i6 
LAND & WATER 
May IT, 191 6 
far more neaily adequate than the latter* j;, and when the 
experience of the war proved the imperative necessity of 
speedily increasing these, the f^reat number uf German 
factories which had been closed down when that country's 
export trade was cut off stood ready for conversion. It 
was this circumstance, indeed, that made it possible for 
(iermany to react to the unexpectedly gr^^t demand 
for shells more quickly than did France and England, 
both of which countries, far from having any idle factories, 
were confronted with a greater export demand than ever, 
(iermany, has, it is true — especially in turning out the 
endless list of " substitutes " which have been required to 
replace products cut off by the blockade of the Allies — 
built many new factories, but there is no reason to believe 
that the increase has been on an\' where near so consider- 
able a scale as in England. 
Germany's Losses 
Germany's losses in man-power have been, and will 
continue to the end to be, much heavier than those of 
]i!ngland, since the former has been putting forth her 
extreme efforts and lighting on over a thousand miles 
of front from the outset. Yet it is still probable that 
the war may end without Germany's total losses being 
great enough to offset the better training of the it en and 
vomen who have continued in, or been pressed into, 
industrial work. 
All in all, therefore, there seems every reason to believe 
that both England and Germany will have gained rather 
than lost industrial strength as a consequence of the war, 
and that of the two England's position will have improved 
considerably more than that of Germany. Both will be 
better able to manufacture for export than ever before, 
and both, as a consequence of their great need of money, 
will be forced to go after overseas trade even more 
aggressively than in the past. Just how much their huge 
war debts are going to handicap them in their renew'ed 
commercial activities it is difficult to forecast just yet. 
Germany's carefully prepared financial scheme was 
fcased on the expectation that her enemies would be 
forced to pay her war bill through indemnities. This 
hope appeared to persist in Government circles during 
most of the first year of the war, and even down to the 
time of the latest loan efforts were made to keep it alive 
in the hearts of the German people. As a matter of fact 
the sum total of the indemnities Germany is likely to 
receive is represented by the " fines " that were levied 
upon occupied French and Belgian cities in the first 
months of the war. As long ago as the beginning of the 
present year — three months before the great drive at 
Verdun had been definitely halted — it was an open 
secret in Washington that Germany would be quick to 
welcome a peace that would involve not only her with- 
drawal from Belgium and France without the receipt of 
indemnities, but even the payment of an indemnity to 
the former under the euphemistic title of a " reconstruc- 
tion fund." 
Since it is absolutely certain, then, that Germany will 
not be able to pay her war debt with indemnities levied 
upon Russia and France, and since it is likely that 
this debt will be increased by a payment to Belgium, 
and also to Serbia and France, it is hard to see how 
she can escape paying the penalty of a huge financial 
crash for erecting those precarious " houses of cards," 
her unbacked war loans. The dead weight of her idle 
ships and stagnant export trade must also be felt in 
(iermany long after both have begun to move once more 
as the British Navy lowers its bars. 
With anything less than the clean-cut victory that 
would enable her to shift her debts upon her enemies' 
slioulders — an almost negligible contingency — Germany's 
after-the-war financial problem will be a staggering one, 
and not the least difficult part of it will be to per- 
suade her people to take back in paper what they gave 
in gold. Indeed, there is much to support the view of 
those who hold that the Kaiser's greatest trouble is 
coming, not in the settlement with his enemies at the 
peace conference, but in the settlement with his own 
deluded people after the peace conference. The (icrman 
people they say have, under the stimulus of war enthusi- 
asm, freely dribbled out their gold for iron rings and 
iron nails, but when they learn that their life savings 
have gone in a lump to pay for a war which has most 
signally, failed to accomplish what they had been assured 
it .would, they are likely, to develop, to say the least, an 
unsuspected intractability. 
If we knew what course the German Government 
would pursue in the way of paying off its war debt, we 
should be in a better position to forecast what effect 
the existence of this debt will have upon Germany as a 
competitor for the world's trade. In the case of England, 
which has financed the war by perfectly legitirnate 
methods of remarkable astuteness, the influence of her 
new debt would seem to be perfectly clear. A con- 
tinuation for an indefinite length of time of some such 
rate of taxation as the country has shown itself so well 
able to bear during the war, combined with continued 
and perhaps increased national and ])crsonal economy, 
should ultimately see England through with a clean 
slate and a clean conscience. The high taxes will, of 
course, mean that the cost of living will remain high, and 
this, in turn, will keep wages up, thereby increasing the 
cost of production. Should ocean freights remain any- 
where near their present level for a number of years, it 
is possible that the cost of living in England might become 
as high as in the United States, though that is an unUkely 
contingency. Wages, however, are hardly likely to 
increase quite proportionately to food, and it is probable 
that the higher standard of living of the American work- 
man will always keep his pay higher than on the other 
side of the .Xtlantic. 
Still paying lower wages than the United States, 
England has but to bring her industrial organisation up 
to that of the former to be able to turn out goods more 
cheaply, and it will be found that a long step has been 
taken in this direction during the war. The advantage 
that England will still enjoy as the world's principal 
carrier will rather more than offset the considerably in- 
creased expense she will be under for raw materials 
from abroad. 
International Trade Alliances 
While it would be idle to speculate before the peace 
settlement concerning international trade alliances to be 
entered into after the war, it is quite possible to observe 
already the set of certain significant currents in some 
of the individual nations. The British . Empire, for 
instance, appears to be inclining strongly toward the 
throwing up of a tariff wall, not only with the object of 
protecting new industries which may have sprung up for 
supplying goods hitherto bought from Germany, but 
also— and principally — w'ith the object of curbing the 
increase of German wealth and power. The decision 
on thii score, it is urged, is one which cannot wait for 
peace-time deliberation, for some kind of protection must 
be devised against the seven thousand million marks 
worth of German goods which have been accumulated 
during the war for the purpose of " dumping " upon 
foreign markets as soon as the seas are open for Get m in 
ships. The figure may be an exaggeration, but there is no 
doubt that Germany's imperative need of money, as well 
as her desire to regain lost markets, will induce her to 
endeavour to kill two birds with one stone by offering an 
unprecedented quantity of her goods at very low prices. 
Not only in F^ngland, but even more insistently from 
Canada, Australia, South Africa and India, there is a 
cry for adequate protective measures against German 
" dumping " immediately after the war, as well as for 
the initiation of some scheme calculated to restrict to 
the minimum for an indefinite period German trading with 
all parts- of the British Empire. There is no mistaking 
the strength of this feeling. It is evident not only in 
the growth of very powerful anti-German societies in 
England and the Dominions and Dependencies, but also 
in the utterances of some of the most conservative mem- 
bers of their Governments. 
It is just conceivable that Germany may be in strong 
enough position at the Peace Conference to insert pro- 
visions insuring her against the formation of a customs 
union among the Allies, but nothing less than sending the 
British Fleet to the bottom of the sea could prevent 
England, once she so desired, from throwing up such 
tariff walls as she pleased about her own Empire. That 
such a wall against German goods — and it would operate 
to restrict German influence generally as well — is not 
only desirable but imrerafivc, I am thoroughly convinced. 
