I 
December 26. 1914, LAND AND WATER 
pieces and material. Accompanying this was ously to affect the confident tone of the general 
an element which Prussia has taught the Ger- mind. Another element of exception is that of 
mans to regard as akin to military success and re- what may be called the middle hnance. High 
placing the ancient sentiments of military glory: finance all over the world is still pro-German, and 
wholesale killing of civilians, including women and we may take some comfort from the reflection that 
children, in Belgium, wholesale destruction of high finance at every stage of the world's history 
things venerable (manuscripts, monuments, and has invariably been wrong in great crises, and thij 
especially things of an ancient religious use whigh for the very obvious reason that you cannot specu- 
stood for the spirit particularly opposed to Prus- late successfully unless you keep your eyes very 
sia), and the loot of property, carried on both closely fixed over a very restricted horizon of time, 
directly and through a system of money payments But what may be called middle finance, the 
pushed to the last limits up to which the popula- bankers whose direct dealings are not with the 
tion could pay. Following this second series of world, but with a district, the middle men who 
national successes after the national heart, came operate only in particular sections of stock, the 
third, the crushing victory won by Hindenburg speculators whose concern is not with universal 
over the Russians in the Masurian Lakes, with produce, but with produce of one kind — these in 
two whole Army Corps of the enemy surrounded Germany are already hit by the war, just as is so 
and destroyed by death, wound, or capture. much of the proletariat upon whose labour they 
Prussia forced the war on France and Russia ultimately live. Gold is getting scarcer, and the 
in the evening of July 31st. Four days later she premium is, I believe, increasing. For Germany 
was across the neutral frontier of Belgium. It was must to-day make many of her foreign payments 
in the first month — before the first three days of in gold. Whole groups of metal, other than iron, 
September had elapsed — and before that anniver- are at famine prices. Petrol is affected, and the 
sary of Sedan to which the curious superstition of textiles also. And though in this financiers' case, 
modern Germany attaches such value— that all as in the case of the proletariat, a certain temper 
these things were done; and the German mind, maj'^ convert hope into faith, and may make sure 
already quite confident of victory, was intoxicated that such troubles are passing, yet they have en- 
by immediate and, in its magnitude, unexpected dured long, they are increasing, and a continuous 
success. failure (though it has nothing of the dramatic 
Now, to sober the mind of any man or nation effect of a defeat), is perhaps of more effect to 
after experiences of this kind, nothing but corre- nourish uncertainty and despair than a sharp de- 
sponding disaster will suffice, and of that disaster feat would be. In this connection, it must be re- 
there has been no outward sign which a civilian membered that all men of a certain education and 
population could understand. The soldier (in the fairly travelled — and what I have called " the 
higher command, at least), could gauge clearly middle finance," is composed of such men — ^know 
enough what happened in the month of Septem- very well that peace itself would not restore th^ 
ber; the meaning of the retreat from Paris and old relations of the German trader and the Ger- 
the loss of German initiative upon the East as man financier. The City of London will never 
upon the West. To his attitude I shall turn in a forget the highly successful trick played upon it in 
moment ; but the mass of the German population the months before Prussia forced the war, and 
had nothing great and striking brought home to the national forces in France after the war will 
it to reverse its original condition, created by not favour, for many years to come, if ever, those 
forty years of increasing wealth and military con- operations of credit whereby industrial Germany 
fidence, followed by this first month of stupendous was supported. The effect of this war upon Ger- 
and triple success. One may compare the process man trade through sentiment alone must neces- 
to that whereby a man, having climbed up some sarily be enormous and adverse for very many 
steep mountain escarpment, the dominating years. And though finance is less directly affected 
height of which occupied his whole mind as he by such sentiment than is production dependent 
gazed at it first from the plain, later, when he has upon exchange, yet it is indirectly just as much 
reached its summit, descends by a very gradual affected in the long run, because the biggest gam- 
sloping plateau to his original level. He will bier in the world, and the most successful, must 
always remember the grandeur of the range as he have something to gamble in. 
approached it, and his successful climbing of that Now, what of the military moral of Germany ? 
height. The very gradual descent beyond will It would be the greatest mistake in the world 
leave no impression upon his mind, and only the to flatter ourselves that this has hitherto declined, 
trained observer possessed of accurate instruments If we neglect, like sensible men, newspaper stories 
could note (but could not convince the traveller), designed for our comfort, and speak to those who 
that there had been any descent at all. have been recently under the immediate test of 
So much, then, for the civilian moral of Ger- German attack, if we do no more than look at the 
many at the present moment, taken in the lump. map and see what the German Army, including 
There are, however, already apparent cer- many new formations, has actually done under 
tain exceptions within that lump, and they are winter conditions in Northern and Southern 
worth noting. There are particular areas in Poland, if we read as they occasionally come to ui 
which unemployment has been severe, notably in the appreciations of the present situation made, 
the great seaports of the north, in certain of the not indeed by the German higher command, but 
metal industries, and. to a great extent, in the by the average military critic in Germany, and 
capital itself. The embarrassment due to the par- by the officer in the field, we must conclude that 
tial blockade, a confident opinion may believe to the enemy has still the same qualities as he had^ 
be temporary; but it is there, and it is felt. Were at least in proportion to his enemy — at the begin- 
unemployment to increase considerably, were it ning of the campaign, 
to double, for instance, it would begin very seri- A breakdown in military moral is a very rapid 
