250, 350 (in color); mailing letters for departing soldiers, vii: 297; in italy, vii: _facing p._ 300, 374 (in colors); canteen at trieste, vii: 301; red cross men in the making, xi: _frontispiece_ (in colors); nurse visiting poor of marseilles, xi: 83; nurse bathing belgian baby, xi: 85; educational cartoons for child welfare in france, xi: 87-90. belgian, hospital trains, vii: 118. british, serving food to germans, vii: 7; wounded soldiers at gift house, vii: 70; in mesopotamia, vii: 260. dutch, volunteers, vii: 170. french, canteen, vii: 48; barge hospitals on the seine, vii: 49, 236; giving refreshments to soldiers on troop train, vii: 226; hospital train, vii: 239; motor canteen, vii: 248; caring for wounded children, vii: 368. japanese, nurses assisting at operation, vii: 44. russian, group of nurses, vii: 362. _red cross_, hospital ship, vii: 45. refugees of war: american, tourists fleeing from war zone, i: 271. belgian, wives seeking news of deported husbands, i: 177; fleeing before german invasion, i: 355, 356; gathered in front of town hall, antwerp, ii: 169; fleeing from antwerp, iii: 17, xi: 60; germans deporting women, vi: 86; fleeing from louvain, vii: _facing p._ 1; assisted at paris railroad station by red cross, vii: 112; relief bundles for, vii: 126; two aged refugees from louvain, vii: 137; finding food and shelter in holland, vii: 169; returning home, ix: _facing p._ 368 (in color); children in france, xi: 86. french, under escort of german guards, i: 205, x: 351; going into holland, i: 224; fleeing out of war zone, i: 270, xi: 57, 58; on road to amiens, ii: 151; in marne district, iii: 298; among ruins of termonde, vii: 74; getting clothing in paris from american fund for french wounded, vii: 102; old peasant woman among ruins of home, vii: 150; red cross relief worker among, vii: _facing p._ 158 (in color); from château-thierry, vii: 312; children found at château-thierry by allied soldiers, xi: 61; child seeking safety in barn, xi: 65; repatriated french children, xi: 75; children at la jonchère sanatorium, xi: 91; arriving in paris with the family goat, xi: 178. german, from east prussia, arriving in berlin, aug., '14, ii: 23. italian, children, xi: 67, 69. rumanian, vi: 350. salonikan, vii: 163, 164, 166, 369, 371. serbian, tramping along railway tracks, vii: 158; finding shelter in caves, vii: 160; destitute children, xi: 73. reichstag building, berlin, vi: 277, xi: 3. reims (rheims), cathedral, i: 76; cathedral being bombarded by germans, i: 225, 245; bird's-eye view, ii: 155; ruins of, ii: 211. renault tank, viii: 159, xi: 260. "reunited," home return of soldier, xi: _facing p._ 188 (in color). rifle brigade, british, fighting way through neuve chapelle, x: 11. rifles, diagram showing path of bullet, viii: 93; u. s. types, viii: 98, 99, 100, 103, 104; german anti-tank, viii: 139. riga castle, iii: 146. rio de janeiro, vi: 391. riva, porta san marco, ii: 49. road construction behind the lines in france, v: 398. romagne, a. e. f. cemetery at, v: 233. rome, anti-german demonstration, vi: 117; crowds celebrating king's birthday, vi: 127; quirinal palace, vi: 128. roosevelt, quentin, entrance card into école de tir aerien, x: 242; record card at école de tir aerien, x: 245. roosevelt, theodore, sagamore hill home, x: 248. rotterdam, harbor, vii: 139. ruggles orientator, machine for testing aviation applicants, viii: 357. rumania, artillery detachment passing in review before king ferdinand, vi: 351. russia: army, marching through marseilles, i: 251; entering burning town in eastern galicia, ii: 26; cossack troops, ii: 233, iii: 130, vi: 195; field guns, ii: 352, vi: 170; outposts encountering germans, ii: 356; women's battalion of death, iii: 125, vi: 162, xi: 206, 208; reserves on march, iii: 266; at field mass, iii: 270, vi: 144; military funeral, vi: 133; troops in panic, vi: 143; reservists mobilizing, vi: 149; greeting news of czar's overthrow, vi: 157; on way to front without rifles, vi: 176; artillery retreating, vi: 209; attacking with hand grenades, vi: 213; riflemen, vi: 215; an impromptu orchestra, vii: 152; trenches on eastern front, viii: 127; on parade in paris, x: 376. general scenes, rural district, vi: 138; children's procession demanding education, vi: 147; group of radicals, vi: 178; winter scene, vi: 191; peasant gathering herbs, vii: 367. s _s-126_, german destroyer, torpedoing of, by british submarine, iv: 208. sagamore hill, roosevelt home at, x: 248. st. mark's, venice, vi: 320. st. mihiel sector, "dead acres," iii: 98; trenches, iii: 99; tank in action at mont sec, v: 202; battleground near mouilly, v: 204. st. nazaire, first a. e. f. camp at, v: 107. st. paul's cathedral, london, u. s. flag in, x: 30. st. quentin, germans in, xi: 51. st. sophia, mosque of, vi: 232. salonika, withdrawal of greek troops, iii: 205; greek troops camping in turkish cemetery, iii: 209; alexander's arch, iii: 394; british supplies, vi: 225; war refugees, vii: 163, 164, 166, 369, 371; rag-picker, xi: 62; water-boy, xi: 63. salonika front, sandbag bridge, iii: 210; british labor battalion at work, iii: 397. salvation army, the "doughnut girl," vii: 380; at the front with british, vii: 381; soft drink bar for service men, vii: 384; women workers cooking doughnuts near front lines, vii: 386, x: 189; women workers being decorated by gen. edwards, vii: 395; collecting funds in new york, vii: 398; hut in union square, new york city, vii: 399. scarborough, england, after a german naval raid, iv: 244. scheldt river, pontoon bridge across, ii: 167. sea scouts, british, boy signalmen, xi: 96. searchlight, mounted on motor truck, viii: 76. sedan, view of, v: 94. sedd-ul bahr fortress, after allied bombardment, iii: 341, iv: 49. senegalese soldier, vi: _facing p._ 270 (in color). senlis, cathedral, iii: 335. sepoys, iii: 182. serajevo, view of, i: 4. serbia: army, group of officers, i: 244, vi: 357; type of soldier, ii: 33; outposts on guard, iii: 282; abandoned artillery, iii: 395; artillery on way to front, iii: 396; troops on march, vi: 246; in camp, vi: 356; artillery in action, vi: 358; campaigning in winter, vii: 157; lack of equipment, vii: 161. general, germans struggling through serbian mud, iii: 399; relief boxes for, vii: 114; war medal, vii: 146; packing clothing for war sufferers of, at bush terminal, brooklyn, vii: 165; monument to mark where serbs reëntered their country after exile, vii: 167; group of peasants, vii: 370; selling wood in market place, xi: 72. _seydlitz_, german battleship surrendered at scapa flow, iv: 389. shells, path of howitzer fire, ii: 129, iii: 159; french, iii: 312, viii: 57; ricochet and non-ricochet, iv: 333; fragments of german, used in long-range bombardment of paris, viii: 46, 48, 58, 63, xi: 272; line of flight of german, used in bombardment of paris, viii: 49; path of trajectory of 120-mile range u. s. gun, viii: 50; construction of german, used in long-range bombardment of paris, viii: 53; manufacture of, viii: 73; path of shrapnel fire, viii: 74; shrapnel exploding, xi: 275; heavy shells on way to front, xi: 279. sherman, fort, u. s. soldiers on parade, xi: 36. shrapnel, line of flight, viii: 74; exploding, xi: 275. siberia, station on trans-siberian railroad, vi: 190. sirens, for warning of german air raids, viii: 216. sister of mercy, x: _facing p._ 48 (in color). smoke screens, ii: 198, iv: 57, viii: 269, 325, xi: 402. soissons, ruins of cathedral, iii: 92. somme, battlefield of, ii: 146, iii: 56; british charging during battle of, iii: 57; front visited by clemenceau, xi: 127. sound horns, for detection of airplanes, viii: 18. sound-mirror, for detection of airplanes, viii: 21. south africa, union of, troops embarking for gallipoli, iii: 176. southwest africa, german, native village, vi: 260. spad airplane, viii: 190. spahis, x: 117. spies, german, english mob attacking shop of suspect, i: 227; under french guard, x: 332. springfield rifle, viii: 98, 99, 103, 105. stage women's war relief, supplying service men with newspapers, vii: 345; service house in new york, vii: 346; theatricals at new york debarkation hospital, vii: 347. _stamboul_, turkish transport struck by torpedo, iv: 209. stanford university, cadets at trench drill, xi: 167. _star-spangled banner_, singing of, by u. s. service men, xi: 331. stelvio pass, in the alps, xi: 42. stockholm, bird's-eye view, i: 134. strassburg, i: 306. strassburg statue, paris, vi: 105. stretchers, types, v: 338, viii: 377; struck by shell, vii: 51. submarines, rising to surface, iv: 56; anti-submarine patrol, iv: 193, 379, xi: 30; german dry-dock for, in kiel canal, iv: 202; development of holland submarines, 1895--1915, iv: 204; british submarine sinking german destroyer, iv: 208; interior, showing torpedo tubes and mechanisms, iv: 210, 237; coat of arms on captured u-boat, iv: 212; u-boat being sunk by destroyer, iv: 213; salvaging torpedoed merchantmen, iv: 218; use of decoys to lure freighters, iv: 254, 276; captured u-boats at brooklyn navy yard, iv: 297; u. s. types, iv: 299, viii: 280, xi: 240; details of german u-boats, viii: 265, 267; use of nets for trapping, viii: 268, 270, 272, xi: 238; use of hinged plates on sides of ships for protection against, viii: 271; mine fields for destruction of, viii: 273, 275; detail of periscope, viii: 277, 282; crew's quarters on board u-boat, x: 275; british type, x: 296; torpedoed ship settling into water, xi: 19; u-boat submerged, xi: 234; u-boat on surface, xi: 235; close-up view of conning-tower, xi: 242; submerged, with conning-tower and periscope projecting, xi: 244; placing torpedo in tube, xi: 246. sudanese troops, in egypt, vii: 323. suez canal, british supply depot on, vi: 223; launching of first british seaplane on, vi: 224. _suffolk coast_, disguised british warship, iv: 301, 303. _suffren_, french battleship, iv: 22. surgical dressing, making of, by volunteer women workers, vii: _facing p._ 198 (in color); warehouse of, vii: 219. _sussex_, channel ferryboat, torpedoed by u-boat, x: 281. sweden, food riots, xii: 46. switzerland, medal cast in honor of president wilson, ix: 69. sydney, australia, town hall, vi: 37; recruiting scene, vi: 41. t tanks, early type, ii: 276; camouflaged, ii: 276; in action, ii: 279, v: 157, xi: 252, 256, 263; sketch drawing, iii: 339; dragging camouflaged gun, v: 316; german anti-tank rifle, viii: 139; framework of first tank, viii: 156; "baby" tank, xi: 270. british, being inspected by king albert, ii: 278; in jerusalem, ii: _facing p._ 280 (in color); approaching gaza, ii: 282; replica of first tank used, vii: 300; _britannia_ in u. s., viii: 137, 138, 142; a whippet, viii: 140; in action, viii: 149, x: 59; tank gun, viii: 150. french, st. chamond type, ii: 275; "baby" tanks, ii: 281, viii: 158, 159 (interior view of renault tank), xi: 260 (exterior view of renault tank); supporting advancing u. s. troops, v: 193; tractors for transporting renaults, viii: 141; interior views, viii: 144, 145, 147, 159 (renault); predecessor of tank, viii: 155; in action, viii: 157; renault type, viii: 159 (interior view), xi: 260. german, overturned, viii: 160; miniature one-man tank, viii: 161. u. s., supporting infantry attack, v: 181; going over the top at st. mihiel, v: 202; tank troops training, v: 287; largest in world, viii: 146; first, xi: 258; ford "baby" tank, xi: 262. targets, range-finding on u. s. battleship, viii: 11; for long-range, viii: 94; for rapid fire, viii: 95; for 200 and 300 yards, viii: 97; for mid-range, viii: 101; spotting disk, viii: 101. tauris palace, petrograd, vi: 173. teleferica, cableways used by italians to cross chasms, viii: 304. telegraph, field headquarters station, i: 353; linesman repairing wires under fire, x: 148. telephone in war, first unit of u. s. women operators, ii: 309; german field telephone, iii: 295; central at french army headquarters, viii: 323; "listening in," x: 394. termonde, ruins of, i: 340, 341. thiaucourt, street scene, v: 162. _thomas_, u. s. transport, at vladivostok, vi: 188. tigris, iii: 319. _tipperary_, vi: _facing p._ 130 (in color). tokyo, celebrating capture of kiau chau, vi: 384. torpedo, at moment of discharge, iv: 16, 400, x: 330; torpedo tubes being turned on target, iv: 153; destroyer dodging, iv: 188; torpedo tubes on submarine, iv: 210; being placed in position on submarine, xi: 246. torpedoplane, iv: 306. toul, cathedral corner, v: 160. tower of london, vi: 11. tractors, for hauling artillery, viii: 42; for transporting tanks, viii: 141; tractor motor truck, viii: 290; use in plowing, xii: 76. treaty of 1839, facsimile of signatures to, guaranteeing belgian neutrality, i: 147. trench stoves, captured from germans, vi: 87. trenches, construction of, i: 360; barbed-wire entrance to, ii: 284; soldiers in entrance to dugout, v: 76; diagram of, showing method of attack in reducing forts, viii: 125; hallway of underground dwelling, viii: 129; machinery used in digging, viii: 130; communicating, viii: 330; _see also_ under name of country, army. trent, river front, vi: 130. trieste, water front, ii: 52; market scene, ii: 245. troopship, religious service on board, iv: 228. trudeau sanitarium, french children under red cross care at, vii: 200. tsing tau, wireless station wrecked by japanese fire, iii: 259; barbed-wire entanglements outside walls of, iv: 61. turkey, army, leaving for the front, ii: 31; infantry at attention, iii: 166; artillery on way to suez canal, iii: 189; putting up hospital tents, vii: 365. tyrol, italians advancing, iii: 242; austrian stronghold, vi: 309. u _u-58_, german submarine captured by u. s. destroyer, iv: 349. _u-65_, german submarine, ii: 20. _u-105_, german submarine, interior of, iv: 237. uhlans, german, in belgium, xi: 196. ukrainian peasants, vi: 242. united states: agriculture, in war time, xii: 84, 137, 147. army, setting-up exercises, i: 308, 365; training for trench warfare, i: 338; equipment, i: 352, xi: 169 (with cost of each item); field headquarters telegraph station, i: 353; student officers in training, i: 367, v: 285; on mexican border, i: 368; signal corps men at work, i: 372, v: 319; marching in paris, july 4, '17, ii: _intro. xxiv_; on march over french roads, ii: 219; advancing at cantigny, ii: 271, x: 75; on regimental parade, ii: 305; first unit of women telephone operators, ii: 309; recruits drilling, ii: 313; military lecture, ii: 315; first troops reaching france, ii: 316, iii: 81, iv: 158, 162; student officers at fort oglethorpe, ii: 319; return from france, iii: _facing p._ 348 (in color); debarking at brest, v: 3; machine gunners at rest, v: 20; resting after march, v: 26; an infantry-man, v: 30; resting near marne front, v: 42; supporting wounded poilu, v: 50; on way to front, v: 60, 63, 381; marching through ruined town, v: 68; territory to advance through in meuse-argonne region, v: 75; advancing through argonne forest, v: 82, 247; officer's dugout, v: 89; first camp in france, v: 107; graves of first killed in france, v: 111; hand grenade practice, v: 112; boxing match for recreation, v: 114, vii: 314; veterans of cantigny, v: 125; motorized machine-gun unit, v: 142; infantry in firing trenches, v: 144; washing day, v: 149; sketches of a. e. f. types, v: 151; troops coming out of action at château-thierry, v: 153; passing through thiaucourt, v: 162; making friends with french children, v: 164; advancing over open field, v: 169; infantry advancing with tank protection, v: 181, 193; billeted in french farmhouse, v: 189; m. p. quarters, v: 200; officers' quarters in the argonne, v: 217; advancing near badonville, v: 232; a. e. f. cemetery at romagne, argonne, v: 233; men of 77th div. in the argonne, v: 244; a. e. f. positions on the aisne, v: 259; marching into alsace, v: 267, xii: 288; negro troops being decorated, v: 268; n. y. national guardsmen in training at camp wadsworth, v: 283; a tank unit in training, v: 287; 27th div. returning home on _leviathan_, v: 298; student officers at fort mcpherson, v: 301; aviator "true-ing" plane, v: 311; assembling liberty planes in france, v: 313; supplies for a. e. f. on brest docks, v: 329; field of auto trucks, v: 333; salvage unit at work, v: 334, viii: 346; assembling locomotives in france, v: 335; reveille, v: _facing p._ 354 (in color); parade and inspection, v: _facing p._ 358 (in color); visitors' day at camp, v: _facing p._ 362 (in color); taps, v: _facing p._ 366 (in color); soldier saluting grave of poilu, v: 374; off duty, v: 376; chicago recruits on way to training camp, v: 377; bringing in wounded french soldier, v: 386; in a bombarded village, v: 387; in genoa, v: 394; group of ambulances and drivers, vii: 31; convalescent soldiers sightseeing in london, vii: 40; medical officers treating wounded on field, vii: 46; hospital trains, vii: 58, 107, 252, viii: 380; type of scotch member, vii: 176; type of scandinavian member, vii: 177; type of negro member, vii: 178; type of english member, vii: 179; type of armenian member, vii: 180; type of greek member, vii: 181; type of irish member, vii: 183; type of italian member, vii: 184; type of jewish member, vii: 185; in line for inoculation at training camp, vii: 195; dental officers at work, vii: 210, 223; convalescing wounded soldiers in workshop, vii: 214; a. e. f. cemetery at luresnes, vii: 224; entertainment for wounded, vii: 231, 347; wounded soldier under operation, vii: 257; class of illiterate recruits being taught, vii: 280; 42nd div. on march, vii: 292; playing ball, vii: 315; soldier-students at eagle hut, london, vii: 320; type of polish member, vii: 356; wounded arriving in new york, vii: 390; types of rifles, viii: 98, 99, 100, 103, 105; bayonet practice, viii: 106, 107, 108, 109, xi: 162, 166; gas training, viii: 121; motorized kitchen, viii: 287; in vaux, x: 7; machine gunners in action, x: 103; gravestones of a. e. f. dead, x: 115; bugler, x: 386; parading in paris, july 4, '19, x: 389; charging drill, x: 398; national army men in camp in winter, xi: 5; on march at fort sherman, xi: 36; training to go "over the top," xi: 38; french soldiers instructing americans, xi: 44; national army draftees arriving at camp, xi: 156; recruits learning manual of arms, xi: 160; army mule getting hair-cut, xi: 164; cavalry stunts, xi: 171; type of american indian in, xi: 177; firing practice, xi: 304; repairing telephone lines in france, xi: 305; field telephoning, xi: 307; operating sawmill behind the lines in france, xi: 311; group singing, xi: 336, 338; drilling awkward squad, xii: 104; secretary baker drawing draft numbers, xii: 289. artillery, coast defense guns, i: 346, v: 307, viii: 27, 41; mountain-guns, i: 371, viii: 25; guns which took part in second marne battle, iii: 95; a. e. f. battery on way to front, v: 64; heavy french gun manned by u. s. coast artillery gunners in action in france, v: 166; marine gunners with field piece, v: 171; french guns for a. e. f. use, v: 172; storing shells, v: 173; gun which fired last shot of war, v: 276; at practice, v: 304, xi: 162; naval gun on caterpillar mount for use on western front, v: 306; training artillery officers, viii: 9; telescopic sight on field guns, viii: 12; 3-in. gun, viii: 23; 6-in. railway-mount gun, viii: 37; 16-in. railway-mount howitzer, viii: 39; path of shell flight of proposed 121-mile range gun, viii: 50; sketch of 121-mile range gun, viii: 51; range-finding, x: 132; type of heavy railway-mount gun, xi: 276. congress, president wilson addressing, on relations with germany, i: 329. declaration of war on germany, facsimile copy, ii: 55. flag, presented to president wilson by frenchwomen, i: 394; used by american ambulance workers in franco-prussian war, vii: 319; in st. paul's cathedral, london, x: 30; original star-spangled banner, xi: 330. marines, embarking for overseas, ii: 223; operating anti-aircraft gun on warship, iv: 338; operating anti-aircraft machine gun on land, v: 11; recruiting poster, v: 131, x: 316; in belleau woods, v: 137; with 3-in. field artillery, v: 171; storing ammunition in dugout, v: 173; advancing with hand grenades, v: 176; in artillery contest, v: 304; in bayonet drill, viii: 108; scene of first stand against germans, x: 3; gen. neville decorating colors of 6th regt., x: 199; advancing to belleau woods, xi: 45. navy, members of war council, iv: _intro. xi_; sailors in victory parade, new york city, iv: 138; battleships of atlantic fleet, iv: 161, 336; submarine chaser, iv: 293; types of submarines, iv: 299, viii: 280, xi: 240; recruiting poster, iv: 316; recruits learning to make knots, iv: 318; returning from torpedo practice, iv: 321; mine-laying, iv: 324, 325, 326, 327, 331, 332; taps, iv: 334; sailors dancing on board ship, iv: _facing p._ 334 (in color); anti-aircraft guns on board ship manned by marines, iv: 338; sailors washing clothes, iv: 339; sailors in "crow's nest," iv: 342; supply ship taking on cargo for a. e. f., iv: 347; naval militiamen off for service, iv: 351; sailor's christmas box from home, iv: _facing p._ 366 (in color); patrol boat in french waters, iv: 378; signalling practice, iv: 402; battleship taking on provisions, v: 330; students at naval radio school at harvard university, viii: 318; fleet on high seas, xi: 30; strong man of norfolk training station, xi: 158; dreadnaughts saluting president wilson, xii: 227; _see also_ name of vessels. ship-building, at camden, n. j., xii: 30; at seattle, wash., xii: 93; at bayonne, n. j., xii: 102. _utah_, u. s. battleship, iv: 341. v vaux, fort, at verdun, ruins of, ii: 187. vaux, village in marne sector, airplane view, v: 36; ruins of, x: 6; american troops in, x: 7. venice, guarding art treasures against air attack, vi: 316; campanile of st. mark's, vi: 319, 320. verdun, views on banks of meuse, ii: 37, iii: 61, 303; german crown prince decorating troops at, ii: 38; battlefield, ii: 39; behind german lines at, ii: 46; ruins of fort vaux, ii: 187; trenches on hill 304, ii: 188; cathedral, iii: 53; main gateway, iii: 54; captured german positions, iii: 315; aviation camp near, viii: 233. versailles, entry of king william of prussia into, 1871, i: 46; proclamation of german empire at, 1871, i: 55; palace of, vi: 101, xii: 157 (hall of mirrors), 160 (signature of peace treaty); german press representatives at, xii: 220. victory way, new york city, xii: 133. vienna, congress of, i: 31. _ville de paris_, french dirigible, viii: 242. vilna, vi: 235. vimy ridge, canadians going over top, iii: 69. _vindictive_, british cruiser, after zeebrugge raid, iv: 263, 271, 273, 278; officers of, iv: 267; crew of, iv: 271; being sunk in ostend harbor, iv: 276. _viribus unitis_, austrian dreadnought, x: 298. vladivostok, a. e. f. base at, vi: 188; u. s. consulate at, vi: 192; allied troops on parade, vi: 193. volunteer motor service, members of, vii: 32. _von der tann_, german battleship surrendered at scapa flow, iv: 389. vosges mountains, french "blue devils" watching long-range bombardment, viii: _facing p._ 122 (in color). war savings stamps, prize poster, x: 346. warneford, lieut, r. a. j., death of, x: 224. warsaw, iii: 126; unloading american relief supplies, vii: 355. water, canvas pipe-line for supplying troops in the field, viii: 395. water-boy at salonika, xi: 63. waterloo, napoleon's retreat from, i: 7. watervliet arsenal, u. s. gun shop, i: 304. westminster, home of duke of, transformed into war hospital, vii: 89. william ii, former emperor of germany, residence at amerongen, holland, ix: 358. wilson, woodrow, princeton home, ix: 60; paris residence, ix: 67, 68; swiss medal cast in honor of, ix: 69. wireless, talking from airplane to ground by means of, viii: 316; u. s. naval radio school at harvard, viii: 318; german station at metz, viii: 319; arc transmitter at metz wireless station, viii: 321. wisconsin, university of, army training corps on hike, xi: 172. woevre, plain of the, iii: 309. women in war industries: american, munition workers, xii: 3; raising hogs, xii: 54; farm workers, xii: 84, 147 (plowing with tractor). british, women's land army recruiting poster, vi: 13; in iron foundry, vi: 15, 22; as munition workers, vi: 16, 59, xii: 23; as war gardeners, vi: 19, xii: 41; building roads, xii: 20. canadian, making shell fuses, vi: 32. french, as farm laborers, ii: 375, iii: 276; as munition workers, xi: 283. unidentified, girl munition worker, ii: 327; as railroad workers, vii: 296. for women in war activities, _see_ american fund for french wounded; canteens; nurses; red cross; salvation army; young men's christian association. "workshop for working girls," established by edith wharton in france, vii: 101. wounded: american, loading on ambulance train for transportation to debarkation point, vii: 58; visited by red cross worker on train, vii: 107; wounded scotch member, vii: 176; wounded scandinavian member, vii: 177; wounded negro member, vii: 178; wounded english member, vii: 179; wounded armenian member, vii: 180; wounded greek member, vii: 181; wounded irish member, vii: 183; wounded italian members, vii: 184; wounded jewish members, vii: 185; being carried to first aid station, vii: 218; at entertainment for, vii: 231; in hospital car, vii: 252; being helped by knights of columbus, vii: 336, 338; at debarkation hospital no. 5, new york city, vii: 347; wounded polish member, vii: 356; arriving at new york, vii: 390; being carried on airplane ambulance, viii: 368; on board hospital ship _mercy_, viii: 370. british, being served food in france, ii: _facing p._ 190 (in color); wounded anzacs, iii: 169, 172; at advance dressing-station in palestine, iii: 326; after a battle in flanders, iii: 385; being carried to dressing-station on western front, vii: 50; being treated at dressing-station behind the lines, vii: 65, 97; making souvenirs at red cross gift house, london, vii: 70; at home of duke of westminster, vii: 89; at prince of wales hospital, tottenham, vii: 108; awaiting first aid, vii: 196; being carried by french soldiers to dressing-station, vii: 232; awaiting transportation, vii: 238; method of transporting in mesopotamia, vii: 260; canadians at home of lady astor, vii: 281; at neuve chapelle, xi: 187. french, first recipients of croix de guerre, iii: 12; being supported by american soldier, v: 50; being brought in by american soldiers, v: 386; being greeted in switzerland, vi: 381; being removed from field, vii: 8; receiving first aid on field, vii: 53; at a fête for, vii: 59; being treated at dressing-station behind the lines, vii: 65; at verdun, vii: 66; promenading with their nurses, vii: 98; in a hospital train, vii: 239; resting, x: 112. german, being treated by a. e. f. medical officers, vii: 46; too seriously wounded to be transported, vii: 80; being brought in on improvised stretcher, vii: 88; being nursed by dutch nuns at red cross hospital, maastricht, vii: 174; getting a smoke from british tommy, vii: 186; being removed from field, vii: 208; awaiting transportation, vii: 238. italian, being cared for by american red cross workers, vii: _facing p._ 300 (in color), _facing p._ 374 (in color). russian, in siberian hospital, vii: 79; too seriously wounded to be transported, vii: 80; cossack officer, vii: 363. unclassified, being helped by comrades, vi: 237; being attended by medical unit men on field, vii: 182; blind learning modelling, vii: 256; blind learning basket-making, vii: 259; being visited in hospitals by y. m. c. a. workers, vii: 289, 311; being brought to surface from dugout by windlass, vii: 304; moved by means of trench trolley, vii: 306; awaiting the stretcher bearers, vii: 309; on board hospital ship, vii: 396; being picked up by ambulance men, vii: 400. _see also_ ambulances; battle scenes; dead; hospitals; _also_ army under country. wright warplane, xi: 218. wright-martin reconnaissance airplane, ii: 124. _wyoming_, u. s. battleship, iv: 397, x: 336. x x-ray, apparatus on u. s. hospital ship _mercy_, viii: 374; use by custom inspectors to detect smuggling, xii: 99. y "y" gun, for launching depth bombs, iv: 332. yarmouth, england, after german air raid, ii: 257. young men's christian association: american, motor kitchen, vii: 216; chicago gymnasium turned into sleeping quarters for service men, vii: 262; brooklyn hospital unit in training, vii: 263, 278; eagle hut, london, vii: 264, 288, 320; eagle hut, new york city, vii: 265; women canteen workers, vii: 269, 270; ruins of hut blown by german mine, vii: 273; in zone of german bombardment, vii: 274; visiting wounded in hospitals, vii: 289, 311; in italy, vii: 291; baths and beds for service men, vii: 295; in dugouts, vii: 307; sports for service men, vii: 315. british, leading party of service men sightseeing in london, vii: 285; providing service men in london with over-night accommodation, vii: 287; in egypt, vii: 325. canadian, at a toronto camp, vii: 305. young women's christian association, american, hostess house at le mans, france, vii: 272; social center for negro troops, vii: 275; inter-allied club for women at le havre, france, vii: 276; vacation house for american women at chaumont, france, vii: 317. ypres, ruins of, i: _facing p._ 98 (in color), ii: 145, x: 356; veterans of second battle of, i: 379; highlanders attacking at, ii: 213. yser river, a belgian bridge across, iii: 77. z zeebrugge raid, british cruiser _vindictive_ at, iv: 263, 271, 273, 278; british landing party battling, iv: 265; officers and men of _vindictive_, iv: 266, 267, 273; british ships sunk in canal to block channel, iv: 269; british ferry-boats _iris_ and _daffodil_ after taking part in, iv: 270. zeppelins, being guided by lighthouse, ii: 265; interior, ii: 269; early type, viii: 247; _l-49_ brought down by french, viii: 249; fuel tanks on _l-49_, viii: 253; pilot's gondola, x: 226; _l-15_ sinking, x: 361. _zrinyi_, austrian battleship, iv: 363. maps africa, european colonies in, iii: 253. albania, ii: 34, 61, 239, iii: _facing p._ 212 (in color). amiens, german drive on, mar., '18, ii: 191; battle lines, '14--'18, ii: 312. armistice, nov. 11, '18, battle lines on all fronts in europe, ii: _facing p. xxiv_ (in color); battle line on western front, ii: _facing p._ 86 (in color), v: _facing p._ 372 (in color); battle line on a. e. f. sector, v: _facing p._ 72 (in color), 273. arras, area of british offensive, apr., '17, iii: 71. arras-neuve chapelle sector, iii: 45. atlantic ocean, area of german submarine blockade, i: _facing p._356 (in color), ii: 21. austro-italian front, alpine frontier, showing fortresses and mountain passes, iii: 227; the trentino, iii: 232; isonzo district, iii: 235; battle lines, showing furthest italian and austrian advances, with topography and rail communications, iii: _facing p._ 246 (in color); north of venice, xi: 25; italian advance on trieste, xi: 26. austro-russian front, iii: 120, 133; battle line, aug. 5, '15, iii: 139. austro-serbian frontier, iii: 152. bagdad railway, route of, ii: 293. balkans, national boundaries in '14, ii: 34; territorial adjustments resulting from balkan wars, ii: 61; southeastern, and dardanelles, topography of, ii: 199; western, and italy, ii: 239; topography, boundaries, and railroads, '14, iii: _facing p._ 212 (in color). belgian front, june, '17, iii: 40; for particular sector or locality, _see_ under name. belgium, german and french frontiers, ii: 7; concentration of german armies along border before invasion, aug., '14, iii: 7; and northern france, iii: 11. boy scouts, distribution of, in u. s., xi: 95. bulgaria, in '14, ii: 34, iii: _facing p._ 212 (in color); boundaries before and after balkan wars, ii: 61. cambrai, battle of, iii: 82. cantigny, battle line near, v: 124. carpathian passes, iii: 120, 133. caucasus front, iii: 261. château-thierry sector, v: 136. coronel, battle of, with chart of position and movements of opposing warships, iv: 65. dardanelles, with topography of shores, ii: 199; showing mine fields, location of allied ships sunk, and fortifications and roads on gallipoli peninsula, ii: 291; with detail of southern gallipoli, iii: 163; with sea of marmora and bosphorus, iv: 19; with topography of shores, showing turkish positions, iv: _facing p._ 38 (in color). dixmude-ypres line, june, '17, iii: 40. east prussia, iii: 107, 109. europe, and near east, showing projected german expansion from north sea to persian gulf, i: 6; areas of german occupation, '16, i: 10; in '14, ii: _intro. xi_; armistice lines, nov. 11, '18, ii: _intro. facing p. xxiv_ (in color); southeastern topography, boundaries, and railroads of, iii: _facing p._ 212 (in color); important battles and events of war, '14--'17, xi: 13; food conditions after armistice, nov. 11, '18, xii: 43. falkland islands, battle of, with chart of position and movements of opposing fleets, iv: 71. france, german and belgian frontiers, ii: 7; marne-aisne-oise district, ii: 10; northern, and belgium, iii: 11; a. e. f. supply depots and lines of communications, v: 5; principal ports, v: 5; for battle lines, _see_ name of sector or locality; _also_ western front. gallipoli, topography, ii: 199; with detail of elevations, roads, turkish fortifications, and areas of allied occupation, ii: 291, iii: 163; and northwestern turkey, iv: 19; topography with turkish lines and forts, iv: _facing p._ 38 (in color). germany, projected expansion from north sea to persian gulf, i: 6; empire before war, i: 39; empire after war, i: 40; belgian and french frontiers, ii: 7; russian frontier, iii: 107, 109. great britain, showing areas of german submarine blockade around, i: _facing p._ 356 (in color), ii: 21; german sea raid on coast, dec., '14, iv: 245. greece, in '14, ii: 34, iii: _facing p._ 212 (in color); boundaries before and after balkan wars, ii: 61. iceland, allied patrol areas off coast of, iv: 90. indian ocean, showing trade routes and british possessions, iv: 179. isonzo, region of, iii: 227, 235, _facing p._ 246 (in color). italian front, _see_ austro-italian front. italy, and territories claimed under treaty of london, ii: 239; distribution of american red cross relief work in, vii: 83. jutland, battle of, showing position of opposing fleets before start of engagement, iv: 103; charts of movements of opposing fleets during course of battle, iv: 104, 105, 106, 107, 108, 109, 111, 112, 114, 116, 117, 118, 120, 123, 124, 125, 127, 128, 134. keeling island, iv: 185. kiau-chau, iii: 258. luxemburg, ii: 7. lys salient, iii: 90. marne, first battle of, showing position of opposing armies, iii: 30, 31. marne salient, battle lines, jan.--june, '18, ii: 72; battle lines, may 26--june 12, '18, ii: 79; position of german armies, july, '18, ii: 322; extent of german advance, july, '18, v: 43; german retreat to the vesle, july 18--aug. 5, '18, v: 59; battle lines, june 1--aug. 4, '18, with position of french and a. e. f. divisions, v: _facing p._ 184 (in color); _see also_ western front. marne-aisne-oise district, ii: 10. mediterranean sea, area of german submarine blockade, i: _facing p._ 356 (in color). mesopotamia, iii: 179, _facing p._ 190 (in color), xi: 50. messines ridge, iii: 76. meuse-argonne, a. e. f. advance, sept. 26--nov. 11, '18, with positions of divisions participating, v: 72; towns and roads of district, v: 77; a. e. f. advance, sept. 26--oct. 4, '18, with positions of divisions participating, v: _facing p._ 222 (in color); a. e. f. advance, sept. 26--nov. 1, '18, with positions of divisions participating, v: _facing p._ 260 (in color); battle line, nov. 11, '18, with positions of a. e. f., french, and german divisions, v: 273. montenegro, in '14, ii: 34, iii: _facing p._ 212; before and after balkan wars, ii: 61. naval operations, of war, locations of, iv: _facing p._ 166 (in color). neuve chapelle-arras sector, iii: 45. north sea, area of german submarine blockade, i: _facing p._ 356 (in color), ii: 21; allied mine barrage, german naval bases, and scenes of naval battles in, iv: _facing p._ 86 (in color); british cruising areas, iv: 89, 91. palestine, iii: _facing p._ 190 (in color), 193, 197, 198, 325, xi: 50. red cross, american, sectional divisions of u. s., vii: 16; distribution of relief work in italy, vii: 83. reims (rheims)-soissons sector, iii: 75. riga, gulf of, iv: 137. rumania, in '14, ii: 34, iii: _facing p._ 212 (in color), 215; before and after balkan wars, ii: 61. russia, showing territories under german and allied control, '18, ii: 67; german frontier, iii: 107, 109; austrian frontier, iii: 120, 133; russo-teuton battle line, aug. 5, '15, iii: 139. st. mihiel salient, showing battle lines and course of a. e. f. advance against, sept., '18, ii: 338, v: 70, _facing p._ 210 (in color, and giving positions of french and a.e.f. divisions), 385; detail of terrain, v: 69. salonika front, iii: 204. scapa flow, iv: 93. scotland, british cruising areas off coasts of, iv: 89, 90, 91. serbia, in '14, ii: 34, iii: _facing p._ 212 (in color); boundaries before and after balkan wars, ii: 61; austrian frontier, iii: 152; encirclement by teuton armies, iii: 157. sinai peninsula, iii: 193. soissons, and region to the south, v: 178. soissons-reims (rheims) sector, iii: 75. somme, first battle, '16, area of, iii: 60; second battle, '18, area of, iii: 87. somme-oise sector, battle lines during allied offensive, aug. 8--18, '18, ii: 332. suez canal, iii: 193, xi: 50. syria, iii: _facing p._ 190 (in color), 198, xi: 50. tonnenberg, battle of, showing maneuvers of opposing armies, iii: 114; _see also_ east prussia. transylvania, iii: 215. trentino, iii: 227, 232, _facing p._ 246 (in color). trieste, italian advance on, xi: 26. tsing tau, iii: 258. turkey, as part of german plan of empire from north sea to persian gulf, i: 6; with reference to balkans, ii: 34, 61 (territory in europe before and after balkan wars), iii: _facing p._ 212 (in color); dardanelles region, ii: 199, iv: 19; route of bagdad railway, ii: 293; route of british campaigns in, iii: _facing p._ 190 (in color); in asia, xi: 50. united states, red cross sectional divisions, vii: 16; distribution of boy scouts, xi: 95. verdun, perspective of battlefield with battle lines, feb. 20--june 14, '16, iii: _facing p._ 50 (in color); battle lines and positions of opposing armies, iii: 306. vimy ridge, iii: 344. western front, battle line from north sea to reims, apr., '17, ii: 54; battle line, mar., '18, compared with line of furthest german advance, sept., '14, ii: 64; battle lines, sept., '14--june, '18, ii: 72; battle lines, sept. 19--oct. 2, '18, ii: 81; battle line at armistice, nov. 11, '18, compared with line of furthest german advance, ii: _facing p._ 86 (in color); plan of german concentration, aug., '14, iii: 7; battle line, nov. 11, '14, iii: 39; battle lines, sept., '14--sept., '18, iii: 97; german advance, aug.--sept., '14, with positions of german armies, iii: 278; battle line, july, '18, v: 5; position of a. e. f. divisions at armistice, nov. 11, '18, v: 273; battle lines, july 18, '18, and nov. 11, '18, with dates and localities of principal operations and a. e. f. divisions participating, v: _facing p._ 372 (in color); for particular sectors or localities, _see_ name. world, areas inhabited by peoples not self-governing, i: 24; sources of coal and oil supply in '14, ii: 15; centers of live-stock production, xii: 36. ypres, and neighborhood, iii: 11. ypres-dixmude line, june, '17, iii: 40. yser, battle of, iii: 43. zeebrugge, german submarine base, iv: 262. transcriber's notes: italics are rendered with underlines at the beginning and end e.g. _italics_. bold font is rendered with equal signs at the beginning and end e.g. =bold=. small caps have been replaced with all caps e.g. small caps. the following are believed to be typos and have been corrected. +----+--------------+--------------+ |page| changed from | changed to | +----+--------------+--------------+ | 11| out | our | | 15| finanical | financial | | 17| the | be | | 17| be | the | | 22| reichbank | reichsbank | | 24| statiticians | statisticians| | 24| ought to to | ought to | | 25| soliders | soldiers | | 27| jourial | journal | | 28| bonsuses | bonuses | | 31| 311,070,250 | 60,000,000 | | 31| 50,000,000 | 60,000,000 | | 31| canadaian | canadian | | 41| prorable | probable | | 53| men't | men's | | 54| offorded | afforded | | 56| there | their | | 56| pears' | years' | | 57| everage | average | | 59| sacrifce | sacrifice | | 59| drastice | drastic | | 75| exclusivevly | exclusively | | 77| accesible | accessible | | 77| comsumpton | consumption | | 80| somethink | something | | 81| rsesources | resources | | 82| beween | between | | 98| known | know | | 101| urpassed | surpassed | | 102| negotiatd | negotiated | | 114| 743,556 | 74,556 | | 126| oversea | overseas | | 130| ito | into | | 132| ecstacy | ecstasy | | 166| show | shoe | | 184| mmber | member | | 199| asociated | associated | | 204| givn | given | | 205| asociated | associated | | 215| space | spare | | 216| nutral | neutral | | 221| patricular | particular | | 235| of | if | | 252| that | the | | 254| line | lines | | 260| case | cast | | 263| occured | occurred | | 332| maestricht | maastricht | | 353| jaulognne | jaulgonne | +----+--------------+--------------+