To come victorious out of the present ordeal—if, indeed, that be possible with the leaders, principles, methods and strivings that still characterize us—will not suffice to effect the triumph of our cause. The present, momentous though it be, cannot with safety be separated in thought or action from the future. The struggle will go on relentlessly after this campaign until one side has worsted the other definitively. And it is for that struggle that it behoves us to prepare while the war is still at its height.

The Germans, true to their practice, have set us the example. Their curious combinations for dividing the Allies while negotiating their own schemes for reorganizing political Europe have been worked out in almost every detail. Their projects for creating a vast and powerful economic organization, to be known as Central Europe,[144] with its first appendix in the Balkan Peninsula, have been carefully woven, and will be duly embellished when the hour for unfolding them has struck. In a word, when opportunity suddenly appears like the bridegroom of the Gospel, the German will be found waiting, with girded loins and trimmed lamp. He has distributed the parts of each nation in the international drama, and if the rÔles cannot be taken over to-morrow, he will wait until the day after.

The world is henceforth no longer a field of labour for the individual. Co-operation is the open sesame to the economic life of the future. And co-operation means organization. Organization, then, is the Alpha and Omega of the new era. That is the mysterious radium which has enabled a single race to assail and hold its own against a group of powers whose territory and population are many times greater than its own. That race has demonstrated the quasi-omnipotence of organized labour, and has thereby itself become almost omnipotent. On the success or failure of its adversaries to create a like force and rise to the same height depends the future of Europe and the British Empire. One of the first corollaries of the new principle is the enlargement of all great units, including political communities. Germany and Austria, therefore, are bound, if not precisely to coalesce in one whole, at least to co-operate and combine for their common ends against common competitors, and thus to form the nucleus of that federal state which is, our enemies hope, one day to be commensurate with the continent of Europe.

At present, however satisfactory the military situation may be said to be, the general outlook is far from bright. Our aims are impoverished, our creative energies are clogged by prejudice, our political vision is narrowed by party goals, and the forces inherent in the nation which should be employed in readjusting its life to the new conditions are being frittered away in abortive efforts to neutralize dissolvent ideas that are sapping only those organs of our social and political system which are already vicious or decayed. The waste of the empire’s resources has no parallel in history. Supreme confusion marks our internal condition. Our leaders have done nothing to familiarize the nation with the dangers that threaten it, the means by which they should be met, or with the social and political ideas which are destined to shape and sway the new order of things which is already close at hand.

In the absence of constructive leaders it is for the nation itself to make due preparation for the momentous changes in the social and political system of Europe to which the present crisis is but the prelude.

And although much has been spoken and written on the subject since the war began, little permanent work has as yet been done. And there are few signs of a radical change for the better. The confusion and incongruousness that mark the ideas of the reformers, and the hesitancy and conflicting interests of politicians make one dubious of the outcome of the present contest. Almost everything essential would appear to be still lacking to the Allies, and the nature of the coming “peace period” is not realized, because the war is looked upon as an isolated phenomenon which began in July 1914, and will end when hostilities have ceased. Another belief equally misleading and mischievous is that the Teuton race can be paralysed if not crushed, and that for fifty or sixty years to come no revival of its energies, no recrudescence of its morbid aggressiveness need be apprehended. If we continue to shape our conduct on that assumption we may find ourselves one day in a Serbonian bog from which there is no rescue. However stringent the conditions which the Allies may be able to impose on their enemies, there will still remain a keen, strenuous, irrepressible race of at least a hundred and twenty millions, endowed with rare capacities for organization, cohesion, self-sacrifice and perseverance, whom no treaties can bind, no scruples can restrain, no dangers intimidate. At any moment a new invention, a favourable diplomatic combination, would suffice to move them to burst all bounds and resume the military, naval and aerial contest anew.

Even now, while the war is still raging, they are busy with comprehensive plans for the economic struggle which will succeed it. Nor are they content to weave schemes. They have already begun to carry them out. To mention but a few of the less important enterprises, as symptoms of the German solicitude for detail, there was a numerous gathering of railway representatives, Austrian, Hungarian and German, in August 1915, to consider the means of readjusting the railway service to the conditions which the peace would usher in. Among the projects laid before the meeting and insisted on by various financial institutions was the reconstruction on a new basis of the Sleeping Car Company, from which Belgian capital is to be excluded.[145]

In Italy many of the German commercial houses are, so to say, hibernating during the war. They merely altered their names and substituted well-paid, friendly Italians for Germans, and the feat was achieved. In this way the Kaiser’s mercury mines of Abbadia, San Salvatore and Corte Vecchia in Tuscany are being protected, and nobody in Italy is under any misapprehension as to what is going on there. They are nominally in the hands of Swiss.

One of the most successful manoeuvres by which the Germans have already parried the strokes of their rivals in the economic struggle is by crossing the frontiers and carrying on the contest in the enemy’s country. It was thus that, when Russia, by way of protecting her own nascent textile industries, levied heavy duties on imports from abroad, the Germans transported their plant and their workmen across the border, built extensive works in Lodz which gradually grew into a prosperous German city and rendered sterling services to the Teuton invader during the present war. They intend to have recourse to the same device as soon as hostilities have ceased. German trade papers announced this to their readers and urged them to communicate with the staff with a view to receiving information respecting ways and means.

One Berlin trade journal—the most widely circulated in the German capital—had recently a great headline entitled: “How to keep up German Exportation after the War!” After a preamble enumerating the difficulties that would be thrown in the way of exporters by the Allies, the article went on thus: “For some years to come the means of extricating ourselves from this cruel predicament will consist in transporting the work of manufacturing or refining our merchandise to a neutral country. We are now in a position to offer information and advice on this head to those German manufacturers who are working for exportation, and we shall endeavour to extend our action in the future. We advise all those manufacturers who are desirous of developing their business in this way to enter into relations with us without delay.”[146]

The device is simple, and has hitherto been efficacious. In Switzerland the number of German firms is large and continues to augment. They are branches of German houses, and their aim is to further the interests of these. They mask their intentions by assuming Swiss names and also by obtaining for their employees naturalization papers in the little republic. How, it may be asked, do the Allies propose to thwart these manoeuvres? They probably have not given the matter a moment’s serious consideration. A Swiss journal of repute[147] published some time ago a characteristic letter received by a Swiss business man from a German textile manufacturer. One passage is worth reproducing: “The actual situation renders it impossible for us to maintain relations with our former customers. Hence, it is of the utmost importance for us to be informed respecting the commercial and financial situation with a view to the resumption of our intercourse in a lucrative form after this long interruption. It is our intention, therefore, to have our products sold through a Swiss branch by Swiss agents.”[148]

With their incorrigible disposition to judge others by themselves, the British people fancy that after the war a wave of liberalism will sweep over Germany, demolish the strongholds of militarism there, and reveal a pacific, level-headed nation with whom it may be possible to hold friendly intercourse. This, to my thinking, is also a delusion. Even if the Kaiser and his environment were dislodged from their places, Germany’s ideals, aims and strivings would remain unchanged. But the Kaiser and his Government are minded to leave nothing to chance. They, too, have their plans, which are simple and comprehensive, and would appear to have escaped the notice of British optimists. And yet they are well worth consideration. The Germans themselves put the matter thus—

The enormous expenditure necessitated by the war will call for special financial legislation of which the keynote will be found in monopolies. Now, the present German Finance Minister, who is a banker by training, intends that the monopolies to be created shall be effected, not by the unaided resources of the State, but by its co-operation with the interested business men and banks. On this basis he is working at monopolies of cigarettes, life insurance and electric power. This complex arrangement is facilitated by the machinery of the banks and their peculiar activity. And here we touch upon one of the main sources whence German organization after the war will draw its vitality. It is on the operations of these financial institutions that it behoves us to lay stress. They are so many magnetic centres which attract nearly all the free capital of the country and then employ it as they think fit. And one momentous consequence of this command of money is the possession of almost unrestricted power over industrial enterprises, present and future. For it depends on the banks to extend these and to restrict the output of those in consonance with the economic policy pursued by the State.

Nor should it be forgotten that the power and influence of the banks is not limited by the amount of capital they actually possess. Over and above this they wield all the financial force conferred by the vast amounts deposited with them by customers. This was evidenced in the case of the Banca Commerciale in Italy, which had a working capital of £6,240,000 in the year 1914. Now, of that sum only 2·5 per cent. was owned by Germans, yet the bank itself and all the industries dependent on it were exploited by the German Board of Directors.[149] In the Fatherland we observe the same phenomenon. All the German banks together, excepting the hypothecary institutions, owned £195,000,000 sterling, about 44 per cent. of which belonged to the eight principal banks of the empire.[150] Possessing only £86,050,000 of their own, they disposed of £259,600,000 belonging to other people.

One effect of the establishment of groups of monopolies will be to increase the number of persons dependent for their livelihood on the State. It is calculated that the total, including heads of families, will amount to tens of millions. The corn monopoly will bring in five million farmers, heads of families, who will have to look to the State for the amount of their yearly income. For it is evident that the Government will be “co-operating” not with the peasants, but with the great landed proprietors. Now, these are the men whose backing is indispensable, and has never been wanting, to the military and court parties who are primarily responsible for the war. Once the wages of the workmen and the interest on capital become dependent on the State, the entire nation is but a vast machine worked by the men in power. To suppose that these will lend a willing ear to the demands for political liberty which are certain to be made after the conclusion of peace is to expect the impossible. What will probably happen is a keen struggle between the classes and the masses for the mastery, but until it is decided in favour of the latter, the Germany of the future will continue to be the Germany of to-day.

In the meanwhile, the Teutons, despite their striking inferiority in numbers and resources, have kept the Great Powers of the world at bay, have defeated their armies, sunk their mercantile marine, occupied their territory, drained their wealth, paralysed their trade and deprived them of all the odds which they owed to circumstance. Organization has thus more than made up for the seemingly overpowering advantages possessed by the Allies at the outset. That it will suddenly lose its worth during the remainder of the campaign is hardly to be expected. The contingency which we may have to face, if we continue to move at our present pace, is manifest to the observant student of politics.

By the average man and our “leaders of men” it is hardly even suspected. Our easy-going optimism is largely the result of temperament and partly, too, of presumptuous confidence born of past luck, and in especial of the relief we feel at our escape from most of the obvious dangers that menaced us at the outset of the war. There has been no trouble over Ireland, no rising in India, no serious defection in South Africa, no invasion of Egypt. And we irrationally feel that these dark clouds, having drifted harmlessly past, the others will follow them. It was said of the Swiss in mediÆval times, that they were kept together by the bewilderment of men and the providence of God, confusione hominum et providentia Dei. The same might be truly predicated of the British people of to-day.

But there is no reason for assuming that they will be thus providentially cared for in the future. The Allies have not yet driven the Germans out of Belgium, France, Serbia, Montenegro, Poland or Kurland. Neither have they contrived to starve them into sueing for peace. They talk glibly of exhausting them as though their own resources were inexhaustible. They do well perhaps to make light of the Zeppelins, but they pay far too little attention to the submarines, and seem not to realize the magnitude of the losses which these weapons have inflicted on our merchant shipping, nor to have calculated how long it can hold out at the present rate of destruction. Freights have increased enormously, and they have not yet reached the highest point they are likely to attain. Imports have been restricted, prices have gone up and taxation has increased. Time may not be on the side of our enemies, but is it on ours? It is a fickle ally at best, and to rely on its support is to lean on a split reed.

Optimism of the unreasoning kind prevalent in Great Britain is unwarranted, whether we confine our view to the actual campaign or extend it to the greater struggle of which that forms but an episode. Taking the former case first, one is struck with certain considerations which, without inspiring dismay, ought surely to preserve us from that excessive self-confidence which is too often a hindrance to fruitful exertion. The financial burden and its relation to the limits of the allied nations’ capacity to bear it is a fit subject for meditation when we feel uplifted in self-complacency. Doubtless it is encouraging to watch the symptoms of slow exhaustion displaying themselves in the central empires and to speculate on the consequences of the further fall of the German mark. But these consequences we are too apt to exaggerate. For we misjudge the character, the staying powers, the ideals, the psychology of the German people. We fancy that because they have been reduced from comfort to hardship therefore they are on the verge of collapse. We imagine that because their commercial and industrial classes are keen on making money and ardently desire peace, they are also ready to purchase it by acquiescing in conditions which would dispel their dreams of world power. We feel certain that if Prussia and all the German States received genuine parliamentary government, the costly ambitions of the military party would forthwith be dispelled for all time.

It is by delusions such as these that the British people were hoodwinked in the past, and it is by the same vain imaginings that they may be victimized in the future. For they seem incapable of gauging the German psyche. The two races meet each other in masks. The apparent ingenuousness of the English-speaking Teuton is calculated to throw the most vigilant Anglo-Saxon intelligence off its guard. We have no psychological X-rays by which to pierce the peculiar racial vesture in which the German soul is shrouded, nor are we endowed with the gift of patient observation which might enable us to extract those rays from facts. And so we stumble along, dealing with an imaginary people whom we ourselves have created after our own image and likeness, falling into fatal blunders and recommencing anew.

It is true that the mark has fallen, and that the German financial fabric is in a parlous condition. But that fabric is kept from crumbling away by the war, just as the Egyptian papyrus is preserved so long as it does not come into contact with the air. Moreover, common prudence should impel us to find out at what a cost to ourselves we have reduced the value of the mark. If financial exhaustion be among the ways in which one group of belligerents may be made to succumb, it is wise to ask whether it is the States which have to pay gold for their huge requirements or those which can get almost everything they need for paper that are likely to succumb first.

The question is relevant, yet, because it has not been moved into the foreground of discussion, there are few people who ponder on it.

Personally, I am convinced that impecuniosity and loss of credit will never bring the Germans to their knees.

Great Britain has achieved wonders in the financial sphere during this war, as the Allies and certain neutrals can testify. Our budgets are monuments of the nation’s spirit of self-sacrifice. But we have not come scathless out of the ordeal. And besides our inevitable losses we are suffering from criminal waste. No other country is so thriftless as ours. In this respect we are a byword among the peoples of the world. But we give no thought to the consequences. Yet the yearly outlay on the one hand and the means of meeting it on the other hand are calculable, and it would be well if those who rely upon Germany’s financial prostration would carefully reckon up and compare the two, were it only for the sake of the sobering effect. On this aspect of the problem it is needless to dwell further. It will compel close and painful attention before the end of the campaign.

Another point to which inadequate heed has been paid, is the lack of working men. This dearth of labour is not felt in Germany or Austria, because they have two million prisoners and two million Poles on whom they can draw not only for agricultural work but also for skilled labour. And the authorities of both those empires are employing their war prisoners very freely. Here, as everywhere else, the Teuton is enterprising. I have seen photographs of Russians in Germany harnessed and employed as beasts of burden. At any rate, it is no secret that from the latter half of the year 1915 Germany and Austria were far ahead of Great Britain, France, Russia, the United States and Japan combined in the amount of munitions they turned out every week. And they are still ahead of them to-day. This fact, which can be verified, has an ominous ring. What it connotes is that our enemies have no strikes, no conscientious objectors, no fiddling with obligatory service, industrial or military. Each man is at his country’s beck and call. Germany is free from strikers, slackers and such-like anti-social types.

In Russia the want of working men is felt keenly. It is one of the main elements of the sharp rise of prices there. In France, too, the number of hands needed is very great, and the loss inflicted by their withdrawal from the labour market is more sensible than the average reader has any notion of. And far from being filled, these gaps are becoming wider day by day. This shortage is a source of solicitude to the Government of the Republic.

What it portends may readily be imagined. It certainly compels us to qualify the cheering assertion that time is on our side. What else it implies may be left to the imagination of the reader.

More serious still than the financial burden, or the dearth of workmen, is the inadequacy of the mercantile marine to the needs of the Allies in general, and of Great Britain in especial. To this privation submarine warfare has contributed materially. And there is not the slenderest ground for hope that the Germans will desist from it during this campaign. On the contrary, they will intensify it. Of the neutrals, some are too weak and others too timid to enter an energetic protest against this violation of international law. The freight-carrying capacity of the transports still available is less than the British optimist realizes. How much less, it would be unfruitful to inquire. It is enough to know that in this matter, too, we had better seek a more helpful ally than time. Those who are most conversant with these elements of the problem are haunted by a restive consciousness of disappointment and apprehension.

For the power, the independence, the destinies of the Empire are interwoven with our command of the sea. On our merchant tonnage depend our economic life, our army and navy, everything we have and are and hope to be. That destroyed or paralysed, nothing remains but a memory. And the Germans are working hard and not unsuccessfully to cripple it. During the week ending April 13, 85,000 tons of British and neutral shipping were destroyed. Since the beginning of the submarine blockade over 3,000,000 tons have been sent to the bottom of the sea. On an average 50,000 tons a week are being torpedoed or mined, and our losses tend to augment rather than diminish. Nor is that all. Not only is our merchant tonnage being whittled down below the minimum needed for our strict requirements, but we are also being hindered from utilizing the transports available. And herein lies a danger the full significance of which has not yet received proper attention. Shortage of labour is pleaded as the reason why effective measures have not been adopted to fill the gaps made by the enemy submarines. And labour is inadequate because the Government eschewes industrial as well as military compulsion. It possesses the power, but shrinks from wielding it. To my thinking, this is one of the symptoms of that madness with which the gods strike a nation before destroying it.

And the longer this process of—shall we call it mutual?—exhaustion goes on, the more important grow the neutral States and the louder sound their voices. They are like Jeshurun, who waxed fat and kicked. Without special aptitudes for arithmetic one may calculate, with a rough approach to accuracy, the time when the process of mutual exhaustion will enable the neutrals to exert an absurdly disproportionate and possibly dangerous influence over the belligerents. That is a calculation which those optimists would do well to make who tell us that all is well because “time is on our side.”

It is still open to us to utilize our superior resources, realize our latent strength, and ward off the dangers that beset us. But the first advance towards the goal must be to face the facts, behold things and persons as they are, and apply our new-found knowledge to the work of self-rescue. Our conception of the nature of the contest in which we are engaged must be recast. Our demands on our national leaders—not those now in power who only mislead—must be greatly enlarged. Truth, however bitter, must take the place of fancy. Ideas and institutions incongruous with the new social and political conditions must be displaced. The nation’s aims and policy should be stated boldly and clearly, and adequate machinery set up to achieve them. In a word, system will have to be substituted for confusion, method for haphazard. Destitute of a great or strong man, it behoves us to imitate our enemy and create a vast organization with branches all over the empire. But the influence of the government ever since the outbreak of the war has militated against all those reforms.

If these changes had been effected at the outset the story of the present campaign would have been different from what it is. A group of belligerents representing only 5,921,000 square kilometres of territory and 150,199,000 inhabitants, or, say, 4 per cent. of dry land and 9·1 per cent. of human beings, would not have held its own for twenty-one months against a group disposing of 68,031,000 square kilometres of territory and a population of 770,060,000, or 46 per cent. of the land on the globe and 47 per cent. of the human race. Providence has bestowed upon the Allies the wherewithal to attain their legitimate ends. The Allies’ leaders are frittering them away.

For the thirty years of preparation do not afford us an adequate explanation of the Teuton superiority. The clue is to be found in the psychological factor. Germany is wholly alive, physically, intellectually and psychically. And she lives in the present and future. We either drowse or vegetate in and for the past. She has the decisive advantage of possessing organization and organizers. Therein lies the secret of her sustained success. The Allies lack both, and are hardly conscious of the necessity of making good the deficiency. Therein lies their weakness. It has made itself felt throughout the campaign and will determine the upshot of the war. And in the politico-economic struggle that will follow the war, it is the same psychological factor which the Allies rate so low that will decide the final issue.

Unless we wake up to the reality and readjust our ideas and methods to that—and of such awakening there is as yet no sure token—the outcome of the present war will be a draw, and the final upshot of the larger contest will be our utter defeat. No journalistic optimism, no ministerial magniloquence can alter that. These contingencies are already fullfronting us, as we shall soon learn to our cost, and the people who are veiling them from the public view, however praiseworthy their intentions may be, are leading the nation to ruin. And if we continue to uphold our present chiefs and methods national disaster is as inevitable as destiny. But it is well to remember that it is not Fate that is pursuing us; it is we who are overtaking Fate.