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THE 
 ECONOMIC BASIS 
 
 OF 
 
 AN ENDURING PEACE 
 
 BY 
 
 C. W. MACFARLANE, C.E., Ph.D. 
 
 EX-VICE-PBE8IDENT, AMERICAN ECONOMIC ASSOCIATION 
 
 PHILADELPHIA 
 
 GEORGE W. JACOBS & COMPANY 
 
 PUBLISHERS 
 

 COPYRIGHT, 1918, BY C. W. MACFARLANE 
 
 PRESS OF 
 
 J. B. LIPPINCOTT COMPANY 
 
 PHILADELPHIA 
 
 •1 ) jr * w!»> 
 
 
. w 
 
 THE ECONOMIC BASIS 
 
 OF 
 
 AN ENDURING PEACE 
 
 That wars have ofttimes been due to the pres- 
 sure of population upon subsistence is now so gener- 
 ally recognized as to have become a commonplace 
 in our historical studies. The various barbarian in- 
 vasions of the Roman Empire may be cited as due 
 to this cause, and even where the immediate invaders 
 came from the fertile plains of southern Russia 
 their migration is held to be the result of the pres- 
 sure of less favored people upon the borders of 
 those who held these more fertile lands. Nor is this 
 pressure of population upon subsistence restricted 
 to more primitive days but is clearly seen in the 
 great struggle that now threatens to engulf our 
 modern civilization. For is it not true that insular 
 England, fearing to have her food supply cut off, 
 has been forced to maintain a great navy for its 
 protection and to insist that Germany shall limit 
 its naval programme to the ratio of twelve to sixteen. 
 
 With the growth of trade and commerce, how- 
 ever, the direct pressure of population upon sub- 
 sistence has ceased to play quite so important a part 
 
 S 
 
-r: : THE ECONOMIC BASIS 
 
 among the economic causes of war. For with their 
 rise the control of the trade routes soon became 
 such a fruitful source of wealth and power that 
 nations were willing to accept the gage of battle 
 to secure or retain control of these routes, and so 
 we had what are sometimes called " trade wars '* 
 in which the struggle was no longer directly for 
 fertile lands or food, but for advantages in trade 
 and commerce. This, too, plays no unimportant 
 role in the present great war which is in part a 
 struggle to secure control of the waterway of the 
 Dardanelles and a right of way for the Bagdad 
 Railway to the Persian Gulf. 
 
 In a primitive civilization, a large percentage of 
 the income of the individual is expended upon food, 
 while in a more advanced society where the range of 
 satisfactions is much wider, manufactured goods 
 play a more important part and so absorb a large 
 measure of the total income, leaving a smaller per- 
 centage of that income to be expended upon food. 
 Under these circumstances the pressure of one civi- 
 lization upon another may first be felt, not in a 
 scarcity of fertile land or food but in a scarcity 
 of the more important raw materials of manu- 
 facture, to wit: Coal and Iron. From this it 
 follows that if any one nation or group of nations 
 4 
 
OF AN ENDURING PEACE 
 
 can secure control of Europe's supplies of coal 
 and iron naught can prevent such a combination 
 from conquering the industrial and political hegem- 
 ony of Europe. For the " balance of power " in 
 Europe no longer rests exclusively upon the distri- 
 bution of its fertile lands but even more immediately 
 upon the wise distribution of its supplies of coal and 
 iron. In brief, if Germany should emerge from the 
 present war still holding possession of the iron-ore 
 of Lorraine as well as her 409 billion tons of coal, 
 naught can prevent her from so growing in wealth 
 and population as ultimately to conquer the hegem- 
 ony of Europe, while France, restricted to her pres- 
 ent beggarly holdings of 17 billion tons of coal, 
 must, despite her heroic struggle and her appalling 
 sacrifice of blood and treasure, disappear as a 
 great power and at last be forced to bow a servile 
 knee to the Baal of German Imperialism. It is to 
 the further exposition of this thesis in connection 
 with the coal lands of Europe that the first part 
 of the present paper is devoted. 
 
 The reader is doubtless aware of the fact that up 
 to the end of the first half of the eighteenth cen- 
 tury English economic writers were quite generally 
 persuaded that England had reached the limit of her 
 possible population at about eight millions of people. 
 
 5 
 
THE ECONOMIC BASIS 
 
 The great industrial revolution, however, that came 
 in with the introduction of steam, changed all this, 
 and England passed with great rapidity from an 
 agricultural to an industrial or manufacturing 
 economy, with the result that to-day she supports 
 thirty-eight millions of people, though she still con- 
 tinues to grow but little more than enough to feed 
 the original eight million. 
 
 The men who guided the fortunes of Germany 
 at the conclusion of the war of 1870-71 saw quite 
 clearly that their country, surrounded as it was 
 by hostile nations, must find means to grow in 
 both wealth and population if she would in the 
 future successfully meet a great combined attack. 
 The very interesting English experience was, of 
 course, well known to these German publicists, 
 and so we find them resorting to every possible 
 device, like protective tariffs, etc., to encourage 
 the expansion of their industries, until to-day she 
 is pressing hard upon the heels of English manu- 
 facturers and merchants in all the marts of the 
 world. Note, too, that during this time her popu- 
 lation has grown from about forty million at the 
 close of the war of 1870-71 to approximately 
 seventy million to-day, while for three years she 
 has succeeded in financing a world-wide war. 
 6 
 
OF AN ENDURING PEACE 
 
 It hardly need be urged that the expansion of the 
 population of any country to a point greatly in ex- 
 cess of its home-grown supply of food may be at- 
 tended with serious danger in the event of a great 
 war. As we have already written, it is largely for 
 this reason that England is forced to maintain a 
 great navy, and to regard as a serious menace the 
 rapid growth of the German navy, for should the 
 latter become strong enough to sweep the British 
 fleets from the sea, England could quickly be 
 starved into submission and so become little more 
 than a vassal state of Germany. 
 
 The refusal of Germany to enter into an agree- 
 ment with England for the limitation of their naval 
 armaments has been rather severely criticised by 
 the champions of English interests. In reality, 
 however, this refusal was entirely rational since 
 England insisted, as was quite natural for her to 
 do, on an agreement by which she could always 
 maintain her preponderance in naval power. If 
 Germany could still have hoped to grow enough 
 food within her own borders to feed her rapidly 
 increasing population, the case would of course 
 be quite different, but her growth in industry and 
 population had rendered her vulnerable to a naval 
 attack that would cut off her imports of food. It 
 is true that Germany still grows more than 70 per 
 
 7 
 
THE ECONOMIC BASIS 
 
 cent, of her food supplies, while England has been 
 growing about 30 per cent, of the food consumed 
 within her borders; but with the continued growth 
 of German industry and population, she, too, must 
 ere long approximate the conditions that now obtain 
 in England, and hence it was quite in order for her 
 to refuse to accept a naval progranmie that must 
 forever leave her food supply at the mercy of Eng- 
 land. In a word, there is here a conflict of economic 
 interests so serious, so fundamental that, as men 
 are still constituted, the only solution they can find 
 for the difficulty is in the arbitrament of war. 
 
 The great increase in the wealth and population 
 of England in the eighteenth century, as of the 
 wealth and population of Germany in the nineteenth 
 century, was clearly due to their transition from 
 an agricultural to an industrial or manufacturing 
 economy. If then France is to keep pace with 
 Germany in her resources of men, money and arms, 
 she too must bring about a like expansion of her 
 industry and commerce. It is therefore important 
 to note that the industrial expansion in England 
 that came in with the introduction of steam, was 
 conditioned upon her having a generous supply of 
 cheap coal with which to make that steam. So, too, 
 the industrial expansion of Germany rests in last 
 resort upon the fact that she is generously endowed 
 8 
 
OF AN ENDURING PEACE 
 
 with cheap coal. When, therefore, the necessity for 
 a further industrial expansion is urged upon the 
 public men of France, a serious difficulty is en- 
 countered, for as we have already learned, this fair 
 land is but poorly supplied with coal. 
 
 The poverty of France in this regard will be 
 brought into clear relief by the following statement 
 of the distribution of coal in the various countries of 
 western Europe. While Germany has an estimated 
 supply of some 409 billion tons, England has an 
 estimated supply of 189 billion tons. Again, while 
 Austria-Hungary has some 55 billion tons, France 
 and Belgium taken together have only 28 billion tons 
 (17 billion in France and 11 billion in Belgium).* 
 
 This brief statement serves to show not only the 
 essential weakness in the industrial outlook of 
 France, but, as well, the strongly intrenched posi- 
 tion of German industrialism behind its 409 billion 
 tons of coal. There is, however, an interesting ele- 
 ment of weakness in the geographical location of 
 the two great German coal fields, 160 billion tons 
 being in Silesia on her eastern frontier, and a like 
 
 * These figures are the results of the recent careful 
 drilling of the coals lands of Europe to a depth of from 
 1500 to 1800 feet. See "The Coal Resources of the 
 World," a work initiated by the Toronto Congress of 
 Geologists in 1913. 
 
 9 
 
THE ECONOMIC BASIS 
 
 amount in Westphalia close to her western frontier, 
 and in addition the small but important coal fields 
 lying west of the Rhine. Now in the event of the 
 defeat of Germany in the present struggle, it will 
 clearly be impossible for her to satisfy the claims of 
 her conquerors by any money indemnity such as she 
 exacted from France in 1871, for if Germany is 
 vanquished it will only be after she has been reduced 
 to a hopelessly impoverished condition. In that 
 event her only available assets will be f oimd in these 
 coalfields (Plate I). 
 
 Here, then, in the expropriation of a part of 
 these western coal fields, France will have an oppor- 
 tunity to strengthen her industrial position at the 
 point of its great weakness, for with this possible 
 increase in her supply of coal, together with the 
 great beds of iron ore that lie within the borders of 
 Lorraine, there would be nothing to prevent a great 
 expansion of her industries, and a consequent growth 
 in wealth and population that would ere long make 
 her a formidable competitor of Germany in industry, 
 commerce and war. 
 
 The Westphalian coal field, lying in the valley 
 of the Ruhr, has its western end near Duisburg on 
 the Rhine, some twenty-five miles from the Bel- 
 gian frontier, and its eastern end in the neighborhood 
 of Dortmund, about sixty-five miles from the same 
 10 
 
scale: %INCH = 20MILES 
 ROADS QSJ IRON MINES ^COALFIELDS 
 
 Plate I 
 
OF AN ENDURING PEACE 
 
 frontier. Here, in an area of fifteen by forty miles, 
 we have one of the greatest coal fields of the world. 
 Situated, as it is, within a few miles of the Belgian 
 frontier, it might, in the event of the defeat of Ger- 
 many in the present war, afford an easy solution for 
 the future industrial problems of France and Bel- 
 gium. But before accepting this solution it may be in 
 order to inquire whether another may not be found in 
 the two smaller coal fields lying west of the Rhine? 
 The best available information that we have in 
 regard to the coal resources of western Europe is 
 found in an " Atlas " published by E. Gruner, 
 Paris, 1903, and "The Coal Resources of the 
 World," published at Toronto in 1913. The latter 
 contains the reports of German mining engineers 
 on the coal reserves of western Germany and as they 
 are ten years later than the French publication, 
 though in essential agreement with it, we will avail 
 ourselves of these German reports in which the fig- 
 ures are given in billions of metric tons. 
 
 Actual Possible 
 
 District Reserves Reserves 
 
 Westphalia 56.344 157.222 
 
 West of Rhine * 10.458 Considerable 
 
 Saarbriicken 16.548 Very considerable 
 
 * While the Saarbriicken district lies west of the Rhine, 
 the *' West of Rhine district " only includes the coal fields 
 lying north of the Saarbriicken district. 
 
 11 
 
THE ECONOMIC BASIS 
 
 The question of course arises: — How are we to 
 interpret the rather vague terms — " considerable " 
 and " very considerable " as applied to the Possible 
 Reserves of the West of Rhine and Saarbriicken dis- 
 tricts respectively? 
 
 Some help may be found in the figures that are 
 given for the Westphalian district in which the Pos- 
 sible Reserves are 2.80 times the "Actual Reserves " 
 and as the larger part of the West of Rhine district 
 is but an extension of the Westphalian basin, it 
 might be inferred that the term " considerable " as 
 applied to the former district means that its " Possi- 
 ble Reserves " are 2.80 times its Actual Reserves, 
 or the same as in the Westphalian district. From 
 this it would follow that the term " very consider- 
 able '* as applied to the Saarbriicken district implies 
 a ratio greatly in excess of the Westphalian ratio 
 of 2.80. It is not necessary to tell the reader that 
 this is a rather unreliable way of determining the 
 "Possible Reserves" of the West of Rhine, and Saar- 
 briicken districts, if any great degree of exactness 
 is intended, but it does seem fair to assume in a tenta- 
 tive way, that the " Possible Reserves " of these 
 districts are at least 2.50 times their "Actual Re- 
 serves " as given in our table. If we perform this 
 multiplication we get the following results : — 
 
OF AN ENDURING PEACE 
 
 For the district West of the Rhine we have an 
 
 Actual Reserve of . . . ., . 10.458 
 
 This multiplied by 2.50 gives us a Possible Re- 
 serve of u . 25.345 
 
 or a Total Reserve of 35.803 
 
 So too for the Saarbriicken district we have an 
 
 Actual Reserve of , . ., 16.548 
 
 This multiplied by 2.50 gives us a Possible Re- 
 serve of , ,. . . 41.370 
 
 or a Total Reserve of 57.918 
 
 If to the Total Reserves of the West of Rhine 
 
 district 35.803 
 
 we add the Total Reserves for the Saarbriicken 
 
 district . ., . 57.918 
 
 and to this add the Present Reserves of France 
 
 and Belgium ,. . . 28.264 
 
 we get a Total Reserve for these two countries of 121.985 
 or in brief 122 billion tons of Reserve coal. 
 
 Whether this would be sufficient to enable 
 France and Belgium to effect the great industrial 
 development on which their survival depends must 
 be left to the statesmen of these countries to decide 
 after their engineers have carefully checked up the 
 figures of the above tentative calculation. If they 
 should decide this question in the affirmative this 
 
 IS 
 
THE ECONOMIC BASIS 
 
 solution would have whatever advantage there may 
 be in establishing a clearly defined and strategic 
 frontier and would carry us back to the days of 
 Caesar when all east of the Rhine was Germany and 
 all west of that river was Gaul. If the reader will 
 again turn to the map of these coal regions he will 
 notice that if Alsace-Lorraine is returned to France 
 a very slight additional area, of about 10 by 20 miles, 
 would give her the Saarbriicken coal basin with its 
 estimated coal reserves of nearly 60 billion tons, and 
 lying as it does close to the Lorraine ore basin, it 
 alone would mean much for the future industrial 
 development of France. If it should be found that 
 there is not sufficient coal west of the Rhine to insure 
 the industrial development of France and Belgium 
 then there should be no hesitation about expropriat- 
 ing the Westphalian coal field, the western end of 
 which is but twenty-five miles from the Belgian fron- 
 tier. For France, cut off from an adequate supply 
 of coal, will at best remain stationary in wealth and 
 population, while Germany with her great reserves 
 of coal can agam double her population in another 
 fifty years and so prove irresistible in her determina- 
 tion to conquer the hegemony of Eru'ope and so of 
 the world. 
 
 It may be said, that the failure of Germany to 
 14 
 
OF AN ENDURING PEACE 
 
 assimilate the French population of Alsace and 
 Lorraine is a warning that should not be ignored, 
 and hence for France and Belgium to expropriate 
 the territory west of the Rhine with its distinctly 
 German population would only mean a never ending 
 source of trouble. But is this necessarily true? 
 German methods as applied to colonies, or subject 
 people, are notoriously inefficient, while France has 
 shown an exceptional degree of wisdom in adapting 
 her methods to the peculiar psychology of the con- 
 quered people. Again, when it is remembered 
 that the essentially German population of Alsace had 
 been so won over by France that forty years of Ger- 
 man rule has failed to win it back to its old German 
 allegiance ; and when it is further remembered that 
 the present German population west of the Rhine 
 would become, not the subjects of an Absolute Mon- 
 arch, but the citizens of a great Industrial Republic, 
 its successful assimilation by France would seem to 
 be well within the range of possible achievement. 
 
 It is true, that so long as England will permit 
 the free exportation of her coal, France may make 
 progress in her industrial activities, but to assure 
 that progress beyond all peradventure, France must 
 have a liberal supply of cheap coal within her own 
 frontiers, and if this adjustment of the coal supply 
 
 15 
 
THE ECONOMIC BASIS 
 
 of Europe is not effected now, it must be effected 
 in the near future, or France will ere long cease to 
 exist as one of the great powers of Europe. As 
 Rome and Veii long fought for possession of the salt 
 pits at the mouth of the Tiber, so Germany and 
 France are to-day battling for the coal and iron pits 
 of western Europe. Nor can any adjustment of 
 European boundaries long endure which permits 
 Germany to retain well nigh double the amount of 
 coal that is held by all the rest of western Europe 
 taken together. Let us not deceive ourselves. It 
 is not common language, literature and traditions 
 alone, nor yet clearly defined or strategic frontiers, 
 that will in the future give stability to the boundary 
 lines of Europe, but rather such distribution of its 
 supplies of coal and iron as will prevent any one of 
 the great nations of Europe from becoming strong 
 enough to dominate or absorb all the others. Here 
 then in giving to France an adequate supply of coal 
 we have the only possible way in which the old 
 " balance of power '* in western Europe can be 
 re-established. In a word, the best guarantee for the 
 future peace of Europe must be found in a strong 
 England with her 187 billion tons of coal; a strong 
 France with approximately 122 bilUon tons; a re- 
 constructed Russia with 233 billion tons and a chas- 
 16 
 
OF AN ENDURING PEACE 
 
 tened Germany with her remaining 300 billion tons 
 of coal without including the brown coals of Prussia. 
 
 It may be said that we are here demanding im- 
 possible conditions; that Germany will never sur- 
 render any part of her western coal lands, and 
 that to make this demand means to prolong the war 
 until Europe collapses in absolute exhaustion. But 
 to pass intelligently upon this bit of camouflage 
 we must have clearly in mind what the effect will 
 be upon European civilization if Germany is per- 
 mitted to retain these lands. 
 
 As we have elsewhere written, France cut off 
 from all hope of any growth in wealth and popu- 
 lation because of her present limited supply of coal 
 must eventually succumb in the struggle for exist- 
 ence, while Germany secure in the possession of 
 more coal than all the rest of western Europe taken 
 together, may in another fifty years, again double 
 her population and so prove irresistible in her deter- 
 mination to conquer the hegemony of all Europe. 
 
 Again, it must be borne in mind that we have 
 just as difficult a problem in the adjustment of the 
 iron supplies of these two countries as in the adjust- 
 ment of their coal supplies. Anticipating the argu- 
 ment of later pages we would here urge that if 
 France is awarded the province of Alsace-Lorraine, 
 
 17 
 
THE ECONOMIC BASIS 
 
 stolen from her in 1871, Germany will be deprived 
 of 75 per cent, of all her supplies of iron, and since 
 this would seriously halt her further progress in 
 industry, wealth and population it does not seem 
 probable that she will yield to this demand any 
 more readily than to a demand for a part of her west- 
 ern coal lands. Indeed, she could better spare even 
 the Westphalian coal field than the iron ores of 
 Lorraine. In a word, no adjustment of the prob- 
 lem of Alsace-Lorraine is possible until Germany 
 is absolutely beaten to her knees, and when that is 
 accomplished there will be little additional difficulty 
 in collecting a well-earned indemnity for France in 
 terms of the western coal lands. 
 
 Let us have no illusions about this matter, for 
 unless Germany is thus forced to her knees so that 
 a readjustment of these coal resources can be 
 brought about, she will emerge triumphantly from 
 this war, feeling assured that as the years go by 
 her 409 billion tons of coal will ultimately enable her 
 to conquer all Europe. 
 
 The Allies, on the other hand, despite their 
 enormous sacrifices of blood and treasure will be 
 doomed to lose all for which they have fought. It 
 may be urged that this ultimate triumph of Ger- 
 many, even though assured, is not an immediate 
 18 
 
OF AN ENDURING PEACE 
 
 and pressing danger, and so in a weak moment 
 we may be tempted to make a peace that will ignore 
 this eventuality. But if we do, let us not deceive our- 
 selves with any euphemistic phrases about our having 
 won this war. Let us at least be frank with ourselves 
 and admit that in our weakness we have allowed 
 Germany to triumph over all modern civilization. 
 
 It is not here maintained that there are none but 
 economic causes of war. The chapter of accidents, 
 racial differences, dynastic rivalries, etc., still play 
 a part ofttimes forcing the peoples into wars in 
 which they have no real interest. But to hold that 
 with the rise of democracy wars will cease is to ignore 
 the plain facts of experience, to wit, that many, if 
 not most wars have been due to a divergence in eco- 
 nomic interest between the peoples themselves and 
 that under such circumstances democracy will give as 
 fierce battle for what it conceives to be its vital inter- 
 ests as either an oligarchy or a monarchy. Athens 
 indeed never gave such valiant battle under her ty- 
 rants as she did as a free and self-governing people. 
 
 In concluding this part of our paper we would 
 call attention to the fact that during the Civil War 
 in America the people of the seceding states held 
 that they were fighting for the doctrine of " State's 
 Rights '' while in the same way the great mass of 
 
 10 
 
THE ECONOMIC BASIS 
 
 the people in the North thought that they were fight- 
 ing for the " Preservation of the Union." The 
 real leaders of the time, like President Lincoln, saw 
 quite clearly, that these were but rallying cries, 
 and that the real question at issue was whether 
 a civilization based upon slavery or a civilization 
 based upon free labor should survive in America. 
 So, too, in the France of to-day the cry for the 
 recovery of Alsace and Lorraine makes a strong 
 appeal to the patriotism of the French people, and 
 so is an effective rallying cry for the great mass of 
 the people of France. The leaders of France, how- 
 ever, must realize that this is not the only important 
 question at issue. They must see quite clearly, that 
 the survival of France as one of the great powers 
 of Europe depends upon her development along 
 industrial lines and that this development depends 
 in last resort upon her possession of an adequate 
 supply of coal and iron. If they realize this they 
 will be recreant indeed to their trust if they agree 
 to any settlement of the present difficulty that does 
 not give an adequate supply of coal to France and 
 Belgium in lieu of an impossible indemnity. 
 
 We have seen that in earlier days the " balance 
 of power " in Europe depended in large part upon 
 the distribution of its fertile lands but that with 
 20 
 
OF AN ENDURING PEACE 
 
 the rise of manufactures this " balance of power " 
 came to depend as well upon the distribution of the 
 fundamental elements in all industrial enterprises, 
 namely, Coal and Iron. We have seen, too, that 
 by the expropriation of the coal lands west of the 
 Rhine in lieu of an impossible indemnity, both 
 France and England would have an adequate sup- 
 ply of these essential elements of progress. It now 
 remains for us to inquire how these two nations are 
 to provide the increased supply of food that will be 
 necessary if they are to continue to grow in industry, 
 wealth and population. 
 
 Fortunately for France the solution of this prob- 
 lem lies close at hand or in her North African posses- 
 sions. Indeed, if it had not been for the intelligent 
 activities of General Lyautey, the present Director- 
 General of Algeria, France might have felt the sad 
 pinch of hunger added to her other troubles during 
 the trying days of 1916. Under this able adminis- 
 trator, however, the deficit of 2,567,107 tons in the 
 1915 grain crop of European France was largely 
 made up by his shipment of grain from Algeria. In 
 keeping with this a contributor to the December, 
 1917, number of Scrihner's Magazine reports that in 
 Paris he has "seen no bread line anywhere" — and 
 that "bread is cheaper than in the United States." 
 
 21 
 
THE ECONOMIC BASIS 
 
 This of course raises the question: Can the 
 French possessions in Northern Africa be depended 
 upon to feed the increasing population of France 
 which must result from any marked expansion of 
 her industrial activities? We all know in a general 
 way that imder Carthagenian as vmder Roman rule 
 this region was made to yield generous crops of 
 grain by the employment of the method of ** dry- 
 farming," and it may be interesting to note that 
 this method which was introduced some years ago 
 on the dry lands of western Kansas and Nebraska 
 has there been attended with such success that our 
 experience is now followed by all foreign countries 
 that are essaying to solve this problem. For while 
 Europe has still much to teach us about intensive 
 farming she now turns to us for the latest and best 
 information about the extensive cultivation of grain 
 lands. Again, it may fairly be urged that with the 
 great stretches of Africa that are adapted to " dry- 
 farming" the problem of the world's supply of 
 grain will long remain largely a question of exten- 
 sive cultivation, especially since our American ex- 
 perience has shown that wheat may safely be grown 
 on land with an annual rainfall as low as six inches. 
 
 The only estimate that we have been able to se- 
 cure, of the area in Northern Africa available for 
 22 
 
OF AN ENDURING PEACE 
 
 the growing of grain under these conditions, was 
 given by Mr. W. T. Swingle, of our own Agricul- 
 tural Department. As is well known, he is a highly 
 trained, careful observer who has spent much time 
 in that part of Africa and who gives it as a very 
 conservative opinion that in the upper plateau of 
 Algeria alone there are tens of thousands of square 
 miles of land that may be utilized for the growing 
 of grain by the intelligent practice of the method of 
 " dry-farming." Again, in the report of a French 
 Commission which spent much time exploring the 
 supposed barren wastes of the Sahara desert, we 
 learn that there is an area of 9 degrees of longitude 
 by 12 degrees of latitude with sufficient water to 
 grow grain. In a word, this Commission found 
 a territory larger than European France, in 
 the very heart of the Sahara desert, that may be 
 added to the grain-producing areas of France, 
 while the great stretches of the Senegal and Niger 
 valleys still remain to be accounted for. Surely 
 then France has no cause for anxiety about the 
 food supply for a growing industrial population. 
 For England, however, this problem is an ever- 
 present source of anxiety. She cannot turn to 
 India, since even under English supervision famine 
 has more than once stalked through the land be- 
 ds 
 
THE ECONOMIC BASIS 
 
 cause of a failure in the grain crops. It is therefore 
 to Africa with its great cultivable area and limited 
 population that England must turn for a solution 
 of this problem. We all know what an important 
 part Egypt played in supplying Rome with corn. 
 But while the yield of the valley of the Nile was 
 considerable as compared with the needs of Roman 
 civilization it would not bulk very largely in satis- 
 fying the world's present demand for grain, for 
 while the soil of her river bottom is very fertile the 
 area available for cultivation is distinctly limited, 
 not greater, indeed, than the area of Vermont and 
 Rhode Island taken together. Again, it must be 
 remembered that cotton, as a more profitable crop, 
 is replacing grain in much of this limited area and 
 this despite the two crops per year which are made 
 possible by perennial irrigation. 
 
 It is therefore to the upper Nile or to the great 
 reaches of the Sudan that England must look for 
 any important increase in her supply of grain. Nor 
 has she been idle or lacking in foresight in her plans 
 for the exploitation of this great domain which has 
 an area nearly equal to two-thirds of India. 
 Already, although her title to these lands extends 
 back but a few decades, she has constructed a 
 railroad system reaching almost to the heart of this 
 S4 
 
OF AN ENDURING PEACE 
 
 great empire at El Obied and another branch to 
 Port Sudan on the Red Sea, so affording cheap 
 water transportation for the products of this fertile 
 region. Some idea of the fertility of this part of 
 the world may be had from " Egypt in Transition " 
 by Sidney Low, in which he writes : " The northern 
 part seems bare and brown, but with water it would 
 bloom as the rose. It is nowhere quite rainless so 
 that much of it may be redeemed by * dry-farm- 
 ing ' and more by irrigation while in the south or 
 tropical portion rain is abundant." Again, Sir 
 William Garston, a well-informed investigator, tells 
 us that it is one of the finest wheat-producing coun- 
 tries in the world, while Sir Lawrence Balls in his 
 " Egypt and the Egyptians '* writes that " The 
 Sudan has enormous areas suitable for maize 
 cultivation.'* 
 
 The most authoritative as well as the most satis- 
 factory source of information on this subject is a 
 report on " The Improvement and Possible Devel- 
 opment of the Sudan " by W. W. A. Fitzgerald, 
 published at Cairo in 1903, from which we will now 
 quote freely without further reference to the source 
 of our information. ..." That in the region of low 
 rainfall we may anticipate with confidence that 
 what irrigation has accomplished in India, South 
 
 26 
 
THE ECONOMIC BASIS 
 
 Africa, and especially in the arid western states of 
 North America can also be accomplished in the 
 Sudan." Again, " The fact is apt to be overlooked 
 that behind the sandy wastes that hem in the north- 
 ern frontiers there extend extensive fertile regions 
 — which in the provinces of Khartomn and Senar 
 alone are estimated at many million acres." . . • 
 Such parts of this region as depend upon a system 
 of irrigation are handicapped by the fact that the 
 Lower Nile valley has prior rights to the waters of 
 that river, but already English engineers are at 
 work upon the problem of damming the waters of 
 Lake Victoria and when this is accomplished and 
 labor is secured from Africa or from the teeming 
 millions of India, this region is assured of a won- 
 derful development not alone in grain-growing, but 
 as well in the growing of cotton, sugar, rubber, etc. 
 Nor is the climate impossible for Europeans 
 over any large area. ** Even in the Sudd or Swamp 
 region, where rains are frequent for five months of 
 the year, there is much sunshine and the average 
 temperature is only 85° F. . . . In the Subat 
 valley where rains prevail from May to October 
 there are neither fogs nor mists and from May to 
 November the climate is in no sense relaxing. . . . 
 In Bogosland rains are intermittent from April 
 26 
 
OF AN ENDURING PEACE 
 
 to October, but after July the thermometer rarely 
 exceeds 77°. . . . In the higher and drier regions, 
 as at El Obied and even below this point, the tem- 
 perature ranges from 77° to 91°, although there is a 
 record of 105°, while at Khartoum the summer is 
 said to be cooler than at Cairo." In the regions of 
 high rainfall you are of course confronted by the 
 problem of tropical diseases, but after the experi- 
 ence of Dr. Gorgas at Panama this need not cause 
 any great uneasiness. In a word, England is here 
 in possession of a domain imperial in its extent and 
 possibihties in most of which Europeans can live in 
 reasonable comfort and health. 
 
 But what shall it profit either France or Eng- 
 land to possess great stretches of corn land in 
 Africa if in time of war they can be cut off from 
 this source of their food supply by the enemies' 
 navy? In reply to this it seems quite fair to assume 
 that before these countries again enter into a great 
 European conflict they will have completed a tun- 
 nel from Dover to Calais so that the transportation 
 of men and supplies between these two points shall 
 never again be in danger of interruption. Again, 
 if they can succeed in establishing the necessary 
 friendly relations with Spain, the construction of 
 another tunnel at Gibraltar would forever protect 
 
 27 
 
THE ECONOMIC BASIS 
 
 their supply of food, since a slight rail extension 
 would connect them with the present French rail- 
 road system, which to-day carries you to the very 
 heart of all this region at Timbuctoo as well as to 
 the southeastern coast of Tunisia. From the former 
 the line could readily be extended into the fertile 
 stretches of the Sudan and thence up the Nile 
 valley and on to Cape Colony, while from the lat- 
 ter an extension might be made across Tripoli to 
 Cairo and the lower Nile valley with the possibility 
 of extending this line to India at some future day. 
 In any event, the construction of the tunnels at 
 Dover and Gibraltar would protect the food supply 
 of England and France in all the years to come. 
 Nor is there any reason to anticipate any greater 
 engineering difficulties in the construction of the 
 tunnel at Gibraltar than in the construction of the 
 much longer tunnel at Dover-Calais. 
 
 It may be urged that we have here been losing 
 sight of the fact that this is a land of magnificent 
 distances. The answer to this, however, is that 
 France and England have divided well nigh a con- 
 tinent between them, and if they are to administer 
 these great regions with sanity and wisdom they 
 will be forced to think in continental terms and not 
 in the terms of a county or a department. Nor is 
 28 
 
OF AN ENDURING PEACE 
 
 there any reason to doubt that they will think in 
 the larger terms. To this it may be added that not 
 the least of the advantages that would accrue from 
 the establishing of this overland route would be its 
 influence in sealing for all time the friendship be- 
 tween England and France, a friendship already 
 strongly cemented in blood and treasure. 
 
 The building of these tunnels, interesting and 
 important as they might prove to be at some future 
 day, does not serve us in any good stead at the pres- 
 ent time. And so we would suggest that if this 
 war is to be still further prolonged it might be 
 well to ship immediately tractors, ploughs, har- 
 rows, etc., from this country to northern Africa 
 and so find employment for the thousands of 
 German prisoners in France and England in the 
 cultivation of the great areas in Northern Africa 
 that are known to be suited to " dry-farming.'' 
 It might even be well to send men from our Agri- 
 cultural Department who are familiar with the 
 experience in the arid belt of our western states, 
 to co-operate with General Lyautey in the promo- 
 tion of this enterprise. This would have the double 
 advantage of providing the much-needed grain 
 without further taxing our resources and would re- 
 duce the amount of tonnage necessary for its trans- 
 
 29 
 
THE ECONOMIC BASIS 
 
 portation, since the distance even from Oran to 
 Marseilles is very much shorter than from New 
 York to Liverpool. 
 
 Let us now inquire what bearing all this has 
 upon the terms of peace that can be conceded to 
 Germany at the close of the present war. Presi- 
 dent Wilson in his last address to Congress has 
 laid down a platform upon which every right think- 
 ing American should stand, to wit: that "our 
 present and immediate task is to win the war," . . . 
 that " the Germans must repair the wrongs their 
 rulers have done "... and that ** we are seeking a 
 permanent peace, based upon generosity and jus- 
 tice to the exclusion of all selfish claims even on the 
 part of the victors." It is in the broad spirit of this 
 statesmanlike document that we must now interpret 
 the results of our economic studies. 
 
 If the German people persist in defending the 
 barbarous practices and crude political philosophy 
 which has made their name anathema throughout 
 the civilized world but little can be conceded in the 
 way of generous treatment. Civilization dare not 
 put into the hands of such a people the weapons 
 of its own destruction, but if with a chastened spirit 
 the German people repudiate the evil ways of their 
 present rulers, the question must needs arise — what 
 80 
 
OF AN ENDURING PEACE 
 
 in concrete terms can then be conceded to them not 
 in the interest of Germany alone but in the interest 
 of that modern civilization whose very existence 
 they have threatened and whose preservation and 
 progress should be the aim of all our political 
 philosophy? 
 
 We have seen that under the assumption of an 
 all-rail route to the grain lands of Africa ; the return 
 of Alsace-Lorraine; and the expropriation of the 
 coal lands west of the Rhine, France and England 
 would have an assured and adequate supply of the 
 three essentials of material progress, to wit: coal, 
 iron and food. Clearly then if Germany is to sur- 
 vive and make a like progress in industrialism and 
 civilization, some consideration must be given to 
 the problem of conceding to her a like adequate 
 supply of these essential commodities. The prob- 
 lem is by no means a simple one, and yet on the wise 
 solution of this problem must depend that " balance 
 of power " on which in final resort the lasting peace 
 of the world depends. 
 
 The solution of the coal problem in Germany 
 presents no very great difficulties since even if 
 France and Belgium should expropriate the entire 
 Westphalian coal field Germany would still retain 
 169 billion tons without including the brown coals 
 
 81 
 
THE ECONOMIC BASIS 
 
 of Prussia. It is true that these brown coals are 
 of an inferior quality as compared with the bitu- 
 minous coal of Westphalia, but this is not necessarily 
 an insurmountable difficulty since the drift of mod- 
 ern practice is toward the use of gas rather than the 
 burning of the coal directly, even in metallurgical 
 processes. The iron problem, however, presents 
 some serious difficulties. It appears that in 1871, 
 before the signing of the treaty of Versailles, Ger- 
 many had the iron lands of Lorraine, containing one 
 of the largest and most important deposits of iron in 
 the world, very carefully examined and reserved to 
 herself what her experts regarded as the valuable 
 part of this ore land. The balance was left to France 
 because it ran too high in phosphorus and because 
 they thought that the limestone in which the ore was 
 found would be so flooded with water as to render 
 mining operations impossible. As a matter of fact 
 the water has not proved to be a very formidable 
 difficulty, while the invention by two British citi- 
 zens, Gilchrist and Thomas, of a process for elimi- 
 nating the phosphorus and its utilization in phos- 
 phates for manuring purposes has changed the 
 whole aspect of the problem, and incidentally has 
 put the much vaunted efficiency of German tech- 
 nology in a rather awkward position. Thanks to 
 82 
 
OF AN ENDURING PEACE 
 
 their lack of efficiency, in this as in so many other 
 technical matters, they left to France by far the 
 largest body of this ore while to-day they are sacri- 
 ficing hundreds of thousands of lives and billions 
 of marks in a vain effort to correct this mistake. 
 
 One of the results of this error on the part of 
 the German experts is the fact that the line of the 
 frontier between France and Germany as deter- 
 mined in 1871, runs directly through this great 
 body of ore from which it follows that there must 
 be some change in the location of this line if peace 
 is to be preserved for any long time. France, of 
 course, will hold fast to her contention that she 
 must get back Alsace-Lorraine of which she was 
 robbed in 1871, while Germany, knowing full well 
 that her very existence both in peace and war de- 
 pends upon her at least retaining what she now 
 has of these iron lands, will long insist on not part- 
 ing with Lorraine, and this not because of its fertile 
 lands but because of its great deposit of iron-ore. 
 Note, too, that if France secures Alsace-Lorraine 
 without securing any part of the western coal lands, 
 a very interesting situation will arise in which 
 France will be in control of all the iron and Germany 
 in practical control of all the coal of northern 
 Europe, at least so far as the continent is concerned 
 (Plate II). 
 
 33 
 
THE ECONOMIC BASIS 
 
 In September, 1915, an article appeared 
 in " La Revue de Deux Mondes " in which the 
 writer suggested a very simple solution for this 
 difficulty, to wit, that France should exchange the 
 ores of Lorraine for the coals of Westphalia as 
 commercial products. To this it may be answered 
 that while this arrangement seems to be charming 
 in its simplicity it would hardly be accepted by 
 Germany, since in the event of another war she 
 would be hopelessly at the mercy of France for 
 her supply of guns and munitions. 
 
 It has also been suggested that a buffer-state 
 be created, under an " international guarantee," to 
 include both the iron mines of Lorraine and the 
 coal mines of Westphalia. But when we remember 
 how ruthlessly Germany over-rode her solemn 
 treaty obligation in her invasion of Belgium, it 
 hardly seems probable that France would be a party 
 to such an arrangement. And so whether the fron- 
 tier line continues to pass through the middle of this 
 great ore deposit ; whether it is shifted eastward by 
 the giving back of Alsace-Lorraine to France, or 
 whether we seek to create a buffer state under an 
 ** international guarantee " we are confronted in 
 each and every case by serious difficulties. 
 
 Emboldened by this, we will presume to suggest 
 S4 
 
OF AN ENDURING PEACE 
 
 a quite different solution for this problem. In 
 passing judgment upon this suggestion it must be 
 borne in mind that it is made under the assumption 
 that the military power of Germany has been 
 crushed and that Germany, repenting her evil ways, 
 has at last qualified for admission to the " partner- 
 ship of nations." For unless we clearly distin- 
 guish between the terms that can be granted to an 
 unregenerate Germany and those that can be 
 granted to her as a chastened people anxious to 
 again take its place among the civilized nations of 
 the world, nothing but confusion can arise. In 
 brief, then, a repentant Germany must be accorded 
 such a supply of coal, iron and food as will make 
 possible her further progress in industry, wealth 
 and population or we shall give rise to such a fes- 
 tering sore in the body politic of our modern civiliza- 
 tion as will ere long again shake it to its very base. 
 In brief, if Alsace-Lorraine is returned to 
 France, as it should be, it would strip Germany 
 of seventy-five per cent, of her present supply of 
 iron ore, and if this is done some provision must 
 be made to replenish Gei^any's hopelessly de- 
 pleted supply of these ores if she again qualifies for 
 admission to the " partnership of nations." If, how- 
 ever, Germany continues imrepentant then the most 
 
 35 
 
THE ECONOMIC BASIS 
 
 effective way of rendering her impotent as a great 
 power is to cut her off from these supplies of iron, 
 but in doing this let us not fail to remember that we 
 are undertaking the very serious task of holding 
 seventy million people hopelessly in leash. It may 
 be that we will be forced to accept this undesirable 
 consimimation, but let us not do so in any light or 
 flippant manner but rather as serious-minded men 
 forced to face a grave and unavoidable dilemma. 
 
 It is only when we realize that without the iron 
 ores of Lorraine Germany would lie like some huge 
 helpless hulk, the prey of every storm that breaks 
 over the sea of European politics ; doomed to sink at 
 last and disappear as a great power from the map of 
 Europe, that we can understand the frankness of 
 Maximilian Harden's remark: " If the French peo- 
 ple think that the re-establishment of peace is only 
 possible through the restitution of Alsace-Lorraine 
 and if necessity compels us to sign such a peace, 
 seventy million Germans will tear it up." Let us 
 not dismiss this too lightly as another example of 
 Germany's willingness to regard the most solemn 
 treaty obligations as mere " scraps-of -paper." For 
 in the ore-mines of Lorraine, vital alike to the sur- 
 vival of France as to the survival of Germany, we 
 have the rock on which all attempts to formulate the 
 86 
 
OF AN ENDURING PEACE 
 
 terms of peace are in serious danger of foundering. 
 Well then has M. Pichon, former French Minister 
 of Foreign Affairs, declared: " This is a war to the 
 death." 
 
 Is there then no escape from the toils in which 
 our modern civilization seems to be enmeshed? In 
 suggesting a solution for this very serious difficulty 
 we must ask the reader to forget for the nonce all 
 that he has read about the Pan- German Plot as the 
 sole and only cause of the present war, although later 
 on we will return to the consideration of the serious 
 problems raised by the Bagdad Railway. We here 
 only ask the reader to realize that there may be other 
 difficulties involved in the settlement of this war 
 and that he will for the present fix his mind upon 
 the very pressing difficulty: — ^what shall be done 
 with the ore mines of Lorraine? 
 
 We all know that in classical literature there 
 are frequent references to the mines of gold, silver, 
 lead, copper and iron in Asia Minor and our sug- 
 gestion is that we might there find a solution for 
 our difficulty. The only reliable source of infor- 
 mation that we have to-day in regard to the possi- 
 bilities of iron production in Turkey is to be found 
 in the report to the "Congress of the World's Geol- 
 ogists " held at Stockholm in 1909. M. Ettore 
 
 87 
 
THE ECONOMIC BASIS 
 
 Coulant, Ingenieur en Chef des Mines, Constanti- 
 nople, informs us that while the amount mined to- 
 day is insignificant he is satisfied that with a more 
 liberal regime there will be such a development in 
 the near future as will give Turkey an important 
 place among the iron-producing countries of the 
 world. He also gives a list of localities where there 
 are considerable showings of iron, some of them but 
 a few miles from the Black Sea. Among others 
 he mentions those in the neighborhood of Trebi- 
 zonde, which he says were exploited in ancient times. 
 It is quite possible that these are the mines referred 
 to in Xenophon's account of the march of the ten 
 thousand for, soon after they left this town, where 
 they had their first glimpse of the sea, they reached 
 the land of the Chalybes. " These,'* he writes, 
 " are a people few in number, and subject to the 
 Mossynoecians. Their livelihood was for the most 
 part derived from mining and forgi7ig iron/' (Book 
 V. ) Again, that this was one of the early sources of 
 iron for Rome is at least suggested by the fact that 
 the Latin word for steel was chalybs which still 
 survives in our word chalybeate. There are also 
 important showings of iron ore in the neighborhood 
 of Adrianople and at several points not far from 
 the Sea of Marmora in European Turkey. So, too, 
 38 
 
OF AN ENDURING PEACE 
 
 in Albania, which may serve to explain Italy's wise 
 and keen interest in that part of the Adriatic coast. 
 For, if she could add to this some part of the coal 
 lands of Austria her industrial outlook would be 
 greatly improved. 
 
 In this same volume there is a report by a Ger- 
 man engineer, Max Nottmeyer, Bergwerkdirektor, 
 which gives us a much more detailed account of the 
 iron resources of Turkey, supplemented as it is by 
 frequent analyses of the ores. Again, avoiding the 
 technical details, we can quote this writer as holding 
 that Turkey is very rich in iron, ores with 60 per 
 cent, of metallic iron being of frequent occurrence. 
 One of the most interesting features of this report 
 is the account of the ores in the neighborhood of 
 Damascus, which he says are liberal in amount and 
 excellent in quality, so recalling the traditional excel- 
 lence of the old Damascus blades. Again, he calls 
 attention to the fact that there are important show- 
 ings of coal in this neighborhood as also at Mt. 
 Hermon, where he says there are distinct outcrop- 
 pings of lignite coals. Oil, too, is found in the 
 valley of the Tigris, from Mosul to its mouth, while 
 in the immediate neighborhood of the Persian Gulf 
 there is an oil field of great promise. Now if these 
 showings of iron, coal and oil should justify them- 
 
 39 
 
THE ECONOMIC BASIS 
 
 selves they might well play a somewhat important 
 part in the rehabilitation of Palestine as the centre 
 of Zionism. 
 
 Of course even where the iron mines are close 
 to the Black Sea, so giving possible water transpor- 
 tation via the Danube and an Austro- German canal 
 system to the coal regions of Silesia, the freight 
 charges would be greatly in excess of those incurred 
 in the Lorraine- Westphalian region. When, how- 
 ever, we remember that the Bethlehem plant in 
 Pennsylvania brings its ores from as far afield as 
 Cuba and Chile, this difficulty does not seem to be 
 an insurmoimtable one, especially when it is remem- 
 bered that many of the ores in Asia Minor are 
 magnetites with over 70 per cent, of metallic iron 
 while the ores from Lorraine seldom reach 40 per 
 cent. Again, the shaft mining in Lorraine and the 
 necessity of lifting two tons of water for every ton 
 of ore extracted would offset much of the trans- 
 portation charges on ore from Asia Minor. 
 
 That there are other difficulties to be confronted 
 by this proposal need hardly be urged at this time 
 in any detailed way. We should not, however, lose 
 sight of the fact that, before finally passing upon 
 this proposal there must be a careful survey of this 
 region by competent mining geologists, the neces- 
 40 
 
OF AN ENDURING PEACE 
 
 sary drillings being made wherever the showings 
 will justify this action. Again, while the ores might 
 find cheap water transportation, Germany would 
 naturally want to be assured of an all-rail route to 
 her new and important interests in Asia-Minor. As 
 this might involve a tunnel under the Bosphorus we 
 find ourselves in another impasse because of Russia's 
 long standing and perfectly natural claim for a free 
 outlet for her ships to the waters of the world. This 
 might call for, what has often been suggested, the 
 creation of a federated Balkan state under an " in- 
 ternational guarantee " while Germany might be 
 granted a right of way for a railroad under the same 
 guarantee; this, of course, being conditioned upon 
 Germany's continuing to " bring forth fruits meet 
 for repentance." 
 
 It is not the purpose of the present paper to 
 attempt to find a solution for all the difficulties that 
 may arise in the practical working out of this sug- 
 gestion, nor even to insist too strongly upon this 
 particular solution of the very difficult problem of 
 finding an available supply of iron for Germany 
 imder the assumption that in fixing the terms of 
 peace Alsace-Lorraine will surely be returned to 
 France. But we do wish to insist as strongly as 
 possible that some solution must be found for this 
 
 41 
 
THE ECONOMIC BASIS 
 
 problem if we do not wish to create an Ireland of 
 seventy million instead of four million people in 
 the very heart of Europe. Again, it may fairly be 
 m-ged that the solution here suggested has one great 
 advantage over all others, so far proposed, in that it 
 solves at one and the same time an equally important 
 and pressing problem, namely, the providing of an 
 adequate supply of food for the increasing indus- 
 trial population of Germany by opening up Turkey 
 in Asia to modern agricultural methods. 
 
 Oscar L. Heizer, our Vice Consul General at 
 Constantinople, writes in a consular report, January 
 9th, 1913, that " the average farm in much of this 
 country contains but ten acres while many farms 
 contain less than three acres. . . . On these small 
 farms only primitive methods are used, the plough- 
 ing being done by placing an iron point on a sharp- 
 ened stick. . . . The planting and reaping are 
 done by hand, and the grain is thrashed in the same 
 manner by placing the grain upon the ground and 
 drawing a heavy plank of wood over it, after which 
 the grain is separated from the chaff by hand." 
 Clearly there is here much room for improvement. 
 
 Shortly before the present war broke out various 
 schemes for irrigating large sections of this land 
 were suggested. One by a French Company, I 
 42 
 
OF AN ENDURING PEACE 
 
 think, for the recovery of the fertile lands in Cilicia. 
 Another by the Bagdad Railway for the redemption 
 of some 125,000 acres contiguous to its lines, and 
 the still more ambitious scheme of Sir Wm. Will- 
 cocks to recover the great stretches of fertile land 
 in the valleys of the Euphrates and the Tigris. 
 Others again have urged that much of the land on 
 the upper plateau was suitable for " dry-farming." 
 Here then we find great areas of wheat lands that 
 could be redeemed under German administration, 
 and the introduction of modern methods, and so 
 made to yield an abundance of grain for her increas- 
 ing industrial population if she is to be permitted 
 to grow in wealth and population. 
 
 M. Cheradame, who has done such excellent 
 work in persistently calling attention to the evils 
 that might result from the completion of the Bagdad 
 Railway, and hence the necessity for destroying the 
 Prussian Military System by the signal defeat of 
 their armies, is likely to take serious exception to the 
 solution suggested in the preceding pages if he 
 should ever chance to read them. Nevertheless, I 
 take it that the points of difference between us are 
 not so serious as our points of agreement. We both 
 hold that there can be no lasting peace without the 
 absolute destruction of the military power of Ger- 
 
 43 
 
THE ECONOMIC BASIS 
 
 many. Nay, more, that this must be a fact precedent 
 to all discussion of the terms of peace ; that it is idle 
 and mischievous, if not treasonable, to talk of peace 
 save under the assumption that this military success 
 has been achieved since all such talk but strengthens 
 their resolve to continue the war and so gives aid and 
 comfort to the enemy. 
 
 Where then is the source of our disagreement? 
 Quite early in the present paper we called attention 
 to the fact that in any attempt to fix the terms of 
 peace we must clearly distinguish between the terms 
 that can be granted to an unrepentant Germany and 
 those that should be granted to her when she has 
 again qualified for admission to the ** partnership 
 of nations." Now it seems to the present writer 
 that M. Cheradame is too prone to lose sight of the 
 second of these conditions. This is seen in an article 
 in the "Atlantic Monthly," December, 1917, in 
 which he writes ** As a matter of fact the Germans 
 have, for all time, had such a penchant for rapine 
 . . . ever since the dawn of history they have 
 always subordinated everything to their passion for 
 lucrative wars. The same is true of them to-day." 
 In a word, M. Cheradame would seem to regard the 
 Germans as beyond all hope of any moral regenera- 
 tion and if you start with this as your premise it is 
 44 
 
OF AN ENDURING PEACE 
 
 difficult to see how you are to avoid the conclusion 
 that they should be utterly destroyed, so that they 
 may never again seriously disturb the peace of the 
 world. But may we not gravely question the sound- 
 ness of this premise? Was not President Wilson 
 in his Buffalo address much nearer the truth when 
 he said: "I believe that the spirit of freedom 
 can get into the hearts of Germans and find as fine 
 a welcome there as it can find in any other hearts.'* 
 
 It may be asked how we can reconcile this with 
 the many horrible outrages committed by German 
 soldiers and Germany's despicable plottings against 
 a government with which she was openly maintain- 
 ing friendly relations. So, too, their violation of 
 the most sacred treaty obligations and their cynical 
 disregard of all moral restraints " must give us 
 pause." Answer might be made to this that Ger- 
 many is to-day suffering from a futile attempt to 
 confine the new wine of the modern industrial psy- 
 chology of a great mass of her people in the old 
 bottles of the system of government developed in the 
 days of a feudal agriculturalism. 
 
 To make this quite clear it will be necessary to 
 turn back the pages of history to the time immedi- 
 ately following the Crusades when towns and cities 
 suddenly sprang up or grew apace while with their 
 
 45 
 
THE ECONOMIC BASIS 
 
 rise came that wondrous growth in civil liberty which 
 belies all the illusions of our childhood about liberty 
 being born of the free spaces of the country. The 
 exactions of the feudal lords so easy of enforcement 
 in the outlying country districts were now con- 
 fronted by the charters of these towns and cities 
 while within their walls there had grown up those 
 trade guilds that proved to be such powerful de- 
 fenders of the weak against oppression. We are 
 prone to think of these guilds as strictly trade organ- 
 izations or as organizations of men all of whom were 
 interested in the sale or production of the same 
 commodities. In a large measure this was undoubt- 
 edly true and yet at times they seem to have per- 
 formed a broader function in affording protection 
 to men in no way connected with the particular 
 activities indicated by the name of the Guild. 
 
 This comes out quite clearly in Vasari's " Lives 
 of the Painters," where we find that many artists 
 on first reaching Florence were initiated into the 
 " Grocers' Guild " while later on, when they had 
 acquired some reputation as artists they were initi- 
 ated into the " Gold Workers' or Artists' Guild." 
 It would therefore seem fair to assume that for some 
 time after the rise of the towns the feudal lord pre- 
 simied to follow, within the city's walls, any one on 
 46 
 
OF AN ENDURING PEACE 
 
 whom he wished to enforce some feudal claim and 
 that in the Florence of that day men were forced 
 to seek the protection of some corporate body and 
 that the " Grocers' Guild" was generally utilized for 
 that purpose since it was probably easier to gain 
 admission to the " Grocers " than to any other 
 " Guild." 
 
 Now the influx of men from the country, and 
 their employment in commerce and industry, in- 
 stead of in agriculture, necessarily led to a marked 
 change in the psychology of these men. So long 
 as the great bulk of mankind were engaged in agri- 
 culture, tilling the land whose title was vested in 
 some feudal lord, the position of the masses was 
 neither a very enviable one nor one likely to beget 
 in them any strong faith in their individual judg- 
 ments even in matters affecting their daily toil. This 
 was due to the fact that the results of their labors 
 were largely beyond their control, being subject to 
 the uncertain variations of time and season. 
 
 Note, however, that with the rise of trade and 
 industry there was a rapid increase in the number of 
 men engaged in these new forms of human activities. 
 Time and season here played a much less important 
 part so that the results of man's efforts were more 
 assured. And since a given effort was almost in- 
 
 47 
 
THE ECONOMIC BASIS 
 
 variably followed by the same result man's confi- 
 dence in his own judgment grew apace. Again, no 
 longer living in isolation on a remote fann or in 
 some small village, he finds his confidence strength- 
 ened by association with his fellows in trade guilds 
 and other organizations. Ere long this confidence 
 in his own judgments, in regard to his daily activi- 
 ties, extended itself to the domain of political discus- 
 sions and beliefs. The old psychology which was the 
 outcome of their activities in a feudal agricultural 
 economy disappeared in time and in its place we 
 find a new psychology, with its more confident judg- 
 ments, which in last resort was the outcome of the 
 change in their daily activities. It is not here meant 
 that no other influences like secular and religious 
 education, etc., played a part in effecting this change, 
 but since man's industrial activities occupy so large 
 a part of his waking hours they naturally played 
 a most important part in this change in his 
 psychology. 
 
 With this in mind let us now recall the fact that 
 many of the German people have for nearly two 
 generations been under the influence of a great in- 
 dustrial movement. That this has effected an 
 important change in their psychology is shown by 
 the rapid growth of the Socialist vote until to-day 
 48 
 
OF AN ENDURING PEACE 
 
 it has the largest representation in the Reichstag 
 of any single party. Again, it is interesting to 
 note in this connection, that the delegations from 
 the large cities and industrial centres are almost 
 to a man members of this party. 
 
 Why then, it may be asked, has not this more 
 modern psychology been able to find a voice with 
 which to protest against all the horrors that have 
 made the name of Germany anathema throughout 
 the civilized world? To this we can only make 
 answer that the men with the old feudal psychology 
 are still in control of the German government. Nor 
 is there any immediate prospect of unseating them 
 without the signal defeat of their armies in the field 
 and such action on the part of the Entente Allies 
 as will disabuse the minds of the industrial workers 
 of Germany of the notion that the Allies seek 
 the complete destruction of their Fatherland. To 
 effect this some assurance must be given that when 
 the allied people are satisfied that the government 
 of Germany is firmly lodged in the hands of the men 
 with the modem psychology, that country will be 
 given every reasonable chance "to multiply and 
 replenish the earth." It is not so much a question 
 of the form of government which they may see fit to 
 install but rather a question of the psychology of the 
 
 49 
 
THE ECONOMIC BASIS 
 
 men who are to direct its fortunes, and when this 
 change has been surely effected there should be no 
 question about according to Germany that " gener- 
 osity and justice " which is meted out to all other 
 nations. 
 
 It may naturally be felt that the extension of 
 German influence through Asia Minor to the Per- 
 sian Gulf might seriously jeopardize British inter- 
 ests in India. But while this is quite possible it does 
 not necessarily follow from the premises. It is 
 interesting to note by what a curious irony of fate 
 the present ruling classes in Germany are caught 
 between the upper and nether millstone. On the 
 one hand they are forced to expand industrially or 
 to grow in wealth and population in order to protect 
 themselves against outside aggression. On the other 
 hand, this industrial development is of necessity 
 breeding men with the modern psychology who 
 sooner or later will unseat the very men who have 
 been constrained to foster this growth in industrial- 
 ism. And so the old German saying that " the air 
 of the city breeds freemen '* returns Nemesis-like 
 to plague them. The great importance of adminis- 
 tering a signal defeat to the armies of Germany at 
 the present time is that it will hasten the day when 
 the reins of government shall pass from the hands 
 50 
 
OF AN ENDURING PEACE 
 
 of her feudal aristocracy to the hands of the men 
 whose more liberal psychology is the product of 
 modern industrialism. When that day comes Ger- 
 many may be just as insistent upon her place in 
 the sun, but she will no longer insist upon foreclosing 
 an unfounded claim upon the entire sun and so will 
 be less anxious to reach England's possessions in 
 India or to construct a railroad with the object of 
 attacking these possessions by an overland route. 
 
 Here again President Wilson seems to have seen 
 the truth with eyes that are not dimmed. In his 
 Buffalo address, in speaking of the extension of 
 German influence through the Balkans, Asia Minor 
 and Mesopotamia to the Persian Gulf, he said: " If 
 she can keep that, her power can disturb Europe 
 as long as she keeps it — always provided, for I feel 
 bound to put this proviso in — always provided the 
 present influences that control the German govern- 
 ment continue to control it." 
 
 Bear in mind, it is not here proposed to at once 
 hand over to Germany the valuable lands of south- 
 western Asia, but to hold these lands under an 
 ** international guarantee " while allowing Germany 
 to develop their resources, as she might have done 
 imder Turkish rule, so that the liberal-minded men 
 of Germany can see some hope for such a supply of 
 
 51 
 
THE ECONOMIC BASIS 
 
 coal, iron and grain as will permit her to make a 
 reasonable growth in wealth and population. Eng- 
 land and France have divided a continent between 
 them. Why then in the interest of that larger civili- 
 zation, which alone is our serious concern, should 
 not a liberal Germany be assured of like supplies 
 of coal, iron and food if it can satisfy the civilized 
 nations of the world that henceforth it will abide by 
 the rules of the game? 
 
 It should here be borne in mind that even under 
 the worst assumption that can be made in regard to 
 the extension of German influence into Asia Minor 
 and Mesopotamia, to wit — that it shall be effected 
 under the present system of Prussian militarism, the 
 results could not be a more serious threat to modern 
 civilization than would arise by continuing to cut 
 France off from an adequate coal supply and so 
 leaving her, with her beggarly 17 billions of tons, 
 impotent alike in war and in industry, while Ger- 
 many with her 409 billion tons would continue to 
 grow in wealth and population until in the not 
 distant future she would again turn and rend her 
 foes of to-day, and so quickly conquer the hegemony 
 of Europe. If an American writer may presume 
 to do so, we would ask, might not England be better 
 off with an assured supply of food and the friendship 
 of a strong and growing France than to retain her 
 62 
 
OF AN ENDURING PEACE 
 
 hold on India which sooner or later she will have 
 to defend against an overland invasion? In a word, 
 is not the real future of England in Africa rather 
 than in Asia, especially if under an international 
 guarantee the markets afforded by the teeming mil- 
 lions of India like those of China can be kept open 
 to all the world? 
 
 What shall we now say about M. Cheradame's 
 contention that " the Pan-German Plot (or Plan) 
 is the only cause of the war "? A plot that " is 
 summed up in the formula — * Hamburg to the Per- 
 sian Gulf,' or, if you like, * Le Chemin de fer de 
 Bagdad.' " That this plot or plan played an im- 
 portant part for at least twenty years in the foreign 
 policy of Germany cannot be denied. Again, it 
 must be admitted that if she wins this war and so 
 succeeds in carrying out this plan, her conquering of 
 the practical hegemony of Europe would seem to be 
 imminent. Thus far then we are in substantial 
 agreement with this most interesting writer^ 
 Again, it must be remembered that M. Cheradame 
 is actively engaged in the very important task of 
 trying to arouse the people of the allied nations to* 
 a realizing sense of the great danger that threatens 
 our modem civilization if Germany should win this 
 war. Some allowance must be made, therefore, for 
 the exigencies that confront every active propagan- 
 da 
 
THE ECONOMIC BASIS 
 
 dist, — forcing him at times to a greater simplicity 
 of statement than is compatible with a full and clear 
 enunciation of all the factors involved in the discus- 
 sion. This indeed is in agreement with his conten- 
 tion that *' the allied propaganda should be founded 
 upon a small number of positive arguments " (pp. 
 216 and 230, " Pan-German Plot Unmasked "). 
 
 Now as a method of fixing the attention of the 
 public mind upon the vital necessity of signally de- 
 feating the German armies in the present war the 
 declaration that the Hamburg to the Persian Gulf 
 scheme is the sole cause of the war has the advantage 
 of a single direct and readily apprehended state- 
 ment. But like all partial truths it is a dangerous 
 doctrine to impress too strongly upon the public 
 mind. We shall therefore endeavor to show bv ex- 
 tracts taken exclusively from " The Pan-Geiman 
 Plot Unmasked " that this statement does not con- 
 tain either the whole truth or even the more funda- 
 mental and essential parts of the truth. 
 
 On page 48 he quotes from the May, 1915, 
 " Memorial to the Imperial Chancellor " to the 
 effect that Germany must secure the coast of Bel- 
 gium up to the mouth of the river Somme. "Again, 
 besides the iron district of Briey, already mentioned, 
 the coal districts of the department of the Nord and 
 of the Pas de Calais must be seized " . . . or "that 
 54 
 
OF AN ENDURING PEACE 
 
 all means of economic power which exist in these 
 territories must pass into German hands/* In 
 brief, in the event of a German victory France is to 
 be stripped according to this memorial of all its coal 
 and iron and so left a hopeless prey to any after 
 aggressions that Germany may see fit to visit upon 
 her. Now there might be some conceivable excuse 
 for the taking of the Lorraine ore-fields, but when 
 you remember that Germany has already more coal 
 than all the rest of Western Europe this rape of 
 the coal field of northeast France seems utterly 
 heartless. 
 
 That these memorialists were keenly alive to the 
 military as well as to the industrial importance of 
 the iron regions of Lorraine is shown by the follow- 
 ing quotation from the same memorial: " If the 
 fortress of Longwy with the numerous blast fur- 
 naces of the region were returned to France, and if 
 a new war broke out, with a few long-range guns 
 the German furnaces of Luxemburg would be 
 paralyzed in a few hours " (page 47) . It then con- 
 tinues : " The security of the German Empire in a 
 future war requires therefor imperatively the owner- 
 ship of all mines of iron-ore, including the fortresses 
 of Longwy and of Verdun, which are necessary to 
 defend the region " (page 49). 
 
 How with these facts fully displayed upon his 
 
 55 
 
THE ECONOMIC BASIS 
 
 own pages M. Cheradame could persuade himself 
 that the " Hamburg to the Persian Gulf scheme " 
 was the sole cause of the present war it is difficult 
 indeed to understand. For the carrying out of the 
 suggestions in the above " Memorial " would abso- 
 lutely destroy the power of France and so would 
 lead, just as surely as any railroad from the North 
 Sea to the Persian Gulf, to Germany's conquering 
 the hegemony of Europe. Nor could Germany tem- 
 porarily surrender the ore-lands of Lorraine in order 
 to secure this all-rail route and then turn and recon- 
 quer the Longwy-Briey ore-basin with easy facility. 
 For unless she secured another supply of iron-ore 
 from which to make guns and munitions she would 
 be powerless to again wage effective war. The 
 reader can bring this home by asking himself which, 
 in view of the evidence set forth in this " Memorial," 
 Germany would prefer to surrender: the Pan- 
 German plan for extending the future power of 
 Germany or the iron-mines of Lorraine, which by 
 confession are imperatively necessary to the very 
 existence of the present empire of Germany. When 
 you have answered this question you will under- 
 stand why Germany persisted in sacrificing hun- 
 dreds of thousands of lives in the vain hope of captur- 
 ing Verdun. For strip Germany of 75 per cent, of 
 all her iron-ore, and the curtain will soon be rung 
 56 
 
OF AN ENDURING PEACE 
 
 down upon all her imperial aspirations. So far then 
 from being the sole cause of the war " the Pan-Ger- 
 man Plan " is seen to be not even the most important 
 cause of the war. 
 
 From this same " Memorial " M, Cheradame 
 quotes the following: " With regard to the East the 
 following considerations must guide us. For the 
 great increase of industrial power which we expect 
 in the West we must secure a counterpoise by the 
 annexation of an agricultural territory of equal 
 value in the East. It is necessary to strengthen 
 the agricultural basis of our national economy; to 
 secure room for a great German agricultural settle- 
 ment." Again Dietrich Shaeffer is quoted as saying 
 that "it is absolutely necessary for us to expand 
 the sphere of our power especially eastward . . . 
 the immense Russian force must recede behind the 
 Dnieper." * 
 
 * If Germany, under the present collapse of Russia, 
 should succeed in extending her influence as far as the 
 river Don, she would secure control of the most valuable 
 iron deposits in all Russia together with coal, manganese 
 and great stretches of very fertile land. This would assure 
 her an adequate supply of both iron and grain but in a 
 way far more threatening to the rest of Europe than the 
 permitted extension of her influence through the Balkan 
 states into Asia Minor, as suggested earlier in this paper. 
 
 57 
 
THE ECONOMIC BASIS 
 
 Now when we look to M. Cheradame's text for 
 a solution of this difficulty we get nought but the 
 following rather unsatisfactory statement: " One 
 aim of the Pan-Grerman plan was actually to put an 
 end to the enormous difficulty which Germany has 
 created for herself by the hypertrophy of her indus- 
 tries and thus upsetting the proper balance which 
 had formerly existed between her agricultural and 
 her industrial production " ( page 41 ) . In brief, it is 
 here implicitly stated that it is quite legitimate for 
 England and France to expand industrially and then 
 seek new grain fields in Africa, but that Germany's 
 industrial expansion is hopelessly im justifiable since 
 it disturbed the nice balance between her population 
 and her supply of food and so created the "^ enor- 
 mous difficulty '* for which she alone is to blame. 
 
 We cannot fail to conclude then, from the evi- 
 dence set forth in this " Memorial," that the present 
 war is not due solely to any scheme of railroad ex- 
 tension to further the growth of the future power 
 of Germany, although this undoubtedly played a 
 part in this world drama, but that this tragedy is 
 fundamentally due to the very present and pressing 
 necessity to provide an adequate supply of iron and 
 food to permit the growth of G^ermany in industry, 
 wealth and population. As this involved the seizure 
 58 
 
OF AN ENDURING PEACE 
 
 of lands held by other nations it led to a conflict of 
 interests so serious, so fundamental, that, as men 
 are still constituted the only solution they could 
 find for the difficulty was in the arbitrament of war. 
 In a word, the present world war was just as cer- 
 tainly an irrepressible conflict as our own Civil War, 
 a conflict that was heightened in both instances by 
 the ambitions and arrogance of a feudal aristocracy. 
 When this is clearly recognized much of the vehe- 
 ment declamation about who is morally responsible 
 for the bringing on of the present war loses its force 
 and interest. Again, the Pan-German scheme for 
 an all-rail route from Hamburg to the Persian Gulf 
 may well have had in mind, among other aims, the 
 relieving of this pressure of population upon sub- 
 sistence, etc., and to the extent that this was true 
 this " scheme " takes its place as an occasion rather 
 than as a cause of the present great conflict. 
 
 Throughout this paper we have assumed the de- 
 feat of German arms as a necessary premise in all 
 our arguments. For the moment, however, with 
 the debacle in Russia and the German drive in Italy 
 the current does not seem to set very strongly in 
 the direction of a victory for the Allies. With 
 General Pershing, however, we are disposed to hold 
 that the notion of an unbeatable Germany is not at 
 
 59 
 
THE ECONOMIC BASIS 
 
 all justified by the facts of experience. For when 
 we remember her undenied corruption of Russian 
 officials, her attempted corruption of French officers 
 in the earlier days of the war, and the charges of 
 similar attempts to corrupt Italian officers in these 
 latter days, why should we credit such success as she 
 may have had entirely to her military prowess? 
 
 In the meantime, France and England will 
 unfortunately be forced to take the shock of the 
 additional forces that will be released by the present 
 collapse of Russia. It should be remembered in this 
 connection that at Verdun, France alone sustained 
 the shock of a large part of the German Army. It 
 is therefore reasonable to assume that with the Brit- 
 ish troops that are now available, together with the 
 great supply of ammunition that is now on hand, 
 the western line will hold fast until the United States 
 can come to their assistance. It may indeed be 
 necessary to postpone any great allied drive until 
 we can place an adequate force on that line, though 
 no time should be lost in the performance of our 
 part in this effort. 
 
 It is well enough for German writers to point 
 
 to the limited area retaken by the Allies and that, 
 
 too, after prolonged effort and enormous sacrifices 
 
 and then to ask how long, at this rate of progress, 
 
 60 
 
OF AN ENDURING PEACE 
 
 will it take to reach Berlin? But after all this is 
 but another case of German camouflage. The 
 real and immediate objective of the Allies' drive is 
 or ought to be to secure possession of the Lorraine 
 ore-mines, since without them it would be impossible 
 for Germany long to maintain an adequate supply 
 of guns and munitions. It is true that she could 
 still import ores from Austria and Sweden, but de- 
 prive her of the mines and blast-furnaces of Lor- 
 raine and the end of the war will not be far removed. 
 If you will now turn to our map of this region 
 you will find that the present fighting line is within 
 23 miles of Longwy and less than 17 miles from 
 Briey. Note, too, that the frontier line which 
 divides this ore-bed runs along the crest of a ridge 
 or rather an elevated plateau from 300-600 feet high 
 and that the only considerable break in this ridge is 
 at the lower end where the River Moselle has suc- 
 ceeded in cutting its way through. It is clear from 
 the map, however, that any attempt to flank the 
 German position through this opening in the hills 
 will be confronted by the fortifications at Metz, 
 whose great guns are doubtless trained upon this 
 gap. There are two small streams, north and south 
 of Longwy, that find their way through this ridge 
 and eventually reach the Meuse. South of Briey 
 
 61 
 
THE ECONOMIC BASIS 
 
 there is a somewhat larger stream, the Orne, which 
 empties into the Moselle. As this narrow valley is 
 traversed by a railroad it would seem to oiFer some 
 opportunity for a flanking movement. The avail- 
 able maps, however, show only a single fort — Bat- 
 tery Bous — confronting this pass on the east, which 
 would seem to indicate that for some reason the 
 Germans are not very apprehensive about any move- 
 ment through this narrow defile (Plate II). 
 
 Note, too, how slight is the gain made by the 
 French on the line from Verdun to St. Mihiel, while 
 to the southwest of the former as to the southeast of 
 the latter the Germans have been driven back to an 
 ever-widening distance. The holding of this line 
 from Verdun to St. Mihiel, has, as we know, cost 
 the Germans a staggering toll in human life, so 
 testifying to the great importance of this ore-field in 
 the minds of the German strategists. Here then in 
 an area of 15 by 30 miles we would seem to have the 
 real crux of the military situation. 
 
 So long as the Germans can divert the allied 
 armies from laying serious siege to this sector of 
 their line, by carrying the war to more northern 
 points, they are achieving an important strategic 
 success, for the end of this war can only come after 
 the capture of this great ore-basin. The enormous 
 62 
 
Plate II 
 
OF AN ENDURING PEACE 
 
 sacrifices made by Germany in her persistent 
 attempt to capture Verdun should give us some idea 
 of the toll to be paid by the Allies before Germany 
 will surrender a position so essential to her survival. 
 France has suffered such losses in her defense of 
 Verdun that a great offensive on her part is not to 
 be considered for a moment, while England seems to 
 feel that she has all she can do in defending the 
 channel ports, and so the line of communication be- 
 tween France and England, and in exterminating 
 the U-boats from their bases at Ostend and Zee- 
 brugge. It would therefore seem that the task of 
 reducing this strong German position will have to be 
 taken over by the American troops as soon as they 
 are in sufficient force to undertake this very serious 
 bit of work. I feel that I owe an apology to my 
 military friends for venturing to offer a layman's 
 opinion on a strictly technical problem. Nor would 
 I take offense if I heard them muttering, sotto 
 voce, something about " the cobbler and his last," 
 and yet one cannot help feeling that if Germany 
 were deprived of 75 per cent, of her iron-ore the 
 resistance of her armies must rapidly weaken. 
 
 The problem confronting the Allies is therefore 
 much simpler than to fight kilometre by kilometre 
 from Lorraine to Berlin against an ever-stiffening 
 
 63 
 
THE ECONOMIC BASIS 
 
 resistance. And yet to Berlin the allied armies must 
 go if Germany is to be forced to realize that she has 
 been hopelessly beaten, and so will be compelled to 
 agree to an unconditional surrender. For without 
 such a surrender the enormous sacrifice of life and 
 treasure by the allied powers will have been largely 
 in vain, while the hour hand of civilization will be 
 set back by many decades. 
 
 In the earlier pages of this paper we endeavored 
 to show that in the future drift of historic phenomena 
 the nations of Europe are likely to group them- 
 selves in such a way as will secure to each group 
 an adequate overland supply of coal, iron and food. 
 The objection may be urged against this that it 
 would wipe out all national boundaries; that we 
 are in this war to help preserve these boundaries, 
 and especially to protect the rights of the smaller 
 and weaker states to an independent existence. If, 
 however, we have here read aright the signs of the 
 times it may be difficult, in the future, for any small 
 nation whose food supply is not assured to maintain 
 a wholly independent existence, since in its day of 
 trial it will inevitably be forced to make terms with 
 some group or federation that can protect this sup- 
 ply. If this is true, then one of the gravest problems 
 confronting the Europe of the future, is the organ- 
 64 
 
OF AN ENDURING PEACE 
 
 ization of these great federations in such a way as to 
 protect the interests of the smaller states from the 
 aggressions of a Prussia. 
 
 In conclusion, then, we would again urge that 
 in all attempts to formulate the terms of peace we 
 are primarily concerned not with the interests of 
 any one nation, victor or vanquished, but with the 
 preservation of that modern civilization which is the 
 common heritage of both Europe and America. 
 And so when it is proposed to take Palestine, Meso- 
 potamia and Armenia from Turkey, while still per- 
 mitting her to retain control of Asia Minor on the 
 ground that the people of that country are largely 
 Turks, it seems to the present writer that in this over- 
 insistence on the idea of nationality, we are losing 
 sight of our fundamental proposition. When a 
 people has ruthlessly slaughtered thousands on 
 thousands of Armenians and for generations has 
 hindered every attempt to develop the country in 
 which they live, what shall be said to them? Shall 
 we say, " Well done, good and faithful servant,'* or 
 shall we not rather say, as was said to him who kept 
 his talent " laid up in a napkin . . . from him 
 that hath not, even that he hath shall be taken away 
 from him "? And so we would add to our general 
 proposition the corollary that the long-continued 
 
 65 
 
THE ECONOMIC BASIS 
 
 failure of any people to develop the resources of the 
 country in which they live should, when feasible, 
 work a lapse of their title to that country. 
 
 In a word, does not the title of a people to any 
 country, like the right of private property, rest in 
 final analysis upon whether or not such use is made 
 of this right as will further the best interests of 
 society or in the case of national rights the best 
 interests of our modern civilization? For it is only 
 as national rights and national boundaries serve this 
 end that they can have any standing in the final 
 Court of Appeal. Let us not then make the mis- 
 take of elevating the means to a place of higher 
 importance in our scheme of thought than the end 
 which it must subserve. 
 
 In the very near future no one will insist more 
 strenuously upon the importance of maintaining 
 national rights and boundaries than those who strode 
 so ruthlessly across the borders of Belgium. The 
 sacredness of national boundaries will undoubtedly 
 be urged against any expropriation of the western 
 coal lands. So, too, it will be maintained that, 
 the Entente Allies having laid down the proposition 
 that every people should have the right to determine 
 to whom they shall owe their allegiance, the problem 
 of Alsace-Lorraine should be left to a plebiscite of 
 66 
 
OF AN ENDURING PEACE 
 
 the people living in that country. If, however, 
 those who shall be responsible for fixing the temis of 
 peace will hold fast to the proposition that all ques- 
 tiofis must be decided not in the interest of any one 
 people but in accordance with the best interests of 
 our modern civilization as a whole, and that national 
 boundaries are only important as they minister to 
 this endj, there will be little difficulty in escaping 
 the pitfalls of this German camouflage. It is not 
 here intended to minimize in any way the importance 
 of preserving national life and boundaries, but to 
 sound a note of warning lest we shall be betrayed 
 into setting the tithes of mint, anise and cummin 
 above the weightier matters of the law. 
 
 When in this paper we have urged the return 
 to France of Alsace-Lorraine and the securing by 
 that country of the coal lands west of the Rhine, 
 we have not rested our case upon the great and 
 heroic sacrifices which France has made for mod- 
 ern civilization, though these sacrifices would justify 
 almost any claim that might be made for that de- 
 voted country, but have on the contrary rested our 
 claim on the contention that without the natural 
 resources that this would bring to France that coun- 
 try cannot hope to grow in wealth and population; 
 and that without a great and growing France mod- 
 
 67 
 
THE ECONOMIC BASIS 
 
 ern civilization, for which she has made such enor- 
 mous sacrifices, will again be seriously threatened 
 in the not distant future. It may be contended that 
 the problem of to-day is to fix the terms of peace for 
 the present war and not to rearrange the map of 
 Europe in such a way as will bring about an ideal 
 distribution of its natural resources. Now if one 
 has in mind an armistice or any other temporary 
 form of peace we must admit the force of this conten- 
 tion, but if we have in mind a " lasting peace ** we 
 must confront the more difiicult problem of redis- 
 tributing these resources. Nor can we hope to 
 escape this task for any long time. 
 
 When one has in mind the horrible atrocities 
 perpetrated by the Germans it is difiicult indeed to 
 restrain the feeling of righteous wrath that is aroused 
 in the hearts and minds of all civilized people, and 
 under this impulse we are prone to cry out that it 
 shall be ** an eye for an eye and a tooth for a tooth " in 
 the day when these barbarous hordes shall be driven 
 to the other side of the Rhine. While for men like 
 Tannenberg, who is reported to have said: *' The 
 war must leave nothing to the vanquished but their 
 eyes to weep with," we are prone to cry out, so let 
 it be when that day arrives. Indeed it has been 
 urged that unless the Germans are treated with much 
 68 
 
OF AN ENDURING PEACE 
 
 the same ruthlessness that they would have employed 
 had they been the victors, they will fail to realize 
 that they have been beaten, since to their minds only 
 those have " the will to conquer " who are willing to 
 go to any brutal length in the punishment of their 
 enemies. But whatever our feelings may be in the 
 midst of war all this must be set aside when we come 
 to discuss the terms of peace, and we take it that when 
 that time comes the men charged with the grave 
 responsibility of fixing these terms will be so sobered 
 by this responsibility as to purge their minds and 
 souls of all vindictive feeling. " Vengeance is mine, 
 I will repay, saith the Lord," is the spirit that must 
 then prevail if we are to have in truth " a lasting 
 peace based upon generosity and justice." 
 
 Let us not, however, lose sight of the fact that 
 there can be no lasting peace without the destruction 
 of the military prestige of the group now in control 
 of the German government. So large a part of the 
 German people are dependent upon the government 
 for their livelihood, whether it be the preachers and 
 teachers or the laborers (under the much praised 
 German pension system) , that the men of free minds 
 may long find it difficult to arouse the whole 
 people unless their faith in the military prowess of 
 the Berlin group can be broken. It is right and 
 
 6d 
 
AN ENDURING PEACE 
 
 wise to try and win over the German people by 
 assuring them of fair and rational treatment when 
 this horrible incubus has been forever removed, but 
 let us not hope to win this war in any way that is at 
 all worth the cost in blood and treasure if we slacken 
 our efforts to destroy the brute that for three years 
 has run riot in Belgium and northeast France. 
 
 In brief, this war cannot be won by the German 
 people alone and unaided, or by the methods that 
 savor of passivism, but by paying our toll in the 
 prompt and energetic prosecution of the war even to 
 the last dollar and man. Any negotiated or incon- 
 clusive peace will only give Germany the time she 
 needs to prepare for a still greater war of aggression. 
 January 12, 1918. 
 
 70 
 
LES DEFENSES DU SANGLIER 
 
 ou 
 LA^LUTTE POUR LES MINES DE WESTPHALIE 
 
 PAR 
 
 C. W. MACFARLANE, Ph.D. 
 
 EX-VICE-PRESIDENT DE LA SOCIETE DES ECONOMISTES AMERICAIN8 
 
 PRESS OF 
 
 J. B. LIPPINCOTT COMPANY 
 
 PHILADELPHIA 
 1915 
 
COPYRIGHT. 1915, BY C. W. MACFARLANE 
 UNITED STATES 
 
ACKNOWLEDGMENTS FROM 
 FRENCH PUBLICISTS 
 
 In this brochure, "Les Defenses du Sanglier," 
 attention was called to the fact, that as long as 
 Germany has more than 400 billion tons of coal 
 and France but 17 billion tons the former will 
 continue to outstrip the latter in industry, 
 wealth and population and so in another fifty 
 years will be able to again turn and rend her 
 foes of to-day, even though she suffers a signal 
 defeat in the present war. It was then urged 
 that the best way to disarm the German boar is 
 to deprive him of one, at least, of his great tusks 
 — the coal deposits of Westphalia — below will 
 be found some extracts from among the scores 
 of serious and appreciative acknowledgments 
 received from the public men and journals of 
 France : 
 
 One member of the Senate writes : — " It is 
 remarkable for its great good sense, its breadth 
 of view and the soundness of its judgments." 
 
 An important minister of France expresses 
 himself as follows : — " I have read with keen in- 
 terest your brochure, * Les Defenses du Sang- 
 lier.' It contains considerations that merit the 
 serious attention of all those who are interested 
 in the industrial development and even the secur- 
 ity of France. I thank you for having sent it 
 to me." 
 
 A member of the Chamber of Deputies, 
 trained in the field of mining and metallurgy, 
 writes as follows : — " I have received your 
 brochure, * Les Defenses du Sanglier,' and have 
 read it with very great interest. I am studying 
 at this time the metallurgy of Germany, having 
 just finished a series of articles for ' Le Corre- 
 spondant ' on * Germany and Its Iron.' It is 
 sufficient to say to you that I am peculiarly 
 
 73 
 
prepared to understand the great importance of 
 the suggestions you have made to us. Ger- 
 many's abundant supply of coal has undoubt- 
 edly been a great factor in her attempt to 
 conquer the industrial and political hegemony 
 of Europe." 
 
 In " Le Correspondant " of May 10th, 1915, 
 this author concludes a review of " Les Defenses 
 du Sanglier," with the significant remark : " The 
 counsel has been received and will be remembered 
 with keen appreciation." 
 
 A leading Senator of France takes occasion 
 to write the following : — " I thank you sincerely 
 for your communication which I have read with 
 the greatest interest. I will keep your argu- 
 ments and conclusions in mind when the terms of 
 peace come up for discussion in the Senate Com- 
 mittee on Foreign Affairs." 
 
 The journals of France gave liberal space 
 and serious consideration to the thesis developed 
 in this brochure, in some instances reprinting it 
 in its entirety. A great journal like " Le 
 Temps " devoted the leading editorial of April 
 17th, 1915, to a careful examination of its 
 arguments under the title " Les Problems 
 Economique." 
 
 After reviewing the paper in some detail the 
 editor writes : — " This is not the time to talk 
 of peace, but rather to give battle to our enemies 
 and in any event an agreement would have to be 
 reached with our allies before France could de- 
 clare herself on so important a matter. He then 
 continues, almost in the words of the brochure, 
 — " If, however, we ignore these considerations 
 the most signal triumph of our arms in the pres- 
 ent war may be barren of all permanent advan- 
 tage, leaving us exposed in the not remote future 
 to the redoubtable revenge of the vanquished 
 in this struggle." 
 
 74 
 
 
 
VALUE 
 AND DISTRIBUTION 
 
 AN HISTORICAL, CRITICAL AND CONSTRUCTIVE 
 STUDY IN ECONOMIC THEORY 
 
 ADAPTED FOR ADVANCED AND POST-GRADUATE WORK 
 
 BY 
 
 CHARLES WILLIAM MACFARLANE, Ph.D 
 
 SECOND EDITION 
 
 PHILADELPHIA 
 J. B. LIPPINCOTT COMPANY 
 
 1911 
 
COPYRIGHT, 1808, BY 3. B. UPPINCOTT COMPANY 
 
 Electrotyped and Printed by J. B. Lippincott Company 
 The Washington Square Press, Philadelphia, U. S, A. 
 
APPRECIATIONS AND CRITICISMS 
 
 BY 
 
 LEADING ECONOMISTS 
 
 " From the standpoint of pure theory, this 
 work has decided value. To begin with, unlike 
 many writers on quasi-mathematical economics, 
 the author is a trained mathematician. This 
 has the double effect of making him sparing in 
 the use of illustrative formulas or diagrams, and 
 making him employ correct methods of con- 
 struction in those which he does use. He also 
 has an amount of practical good sense which 
 prevents him from leaving his theories in the air, 
 in unverified and unverifiable shape." — President 
 Arthur T, Hadley {Yale University), ** Yale 
 Review" August ^ 1899, 
 
 " To the large body of advanced students, 
 whose only means of mastering a vital phase in. 
 the development of economic thought is the 
 laborious study of a scattered controversial 
 literature, the book will come as an important 
 aid and stimulus. In the main, the volume in its 
 arrangement and schematization is a model of 
 clearness and scientific order. . . . Both as 
 a vigorous criticism of recent theories of value 
 and distribution, and as an independent study 
 of certain aspects thereof, the book is a stimu- 
 lating contribution to economic literature." — 
 Prof, J. H. Hollander (Johns Hopkms Univer- 
 sity), "Annals of American Academy t** July, 
 1899. 
 
 " This work is a valuable contribution to the 
 literature of economic theory . . . Perhaps 
 
 77 
 
the most interesting and important point in the 
 author's critical discussion of other theories, and 
 the one in which his own contribution to eco- 
 nomic thought is the largest, is his treatment of 
 rent and profit. . . . The work will be 
 valued by all who appreciate the importance 
 of clear thinking concerning the laws of distribu- 
 tion." — Prof. J. B. Clark (Columbia Univer- 
 sity), " Political Science Quurterli//' September, 
 1899, 
 
 After criticising Prof. Marshall (Cambridge) 
 for losing himself in the mists of normal value 
 and free competition, Charles S. Devas contin- 
 ues as follows : " That these mists need dispelling 
 even on the west of the Atlantic is seen by the 
 example of so able a reasoner as Dr. C. W. 
 Macfarlane in his volume on ' Value and Distri- 
 bution.' For after admirably recognizing the 
 need of bringing economic theories into harmony 
 with facts, and the utter collapse of the ideal of 
 free competition that seemed to Mill about to 
 be realized; after many brilliant criticisms and 
 valuable contributions toward a proper theory 
 of monopoly he too loses himself in a mist. . . . 
 
 " But, lest I be totally misunderstood, let 
 me repeat that I am not complaining of the two 
 writers just mentioned as if they ignored 
 monopolies ; on the contrary, as already indi- 
 cated, they are among the foremost of those who 
 have dealt with the new problems that face 
 us." — Charles S. Devas (Bath, England), " In- 
 ternational Journal of Ethics," October, 1901, 
 
 Professor Bohm-Bawerk likewise files an ex- 
 ception as when he writes : " Professor Marshall, 
 
 78 
 
however, and with him all those scientists (as, 
 for example, in former times John Stuart Mill 
 and Jevons, in our day Macf arlane, and indeed 
 also Carver), who have considered the psycho- 
 logical fact, introduced into the science by Rae 
 and Jevons, of the smaller estimation of future 
 pleasures and pains as identical with the recog- 
 nition of the abstinence theory, makes an addi- 
 tional error, in that he fails utterly to see that 
 a choice must here be made between two con- 
 cepts which cannot possibly exist side by 
 side." — Prof. Eugene von Bohm-Bawerk {Uni- 
 versity of Vienna) y " Recent Literature on 
 Interest.*' 
 
 " I spoke to Bohm-Bawerk a few days ago 
 about your book. He thinks you are right in 
 some of your criticisms of his theories, and says 
 that he will take them into consideration in the 
 second edition of his work now in preparation. 
 I congratulate you very heartily upon your 
 great success, and expect to avail myself of 
 several parts of your work in the next edition 
 of my ' Grundriss.' " — Prof. Eugene von PhUlip- 
 povich {University/ of Vienna). 
 
 " I have read your book, ' Value and Dis- 
 tribution,' with great interest. I am just now 
 engaged upon a new edition of my work on 
 * Capital,' and shall there take occasion to dis- 
 cuss some questions which your book has sug- 
 gested to me. In many points I must agree 
 with your opinions." — Prof. Eugene von Bohm- 
 Bawerk {University of Vienna). 
 
 "Dr. Macfarlane leads up to his own theories 
 by improving upon the theories of his prede- 
 
 79 
 
cessors. Many of his criticisms appear to us 
 very just and instructive. . . . Contending 
 with the great Austrian leader (Bohm-Bawerk) 
 on the theory of interest, Dr. Macfarlane ap- 
 pears to us to be victorious all along the line." 
 — Prof, F. S. Edgeworth {Oxford University), 
 " Economic Journal" Jime, 1899. 
 
 CONTRIBUTIONS TO 
 
 ECONOMIC LITERATURE 
 
 BY THE SAME AUTHOR 
 
 THE GENERAL DOCTRINE OF RENT IN GERMAN 
 ECONOMICS 
 
 RENT AND PROFIT 
 
 DISTRIBUTION BY A LAW OF RENT 
 
 THE PENNSYLVANIA PAPER CURRENCY 
 
 THE PRIMARY LAWS OF SOCIAL EVOLUTION 
 
 VALUE AND DISTRIBUTION 
 
 THE PLACE OF PHILOSOPHY AND ECONOMICS IN 
 THE CURRICULUM OF A MODERN UNIVERSITY 
 
 THE ECONOMIC INTERPRETATION OF EARLY 
 ROMAN HISTORY 
 
 LES DEFENSES DU SANGLIER 
 
 ETC., ETC., ETC. 
 
THIS BOOK IS DUB ON THB LAST DATE 
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 UNIVERSITY OF CALIFORNIA LIBRARY