UNIVERSITY OF CALIFORNIA 
 AT LOS ANGELES 
 
 ROLF HOFFMANN
 
 ENGLAND AND 
 
 THE NEW ERA
 
 BOOKS BY 
 BROUGHAM VILLIERS 
 
 THE OPPORTUNITY OF 
 LIBERALISM 
 
 THE SOCIALIST MOVEMENT 
 IN ENGLAND 
 
 MODERN DEMOCRACY 
 
 T. FISHER UNWIN LTD LONDON
 
 ENGLAND AND 
 
 THE NEW ERA 
 
 BY 
 
 BROUGHAM VILLIERS 
 
 rp. j.s 
 
 u n 
 
 T. FISHER UNWIN LTD 
 LONDON: ADELPHI TERRACE
 
 Firtt publithed in 1920 
 
 (All rights rsserved)
 
 PREFACE 
 
 BEFORE this book leaves my hands I want to 
 repeat the explanation given in the text for 
 dealing specially with England, rather than with 
 the United Kingdom as a whole. Scotland 
 and England are so closely united, spiritually 
 as well as politically, that it is hardly conceivable 
 that either bond should ever be broken. For 
 all that the qualities of each are so valuable 
 that it would be a great misfortune if either 
 ever lost its identity. This they are little likely 
 to do in a world where it is to be hoped nation- 
 ality will play a greater part than ever before. 
 Had I been a Scotsman I would gladly have 
 written a book on Scotland and the New Era, 
 but I wish throughout to emphasize my position 
 that not merely the United Kingdom but every 
 nationality within it should think out the prob- 
 lems of the New Era for itself, forming its 
 associations whatever they are, even with its 
 most intimate friends, in absolute freedom. Self- 
 determination, in the most complete sense of 
 the term, for England and Scotland is about 
 the last thing in the world to lead to separation 
 or unfriendliness between the two nations. 
 
 167570
 
 CONTENTS 
 
 CHAPTER PAGB 
 
 I. INTRODUCTORY . . . .9 
 
 II. THE BANKRUPTCY OF GOVERNMENTS . 30 
 
 III. CREATIVE REVOLUTION . . .51 
 
 IV. THE DILEMMA OF CAPITALISM . . 72 
 
 V. THE CAPITAL LEVY . . . 103 
 
 VI. EMPIRE IN THE NEW ERA . . 137 
 
 VII. THE FOUNDATIONS OF THE NEW ERA . 167 
 
 VIII. PARTIES AND POLITICS . . . 191 
 
 IX. THE NEW PATRIOTISM . . .218 
 
 APPENDIX . 244
 
 BLOW, winds of March ! and clear these leaden skies, 
 Dissolve in driving showers the winter's snows ; 
 
 Blow where, in leafless sleep, the woodland lies, 
 Where the pale snowdrop grows. 
 
 Blow ! winds of March, where yet the crocus hides 
 Its coming wealth of gold blow warm, and fill 
 
 With flowers the mossy hollow, where abides 
 The frost-bound daffodil. 
 
 Blow, winds of THOUGHT ! Dispel our winter's gloom, 
 Blow with stern breath on tyranny and power : 
 
 Let human life as doth the spring-tide bloom, 
 And bring the PEOPLE'S HOUR.
 
 England and the New Era 
 
 CHAPTER I 
 INTRODUCTORY 
 
 SIXTEEN years ago I published a little book 
 entitled The Opportunity of Liberalism. It 
 was written under circumstances in some re- 
 spects similar to those of the present time. A 
 Conservative Government was in office, sup- 
 ported by a formidable majority, returned not 
 long before for a second time on what was 
 supposed to be the conclusion of a great war. 
 The claims on which the Government had secured 
 its majority had proved to be ill-founded, and 
 pledges given to the electors had already been 
 violated, while the victories of the Opposition 
 at almost every by-election had shown that 
 the people appreciated these facts. Though the 
 war had been proclaimed at an end in 1900, 
 the careers of De Wet and other guerilla leaders 
 had made the claims to a final victory made 
 after Paardeburg look ridiculous ; almost as much 
 blood and treasure had been expended after 
 the General Election as before it. Pledges freely
 
 10 ENGLAND AND THE NEW ERA 
 
 given to Liberal voters that their confidence 
 would not be abused had been followed by 
 reactionary legislation, by the Education Act of 
 1902 and by the "raging, tearing propaganda" 
 of Tariff Reform. The Government had already 
 lost its popularity, and though few saw how 
 complete would be its defeat at the next appeal 
 to the electors, it was becoming daily more 
 certain that it would not be returned again. 
 
 How similar in some respects is the position 
 to-day ! The forces of reaction have changed 
 their name : they are now a " Coalition," they 
 were then " Unionists," but they are still true 
 to type. Again they have appealed to the 
 people for a mandate to secure peace, and again 
 we have as yet no peace, but only " a sort of 
 war " waged, in Russia and elsewhere, without 
 the people being consulted in any way. Again 
 the record of the Government is but one of 
 broken pledges and unfulfilled predictions. The 
 story of the by-elections is very similar, and 
 points to an equal disillusionment of the people. 
 
 Thus, on the surface, history appears to 
 repeat itself; fundamentally, however, it may 
 be doubted if it ever does. When differences 
 of degree are great enough, they often become 
 as vital as differences in kind. The Boer War, 
 costly as it was, did not in any way threaten 
 the stability of society ; it destroyed the Boer 
 Republics and increased the National Debt,
 
 INTRODUCTORY 11 
 
 but it added little to the problems facing the 
 Government of these islands, and hardly affected 
 the rest of the world at all. The World War is 
 a very different matter. Waged on three con- 
 tinents and over the widest stretch of ocean, 
 it drew into it the energetic youth of the world 
 in millions ; costly beyond all precedent, it 
 has flung into hopeless confusion the finances 
 of nearly every nation engaged ; it has already 
 brought down in revolution half the belligerent 
 Governments, and threatens with similar revo- 
 lution those that remain in existence. 
 
 The difference is, I think, imperfectly realized 
 even yet. After the Boer War there was an 
 extensive revulsion of feeling in this country 
 against the policy that had produced it, and 
 the astonishing General Election of 1906 was 
 the result. For more than seventy years no 
 Government had ever received such a majority 
 as that accorded to Sir Henry Campbell-Banner- 
 man, and never had the Tory Party been so 
 hopelessly discredited among the people. Looking 
 back on the time, however, it cannot be said 
 that there was anything inevitable about this. 
 There was no tremendous crisis in the history 
 of the nation. After the war, as before it, 
 industry went on pretty much on the old lines ; 
 no very great change had occurred in the general 
 outlook of the people ; taxation was not increased 
 to any intolerable extent ; it was still possible
 
 12 ENGLAND AND THE NEW ERA 
 
 to live within the framework of nineteenth- 
 century civilization very much as people had 
 been accustomed to live before the war. 
 
 But, as a matter of history, the majority of 
 the electors soon turned against the Govern- 
 ment, and a new era of mildly reformist legis- 
 lation followed. Certain inconsiderable changes 
 were made in the law, and others were projected, 
 in their effects not much more or less important 
 than those that were carried out in the more 
 actively liberal periods of the nineteenth century. 
 After the first two Reform Bills, for instance, 
 as important changes were made in a few years 
 as any that happened from 1906 to 1914 ; while 
 the measures of the late Liberal Government 
 were not imposed upon them by any actual 
 breakdown of the previous state of things 
 useful as many of them were, it would not have 
 been impossible to carry on the government 
 of the country and preserve order without any 
 of them. By their free choice the electorate 
 turned out the Tories and put in a Government, 
 which then selected for legislation the subjects 
 with which they felt it most urgent to deal, 
 and framed laws which in no way resembled 
 " emergency " legislation. 
 
 In fact, after the Boer War electors and 
 politicians controlled things, in so far at least 
 as they ever do so ; now, however, things are 
 everywhere coming to control men. With the
 
 INTRODUCTORY 13 
 
 whole system of modern civilization breaking 
 
 down under their eyes, revolutions have followed 
 
 one another over half Europe ; " provisional 
 
 Governments " have arisen and fallen, almost 
 
 as rapidly to give place to others perhaps as 
 
 ephemeral as themselves. Indeed, it may be 
 
 said that little but " provisional " government 
 
 has existed since 1914 anywhere. " Provisional " 
 
 legislation to restore credit had to be sanctioned 
 
 by Parliament in the first moments of the war ; 
 
 Budgets are framed to deal with the emergency 
 
 of the moment and to conceal the desperate 
 
 prospects of the future ; " coalitions," which 
 
 are essentially expedients for combining as many 
 
 people as possible in a conspiracy not to think 
 
 at all, are the order of the day. These things 
 
 mean that thought is dangerous, the realization 
 
 of fact is fatal, and the continuance of the old 
 
 order impossible. 
 
 Thus we have to deal with a state of things 
 altogether different from that in existence when 
 I wrote The Opportunity of Liberalism, The 
 Socialist Movement in England, or Modern 
 Democracy. The view point in these books was 
 that of an evolutionist in an era of evolution ; 
 the only possible standpoint for me to-day is 
 that of one who would combine revolution with 
 order in a time of revolution. I still believe 
 that rebus sic stantibus most of what I have 
 previously written would be valid, but in such
 
 14 ENGLAND AND THE NEW ERA 
 
 a totally changed condition of affairs everything 
 is altered and the time has arrived for a thorough 
 revision of work written in less critical times. 
 To-day every one is compelled to be a revolutionist 
 whether he will or no. Whether he be Con- 
 servative, Liberal, or Socialist; whether he aim 
 at reversing the work of centuries and destroying 
 democracy, or whether he wish to complete 
 it by establishing Socialism, in neither direction 
 is it possible to proceed by the old, cautious 
 methods of British politics. 
 
 Political changes must more or less keep 
 pace with the social and industrial changes 
 which are the causes of them. The gradual 
 development of modern society in time of peace, 
 brought about by the progress of industrialism, 
 the cheapening of printing, the spread of edu- 
 cation and discussion led, much more than any 
 action of statesmen, to the extension of the 
 franchise and the growth of democracy. Politics 
 followed rather than led the advance of the 
 people. In the matter of the franchise, at 
 least, the slowness of politicians was carried to 
 dangerous lengths, as the Bristol riots of 1832, 
 the Hyde Park disturbance of 1867, and the 
 Suffragist disorders before the war suffice to 
 show. The industrial organization of the people 
 was perhaps more rapid, but it, too, only 
 followed with halting steps the progress of 
 industrial change. This, all the time, went on
 
 INTRODUCTORY 15 
 
 unhasting, unresting, shaping everything anew. 
 As I argued in Modern Democracy, this gave 
 the reformer the opportunity he desired, while 
 imposing upon him conditions of progress not 
 by any means to his mind. The Reaction 
 throughout the century was always in retreat, 
 never in disorder ; forced from one entrench- 
 ment it retreated for a short distance to the 
 next, making the progressive forces fight for 
 every inch of the ground. 
 
 To pursue the military analogy that comes so 
 inevitably just now, politics have recovered 
 their mobility, and with mobility has come the 
 possibility, nay, the necessity, of far more rapid 
 changes than before the war. In a dim way 
 even the politicians feel this, and it is the secret 
 of Mr. Lloyd George's success. Under ordinary 
 conditions even the average member of Par- 
 liament has a fair general idea of what ought 
 to be done next. He may have no philosophy 
 of politics, his reading of economics or history 
 may be scanty, but he knows the general lines of 
 his party's policy fairly well, and can distinguish 
 which of a number of possible " leaders " has 
 the strongest grasp of Conservative, Liberal, or 
 Labour principles. The difference between the 
 leadership of Mr. Asquith and of Mr. Lloyd 
 George is the difference between a man of limited 
 though coherent vision, and one who has fleeting 
 glimpses of everything and vision of none. The
 
 16 ENGLAND AND THE NEW ERA 
 
 one is fixed at the centre of a narrow circle : 
 the other moves round the circumference of 
 everything and never reaches the centre at all. 
 Mr. Asquith is a great Whig leader. It cannot 
 be said that he has ever originated anything 
 in politics ; too essentially Conservative ever 
 to become reactionary, he seems by his very 
 nature always to appear a trifle old-fashioned. 
 In easy times he is hardly likely to make any 
 serious mistake, even if he fails to initiate any 
 striking reform. His premiership might readily 
 have come to an early end in 1909 were it not 
 for the fighting Budget of his most redoubtable 
 colleague, for he has never persuaded the rank 
 and file of the people to " trust Asquith " with 
 the pathetic faith of the Liberal Party man. 
 He is, however, entirely unsuited to times of 
 rapid and unexpected change. He suffers from 
 the fundamental defect which caused Mr. George 
 Brandes to condemn the attitude of the Lake 
 poets in the early years of last century, as 
 compared with that of Byron and Shelley : 
 he thinks of " liberties " as secured by the 
 British Constitution, not of Liberty ; he is 
 insular, not universal. Wordsworth, at least, 
 of the Lake School never lost his love of freedom 
 as he conceived it, but he raised no protest 
 either against the Holy Alliance or the Tory 
 reaction at home. The inspiration for Europe 
 of Byron's work, and almost more of his death,
 
 INTRODUCTORY 17 
 
 is to be found in his defiant spirit, in the fact 
 that he was utterly unlike Wordsworth or 
 Mr. Asquith he could think outside British 
 ideas. 
 
 It is this defect in Mr. Asquith that gives 
 Mr. Lloyd George his opportunity to succeed, 
 not indeed in solving the problems of the day, 
 but in ousting his former chief. There is probably 
 no one who has less insight than Mr. George 
 into what is really going on in the world : no 
 one has less perception of fundamental causes ; 
 no one is less fitted to provide a cure for any 
 of the evils brought on by the war. But if 
 he cannot understand causes, there is no one 
 who has a quicker eye for the surface phenomena 
 they produce. Both are buried, Mr. George 
 probably far deeper, in Plato's cave, but Mr. 
 George's eyes are always directed towards the 
 opening of the cavern ready to receive the 
 first impression of any shadow that flits across 
 it. He thus knows everything only when the 
 knowledge of it is common property, especially 
 at home. He is aware that there is a railway 
 strike on when the railways throughout the 
 country are all held up ; he discovers that the 
 policies of blockading Russia and exacting vin- 
 dictive terms from the Central Powers were 
 wrong when European civilization is going to 
 pieces before his eyes. And whenever the con- 
 sequences of any false policy, his own or that 
 
 2
 
 18 ENGLAND AND THE NEW ERA 
 
 of others, becomes manifest to all, Mr. George 
 will have something to propose. True, it will 
 be an expedient and not a remedy, but until 
 some one arises who understands the root causes 
 of current troubles and deals effectively with 
 them, the man of expedients can always com- 
 mand support 
 
 Mr. George is admirably fitted to head a 
 coalition ; he is himself a coalition. A coalition 
 of parties is only possible among those who 
 have no coherent ideas but only expedients. 
 The proper leader for such a combination, hence, 
 is one who has what I may call the " coalition 
 mind," a mind in which all the passions and 
 prejudices of the moment meet and are welcomed. 
 The statesman when confronted with something 
 he does not understand is silent and helpless ; 
 to a politician of Mr. George's stamp this is an 
 occasion for making a speech. For such a 
 speech the public mind is prepared because 
 the public is probably even more puzzled by 
 the situation than the statesman. Neverthe- 
 less, the public wants some answer, and in 
 default of a good one will applaud the best that 
 offers. Mr. George will never for a moment 
 believe, still less admit in public, that he has no 
 remedy available. He will fuss about a good 
 deal, call somebody names, give something to 
 those who clamour most loudly, and then plead 
 an "important engagement "in Paris if the
 
 INTRODUCTORY 19 
 
 trouble has arisen in England, in Parliament 
 if he is in difficulties abroad. But his remedy, 
 whatever it is, will deal with effects, not causes ; 
 before very long he will be called upon to deal 
 with another crisis which he has not foreseen, 
 which probably he has himself created. No 
 matter. Mr. Lloyd George has remained in 
 important office for more than fourteen years, 
 longer than any other statesman of our time. 
 Every other Minister who entered into office 
 in 1905, and most of those who have joined 
 with him since, have been held responsible for 
 the mistakes of the Governments to which they 
 have belonged, and have paid the penalty. 
 For every mistake of each of these Governments 
 Mr. George shares the responsibility, for a very 
 large proportion of them he is mainly respon- 
 sible, yet he is still in office and may possibly 
 remain so until a new factor appears in politics, 
 until a statesman or a party has arisen which 
 really understands the tragic condition of the 
 nation and civilization, and is prepared to deal 
 effectively with causes and not merely pheno- 
 mena. This no European statesman whose mind 
 was fully trained before 1914 is at all likely 
 to do. Help is not likely to come from any 
 man or group that had anything to do with 
 shaping the events that led up to the disaster 
 of 1914. The new world must be shaped by 
 new minds. Already we see abroad the evidence
 
 20 ENGLAND AND THE NEW ERA 
 
 of this in all the countries to whom the war 
 has brought defeat in Russia, Austria, and 
 Germany alike. But to no nation, unless it be 
 the United States, has the war brought real 
 victory : those who have prospered most in 
 arms have only postponed the defeat that awaits 
 them. It is a system that has been defeated, 
 not either side in the great quarrel, and the 
 victors in the battle have only earned for them- 
 selves a respite and not a pardon. The French 
 Revolution, it was said, like Saturn, devoured 
 its own children ; the catastrophe of our age 
 has begun by devouring its parents. The 
 Romanoffs, the Hapsburgs, the Hohenzollerns 
 have passed away from the scene, and the 
 systems in which they lived and flourished have 
 fallen in irremediable ruin. Among the Allies 
 no such rapid collapse has occurred for two 
 reasons, one of them obvious, the other perhaps 
 even more potent. The glamour of victory 
 has given to the Governments of France, Italy, 
 and Great Britain an immense prestige, declining 
 certainly every month since the armistice, but 
 nevertheless very useful to the leaders in each 
 nation. Victory, too, has enabled them to keep 
 going the game of bluff in which all nations 
 indulged before the war, and to hide from their 
 peoples and probably from themselves the real 
 position of their countries. In France this game 
 of bluff has been carried to incredible lengths.
 
 INTRODUCTORY 21 
 
 It should be obvious that the Government of 
 France is utterly bankrupt, more hopelessly 
 so than that of Germany or even Austria. 
 With its stationary population depleted by 
 enormous losses among its young men, France 
 seems far less likely than any other first- class 
 Power to be able to recover from the war. 
 Nowhere has there been greater reluctance to 
 face the financial sacrifices which the war in- 
 volved, nowhere have more fantastic devices 
 been proposed for making other people pay it, 
 and nowhere would failure to pay the interest 
 on its debt bring ruin to so many millions of 
 its own people. I hold it to be as certain as 
 anything can be that no considerable indemnity 
 for the costs of the war will ever be obtained 
 by France or any one else. France, like every 
 other land, will sooner or later be compelled 
 either to repudiate its debt or to provide for 
 it by some real scheme of direct taxation that 
 will realize hundreds of millions of pounds each 
 year more than has ever been raised before. 
 The timidity with which the French Government 
 have treated the problem of taxation from the 
 beginning of the war until now, the pathetic 
 way in which they continue to hold before the 
 eyes of their people the hope of impossible 
 indemnities from Germany indicate only too 
 well what may be expected when at last the 
 French people are face to face with the facts.
 
 22 ENGLAND AND THE NEW ERA 
 
 No Government of France, not that of Louis XVI, 
 has ever been in such a hopeless position as 
 the present one ; never have the French people 
 had so many examples of revolution elsewhere 
 before their eyes. If the success of Washington 
 and the taxes of Necker could do so much, 
 what consequences may that of Lenin and a 
 demand for 500,000,000 a year produce ? 
 
 Yet we ourselves are confronted with problems 
 hardly less alarming. Our financial position 
 is certainly better, and Mr. Lloyd George, as 
 Chancellor of the Exchequer, and Mr. McKenna 
 after him, made far better attempts to deal 
 with the problem at the outset. Mr. Bonar Law 
 was more timid, while Mr. Austen Chamberlain's 
 device of making an apparently favourable 
 balance by reckoning as income money obtained 
 by selling off war material, and from the Excess 
 Profits Duty, which may soon disappear, leaves 
 for him or some future Chancellor of the Ex- 
 chequer a position nearly as desperate as that 
 of Continental Governments. Mr. Chamberlain's 
 finance is a scandalous degradation of sound 
 British methods. In truth, the history of our 
 finance from the outbreak of war tends to show 
 that while Mr. Lloyd George may make an 
 energetic Minister when, and in so far as, he 
 is controlled by a strong leader, he is himself 
 an utterly incapable Prime Minister. He can 
 never see more than one thing at a time.
 
 INTRODUCTORY 23 
 
 He can understand, at least superficially, the 
 work of his department and can even infuse 
 into it an unwonted energy, but he can never 
 grasp the relation of one thing to another, so 
 as to survey the field of politics as a whole. 
 He is a very good servant, when he is content 
 to be one, but a terribly bad master. His 
 Budget at the beginning of the war may pass, 
 though it was not heroic, but he has exercised 
 no control whatever over finance since he left 
 the Treasury. 
 
 The menace of finance will be dealt with later, 
 however, as well as those problems, the existence 
 of which has been the cause of what is known as 
 44 Labour Unrest." Here it is only necessary 
 to say that Mr. George's policy has been a mere 
 hand-to-mouth one, destitute of any coherent 
 plan whatever. Until industry has been brought 
 to a standstill through a great strike, Mr. George 
 says, or at least for it is hard for him to keep 
 silence does nothing. When Labour troubles 
 occur Mr. George makes a violent speech, calls 
 the strikers ugly names, which does no good 
 at the time and may do a great deal of harm 
 afterwards, agrees to a compromise, and pro- 
 claims himself a victor ! 
 
 A third factor, as menacing as any other, 
 calls for a little more consideration even at 
 this stage. Up to 1914, in spite of some talk 
 of nationalism, and much deep discontent among
 
 24 ENGLAND AND THE NEW ERA 
 
 the smaller nations of Europe, there was, on 
 the whole, a steady drift towards Imperialism 
 throughout the world. All the Empires, except 
 that of Turkey, tended to increase in area 
 and become consolidated. Towards the general 
 movement we here, in England, took up rather 
 an inconsistent attitude ; our own Empire had 
 grown more rapidly than any other, but at the 
 same time there had developed within it a 
 strong tendency to decentralization, in so far 
 as the English-speaking portions of it were 
 concerned. The more definitely national portions 
 of the Empire were governed from Downing 
 Street ; those which most nearly approached 
 to ourselves in ideals and aspirations, in which, 
 that is to say, any strong national consciousness 
 was least likely to exist, governed themselves. 
 Nor did the system appear unsatisfactory. 
 India is so vast a collection of peoples that a 
 distinct national consciousness was hard to arouse, 
 and though, for a number of years past, one 
 has been rapidly forming, the great Dominion 
 was loyal and apparently content. Egypt was 
 quiescent, while the English-speaking Dominions 
 were enthusiastically loyal. Our faith in this 
 general loyalty received strong confirmation at 
 the outset of the war, one of the most remarkable 
 things in which was the enthusiasm of the 
 overseas Dominions who, with one consent, rushed 
 to the help of the Mother Country. It seemed,
 
 INTRODUCTORY 25 
 
 therefore, as if the general drift towards Impe- 
 rialism, at least of the British type, was to 
 continue. It would be dangerous to presume 
 upon this idea any longer. We cannot disguise 
 from ourselves the fact that the whole general 
 drift of the world is now in the opposite direction. 
 Austria has fallen to pieces entirely ; Russia 
 is shedding every part of her vast dominion 
 which speaks a dialect of its own, which has a 
 specialized economic or cultural character, or a 
 partially detached geographic position. On the 
 one hand, we see a greedy keenness to undertake 
 " mandates " to control backward people ; on 
 the other, the strongest reluctance among all 
 peoples to recognize that they are too " back- 
 ward " to control themselves. We have to face 
 a general fissiparous tendency throughout the 
 world, the exact opposite to the drift of things 
 before the war. 
 
 Curiously enough, very few people seem to 
 realize that this has any relevance to the British 
 Empire. The fact, obvious to all, that public 
 opinion in Ireland has drifted from a concili- 
 atory nationalism to an irreconcilable Sinn Fein 
 might, one would think, have been warning 
 enough against such easy optimism. There can 
 be no doubt, however, that Indian nationalism 
 has made enormous progress during the last few 
 years, while Egypt is in virtual revolt. With 
 regard even to the self-governing Dominions
 
 26 ENGLAND AND THE NEW ERA 
 
 things are not all so pleasant as people think, 
 and, in Canada at least, the plea for a separate 
 Republic has revived again. 
 
 Two definite results of the war have prepared 
 the way for this the general revival of nation- 
 alities throughout Central and Eastern Europe 
 and the destruction of the German Navy. The 
 first of these necessarily exercises an infectious 
 influence, bound to tell in the long run, but the 
 second is a less obvious factor in the situation. 
 It has frequently been said that the American 
 Revolution was a consequence of the British 
 conquest of Canada. So long as Canada re- 
 mained in the hands of the French, a perpetual 
 menace from the North and a centre of intrigues 
 to prevent the advance of the Colonists towards 
 the Mississippi, the thirteen Colonies, though they 
 might individually quarrel with the Home Govern- 
 ment, were never likely to combine together to 
 throw off their connection with it. Wolfe's 
 victory on the Heights of Abraham changed all 
 this it was no longer a question of British or 
 French rule, but of British rule versus inde- 
 pendence. Hence the same men who helped to 
 bring about the fall of Quebec fought later on 
 by the side of Washington to drive out the 
 English. European navalism especially in these 
 latter days that of Germany may readily have 
 played the same part. As long as Europe was 
 an armed camp, the British Fleet was essential
 
 INTRODUCTORY 27 
 
 to the safety of the British Dominions. It is 
 said that Charles II, on being appealed to by 
 his brother to take more care to avoid danger 
 of assassination, told him to have no fear : 
 " They won't kill me, James, to make you King. 
 I am safe so long as you are my heir." Foreign 
 fleets, especially that of Germany, have hitherto 
 played the part of James ; whatever might be 
 the defects of our rule, ours was at least the most 
 liberal Imperialism ever known. But now our 
 " James " is dead, a momentous change which 
 may have unexpected results. 
 
 Separatist agitation can no longer be met by 
 the fear of foreign invasion. The war has 
 probably crippled Europe for aggressive purposes 
 for generations. Separation from the Mother 
 Country now only offers to the overseas Do- 
 minions the tempting prospect of independence. 
 They may not avail themselves of the oppor- 
 tunity, but in view of the rapid growth of nation- 
 alist feeling throughout the world, it is foolish 
 not to face the possibility of them doing so 
 sooner or later. As an Englishman, for my 
 part, I would not sacrifice the independence of 
 England for any Empire, however splendid, and 
 I cannot feel certain other people may not come 
 to have similar feelings for their own lands. 
 Many Americans realized at the outset of the 
 war that the British Navy was the strongest 
 guarantee of the Monroe Doctrine ; it was also
 
 28 ENGLAND AND THE NEW ERA 
 
 the best security against German aggression in 
 South Africa, and against any interference, 
 European or Asiatic, in Australia and New 
 Zealand. Irish independence could not be secure 
 in an armed world ; autonomy, in some form 
 or other, was the utmost Irishmen could hope 
 for with security. To set against the disin- 
 tegrating tendencies to which the effects of war 
 have given such a stimulus, there is really nothing 
 but the Imperial sentiment remaining, a thing 
 incomparably less strong than an awakened 
 national spirit. Scotsmen and Welshmen are 
 undoubtedly proud of the Empire they have 
 done so much to form, but they are very much 
 fonder, if not prouder, of Scotland or Wales. 
 Undoubtedly the affection for the Empire of 
 the English-speaking Dominions, whose nation- 
 ality is as yet only in the germ, is deep and 
 sincere, but we have only to look at the map 
 of the world to see that the tie can only be 
 a sentimental one. To this has hitherto been 
 added, less clearly denned than in America, but 
 certainly everywhere present, the instinct of 
 self-preservation that found expression in the 
 Monroe Doctrine of the United States. 
 
 Everywhere the war has rendered out of date 
 the fears upon which the Imperialism of the 
 last generation was based. Russian Imperialism 
 which secured popular toleration for that of 
 Germany has fallen, and with it that of Germany.
 
 INTRODUCTORY 29 
 
 As the passions of the moment die away, the 
 nightmare of German militarism will cease to be 
 a support for the army of France. Europe is 
 crippled and largely disarmed ; Asia, Africa, and 
 America need no longer fear aggression from any 
 of her Powers. In the wake of the passing 
 Empires follows everywhere a renewed spirit of 
 nationality, conscious, confident, and aggressive. 
 Sinn Fein is no isolated phenomenon : it is only 
 the Irish manifestation of a universal spirit. 
 Everywhere the resurgent nations have to face 
 decrepit Imperialisms, struggling hopelessly in a 
 quagmire of debt. To this pass have the Impe- 
 rialist statesmen of the last generation brought 
 the system to which they belonged ! Many of 
 them have already passed from sight ; the rest 
 in turn must go and give way to statesmen of 
 clearer and wider vision. We seem to hear the 
 mocking laughter of the Fates as they withdraw 
 one by one from the stage the puppets who ruled 
 Europe in 1914.
 
 CHAPTER II 
 THE BANKRUPTCY OF GOVERNMENTS 
 
 THE renewed impulse towards national inde- 
 pendence and the consequent break-up of 
 Imperialism would be a grave enough pheno- 
 menon if it stood alone. It is accompanied and 
 rendered far more difficult, however, by another 
 result of the war, the bankruptcy of the bellig- 
 erent Powers, at least of the Continent, and per- 
 haps of our own Imperial Government. This is 
 a matter that has caused far more alarm than 
 the nationalist movement, though I fear the 
 extent of the problem is, even yet, very imper- 
 fectly understood. Without a full and fearless 
 examination of the financial position it is idle 
 to outline any policy, national or international. 
 Until the debts and the resources of Europe have 
 been approximately ascertained, it is impossible 
 to say whether the former can be paid or not, 
 or whether any particular proposal is adequate 
 or inadequate, possible or impossible. 
 
 Though finance is far from being the only 
 problem with which we have to deal, it is one 
 which enters into every other, It affects even
 
 BANKRUPTCY OF GOVERNMENTS 31 
 
 the nationalist difficulty dealt with in the last 
 chapter. Irishmen have told me that they believe 
 their countrymen would be satisfied with Do- 
 minion Home Rule, but they would stoutly refuse 
 to pay any part of the Imperial War Debt. 
 Why ? Whatever the faults of the then Govern- 
 ment of Ireland, it is certain that both the 
 Nationalist and Ulster members supported the 
 war and that they were elected to the Imperial 
 Parliament by a free ballot on the same suffrage 
 as that of England. The fact that the Irish 
 electors have been converted to Sinn Fein by no 
 means justifies them in leaving the debt con- 
 tracted by the authority of those members of 
 Parliament whom they chose to represent them, 
 as much as by that of the members for Great 
 Britain, entirely to the taxpayers of the latter 
 island. 
 
 As soon as the capitalists of Ulster recognize 
 the effect of such an arrangement on the rate 
 of income tax in Ireland, Sir Edward Carson 
 may find it more difficult than it has hitherto 
 been to organize Orange opposition to Home 
 Rule. Yet, though there is no stronger case 
 anywhere for " self-determination " than in 
 Ireland, it is clear that the proposal to leave all 
 the common debt of the United Kingdom to 
 be paid by England and Scotland is utterly 
 unfair. The control of the United Kingdom 
 Parliament over finance is absolute, and the
 
 32 ENGLAND AND THE NEW ERA 
 
 freely elected representatives of Ireland assented 
 without hesitation to every tax and every loan 
 for the war. In countries where Parliament was 
 less powerful or where the majority of the 
 representatives of any nationality dissented from 
 the war policy of their Imperial Governments, 
 there is, of course, an incomparably better case 
 for refusing to take a share in the common 
 burden. The point is that here we have a 
 powerful new factor making for Imperial disin- 
 tegration. Scotland and Wales are just as much 
 nationalities as Ireland, and may readily come to 
 think that if we in England are to bear the Irish 
 share of a common debt, we may as well make 
 ourselves responsible for theirs also. Before 
 the war the dominant nationalities Austro- 
 Germans, Magyars, Prussians, Great Russians, 
 English whatever their faults may have been, 
 could at least give defence to the minor nations 
 grouped under the same flag. Under the state 
 of things likely to prevail in the future this may 
 be entirely changed. The League of Nations, 
 if reconstructed on national lines, may give far 
 better protection than the old Empires could 
 do, who may have nothing more attractive to 
 offer their old partners than a share in the pay- 
 ment of enormous taxes. The Imperial nations 
 are likely to be the poor relations of the new 
 world and may readily be no more popular than 
 poor relations have ever been.
 
 BANKRUPTCY OF GOVERNMENTS 33 
 
 It is less, however, with the influence of the 
 debts on Imperialism than with the effect they 
 are likely to have on internal politics here and 
 also, to some extent, abroad that I am concerned 
 in this chapter. It is possible, however im- 
 probable, that none of the Governments that 
 have engaged in the war may fail in the long run 
 to avoid actual bankruptcy, but only, I am con- 
 vinced, as far at least as Europe is concerned, 
 if they make such fundamental changes in their 
 social and political organization as are hardly 
 contemplated except by groups of the extreme 
 Left at the present day. The abortive revolt 
 of manufacturers against the increase in the 
 excess profits duty imposed by Mr. Austen 
 Chamberlain this year, is one indication of a 
 state of mind widespread, indeed universal, 
 among the wealthy classes. The rich people of 
 this country seem to have no idea whatever of 
 the position in which the war has left us. Apart 
 from other expenses, we have somehow or other 
 to find interest for, and, if possible, to repay a 
 debt of nearly 8,000,000,000, an amount equal 
 to one-third of the total estimated wealth of the 
 country before the war. After allowing for the 
 vast depreciation in the value of money, this 
 is still a most tremendous, a revolutionary fact, 
 involving necessarily all sorts of unpleasant 
 consequences to people fortunate enough to 
 possess any of the national assets out of which it 
 
 3
 
 34 ENGLAND AND THE NEW ERA 
 
 must be paid. Much of the talk that goes on 
 would lead one to believe that the payment of 
 eight thousand millions can be made a pleasant 
 operation. It cannot. By no system of pain- 
 less dentistry can any Chancellor of the Ex- 
 chequer extract such a sum of money from the 
 public without agony for the victims. The 
 excess profits duty may not be the best and 
 fairest way of raising money ; it is certainly 
 unjust to penalize the manufacturer and let 
 off the landlord and the farmer altogether ; 
 but Mr. Chamberlain's fault is that he took 
 far too little, not too much of the accumulated 
 wealth of the propertied class in his Budget. 
 Mr. Chamberlain probably went as far as he 
 could with such colleagues in the Cabinet and 
 such a majority in the House, but we must, 
 in these days, be thankful for small mercies, 
 and it is something to the good that the Chan- 
 cellor did not shirk the financial issue altogether. 
 As compared with recent Budgets, that of 1920 
 may even be commended as the first serious 
 official attempt to call the attention of the nation 
 to the gravity of the position. 
 
 How hopelessly the House had failed to realize 
 the state of things brought about by the war is 
 revealed by the general line of criticism taken 
 in attacking the excess profits duty. As an 
 expedient for balancing the revenue and expendi- 
 ture this tax is open to many objections, at
 
 BANKRUPTCY OF GOVERNMENTS 35 
 
 least two of which are valid from the capitalist 
 point of view. The enormous expenditure for 
 which Mr. Chamberlain had to provide, amount- 
 ing to more than half the estimated pre-war 
 income of the nation,* was largely due to the 
 scandalous waste of the Government and the 
 militarism of Mr. Winston Churchill. Mr. 
 Churchill at the War Office is a sort of inverted 
 Don Quixote, who seems to think it the duty of 
 the British forces to interfere anywhere on 
 behalf of any oppressed capitalism and to hand 
 in the bill to the British taxpayer ; unfortunately, 
 the results of his exploits are not matter for 
 laughter. The opponents of the excess profits 
 duty, then, might have done something to help 
 their case by insisting upon a thorough over- 
 hauling of the estimates, accompanied by vig- 
 orous criticism of the policy that had produced 
 them. 
 
 Equally effective work could have been done 
 by insisting upon other forms of wealth bearing 
 their fair share of the burden. In a book written 
 during the war, Britain after the Peace, I argued 
 
 * It must be remembered, however, that owing to the 
 rise in prices the national income, as expressed in terms of 
 money, is now much larger than before the war. We must 
 bear in mind the paradox that while the country has been 
 losing heavily in real wealth, money values have greatly 
 increased. Thus a house which could have been bought for 
 500 in 1914 may now readily bring 1,000, though the 
 only differences between its former and its present condition 
 may be those due to six years' wear and tear.
 
 that the profiteering of the capitalists during 
 the war, bad as it was, is not likely to be any- 
 thing like so enduring and so mischievous in 
 its effects as that of the landowners. The 
 dearth throughout the world of foodstuffs and 
 raw materials, with the consequent rise in prices, 
 must ere long increase enormously both the 
 rental and selling value of the lands from which 
 they come. The general fall in the exchange 
 value of money has in like manner increased 
 urban land values. Unless something is done 
 to secure this increment for the State, the 
 Junkers of England are likely to come out of 
 the war enriched beyond the dreams of avarice, 
 and enriched, not for the term of a boom in 
 trade, but for an indefinite length of time, 
 perhaps for ever. Yet, at the very time he was 
 increasing the burden on the capitalist under 
 the sore pressure of national need, Mr. Chamber- 
 lain took the opportunity to relieve the land- 
 owners of the very inadequate burdens imposed 
 on them by his own chief in 1910. It was his 
 clear duty to make the landlords contribute their 
 full share of any new taxation he needed to 
 impose. A complete revision and reconstruction 
 of the land value duties on more scientific lines, 
 accompanied by a heavy increase in their amount, 
 might have made his Budget an adequate one to 
 meet the emergency or at least divided the 
 incidence of what taxation he did impose a little
 
 BANKRUPTCY OF GOVERNMENTS 37 
 
 more fairly. As it is, his plan is neither adequate 
 nor just. 
 
 If Mr. Terrell and his rebels had insisted upon 
 a thorough revision of the estimates and a fair 
 distribution of the rich man's burden between 
 themselves and the landowners, they might have 
 secured the support of many who ultimately 
 entered the division lobby on the side of the 
 Government. A merely negative position was, 
 however, hopeless. The possessing classes, the 
 only people who were in a position to lend on a 
 great scale, have advanced about seven thousand 
 millions, and are now on the horns of a dilemma. 
 Either they must be taxed to pay the interest 
 and redeem the principal of the debt, or their 
 holdings in the debt itself will yield no income 
 and will rapidly become valueless. To a certain 
 extent, indeed, they have freedom of action ; 
 they can insist upon the cutting down of all 
 useless expenditure, so as to reduce to a minimum 
 the taxation they are called upon to pay in 
 addition to the amount they receive back again 
 as interest or repayment of debt, or they can 
 fight among themselves as to which section of 
 them has to bear the heaviest portion of taxation ; 
 but by no jugglery can they avoid in the long 
 run accepting the fact that, as a class, they have 
 given to the State 7,000,000,000, to be repaid 
 ultimately out of their own pockets or not 
 at all. 
 
 167570
 
 38 ENGLAND AND THE NEW ERA 
 
 An imperfect recognition of this truth is 
 responsible for the horror with which such 
 proposals as that of Mr. Pethick Lawrence and 
 the Labour Party for the conscription of capital 
 have been received, and for the painful efforts 
 of Liberal politicians to hit upon some less 
 unwelcome expedient. Such schemes should be 
 considered, from a rich man's point of view, 
 not as alternatives to something more pleasant 
 in itself, but to other possible plans equally or 
 more disagreeable. Mr. Pethick Lawrence's 
 scheme to clear off six thousand millions of 
 the debt by a graduated levy on capital in all 
 forms, so far from being an extreme proposal 
 errs, if at all, by not being drastic enough ; 
 very lucky will the propertied classes of this 
 country be if in the end they get off so cheaply. 
 Mr. Pethick Lawrence should not be looked 
 upon by the rich man as a foe. Rather, he is 
 to be regarded as a faithful surgeon, who recom- 
 mends an operation, painful indeed, but less so 
 than the disease it is intended to cure. It 
 would probably be the wisest course for the 
 rich man to-day, for the sake of his own peace 
 of mind, to take an inventory of his possessions 
 and deliberately write off one half their value 
 as mortgaged to the Government, planning out 
 his domestic economy accordingly. By this 
 means he will avoid many heart-burnings in 
 the future, and possibly prepare for himself some
 
 BANKRUPTCY OF GOVERNMENTS 39 
 
 day the pleasant surprise of finding a little left 
 over after all. 
 
 We have certainly travelled a long way from 
 the time when politicians who ought to have 
 been serious talked of recovering the war debt 
 from Germany, and Mr. Chamberlain's Budget 
 marked a stage on the journey from dreamland 
 to reality. Nevertheless, it was a pitiful affair 
 after all. Mr. Chamberlain claimed that his 
 Budget provides for a debt reduction of 
 234,198,000 ; in reality, if his estimates come 
 out as he anticipated, the Government will be 
 in a worse position at the end of the financial 
 year to the extent of nearly seventy million 
 pounds than at the beginning. His debt reduc- 
 tion is only obtained by selling off 302,000,000 
 worth of war material, the receipts from which it 
 is absurd to regard as revenue at all. Thus, 
 unless expenditure is greatly reduced, taxation is 
 not excessive but inadequate. 
 
 What we want before anything else is a fearless 
 realism in politics, a statesmanship that will face 
 the unwelcome facts and tell the country the 
 truth. The methods hitherto pursued by the 
 Government, and the attitude of mind that 
 regards Mr. Pethick Lawrence's proposal as 
 extravagant, lead straight to Bolshevism, at least 
 to one feature of Bolshevism of which " bourgeois" 
 Governments most strongly disapprove, the 
 repudiation of debt. Nor could repudiation stand
 
 40 ENGLAND AND THE NEW ERA 
 
 alone. With it would come a breakdown of 
 British credit, the widespread bankruptcy of 
 British firms, and the necessity for a provisional 
 Government unhampered by Parliamentary 
 delays to take over the assets of the country 
 and reorganize industry on a new basis as best 
 it could. 
 
 We cannot judge the gravity of the financial 
 difficulty without taking into consideration the 
 position in other countries. With the further 
 advances provided for in the Budget of 1920-1 
 our loans to the Dominions and foreign countries 
 will amount to 1,886,000,000, only about one 
 hundred and twenty millions of which will 
 consist of advances made to the Dominions. 
 Russia and France each owes us over five hundred 
 and Italy over four hundred millions of pounds. 
 Mr. Bonar Law, with the weak optimism of 
 modern Chancellors of the Exchequer, once 
 estimated that 10s. in the pound of this might 
 some day be recovered. He must be a vary 
 sanguine or a very badly informed man who 
 expects we shall ever receive any of this. No 
 Continental belligerent is in a position to pay 
 its debts ; we shall have, sooner or later, 
 to accept one side at least of Mr. Keynes's 
 proposals for the cancellation of all inter- 
 Allied indebtedness, and simply write off all 
 the money advanced to the bankrupt nations 
 of Europe. If we do that we shall raise a nice
 
 BANKRUPTCY OF GOVERNMENTS 41 
 
 Imperial problem, for though Canada and Aus- 
 tralia could no doubt repay the money lent 
 to them, and are indeed better able to support 
 their burdens than we are likely to be, it is a 
 very invidious thing to exact from one debtor 
 the full amount of his borrowings, while remitting 
 much greater debts to other people. It is just 
 as foolish, however, to expect that hopelessly 
 bankrupt allies can repay enormous debts of this 
 kind as to expect great indemnities from Germany 
 or Austria, and it would be much wiser to face 
 at once the fact that such debts are irrecoverable, 
 than to begin a wrangle with our late Allies over 
 repayment claims that will ultimately have to 
 be dropped as hopeless. Whether Mr. Keynes's 
 hope that the United States, on their part, may 
 remit the vast debt we owe them will be realized 
 is not certain, for it is not yet evident that we 
 cannot pay. In remitting a debt of 850,000,000 
 to us the States would be performing an act of 
 great generosity, very different from our refusal 
 to press for debts which it is morally certain we 
 will never recover in any case. Nor do I think 
 it would be to the honour of this country to ask 
 such a thing, so we will be wise to make provision 
 to pay our own debt and write off every farthing 
 that other nations owe to us. This will, in the 
 long run, be best for our own peace of mind, 
 as well as for the good name of the nation 
 It is rather a bleak prospect for all that. If
 
 42 ENGLAND AND THE NEW ERA 
 
 other nations are driven to repudiate their 
 debts, we shall emerge from the period of recon- 
 struction after the war more heavily burdened 
 than any other country, for, of course, the 
 United States' debt will be far lighter in propor- 
 tion than ours. I am not clear what bearing 
 this will have on the future of our trade, but, 
 on the face of it, a people handicapped by having 
 to pay nearly 400,000,000 a year in interest on 
 their debt should be in a worse position than 
 those who have solved the problem by repudia- 
 tion. One thing is pretty certain : such a state 
 of things would raise acutely the question of 
 repudiation here also. The idea was widely 
 spread among the soldiers during the war, many 
 of whom affirmed loudly that they were not 
 going to fight for years and then come back 
 from the trenches to earn interest for those who 
 only stayed at home and lent money. 
 
 Yet it seems difficult to see how most of the 
 European Governments are to avoid repudiation 
 both of their debts and of their paper money. 
 The credit of the Continent is now buried under 
 a litter of nearly worthless paper. Mr. E. Cannan 
 has advised us to burn Treasury notes until the 
 number has been reduced to such a point that 
 the remainder attain to par value, and indeed 
 the proper course to pursue is to stop the further 
 issue of paper money as soon as possible, and 
 to redeem in gold as much and as fast as we can.
 
 BANKRUPTCY OF GOVERNMENTS 43 
 
 Only when the paper pound can be exchanged 
 at will for its nominal equivalent in gold will the 
 national credit be in a sound condition. But 
 with francs at 65 to the depreciated pound and 
 other currencies at anything from a tenth to a 
 fiftieth of their face value, it is simply incredible 
 that a similar operation can ever be carried 
 through on the Continent. Terrible as the hard- 
 ship of such a measure might be, it seems to me 
 that the only possible course to pursue with the 
 mark, franc, lira, rouble, etc., may be to repudiate 
 them and begin anew with a world currency 
 issued under stringent conditions and based, 
 perhaps, not on gold at all but on some such 
 article in wide demand as the electrical unit. 
 At any rate, nothing is lost by facing facts, and 
 the plain fact is that the Continental currencies 
 are paper and rapidly becoming no more valuable 
 than other paper. 
 
 Were it not for the overwhelming pressure 
 of their debts, the European States might, 
 perhaps, recall much of their paper currency by 
 raising further loans. They are likely, however, 
 to need all the borrowing power they have to 
 raise, either separately or in combination by 
 means of an international loan, the money 
 needed for the even more urgent work of 
 restoring their industries and agriculture. Such 
 a loan must of necessity take precedence of all 
 other indebtedness, of all payments for armies
 
 and navies and of all indemnities. Even so, 
 the security will be none too good, so desperate 
 is the plight of Europe. And this plight is 
 rendered all the worse by the childishness- 
 there is no other word for it of European 
 statesmen. Before the dismemberment of Poland, 
 the Poles earned for themselves a reputation 
 for political incompetence, which sympathy for 
 them after that crime had largely tended to 
 obliterate. The lamentable history of their faults 
 had been forgotten by the world. It will not 
 be forgotten for long unless the Polish Republic 
 can settle down to deal with the actual problems 
 of the day with less levity than it has shown so 
 far. But Poland in this matter is, after all, 
 little worse than France, which has not the 
 excuse of inexperience. M. Charles Gide estima- 
 ted that the total income of the French people 
 before the war amounted to 33 milliards of 
 francs ; this year M. Frangois Marsal presented 
 to the Chamber a Budget involving the expendi- 
 ture of 47 milliards ! The general rise in prices 
 since 1913 has, no doubt, raised the money value 
 of French produce to this amount, but it is 
 obvious that by no possibility can the French 
 people permanently contribute such a sum of 
 money annually to the Government. Of this 
 sum, it is true, 22 milliards was not provided 
 for by taxation, in the expectation that it 
 would ultimately be paid by Germany. In the
 
 BANKRUPTCY OF GOVERNMENTS 45 
 
 meantime, it was to be borrowed and another 
 900,000,000 added to the French debt. 
 England, the United States, Italy, and Japan 
 had, we are told, pledged their honour that this 
 would be done ! 
 
 If this means that the four States in question 
 have underwritten this sum and undertaken to 
 find the money if it cannot be got from Germany, 
 I can only say that our statesmen have been 
 very generous with the taxpayers' money. If, 
 on the other hand, it only means that the four 
 Allies consider Germany ought to pay this money, 
 then it is not a question of our national honour 
 at all, but only one of Germany's ability to pay. 
 To the opinion of the Allied statesmen on this 
 latter point no wise man will pay any attention 
 whatever, and the French people will be well 
 advised to admit that the Budget for 1919-20 
 shows a deficit of about 1,000,000,000. This 
 surely is a state of things calling for some severe 
 measure of retrenchment, yet nothing seems to 
 be further from the thought of the French 
 Government. On the contrary, though the 
 national expenditure has gone up from 104 
 million francs a day in 1917 to 127 millions in 
 1918, and 130 millions in 1919, the Government 
 anticipate a further increase in this rate to 
 164 million francs daily in 1920. Now, whatever 
 possibility there may be of recovering an indem- 
 nity from Germany, it seems clear that every
 
 46 ENGLAND AND THE NEW ERA 
 
 franc of new debt incurred by the French Govern- 
 ment, on the army of occupation or at home, 
 will ultimately have to be paid by the French 
 people, if it is ever paid at all. There are limits 
 to Germany's capacity to pay, but if the Allies 
 get their own way she will be compelled, in 
 any case, to pay as much as she can. Neither 
 the Allies nor any one else, however, can get 
 more, and as the maximum that can be got from 
 Germany will certainly fall far short of the 
 claims already made by the Allies, it follows that 
 any new expenditure incurred by armies of 
 occupation, etc., is just good money thrown 
 after bad. 
 
 Looking at Europe to-day and seeing the 
 lands from which have sprung all that was great 
 in modern civilization lying in pitiful ruin, one 
 might almost think France by comparison less 
 unhappy than the rest. Victorious mistress of 
 Europe, leader of the world alike in ideas as in 
 taste, in art and letters, the splendour of her 
 historic past shining yet more brightly in the 
 glory of her recent deeds, she at least seems 
 happier than her vanquished foes. Yet I believe 
 that never was France in more deadly peril. 
 Quos Deus vult perdere prius dementat, and the 
 fiscal dreams of French statesmen can only be 
 described as madness. Two years ago, M. Charles 
 Gide wrote a pamphlet Projets d'Entente Finan- 
 ciere, in which he dealt with several of the
 
 BANKRUPTCY OF GOVERNMENTS 47 
 
 proposals made in France for dealing with the 
 problem of finance. These French projects make 
 curious reading. One of the most remarkable of 
 them proposed to divide the debts of the Allies 
 among them in proportion to the annual national 
 income, revenu global, of each. In this way, 
 France would be relieved of nearly two-thirds of 
 the interest on the debt she had so far incurred, 
 Italy of nearly one-half, and Great Britain of 
 nearly a quarter, the deficits so caused being 
 made up by the United States ! Nor does 
 M. Gide, perhaps the greatest of living French 
 economists, altogether repudiate this scheme, 
 though he mildly says : " ce serait trailer Voncle 
 Sam un pen trop en oncle d'Amerique." Certainly, 
 cool as this transference of their own debts on 
 to the shoulders of the most business-like nation 
 in the world may appear, it is, nevertheless, 
 much more reasonable than other proposals 
 gravely advocated in France and examined by 
 M. Gide. He analyses only one of the wild 
 proposals, " assez nombreuses pourtant" of those 
 who, not content to lighten the burden of the 
 debts, wish to remove it altogether by establishing 
 an international bank to issue notes to the value 
 of 1,200 milliards of francs and dividing the issue 
 among the nations for the payment of debts 
 and indemnities. 
 
 In fact, France, even more than England, 
 has been unwilling to face the elementary truth
 
 48 ENGLAND AND THE NEW ERA 
 
 that the war is a gigantic loss either for the 
 taxpayers or the fund-holders of the nations 
 engaged in it. The debt of France is so un- 
 wieldy to-day largely because the French Govern- 
 ment dared not tax its people while the war 
 was in progress. Only one-sixth of the national 
 expenditure from August, 1914, to January, 
 1920, was raised by taxation, only about one- 
 quarter by permanent loans, and more than 
 half by short term borrowings and floating 
 debt. Now, whatever may be the case at the 
 moment, this state of things probably places 
 France in a worse position for the future than 
 that of any other nation. The population of 
 France has been stationary for a number of 
 years, and the loss of so many young men seems 
 to threaten her with a permanent reduction in 
 it. Terrible as is the present plight of the States 
 which constituted the Austrian Empire, they 
 at least have the prospect of recovery, if only 
 they can agree among themselves to some sort 
 of federal arrangement which will permit of 
 unrestricted trading among them. The popu- 
 lation is normally a growing one and the riches 
 of their lands can probably be much further 
 developed. The very hopelessness of their bank- 
 ruptcy probably favours them by rendering the 
 repudiation of their war debts unavoidable and 
 hence admitting of excuse. 
 
 This is practically the condition of all Eastern
 
 BANKRUPTCY OF GOVERNMENTS 49 
 
 Europe. Before the war, the Austro-Hungarian 
 Empire was travelling at no slow rate towards 
 national bankruptcy. Every year the budgets 
 of the Dual Empire showed deficits, and the 
 amount of the national debts was steadily 
 growing. It was the same in Germany and in 
 the various States of the Empire. Even then 
 the social order was growing old, and even 
 without the calamity of war the modern 
 Imperial system must sooner or later have 
 brought about its own destruction. War and 
 defeat have hastened the process by heaping 
 up debt and indemnity claims so high that the 
 most sanguine holder of German, Austrian, or 
 Russian stock can hardly hope to receive any 
 more interest on his money. The reconstruction 
 of society on a vast scale is therefore inevitable. 
 Banks and business houses, bourgeoisie, and 
 aristocracy are alike ruined, and the future of 
 civilization has to be built up again from the 
 foundation. 
 
 The more one considers the financial position 
 of the Continent, the more one is convinced that 
 it is necessary to begin by suspending if not 
 repudiating all debts and indemnities incurred 
 up to the present. It will be necessary to raise 
 for the restoration both of Allied and enemy 
 nations a great international loan, and in order 
 to do this with reasonable security the interest 
 and repayment of this must take precedence 
 
 4
 
 50 ENGLAND AND THE NEW ERA 
 
 of all other claims whatsoever. What portion, 
 if any, of the older claims may afterwards be 
 paid, must be left, in so far as internal debts 
 are concerned, to the discretion of the several 
 nations, and, as regards external claims, may 
 be fair matter for negotiation. The international 
 loan, however, must come first. Europe is bank- 
 rupt there is no use mincing matters ; and if 
 anything is to be recovered from the ruins, it 
 can only be by giving the new creditors w r ho are 
 willing to finance it a first claim on the estate. 
 Whether the Continental belligerents will 
 ultimately pay any of their debts is, I think, 
 very doubtful. Bondholders will probably have 
 to wait many years without receiving anything, 
 and with only the melancholy satisfaction of 
 seeing their claims against the State mount up 
 at compound interest. It will be too much to 
 expect of human nature to think that the demo- 
 cratized States of Europe will do more than 
 compromise such claims when at last even a 
 compromise becomes possible. Some, no doubt, 
 will repudiate altogether ; some may pay part, 
 but, in any event, there must be an enormous 
 aggregate loss. When at last some permanent 
 settlement is arrived at, England may readily 
 find herself alone in the new era, the only nation 
 in the Old World bearing a crushing burden of 
 debt, competing with nations which have virtu- 
 ally gone through the bankruptcy court and 
 come out with free hands.
 
 CHAPTER III 
 CREATIVE REVOLUTION 
 
 I HAVE sketched two of the main forces which 
 seem to me destined to render impossible a 
 return to anything like the state of things that 
 preceded the war in the Western world. Of 
 these, the pressure of debts, swollen beyond any 
 amount previously imagined, seems a wholly 
 destructive force defeating alike the aims of 
 statesmen and of struggling interests blindly 
 striving to maintain their foothold in a world 
 slipping away from beneath them. Nor is 
 the rising spirit of nationalism less menacing on 
 the whole. It begins at least with the break- 
 up of Empires, by the division vertically of a 
 world order painfully built up by the labour 
 of many centuries, into fragments of mutually 
 hostile nationalities. If here we may see some 
 hope of a restored order based on national 
 liberties in the future, the immediate prospect 
 is only one of disintegration, almost of chaos. 
 The very thought of union seems unknown to 
 the conflicting little nations of Europe rendered 
 mad by new hopes and ancient hates. Where 
 
 51
 
 52 ENGLAND AND THE NEW ERA 
 
 unity is most imperative, there division is most 
 acute ; where the horrors of war have been 
 most deeply felt, there the spirit of war survives 
 in greatest strength. Poles, Czecho-Slavs, South 
 Slavs, dependent for the barest necessaries of 
 life on the restoration of peaceful conditions, 
 are ambitious not only for liberty but for empire 
 in the days when as never before the vanity of 
 empire has been most clearly shown. 
 
 It is a relief to turn to forces which, however 
 fatal they may be to existing institutions, are 
 essentially constructive ; to ideas, not of schism, 
 but of unity ; to a movement which, however 
 vexed it may be by the conflicts of the hour, is 
 nevertheless founded on a serene humanity. 
 Such is the Labour movement throughout the 
 world. There are, of course, vast differences in 
 form between its manifestations in various 
 countries and in the same country at various 
 times, but in Germany and France, in Great 
 Britain and in Russia, among the most moderate 
 ' collectivists ' and the most extreme revo- 
 lutionaries, there is an essential unity of idea, 
 a common conception of a new order utterly 
 different from that which is falling to pieces 
 around us. It is here, as will be seen later on, 
 that the hope of the world is to be found ; here, 
 if anywhere, is the foundation from which a new 
 order can arise. 
 
 But to the present order the Labour movement
 
 CREATIVE REVOLUTION 53 
 
 comes as a disruptive force, and it is this aspect 
 of it which concerns us in this chapter. In 
 previous books* I have dealt with the genesis 
 and earlier growth of the Labour movement 
 and with its relation to Socialist ideals. Of the 
 comments then made I have little to alter, 
 though the publication of the last of these books 
 almost synchronized with a remarkable develop- 
 ment both of the Labour movement itself and 
 of Socialist theory. The year 1911 was marked 
 by an unprecedented series of strikes throughout 
 the country and by a rapid expansion of Trade 
 Unionism. A new spirit had come into the 
 movement which found expression both in the 
 temper and in the organization of Unionism. 
 
 The change came so suddenly it is difficult 
 to assign an adequate cause for it. There can 
 be no doubt that from the beginning of this 
 century there had been a steadily growing dis- 
 content among industrial workers. Trade upon 
 the whole had been good, and our exports had 
 increased in the first decade of the century more 
 than in any previous ten years in our history. 
 Prices which, from the seventies till the end of 
 the nineteenth century, had on the whole steadily 
 declined, began again to rise, so that the cost 
 of living in 1911 was considerably higher than 
 it had been in the lifetime of the younger 
 
 * The Socialist Movement in England and Modern 
 Democracy.
 
 54 ENGLAND AND THE NEW ERA 
 
 workmen. It was a time in which the rich grew 
 rapidly richer, and in ten years the amount of 
 money brought under review of the Income Tax 
 Commissioners rose from 867,000,000 to 
 1,070,000,000. It was a time, too, of rapidly 
 increasing luxury, the signs of which every one 
 could see around him ; the new motor-cars rolling 
 along everywhere were pretty clear evidence of 
 the good time rich people were having. 
 
 And if, on the one hand, expanding trade was 
 making fortunes for the few, it was doing less 
 than ever to benefit the masses. Employment, 
 no doubt, was more regular ; there was less 
 time lost, and the average workman might take 
 home enough money at the end of the week to 
 balance the rise in prices. He gained, however, 
 very little indeed in extra rate of wages nothing 
 at all adequate to set off against the rising cost 
 of food, to say nothing of improving his con- 
 dition in anything like the same proportion as 
 the employers. This had not been the case in 
 previous " boom " years. Trade Unionism had 
 been under a cloud since the Taff Vale decision 
 rendered the funds of unions liable for the 
 misdeeds of individuals. Perhaps the union 
 officials during the expansion of trade in the 
 first years of the century were unduly cautious, 
 but their position was a very difficult one. When 
 the accumulated funds of a great union were 
 at the mercy of the law courts whenever any
 
 CREATIVE REVOLUTION 55 
 
 hot-headed striker broke the law, the strike 
 weapon became impotent. Labour dare not 
 strike until the Taff Vale judgment was reversed ; 
 the only possible remedy for the position lay 
 through Parliament. This state of things had 
 the effect of making the Labour Representation 
 Committee into a living party, but it paralysed 
 all industrial action and left the employers free 
 to monopolize all the benefits of expanding 
 trade. 
 
 A less immediate effect was to reverse the 
 relation of Trade Union officials to the rank and 
 file of the movement. For the last ten years 
 of the nineteenth century I think it would be 
 true to say that the leaders of the Trade Union 
 movement were generally far in advance of 
 their followers, certainly politically and probably 
 industrially also. Most of the officials had come 
 into contact with the Socialist movement, and 
 probably for at least a decade the majority 
 of the younger leaders had been generally theo- 
 retical collectivists. The rank and file were still, 
 however, " guarantists," as I have elsewhere 
 called them, interested only in immediate pro- 
 posals for increases in wages or reductions in 
 hours. Thus it came about that the Trade Union 
 Congress could pass time after time the most 
 advanced resolutions, because those Trade 
 Unionists sufficiently prominent to get appointed 
 as Congress delegates were themselves advanced ;
 
 56 ENGLAND AND THE NEW ERA 
 
 and yet these resolutions were never effectively 
 followed up, because the constituents who chose 
 the delegates cared very little about them. 
 
 All this was now changed. The steady stream 
 of pamphlets and speeches poured forth by the 
 Socialist organizations working upon the rising 
 discontent among the people suddenly began to 
 take effect. The decorous middle-aged Trade 
 Union secretary, whose youth had been spent 
 in trying to urge on an indifferent proletariat 
 to action, suddenly found himself regarded as 
 an out-of-date obstructive. A new and active 
 order of shop stewards began to usurp the 
 leadership of a movement which was rapidly 
 passing out of his control. To console him, 
 especially if his was one of the newer Labour 
 Unions, he probably found the membership of 
 his branches expanding in a surprising manner. 
 But there was a fly in the ointment here, also. 
 The new union members, and the old also for 
 that matter, had the crudest ideas of union 
 discipline. The spirit of rebellion was in the 
 air ; perhaps Mrs. Pankhurst had released it, 
 or perhaps, even earlier, the passive resisters 
 may have done so, but, at any rate, it had infected 
 the Labour movement at last. 
 
 No one settles down into an armchair more 
 comfortably than John Bull, and no one fills it 
 more amply or in a worthier manner. But when 
 the children have gone to bed and there is no
 
 CREATIVE REVOLUTION 57 
 
 more legitimate racket in the house, it is annoying 
 to be disturbed by complaints from the women- 
 kind and by an upheaval in the servants' hall. 
 In 1911, John Bull had been doing a very pros- 
 perous business and was quite willing to sit 
 down and enjoy himself. He had done his 
 duty ; he had elected, in proper constitutional 
 form, a most decorous Liberal Government. 
 His sympathies with the people had been shown 
 by his approval of Old Age Pensions, and he 
 was making clear to the House of Lords that 
 he did not mean to stand any reactionary 
 nonsense. He seemed perfectly justified in 
 thinking that the affairs of the world were 
 pleasantly settled, or in a fair way to be settled, 
 and that things as he had known them would 
 last his time, if not for ever. It seemed hard 
 that, just at such a time, the old reverence for 
 law and order should begin to give way, and 
 that this new incalculable spirit should appear 
 on all sides. 
 
 Now I am not concerned to defend all the 
 actions of the Trade Unions during the last 
 ten years, any more than I should attempt to 
 justify those of the Women's Social and Political 
 Union. The nation had drunk of a new wine, 
 which quickened the blood and rose not in- 
 frequently to the head. Labour, so long tame, 
 became mettlesome, capricious, dangerous ; it 
 was quite impossible to control it any longer by
 
 58 ENGLAND AND THE NEW ERA 
 
 the old methods or through the old leaders. 
 Mere discontent caused by the slow progress of 
 recent years would not, I think, suffice to account 
 for this. Partly it may have been due to the 
 realization of power revealed by the success of 
 the sympathetic strike ; for the gains of Trade 
 Unionism in the summer of 1911, very largely 
 won by a new inter-trade solidarity and sym- 
 pathetic action, were so much more striking and 
 important than anything won by the unions for 
 a generation or more that they were in themselves 
 sufficient to account for the new spirit among the 
 men. The change, both in spirit and method, was, 
 however, fundamental, whatever the cause. The 
 year 1911 marked an era in the attitude of the 
 average British workman : before then he might 
 dispute about the conditions of service, but, 
 broadly speaking, he was content to be a servant ; 
 since that time he has been every year less 
 willing to be anything of the kind. 
 
 The Socialist has not, perhaps, succeeded in 
 teaching the Trade Unionist his economics, but 
 he has at last inspired him with something of 
 Socialist ethics. For years Socialist propaganda 
 has insisted that a life of useful, productive work 
 is the only honourable and honest one ; it has 
 glorified work of hand or brain done for the good 
 of society. On the other hand, it has always 
 denounced as " wage slavery " a system that 
 enables the rich man to make profits by buying
 
 CREATIVE REVOLUTION 59 
 
 the labour of the poor. The terms " masters " 
 and " men " had given way to " employers " and 
 " employees " even before 1911, an indication in 
 itself of the coming spirit. By the time of 
 which I am writing, this spirit had spread far ; 
 men were coming round to the revolutionary 
 point of view. They were still striking about 
 questions of hours and wages, of course, but 
 they were striking about something deeper as 
 well. A change was coming over the temper of 
 Labour not unlike that which must have come 
 to the peasants of the fourteenth century in the 
 days of John Ball. For centuries villeinage had 
 been an accepted institution, an essential part 
 of the feudal order of the day. Nor, as far as 
 we know, was there any steady opposition to 
 the institution even among the villeins themselves. 
 Chattel slavery had been forbidden in England 
 as early as the days of Anselm, and no doubt 
 the mediaeval villein would have highly resented 
 being sold as a slave. Against hard and grasping 
 lords, who exacted more or even as much as 
 their full legal rights, resistance might often be 
 bitter and determined, but villeinage as a status 
 was not felt to be intolerable ; probably it was 
 regarded as something inevitable, part of the 
 nature of things. Suddenly, however, society 
 was startled out of its complacency by the 
 Peasants' Revolt. A day had come when men 
 would no longer be villeins, though they were
 
 60 ENGLAND AND THE NEW ERA 
 
 willing enough to be hired for wages. It was 
 the protest against villeinage, not the more 
 ideal aims of the agitators who led the Peasants' 
 Revolt, that took effective hold of the people. 
 The frightened nobles, through the King, promised 
 the people what they wanted, and then, of 
 course, broke their promise. Nevertheless, it 
 would seem the Peasants' Revolt did destroy 
 villeinage. As soon as it was felt to be an 
 indignity to be a villein, it became no longer 
 possible to maintain the institution, and villeinage 
 rapidly died out. 
 
 The repudiation of villeinage was thus funda- 
 mental, and it is obvious that if the working 
 classes no longer wish to be " employees " pro- 
 ducing goods for any one's profit, such a change 
 in the point of view must in the long run be 
 equally fundamental ; it is a revolutionary and 
 not a " reformist " idea at all. The employers 
 complain that it is impossible for them to come 
 to a working arrangement with their men. 
 They are right : it is impossible. No sooner is 
 one set of workmen apparently satisfied than 
 another is out on strike, possibly, I frankly 
 admit, on a frivolous pretext, or at least one 
 on which no strike would have occurred twenty 
 years ago. Then very likely the union that 
 has just come to terms is " out " again in sym- 
 pathy with the new demand of their comrades, 
 almost as much to the disgust of the union
 
 CREATIVE REVOLUTION 61 
 
 officials, who have made, as they consider, a 
 good bargain, as of the employers. The new 
 wine cannot be confined in the old bottles ; 
 it is rapidly becoming impossible to come to any 
 agreement with employees qua employees, for 
 that, at bottom, is what they refuse to be. 
 
 The new state of things is disturbing to the 
 agitator of the 'nineties, now middle-aged and 
 respectable, who has become used to the con- 
 ception of peaceful evolution towards an orderly 
 collectivist State. Well for him if he possesses 
 a sense of humour, can delight in the independence 
 and initiative of the people, and has a mind 
 open to be enriched by new experience. Such 
 a man can trudge home from work when the 
 trains have suddenly stopped running, or sit 
 down at an empty coal-grate when the miners 
 are on strike, with a good-humoured chuckle as 
 he thinks that at last the world is moving in the 
 way he has always said he wants it to go. 
 Capitalist society is becoming unworkable, a 
 fact fully realized by the advocates of Guild 
 Socialism. Thus, Mr. G. D. H. Cole, in a Fabian 
 pamphlet on Guild Socialism says : 
 
 . . . There is no hope in bureaucratic society, no hope 
 that it would work, even if any one still desired to bring 
 it into existence. Nor is there hope or chance of capitalism 
 lasting much longer. We have to find some new way of 
 facing the problem of industrial organization. Neither the 
 old consumers' Socialism, nor Capitalism, is capable of 
 turning out the goods. That puts it up to you either to
 
 62 ENGLAND AND THE NEW ERA 
 
 accept what I am saying, or else to find some way by which 
 you can induce men to go on producing, by means other 
 than the means which were employed right through the 
 nineteenth century the means of hunger and fear. Almost 
 the only reason why people have worked in the past, why 
 people have consented to go on working under such 
 miserable, unjust conditions, has been that they have been 
 frightened, that they have been starved. If that breaks 
 down and it is everywhere breaking down to-day then 
 either men won't go on working at all or else they will go 
 on working for some quite different reason. 
 
 And this is true. Capitalism will " work " no 
 longer, for Labour is refusing to work it. There 
 is a new conception of manhood in the Labour 
 movement. If we read Orlando's panegyric on 
 his servant, that " perfect pattern of the antique 
 world," or think of Caleb Balderston and the 
 faithful body-servants of Scott's novels, we realize 
 that even menial service may be noble and 
 dignified. Yet what, in essence, can be less 
 dignified, more ignoble, than to base one's claim 
 to usefulness on personal service to another man ? 
 It is to exist, so to speak, for his sake ; to be 
 justified only in so far as his comfort and con- 
 venience are considered. It is not surprising, 
 then, to find loud lament throughout the ages 
 at the way in which servants fail to keep up 
 with the ancient ideal, till " flunkey " becomes 
 a word of opprobrium, a thing which even the 
 unskilled labourer would scorn to become. In a 
 sense it is true that " there is nothing either good 
 or ill but thinking makes it so," and even menial
 
 CREATIVE REVOLUTION 63 
 
 service can be dignified, in reality as well as in 
 opinion, when it becomes an ideal of honour, 
 however essentially false. Yet the thing is 
 radically wrong. No man or woman exists for 
 the sake of another ; all exchange of service 
 should be on the basis of equality ; then only is 
 it honourable, not only in transient opinion, 
 but in fact. For a while, the thing may really 
 in a manner be what it is thought to be, but 
 sooner or later its true character will be revealed 
 and the servant will, if capable of better things, 
 become a rebel, if not, a flunkey. 
 
 During the last few years, industrial service 
 has been subjected to a change in public feeling 
 similar to that which has taken place more 
 gradually in domestic service. The husband in 
 business has been confronted with the same 
 problem as that which has been the constant 
 complaint of his wife at home. The modern 
 servant will not live for her mistress like the old 
 family retainer ; she will earn her wages because 
 she must live and cannot help herself, but she 
 is : essentially dissatisfied with her position in 
 life. Nor will the factory worker consent to 
 make profits for another man, however favour- 
 able the conditions or wages of labour. He is 
 radically at war with the fact, not merely with 
 the conditions, of his position in life. You 
 cannot come to terms with him ; it is impossible 
 to content him, because he has passed out of the
 
 64 ENGLAND AND THE NEW ERA 
 
 condition of mind which regards wage slavery 
 as a tolerable state of life. 
 
 The most important thing, undoubtedly, about 
 the movement that began with the industrial 
 unrest of 1911 is this new spirit ; but there are 
 other factors in the matter which deserve con- 
 sideration also. First of these is the rapid 
 expansion of the organized Labour movement. 
 Between the years 1899 and 1911 the total number 
 of Trade Unionists rose from 1,861,000 to 
 2,446,000, an increase of 600,000. At one bound 
 in 1911 this increase was practically doubled, and 
 with that year began a sustained and steady 
 growth, which has increased the number of Trade 
 Unionists to six millions at the present day. 
 Trades which in former times it had been difficult, 
 almost impossible, to organize felt the impulse of 
 the new spirit. Agricultural Labourers' Unions, 
 both in England and Scotland, took root and 
 flourished in a way that would have delighted the 
 soul of Joseph Arch, and the Shop Assistants' 
 Union grew rapidly to many times its old 
 size. With the war came a similar extension 
 of the Co-operative movement, the number of 
 co-operators rising from three millions in 1913 
 to four millions in 1920. Indeed, not only the 
 spirit, but the standing of the Labour movement, 
 politically and industrially, gained beyond all 
 precedent in the years immediately before and 
 after 1911.
 
 CREATIVE REVOLUTION 65 
 
 Much of this was probably due to the new 
 propaganda of Guild Socialism. Whatever may 
 be the ultimate outcome of the Guild Socialist 
 movement, at least this is true of it, that it has 
 greatly enriched, if not the philosophy of Social- 
 ism, at least the stock of ideas current among 
 British Socialists. There is a general tendency 
 in the English-speaking countries to make of 
 Socialism a thing too systematic and mechanical, 
 and thus make it work not with, but against, 
 the trend of evolution, which is naturally towards 
 ever greater variety and not uniformity. Helpful 
 probably at the time it came out in giving a 
 coherent ideal to minds unaccustomed to thinking 
 out social problems, Edward Bellamy's Looking 
 Backward has had, on the whole, I think, an 
 injurious influence on Socialist thought. Even 
 where such a vision of the future is attractive 
 at first sight, and certainly it is not attractive 
 to many people, the essentially Philistine ideal 
 there presented must very soon pall on any one 
 whose conception of life is continually becoming 
 wider and more human. And this is exactly 
 what occurs or ought to occur to the average 
 man or woman who joins the Socialist movement. 
 The convert to Socialism is drawn impercep- 
 tibly into the general movement of the world's 
 thought. The names and ideas of a crowd of 
 people who have come to the movement from 
 the educational, artistic, literary, or philosophic 
 
 5
 
 66 ENGLAND AND THE NEW ERA 
 
 side of things become familiar. However im- 
 perfectly understood at first, the criticisms of 
 capitalistic society from these unfamiliar points 
 of view blend gradually with the more mate- 
 rialistic demand of the struggling workman and 
 enlarge his conception of Socialism itself. He 
 realizes that Socialism is very much more than 
 Collectivism, and is by no means disposed to 
 hand everything over to an omnipotent and 
 centralized State. 
 
 " The very force that brings Socialism into 
 being will be the first to resist any form of 
 restraint not rendered necessary to abolish a 
 sterner tyranny than itself." When, many years 
 ago, I wrote this sentence, I was thinking of 
 the general character of those who formed the 
 Socialist movement ; they are the very last 
 people in the world to submit to any control 
 that cannot be shown to be absolutely necessary 
 if then. To become a Socialist at all implies 
 a spirit of revolt and the " divine discontent " 
 from which it springs, and Socialists generally 
 have been far more apt to break through the 
 rules of their own organizations than to submit 
 with too great tameness to those of the con- 
 stituted authorities. Indiscipline rather than 
 subservience is the fault in their disposition. 
 The spread of the Guild Socialist movement, 
 almost from the moment that sentence was 
 written, confirms its truth. We were certainly
 
 CREATIVE REVOLUTION 67 
 
 far enough from the Collectivist, the servile state 
 at that time, and no one had suffered or was 
 likely to suffer from its tyranny ; yet, even so 
 long before it came into existence, this revolt 
 against State Socialism was organized by the 
 same sort of people as those who had been its 
 original advocates. Possibly Guild Socialism 
 itself is not the last word in the matter, but, 
 at any rate, it is a useful check on the mechanical 
 ideals that prevailed in the movement before 
 its advent. 
 
 We should never lose sight of the fact that the 
 root idea of Socialism is common ownership 
 and co-operative as against individual ownership 
 and competition ; it is only incidentally con- 
 cerned with questions of the extension or restric- 
 tion of State action. Whatever may be its 
 justification at any given time, legal property is 
 always in essence authoritarian. What makes 
 anything " property," that is " proper " to any 
 one man rather than free for the use of all ? 
 Obviously, it is some law, custom, or moral ideal 
 preventing other people from making use of the 
 thing without the owner's consent ; it is not 
 positive, but negative ; it is not in essence an 
 enlargement of the owner's rights, but a limita- 
 tion of other people's. This is so even in the 
 most just and rational forms of property as much 
 as in those to which social reformers are opposed. 
 You cannot find any natural basis for property
 
 68 ENGLAND AND THE NEW ERA 
 
 except that of effective possession as long as 
 possession remains effective. Thus my watch is 
 mine in the nature of things as long as it is in 
 my pocket ; it ceases to be mine as soon as some 
 clever thief has transferred it to his. Of the 
 world of things not part of myself or not imme- 
 diately attached to my person I have no hold 
 whatever, except such as the law, custom, or 
 the consciences of my fellow-men accord to me. 
 And if any one disputes my claim to anything 
 external to me in a practical manner, that is 
 by making use of it without my consent, I have 
 no means of preventing this in the last resort 
 except by force, either my own or that of society. 
 Property is a great " taboo," largely justifiable 
 and necessary, no doubt, but still a taboo against 
 every one but the legal owner of a thing. But, 
 and this is the point to remember, it is property 
 and not communism that essentially implies a 
 State organization. As long as a footpath is 
 open to the public you may be able to do without 
 any law at all ; but as soon as any one claims the 
 right to close it, you must have a court to deal 
 with trespassers. IS Esprit des Lois c'est V esprit 
 de la propriety as some one said to Montesquieu. 
 Naturally, for the right of property in land, for 
 instance, confers no new power on the land- 
 owner to use land himself, but merely to prevent 
 other people from using it without first paying 
 him a rent. If the law did not give him power
 
 CREATIVE REVOLUTION 69 
 
 to distrain or evict, his tenants could go on using 
 the land without giving him any part of the 
 produce. 
 
 It will be seen, then, that in so far as Socialism 
 aims at opening up access to land and capital 
 to every one alike, it does not imply any extension 
 of State powers ; rather, it involves the ending 
 or limitation of what has been the chief activity 
 of the State in the past. Conceivably, it might 
 even mean the disappearance of the State as 
 is assumed in Morris's News from Nowhere. 
 The later criticism of politics by the Guild 
 Socialists may have at least one good effect 
 it may induce both friends and opponents of 
 the movement to revise their estimate of the 
 place of the State in any possible system of 
 Socialism. 
 
 I have given, however, rather too much space 
 to this matter; for the present I am more 
 concerned with the Labour movement from its 
 destructive than from its constructive side. And 
 as a force definitely at war with the existing 
 social order, the Guild Socialist movement fits 
 in admirably with the growing revolt of Labour. 
 I think the Guild propaganda has spread far 
 more rapidly than the earlier agitation of the 
 Collectivists. This is due very largely to the 
 spade work for a generation of the Collectivists 
 themselves. It was they who first stirred the 
 torpor of the Victorian democracy ; they who
 
 70 ENGLAND AND THE NEW ERA 
 
 first taught the people to look beyond the speeches 
 of " orthodox " politicians and gather round the 
 street corner orator with his strange and attrac- 
 tive ideas ; they who established everywhere 
 missionary branches of the I.L.P.,* composed of 
 members largely emancipated, and all under- 
 going a process of further emancipation, from 
 Victorian ideals. It is due to them that a 
 considerable public exists who are open to 
 receive and assimilate new thought, and are not 
 necessarily shocked or merely puzzled because they 
 are told of something very different from that 
 which they have been brought up to believe. 
 This release from the tyranny of customary 
 thought is perhaps the greatest service rendered 
 to the democracy by the older Socialists. It has 
 prepared the field for the Guild Socialists, and 
 for the progressive enrichment of Socialism 
 itself. 
 
 But this enrichment of the Socialist ideal 
 arises even more from the people themselves 
 than from any school of Socialists whatsoever. 
 It is the gradual formation within the old society 
 of the framework of the new, the development 
 and increasing boldness of Trade Unionism, 
 the spread and widening scope of Co-operation, 
 
 * As in previous books, I propose to use the letters I.L.P. 
 when referring to the Independent Labour Party. This 
 seems to me the readiest way to avoid confusion with the 
 Labour Party, of which the I.L.P. is an affiliated part.
 
 CREATIVE REVOLUTION 71 
 
 as well as the increase of Labour representation 
 on local and national authorities ; the growth, 
 in short, of a democracy trained in action and 
 disciplined by experience that constitutes the 
 real menace to the old order and the hope of 
 the new. 
 
 And a formidable menace indeed it is. Had 
 it not been for the war, if the empires financially 
 solvent had been able to pay their armies, if the 
 wave of enthusiasm with which the youth of 
 the world responded to the appeal for help in a 
 war for freedom had never reached the subject 
 nations, white, black, and yellow, and never 
 aroused in them the hope of liberty ; if the new 
 generation of English men and women had never 
 been torn from the old life of use and wont and 
 compelled to look at life as at a thing complex 
 and changing, not as something complete and 
 stable, which must be to them and would be to 
 their children as it had been to their fathers, 
 then perhaps the old methods might have sur- 
 vived for years. I cannot see how this is possible 
 now. Menaced by the growing spirits of nation- 
 alism and militant Labour, and crushed by 
 debt, the political and industrial structure of 
 Western civilization as it was before the war is 
 shaken to the foundations. All that we can 
 hope to do is to rescue from the crash the acquired 
 knowledge, the art and science almost buried 
 beneath the capitalist superstructure.
 
 CHAPTER IV 
 THE DILEMMA OF CAPITALISM 
 
 IT is now necessary to develop more clearly 
 my reasons for thinking that the system of 
 society which has existed for several genera- 
 tions in England must necessarily fall to pieces, 
 and leave for the coming generation an oppor- 
 tunity, such as perhaps never occurred before 
 in our history, to build upon its ruins a civil- 
 ization of their own. So far I have dealt with 
 the three main forces menacing this order : the 
 progress of nationalism all over the world, the 
 pressure of debt on the leading States, and 
 the growth of the Labour Socialist movement. 
 The first and last of these are in essence creative ; 
 they are pillars on which a new society may 
 ultimately be built. Thus their influence as 
 destroyers of the old is not the only or even 
 the main thing to consider about them. Nor 
 are they, I think, such formidable agents of 
 destruction as the debt of Europe ; but for 
 that they might remain for generations merely 
 impotent aspirations of the peoples towards 
 national and industrial freedom.] 
 
 72
 
 THE DILEMMA OF CAPITALISM 73 
 
 It is altogether otherwise with the gigantic 
 burden of debt which the Imperial States have 
 piled upon their shoulders during the war 
 there is no way of dealing with this that does 
 not imply a revolutionary reconstruction of 
 society within the States themselves and a 
 paralysis of their strength sufficient to render 
 impossible for a long time any effective inter- 
 ference with the affairs of countries beyond 
 their borders. 
 
 As this book is primarily devoted to English 
 affairs, it will only be necessary for me to deal 
 at any length with our own financial position, 
 yet it is desirable for the reader to remember 
 throughout that, bad as our position may be, 
 it is incomparably better than that of our 
 European Allies and enemies. It is not possible 
 for all or any of the great States to become 
 bankrupt and repudiate their debts without 
 making it much more difficult to maintain our 
 own credit, and without strengthening the party 
 here who are wishful to settle once for all the 
 whole problem of the debt by refusing to pay 
 either principal or interest. 
 
 Before the war the total wealth of the country 
 was estimated at about twenty thousand million 
 pounds. The National Debt now stands at 
 about eight thousand millions, to which should 
 be added the various local debts throughout 
 the country. This looks at first sight as though
 
 74 ENGLAND AND THE NEW ERA 
 
 the land and capital of the nation was mort- 
 gaged to the extent of about forty per cent, 
 of its total value. Two factors, however, prevent 
 us from taking this as a true statement of 
 affairs. The real wealth of the country must 
 have declined since the beginning of the war 
 to a considerable extent. Houses, roads, rail- 
 ways, and in many cases factories have been 
 let down for want of adequate repairs ; land 
 has suffered for want of labour, and ships have 
 been destroyed by submarine warfare. Though, 
 of course, we have not suffered as much as 
 Continental nations, I think there can be no 
 doubt that, at pre-war prices, the assets of 
 the nation would show a heavy depreciation 
 in the value given before the war. 
 
 Prices, however, have risen enormously ; it 
 is money that has depreciated in value ; there 
 can be no doubt that, stated in terms of money, 
 the nominal wealth of the nation must be 
 greater than it was in 1914. If these values 
 are maintained in the future, then, the real 
 burden on the nation will not amount to so 
 much as forty per cent. In any case, however, 
 the weight of the debt is a crushing one. 
 
 In the year before the war we raised by 
 taxation, or received as revenue from the Post 
 Office and other sources, 198,243,000, or one 
 and eightpence in the pound of the estimated 
 total annual income of the country. During
 
 THE DILEMMA OF CAPITALISM 75 
 
 the current year Mr. Austen Chamberlain 
 expects to raise 1,035,150,000 from taxes and 
 nearly four hundred millions from other sources. 
 Three hundred millions of this latter, however, 
 he expects to get by selling war stores, a source 
 of revenue which must soon cease. He estimates 
 the necessary expenditure at 1,184,102,000, and 
 expects to pay 234,000,000 off the debt. 
 
 This is a much better state of affairs than 
 the Continental nations can show, but it is a 
 desperately bad one for all that. It presupposes 
 the raising by taxation of an amount equal to 
 eight shillings in the pound of the annual income 
 of the nation previous to the war. Again the 
 question of prices comes in. Except in the 
 cases of the unhappy people with fixed incomes, 
 money earnings are everywhere higher than in 
 1914. The toll of the nation's income taken 
 by the State will not, therefore, be so large, 
 but I think it would be hard to show a case 
 of any nation subjected to such a burden as 
 we shall have to bear, without relapsing into 
 poverty or finding relief by revolution. 
 
 A disquieting factor in the case is the little 
 confidence that can be given to the estimates 
 both of receipts and expenditure. Last year 
 the revenue exceeded the estimate by 
 170,000,000. On the other hand, the expen- 
 diture amounted to 238,000,000 more than 
 the original sum provided for in April 1919.
 
 76 ENGLAND AND THE NEW ERA 
 
 Mr. Chamberlain is certainly not entirely, and 
 perhaps not to any great, extent, to blame for 
 this wild estimating. The mad and wicked 
 Russian policy of Ministers as a whole is chiefly 
 responsible for the vast supplementary expendi- 
 ture. Whatever the reason, however, it is 
 perfectly clear that we cannot place much 
 dependence on estimates which may readily 
 be wrong on either side to an extent equal to 
 the whole pre-war expenditure of the country. 
 This uncertainty about the estimates is partly 
 due to the erratic policy of the Coalition Govern- 
 ment. It is obvious that the helmsman does 
 not know how to steer or where he is going, a 
 truly alarming state of things considering the 
 rough and uncharted seas through which the 
 ship of State is now sailing. Even more of it, 
 however, arises from the unsettled condition 
 of the national income itself. In normal times 
 we may expect a moderate increase or be pre- 
 pared for a possible slight decline in the amount 
 brought annually under review of the Income 
 Tax Commission, a larger or slightly smaller 
 consumption of dutiable articles. In spite of 
 fluctuations in trade, it is normally possible 
 to arrive beforehand at a very close approxima- 
 tion to the amount a proposed set of taxes will 
 yield. But now, with prices and rates of profit 
 swollen to abnormal dimensions, with no certainty 
 how long the boom will last, estimates are
 
 THE DILEMMA OF CAPITALISM 77 
 
 the merest guesswork. Who, for instance, can 
 possibly say whether Mr. Chamberlain will 
 actually receive the 220,000,000 he anticipates 
 from excess profits duty ? How does he or 
 any one else know whether it will actually be 
 possible to realize 302,000,000 by the sale of 
 war stores during the current financial year ? 
 There is much uncertainty even about the old 
 taxes as a whole. The conditions under which 
 the estimates for them were made are so excep- 
 tional that they may give a very misleading 
 idea of those that will prevail before the financial 
 year comes to an end. As far as the income 
 tax is concerned, however, any remarkable 
 change in conditions during this year will only 
 affect the amount realized in that ending 
 March 31, 1922. It would not surprise me if 
 the Exchequer receipts are above or under 
 the estimates by hundreds of millions again. 
 I have no idea whatever whether they are 
 likely to be less or more ; the one thing that 
 would astonish me would be to find that Mr. 
 Chamberlain has guessed aright. Some day, 
 too, there may be no excess profits to tax, and 
 certainly some day, and that very soon, there 
 will be no war stores to sell. Had that been 
 the case this year, instead of paying off 
 234,000,000 from the debt we should have a 
 deficit of three hundred millions. 
 
 And, of course, in reality there is a deficit,
 
 78 ENGLAND AND THE NEW ERA 
 
 even on this year's Budget. We start the 
 year with a debt of 7,800,000,000 indeed, but 
 with heavy stocks in hand to set against part 
 of it. We propose to repay part of the money 
 borrowed, but in order to do this and pay our 
 way meanwhile, we are to sell nearly seventy 
 millions more of our assets than we repay of 
 debt. Business men and I suppose there are 
 some men among the Coalition majority who 
 understand business, however little they know 
 about politics know that this is no real reduction 
 of debt. Perhaps they might profitably reflect 
 upon this, that out of an estimated revenue of 
 1,418,300,000, more than one-third, 522,000,000, 
 is expected to come from two items excess 
 profits duty and special receipts, that is, sale 
 of war material, which are essentially temporary 
 sources of income. If these resources had not 
 been available, and if our expenditure remains 
 at the present rate, when they are no longer 
 available, it will be necessary to raise nearly 
 300,000,000 a year by increases on the 
 permanent taxes, or by finding new ones to 
 meet current expenditure, without paying off 
 one penny of debt ! And that is on the assump- 
 tion that the permanent taxes maintain their 
 present quite abnormal high yield. It is 
 expected that the income and super tax will 
 produce 385,000,000, customs and excise 
 348,650,000 the first amount nearly double
 
 THE DILEMMA OF CAPITALISM 79 
 
 and the second more than one and a-half times 
 the total revenue of the State in 1913. The 
 death duties are expected to realize 45,000,000. 
 By doubling the income tax we might meet 
 this and provide a small sinking fund to reduce 
 the debt, again, however, on the assumption 
 that taxes continue as productive as at present. 
 The assumption, however, is quite unjustifi- 
 able. Such an income tax would amount to 
 an average duty of ten shillings in the pound 
 on the amount brought under review of the 
 Income Tax Commissioners for 1913, that is, 
 on all incomes over 160 a year. Of course 
 there would have to be a severe method of 
 graduation, raising the taxes of the rich man 
 within measurable distance of twenty shillings 
 in the pound, and in that case it is pretty clear 
 there would soon be no estate duties, for the 
 conditions under which men accumulate estates 
 from which to exact duty would have vanished. 
 I go further ; I maintain that the conditions 
 essential to capitalistic industry in competition 
 with the other nations would be destroyed. 
 Living, with customs and excise monstrously 
 high, would be abnormally dear in England, 
 trade would be strangled, the Dominions and 
 America would be far more desirable countries 
 for labour. The landowner and the capitalist 
 could not pack up their lands and factories 
 and depart for other climes, but thousands of
 
 80 ENGLAND AND THE NEW ERA 
 
 workmen could, and a wholesale exodus from 
 this unhappy country could be safely predicted. 
 
 Turning to the other side of the account, 
 about 230,000,000 of the proposed expenditure 
 is on account of the Army, Navy, and Air Force. 
 The entire abolition of these forces after those 
 in receipt of pensions die out might render it 
 unnecessary to increase the rates of income and 
 super tax by more than about twenty per 
 cent., and economies may be made in the Civil 
 Service estimates. The Consolidated Fund 
 charges, however, can only be reduced by paying 
 off debt, and if the country is to remain a pros- 
 perous and progressive one, and the debt is 
 to be extinguished before our coalfields are 
 worked out, the amount repaid each year should 
 amount to hundreds of millions. 
 
 If we consider this state of things in the 
 light of possible contingencies abroad, and 
 everything should be so considered now, there 
 are broadly two possible alternatives : either 
 the Continental belligerents may pay their debts, 
 or they may be forced to repudiate them. I 
 have already said that the position, at least 
 of the greater States, is incomparably worse 
 than ours. In every case the debt amounts 
 to more than half, in some it must be very 
 much more than the whole estimated wealth 
 of the country before the war. The pre-war 
 finance of Europe, too, was thoroughly unsound.
 
 THE DILEMMA OF CAPITALISM 81 
 
 No adequate system of direct taxation existed, 
 and the European States were, even before the 
 war, gradually piling up debts. Lands have 
 been devastated, wealth producers have been 
 killed and maimed by millions, and production 
 has shrunk to an appalling extent. It is merely 
 as an hypothesis, then, not because I believe 
 such a thing at all possible, that I consider 
 how things will stand if the nations do resume 
 payments of interest on their debts. In that 
 case living will be dear in Europe, as in England 
 taxation will be even heavier, industry will be 
 crippled, and the people poverty-stricken to 
 a degree almost impossible to imagine. Mean- 
 time, beyond unhappy Europe, North and South 
 America, Australia, South Africa, all the 
 temperate lands of the world, will be subjected 
 to 110 such crushing burdens. Partly, I fear, 
 the populations of European lands will be 
 starved, partly they will emigrate ; but I can 
 see no other end for it, Europe must sink to a 
 greater Spain, until at last the inevitable has 
 been accepted and the crushing load of debt 
 thrown off by repudiation. But though in this 
 way Europe would be a weak competitor in 
 our industries and, incidentally, a very poor 
 market for our goods we should still have to 
 face the relatively unhampered competition of 
 the United States, and probably of our Dominions. 
 Our industry would be at a ruinous disadvantage, 
 
 6
 
 82 ENGLAND AND THE NEW ERA 
 
 and I can see no possible prospect of our 
 national income being maintained at a level 
 high enough to support the necessary taxa- 
 tion. 
 
 It is far more likely, however, that all or 
 most of the European debts will either be 
 repudiated, or that some sort of a composition 
 with the national creditors will be made, so as 
 to reduce the burden of interest to some support- 
 able amount. I am fully alive to the terrible 
 misery such a measure must cause in Europe, 
 the millions of people who will be reduced to 
 poverty, the dislocation of industry, and the 
 widespread bankruptcy that must ensue. 
 Nothing but dire necessity will compel any 
 self-respecting nation to take such a step only 
 the necessity that knows no law. Nevertheless 
 I cannot see how it can be avoided, certainly 
 in Austria, almost certainly in the other leading 
 nations. And, however deplorable the effects 
 of repudiation, the nations would emerge from 
 the experience debt free. They would no 
 longer be carrying on their backs a dead weight 
 of unproductive consumers. Practically all their 
 inhabitants would be producers as well as con- 
 sumers. Taxation would be comparatively light, 
 and, when things had settled down a bit, and 
 confidence had been restored, they would 
 resume manufacturing and compete with us 
 in neutral markets.
 
 THE DILEMMA OF CAPITALISM 83 
 
 What would be the result ? We depend for 
 our existence on our power to export to neutral 
 markets enough of our manufactures to buy 
 the food and raw materials necessary for our 
 lives and industry. Cheap production and a 
 moderate cost of living are essential conditions 
 of doing this, for the goods we have to sell 
 must not cost more than those made in other 
 countries in competition with which they have 
 to be sold. But if our industries have to be 
 burdened with a yearly charge of nearly four 
 hundred millions for interest, while Germany, 
 France, Russia, and Italy are free from such an 
 incubus, how can we possibly maintain our 
 hold on the foreign markets by which we live ? 
 I can see no prospect before us that way, except 
 one of gradually declining population and trade, 
 gradually increasing taxation as the number of 
 taxpayers and the extent of their means diminish, 
 until at last we reach strangulation point and 
 the nation is driven into bankruptcy after all. 
 Something like this is what really did happen 
 to Spain under the Hapsburg monarchs, with 
 the result that Spain ceased to count for genera- 
 tions in the civilization of Europe. Her 
 manufactures were crushed, and her populace 
 reduced to beggary under the weight of taxation 
 heavier than that of rival lands. In the long 
 run no fate threatened to the British capitalist 
 by responsible Socialists even of the extreme
 
 84 ENGLAND AND THE NEW ERA 
 
 Left could be worse than that. The notion of 
 maintaining our position among the nations of 
 the world without far-reaching retrenchment, 
 and permanent relief from the burden of debt, 
 is a dream of the ivory gate. That way I suspect 
 hard-headed business men and Imperial pro- 
 consuls send forth as many airy vanities as 
 the poets, only their dreams are not quite so 
 pretty. I am convinced that the return to 
 anything like the conditions that prevailed 
 before the war is one of them ; England will 
 not long remain and will never again become a 
 country carrying on an enormous world industry 
 for the purpose of paying dividends to idlers. 
 We may be ruined, we may become a second 
 Spain, but if we do remain a wealthy country 
 the profits of our industry will have to be applied 
 to very different purposes, and first of all to 
 getting out of debt. 
 
 All roads lead to Rome, and in whatever 
 direction we turn we are brought back sooner 
 or later to the debt. There are obviously three 
 main ways of dealing with it : 
 
 1. To shirk the subject as much as possible, 
 merely manipulating the taxes from time 
 to time, so as to provide as long as possible 
 for the payment of interest and perhaps for 
 reducing the principal. 
 
 2. To repudiate it altogether or in part.
 
 THE DILEMMA OF CAPITALISM 85 
 
 3. To devise some great scheme for its repay- 
 ment either immediately or over a term of 
 years. 
 
 To some extent it may appear that I have 
 dealt with the first of these expedients already. 
 I think at the best it is a very bad way, but 
 even in a bad method there are worse ways 
 and ways not quite so bad. Up to the present 
 we have not even set about the first way properly. 
 From the armistice until to-day no real reduc- 
 tion has been made in the debt, nor has the 
 Government outlined any scheme of reduction 
 for the future. In the straitened circumstances 
 of the time it is of great importance to bring 
 about a balance between the income derived 
 from permanent taxes and the expenditure 
 which the Government intends to maintain. 
 Until that is done, and a trustworthy estimate 
 of income and expenditure laid before the 
 financial world the credit of the country cannot 
 be put on a good footing, and the Government 
 enabled to obtain such temporary advances as 
 it needs on the best possible terms. Now sales 
 of war stores and the excess profits duty are, 
 as I have already said, not permanent sources 
 of revenue, neither can they properly be used 
 to meet current expenses. Whatever money is 
 obtained from such sources should be employed 
 1 in reducing the debt, and a definite balance
 
 86 ENGLAND AND THE NEW ERA 
 
 between income and expenditure obtained alto- 
 gether apart from them. This would probably 
 have been impossible in any case by now, and 
 I am not complaining that it has not been done ; 
 my complaint is that no plan has been produced 
 for doing it in the future. It might be quite 
 impossible, for instance, for the Government 
 to reduce expenditure rapidly enough to come 
 within the permanent income of the country 
 for several years. What should be possible, 
 however, is to put forward a programme of 
 progressive reduction which, if carried out, would 
 bring about a balance at some approximately 
 ascertainable time. 
 
 The most hopeful way in which this could 
 be done is by a definite scheme of armament 
 reduction, which the Government should pledge 
 the country to carry out. This is something 
 very different from, and, from the point of 
 view of national credit, more important than 
 a scheme of demobilization. With very little 
 hope of seeing it carried out I outlined a scheme 
 of demobilization three years ago * which I 
 am convinced would have treated the soldiers 
 far more justly than they have been, and would 
 have made the reconstruction of industry 
 very much easier. My way, however, would 
 probably have left us for the present with a 
 
 * See Britain after the Peace, by the author.
 
 THE DILEMMA OF CAPITALISM 87 
 
 very much larger army than we have to-day. 
 No man, I contend, should have been demobilized 
 until he himself applied for his discharge, and 
 every endeavour should have been made to 
 persuade men, while fully admitting their right 
 to leave the army when they chose to do so, 
 not to demobilize themselves until they had 
 found really satisfactory and permanent civil 
 employment. But it is one thing to admit a 
 war hero's right to stay in the army until he 
 has got something better, and it is quite another 
 to enlist a new man. If the Government, 
 instead of enlisting more men for all services, as 
 it is now doing, had definitely stopped recruiting 
 altogether for the present, and announced their 
 intention to bring a general scheme of disarma- 
 ment before the League of Nations, declaring 
 that if their scheme were approved, recruiting 
 would not be resumed until by death, resigna- 
 tions, and superannuation our forces were 
 reduced to our agreed strength, they would 
 have taken a most useful step towards making 
 the League of Nations a reality and placing the 
 credit of the country on a sure basis. It would 
 have mattered comparatively little then if, for 
 the time being, our expenditure had exceeded 
 our income. Men with money to invest would 
 have seen before them a time at which the 
 national finances would adjust themselves and 
 we might confidently have expected to borrow
 
 88 ENGLAND AND THE NEW ERA 
 
 what we require for demobilization and recon- 
 struction on reasonable terms. 
 
 For the same reason, if for no other, we should 
 have avoided any action likely to involve us 
 in great, or still worse, indefinite expenditure 
 abroad. To incur by our Russian expeditions 
 and our interference in that country a huge 
 supplementary expenditure, to leave the country 
 in doubt as to whether we might not soon be 
 engaged in another big war, to allow the League 
 of Nations to become a laughing stock, and to 
 provoke Ireland to rebellion were from the 
 financial point of view, to say nothing of even 
 more vital questions, desperately unpatriotic 
 policies. I know no meaning that can be 
 attached to the word " patriotic " which does 
 not include a care for the financial stability 
 and internal welfare of the country ; our foreign 
 policy since the armistice has given no considera- 
 tion to this aspect of things whatever. 
 
 Before approaching other methods of dealing 
 with the debt, I may ask the reader to consider 
 what the prospect for the nation is if we pursue 
 our present policy ? I do not think that even 
 by the wisest and most cautious policy domestic 
 and foreign unless it is accompanied by organic 
 changes we can avoid the decay and strangula- 
 tion of our industry. We have got to inaugurate 
 an entirely new system if the greatness of 
 England is to be maintained. But look at
 
 THE DILEMMA OF CAPITALISM 89 
 
 the present state of affairs ! Five per cent, 
 stock is down to 83 at the time of writing, 
 pound notes are not worth more than about 
 16s. in gold, Ireland is in open rebellion, India 
 is furious over Armitsar, the native Egyptian 
 army cannot be trusted in Egypt itself, and 
 has to be banished to the Soudan while its own 
 country is held down by British troops. Mean- 
 time Lord Milner is forcing on the reluctant 
 natives of West Africa and the Malay States 
 a policy of Imperial Preference which they 
 detest and foreign nations dislike. The demand 
 for a Canadian Republic is openly advocated 
 by at least a section of the Press of that country. 
 Everywhere there seems to be an immense 
 decline in the moral prestige of England. And 
 moral prestige seems to me the only thing on 
 which we can rely for the future as a cement 
 for Empire. Can we, crushed with debt as we 
 are, hold down this great Empire against its 
 will ? Is it thinkable when, in spite of the 
 follies committed by the Allies, the world has 
 received an immense impulse towards nationality 
 can there be any hope, even if we were justified 
 in desiring it that this impulse will exhaust 
 itself just at the point we may wish it to halt ? 
 Is it not certain, should we attempt, armed to 
 the teeth and taxed to the last shilling, to 
 erect a barrier against the nationalist movements 
 within the Empire, that it is not the discon-
 
 90 ENGLAND AND THE NEW ERA 
 
 tented Dominions that will fail to obtain their 
 freedom, but England that will be ruined ? 
 
 For our time, at least, and unless we are 
 compelled to do it by the gradual decline of 
 our trade, at any later time there is possibly 
 little danger of a repudiation of our debt, what- 
 ever foreign nations may do. It should not be 
 assumed, however, that even such a desperate 
 expedient is absolutely out of the question. I 
 think there has always been a small section 
 who have advocated this, from the Chartist 
 days downwards, and during the war the idea 
 has won more acceptance than many people 
 know. I have met advocates of repudiation 
 in several debates, and many of the soldiers 
 proclaimed their unwillingness to spend years 
 in the trenches and then work the rest of their 
 lives to pay interest to people who had only 
 lent money for the war. It might still, however, 
 be safe to ignore these idealists, they are no 
 doubt an insignificant minority, were it certain 
 they would always remain so insignificant ; but 
 as the strain upon the country imposed by the 
 debt is realized, and as people see, as they 
 probably will, other nations even more heavily 
 burdened compelled to give up the attempt to 
 pay their creditors, the repudiation party may 
 readily become formidable. Indeed, bad as it 
 would be, I fear such a policy may some day 
 become unavoidable if no really comprehensive
 
 THE DILEMMA OF CAPITALISM 91 
 
 and efficient means is adopted to deal with the 
 matter in time. 
 
 The arguments advanced by the advocates of 
 repudiation, as far as I have heard them, are 
 two : it is contended that no money really passes 
 when a war loan is raised ; all that happens, 
 in the vast majority of cases, is the transfer in a 
 business ledger of a credit from one account to 
 another ; and it is claimed that in a national 
 emergency such as a war, when men are com- 
 pelled to risk and often lose their lives for the 
 nation, those who have the wealth should be 
 compelled to pay the whole of the cost ; in 
 fact, that war should be financed by a capital 
 levy. The war debt and the interest paid on 
 it are only further extensions of capitalism and 
 a means of exploiting the industry of the 
 people. 
 
 Now it is little use saying that this is a very 
 weak case from the point of view of reason, 
 for it is not, in the long run, pure reason that 
 will decide the matter. As a practical proposi- 
 tion its force will depend much more on the 
 circumstances under which it is uttered than 
 on the soundness of the arguments in support 
 of it. If men find themselves struggling to 
 make a living, suffering from declining trade, 
 and oppressed by ruinous taxes, they will welcome 
 any policy that promises to give them relief. 
 No wilder statement was ever made than that
 
 92 ENGLAND AND THE NEW ERA 
 
 the " foreigner " would pay our taxes if we 
 adopted Tariff Reform, and yet thousands of 
 people believed this absurdity. We are in such 
 a critical position to-day that we cannot be 
 certain that conditions may not render such a 
 propaganda formidable or even successful. It 
 is, therefore, well to consider seriously the 
 arguments advanced in its favour and what 
 the probable result of repudiation would be. 
 
 There is a crude fallacy involved in the 
 contention that in a loan to the Government 
 nothing passes and that all that takes place 
 is an entry in a ledger. Of course there is a 
 real transference of purchasing power. If a 
 man instructs his banker to invest for him his 
 deposit balance, say, 1,000, in war loan, it 
 is not a mere fiction, but a solid fact that the 
 investor cannot spend the money on a new 
 motor-car, but the Government can immediately 
 spend it on shells. Every money loan is exactly 
 the same a transference of purchasing power 
 from the lender to the borrower. The entries 
 in the bank's ledger are not the essence of the 
 transaction at all, they are merely the means 
 adopted to record it. You may indeed dispute 
 the justice of a system which permits of large 
 fortunes accumulating in private hands, or with 
 Ruskin deny the morality of interest on money 
 at all. Neither of these is, however, the ques- 
 tion : the point is that by whatever title the
 
 THE DILEMMA OF CAPITALISM 93 
 
 lender has acquired purchasing power, he has 
 as good a right to it after the loan was made 
 as before. 
 
 With regard to the other point : I do not 
 deny for a moment the right of the State to 
 commandeer such wealth as it requires to carry 
 on a great war. In this case, indeed, I deny 
 the right of any one to raise a conscientious 
 objection to its money demands. The taxpayer 
 is not morally responsible for the way in which 
 the State spends the money it takes from him ; 
 in that respect his rights and responsibilities 
 are limited to voting for a change in Govern- 
 ment and a new policy. Heaven forbid that 
 I should be asked to endorse the justice of all 
 the wars in which the Empire has taken part 
 by which the National Debt has been created, 
 or that my contributions in taxes towards the 
 interest on the old debt should be taken for 
 an admission that these wars were necessary ! 
 We are all paying taxes and bearing losses 
 caused by things of which, for one reason or 
 another, we disapprove. Unless you are an 
 anarchist you have no justification for refusing 
 to pay rates or taxes imposed by an authority 
 which you admit in other matters because you 
 disapprove of this or that activity of the authority. 
 Hampden's protest was of another character. 
 He denied that the King was the taxing 
 authority ; he did not discuss the wisdom or
 
 94 ENGLAND AND THE NEW ERA 
 
 unwisdom of ship money, and if Parliament 
 had voted such a tax he would have been quite 
 willing to pay. 
 
 To refuse to take a personal part in a war 
 is an entirely different matter. It is certainly 
 the gravest thing any one can do to kill another 
 man, and no one can escape the moral respon- 
 sibility of refusing to do so unless absolutely 
 convinced, first, that an occasion can ever arise 
 to justify such a thing, and, secondly, that it 
 actually has arisen in the particular case. It 
 is the old distinction made by Douglas : 
 
 My castles are my King's alone, 
 From turret to foundation stone. 
 The hand of Douglas is his own. 
 
 This distinction must be clearly kept in mind 
 if we are to steer a safe course between two 
 dangers anarchy and despotism. To argue, as 
 passive resisters did, that men have a right to 
 refuse to pay rates because they object to the 
 way in which they are to be used, is logical 
 anarchy. It is simply impossible to carry on 
 a State without spending money in ways of 
 which some one may disapprove. Often, too, 
 States being, like every other human institu- 
 tion, very imperfect and fallible, the objector 
 will be right and the State wrong ; if so, it is 
 the right and even the duty of the citizen to 
 protest against the policy pursued and to try
 
 THE DILEMMA OF CAPITALISM 95 
 
 to get it changed, but it is not his duty to refuse 
 to pay. You cannot have a State at all without 
 assuming its right to tax and to spend the 
 money raised by taxation according to the 
 conscience of the Government and not according 
 to the consciences of any minority of the 
 individual citizens who take a different view. 
 
 On the other hand, we must as clearly deny 
 the State's right to compel any man to attend 
 the State Church, to teach a doctrine which he 
 does not believe, to take an oath if he is a 
 Quaker, or to fight in any quarrel in which he 
 does not agree with the rest of his countrymen. 
 This is despotism, and is just as detestable 
 when the State happens to be right and the 
 individual wrong as in any other case. We 
 must remember that, if we concede to the State 
 the power to conscript men, we grant the right 
 to compel them to serve in an unjust war and 
 when the country is not really in danger. This 
 is so because no State ever engages in a war, 
 however criminal, which it admits to be unjust 
 and unnecessary. To say that men should be 
 compelled to serve only in a righteous war is 
 to beg the question ; obviously, what is con- 
 ceded is the power to conscript for any war the 
 State chooses to declare righteous. 
 
 I have, however, wandered from my point. 
 I have given my reason for believing that the 
 State is justified in conscripting wealth, even
 
 96 ENGLAND AND THE NEW ERA 
 
 of conscientious objectors. This, a Parliament 
 of elderly men, mostly well off, refused to do ; 
 they preferred to conscript men mostly younger 
 and poorer than themselves. They did that 
 thing they ought not to have done, and left 
 undone the thing they ought to have done, 
 and can therefore join in the general confession 
 in church with perfect propriety. The fact 
 remains, however, that the State did not take 
 that way of raising money ; by far the greater 
 part of the cost of the war was raised by loans. 
 Now, a general levy on capital can be graduated 
 according to ability to pay ; only that which 
 the victims can spare without reducing them 
 to poverty need be taken. Again, payment 
 of a capital levy is universal among men having 
 more than an agreed upon minimum of wealth. 
 A war loan is on a different footing. Naturally, 
 many people who could quite well afford it 
 refuse to subscribe altogether : others put in 
 only part of their fortune, while some invest 
 in the new security every penny they have. 
 All who do invest, however, have done essen- 
 tially the same thing they have transferred 
 purchasing power which they could have spent 
 or otherwise invested to the State. Often they 
 have sold their holdings in other stock to people 
 who preferred private investments. Their title 
 in abstract justice to the value they have 
 invested is neither better nor worse than it
 
 THE DILEMMA OF CAPITALISM 97 
 
 was before they made the change ; from the 
 point of view of the honour of the nation, it is 
 a great deal stronger. A perfectly healthy 
 instinct has convinced the British people of 
 this hitherto; it would be a sad falling off if 
 it ceases to do so now. 
 
 So long as the land and the leading industries 
 of the country are not owned by the nation 
 but by private individuals, it is chiefly they 
 and not the people who could benefit by a 
 repudiation of the debt. The debt is a kind 
 of mortgage on the land and working capital 
 of the nation. If the debts are repudiated on 
 the Continent, we may be sure the measure will 
 be accompanied by a confiscation of land and 
 capital. It is within the power and should be 
 the policy of the democracy, whatever the 
 method adopted in dealing with the debt, to 
 see that the weight of it is divided fairly 
 among the wealthy classes, in proportion to 
 each man's means, not according to the nature 
 of his investments, while firmly maintain- 
 ing the standard of living among the wage 
 earners. 
 
 The repudiation of the debt would be, in 
 itself and its necessary consequences, an act of 
 revolution. This is not an objection to it ; 
 on the contrary, revolution is now a necessity 
 for the nation. But it is the revolution of 
 despair, not the revolution of creative adventure, 
 
 7
 
 98 ENGLAND AND THE NEW ERA 
 
 out of which we can build up a greater England, 
 " a land fit for heroes to live in." It is a thing 
 that would bring the destruction of the present 
 order on in a moment and reduce everything 
 to chaos. 
 
 Repudiation would obviously create at once 
 a large class of ruined bondholders without any 
 means of living at all. Their position would be 
 pitiable ; they would be a helpless and pathetic 
 minority of the population, but they would 
 nevertheless be an embittered and disorderly 
 portion of it ; a potential " White Guard " on 
 the flank of the progressive forces. But the 
 effects of repudiation would not be confined to 
 the bondholders alone. The whole fabric of 
 our industry, as it is at present constituted, 
 would necessarily collapse and that at once. 
 Government stock is, to a very large extent, 
 used as collateral or full security for business 
 loans, and with it rendered valueless thousands 
 of big firms would immediately become bank- 
 rupt. Banks would fail all round us ; credit 
 would be gone, and we should lose our power 
 to import from abroad, without which it is 
 impossible to feed our people. The whole 
 responsibility for the management of industry 
 would be flung in a moment on the authorities, 
 on a revolutionary Government having in the 
 eyes of the world no stability and no credit. 
 We should be forced to carry out a wholesale
 
 THE DILEMMA OF CAPITALISM 99 
 
 policy of confiscation to obtain the means to 
 live, so that it would amount, from a capitalist's 
 point of view, to a more sudden and not less 
 painful method of extinction than the one 
 previously considered, but it would involve 
 fearful misery for the people. Bolshevism was 
 possibly the only way out for Russia, and in 
 spite of the crimes of the Bolshevists, it looks 
 as though the Russian Revolution were an even 
 greater thing for Russia than the French Revolu- 
 tion, equally blood-stained, was for France. 
 But such a state of anarchy in England would 
 be much more terrible than in Russia. In 
 Russia the food problem, acute as it was, was 
 one of distribution. In many parts of the 
 country food was plentiful ; where war has not 
 actually passed over the land the largest class 
 of the people, the peasants, have often had 
 difficulty in disposing of their produce. In 
 England, densely peopled, and living mainly 
 by manufactures, it would be a very different 
 matter. We depend absolutely on our credit 
 abroad, and during the throes of such a revolu- 
 tion as that of Russia we could expect no foreign 
 credit. 
 
 Repudiation of our debt would make England 
 a hell. 
 
 In the next chapter I shall consider a third 
 method of dealing with the debt, but before 
 doing so it may be well to sum up what has
 
 100 ENGLAND AND THE NEW ERA 
 
 been said on the character of the other two. 
 Neither of them shows any prospect of renewed 
 vitality to English capitalism. If we adopt 
 the first, and endeavour to meet the problem 
 by means of permanent taxes, aided by such 
 imposts as excess profits duties and war 
 profits levies, our industry will be hopelessly 
 handicapped in the competition with those of 
 less burdened nations. The lands of the New 
 World, perhaps those of a revolutionized Europe, 
 will be able to outbid us in all our foreign markets, 
 and we shall settle down to a period of depres- 
 sion and decay. In this way more slowly 
 perhaps, but as certainly as in any other, our 
 rich classes will cease to be rich, and our poor 
 will become poorer than ever. For capitalism 
 it is a method of lingering death, but of death 
 all the same. Such expedients as excess profits 
 duties at the expense of one section of the 
 rich, will not help the class as a whole. There 
 has been a disposition in some quarters to see 
 in measures like a levy on war profits a means 
 of funding the large floating debt, and to think 
 that this would be an important step in solving 
 our difficulties. The money taken from the 
 war profiteers would certainly be a gain, but 
 I am not altogether certain that it is not as 
 well to leave a good proportion of the debt 
 unfunded for the present, until at last we have 
 summoned up courage to deal with the matter
 
 THE DILEMMA OF CAPITALISM 101 
 
 on very much broader lines. The chief gain 
 in funding would be in peace of mind to the 
 Chancellor of the Exchequer. With a large 
 floating debt he must carry on continual negotia- 
 tions with bankers ; he must renew Treasury 
 bills ; he must continually worry about ways 
 and means. Now I am not at all anxious at 
 present to save our Chancellors of the Exchequer 
 from worry ; the more worried they are the 
 better I shall be pleased. Grey hairs gathering 
 on the head of the Chancellor may possibly 
 mean that the gravity of the national danger 
 is dawning on him, and that some day he may 
 realize the necessity of dealing with it effectually. 
 Meanwhile a Chancellor of the Exchequer who 
 is not worried, and very badly worried, is not 
 doing his duty by the nation. For the putting 
 off from year to year of any real attempt to 
 face the problem is a means of making it ulti- 
 mately more difficult than ever. As long as 
 from year to year it is quite uncertain what the 
 taxes will yield, whether some fresh levy to 
 patch up things a little longer will be wanted 
 next year, whether we are or are not going to 
 be mixed up in some new military adventure, 
 or whether any new and unexpected tax is to 
 be imposed, and if so, what, the public mind 
 must necessarily be unsettled, and business men 
 must always be hampered and enterprise crippled 
 by the prevailing uncertainty. Absence of
 
 102 ENGLAND AND THE NEW ERA 
 
 worry for the Chancellor means, not only worry, 
 but further loss, for the nation. 
 
 As far as the two methods of dealing with 
 the debt which we have been considering in 
 this chapter are concerned, it is simply a choice 
 for the British capitalist between a lingering 
 or a sudden death. I do not suppose that 
 even this consideration will reconcile many 
 wealthy men to what I have to propose in the 
 following chapter, but from some of them, 
 less deeply wedded to the luxury and outward 
 show of modern fashionable life, what I have 
 to say may win more favourable consideration 
 when they see the alternatives. Their aid will 
 not go very far, however. A great struggle 
 lies before the young democracy of England, a 
 struggle for life, for expansion, no less difficult 
 though less bloody than the struggle of the 
 trenches.
 
 CHAPTER V 
 THE CAPITAL LEVY 
 
 IN the last chapter I have dealt with two ways 
 of meeting the problem of the debt, one of which 
 might be called the " bourgeois," and the other 
 the " Bolshevik " method, and seen reason to 
 be convinced that they offered to the capitalist 
 society only the choice between a slower or swifter 
 manner of destruction. Unlike as they are, 
 they have one demerit in common, they are 
 neither of them based on an honest consideration 
 of the question. Very little thought will suffice 
 to show any one the grave danger to our industrial 
 position, almost our very existence as a nation, 
 in leaving the country burdened for an in- 
 definite length of time with such a load of debt 
 and no public assets ; while it needs as little 
 reflection to realize, not only the injustice, but 
 the immediate and terrible consequences of re- 
 pudiation. Neither course would be acquiesced 
 in by any one who had turned the matter over 
 in his mind, unless he could think of no possible 
 alternative. It is a relief, then, to turn to the 
 consideration of an idea to which serious thought 
 
 103
 
 104 ENGLAND AND THE NEW ERA 
 
 has been given, to a scheme which would at 
 least relieve the nation of an intolerable burden, 
 while doing substantial justice to the creditors 
 of the State. 
 
 The proposal to extinguish the debt by means 
 of a levy on capital has met with very little 
 support outside the ranks of the Labour Party. 
 It is true that Mr. Sydney Arnold, from the 
 free Liberal benches, brought the matter to 
 the attention of the House of Commons last 
 year ; but even his leader, Sir Donald Maclean, 
 was by no means enthusiastic in his support. 
 Since then, I think the proposal has, on the 
 whole, lost ground in Liberal circles ; for though 
 many Liberals are in favour of a levy on capital, 
 some of them at least seem only to contemplate 
 a levy of 2,000,000,000, in order to get rid, 
 not of the debt as a whole, but of the unfunded 
 part of it. Many also are much more fond of 
 discussing a war profits levy, a thing hopelessly 
 inadequate. This is most unfortunate. It is 
 really too important and too urgent a subject 
 for any party to leave an open question. Finan- 
 cial questions are not, like many others, matters 
 that can wait to be brought up and dealt with 
 at any time during a party's term of office. Any 
 Government must present a Budget of some sort 
 in its first and every succeeding session, and 
 when financial matters are so critical as they 
 are now, it is exceedingly important that any
 
 THE CAPITAL LEVY 105 
 
 party that appeals to the electors should disclose 
 the general lines of its policy with regard to 
 the debt. 
 
 In the case of the Coalitionists, I suppose 
 we must take it that their policy is represented 
 by Mr. Chamberlain's Budget, together with 
 some hope of recovering money from Germany. 
 I, myself, expect very little from that source 
 even for France and Belgium, for it seems to 
 me impossible for Germany to pay anything 
 but a fraction of the sums expected from her. 
 As for us, our claims are much weaker, and I 
 am convinced the recovery of anything worth 
 taking into account is utterly hopeless. 
 
 However, it is only by courtesy that Mr. 
 Chamberlain's proposals can be called the 
 " policy " of the Coalition. Of a very large 
 part of the Government majority, the policy is 
 much simpler. Put bluntly, it is a policy of 
 not paying at all. Extremes meet, and if Sir 
 Frederick Banbury and others of like mind had 
 their way, we should have a sort of Tory repudia- 
 tion, to compare with the Bolshevist method, 
 brought about by the refusal of rich men to 
 be taxed for the necessary service of the debt. 
 It does not matter whether it is an excess 
 profits duty or a war profits levy, they are 
 equally opposed to it, while they offer no alter- 
 native proposal. They hardly seem to realize 
 that the debt is a stern fact, and that no interest
 
 106 ENGLAND AND THE NEW ERA 
 
 can possibly be paid on it until some one who 
 has money has first been heavily taxed. 
 
 The Labour Party, however, is definitely com- 
 mitted to a levy on capital, and is thus, as 
 compared to its rivals, in the fortunate position 
 of having a definite principle which can be 
 advocated by its candidates and considered by 
 the electors. If this state of things continues 
 among the parties, and Labour sticks to its 
 guns, the party will probably call down upon 
 itself a good deal more opposition at the next 
 general election than will be aroused by any 
 of its other proposals. The immediate effect 
 may be to prevent it winning a good many 
 seats which might otherwise be gained. Perhaps 
 so ; but nothing in the long run can prevent 
 the party that has a policy from defeating 
 those that have none. Some subsequent election 
 will certainly find the people tired of makeshifts 
 and ready to return to power the only party 
 with a thought-out plan. 
 
 The levy on capital, besides being a most 
 valuable proposal in itself, then, is likely soon 
 to be one of the decisive practical questions in 
 politics ; it will certainly be so unless some 
 equally effective method of dealing with the 
 debt can be devised. Under such circumstances, 
 it calls for full consideration. 
 
 The clearest statement of the case that I 
 have seen is that given in Mr. Pethick Law-
 
 THE CAPITAL LEVY 107 
 
 rence's little book, A Levy on Capital. The 
 book was written before the end of the war 
 and the figures used by Mr. Lawrence could 
 now be made nearer to the actual facts. They 
 are, however, sufficiently near for my purpose. 
 Mr. Lawrence proposed a graduated levy on 
 capitals of 150 and upwards. He suggests 
 that this 150 should be free of tax, but that 
 on the next 50 of capital a duty of 3 per cent., 
 i.e. 30s. should be levied. On the third hundred 
 pounds of an estate of 300, 6 per cent, or six 
 pounds would be charged. Thus a man with 
 such a capital would pay : 
 
 On the first 150 . . . . nil. 
 On the next 50 . . . . l 10 
 On the last 100 600 
 
 300 7 10 
 
 At intervals, as capitals rise in amount the 
 rates would rise progressively to 21 per cent, 
 on wealth between 1,500 and 2,000; 30 per 
 cent, on 5,000 to 7,500, and so on. By 
 this means Mr. Lawrence expected to obtain 
 wealth to the amount of 6,000,000,000 which, 
 as he then estimated, would with the help of 
 1,000,000,000 to be repaid by our Allies clear 
 off the war debt altogether. Even now it would 
 nearly do so, if, as he hoped, our Allies and 
 Dominions to whom we lent money in the war
 
 108 ENGLAND AND THE NEW ERA 
 
 do ever pay us a thousand millions out of the 
 eighteen hundred they owe us. I cannot feel 
 so sanguine and therefore think the rates might 
 have to be increased. Little money would be 
 obtained and needless hardship would be inflicted 
 by taxing such small capitals as 200. The first 
 thousand pounds in each estate is exempted 
 in most proposals for a capital levy. Mr. Law- 
 rence has, however, given us an excellent text- 
 book on the subject, and I have no other objec- 
 tion to raise. 
 
 Mr. Lawrence then proceeds to estimate the 
 effects such a levy would have on people having 
 various incomes and capitals. The capital levy, 
 by relieving the Budget of the burden of in- 
 terest and sinking fund on 6,000,000,000, ob- 
 viously renders possible a great reduction in 
 taxation. The tax collector would no longer 
 be such an object of dread, and after the first 
 shock, industry would have a far better chance 
 to recover. Taking the estimates made by him 
 two years ago, and starting with his second 
 instance, that of a small shopkeeper having a 
 capital of 900, personal effects worth 100 and 
 an income of 300 a year, he reckons it would 
 be possible to reduce this man's taxation from 
 30 to 14 a year. Against this, there would 
 be a capital levy of 93 which he would have 
 to pay, equivalent to a further tax of 5 a year. 
 In the long run, therefore, the capital levy
 
 THE CAPITAL LEVY 109 
 
 would mean to him a saving of 11 a year. 
 Another instance given is that of a business man 
 having 48,000 capital, 2,000 personal effects, 
 and 4,000 a year income. To such a man, 
 also, the capital levy would come as a relief, 
 and his permanent net income after the levy 
 would be 2,477 against 2,381, which Mr. Law- 
 rence estimates will be all that would be left 
 to him after paying his taxes, if no levy is made. 
 
 These reductions in the amounts paid by poor 
 and moderately rich people are rendered possible 
 by the heavy rate of graduation against the 
 very rich. Mr. Lawrence ends his examples 
 with that of a millionaire having an income 
 of 50,000 a year. Without the levy, this man's 
 income, after paying his taxes, would be reduced 
 to 19,000 ; after paying the levy and allowing 
 for the consequent reduction to his yearly taxa- 
 tion, he would have a net income of 13,000 
 a year. 
 
 It looks as though eight, rather than six 
 thousand millions, would have to be raised ; 
 for I am, as already said, profoundly sceptical 
 about getting any of the money we have lent 
 to our Allies or of recovering an indemnity 
 from Germany. On the other hand, there is an 
 important consideration not touched on by Mr. 
 Lawrence, which would probably lessen the 
 amounts in the pound required very greatly. 
 There has been an enormous increase in the
 
 110 ENGLAND AND THE NEW ERA 
 
 money value of the visible assets of the country 
 since the last year of peace. Stated in terms 
 of money, almost everything land, houses, fac- 
 tories, machinery, furniture that existed before 
 the war has increased so much in value that 
 you can often get double for an old machine 
 to-day what was paid for it when it was new. 
 This is notorious. It does not, of course, mean 
 that the country is really richer ; on the con- 
 trary, roads, houses, railways, bridges, machinery, 
 even land are generally in very much worse 
 condition than they were in 1914. It is a very 
 important consideration in our present inquiry, 
 however. To some extent, no doubt, this in- 
 flation of values is due to temporary conditions, 
 the cutting off of foreign supplies accounting 
 for much. A far greater part of the inflation 
 is in all probability permanent. To-day you 
 will hardly be able to buy a house which originally 
 cost five hundred pounds for a thousand indeed, 
 the price is very likely to be twelve or fifteen 
 hundred. Nor do the new houses that are being 
 built offer much prospect of such prices being 
 cheapened when the supply becomes more ade- 
 quate, for it costs much more than twice as 
 much to build a house to-day as it did in 1914. 
 To however great an extent, then, the land 
 and capital of the country have been let down 
 during the war, Mr. Lawrence's proposed levy 
 of 6,000,000,000 on a valuation of them made
 
 THE CAPITAL LEVY 111 
 
 to-day would certainly involve much lower per 
 centual rates than he calculates. He was, how- 
 ever, quite justified in practically ignoring this 
 consideration, as, while it is clear there has been 
 a great inflation in money values, any attempt 
 to give an estimate of how much it is would 
 as yet be mere guesswork. To obtain any 
 stated amount, however, it may be taken as 
 certain that it would only be necessary to impose 
 considerably lower rates on estates than those 
 anticipated by Mr. Lawrence. 
 
 The fact that Mr. Lawrence's figures would 
 have to be revised now that the war being at 
 an end we are in a better position to tell exactly 
 how much the debt will be, does not affect 
 their value as examples of the working of a 
 capital levy. Whatever the actual amounts to 
 be dealt with, a capital levy would be a great 
 relief to the poor and moderately well off tax- 
 payer, while it would fall heavily on the rich. 
 To both, however, it would have one great 
 advantage, it would free them for the rest of 
 their lives from a continual source of worry, 
 while at the same time restoring the credit of 
 the State and rendering possible the maintenance 
 of our position in the world as a trading country. 
 
 Earlier in his book Mr. Lawrence gives a 
 very clear account of the way in which a capital 
 levy could be imposed. It is obvious that 
 very few could pay the amount of the levy in
 
 112 ENGLAND AND THE NEW ERA 
 
 cash. Other alternatives would have to be 
 offered at the option of the taxpayer. Equiva- 
 lent values in certain specified forms of wealth 
 as the Government's own stock, land, railway 
 shares, etc., would be accepted as payment. 
 In other cases mortgages to the amount of the 
 levy on approved security could be accepted by 
 the State ; where necessary arrangements would 
 be made for payment of the principal and in- 
 terest of the levy over a term of years. 
 
 Thus, what would emerge from the whole 
 thing would be something like this : 
 
 1. Some of the levy being paid in cash 
 or in Government stock, there would be an 
 immediate reduction in the principal of the 
 debt. 
 
 2. A larger amount would be paid by 
 handing over to the State permanently 
 quantities of land and approved railway 
 and other shares, and similar forms of 
 wealth. 
 
 3. The State would hold interest-bearing 
 mortgages on various properties considered 
 satisfactory as security for the ultimate 
 payment of the levy. 
 
 4. In addition there might be a number 
 of deferred payments, where men would be 
 paying off their share of the levy with 
 interest over a term of years.
 
 THE CAPITAL LEVY 113 
 
 It is evident that such a state of things implies 
 in itself an important social change. The State 
 would become a shareholder and sometimes 
 complete owner of a large variety of business 
 undertakings ; and it would be incomparably 
 the greatest landowner in the country. Along- 
 side of businesses carried on by private enter- 
 prise, there would be a great increase in the 
 number of others in which the State would be 
 sole owner ; while in a yet greater number of 
 instances, though not owning the business, the 
 State would yet possess voting power and in- 
 fluence. An immense and permanent impulse 
 would be given to State Socialism and, in any 
 form of industry in which State control proved 
 to be efficient, private enterprise would ere long 
 die out. 
 
 Again, the graduation of the levy would, for 
 a time at least, go far to abolish the millionaire 
 class. The great landed estates would of neces- 
 sity be broken up and a heavy blow dealt at the 
 principle of aristocracy. I think it could never 
 again recover its ancient prestige. The political 
 and social power of the new and the old rich 
 would be much diminished. With perhaps a 
 fifth or a sixth of the land in every country 
 directly controlled by the State or handed over 
 under some arrangement to the local authority, 
 there would necessarily be a considerable per- 
 centage of the population in each district to 
 
 8
 
 114 ENGLAND AND THE NEW ERA 
 
 whom the local landlords could apply no political 
 pressure. Farmers and labourers who felt their 
 personal freedom in any way curtailed would, 
 frequently at least, have the option of escaping 
 from the authority of the private landowner 
 and obtaining land or work under the public 
 authority. Almost certainly a large part of the 
 land ceded to the State would be managed on 
 a different principle from that remaining in 
 private hands. State or municipal management 
 would, in the nature of the case, be largely 
 directed by two considerations, a financial and 
 a social. Game preserving and fox-hunting 
 would not be considered at all. It is to be 
 feared that a very much more important matter 
 than hunting might be neglected, a thing for 
 which, with all their faults, the landowners of 
 England did care somewhat, I mean the character 
 of English country life, the ordered freedom 
 and beauty of English scenery. We don't want 
 to see wire fences and corrugated iron roofs 
 permanently dividing and disfiguring the small 
 holdings of the future. A capital levy would 
 open the way for small holdings, but it is very 
 important that they should be so formed as to 
 develop and emphasize the characteristic note 
 of our land, and should not appear in any way 
 as excrescences upon its surface. Socially, the 
 pressure of the electorate would compel the 
 State to develop small holdings to meet the land
 
 THE CAPITAL LEVY 115 
 
 hunger of the people. Members of Parliament 
 would come to Westminster pledged to see that 
 the public lands, wherever there were public 
 lands, should be opened up to the people. 
 Financially, the State could give no countenance 
 to anything that decreased production. There 
 would be no room for foxes or pheasants on the 
 State's demesne. 
 
 Now it would be impossible for a life so 
 different in its methods and ideals to exist 
 alongside the old system without having a pro- 
 found influence upon the latter. The peasantry 
 would stand far less in fear of the squire ; they 
 would be far more readily influenced by the 
 thoughts and aims of an outside world now 
 brought so near them. The prestige of the 
 squirearchy would be gone : they would be less 
 envied and less feared ; their ideals would count 
 for less, even in the country, and they would 
 bring less political and social prestige with 
 them when they came to town. Reduced rela- 
 tively in resources, the greater landowners would 
 probably have to give up some of their mansions, 
 which would either fall into decay, be taken over 
 by the public authorities, or be converted into 
 hotels. The smaller landlords would generally 
 have to adopt a reduced style of living, or at 
 least one that would be relatively reduced as 
 compared with that kept up by professional 
 men and public servants living in their neighbour-
 
 116 ENGLAND AND THE NEW ERA 
 
 hood. In the end, they would be driven out 
 by the advance of the new world growing up 
 around them, and their sons and daughters be 
 dispersed over the world, earning their living 
 and acquiring new ideas. 
 
 With the capitalist class a similar evolution 
 would begin. Here, however, there is little fear 
 that State control would vulgarize anything ; 
 the modern industrial town cannot be made any 
 worse than it is. But the State would own 
 many shares in railway and dock companies ; 
 it would own, or at least share largely in the 
 management of thousands of industrial enter- 
 prises. The whole political influence of Labour 
 would be used to insist that its industrial stand- 
 ards should be put into force, wherever the 
 State had sufficient voting power to do so. A 
 standard would be set up and widely applied to 
 which private firms would find it necessary to 
 conform. Once started, too, there would be a 
 strong tendency for the State to take advantage 
 of its stronger credit and greater capital to help 
 those concerns in which it was financially in- 
 terested in their competition with the remainder, 
 by obtaining raw materials on the cheapest 
 terms, by organizing transport, and by securing 
 the services of the most experienced organizers 
 as Civil Servants. The formation of rings and 
 trusts, the victimization of Trade Unionists, and 
 all the more objectionable features of capitalist
 
 THE CAPITAL LEVY 117 
 
 power would be very difficult ; while the capital- 
 ist, like the landowner, would find it impossible 
 to preserve his prestige in a new world having 
 ideals entirely alien to his own. 
 
 Nevertheless, if I were a rich man, I should 
 not oppose Mr. Lawrence's scheme. Again I 
 must insist that it is not a question of whether 
 his plan is agreeable ; the question is : Is it 
 less disagreeable than others ? The situation 
 itself is an intensely disagreeable one, and cannot 
 be dealt with in any pleasant way. At present, 
 the typical rich man who has invested, say, 
 100,000 in war loan, finds himself in this posi- 
 tion : he can, if he likes, receive 5,000 a year 
 in interest, provided he is willing first of all to 
 pay 5,000 yearly in additional income and 
 super tax into the Treasury. On the other 
 hand, he can kick against the pricks and refuse 
 to pay his taxes in which case he won't get 
 his interest, and his war loan will be valueless. 
 If he has bought no war loan, or if he has in- 
 vested an unusually large part of his fortune in 
 it, he will of course pay more or less than he 
 receives, but taking the rich as a class, the 
 instance is true : they put the money into the 
 Treasury first and take it out again afterwards. 
 
 And no one of the three ways so far discussed 
 of dealing with the debt, nor for the matter of 
 that any other that man can devise, will make 
 any real difference in the substantial fact. To
 
 118 ENGLAND AND THE NEW ERA 
 
 continue paying the interest on the debt, how- 
 ever, will mean that British industry will be 
 subjected to a constant handicap in competition, 
 certainly with some, and probably with most 
 other nations. It means, for the rich man, 
 that while the taxes he has to pay will not 
 diminish, the income out of which he has to 
 pay them will almost certainly decline. Repu- 
 diation of the debt means certainly the cessation 
 of all interest on his loans and a shrinkage of 
 all his British investments. It means, too, 
 national anarchy, a revolutionary Government, 
 a considerable chance for him of being shot in 
 a " Red Terror." A levy on capital would not, 
 from a financial point of view, be the worst 
 expedient for the wealthy class as a whole, 
 while it would give them a great assurance of 
 peace and security. 
 
 Mr. Pethick Lawrence is to be praised above 
 all things for looking the problem in the face, 
 and unless some one else does this, and produces 
 a rival scheme equally far-reaching and equally 
 effective, I have little doubt that, with modifi- 
 cations, it will sooner or later be put in force. I 
 think this, because it seems to me that both the 
 power and to some extent even the inclination to 
 resist are likely to be broken down by circum- 
 stances. The dilemma of capitalism is a very 
 real thing ; it is a thing people will be compelled 
 to face sooner or later just as Mr. Lawrence has
 
 THE CAPITAL LEVY 119 
 
 faced it. Until some effective way of dealing 
 with the debt has been found, finance will be a 
 constant source of trouble and disappointment. 
 Taxation will be at an enormous rate, very likely 
 considerably higher than it is to-day, prices of 
 Government stock will be low and everything 
 else high. Yet there will be constant danger 
 of a great deficit, so that every Budget will be 
 an object of terror, both for the possibilities it 
 may bring of new taxation and for its unsteady- 
 ing effect on trade. The debt, in fact, will carry 
 on its own propaganda, forcing the attention of 
 the people to its unwelcome presence, and 
 gradually convincing them of the necessity of 
 finding some method of dealing with it once for 
 all. This necessity will be brought home very 
 vividly to successive Chancellors of the Ex- 
 chequer. I wish I was as certain of the fulfil- 
 ment of other hopes as of my desire to worry 
 the heads of the Treasury. 
 
 The levy on capital thus holds the field ; 
 it is, as yet, without serious rival, and unless 
 one arises the party advocating it will probably 
 ere long get an opportunity to put it in force, 
 with the entire approval of the middle and 
 working classes, and perhaps even with the 
 sullen assent of the rich. Yet I am not certain 
 that it is the best plan possible. I think a 
 method could be devised more just as between 
 the various forms of capital, that would leave
 
 120 ENGLAND AND THE NEW ERA 
 
 the way easier for the reorganization of the 
 country afterwards. 
 
 There is, after all, a perfectly healthy instinct 
 behind the demand for a special tax on war 
 profits. This feeling is not by any means 
 confined to Radicals or Labour men, indeed 
 I suspect it is rather less influential with thinking 
 democrats than with people who generally pay 
 little attention to politics. It is felt to be a 
 shameful thing that any one should make money 
 out of the needs of a nation for which so many 
 thousands have sacrificed their lives. If the 
 confiscation of all war profits could be effectively 
 carried out and yielded an adequate sum to 
 dispose of the debt, most people would jbe 
 very well pleased. The war was not a gain but 
 a loss to the national wealth, and it is really 
 the duty of those who share in that wealth to 
 bear their fair proportion of the loss, certainly 
 not to make any profit. 
 
 But an excess profits tax, exempting many 
 industries, such as farming, which it is well 
 known have made large profits during the war, 
 or even any such tax planned out and levied 
 without favouritism, is a very clumsy expedient. 
 Excess profits in industries above the average 
 in peace time certainly give little indication of 
 the real profiteering due to the war. I have 
 already pointed out the great increment in 
 money value of the land, industrial plant, and
 
 THE CAPITAL LEVY 121 
 
 other visible wealth of the country since 1914. 
 This enhancement of values in things actually 
 in existence before the war has taken place even 
 where serious deterioration owing to wear and tear 
 has reduced the practical usefulness of the things 
 themselves. Machines, which would have had 
 to be sold as scrap metal in better times, have 
 brought more at sales than their original prices 
 when new. In the aggregate, there must be a 
 much greater sum involved in this form of 
 profiteering than in any touched by the excess 
 profits tax. 
 
 Where, as in all forms of capital, property 
 is subject to decay, the matter is less serious, 
 but in the case of rural land values, in view 
 of the fact that prices are almost certain to be 
 permanently raised, if not to their present 
 level, at least to one much higher than that 
 prevailing before the war, the change involves 
 a permanent enrichment of one of the non- 
 productive classes of the community. Mr. Law- 
 rence's scheme would certainly be strengthened 
 by a heavy duty on land values to recover this 
 unearned increment from the landowners, but 
 it would still leave much to be desired from the 
 point of view of even justice between various 
 forms of property. 
 
 For all forms of property have not increased 
 even in money value. When we turn from 
 visible assets to Consols, holdings in municipal
 
 122 ENGLAND AND THE NEW ERA 
 
 debts, debentures and mortgages given by 
 building societies, etc., there must have been 
 a formidable shrinkage in selling values, and with 
 fixed rates of interest a serious falling- off in the 
 purchasing power of incomes. The position of 
 people of small means living on such investments 
 is pitiable in the extreme, and there is little 
 justice in adding to their present troubles a 
 demand for a levy on capital at the same rate 
 as that imposed on an equivalent investment, 
 the selling price and annual profit of which has 
 increased perhaps two- or three-fold. Suppose 
 the case of two people, one of whom had a 
 thousand pounds invested in a house the other 
 the same sum in Consols before the war. At 
 present, the former can easily sell his house 
 for two thousand pounds and, when the Rent 
 Restriction Act expires, get double the old rent 
 for it. Even with the Act in force, he can add 
 forty per cent, to the old rent. The unfortunate 
 owner of Consols, however, cannot get more 
 than six or seven hundred pounds for the stock 
 for which he gave a thousand in 1914, while 
 his income as long as he holds Consuls will be 
 exactly the same in amount and about half 
 what it was in purchasing power. 
 
 Again, the capital levy could extinguish the 
 debt and, coupled with the virtual abolition 
 of armaments, would place the country in a 
 position in which advance would be possible.
 
 THE CAPITAL LEVY 123 
 
 But it would still be very difficult. The reader 
 may have been struck by the strange half-col- 
 lectivist, half-individualist social order I have 
 attempted to describe as emerging after the 
 capital levy. Such a state of things would, 
 under ordinary circumstances, be an advance 
 upon the past. A gradual transition from the 
 old order to the new, " from un-Socialism to 
 Socialism," as the Fabian Society once phrased 
 it, is the method hitherto considered inevitable 
 and even desirable by most Socialists. No 
 wise person wants to see any system, even a bad 
 system, thrown out of gear all at once ; evolu- 
 tion is normally to be preferred to revolution. 
 But the war has already thrown everything out 
 of gear ; it is in itself a revolution. And there 
 is a profound difference between the Socialization 
 imposed, so to speak, on the nation by a capital 
 levy, and that which would have occurred at 
 any stage in the taking over of land or industrial 
 capital in any process of orderly evolution. By 
 such a method capita] would have been acquired 
 only as some more or less definite plan had 
 been formed for its management. Such land 
 would have been nationalized, or taken over by 
 the municipalities as it was wanted for some 
 definite social purpose ; industries would be 
 communized as they became or tended to become 
 monopolies. The State would act as it was 
 ready and only when it was ready to act. But
 
 124 ENGLAND AND THE NEW ERA 
 
 the capital levy would hand over to the nation 
 land or capital, not as the nation wanted it, 
 but very largely according to whether the 
 individual rich man found it to his convenience 
 to pay in kind rather than in money. The result 
 would be a curious hotch-potch of properties 
 scattered about the country, over some of which 
 the ownership of the State would be complete, 
 of others in which the State would be part owner, 
 and of large areas over which it would have no 
 control at all. There would probably be much 
 friction between the two systems, and it might 
 be necessary to round off many State properties 
 by purchasing those near to them in order to 
 make them workable. Unless we had a heavy 
 tax on land values and took powers to purchase 
 land on the basis of its declared value for taxa- 
 tion purposes, the State would certainly be 
 heavily overcharged for what it bought in this 
 way. 
 
 Again, for a long time, we should have 
 numerous survivals of the various class interests 
 which have rendered progress difficult in the 
 past when the nation had fewer other difficulties 
 to face. These would be a very great handi- 
 cap now that we shall have to undertake a great 
 reconstruction, a work of creative adventure on 
 a scale undreamt of in the past. I do not like 
 to think of Young England being hampered in 
 this way ; I should like to give it a fair start off
 
 THE CAPITAL LEVY 125 
 
 in the world. We are now, as it were, in a tangled 
 forest where no light can penetrate. We have 
 to cut our way through the forest to the open 
 air, and I should like to see the road cut as 
 straight and broad as possible. The capital 
 levy is one way out, but it is a slow and cir- 
 cuitous way. If no other is possible, we may 
 have to be content with it, but I think we can 
 do even better. 
 
 The land valuation ordered by Asquith's 
 Government and carried out by Lloyd George 
 was virtually complete when the war broke 
 out. Adding the land of Ireland and allowing 
 for a few incomplete valuations, it showed that 
 the unimproved value of the land is about six 
 thousand millions. Incidentally, the survey did 
 more than that. The gross as well as the net 
 value of each estate was given and recorded, 
 the net value being ascertained after deducting 
 all improvements. The gross value was not 
 published, but it is known by the Department. 
 Thus the value of an immense part of the 
 wealth of the country, buildings, improvements, 
 railways, etc., at pre-war prices can be known. 
 Any higher value put on these things already 
 in existence before 1914 is an increment due 
 to the war, and where anything is sold at a 
 higher price we have a case of profiteering. 
 It is a different matter of course in the case of 
 an improvement, of additional buildings or plant
 
 126 ENGLAND AND THE NEW ERA 
 
 put up during the war itself. Such improve- 
 ments would be quite fairly valued on the basis 
 of the cost to the owner at the time he made 
 them. 
 
 Now I propose that the whole land of the 
 country, with the buildings, railways, and plant 
 upon it as they were in 1914, shall be taken over 
 by the nation at the gross valuation recorded 
 in the books of the Land Valuation Department, 
 and the owners compensated by Government 
 five per cent, stock to the amount of the valua- 
 tion. This transaction should, I think, be carried 
 through at one stroke, in so far as the transfer 
 of title is concerned, and Government bonds for 
 eighty per cent, of the value recorded in the 
 Department's books paid over at once. The 
 remaining twenty per cent, might be held 
 over until it could be ascertained whether any 
 exceptional dilapidations had occurred since the 
 valuation. If there were none, or only deprecia- 
 tion due to fair wear and tear, the balance could 
 then be handed over in bonds with five per cent, 
 interest in cash. 
 
 Numerous cases would, however, arise where 
 properties had changed hands, generally at 
 greatly augmented prices, since the valuation. 
 In these cases, on production of evidence as to 
 the prices paid, the new owners should be 
 compensated in full whatever the amount they 
 had paid, and the difference between the official
 
 THE CAPITAL LEVY 127 
 
 valuation and the new price recovered wherever 
 possible from the original vendors by means 
 of a war profits tax. 
 
 But the adjustments of claims arising out of 
 the transfer should be dealt with at leisure by 
 Commissions appointed for the purpose, failure 
 to come to an agreement being settled by arbi- 
 tration, or, in the last resort, by test cases in 
 the Law Courts. The nation should take posses- 
 sion of the properties at once, and thus inaugurate 
 what would be in reality a new era. 
 
 It is evident that by such a measure, far from 
 getting rid of a debt of eight thousand, we should 
 have increased the national liabilities to almost 
 twenty thousand million pounds. On the other 
 hand, we should have handed over to the State 
 income-yielding assets which, at present values, 
 would greatly exceed the amount of the increase. 
 We should have to face an annual payment for 
 interest of about 1,000,000,000, together with 
 at first very heavy payments for debt redemp- 
 tion. But the transaction once carried through 
 would give us a much freer hand than any other 
 method as yet considered. Further than that, 
 as between the nation and the propertied classes 
 as a whole and also as between different sections 
 of property holders, it would enable us to act with 
 substantial, if not perfect, justice to all claims. 
 Improvements or new buildings added since the 
 valuation was taken should be paid for at cost,
 
 128 ENGLAND AND THE NEW ERA 
 
 on production of evidence as to the amounts paid 
 on account of them. 
 
 To deal with the latter aspect of the matter 
 first. I have already said that it is a sound 
 ethical instinct that convinces so many people 
 that no one should make profit out of the war. 
 I go further. To the nation as a whole the war 
 brought, not a profit, but a gigantic loss. In 
 this common loss all who are able to bear it 
 should share according to their means. The war 
 has brought fortunes to some, while creating a 
 pitiful class of " new poor," struggling on 
 narrower means to cope with inflated prices. 
 The plan proposed at once takes over for the 
 State, which alone has any title to it, the incre- 
 ment in money value due to the war, while 
 refunding to the individual the same amount 
 in money as his estate was worth before it. 
 But, it will be correctly urged, this is no real 
 equivalent, a real equivalent would be an iden- 
 tical amount of purchasing power. A great, 
 and almost certainly to a large extent permanent, 
 increase in prices has taken place meanwhile, 
 and a man who receives 10,000 Government 
 stock for a place worth that sum six years ago 
 will find himself a very much poorer man. I 
 answer that is his share of the common loss. 
 And if he be a person of moderate means, I 
 do not know how we can now arrive at a better 
 measure of it. There is certainly not a greater
 
 THE CAPITAL LEVY 129 
 
 amount of consumable commodities being dis- 
 tributed in the country now than there was 
 before the war, and if we take the quality of 
 the things we get into account, margarine in- 
 stead of butter, inferior bacon, inferior cloth, 
 houses out of repair, etc., there is less, not more, 
 real wealth than there was before the war. 
 The inflation of prices enables some people to 
 escape their share of the loss and hand it on 
 with crushing weight to those whose incomes 
 are inelastic. As between the forms of capital, 
 the burden is borne mainly by holders of mort- 
 gages, debentures, and Consols, the value of 
 which has heavily depreciated, at the same 
 time that that of visible wealth has increased. 
 As between one form of property and another, 
 then, I hold that my proposal tends to equalize 
 matters. As between large holders of any kind 
 of property and moderate or small fortunes in 
 the same, it does nothing to graduate the burden 
 according to means. That is a matter that 
 must be dealt with in another way.* 
 
 From the point of view of the nation as a 
 whole, this scheme goes far to make an end 
 of the shareholding and rent-receiving classes 
 and to substitute for a complex of non-producers 
 of various sorts one uniform class of fund- 
 holders. The dead hand of the mere shareholder 
 or the landlord is deprived of all direct control 
 * See Appendix. 
 9
 
 130 ENGLAND AND THE NEW ERA 
 
 over industry and enterprise, the whole of which 
 can now be placed in the hands of the actual 
 producers, the workmen, the managers, and the 
 technical and clerical staffs. With these the 
 State could henceforth negotiate directly. The 
 political influence of the parasitic classes would 
 be reduced to their voting power, and would no 
 longer be a serious hindrance to the nation 
 in any scheme it proposed to undertake. 
 
 The great majority of unearned incomes coming 
 directly under the eyes of the authorities, who 
 as payers of interest on the debt would know 
 exactly how much money every one received, 
 and would have the value of each estate as a 
 means of assessing succession duties, it would 
 become possible to distribute the national 
 burden as fairly between the millionaires and 
 the smaller holders of stock as the original 
 transfer had divided it between different forms 
 of property. It would be easy to put in force 
 any scheme of graduation decided upon, while 
 the work of collection would be simplicity itself. 
 It would only be needful to deduct from every 
 man's interest the amount of his income tax 
 every half year and send him the balance. 
 
 Meantime, there would be an immense annual 
 sum, probably about 1,000,000,000, to pay 
 in interest, and a heavy sinking fund should 
 be provided. As a means of paying these, we 
 should have the earning power of the nation in
 
 THE CAPITAL LEVY 131 
 
 possession of practically the whole of its land 
 and capital. The country would take over a 
 great going concern, subject to a mortgage of, 
 say, 20,000,000,000. Whether such a debt would 
 be a crushing burden or not would largely 
 depend upon the energy and initiative of the 
 Young England which has already been taking 
 shape beneath the crust of the old. Are the 
 forces of Co-operation and Trades Unionism, 
 representing as they certainly do a higher ethical 
 conception than that of capitalism, capable of 
 forming a new national economy as or more 
 efficient ? Is the Socialist propaganda, true 
 certainly from the standpoint of the idealist, 
 true also from that of the practical man ? Has 
 it been reinforced with a new elasticity and 
 freedom by the teachings of the Guildsmen ? 
 If this plan were adopted, Young England would 
 have committed itself to a great adventure, 
 and it would be for the young manhood and 
 womanhood of the nation to prove themselves 
 worthy of it. 
 
 But though all would depend upon the energy 
 of the young nation, it would, I think, start 
 upon its task under more favourable conditions 
 than under any other scheme hitherto proposed. 
 It should be noticed that this method of nation- 
 alization is in effect a levy on capital. Land and 
 capital are to be taken over, not at their present- 
 day money value, but mainly at prices for which
 
 132 ENGLAND AND THE NEW ERA 
 
 the same things could have been sold before 
 the war. Now, though there may be reductions, 
 and even very great reductions on present prices, 
 when world production has been restored to 
 its old level, I think it must be a very long time 
 before things will be cheap again. Something 
 must be done to reduce the vast amount of paper 
 currency that has depreciated the purchasing 
 power of money all over the world. Here it 
 will be necessary to make the pound note, actu- 
 ally as well as theoretically, convertible into 
 gold. This may involve the calling in of a 
 great amount of paper money, but even when 
 enough has been withdrawn from circulation 
 and the pound is again worth its nominal value 
 even in America, there will certainly be a much 
 larger amount of currency in use than there was 
 before the war. There will be strong competition 
 for raw materials throughout the world, and a 
 brisk demand for building materials, clothes, 
 and machinery. In effect, I think the world, 
 when it does at last settle down again, will find 
 that there has been a permanent all-round ad- 
 vance in prices, probably to not less than double 
 those prevailing before the war. Now the 
 burden imposed on industry by the interest on 
 the debt is not necessarily defined by the amount 
 of money paid. The real burden is in the pur- 
 chasing power, the share in the total wealth 
 production of the nation which the money
 
 THE CAPITAL LEVY 133 
 
 enables the fundholders to command. The 
 higher prices are, the smaller share the fund- 
 holders get ; when prices fall their share is 
 automatically increased. It is the general rise 
 in the cost of living that has pressed so hard 
 on the old fundholders ; they get so much 
 smaller a share of the commodities produced 
 by the nation for their money. If, then, pro- 
 duction under the new system can be maintained 
 at the level of the old, the real toll on industry 
 will be nothing like so heavy as would appear 
 from its money value. I think it would be 
 much less burdensome than that exacted by the 
 receivers of rents and dividends before the 
 war. 
 
 Out of the profits of industry and by taxa- 
 tion, however, the money would have to be paid, 
 and there is no doubt at all that it could be 
 paid. When the returns from industry were 
 poor, a graduated income tax, while giving to 
 the smaller fundholders every penny of their 
 interest, would enable us to deduct a larger 
 proportion than usual from the dividend of the 
 wealthy man ; when the earnings of the nation 
 were good, the rate of taxation might be reduced ; 
 but at least this way it would be possible to 
 avoid in this country the alternative of repudia- 
 tion, which seems inevitable in many lands, 
 and achieve our revolution without anarchy 
 and bloodshed.
 
 134 ENGLAND AND THE NEW ERA 
 
 And the nation in facing the gigantic task 
 before it would be able to put into the work 
 its full productive energy. It is only the para- 
 sitic classes that would disappear from the scene, 
 retiring to whatever places they preferred to 
 spend their income in the way most pleasing to 
 them. The real pith and sinew of the nation 
 would remain. Organizing experience and ability 
 would still be wanted, probably for many years 
 it would command a very high price, the skilled 
 chemist and engineer would be more in demand 
 than ever ; no man or woman who knew how to 
 do anything useful and who wanted to do it 
 need fear lack of employment ; while all could 
 be assured that their efforts were not going to 
 increase any one's dividends, but that the wealth 
 they created was being used for the benefit for 
 all alike. The progress of science and invention 
 would be all in their favour, rendering it easier 
 to increase production, and shortening the time 
 needed to deliver the country from its burden 
 of debt. All would depend upon the common 
 enthusiasm, the spirit of the new patriotism 
 aroused, on the solidarity of the workers whether 
 with hand or brain. 
 
 At the same time I recognize the difficulty of 
 the task. England's industrial position will be 
 hard to maintain. Old markets have been 
 lost during the war and new ones may be hard 
 to find. We depend mainly on foreign raw
 
 THE CAPITAL LEVY 135 
 
 materials and these must for long be dear. 
 I have not space in this book to deal with the 
 developments that I think will be necessary in 
 the industry of the country, and can only here 
 refer the reader to the fifth chapter in Britain 
 after the Peace for an account of the conditions 
 which seem to me likely to prevail, and the 
 way in which we could deal with them. I 
 suspect, however, that if the will of the people 
 is strong enough, ways will not be hard to find, 
 either to secure for England this new start in 
 life, or to make the best use of it after.
 
 CHAPTER VI 
 EMPIRE IN THE NEW ERA 
 
 WHATEVER method we may adopt to deal with 
 our difficulties at home, other nations will have 
 as great, often far greater, troubles to face. 
 England will not only be changed herself, but 
 she will be part of a changed world, in which 
 she will have to find her place. The dominant 
 force in the world that has been blown to pieces 
 by the explosion of 1914 can best be defined 
 as Capitalist Imperialism. We had, in the 
 first place, a rapidly expanding world commerce, 
 based on a greatly increased power of production 
 through machinery. Immense capitals came 
 largely under the ownership and still more 
 largely under the control of a new rich class, 
 who were continually seeking further invest- 
 ments at home and abroad for the surplus wealth 
 they gained by manufactures and trade. With 
 this the mechanism of commerce and invest- 
 ment was steadily developed and improved. The 
 strong-box of the miser became a thing of the 
 past, and stockbrokers and bankers would find 
 for his modern representatives much more pro- 
 
 136
 
 EMPIRE IN THE NEW ERA 137 
 
 fitable and often quite as safe investments for 
 their money. Nevertheless, accumulation tended 
 always to outrun the possible means of disposing 
 of it ; there was generally money seeking in- 
 vestment, either in speculative enterprises or in 
 some " gilt-edged " security. 
 
 Here was one of the many ways in which 
 capitalism was drawn into politics. The spirit 
 of aggrandisement was still strong in the world's 
 rulers, while the instinct of self-defence impelled 
 each nation to attempt to out-distance its neigh- 
 bours in strength of armament. This state of 
 things gave food to the military spirit. There 
 is a natural tendency in any profession to 
 magnify its own importance. This is equally 
 the case when the further extension of a pro- 
 fession would be in reality a good, a bad, or an 
 indifferent thing. The merchant complains that 
 the Government neglects trade interests, the 
 scientist demands endowment of research, the 
 painter complains that the public cares nothing 
 for art, and Swinburne lamented the popular 
 ignorance of the minor Elizabethan dramatists 1 
 It is not, then, due to any special vice on his 
 part that the soldier throughout the ages has 
 always tried to magnify his office, but he has 
 far more favourable conditions for doing so than 
 any one else, except perhaps the priest. He can 
 always persuade the people that the " country 
 is in danger," and does so all the more easily
 
 138 ENGLAND AND THE NEW ERA 
 
 because he himself firmly believes it. He has 
 nearly always succeeded in getting a very large 
 part, generally by far the larger part, of the 
 public revenue spent upon the Army. 
 
 In a previous book * I tried to sketch the pro- 
 gress of militarism from primitive savagery 
 to modern times. Briefly, militarism generally 
 tends to take all the money the taxpayers of 
 the nation can possibly be persuaded or com- 
 pelled to pay in time of peace, and to borrow 
 all that the people will lend into the bargain. 
 Thus the Continental States, even before the 
 war, were steadily increasing their national 
 debts. Strangely enough, this state of things 
 fitted well into the capitalist system. Com- 
 mercialism, whatever its other faults, should 
 normally be anti-militarist ; and for the greater 
 part of last century the trading classes were 
 notably pacific. Their influence was directed 
 towards Free Trade, peace and good will among 
 nations ; Cobden and Bright were their most 
 representative statesmen. Later came a marked 
 change, and it is worth while studying the reason. 
 Peace and invention had developed an enormous 
 power of production ; the wealth of the business 
 community increased to such an extent that 
 capital accumulated in the hands of " big 
 business " men faster than it could find invest- 
 ment. Nor did men desire only investments 
 * Britain after the Peace,
 
 EMPIRE IN THE NEW ERA 139 
 
 in commercial enterprise. It was often attrac- 
 tive to accept security, or what was thought 
 to be such, even at a low rate of interest. In 
 this way widows could be provided for, and men 
 could leave the world confident that their families 
 were secure against the fear of poverty. Here 
 militarism and capitalism met on common ground. 
 Militarism on the Continent and in " backward " 
 countries was continually making deficits, giving 
 occasion for new loans on the security of the 
 taxes, a very attractive state of things for 
 financial magnets on the look-out for " gilt- 
 edged " investments for surplus funds. Mili- 
 tarism, again, brought into existence powerful 
 armament firms apparently almost as safe and 
 much more profitable than Government loans. 
 Far apart as they were at one time, capitalism 
 and military imperialism had come to dovetail 
 into one another admirably. True, in England, 
 things were not quite so pleasant as abroad. 
 Militarism meant here a high income tax ; 
 on the Continent, the whole and not only part 
 of the burden could be placed on the working 
 classes. 
 
 But of course all depended upon whether the 
 securities created were in reality " gilt-edged." 
 People put their money into such investments 
 because they were confident it would be safe, 
 and that safety depended upon there being no 
 really big war. The state of things I have
 
 140 ENGLAND AND THE NEW ERA 
 
 been describing has passed away, there is now 
 no gilt-edged security and, on the Continent, 
 no surplus capital either. The holders of Govern- 
 ment stock, if they have any choice in the matter 
 at all, will have to choose between losing their 
 money altogether or paying it themselves in 
 crushing taxation. After all, it is dangerous 
 to go into partnership with the Army. 
 
 The Army, too, was the only means by which 
 the Imperialist States could be kept together, 
 and the weaker nations controlled. After 1870, 
 the armed peace seems to have effectually 
 smothered the nationalist movement in Europe. 
 In Germany, Italy, Hungary, the nations had, 
 indeed, secured independence or at least self- 
 government ; but, except in the Balkans, there 
 was little advance elsewhere. Indeed, there 
 seemed so little hope of it that revolutionary 
 nationalism almost died out in despair. One 
 of the most striking things about the history of 
 Europe during the fifty years before Sedan is 
 the undaunted spirit of revolt against alien rule. 
 To this day, Byron is accorded a far higher 
 rank among the poets by foreigners than by 
 his own countrymen, largely because of the thrill 
 his attack on the Holy Alliance and his death 
 at Missolonghi sent through Europe a century 
 ago. And of the most famous names of the 
 mid-century, how many are connected with 
 this very movement for national freedom 1
 
 EMPIRE IN THE NEW ERA 141 
 
 Mazzini, Garibaldi, Kossuth, these men were 
 world-famous in their own day, and have taken 
 their place among the great memories of history. 
 Certainly no one has become equally famous 
 for similar services in our day. The new military 
 Empires were far too strong to give any rebellion 
 hope of success. National aspirations were 
 crushed beneath their weight, and the movement 
 for liberty seemed almost to have died out. 
 
 That the desire for national liberty was not 
 dead is now clear. Far from dying, it has 
 spread to the East. In Europe the iron cage 
 is broken, and a whole aviary of nations has 
 escaped into the light of freedom. They are 
 indulging in strange gyrations at present, pecking 
 and screaming at one another, rather than 
 settling down to build nests or gather food for 
 themselves ; yet I have no doubt that this 
 result of the war at least is a great potential gain 
 for humanity. Some day they must settle 
 down and find their places in the strange new 
 world in which they have to live. 
 
 While, where the Imperial system has already 
 been broken down by defeat, the nations are 
 now free, there seems to be no likelihood at 
 all that the movement will stop with them. 
 The Allies at the outset of the war proclaimed 
 that they were fighting for the freedom of 
 nationalities, and thus aroused hopes, the far- 
 reaching effect of which they probably never
 
 142 ENGLAND AND THE NEW ERA 
 
 realized. Phrases they meant to apply to nations 
 under the dominion of their enemies were inevit- 
 ably universalized by the peoples of all lands. 
 They thus roused aspirations throughout the 
 world which their own action in defeating the 
 Central Powers and reducing themselves to 
 virtual bankruptcy will ere long render it diffi- 
 cult, if not impossible, to resist. I see no definite 
 boundaries that can now be placed to the progress 
 of national independence, without the Empire 
 or inside of it. That is why I have called this 
 book England and the New Era. I do not 
 really believe that our fellow-subjects in Scotland 
 and Wales will wish to separate from us and 
 set up as independent States, but I wish to 
 make no assumptions whatever, and face the 
 possibility of England standing entirely alone. 
 In one way, at least, it is highly desirable she 
 should do so. Nationality is really an admirable, 
 a delightful thing, which it is desirable to en- 
 courage in every way possible. It would be a 
 misfortune if the vigorous nationality of Scotland, 
 with its genius for song, its flavour of the heather 
 and the hills, even perhaps its taste for theological 
 argument, were merged in that of England ; 
 as an Englishman, I should naturally think it 
 even worse if the opposite result came about 
 and we all became Scotsmen. Neither is at all 
 likely, though I fear there can be no question 
 that English national feeling has decayed or
 
 EMPIRE IN THE NEW ERA 143 
 
 been merged in the Imperialist fever far more 
 than that of Scotland. If, then, which I do 
 not doubt, some form of federal union, of Great 
 Britain at least, will continue, it should be a 
 union leaving the most absolute freedom of 
 self-development to all the three nations of 
 Great Britain, on terms, not " planned " in 
 Whitehall, but worked out by free agreement 
 between the peoples and capable of modification 
 from time to time. I should have said the same 
 only a few years ago about Ireland, but the mad 
 attempt to impose conscription upon that coun- 
 try has rendered this very doubtful. That 
 measure ruined the Nationalist Party in Ireland 
 and handed over the people to Sinn Fein. 
 Whether we now obtain the good will of Sinn 
 Fein to any form of union seems open to doubt. 
 For I am convinced of this, that the war 
 has killed the principle of AUTHORITY in politics. 
 Nations will, for the future, have to depend in 
 dealing with others, not on authority but on 
 INFLUENCE. Authority, however wisely or 
 rightly employed, is impossible without power. 
 Now it is only too likely that Europe will take 
 a long time in settling down into peace. The 
 Continent may sink into a horrible reproduction 
 of South America. If it does, however, there 
 will be no revival of European industry, no 
 restoration of European credit. Europe will 
 be formidable only to itself, and Asia and
 
 144 ENGLAND AND THE NEW ERA 
 
 Africa will be freed from European inter- 
 ference. As I pointed out in my first chapter, 
 one main prop of our Empire overseas was 
 that we really were necessary to the lands we 
 ruled, and this necessity had its roots in the 
 condition of the rest of Europe. The physical 
 force of the age was almost entirely in the hands 
 of the Europeans ; they made nearly all the 
 ships and the guns. Europe was the only 
 aggressive continent ; were it not for the great 
 nations of Europe, the rest of the world 
 could have lived its own life without interference 
 from any one. Greedy as she might be for her- 
 self, England did stand between Asia and 
 America, on the one hand, and Europe on the 
 other ; we stood in the way alike of Philip II, 
 of Louis XIV, of Napoleon, of the Tsar, and 
 of the Kaiser, and substituted for theirs a rule 
 which was reasonably tolerant and just. So 
 long, however, as Europe remained overwhelm- 
 ingly strong, there was no possibility of in- 
 dependence for any nation that did not know 
 how to make heavy artillery, just as there was 
 no possibility of independence for Poland under 
 the drei Kaiserbund. 
 
 Again, the state of things prevailing before 
 the war made Imperialism a practical necessity 
 for us. Deeply as we have wronged Ireland, we 
 are not without excuse for having insisted upon 
 keeping her under the rule of our kings. It is
 
 EMPIRE IN THE NEW ERA 145 
 
 a most unfortunate thing, not that Ireland is 
 Roman Catholic and Great Britain Protestant 
 that matters little but that whichever side 
 they took at the Reformation the two islands 
 did not both take the same. Henry VIII 
 might detest Lutheran ideas, but when he 
 denied the supremacy of the Pope, even if 
 the Church of England had never gone any 
 further than that, he effectually committed 
 England to the Protestant side during the 
 whole period of the religious wars. Whatever 
 a theologian may think, the schism would have 
 been less vital politically, if he had denied the 
 Trinity. As, however, the Irish people still 
 remained Papists, Ireland was from that day 
 to the time of the Revolution, in sympathy at 
 least, opposed to England whenever England 
 was in danger. Ireland was from her geographi- 
 cal position a perpetual menace on our flank, 
 and many of the worst things we did there to 
 maintain our position were just what other 
 Governments would have done in similar cir- 
 cumstances. Religious bigotry and afterwards 
 commercial jealousy certainly made matters 
 worse, but it is only fair to remember that a 
 free Ireland in the seventeenth century would 
 have been a hostile Ireland and a very dangerous 
 addition to our enemies. 
 
 Again, our Empire in more distant lands was 
 largely necessary to us if we were to keep the 
 
 10
 
 146 ENGLAND AND THE NEW ERA 
 
 trade routes of the world open to our commerce. 
 Our rivals there were the Latin countries, the 
 most narrowly Protectionist of all lands. Old 
 Spain and modern France are alike in their 
 exclusiveness, the persistency with which they 
 endeavour to monopolize the trade of depen- 
 dencies for themselves. 
 
 But this bond of Empire, the necessity of 
 control to the Mother Country, will also 
 disappear with the decay of European Im- 
 perialism. Ireland in herself could hardly be a 
 menace to us ; it is only as a base for the armies 
 and navies of a more powerful State that she 
 could really do us harm. Nor is it at all likely 
 that the European States will be able to pursue 
 a colonizing mission for the future. It seems 
 to me, indeed, very doubtful whether France 
 and Italy will be able to maintain their hold 
 on the empires they have already, or the mandates 
 they are acquiring under the Peace Treaty. 
 
 And this because from them, as from us, has 
 gone, not merely the need for Empire, but the 
 power to maintain it. Europe needs peace, but 
 she needs also credit. Now it would be mid- 
 summer madness to lend to any of the European 
 nations without a definite guarantee that the 
 money is not going to be lost in another great 
 war. If interest is to be paid on any new loan 
 three things are essential : the loan must take 
 precedence of any debts already incurred on
 
 EMPIRE IN THE NEW ERA 147 
 
 the Continent ; the money lent must be employed 
 in restoring productive industries out of which 
 it may be possible to pay the interest on it ; 
 and the States must put it finally out of their 
 power to fight again by virtually complete 
 disarmament.* A loan from America, or one 
 guaranteed by the leading nations of the world, 
 and except from America and on such a guaran- 
 tee it is not at all likely such a loan could be 
 raised, would involve a very heavy importation 
 of foodstuffs, raw materials, and machinery into 
 the devastated and impoverished areas of the 
 Continent. The need of these countries is a 
 steady flow of imports ; they cannot export 
 goods to pay interest upon their loans, until 
 they have first been supplied with food on which 
 to live and the materials needed for production. 
 This being the case, it would obviously be absurd 
 to permit of the reimposition of the elaborate 
 tariffs on foodstuffs which have now been 
 broken down by the war. Indeed, it is an 
 absurdity to impose a tariff on any imports 
 when the nation is being driven by dire need 
 to borrow money in order to obtain them. 
 Disarmament on a drastic scale and a great 
 
 * I would say total disarmament, but have left room for 
 contributions from each State towards an international 
 police force, if necessary. Whether this will be necessary 
 or not depends to my mind largely upon whether Japan 
 will also consent to disarm.
 
 148 ENGLAND AND THE NEW ERA 
 
 extension of Free Trade are essential conditions 
 of any restoration of prosperity in Europe. 
 To insist upon this condition would be no undue 
 interference with the self-determination of 
 nations, but a necessary precedent to success 
 for those entrusted with raising the money 
 needed to give the world a fresh start. 
 
 Possibly, Europe may reject help on such 
 terms, though I think the pressure of events 
 will drive it to accept them. In the former 
 case, European civilization will simply collapse. 
 On the other hand, if the nations, recognizing 
 the inevitable, dispense with their armies and 
 their tariffs, Europe will recover fairly rapidly. 
 In either case, however, the danger of aggression 
 from Europe will be gone neither we nor the 
 rest of the Empire will need great armaments 
 any more. And, as far as we are concerned, 
 there will be the most urgent necessity for a 
 reduction. The Naval, Army, and Air Service 
 estimates for this year amount to 230,000,000, 
 a monstrous burden in view of the serious 
 financial position in which we stand even with- 
 out them. It is quite possible that this charge, 
 amounting to much more than the previous 
 income of the State, may render any restoration 
 of prosperity hopeless, whatever else we do. 
 Much of it, however, is for pensions and charges 
 that could not be got rid of, even with total 
 disarmament, for many years. Each man
 
 EMPIRE IN THE NEW ERA 149 
 
 enlisted has a contract with the State ; we are 
 not at liberty to dismiss him until his term of 
 service is over. What we are entitled to do is 
 to stop recruiting. We are doing the very 
 opposite. Not only does Mr. Churchill propose 
 to waste three millions of money in reclothing 
 the army in scarlet, but urgent recruiting posters 
 are displayed on the walls, bearing witness to 
 the activity of militarism. Here are some headings 
 taken from the posters in Scotland Yard : 
 
 You can become a Skilled Tradesman by joining the 
 
 Army. 
 Wanted, Smart Men for the Tank Corps. Let Professor 
 
 Tank teach you a trade. 
 Join the R.A.M.C. 
 Experience Counts. A few years with the Ordnance 
 
 teaches a man to do anything. 
 Welsh Guards. Smart Men wanted. 
 Smart Men wanted for the Grenadier Guards. 
 Smart Men wanted for the Coldstream Guards. 
 Are you fond of Horses ? Then join the Cavalry. 
 Become a Skilled Artisan by joining the Royal Engineers. 
 Urgently wanted ! Men are required immediately for 
 
 the R.E. Signal Service. 
 
 These, with a poster giving the rates of 
 Army pay, complete the list. It will be seen 
 that an attempt is being made to persuade 
 possible recruits that Army training will be a 
 help to them in getting better positions after. 
 The first poster, for instance, gives a picture of 
 two men engaged in shoeing a horse, and I 
 suppose is intended to imply that the ex- Army
 
 150 ENGLAND AND THE NEW ERA 
 
 man can settle down easily into the village 
 blacksmith. " Are you fond of horses ? " 
 appeals to the sporting instinct, and gives a 
 vigorous picture of tent-pegging. Obviously, 
 the fighting side of soldiering is not just at 
 present felt to be the most attractive form of 
 appeal. It would appear that the Coalition 
 Government is not convinced that the war 
 was one to end war, and is not concerned 
 about the paper shortage. 
 
 The policy of the Coalition, or rather its 
 acts, for it is questionable whether it has a policy, 
 is depriving the nation of a valuable moral force 
 by maintaining a useless and dangerous physical 
 force. To us was open up to the time of the 
 armistice, and perhaps still could be recovered, 
 a position in the new era in which only influence 
 will count at least equivalent to that we held 
 in the passing world of authority. We could 
 have led the nations on the road towards 
 disarmament and industrial liberty. Damage, 
 perhaps irreparable, has been done to our posi- 
 tion by the acts of Mr. Lloyd George's Govern- 
 ment. The continuance of the blockade after 
 the armistice has gained for us a name, at least 
 in Russia, as bad as that which Germany earned 
 with us by the atrocities of the war. The 
 acute but undisciplined intellect of Mr. Lloyd 
 George is open to receive in quick succession the 
 most contradictory impressions, vaguely humani-
 
 EMPIRE IN THE NEW ERA 151 
 
 tarian to-day, foolishly vindictive to-morrow. 
 His mind is a battlefield in which things good 
 and evil, vestiges from the past and confused 
 glimerings of the future, meet in indecisive 
 conflict. From outside a medley of voices, 
 M. Clemenceau and President Wilson, profiteers 
 and Trades Unionists, Krassin and Mr. Bottomley, 
 militarists and pacifists, encourage now one now 
 the other combatant and add to the confusion. 
 To make the matter worse, every idea for the 
 moment in the ascendant rushes to his lips 
 and conveys to the world outside the conflict 
 within. Mr. George's policy cannot, therefore, 
 be reduced to any intelligible principle even by 
 his own countrymen, and naturally it is still 
 less comprehensible to the outside world. Every 
 day he is in power the good name of England, 
 both for stability of purpose and for justice, 
 must necessarily sink lower in the esteem of 
 the world, until only her traditional repute 
 for hypocrisy remains. 
 
 A sound policy for England in the new age 
 must break definitely and finally with the past ; 
 it must be conceived and carried out by states- 
 men who have a clear conception of the vast 
 chasm between the old world and the new and 
 some vision of the place possible to England in 
 the future state of things. No one who has 
 had any responsibility for the past can be trusted 
 in shaping the future ; it must be done by
 
 152 ENGLAND AND THE NEW ERA 
 
 entirely new men and women with an entirely 
 new outlook on life. 
 
 For, apart from the difficulty of inducing 
 people who have absorbed into their being the 
 ideas of a perishing age to accept those of the 
 New Era, there is little hope of winning for them, 
 however changed they may be, the confidence 
 of foreign nations. The very fact of a complete 
 change of personnel, the final sweeping into 
 the background of all persons who had anything 
 to do with the diplomacy that led to the war 
 or with the actions of Government during and 
 after it, would be of enormous value to British 
 policy. Such a Government coming into power 
 would be in itself an evidence sufficiently 
 pointed of a break with the past to ensure belief 
 in our good faith. But if an entirely new Govern- 
 ment were returned to power, such a policy as 
 I am about to suggest would, I think, be wel- 
 comed far and wide. Nay, more. So great 
 has been the faith in the sanity of the English 
 nation in the past, so often has the returning 
 love of liberty and fair play swept away from 
 our country the passions of war, so soon have 
 the Cannings succeeded the Castlereaghs, that 
 I believe the very announcement of such a 
 policy would recover for us in a moment the 
 moral prestige of our nation, and drive away 
 the memory of our misdeeds. 
 
 1. The Government should announce that
 
 EMPIRE IN THE NEW ERA 153 
 
 we will definitely give up all recruiting for the 
 Army, Navy, and Air forces, and put a stop to 
 all building of war vessels or manufacture of 
 war materials, being content for the present 
 with the men already in the forces. 
 
 2. That this policy will be continued until 
 it becomes evident that the rest of the world 
 refuses to follow our lead, or until a League of 
 Nations, including Russia and the Central Powers, 
 has decided on the contingent we ought to 
 contribute towards the police of the world. 
 
 3. That when this is done we will maintain 
 such armaments only as the League of Nations 
 shall from time to time judge to be necessary. 
 
 4. That we will abandon as far as the Imperial 
 Government is concerned all attempts at com- 
 mercial preference within the Empire, under- 
 taking to give no preference ourselves, to main- 
 tain our Free Trade system, and to compel no 
 Crown Colony to grant preferential import or 
 export duties. 
 
 5. That we shall be willing to share in 
 guaranteeing an international loan, the proceeds 
 of which shall be devoted to restoring devastated 
 areas and supplying food and raw materials 
 to populations ruined by the war in any countries 
 willing to accept the same policy as ours with 
 regard to armaments and trade. Also that we 
 are willing to cancel all debts to us incurred by 
 our Allies during the war on the same condition.
 
 154 ENGLAND AND THE NEW ERA 
 
 6. That we shall make no treaty with any 
 other Power, except on the condition that it is 
 immediately communicated to the League of 
 Nations and registered with it. With regard 
 to existing engagements, we shall request the 
 Powers with whom they have been made to 
 agree to similar registration, and if we fail to 
 obtain their consent shall refuse to be bound by 
 them any longer. 
 
 I am convinced that such proposals made by 
 a new Government elected with a strong and 
 clear mandate would make a most profound 
 impression throughout the world. I think they 
 would determine the whole future policy of the 
 world itself. The peoples of the world have had 
 enough of the horrors of war, whatever poli- 
 ticians of the old order may think, and when 
 once such a programme has been proposed by 
 a leading nation and published everywhere, 
 it will arouse at least in America, Western 
 Europe, and Russia a widespread enthusiasm. 
 Only in Poland, the Balkans, and other lands 
 intoxicated for the moment with their new 
 freedom and anxious to start on a career of 
 Imperialism and glory in their turn, would any 
 rival enthusiasm have a chance to resist the 
 attraction of the new prospect of peace opened 
 up to the nations, and even in these lands there 
 must be many millions weary of bloodshed and 
 famine. We should send through the world
 
 EMPIRE IN THE NEW ERA 155 
 
 a thrill like that created by the publication of 
 President Wilson's fourteen points. Had the 
 President stood firmly by his famous points, 
 nothing could have resisted him. He and not 
 M. Clemenceau would have dictated the terms 
 of peace, and the United States to-day would 
 be universally recognized as the leading nation 
 of the world. This is a tragedy of history, 
 but it leaves the way open to us ; are we prepared 
 to take advantage of the opportunity ? 
 
 In the first place, the programme here outlined 
 offers to the nations of Europe an immense 
 practical relief. By agreeing to disarmament, 
 they not only relieve their finances of one of 
 their greatest burdens, but they are put into a 
 position to borrow the money desperately wanted 
 to enable them to restart their industries. 
 Though our own financial position is so bad that 
 we could not lend the money needed ourselves, 
 our name would still be a very good one as a 
 collateral security to guarantee an international 
 loan. Indeed, if at the same time in which the 
 offer was made, we not only steadily reduced 
 our own armaments towards vanishing point, 
 but by the policy outlined in the last chapter, 
 we put our national finance on a sound footing, 
 our guarantee would be a perfectly adequate 
 one. American capital would freely accept it 
 as such, and a large international loan could 
 be effected with ease. I do not suppose for a
 
 156 ENGLAND AND THE NEW ERA 
 
 moment that our European Allies will ever 
 pay the debts they owe us, but a frank with- 
 drawal of all claims would relieve them from an 
 embarrassing position and improve their credit. 
 It would be an entirely wise and statesman- 
 like thing for us to realize this. It is hardly 
 too much to say that such action on our part 
 would save European civilization. 
 
 Almost certainly, also, it would remove all 
 danger of the militarist spirit taking hold of 
 America, a terrible possibility if it is allowed 
 to survive in Europe. It is European navalism 
 and militarism that render the Monroe Doctrine 
 necessary, and impose on the United States the 
 duty, in the last resort, of defending any part 
 of the American continent against attacks from 
 the Old World. What is wanted at the present 
 moment is for some strong nation, and we are 
 in by far the best position to do it, to cut itself 
 off formally and publicly from the ways of the 
 old world, and initiate what should be the 
 governing principles of the new. If we do this, 
 future ages will forget all the hypocrisies of the 
 secret treaties, all the brutalities of the blockade, 
 all the cynicism of the peace treaty, and pro- 
 nounce that we did truly fight to obtain freedom 
 for the world. It will be more than we deserve, 
 perhaps, but then it is not the things, however 
 bad, which have been that men remember, but 
 those that remain.
 
 EMPIRE IN THE NEW ERA 157 
 
 It is clear that the new era is going to be marked 
 off from the last by an extension of nationalism 
 and a decay of Imperialism. Something like 
 this, however, it is well to remember, has hap- 
 pened in the world before. From the ruins of 
 the Roman Empire arose a medley of feudal 
 States. For many hundreds of years Europe 
 produced almost nothing that has been of any 
 interest to later ages, while the young nations 
 occupied themselves mainly in a chaos of use- 
 less and destructive wars. Out of this anarchy 
 rose, first the great States and then the Empires. 
 Even Imperialism, then, would seem to have 
 something to say for itself, at least as against 
 feudal anarchy. But the fact is, that Imperialism, 
 defective as it is, was after all an imperfect 
 expression of a true thing. There was a half 
 truth embodied in the Hapsburg Empire, just 
 as there is a half truth expressed in the national- 
 ism of Austria, Hungary, Roumania, Bohemia, 
 and Serbia. In like manner our own Impe- 
 rialists are not hopelessly wrong ; Sinn Fein is 
 not a final expression of natural law, though 
 it has by far the best of the argument as against 
 British Imperialism. 
 
 The truth is that Imperialism is an im- 
 perfect recognition of, an illogical attempt 
 to recognize the interdependence of nations. 
 The German Zollverein, and the federal bond 
 of the United States owe their value mainly to
 
 the fact that they have permitted free com- 
 munication and free trade between the members 
 composing these great unions. There was an 
 essential need for union among the petty 
 nationalities composing the Austrian Empire, 
 which perhaps more than anything else secured 
 its survival for so many centuries. Now that the 
 nations have broken apart, a most preposterous 
 system of tariffs, embargoes, and restrictions, 
 not only between the various independent States, 
 but positively between the provinces of Austria 
 proper, is being set up, and is largely responsible 
 for the starvation of Vienna and other places. 
 This is particularism run mad ; it is a state of 
 things which might sooner or later raise a demand 
 for the recall of the Hapsburgs as the lesser 
 evil of the two. But there is no need for such 
 a counsel of despair. Obviously the advantage 
 of a Customs Union is that it increases the area 
 within which trade is free. If this is so, the 
 more widely you extend the area the better. 
 There is no logical limit ; the full gain, imper- 
 fectly obtained by Imperialism, can be fully 
 and finally secured only by an internationalism 
 that knows no boundaries. Imperialism was in 
 this and other things a rickety makeshift erected 
 to escape the intolerable results of narrow 
 nationalism. As it has broken down now, it is 
 time to erect a permanent structure large enough 
 to fulfil its function adequately. Towards this
 
 EMPIRE IN THE NEW ERA 159 
 
 object the steady influence of British diplomacy 
 should be directed. We should endeavour to 
 get the League of Nations to take up the 
 subject, and whatever disputes arise within 
 the Empire we should refer to the League as 
 the final and only legitimate authority in such 
 matters. Our foreign policy, while fully recog- 
 nizing the truth in nationality, to the extent 
 of leaving it to the self-determination of every 
 nation to decide for itself whether it will remain 
 in the Empire or not, should nevertheless be 
 directed to secure the full recognition of that 
 other truth, the interdependence of all nations, 
 hitherto clumsily realized in part by Impe- 
 rialism. We should stand no longer for the 
 dreams of Mr. Kipling, but for the vision of 
 Kant. 
 
 If our international policy be conducted on 
 these lines, if we boldly cut ourselves adrift 
 from the old and accept the new as a condition 
 of things not deplorable at all, but full of 
 inspiration to us and to the world, we have 
 enough prestige for political capacity left and 
 what Mr. Lloyd George has lost for us we shall 
 soon recover to secure for us a place higher 
 than ever in the councils of the nations. We 
 shall make a great start, and will turn the eyes 
 of the world towards ourselves for other guid- 
 ance. And wise guidance the new world will 
 require, as perhaps never before. While we
 
 160 ENGLAND AND THE NEW ERA 
 
 welcome the new nationalism, we should not 
 ignore its crudity. Of course, the German idea 
 of imposing national " kultur " on other nations 
 by force was itself a stupid barbarism, the 
 result of political inexperience. There is no 
 such thing as the highest culture in the world. 
 Where are we, compared to the Germans in music 
 or to the Italians in art ? Where is Germany, 
 compared to France in matters of taste or in 
 clarity of thought and expression ? Every 
 civilization is incomplete, and it is only through 
 the cross fertilization of many cultures that 
 the progress of humanity can be secured, by 
 free intercourse and toleration among the 
 nations. We have had hitherto an intercourse 
 of ideas among European lands, which, imperfect 
 as it was, kept Europe progressive ; we are 
 about to include the East in the comity of 
 nations to the immense profit of East and 
 West alike. But while there is no nation that 
 can fairly claim to be ahead of all the others, 
 there is, nevertheless, such a thing as seniority 
 in cultures, and, in language at least, seniority 
 is a very important matter. Languages are 
 not to be judged only, or even mainly, by their 
 potential powers of expression, but by the 
 positive value of the things already expressed 
 in them. The late Dean Church lamented that 
 Bacon had not written the Novum Organum 
 in English, and any one who knows Bacon's
 
 EMPIRE IN THE NEW ERA 161 
 
 wonderful command of our language must 
 lament the loss involved in having to read it in 
 some other man's translation of Bacon's Latin. 
 Nevertheless, Bacon was right ; English was 
 not then a recognized language, or one in which 
 it was any use for a great thinker to appeal to 
 the philosophic world. Hardly any foreigner 
 deliberately learnt English, and to have written 
 the book in his own tongue would have been 
 to insure neglect. Descartes could write in 
 French shortly after ; but French had even 
 then a great international prestige, and the 
 Discourse on Method was soon known throughout 
 Europe. A century later English also acquired 
 this standing, and it would have been pedantry 
 for an Englishman to write in Latin. 
 
 There are thousands of languages in the world, 
 and I think, on the whole, it is desirable that 
 all or many of them should survive in local 
 usage, but it is obviously impossible that any con- 
 siderable number can secure an international 
 standing. From among them a few must 
 always stand out by virtue either of the extent, 
 variety, and perfection of form of their litera- 
 tures, or of their wider diffusion over the world. 
 Whatever his mother tongue may be, it is ab- 
 solutely essential for an educated man to know 
 one or other of these leading languages, a 
 language which not only contains a great 
 literature of its own, but one into which has 
 
 11
 
 162 ENGLAND AND THE NEW ERA 
 
 been translated all that matters most in the 
 higher thought of other lands. Only in this 
 way is it possible to gain access to the civili- 
 zation of the world ; only perhaps through such 
 a language can any one speak to the world at 
 all. 
 
 It was certainly absurd enough of the Germans 
 to try to compel the Poles to speak German. 
 The attempt failed, as it deserved to fail, and 
 is only too likely to lead to neglect of the 
 German language and literature in free 
 Poland. Yet will any impartial person contend 
 that German is not a more useful language to 
 know than Polish, both from a cultural and 
 a practical standpoint ? Similarly, while it 
 is a good and interesting thing that Welsh, 
 Gaelic, and Erse survive in the British Islands, 
 is it possible to conceive of any one who only 
 knew one or other of these becoming an educated 
 man in any full sense of the word ? The Celtic 
 revival has been an inspiration, not least seen 
 perhaps in its influence on English poetry, 
 and no doubt it has produced equally fine 
 work in the Celtic languages themselves. But 
 poetry alone cannot give an adequate culture ; 
 men require access to books of science, philo- 
 sophy, politics, and criticism. In order that 
 these may be translated into or produced in 
 adequate numbers in any language, it must be 
 the common speech of many millions of people.
 
 EMPIRE IN THE NEW ERA 163 
 
 Alongside of a general movement to revive 
 or preserve many less-known languages, it is 
 not surprising to find attempts being made to 
 provide a universal one. After all, the Tower 
 of Babel is an uncomfortable place to live in, 
 as its builders found out. And no doubt, if 
 the extant literature of the world could be 
 translated in all its beauty into an expressive 
 tongue, however artificial, Volapuk or Esperanto 
 might become the language of the world. But 
 this is impossible. You cannot translate great 
 poetry ; it remains for ever a thing that can 
 only be felt in the exact form in which the poet 
 himself has written it. It would take centuries 
 before a great literature could be created, even 
 if such a thing would ever be possible in a 
 fixed and artificial language. That being so, 
 those languages that possess a long literary 
 tradition have a great advantage over others, 
 whether natural or artificial. An adequate 
 literature should express the thoughts and 
 history of a great nation, as they have been 
 modified and developed during centuries, a 
 great and unbroken literary tradition. You 
 can no more produce such a thing to order 
 than you can grow an oak forest in a day. 
 
 Thus, in the coming rivalry of nations, such 
 countries as France and Britain start with a 
 great advantage. Probably no modern litera- 
 tures are quite so adequate from all points of
 
 164 ENGLAND AND THE NEW ERA 
 
 view as these. Spanish thought was checked 
 too soon, there can hardly be enough of 
 modernity about Spanish literature ; Germany 
 and Russia entered the field too late ; the 
 literary tradition of Italy, glorious in the Middle 
 Ages and vigorous to-day, had its middle period 
 of weakness and decline. If the civilizations, 
 therefore, of France and Britain continue 
 creative and vigorous, preserving and extending 
 the traditions inherited from the past, they are 
 bound to retain a leading place among the 
 nations and to be far more influential than most 
 others in moulding the thought of the world. 
 
 On the Continent, and perhaps in Latin 
 America, French will probably retain its 
 prestige as the most international of languages, 
 but elsewhere English has a great advantage. 
 It is already the mother tongue of nations cover- 
 ing a larger area than that on which any other 
 is spoken, and ere long it may be the native 
 speech of a larger number of people. And 
 even in many lands throughout the Empire and 
 beyond it where English will never be the 
 native speech, there are a larger number of 
 people who speak it as a secondary language 
 than any other. English has got a tremendous 
 start of its rivals in non-European countries. 
 Not only to the English-speaking peoples, but 
 to Indians and Africans English is the key to 
 Western culture.
 
 EMPIRE IN THE NEW ERA 165 
 
 This means that whatever may become of 
 the Empire of Authority, we have, more than 
 other nations, the opportunity to establish an 
 Empire of Influence. The little States of Europe 
 little that is to say as compared with America, 
 Russia, China, and India can never again, I 
 am convinced, rule the world. Their military 
 power is for the time broken by the war, and if, 
 unhappily, militarism ever revives in the world, 
 its force will certainly be concentrated in larger 
 lands. As the European nations superseded 
 the city States, like Venice and Florence, so 
 in their turn must they give way in any competi- 
 tion based on force to nationalities on a larger 
 scale than themselves. Even we, crippled like 
 the rest by debt, will find it impossible to resist 
 the urge towards nationality and the virtual 
 if not avowed independence of all the Dominions. 
 The new world will be one in which " outside 
 authority will enter only after the precedence of 
 inside authority." But on those terms an 
 immense influence is open to us in the world 
 of to-morrow. Let us accept the new condition 
 of things. That way our true Empire lies. 
 Leadership among the nations can yet be seized 
 by the people that first propounds and boldly 
 pursues a policy of healing for the ills of the 
 world. The influence thus acquired can be re- 
 tained by a nation that clearly realizes the 
 character of this New Era, that develops in
 
 166 ENGLAND AND THE NEW ERA 
 
 itself the most worthy civilization and leaves 
 it free to exert its own power as a model for the 
 rest. The more righteous we are and the less 
 we talk to others about it, the better on the 
 whole for us. But leadership in the future, 
 in a world where only size and population 
 count, will not be possible for us ; if we are 
 to retain our place, it will be necessary to depend 
 on other things than these. Our aim, therefore, 
 if we want England to continue great among 
 the nations, in a world in which mere size will 
 count for little, must be to seek for Influence 
 and not Authority. And in such a world, 
 if we make ourselves worthy of the position, 
 our chance is great. Only we must be worthy ; 
 it is more important that the world should be 
 influenced by the worthiest than that it should 
 be influenced by England. We should not even 
 wish it to be otherwise. Let us then earn 
 our place. There will be no Rome in the future 
 world ; let us endeavour to be its Athens.
 
 CHAPTER VII 
 THE FOUNDATIONS OF THE NEW ERA 
 
 THE political programme advocated in the two 
 last chapters implies a revolution in our policy, 
 domestic and foreign. It is, I think, absolutely 
 essential that we should carry out such a revolu- 
 tion, if the war is not to prove for us, victorious 
 though we have been, a disastrous turning-point 
 in the fortunes of our country. But though 
 I am hopeful as to the result, I am not unaware 
 of the tremendous difficulties in the way. Nay 
 more, I am convinced that we shall find as we 
 go along difficulties which at the moment no 
 one has foreseen. These are often the most 
 formidable of all. My plan implies a form of 
 Socialism. Substantially the nation is to-day 
 individualist : if the programme outlined in 
 the fifth chapter be adopted, it will become in 
 substance Socialist. Now I have never doubted 
 that there were real difficulties in the way of 
 Socialism, only I don't know what they are. 
 In a great enterprise it is not the difficulties that 
 are foreseen that count for most ; the real trouble 
 comes from the unforeseen. A difficulty that 
 
 167
 
 168 ENGLAND AND THE NEW ERA 
 
 is expected frequently turns out to be no diffi- 
 culty at all when we get to grips with it. Solvitur 
 ambulando ; a working arrangement turns out 
 to be quite feasible, and the once formidable 
 threat to progress is passed by almost unnoticed 
 when we come to it. If there is anything that 
 advancing Socialism cannot do, that Socialism 
 will not do. Social forms are never logical ; 
 " survivals " of bygone forms continue for ages 
 after the type of society has been changed beyond 
 recognition, no matter how incongruous they 
 may seem. If the fortress cannot be stormed, 
 it is " contained," and the advancing army 
 rushes forward to occupy more accessible terri- 
 tory. 
 
 The fiercest battle when it comes will very 
 likely be waged round some citadel of the very 
 existence of which the combatants are unaware 
 at the outset of the struggle. We may have 
 to compromise where we do not expect it ; we 
 may find all things smooth where we looked 
 for the greatest difficulty. Certainly the diffi- 
 culties in working out the change will be many ; 
 but, for the moment, I think the greatest is in 
 rousing the confidence and the spirit of the 
 nation to set about the task. 
 
 " By far the greatest obstacle," says Bacon, 
 " to the advancement of the sciences, and the 
 undertaking of any new attempt or department, 
 is to be found in men's despair and the idea of
 
 FOUNDATIONS OF THE NEW ERA 169 
 
 impossibility." He then points out again the 
 novelty of the method he proposes to employ, 
 and derives from the failure of the past a hope 
 for the future. " We will give," he says, " a 
 most potent reason for hope deduced from the 
 errors of the past, and the ways still unattempted ; 
 for well was an ill-governed State thus reproved, 
 ' That which is worst with regard to the past 
 should appear most consolatory for the future ; 
 for if you had done all that your duty commanded, 
 and your affairs proceeded no better, you could 
 not even hope for their improvement ; but since 
 their unhappy situation is not owing to the 
 force of circumstances, but to your own errors, 
 you have hope that by banishing or correcting 
 the latter you can produce a great change for 
 the better in the former.' ' 
 
 If we can arouse in the English people Bacon's 
 magnificent confidence and resolution, we shall 
 have won more than half the battle. The 
 position of the Socialist in England to-day is 
 very like that in which Bacon found himself. 
 Scholasticism was in truth breaking down ; 
 men were indeed examining nature ; they were 
 in actual fact making discoveries. The work 
 of individuals was, however, little co-ordinated, 
 and there was no adequate faith in the world 
 in the great possibilities of science. It was 
 he that had the clearest vision of what might 
 be done ; of the great good to mankind that
 
 170 ENGLAND AND THE NEW ERA 
 
 would come from the faithful and first-hand 
 study of the works of nature. 
 
 Whatever may be faulty in the details of 
 his method, we now know that Bacon was right ; 
 his was a true vision. As he inspired men with 
 enthusiasm for that systematic study of natural 
 science which has had such vast results, so it 
 is our business to arouse a similar enthusiasm 
 for a new political science. And as he did this 
 by attacking the methods of the schoolmen, 
 and substituting the direct interrogation of 
 nature for barren dialectics, so we have to 
 convince people of the true basis of scientific 
 politics ; that Society must rest on co-operation, 
 national and international, and not on antagonism 
 and competition. Incidentally, we are in a 
 position to apply his illustration of the ill-governed 
 State, to point to the world to-day and to say 
 to the advocates of the old methods : " Si 
 monumentum requiris drcumspice ! " For the 
 real reason that we have the tremendous task 
 thrust upon us of recasting the whole system of 
 politics and giving to the nation a new social 
 order is that the old one has committed hara- 
 kiri ; the thing could have been brought about 
 in a more orderly and a less hurried manner if 
 there had been no war. But, as I have endea- 
 voured to show in previous chapters, the old 
 system has become unworkable. You cannot 
 restore credit without security from war and with-
 
 FOUNDATIONS OF THE NEW ERA 171 
 
 out such an expropriation of capital as amounts 
 to a revolution. The most pessimistic view as 
 to the possibility of making Socialism efficient 
 leaves it at least a less hopeless experiment 
 than that of reviving Imperialist Capitalism. 
 And it is not so much of an experiment as it 
 would have been even a few years, much less 
 a century ago. Within the body of the old 
 system the germs of the new have been steadily 
 growing for sixty years at least, and with greatly 
 increased speed during the last decade. This 
 is an essential condition for the founding of a 
 new order. The principle of a society may be 
 simple ; the organization which carries that 
 principle into effect must always be complex. 
 In order that the innumerable functions necessary 
 to the life of a great nation may work freely, 
 society must be provided with numberless organs, 
 voluntary or official, each entrusted with its 
 special department of social life. In a demo- 
 cratic society these organs work directly for the 
 benefit of the people, and are under the control 
 of the people. It is almost, if not quite essential 
 that they should originate with the people them- 
 selves by a process of evolution ; if given to or 
 imposed on the people from without, they will 
 almost certainly require to be controlled by the 
 external agency that has created them, and 
 ultimately, if not by the founders, at least by 
 their successors, in the interests of those who
 
 172 ENGLAND AND THE NEW ERA 
 
 control them. This is notoriously the case with 
 our public schools and colleges. Sometimes, 
 though not often, perhaps, the people may learn 
 to appreciate and control things given to them, 
 but they are far more likely to do so when they 
 have created the new departure themselves to 
 serve some want which they feel strongly, 
 and have kept the whole management in their 
 hands from the beginning. In this way is 
 evolved a democratic public service ; men learn 
 public business by doing it ; public spirit is 
 a product of public activities. 
 
 Now no matter what enthusiasm we could 
 have aroused for a new social order fifty or even 
 far fewer years ago, such a thing would, I think, 
 have been impossible, in England at least. If, 
 by any great and destructive war Capitalism 
 had come to a standstill then, there was no 
 adequate organization to take its place. 
 Fortunately for our country's future, that did 
 not happen, and the last two generations have 
 seen the material growth and increasing confidence 
 of two great democratic institutions, Industrial 
 Co-operation and Trades Unionism. Their 
 progress has followed, of course, the laws that 
 govern the growth of every human institution. 
 Beginning with small things, compelled to fix 
 their immediate attention on modest and strictly 
 utilitarian ends, they have become stronger and 
 stronger, more and more enterprising and aggres-
 
 FOUNDATIONS OF THE NEW ERA 173 
 
 sive, decade by decade, until to-day they con- 
 stitute one of the leading forces in the State, 
 and are becoming more and more conscious of 
 their mission to destroy the present state of 
 things and substitute a new. 
 
 Meanwhile, not only has their membership 
 increased, but their spheres of action have been 
 steadily enlarged. No sooner does the theorist 
 on Trades Unionism or Co-operation come to 
 a conclusion satisfactory to himself as to their 
 functions in the world of to-day, than straight- 
 way one or other of them undertakes something 
 quite new and forces him to revise his estimate. 
 I remember an old friend of mine explaining 
 that Co-operation was well fitted for distribution, 
 but it had entirely failed in production. I 
 think at the time he was quite justified in the 
 face of the facts as they were. Within a few 
 years, however, the great flour mill at Dunston 
 and the factories at Pelaw arose within a few 
 miles on either side of the place where this was 
 said, and soon proved that, though co-operative 
 production might be a failure under Robert 
 Owen, and among a proletariat unaccustomed to 
 business organization, it is a totally different 
 thing to a great established movement with 
 plenty of capital and officered by men having 
 years of business experience. The moral was, 
 not that successful co-operative production is 
 impossible, but that the true order of things
 
 174 ENGLAND AND THE NEW ERA 
 
 is to start with distribution in the first 
 place. 
 
 Similarly with Trades Unionism. However 
 modest its beginnings, Trades Unionism neces- 
 sarily implies a certain limitation on the owner- 
 ship of his factory by the employer. The union 
 imposes conditions on the working of the factory, 
 the extent of which depends on the power of 
 the union itself and the amount of trouble it 
 could cause the employer in the event of a dispute. 
 The growth of Trades Unionism, then, implies 
 the gradual building up of a dual control in 
 industry, a thing which, though implicit in 
 the very idea of Unionism, is hardly realized 
 either by employers or men until in practice it 
 has extended very far indeed. Hence, the " re- 
 cognition " of a union by the employer is a 
 very important thing ; it means the capitula- 
 tion of individualism, or the right of the 
 employer to do exactly as he likes in his own 
 factory. 
 
 Employers are quite right in saying there 
 has been a growing interference on the part 
 of the organized workers in the conduct of 
 factories and workshops. Where they are wrong 
 is in thinking this a bad thing. It means the 
 growing control of organized workmen over 
 the conditions of their working lives, and involves 
 the training, through experience, of numbers 
 of the working classes secretaries, shop stewards,
 
 FOUNDATIONS OF THE NEW ERA 175 
 
 check weighmen, etc. in the administration of 
 affairs. 
 
 But it is only slowly that Labour comes to aim 
 consciously at complete control of industry, at 
 doing without the capitalist employer altogether, 
 nor do I think that the ultimate recognition of 
 this aim is altogether or even mainly due to 
 Socialist teaching. People are generally more 
 or less content with what can't be helped, however 
 unpleasant it may be. As soon, however, as 
 they think improvement possible, the things 
 that before were submitted to, perhaps almost 
 without complaint, rapidly become intolerable. 
 I am speaking here of the mass of men, not 
 of exceptional spirits. Among the masses, there 
 is a general tendency to acquiesce in things that 
 seem firmly established ; it needs a good deal 
 of imagination to see very far ahead. 
 
 But the masses soon realize the value of a 
 new power. When it is possible to effect rapid 
 change for the better, to do something that 
 will have an immediate effect for good, they 
 can be, as they have shown many times in the 
 world's history, as revolutionary as the seers. 
 The realization of their own power revealed to 
 them, not by the preaching of an agitator, but 
 by an actual victory, at once changes their 
 attitude. Their aims enlarge ; their demands 
 stiffen ; a new spirit take possession of them, 
 and they become capable of heroic things. They,
 
 176 ENGLAND AND THE NEW ERA 
 
 too, dream dreams, dreams now shortly to become 
 true. Things which once seemed impossible 
 are demanded and obtained. Possunt quia posse 
 videntur. Now that Trade Unionism really is 
 strong, now that it has created a great and 
 intricate organism, capable of doing things that 
 would have been impossible in former years, 
 the rank and file of Unionism is feeling the 
 momentum of its new strength, and is listening 
 with attentive ears even to the Guild Socialist 
 and the Syndicalist. 
 
 Though it is hard for the idealist to see it, 
 the sluggishness of the masses in the days of 
 their weakness is really an evidence of the under- 
 lying sanity of the race. If the last century 
 had been a mere history, as it might have been, 
 of futile strikes and industrial discord, nothing 
 but misery could have come of it all. After 
 all, a right implies a power, and even the people 
 have no right to control industry until they have 
 developed the ability to do it. There was a 
 kernel of truth in the doctrine of divine right. 
 As long as the only effective and orderly govern- 
 ment was government by a king, as long as the 
 political instincts and public spirit of the people 
 were undeveloped, despotism was unavoidable ; 
 and that being so, we can hardly blame the despot 
 for performing the function no one else could 
 fulfil. The progress of democracy not only 
 depends, but looked at philosophically ought
 
 FOUNDATIONS OF THE NEW ERA 177 
 
 to depend, upon the progress of knowledge and 
 organization among the people themselves. 
 
 With the working classes much more widely, 
 and through the possibilities of the shop stewards' 
 movement more intricately organized than in 
 the past, a new state of things has arisen. Experi- 
 ence of various sorts has been gained, possibilities 
 of still further rapid extension have been revealed, 
 and a foundation laid to which we may hopefully 
 entrust the industry of the nation. Capitalism 
 has proved itself incapable of preserving the 
 peace of the world, on which, in the last resort, 
 the efficiency even of its own system depended. 
 We turn to the workers, not merely because we 
 will, but because we must. 
 
 But it is not by any means only among the 
 Trades Unionists that the foundations for a 
 great democratic experiment have been laid. 
 No movement made more rapid progress during 
 the last twenty years than that for the emancipa- 
 tion of women. I am not here looking at the 
 matter from the point of view of right but of 
 power. From the former there is much to regret 
 in the resistance so long made to the movement 
 by politicians brought up in the Victorian 
 tradition ; but I think the very resistance it 
 encountered was of great value to the women's 
 movement. It compelled the women to organize ; 
 it made them depend on themselves ; it developed 
 in innumerable ways their political consciousness. 
 
 12
 
 178 ENGLAND AND THE NEW ERA 
 
 A Belgian friend of mine, a refugee from the 
 German invasion, was astonished at the political 
 capacity of British women ; he told me he had 
 never experienced anything like it. This capacity 
 was largely the result of actual experience in 
 political agitation, in the give and take of platform 
 propaganda, and in the organization of great 
 political societies. We have now hundreds of 
 women who have far wider knowledge of politics 
 and of social conditions generally than almost 
 any woman had twenty years ago. They are 
 standing now as candidates at local and Par- 
 liamentary elections, working in positions of 
 authority, and not merely on suffrance ; in the 
 work of parties, they are elaborating their own 
 programmes, bringing to the political stock of 
 the nation a fresh outlook on old problems and 
 the addition of many new ones. 
 
 I see, therefore, every reason to hope that we 
 can safely trust the people with the great task 
 of reconstruction that lies before them. The 
 organizations on which the work will fall are not 
 so strong as they would have been with another 
 generation of peace. The people were not 
 consulted, however, as to the time at which 
 their rulers intended to run the ship of State 
 aground, and whatever comes of it we must do 
 our best to get her off again with the appliances 
 at hand. And it is an enormous advantage to 
 have made a good start with organization,
 
 FOUNDATIONS OF THE NEW ERA 179 
 
 it is far easier to extend and develop a thing 
 already in existence than to bring it into being. 
 After all, the Women's, Trade Unionist, Co- 
 operative, and Socialist movements had all very 
 small beginnings and had a long struggle before 
 they exerted any appreciable influence. During 
 the last ten years they have come on with a rush, 
 and there is no reason to doubt their capacity 
 to expand rapidly enough, given the opportunity 
 and the need, to bear the weight of a new social 
 and political order. 
 
 And if we can arouse a great enthusiasm, a 
 renascence of the spirit of the nation, such as 
 occasionally in the history of the world has 
 lifted humanity far above the level of common 
 achievement, we shall do much more than save 
 the State. We ought to aim at more than merely 
 " carrying on," more than on making a new 
 system work. It seems natural that in times of 
 great change and whatever happens the time 
 before us must be one of rapid change the human 
 spirit, seeing new opportunities opening before 
 it, should rise to new heights of creative power. 
 Young England should " hitch its wagon to a 
 star." There will be, I think, after the terrible 
 pressure of the time is over, a great renascence 
 of this kind in the newly emancipated lands. 
 After all, the gain of political freedom in Russia 
 and Germany, of national freedom in Poland 
 and among the peoples of Austria should bring
 
 180 ENGLAND AND THE NEW ERA 
 
 such an inspiration to them. In this renascence 
 we should not be left behind ; we shall have 
 as much new work to do as any of them. Our 
 art has become divorced from life, mainly I 
 think because it has been given no really important 
 work to do. It has been looked upon as an 
 agreeable trifle ; the amusement of an aesthetic 
 sect. Grumblingly perhaps, and with a sense 
 of helplessness and defeat, our artists have gener- 
 ally accepted the position, and in spite of technical 
 advance, creative power has declined in conse- 
 quence. But if the profits of industry become 
 the assets of the State and its internal control 
 be handed to those who actually do the work, 
 a new situation will be created. The actual 
 makers should be far more ready to make inter- 
 esting things, things with an idea and design 
 in them, than those who are only ordering them 
 to be made for some distant market. When 
 the nation owns the land on which houses have 
 to be built, and the women who have to spend 
 most of their time in them have a direct say 
 in how they are built, there will be a revolt 
 against the stereotyped house of the day, certainly 
 from a utilitarian and I hope from an aesthetic 
 point of view. There will be a place for the 
 designer, not merely of the rich man's mansion, 
 but of the average woman's cottage, a social 
 function recognized and appreciated for the 
 artist. I may be too sanguine, but on the whole
 
 FOUNDATIONS OF THE NEW ERA 181 
 
 I am not afraid of what the people will do with 
 their chance when they get it ; I am anxious 
 to see them begin. 
 
 And getting the chance is really the crux of 
 the matter. The political question comes first : 
 How are we to carry out any political programme 
 near enough to the one outlined in previous 
 chapters to give the people their chance ? It 
 must not be imagined that this is just a question 
 of putting one Government out and another in. 
 It is not even a question of putting a Liberal 
 or Labour Government or a Liberal-Labour 
 Coalition in office with a large majority over 
 the present Coalitionists. We need not only 
 a large majority both in the House and in the 
 country, but those majorities must be composed 
 of men and women who have a clear idea of 
 what they are doing. I detest the Coalition 
 and all its works as much as any one, and am 
 very glad the by-elections are going so steadily 
 against them. The sooner their power is broken 
 the better, provided it is broken completely and 
 for ever, but it would be useless to substitute for 
 them a Liberal-Labour Coalition or any other 
 Government that had not broken irrevocably 
 with the past. Nor would even such a Govern- 
 ment be any use to us, if elected on a sort of 
 snap vote as the result of general disgust with 
 the methods of the Coalition. Not merely a large 
 but an overwhelming majority of the electors
 
 182 ENGLAND AND THE NEW ERA 
 
 must understand that the advent of a new 
 Government means a revolution, however peace- 
 fully carried out. The main outlines of the 
 proposed policy, foreign and domestic, must 
 be thoroughly discussed beforehand, and all 
 that is implied by them clearly explained. The 
 only kind of Government, in short, that can 
 usefully replace the Coalition must be unassailably 
 strong in the unity of its own purpose, in the 
 support of the House of Commons, and of the 
 immense majority of the voters. 
 
 This is so, because at the very outset of its 
 career the new Government will have to cut 
 itself finally and completely adrift from the old 
 policy both at home and abroad. Unlike this 
 present, or any, Coalition, it will need to have a 
 programme binding on and fully believed in by 
 all the members of the Cabinet. As soon as a 
 Bill is introduced to take over the land and build- 
 ings of the country on the terms proposed in 
 this book, a howl of indignation will go up 
 from all the vested interests affected. A Coali- 
 tion of Liberals and Labour men could not survive 
 such an outburst for a moment ; the Cabinet 
 would be split, the Parliamentary majority would 
 be split, thousands of the very electors who 
 had helped to return the Government would 
 clamour for its destruction. We should have 
 the old Coalition back in power again almost 
 immediately and the progressive movement would
 
 FOUNDATIONS OF THE NEW ERA 183 
 
 have received a set back that might never be 
 recovered. No, it is no use trying to obtain 
 office on the demerits of the Coalition ; we 
 must get in on merits of our own. 
 
 Now the by-elections afford pretty good evi- 
 dence that the Government is unpopular. Only 
 in a three-cornered fight has its candidate any 
 reasonable chance of success. This is all to the 
 good ; for it would be lamentable if the electors 
 admired this Government after the experience 
 of the last two years. Probably, if the Labour 
 and Liberal Parties could come to an agreement 
 to divide up the constituencies between them, 
 to select a candidate from one party or the other 
 for every one of them and vote solidly together, 
 they could win an election to-day. A Labour- 
 Free-Liberal Coalition could, I have little doubt, 
 displace that of Mr. Lloyd George. We have 
 therefore many homilies from impatient pro- 
 gressives about the folly of the split vote, about 
 the wisdom of coming to an " arrangement " 
 between the two " progressive forces," and so 
 on. Fortunately, such an arrangement is im- 
 possible, however many good people in either 
 party may desire it. In the first place, this 
 would imply an agreement at headquarters as 
 to the general lines on which the country should 
 be mapped out. Now, except to organizations 
 simply hungering for office and nothing else, this 
 is almost impossible, and even with mere office-
 
 184 ENGLAND AND THE NEW ERA 
 
 seekers it is very difficult. The relative strength 
 of the Free Liberal and Labour votes in the 
 country is unknown, and certainly neither party 
 would admit to the other that it was markedly 
 inferior in strength. Neither side would be 
 willing to accord the leadership of the House in 
 case of defeat, or the premiership in that of 
 victory to its rival. Let the Free Liberal put 
 the question fairly to himself: Would Mr. 
 Asquith take office under the premiership of 
 Mr. Ramsay MacDonald, or even of Mr. Hen- 
 derson ? Is he willing to support the sort of 
 Budget Mr. Philip Snowden would be likely 
 to bring in ? Or again, I ask the progressive 
 Trades Unionist whether he thinks the Labour 
 Party, holding, as in the case supposed it would 
 do, hundreds of seats in the House, would allow 
 the Liberals to hold the chief offices in the 
 Cabinet and determine the policy of the 
 country ? 
 
 Nor, if headquarters could come to a friendly 
 agreement, is there the least chance of it being 
 observed. The local people have their own 
 say in the matter, and they will certainly not 
 agree to be suppressed in this way. Wherever 
 the local leaders thought they had the slightest 
 chance of winning, unauthorized candidatures 
 would spring up everywhere. The state of 
 affairs would be worse and not better. Instead 
 of clean three-cornered fights, we should have
 
 FOUNDATIONS OF THE NEW ERA 185 
 
 bad blood between the parties, and accusations 
 of bad faith flung right and left. 
 
 It is best to face the question frankly and to 
 realize that it is not one merely of destroying a 
 bad policy, but of substituting a good one for it. 
 Before we have any right to take office, we must 
 know who are to have the offices and exactly 
 what we want them to do. Now there is no 
 agreement on either point between the two 
 parties. Not even the Alternative Vote or 
 Proportional Representation would help us. As 
 long as we have not a definite and very large 
 majority in the House, supported by an equally 
 strong majority in the country, firmly determined 
 to carry through a revolutionary programme 
 in home and foreign affairs, we had much better 
 let Mr. Lloyd George make a mess of things 
 than take his place and make as bad a one 
 ourselves. 
 
 For the radical fault of the Coalition Govern- 
 ment is just this : it does not consist of men 
 who have made a sincere unflinching study 
 of the appalling problem before the nation and 
 the world. It has a Coalition mind, which 1 
 think is a polite phrase for no mind at all. 
 Amiable but futile Liberals, amiable but loose- 
 thinking Labour men support it as loyally 
 as furious Jingoes and reactionary Tories. On 
 the whole, I think the best men in its huge 
 majority are the more independent-minded
 
 186 ENGLAND AND THE NEW ERA 
 
 Conservatives, who have the courage of their 
 convictions, and have several times interposed 
 with valuable criticisms. A Government such 
 as could arise out of an agreement between 
 Free Liberals and Labour would necessarily 
 have the same infirmity of purpose, however 
 well intentioned it might be. At best it would 
 be like putting an amiable child in charge of 
 complicated machinery now in the hands of a 
 mischievous one ; what is wanted is some one 
 who understands the machine. 
 
 We must not allow our desire for the defeat 
 of the Coalition to bring us back to the old game 
 of " ins " and " outs." I remember a talk I 
 had long ago with the late Mr. Bruce Glasier 
 which made a strong impression upon me. 
 It was just after Sir Henry Campbell-Bannerman 
 had been chosen leader of the Liberal Opposi- 
 tion in the House of Commons. I criticized 
 the Liberals' choice upon the ground that Sir 
 Henry had been a colourless politician, who 
 could give no definite lead to the party, and 
 would not be likely to announce any programme 
 either in home or foreign politics that would 
 arouse the nation. Mr. Glasier pointed out 
 that that was exactly his best qualification. 
 By standing as a " Liberal without adjectives," 
 Sir Henry left himself free to take up any 
 question that should arise and deal with it on 
 Liberal principles, while on the other hand he
 
 FOUNDATIONS OF THE NEW ERA 187 
 
 was not compelled to take up subjects in any 
 particular order. He would have a free hand 
 to do as he liked within the broad sphere covered 
 by Liberal principles. Similarly, he said, a 
 Socialist leader should stand for Socialist prin- 
 ciples, not specially emphasizing any particular 
 application of them, but leaving himself and his 
 party free to deal with any matter of urgency 
 on general Socialist lines. I saw that Mr. 
 Glasier was right, and ever since have had a 
 profound respect for the clear political insight 
 which underlay the fine idealism of his character. 
 I am still convinced that this is a sound posi- 
 tion in ordinary times. But these are not ordi- 
 nary times. The problems of the debt and of the 
 restoration of peace conditions in the world are 
 thrust in front of us, and cannot be deferred for 
 any other. Interest on the debt becomes due 
 at stated intervals and must be met either out 
 of taxation or by new borrowing. Deficits cannot 
 be avoided as long as the debt remains at anything 
 like its present figure, and can only be provided 
 for by imposts which bring up the whole problem 
 anew every Budget. We must decide what our 
 policy is to be towards countries in revolution, 
 towards the reconstruction of Central Europe, 
 towards the revision of the Peace Treaty, towards 
 Ireland, India, and Egypt, and the infant 
 League of Nations. In times of rapid change, 
 events and not men rule politics, at least to the
 
 188 ENGLAND AND THE NEW ERA 
 
 extent of deciding what subjects must be dealt 
 with and what can be left alone. It is not 
 doubtful, it is as certain as anything can be, 
 that the success or failure of the next Liberal 
 or Labour Government will depend upon 
 whether, from the moment it takes office, it 
 is prepared to cut British politics free from 
 militarism abroad and capitalism at home, and 
 to make the schism so deep that it will be out 
 of the power of any subsequent Government 
 to close it again. No difficulty that we are 
 likely to meet in the reconstruction of society 
 after the war is likely to be greater than this 
 first one. The moment the Government's plans 
 are disclosed the tempest of opposition will 
 burst forth. All the skill in vituperation acquired 
 by pressmen by practising on the Germans 
 and the Bolsheviks will be let loose ; agencies 
 will stump the country trying every art to rouse 
 the people against the Ministry. The agita- 
 tion against the Budget of 1909 is but a faint 
 foreshadowing of what we are sure to have, 
 with Mr. Lloyd George this time on the side of 
 the enemy. 
 
 For this reason, if for no other, it is necessary 
 to arouse the storm before or during and not 
 after the elections. The country must be pre- 
 pared beforehand for what it has to expect, 
 and the election itself must constitute a complete 
 defeat, not only of the Coalition Government,
 
 FOUNDATIONS OF THE NEW ERA 189 
 
 but of all the interests it represents. Only this 
 way can we be certain that the country will 
 continue to support us when our measures are 
 brought in, that it is no use the Opposition 
 trying to force a new election, and no use the 
 House of Lords attempting to delay the inevitable. 
 We need a resolute Government perfectly un- 
 derstanding what it has to do, supported by 
 a Northcliffe-proof majority chosen by a North- 
 cliffe-proof nation. 
 
 Until we get that, I care very little whether 
 Mr. Lloyd George or Mr. Asquith, or for the 
 matter of that, Mr. Arthur Henderson, is Prime 
 Minister of this country. Mr. Henderson and 
 the Labour Party have a far better grasp of 
 the position than either the Coalitionists or the 
 Liberals. That may be a reason for putting them 
 in power ; it is no adequate reason for giving 
 them office without it. Until we have fought 
 the storm down and got the country absolutely 
 converted, not only to our opinion of the Coali- 
 tion but to our programme, office would not 
 imply power. It would only play into the hands 
 of the reaction and leave the way open for the 
 return of Mr. Lloyd George.
 
 CHAPTER VIII 
 PARTIES AND POLITICS 
 
 WHAT possibility is there of such a Govern- 
 ment as that spoken of in the last chapter ? 
 The by-elections, helpful as they are up to a 
 certain point, afford no indication of such a thing. 
 No doubt, from a purely party point of view, 
 Paisley was a triumph for the Liberals and Spen 
 Valley for Labour, but neither showed that a 
 clear, let alone an overwhelming majority of 
 the electors in these exceptionally advanced 
 constituencies were resolved on any such drastic 
 change in policy as is advocated in this book. 
 As indications of the rising tide of discontent 
 with the Coalition, they possess a certain negative 
 value, and I do not deny the importance of 
 discrediting the Coalition with the people. A 
 stronger Opposition in the House of Commons 
 might do much to hasten the disillusion of the 
 nation and to restrain the worst excesses of the 
 reaction in the meantime ; but for the Liberals 
 or any Coalition of Liberals and Labour men to 
 take office until the Liberal Party has definitely 
 committed itself in an unmistakable manner 
 
 190
 
 PARTIES AND POLITICS 191 
 
 to a policy at least as drastic as that of the 
 advanced wing of Labour, would be a calamity 
 almost worse than a continuance of Coalition 
 Government. The misdeeds of the Coalition 
 discredit only the reaction ; bad as they are 
 they do not destroy faith in progress. But 
 until a Government that has faced the whole 
 problem and realized the necessity for far- 
 reaching change takes office blunders similar, 
 if not exactly the same, are inevitable. Of these 
 the Opposition and the Opposition Press would 
 take full advantage, and the Government which 
 had to learn its wisdom in office, and not 
 before taking it, would not long remain in 
 power. 
 
 Nor would even an advanced Labour victory 
 at the polls be any better, unless the electors who 
 put it there thoroughly understood what they 
 were about, and unless its support at the polls 
 were greater than that of both other parties com- 
 bined ; unless, in fact, Labour had a substantial 
 majority of the whole possible electorate. The 
 split vote, far from being a nuisance, is at present 
 a very illuminating and useful thing. It serves 
 to safeguard us against dangerous optimism 
 by revealing how great a part must be deducted 
 from every progressive poll for those who are 
 merely disgusted with Mr. Lloyd George, and 
 how few have realized the imperative necessity 
 for fundamental change.
 
 192 ENGLAND AND THE NEW ERA 
 
 What forces are there by which we may hope 
 to convert the nation to such a policy, to a 
 state of mind that will make the great change 
 possible ? Those at our disposal are partly 
 those of the official parties and partly the grow- 
 ing influence of various non-party organizations, 
 most of which have grown up since the out- 
 break of the war. For a generation before the 
 war the Socialist organizations, notably the 
 I.L.P., had virtually created a new political 
 organ in the country. The open-air political 
 meeting, especially the Sunday meeting, was, 
 before the advent of the I.L.P., an occasional 
 rather than an organized and official thing. 
 Political education was left, except at election 
 times, to the party Press, except where secularist 
 Radicals or advocates of particular reforms 
 carried on a supplementary propaganda useful 
 as an addition to party efforts. The branches 
 of the I.L.P. especially, however, now constitute 
 a permanent propagandist force, active in almost 
 every constituency. For the moment, I am 
 only concerned with this in so far as it has 
 provided a ready platform for the propaganda 
 of new ideas brought to the front by such organ- 
 izations as the Union of Democratic Control, 
 the Civil Liberties Group, and the Women's 
 International League, as well as for acquainting 
 the people with the proposals made in such 
 books as Mr. Pethick Lawrence's Levy on Capital
 
 PARTIES AND POLITICS 193 
 
 or Mr. Keynes' Economic Consequences of the 
 Peace. 
 
 Much progress, indeed, has been made on the 
 theoretic side of reconstruction. From the very 
 outbreak of the war, alongside the popular swing 
 towards reaction, there was a strong movement 
 among earnest politicans and intellectuals to- 
 wards the Left. Never, perhaps, has there been 
 more revision of old ideas ; never more attention 
 been given by serious thinkers to the problems 
 of democracy. Whether this book gives any 
 real assistance in solving its problems or not, 
 it is certain that much has been done by writers 
 in all countries towards providing a solution. 
 And the ideas thus worked out on foreign and 
 home policy have had far more influence than 
 many realize. The advocate of a new democratic 
 idea is not nowadays only a voice crying in 
 the wilderness ; he is not entirely dependent 
 for its spread on the daily Press. The organized 
 Socialist movement will sow his idea all over 
 the country for him, leaving the seed to germi- 
 nate in due time. 
 
 We should not undervalue the work thus 
 done its effect will be felt ere long. Except 
 in so far as it has affected the outlook and 
 programmes of the official parties, however, 
 it has done little to render a really efficient 
 alternative Government to the Coalition possible. 
 Neither the Liberal nor the Labour Party is 
 
 13
 
 194 ENGLAND AND THE NEW ERA 
 
 as yet in a position to form such a Government, 
 while the other absolutely essential condition, 
 an electorate convinced of the necessity for 
 drastic reconstruction and prepared to support 
 Parliament in carrying it out, does not as yet 
 exist. Broadly speaking, Liberalism lacks ideas 
 and Labour leadership, both of which will be 
 needed for the great conflict before us. 
 
 What is the present position of Free Liberal- 
 ism towards the new problems of home and 
 foreign politics ? How far does it recognize that 
 there has been a revolutionary change in both 
 since 1914, and that equally far-reaching changes 
 in methods and programmes are required, if 
 this country is still to retain a leading position 
 among the nations of the world ? To take the 
 home question first. By far the most widely 
 advertised proposal for dealing adequately with 
 the problem of the debt is that of a capital levy. 
 As far as I know, there has been as yet no equally 
 well-considered and equally effective plan put 
 before the public. The debt is far too serious 
 a matter to be left alone. Until it has adopted 
 a broad and adequate plan for dealing with the 
 debt, no political party is justified in seeking 
 office and power, any more than a man has a 
 right to apply for a responsible post without 
 understanding the work required in it. Now 
 there js only one form of answer possible at 
 present to the proposal of Mr. Pethick Lawrence,
 
 PARTIES AND POLITICS 195 
 
 and that is the production of an alternative 
 proposal equally far-reaching and effective. The 
 capital levy, at present at any rate, " holds 
 the field," and as I think the Liberal Party will 
 be even less likely to accept the alternative scheme 
 I have suggested, it is desirable to know how 
 they stand as to that. It is the sort of test ques- 
 tion that Liberals should ask themselves. 
 
 In May 1919 Mr. Sidney Arnold gave his 
 party a good lead in the matter by raising the 
 question on the Budget debate. He proposed 
 a graduated levy on fortunes of over 2,000 in 
 order to raise 6,000,000,000 and clear off the 
 great bulk of the debt. He defended his 
 proposal ably, and is entitled to the same credit 
 as Mr. Pethick Lawrence for facing the truth. 
 The effect of his speech was, however, a good 
 deal damaged at the outset by his leader, Sir 
 Donald Maclean, who told the House that he 
 was unable to give an unqualified support to 
 this proposal at the present time ! Three 
 weeks later, the Manchester Liberal Federation 
 endorsed the capital levy in a vague form, 
 proposing " to liquidate," not a definite 
 6,000,000,000, but " a large part of the war 
 debt," by a capital levy, but this was turned 
 down at the meeting of the National Federation 
 at Birmingham in November. The Federation 
 voted in favour of a tax on war profits and an 
 inquiry into the proposal of a general capital
 
 196 ENGLAND AND THE NEW ERA 
 
 levy, an amendment moved by Major Barnes, 
 M.P., in favour of Mr. Arnold's scheme, being 
 41 declared lost by an overwhelming majority." 
 
 Meantime, the scheme appears to have been 
 undergoing a process of " dilution." There is 
 no longer any serious thought of paying the 
 whole or any great portion of the debt ; the 
 levy is merely recognized as one method of 
 relieving the Chancellor's mind by reducing 
 the unfunded part of it. " What would happen," 
 says Lieut.-Commander Hilton Young, M.P., in 
 the Daily News, " would be that the Govern- 
 ment would take securities to the value, say, 
 of a thousand million, which represented true 
 wealth, and would use them to retire floating 
 debt to the same amount representing paper 
 and air." 
 
 Now this sort of thing is no use at all. The 
 floating debt may be an embarrassment to 
 Ministers, but it is the debt as a whole, its 
 immensity, not the way it is held, that is the 
 ultimate problem for the nation. A small capi- 
 tal levy may be a better expedient than an 
 excess profits duty, or even a tax on war profits 
 for funding the debt, but it is open to many of 
 the objections which apply to them, if regarded 
 as a settlement of the problem. Each expedient 
 leaves the country to face an enormous annual 
 demand for interest, which must be met in good 
 years and in bad alike, without handing over
 
 PARTIES AND POLITICS 197 
 
 to the nation any adequate assets to meet this 
 liability. This means crushing taxation even 
 in boom years, and a perfectly hopeless state 
 of things in times of depression. If Parliament 
 has nothing better to offer the country than this, 
 the only alternatives before us are the slow 
 strangulation of British industry or a revolution 
 based on " direct action." 
 
 With regard to foreign politics, Free Liberalism 
 is, I fear, approaching the matter with far too 
 easy a conscience. Whether due to their fault 
 or not, it was under a Liberal administration 
 that the greatest calamity in history actually 
 broke out, and for this it is from official Liberal- 
 ism and not from the Coalition that an explana- 
 tion is due to the world. It may be possible 
 to give such an explanation, but one is obviously 
 wanted. You cannot have such a terrible event 
 occurring when you are in charge of affairs and 
 then treat it as a matter of course that you are 
 not to blame. Now, ever since the war broke 
 out, there has been a world-wide discussion 
 of its causes, and of the means that should be 
 taken to prevent such a catastrophe in the future. 
 This discussion has not been without result, 
 and a very general consensus of opinion, not by 
 any means confined to advanced politicians, 
 has been arrived at as to the ways to prevent 
 future wars. The proposals made in a previous 
 chapter embody, in an extreme way, perhaps,
 
 198 ENGLAND AND THE NEW ERA 
 
 these opinions, but it is certain that, even as 
 they stand, they would be welcomed by millions 
 of thinking people throughout the world. Some 
 of them would be approved by almost every one 
 who has given any serious attention to the 
 subject. What would the Liberal Party actually 
 do, if it were returned to power, about the reduc- 
 tion of armaments, about open diplomacy, or 
 the League of Nations ? 
 
 The sixteen resolutions carried at the Birming- 
 ham meeting of the National Liberal Federation 
 mention only the last of these points, the Federa- 
 tion apparently not being willing to commit 
 itself to open diplomacy or disarmament. We 
 get, however, a definite expression of opinion 
 from the Manchester Federation, who demand 
 that " no treaty or understanding with any 
 other nation should be entered into without the 
 consent of the League and then only when 
 agreed to by Parliament." 
 
 As there was no League of Nations till after 
 the war, the Liberal Government cannot be 
 blamed for not referring any understandings 
 and treaties made to it, but there was a Parlia- 
 ment, which it was possible for the Liberal 
 Government to consult. Does, then, the 
 Liberal Party approve or disapprove of the 
 Manchester demand ? and if the former, does 
 its approval imply a censure on the late Liberal 
 Government ? The foreign policy of Free
 
 PARTIES AND POLITICS 199 
 
 Liberalism wants clearing up perhaps more than 
 anything else. Mr. Asquith has several times 
 stated that the country needs a return to 
 " Liberal principles " ; if so, it is extremely 
 important to know what Liberal principles imply 
 in foreign affairs. I know no more pathetic 
 story than that of Sir Edward Grey's struggle 
 for peace in the fortnight before the outbreak 
 of war. Far more than any other statesman 
 in those dark days, he realized the terrible 
 responsibility that rested upon him ; no one 
 felt, I am sure, more strongly than he the 
 tragedy of his failure. Nevertheless, this ques- 
 tion must be put in all seriousness : Is it for 
 his policy or that of Lord Granville and the 
 Gladstone era that Free Liberalism stands ? 
 The policy of Gladstone's Cabinet at the time 
 of the Franco-German War was directed to 
 securing the observance of the Belgian neutrality 
 treaties of 1831 and 1839 which were published, 
 and guaranteed by us. These treaties are two- 
 sided : the Great Powers on the one part under- 
 take to respect the neutrality of Belgium, which 
 country agrees to preserve its own neutrality. 
 This latter provision was one, of which, I presume, 
 the statesmen of the time saw the absolute 
 necessity. We would not commit ourselves or 
 in any way undertake to defend another country, 
 unless we were first assured that that country 
 would not mix itself up in general politics and
 
 200 ENGLAND AND THE NEW ERA 
 
 incur the danger of invasion. With that guar- 
 antee, however, it was a wise treaty. We 
 had been drawn time and again into war on 
 the Continent because of the Low Countries, 
 and it was a very good thing in the interest of 
 peace to define our attitude clearly and to make 
 sure that the new kingdom would not act in 
 such a way as to make our intervention necessary. 
 
 When there was felt to be a danger of the 
 violation of Belgian neutrality in 1870, the 
 British Government, to fulfil our obligation, 
 put the most effective pressure possible on the 
 belligerents. On August 9, 1870, it obtained 
 from the French and German ambassadors 
 treaties, obviously drawn up by us, and in 
 identical terms, undertaking that, in the event 
 of France or Prussia violating the neutrality 
 of Belgium, we would " co-operate " with 
 Prussia or France " for the defence of the same 
 in such a manner as may be mutually agreed 
 upon." Such a policy was perfectly clear ; 
 it pledged us definitely to fight if Belgium were 
 touched and to remain neutral if she were left 
 at peace. Further, we left no opening for 
 bargaining ; we simply stated how we meant 
 to act, and left it at that. 
 
 Now, neither Bismarck nor Napoleon III was 
 a very scrupulous person, and the latter was 
 known to covet the possession of Belgium, but 
 both perfectly understood this sort of diplomacy ;
 
 PARTIES AND POLITICS 201 
 
 it meant that if they meddled with Belgium they 
 were certain to have us against them, and that 
 if they left her alone we were equally certain to 
 leave them alone. The result is history. Belgian 
 neutrality was respected, and we were not 
 drawn into the war. As Ministers of a free 
 country, too, the Cabinet were perfectly justified 
 in the course they took. They committed the 
 nation to nothing except the loyal fulfilment 
 of an engagement made long before their time. 
 That was Liberal policy as it was understood 
 in 1870. 
 
 Sir Edward Grey, faced with the prospect of 
 war between France and Germany, did nothing 
 of the kind. When the crisis came he had to 
 deal with the same state of things as the Liberal 
 Government of 1870. We still were committed 
 to the Belgian Treaties, not by him, but by 
 his predecessors ; and when Belgian neutrality 
 was again threatened his first duty was to secure 
 the observance of this public engagement of 
 the British people, and to do nothing that would 
 weaken his power to enforce it. It had been 
 done successfully once, and it was his duty to 
 take precisely the course adopted by Lord 
 Granville in 1870. From the first he took up 
 a far weaker position. He did not even state 
 clearly that we would defend Belgium ; his 
 words to the German ambassador are : " If there 
 were a violation of the neutrality of Belgium
 
 202 ENGLAND AND THE NEW ERA 
 
 by one combatant while the other respected it, 
 it would be extremely difficult to restrain public 
 feeling in this country." " The ambassador then 
 pressed me," he says, " to formulate conditions 
 on which we would remain neutral." This he 
 refused to do, only stating that we would " keep 
 our hands free." 
 
 Now Sir Edward Grey's hands were not free. 
 As our Foreign Minister, he was pledged to the 
 only obligation to which the country was publicly 
 committed, the security of Belgium. He was 
 dealing with an unscrupulous militarism, in 
 a tight place, and willing to bid largely for our 
 neutrality, yet he deliberately refused to play 
 his strongest card. That he could have been 
 as successful as Lord Granville, if he had been 
 content to follow the excellent precedent set 
 by that statesman, is the only conclusion I can 
 come to from the correspondence. 
 
 It may be said that in one respect the position 
 was different from that of 1870. Prussian 
 ascendancy then was not regarded as a, danger 
 to us, while in 1914 we would be just as unwilling 
 to see the Germans established in France as 
 in Belgium. If so, there was a case for coming 
 to the same sort of agreement with France as 
 we had done with Belgium in 1839, on two 
 absolutely essential conditions : the arrangement 
 should take the form of a definite public treaty 
 to be laid before Parliament as now demanded
 
 PARTIES AND POLITICS 203 
 
 by the Manchester Liberal Federation, and 
 France should give us a guarantee of her own 
 neutrality. Lord Grey has told us that he 
 had never seen the Franco-Russian treaty of 
 alliance and did not know its terms. Till he 
 saw that treaty, while he was quite able to say 
 that the invasion of Belgium was an act of 
 wanton aggression, he had no reason to believe 
 that, once Germany was engaged in war with 
 Russia, France was not bound by treaty to 
 attack her in the rear. Until he could give 
 Germany a guarantee of French neutrality, he 
 had no right to concern himself with any country 
 except Belgium. 
 
 There were two policies open to us, a definite 
 defensive engagement to help France in the 
 event of wanton invasion, accompanied with 
 complete information about all France's commit- 
 ments and a clear statement of the terms on 
 which alone our aid would be given. This we 
 might have accepted after full consideration ; 
 failing it, we should have stuck rigidly to the 
 policy of 1870. Almost any definite engagement 
 is capable of some defence ; if it were not so, 
 no one would think of making it. Vague " un- 
 derstandings " are simply bad diplomacy. 
 
 Now it is essential that Free Liberalism should 
 state exactly what its policy is on the question 
 of open diplomacy. No question is more im- 
 mediately practical or more widely understood.
 
 204 ENGLAND AND THE NEW ERA 
 
 Vague approval of the League of Nations, such 
 as that embodied in the National Liberal Federa- 
 tion's resolution, will not do. Before any party 
 has a right to seek for power, it is necessary to 
 know what it has to say on the whole anti- 
 militarist programme that has been discussed 
 before the world by innumerable agencies right 
 through the six years of agony. 
 
 There has been most justifiable comment 
 on the slackness of the Labour Party in the 
 House of Commons. Coming to the new Parlia- 
 ment the strongest of the Opposition parties, 
 because of the determination of the Sinn Fein 
 representatives from Ireland to take no part 
 in its deliberations, they have lost, mainly by 
 their own defects, the outstanding position 
 that should have been secured for them. One 
 of the most striking features of the election in 
 1918 was the clean sweep it made of the front 
 benches of the Opposition parties. Mr. Asquith's 
 Ministers, those of them, that is, who had not 
 joined the Coalition, almost all lost their seats, 
 while Messrs. MacDonald, Snowden, and others, 
 the most familiar figures on the Labour side, 
 were not returned to the new House. This 
 deprived both parties of political prestige and 
 Parliamentary experience, and flung upon new 
 and untried members the responsibility for creat- 
 ing a front bench capable of holding its own with 
 the leading debaters of the Unionist Party,
 
 PARTIES AND POLITICS 205 
 
 headed by such a leader as Mr. Lloyd George. 
 There can be no question that Sir Donald 
 Maclean and his little group rose to the occasion, 
 and little doubt that Labour, as a whole, failed 
 to do so. 
 
 To some extent this is excusable. After all, 
 a great Parliamentary leader must have a touch 
 of genius, and genius is not a thing that can be 
 manufactured to order. Mr. Clynes, who not 
 long before was a Coalition Minister, is probably 
 the ablest of the older hands who secured re- 
 election in 1918, for Mr. Henderson was only 
 returned at a by-election, while new members 
 like Messrs. Spoor and McLean, had to make 
 their Parliamentary reputation in the party 
 alongside of men who were much better known 
 in the Trades Union world. 
 
 This, however, does not excuse the failure of 
 the party to vote its full strength in the division 
 lobby. Want of attention to the ordinary work 
 of Parliament is an inexcusable fault. Though 
 many occasions arise in which a member or his 
 party may rightly decide not to vote at all, 
 and many others may occur when illness or 
 important public business of other kinds is an 
 adequate reason for absence, a member of 
 Parliament, in common fairness to his consti- 
 tuents and his party, should always be able 
 to give a reason why he abstained from a divi- 
 sion. The Party outside the House, both leaders
 
 and rank and file, is rapidly advancing far 
 beyond its representatives within it, and it is 
 urgently necessary that the Parliamentary party 
 should pull itself together, keep more closely 
 in touch with the movement outside, and assert 
 its rightful position as the strongest Opposition 
 party in the House. 
 
 Turning from the politics of Free Liberalism 
 to those of Labour outside of Parliament seems 
 like leaving a century behind. The central 
 propositions of this book that capitalism has 
 made Europe bankrupt and created problems 
 which cannot " be solved within the present 
 order of society " and that " the day is coming 
 when no people will be content to rule another 
 or be ruled by any other," were never more 
 clearly put than by Mr. Hutchinson in his address 
 to the Annual Conference of the party in June. 
 Much that I had written before this speech 
 was made seems merely a comment on Mr. 
 Hutchinson's words, which were received with 
 loud applause by the 1,200 representatives of 
 over three million organized workers who attended 
 the Conference. Beside me as I write are various 
 pamphlets just issued by the party, the very 
 titles of which are enough to show how fresh 
 is the outlook of Labour. 
 
 This freshness of outlook is natural enough 
 in a party having so short a history, and founded 
 in the first instance as a revolt against accepted
 
 PARTIES AND POLITICS 207 
 
 political traditions. In such a rapidly changing 
 world as we have to-day, a fresh outlook is a 
 vital necessity for any party that is to be of real 
 use. We find, therefore, during the course of 
 the war itself the party stating that the war 
 is " consuming not merely the security, the homes, 
 the livelihood, and the lives of innocent families, 
 and an enormous proportion of the accumulated 
 wealth of the world, but also the very basis of 
 the peculiar social order in which it has arisen." 
 The italics are mine. The wish may have been 
 father to the thought, but whether this was so 
 or not, the fundamental change brought about 
 by the war was fully realized by its authors. 
 The pamphlets show the international outlook 
 of the party as clearly as they do its perception 
 of the revolutionary character of the time. 
 This appears equally in the criticisms of the 
 peace terms and in the Memoranda on Inter- 
 national Labour Legislation, the title of one of 
 them. 
 
 For though at its outbreak the Labour Inter- 
 national broke down,* the effect of the war as 
 
 * The Women's International, however, did not break 
 down. The Women's International Council of Socialist 
 and Labour Organizations, which had been founded some 
 years earlier, with Frau Clara Zetkin as International 
 Secretary, contrived to meet at Berne in March 1915. 
 Thirty delegates, representing eight different nations, were 
 present. " The resolutions of the Conference," says Miss 
 Mary Longman (now Frau Stenbach) showed an agreement
 
 208 ENGLAND AND THE NEW ERA 
 
 a whole has been to make the outlook of the 
 Labour movement more international than ever 
 before. The complete failure of Labour and 
 Socialism to organize an international revolt 
 against the war was a terrible disappointment 
 to many ardent spirits who had worked long 
 years for Labour and internationalism, but it 
 was hardly a surprise to those who reflected 
 on what had happened on similar occasions ever 
 since the world began. " Considered from the 
 point of view of the community and not from 
 the point of view of the individual," says Dr. 
 Sarolea, " patriotism is mainly the instinct of 
 self-preservation. It is the collective instinct 
 which compels the citizen to rise in defence of 
 his country when it is threatened by a foreign 
 invader. . . . This patriotism is not a moral 
 virtue. Rather it is an organic necessity. It 
 is a spontaneous vital reaction of the community." 
 Now, at the outbreak of war every country felt 
 itself " threat end by a foreign invader," and 
 whether or not he approved of the diplomacy 
 of his rulers, the average man everywhere re- 
 sponded to this elemental instinct. This is well 
 seen by Haase's speech in the Reichstag at the 
 
 which was achieved without difficulty. ... It showed 
 that belligerents can meet and discuss the situation." 
 And though it was found impossible to hold another 
 conference during the war, correspondence never ceased 
 between the women's organizations during the whole four 
 years of war.
 
 PARTIES AND POLITICS 209 
 
 outbreak of the war. " We are standing," 
 said Haase, " before an hour of fate, the result 
 of Imperial policy. The responsibility for this 
 falls on those who have conducted this diplomacy. 
 We refuse to accept it. Social Democracy has 
 fought this fateful development with all its 
 power, and until the last moment it has stood 
 for the preservation of peace through impressive 
 demonstrations in all countries. The struggle 
 has been in vain. We stand now before the iron 
 fact of war. The horrors of invasion threaten 
 us. We have not now to decide for or against 
 war, but upon a question concerning the necessary 
 supplies for the defence of the country." 
 
 These quotations from Dr. Sarolea and Herr 
 Haase explain the failure of the Socialist Inter- 
 national in 1914. When there is serious danger 
 of seeing their homes destroyed and their land 
 overrun by a foreign enemy, people really care 
 very little about the rights or wrongs of the 
 quarrel. They may " refuse to accept " the 
 responsibility for the diplomacy of their rulers 
 that has led to the calamity, but whatever may 
 have been the faults of their statesmen, they 
 are determined that the invader shall not enter 
 their land if they can help it. Elemental instinct 
 overcomes everything and carries away all but 
 a minute minority of idealists. When war breaks 
 out civilization collapses. 
 
 I am convinced this is what happened all over 
 
 14
 
 210 ENGLAND AND THE NEW ERA 
 
 Europe in 1914. It would have happened just 
 the same if there had been no faults or blunders 
 on one side, and an impartial spectator would 
 have placed all the blame on the other. I 
 think if we will honestly face the fact we shall 
 admit that, if this country had been led by 
 the worst man who ever lived into a perfectly in- 
 excusable war of aggression, not one Englishman 
 in a hundred would be willing to see a foreign 
 army planted on our soil for all that. We 
 might hang the responsible Ministers after the 
 war was over, but we would keep the enemy out 
 in the meanwhile. 
 
 Yet, rational and ethical impulses are as truly 
 human as those we share with the savage and 
 the wolf, and in human affairs they are in the 
 long run the victorious things ; it is almost a 
 platitude to say that civilization itself con- 
 sists in their progressive growth. The Labour 
 movement soon began to recover itself. As 
 early as February 1915 a conference of Allied 
 Socialists was held in London, and while point- 
 ing out the responsibility of Germany for the 
 immediate occasion of war, it laid the ultimate 
 blame on the international anarchy which 
 had rendered German militarism possible, and 
 for which all Governments were responsible. 
 Opinion steadily ripened throughout the Labour 
 parties of Europe, and the underlying causes 
 of the war became more and more considered.
 
 PARTIES AND POLITICS 211 
 
 The constructive instincts of the movement 
 asserted themselves, and the line of division 
 throughout Europe between Labour and Capi- 
 talist Imperialism became more and more clearly 
 marked. 
 
 In the British Labour Party this tendency 
 was manifest. The fact that the Labour Party 
 has to-day a clear view on the gravity of the 
 world crisis, together with a party programme 
 in home and foreign politics, to which people 
 who have faced the facts must at least give 
 serious consideration, is due partly to the contin- 
 ual efforts of the party itself to collect and digest 
 information on the problem on its own initiative, 
 and partly to its much greater willingness to 
 consider and accept ideas evolved by the inde- 
 pendent agencies which have arisen all over 
 the world and have specialized on particular 
 aspects of it. These ideas have been circulated 
 throughout the Labour movement by the Soci- 
 alist organizations within it, especially by the 
 wide-spread branches of the I.L.P. It is the 
 special mission of these organizations to oxidize 
 the life blood of the Labour movement, so to 
 speak, to keep it fresh with ideas and the spirit 
 of revolt. Through the Socialist parties the 
 influence of such new organizations as the 
 Union of Democratic Control and the Women's 
 International League have been enabled to reach 
 the Trade Unions, and the conferences organized
 
 212 ENGLAND AND THE NEW ERA 
 
 by women, both of the Socialist International 
 and of the League, in the earlier days of the war, 
 and the principles of foreign policy laid down 
 in the publications of the union have helped to 
 render possible the Labour outlook of to-day. 
 
 But the self-education taken in hand by the 
 party itself has been a most exemplary part of 
 its work. This covers both home and foreign 
 questions. Though it is notorious enough that 
 there has been a succession of Labour deputations 
 to the various neutral, allied, and enemy countries 
 since the armistice, the full implication of this 
 has not always been realized. The Labour Party's 
 accredited representatives have made a first- 
 hand study of present conditions in Europe, 
 and are personally acquainted with foreign leaders 
 of similar opinions and the state of feeling abroad. 
 It has been said that there are only two kinds of 
 travellers who can get passports to-day, million- 
 aires and Labour leaders. The consequence is 
 that at a Labour Party Conference a large pro- 
 portion of the delegates speak with fresh and 
 first-hand knowledge of foreign problems, a 
 thing quite impossible in a conference of either 
 of the other parties. A proposal made at the 
 Scarborough Conference to appoint a permanent 
 agent and correspondent of the party in each of 
 the leading countries is now under considera- 
 tion, so that Labour may soon have a foreign 
 intelligence department of its own. Does this
 
 PARTIES AND POLITICS 213 
 
 not prove the initiative of the party and the 
 modernity of its outlook on international affairs ? 
 
 In domestic politics methods equally new 
 to party work are employed. For some years the 
 Fabian Society conducted a research depart- 
 ment for the purpose of accumulating and 
 tabulating information of all kinds likely to 
 be useful to the Labour movement. Last 
 year this department was greatly extended and 
 transferred to Eccleston Square to keep in touch 
 with the Labour Party and the Parliamentary 
 Committee of the Trades Union Congress. It 
 is now part of the general organization of the 
 Labour movement and is provided with a singu- 
 larly capable staff. Expert advisory commit- 
 tees of men and women gather and sift informa- 
 tion on questions like international Labour 
 legislation, the nationalization of the mines, 
 housing (on which a remarkable inquiry was 
 conducted by women connected with the party, 
 who collected the opinions of about ten thousand 
 housewives upon the requirements of a working- 
 class house, and astonished a committee of 
 architects by their knowledge of the subject), 
 as well as upon freedom of trade and other 
 subjects of more conventional politics. 
 
 In short, the Labour Party has gone far to 
 realize the import of the fact that the war has 
 brought us a new world. The outlook is the 
 outlook of that new world, the condition neces-
 
 214 ENGLAND AND THE NEW ERA 
 
 sary before all others for a party that is to have 
 a future. And it is only such a party that it is 
 worth while to substitute for the Coalition with 
 all its many sins of omission and commission. 
 We must have no more coalitions. If there is 
 ever to be an agreement between the Labour 
 Party and any other it must be based on the 
 acceptance without reserve of the destruction 
 of Capitalistic Imperialism, by transferring the 
 ownership of land and industrial capital to the 
 State and the control to the people who work 
 them, accompanied by a frank recognition of 
 the right of self-government to every nation 
 within or without the Empire. But if any 
 two organizations do accept that programme, 
 their united forces will not be a coalition, they 
 will be one party. 
 
 Is there any chance of gaining a complete 
 electoral victory for such a party as this ? 
 While recognizing the difficulty of the task, 
 I nevertheless believe there soon will be. Facts, 
 however carefully hidden, have an awkward 
 habit of asserting themselves, and it is a fact 
 that the old order of society has brought upon 
 itself its own ruin. The reaction against the 
 Government has not proceeded anything like 
 far enough as yet. Revolutions are not made 
 by majorities such as can effect ordinary changes 
 of government ; they are brought about only 
 when a nation has become all but unanimous
 
 PARTIES AND POLITICS 215 
 
 in its condemnation of the existing state of 
 things. All France was against the old regime 
 in 1789 ; all Russia, however it may be divided 
 since, was determined to be rid of the Tsar. 
 Such wide-spread disillusionment as this only 
 comes about in the very last days of an old 
 system ; as long as things seem to be working at 
 all tolerably many people would rather put up 
 with it than enter upon ways to them untried. 
 A creaking gate hangs long, unless something 
 comes and smashes it down. That something 
 has come in Russia and Central Europe through 
 defeat ; in Western Europe it must assuredly 
 come when the price of victory is realized. 
 And this realization cannot be long delayed. 
 Neither this Government, nor any that is not 
 prepared to make a revolutionary change in 
 its methods, can obtain peace in Ireland, nor 
 for that matter in India or Egypt. Until we 
 have a new basis for industry we cannot come 
 to any terms with organized Labour. As long 
 as the present system continues we shall have 
 strikes of all sorts, lightning strikes, organized 
 strikes, great strikes and small strikes, which 
 the workers may often fail to win, but by 
 which the community will always lose. No 
 capitalistic Government can avoid constant 
 deficits in the Budget, involving constant in- 
 creases in taxation, constant disturbances to 
 
 trade, and discontent everywhere : for no 
 
 \
 
 216 ENGLAND AND THE NEW ERA 
 
 capitalistic Government dare attempt to deal 
 with the debt in any effective way, or to take 
 a strong lead in international disarmament. 
 It is the duty of every one who realizes the 
 actual state of things to-day and has a vision 
 of the future to join in opposition to the Coali- 
 tion and in making converts for Labour, but 
 the propaganda of events, the spreading realiza- 
 tion through experience of the impossibility 
 of continuing on the old lines will do far more 
 than anything else to convince the nation. Eng- 
 land is at the parting of the ways. She may 
 struggle to continue her old methods, refusing 
 to attempt the new that way lies decay ; 
 she may try the way of " direct action " and 
 government by Soviet that is the way perhaps 
 of new life, but of a new life obtained through 
 anarchy and bloodshed ; or she may, while 
 there is yet time, take a way of constitutional 
 revolution equally effective, and of far better 
 promise for the use she will make of her deliver- 
 ance afterwards. 
 
 All depends upon the grit and courage of 
 Young England. We older men, we antedi- 
 luvians, as we pass one by one from the scene, 
 leave to them a world desolated by the flood 
 of war. It has swept away for ever or rendered 
 useless many of the institutions which otherwise 
 it might have taken half their lives to destroy. 
 They can build again as they like, and the
 
 PARTIES AND POLITICS 217 
 
 future England will be their handiwork, the 
 nobility or baseness of the fabric will be a 
 witness to yet later ages of their valour or 
 cowardice. They enter upon a world over which 
 the waters of the flood have passed ; let them 
 make sure that they return not again to cover 
 the earth.
 
 OF the complex of things which go to make up 
 the civilization of a nation at any given time, 
 some are permanent, being essential to human 
 life ; others, more striking perhaps because 
 of their contrast with the civilizations of other 
 lands and ages, are, however, in their nature 
 temporary, and may at any time be modified 
 indefinitely or even dispensed with altogether. 
 The needs for self-preservation and for repro- 
 duction, the instincts of hunger and sex, compel 
 men to till the ground, and constrain the 
 majority to form family groups of some kind 
 or other. Whatever form of social order emerges 
 from the present chaos, it is obvious that these 
 things must be reproduced in it, even if half 
 the population of Europe die of starvation before 
 a working order is established. On the spade 
 and the cradle everything in human life is 
 founded ; on them depends everything in our 
 civilization from Church and State down to the 
 Stock Exchange and Futurist art. 
 
 Besides those things which have existed ever 
 
 5218
 
 THE NEW PATRIOTISM 219 
 
 since human life existed, there are others which, 
 now that they have once taken root, seem equally 
 permanent. I doubt whether the progress of 
 civilization has ever really been arrested, even 
 for a time. The despairing wonder with which 
 the modern poet or artist looks back at ancient 
 Athens may make him think that humanity 
 has retrograded since the days of Pericles. 
 One sees, however, that the decay and conquest 
 of Greece, its absorption in the Roman Empire, 
 the decline and fall of the Empire itself were 
 the means of scattering the germs of Hellenic 
 and Roman civilization over the world. 
 Ancient civilizations were only islets in a sea 
 of barbarism, and even in the Middle Ages 
 mankind as a whole was probably farther 
 advanced than in the greatest days of Athens. 
 Particularly is this the case on the me- 
 chanical side of civilization. Inventions which 
 appeal only to the learned or even to people 
 brought up to city life or to luxury may indeed 
 be lost, but those that are practically useful 
 to a rude society are always, I should think, 
 permanent acquisitions. When once the wind 
 or water mill has been invented, it is never 
 forgotten, even in countries of far lower civiliza- 
 tion than that of New Testament Palestine, 
 where women ground their corn in the quern. 
 This is true of things evil as well as of those that 
 are good. No doubt Alexander and Hannibal
 
 220 ENGLAND AND THE NEW ERA 
 
 were very much abler generals than the captains 
 of the Middle Ages. The skill of such com- 
 manders might have done much to adjust matters, 
 but I fancy the archers of Cre"cy would have 
 been very much more efficient than the slingers 
 of a Greek army, and that mediaeval armour 
 was a distinct improvement on that of the 
 ancients. 
 
 Mechanical inventions useful in the ordinary 
 work of life, once made and fairly wide spread, 
 are made for all time. Things which serve 
 some more specialized need may, on the other 
 hand, depend for their survival on the continuance 
 of the more complex civilization which has 
 produced them. The wider the area over which 
 the invention is known, however, the larger the 
 number and the more widely scattered over 
 the world the places in which the thing invented 
 is made, the less likely will it be to be lost alto- 
 gether. 
 
 I do not think however terrible or prolonged 
 the agony through which our civilization is 
 destined to pass may be, that any important 
 part of our scientific and mechanical knowledge 
 can be permanently lost to mankind. Even 
 if the folly of the world rulers equal that of 
 the Emperors who made the war and the Allied 
 Statesmen who made the peace and should con- 
 tinue till all order and civilization perish for a 
 time, if the famine threatening the world reduce
 
 THE NEW PATRIOTISM 221 
 
 population to a remnant, yet that remnant 
 will retain the keys to all our knowledge. It 
 will not be ages, as after the overthrow of Rome, 
 before culture and knowledge revive, even in 
 Europe ; while it is almost inconceivable that 
 they can be lost, even for a time, in America. 
 Through whatever nightmare we may have to 
 pass, man will not lose the art of reading, and 
 among the multiplicity of printed books enough 
 will survive to render the revival of knowledge 
 easy. The centre of culture may be removed 
 to Cairo or Pekin, but it will still be a culture 
 aware of and influenced by Western thought. 
 At home, England may no longer be a direct 
 political influence ; we may interest the rest of 
 the world chiefly as the country where Magna 
 Carta was signed, where Shakespere and Newton 
 were born, but those that are left of us will 
 still be a civilized people, however changed. 
 The shareholder and the landlord may have 
 gone, but the ploughman for all time and the 
 miner for as long as our coal supplies last will 
 remain. 
 
 But few people, especially English people, 
 realize the whole wilderness of things going to 
 make up the life into which they have been born 
 and to which they have become accustomed that 
 are not thus deeply rooted. Perhaps it may 
 be due to our insular position, and our consequent 
 freedom from invasion and external interference,
 
 222 ENGLAND AND THE NEW ERA 
 
 but I think English people are especially apt to 
 regard everything they see around them as 
 equally permanent. They are certainly adapt- 
 able enough ; no nation has produced more 
 adventurous travellers or more numerous 
 colonists. Yet no sooner does the daring travel- 
 ler from the equator or the pole set his foot 
 again on the London pavements than he becomes 
 as complete a slave to every British convention 
 as if he had never left Pall Mall. The notion 
 that England can travel, that her soul can 
 absorb a new idea or forget an old fallacy, 
 that an established institution can ever dis- 
 appear or a new one ever arise never occurs to 
 him. He comes back from his adventures like 
 a boy from his sports, complacently certain 
 that his mother will be just the same as when 
 he went away. 
 
 If, on the whole, he has rarely been disap- 
 pointed, it is because this country has seldom 
 been subjected to any of those shocks that 
 compel sudden changes. The machinery of 
 society has never broken down, even during 
 our periods of war, for war has never visited 
 our own country. Perhaps the nearest approach 
 to a crisis of this kind we have experienced for 
 centuries was that which took place at the 
 outbreak of the recent war, when, for a few 
 days, the whole mechanism of exchange was 
 thrown out of gear. The effect was startling.
 
 THE NEW PATRIOTISM 223 
 
 It became evident to every one in a moment 
 that the individualistic ideas on which British 
 affairs had been conducted in peaceful times 
 would not bear the strain of war conditions. 
 Without time to think, making many blunders 
 in the doing of it, anti- Socialist statesmen 
 were driven by the logic of events to take over 
 the control of numerous social activities hither- 
 to abandoned entirely to private enterprise. 
 The thing was not well done, and no wonder 
 considering the hurry in which, and the men 
 by whom the scheme had to be carried out ! 
 but the arrangement, such as it is, has worked, 
 a thing the highly developed individualism which 
 it replaced had entirely failed to do. 
 
 The crisis of peace is coming less suddenly 
 upon us than that of war, but when it comes 
 it is difficult to see how it is to be dealt 
 with in such a summary manner. It is not a 
 question of getting goods to circulate and credit 
 re-established in any manner that will work 
 for the moment, but of making arrangements 
 that will run smoothly and permanently. The 
 conservative-minded Briton must learn to 
 grasp the idea of far-reaching change in things 
 which he has fixedly regarded as parts of nature 
 itself. It is in England herself, not on the 
 Congo or the Amazon, that the adventurous 
 Englishman must expect to find the unhackneyed 
 experience, the new adventure. Well for him
 
 224 ENGLAND AND THE NEW ERA 
 
 and well for England, if he can bring to this 
 task the fine temper of his race, the courage 
 under hardships, the initiative and the energy 
 he has shown in other lands. 
 
 But when he founded New England or 
 Australia the adventurous Englishman knew 
 perfectly well that he had nothing to expect 
 for years but the first necessaries of life. Nor 
 was he under any delusion as to what were 
 the necessaries of life, or that he himself must 
 take part in the work of providing them. He 
 might some day come back to England for a 
 holiday, when of course, it went without say- 
 ing, he would find everything just as he left 
 it ; but in the new land he was frankly prepared 
 to find everything different, to submit to entirely 
 new and less luxurious ways of living, and he 
 had made up his mind to make the best of 
 them. 
 
 Now, of course, I do not mean to say that 
 the conditions in England, in the immediate 
 future are going to be like those faced by the 
 pioneer colonist and the traveller in barbarous 
 lands. What I am trying to convey is that 
 they must of necessity be so very different 
 from those to which we have become accus- 
 tomed at home, that we can only face them 
 adequately by accepting unfamiliar conditions, 
 with the adaptability and open-mindedness of 
 the pioneer. English life is not " settled " any
 
 THE NEW PATRIOTISM 225 
 
 longer, nor can be for many years ; on the 
 contrary, everything must necessarily be in 
 a state of flux. Whatever is artificial in our 
 state of society is threatened, and much of it 
 will surely be destroyed or greatly changed. 
 The British Constitution, the Bank of England, 
 the Stock Exchange, Piccadilly, and Pall Mall, 
 fox-hunting and game preserving are not essential 
 parts of the order of nature, and we must 
 accustom ourselves to regard the social and 
 political life which these things conjure up 
 in our minds as something that may soon pass 
 away altogether. 
 
 Whether it is the same with other nations 
 I do not know, but I think most English- 
 men have a very vague idea of what is and 
 what is not essential to our civilization. As 
 a whole, no doubt they vastly over-estimate 
 its values, but this over-estimate is rarely 
 accompanied by any definite knowledge of the 
 things on which pride in the civilization of 
 England might most reasonably be based. Not 
 one Englishman in ten has read Shakespere, 
 not one in a hundred Milton, not one in a thou- 
 sand Bacon. Many are real experts in their 
 own particular studies, but it is not good form 
 to talk " shop," and the scientist knows little 
 or nothing of art, the poet nothing of science. 
 Politics is the only serious subject they discuss 
 together, and the political ideas of some of the 
 
 15
 
 226 ENGLAND AND THE NEW ERA 
 
 ablest men are enough to make angels weep. 
 They meet on common ground, on the tennis 
 lawn or at the billiard table. And right through- 
 out I think that the faults of the British 
 Philistine are far less due to lack of capacity 
 than of development. It is quite a common 
 thing to find men and women of striking natural 
 ability, whose minds are nevertheless as little 
 open to the light as those of far inferior natures. 
 People naturally witty, good at games of skill, 
 far more able, indeed, than others who have 
 done notable and even brilliant work in some 
 important department of life, are to be found 
 in every drawing-room. I am convinced that 
 intellect is much more common than intellectual 
 ambition. Society in England is largely domin- 
 ated by an ideal of " good form " which implies 
 on its positive side a sound ideal of conduct 
 and manners generally well observed, and on 
 its negative an almost total absence of ideas. 
 
 This attitude accords well with a belief in 
 the stability of existing things, and does not 
 work so badly when things really are stable. 
 In days when rapid and fundamental change 
 is necessary, it is anything but admirable. 
 Then it is essential that people should be pre- 
 pared to analyse the social form to which they 
 have become accustomed, to understand what 
 part of it is really necessary and abiding, and 
 how much of it is merely temporary, called intp
 
 THE NEW PATRIOTISM 227 
 
 existence by transitory conditions. As habit is 
 second nature, most men accept these latter 
 as naturally as the first ; the idea of country 
 and all it stands for becomes a complex of 
 everything they have known in it permanent or 
 impermanent. In advanced states of civilization, 
 in the artificial life of great towns the things 
 least deeply rooted seem to the rich most 
 characteristic and important, because they touch 
 most closely their own experience. Thus you 
 get a literature specializing in secondary emotions, 
 such as the novels of Henry James, too subtle 
 to be intelligible to people in a simpler age. 
 That the British people have not lost their 
 elasticity, their power to respond to the unex- 
 pected, was shown both by the splendid response 
 to the appeal for help at the outset of the war, 
 when so many millions of all ranks joined the 
 colours, and by the constancy with which the 
 conscientious objectors refused to do so later 
 on. There was a common element in both cases, 
 the power to respond to an ideal, and to accept 
 for its sake conditions of life, in the trenches 
 or in prison, totally different from those to 
 which our young men had become accustomed. 
 The soldiers' business, however, is concerned 
 with only two things, destruction at worst, 
 defence at the best ; creation does not enter 
 into it at all. Now the highest adventure 
 of the human spirit is not destruction or even
 
 228 ENGLAND AND THE NEW ERA 
 
 defence, however necessary, but creation. 
 The life of even the greatest soldier qua soldier is 
 a failure. It may be necessary for me to defend 
 myself against attack, but even when the defence 
 is successful the whole business is nevertheless 
 unsatisfactory. The satisfaction of life is to 
 be found in making things, not in preventing 
 other people from breaking them. I consider 
 that if a man dies without leaving behind 
 some work of his hand or brain, were it only 
 Swift's " two blades of grass," to show for his 
 activities, he has failed in self-realization, 
 whatever works of defence or destruction he 
 may have accomplished. 
 
 The spirit of adventure is strong in the English 
 people. Men and women alike eagerly volun- 
 teered for any service and faced, in the ranks 
 or in the Red Cross, the terrors of death and of 
 injuries worse than death. And they did so, 
 there is no denying it, often at least, with a 
 sense of joy, with a new exaltation of spirit. 
 There was an atmosphere almost lyrical in 
 England in 1914, though the songs that gave 
 expression to it might not be gems of art. They 
 were out on a high adventure, though only an 
 adventure of defence, a defence that involved 
 terrible destruction, an adventure which, when 
 completed, could at best leave open the way to 
 better work of creation. 
 
 And to far too great an extent the adventurous
 
 THE NEW PATRIOTISM 229 
 
 spirit of our people, on the rare occasions on 
 which it has found vent at all, and not merely 
 been suppressed by sordid circumstances, has 
 been of a purely negative and destructive char- 
 acter. "It is a fine day. Let us go out and 
 kill something," is the saying attributed to 
 the average Englishman by foreign critics, and 
 that not necessarily in contempt, but in a friendly 
 if uncomprehending spirit. True, our pioneers 
 have founded nations in the desert, but nations 
 cannot be founded every day, and I fear our 
 gilded youth have been much more given to 
 shooting big game and domineering over negroes 
 than to bringing unruly soils under the plough; 
 they have been more accustomed to the rifle 
 than to the spade. Yet our literature is evi- 
 dence of the idealism of the race, the very 
 aspect of England itself bears witness to its 
 latent capacity for creation. It seems to me 
 that there is an essential characteristic of 
 English civilization which justifies it as our 
 national contribution to the culture of the 
 world. I suppose that were it not for our 
 poetry we should hardly be accorded a place 
 of any importance among the nations in the 
 world of art, and yet until the industrial towns 
 arose and covered thousands of acres with 
 hideous buildings and hid half the country in 
 a cloud of smoke, it seems that few people can 
 have worked more sympathetically with nature
 
 230 ENGLAND AND THE NEW ERA 
 
 to reveal the fairness of their land. We have 
 borrowed much from the Latin countries, and 
 if what they owe to France and Italy were taken 
 away from our literature and our art we 
 should make a very modest show indeed. Yet 
 I think we have added to what they lent us an 
 element of our own, a marked and recurrent 
 note, the love of open-air life. Our plastic art 
 looks rather poor beside the achievements of 
 other nations, and yet I think, however over- 
 stated, there was some truth at the root of 
 Ruskin's enthusiasm for the landscape painters 
 of England : Turner, at least, seems one of the 
 world's great masters. 
 
 And little as the average Englishman cares 
 for the classics of his literature, his kinship with 
 them shows itself here at least. This is the 
 country of field sports, of a genuine love of the 
 sea, of fields divided by green hedges, and gardens 
 laid out with as little artifice as possible. There 
 is thus an instinctive and popular naturalism 
 in what is best in English civilization, a love 
 of open-air freedom. Of this naturalism the 
 highest expression is to be found in our poetry, 
 nowhere I think more clearly than in the pro- 
 logues of the Canterbury Tales. None of our 
 poets owed more to France and Italy than Chaucer. 
 He has a French grace, while none of his greater 
 work would have been written if he had never 
 visited Italy and learnt its language. Yet
 
 THE NEW PATRIOTISM 231 
 
 Chaucer seems to me as certainly the most 
 thoroughly English of our poets as Burns is 
 characteristically Scotch. And, very largely, 
 what he did was to take the creations of the 
 Latin spirit into the open air. What success 
 we have met with in plastic art seems to me to 
 have largely depended on the extent to which 
 it has been possible to do the same thing. Thus, 
 the more nearly our painting approaches to 
 pure landscape the better it seems to stand 
 comparison with similar work from other nations. 
 In sculpture, where unfortunately the only avail- 
 able form of open-air treatment is to put statues 
 bodily in the street, we have perhaps made more 
 public displays of artistic incompetence than 
 all other nations put together. 
 
 It is this love of the open air and all that 
 it implies, so much older than our industries 
 and Imperial greatness, that forms one of the 
 most characteristic " notes " of English civi- 
 lization ; our long tradition and experience 
 of relatively free government is another. Mr. 
 George Brandes has said that among our great 
 poets of the early nineteenth century not one 
 of them was a scientist, while all but Keats 
 were politicians. The first of these judgments 
 shows how much Englishmen are centred in 
 their own special interests ; the second gives 
 us the exception. " Every one of these is- 
 landers," quotes Mr. Brandes from some one,
 
 232 ENGLAND AND THE NEW ERA 
 
 " is himself an island." He is interested in 
 his own pursuits, but he won't let any one 
 " talk shop," and nobody else will let him do 
 so either. The consequence is he gets to know 
 nothing about anything that is going on in the 
 world apart from his own particular section of 
 it, with the one exception of politics. This has 
 been more or less a subject of common interest 
 since Magna Carta, or at least since the House 
 of Commons was constituted, and has become 
 perhaps more than anywhere else a matter of 
 general discussion. Our long fight for freedom 
 is a legitimate subject for national pride. I 
 could almost wish that, if it were possible, 
 some one would act the play of Hamlet with 
 Hamlet left out over the grave of Shakespere 
 as a fitting punishment for writing the History 
 of King John without mentioning the Great 
 Charter. 
 
 These characteristics of English life are far 
 older and more deeply rooted than anything 
 that was peculiar to the social order of 1914. 
 That order was the result of the industrial 
 revolution, and of the Imperial expansion of 
 the last century and a-half. Capitalistic Impe- 
 rialism is a feature of an age, not of a place ; 
 the fact that we have established a stronger 
 capitalism than most and a wider Empire than 
 any other nation is at least as much due to our 
 insular position as to any special national
 
 THE NEW PATRIOTISM 233 
 
 instinct. And national character, though it, 
 too, has an origin and a growth of its own, 
 is a far more persistent thing than any form of 
 industrial organization ; it can make its quality 
 felt through feudalism, despotism, small-scale 
 production, and even an era of gigantic trusts. 
 Perhaps, once born and firmly established, it 
 is immortal, or why should art revive first in 
 Italy, on that Etruscan soil where it flourished 
 three thousand years ago ? and why should 
 the political genius of Rome rise again in the 
 Church when the Empire had been destroyed ? 
 Thus, the enormous burden of an unproductive 
 class living on dividends and interest, and the 
 concentration in the hands of a Government 
 clique in Whitehall of the affairs of a quarter 
 of the world, are not essential parts of English 
 civilization. Nor do I think they are the things, 
 however they may minister to their pride, 
 which have gained for England the deep-rooted 
 affection of her sons and daughters. Nor is 
 the AUTHORITY of England an essential part 
 of her INFLUENCE, however much it may have 
 helped to spread it in the past. If, therefore, 
 we are approaching a day when authority 
 shall be no more and only influence will count, 
 that is not a reason for despair ; it is rather 
 a call to develop the vital qualities of our civiliza- 
 tion, so that that influence may be as wide and 
 beneficent as possible.
 
 234 ENGLAND AND THE NEW ERA 
 
 What is the real justification for the instinct 
 of patriotism ? There is certainly deeply rooted 
 in most people a belief that their own countries 
 are the best in the world. Vulgar-minded 
 people cannot help protruding this conviction 
 when abroad or when speaking to foreigners ; 
 those with decent manners studiously conceal 
 it ; but I think, if we knew all, there are few 
 exceptions to the rule. Of course, it is obvious 
 that there can be only one " best " nation, and 
 it is pretty certain that there is not even one. 
 It is impossible to balance against one another the 
 complexes of great things implied in the words 
 England, France, Italy, or Germany. Any con- 
 siderate person will admit this, and yet, in a way, 
 the common instinct is right. It may be a matter 
 of indifference whether the raw material of 
 humanity, the newly-born baby, be introduced 
 into the civilization and taught the language 
 of France or of England, but that point once 
 decided, and the process of education begun, 
 the civilization of one country rapidly becomes 
 for the child a vastly greater thing than that 
 of the other. It is not the content of a civili- 
 zation that matters to us, but only that part 
 of it which we can assimilate ; and once the 
 child has learnt to think in any language, and 
 has become accustomed to any scenery, the 
 literature of that language and the beauty 
 of that scenery become, almost irrespective of
 
 THE NEW PATRIOTISM 235 
 
 their actual merits as compared with those of 
 other lands, incomparably more vital and in 
 reality better for him. The man who says 
 that his country is the best in the world is 
 subjectively quite right, however arrogant ; the 
 absurdity comes in when he confuses this sub- 
 jective truth with an objective reality. The 
 same thing applies in the question of family. 
 There is no such person as the best man or 
 woman in the world, though well-married couples 
 may be justified in considering their wives or 
 husbands are. They are for them ; but this 
 comes about largely as the result of becoming 
 accustomed to one another's likings and ways, 
 to the consciousness of a past of common 
 experience and mutual helpfulness. 
 
 Don Quixote, therefore, was justified in con- 
 sidering Dulcinea del Toboso the most beautiful 
 woman in the world ; he only became mad 
 when he took to fighting any one who did not 
 think so too. And it is in affairs of patriotism 
 as in those of love : we are quite right in thinking 
 our ways are the best for us ; we are entirely 
 wrong in trying to impose them on any one else. 
 Nevertheless, while no individual man or woman 
 matters much, the contribution of a great nation 
 to the civilization of the world is a very important 
 thing indeed. We are making no undue or 
 arrogant claim for England when we assert 
 that her political ideas, her literature, even
 
 236 ENGLAND AND THE NEW ERA 
 
 her utilitarian and practical spirit in philosophy, 
 are an essential part of the world's civilization. 
 
 Perhaps there is no fear of it being finally 
 destroyed, but there is, I think, some danger of 
 our moral influence in the world suffering a 
 disastrous and prolonged eclipse. For three 
 hundred years France has been, on the whole, 
 the leader of men in the world of ideas ; during 
 the same period I think we have come next. 
 That this has been so, however, is due to a shadow 
 that fell over Italy, that loss of liberty which 
 Milton tells us had " damped the glory of Italian 
 wits," and to the deadening rule of the Inquisition 
 in Spain. Thus, the way was open for France 
 to become the intellectual leader of Europe, 
 as well as the foremost military power. It 
 was not until Frenchmen like Voltaire and 
 Montesquieu began to praise and advertise us 
 that we became of any account. It was France 
 that introduced this Gothic nation to the polite 
 society of Europe, and France perhaps was the 
 only country with a strong enough social stand- 
 ing to chaperon such a debutante. Since then 
 I think French and after that British thought 
 have been the most potent influences, more so 
 even than that of Germany, in moulding the 
 progress of the world. 
 
 But the intellectual prestige of France and 
 England has been buttressed by their recognized 
 positions as Great Powers. For long, France
 
 THE NEW PATRIOTISM 237 
 
 was the greatest military Power in the world, 
 Great Britain has, hitherto, been the greatest 
 naval Power ; together they were the richest 
 and most progressive industrial nations in 
 Europe. Material aided spiritual prestige, per- 
 haps beyond what was warranted by the posi- 
 tive value of their national contributions to the 
 world's civilization. I cannot believe it possible 
 that either the industrial or the military system 
 of the past can survive the terrible chaos of 
 the present time. Something very much better 
 it may readily be that will, I hope, come 
 out of it, but the system we have known is 
 doomed, and must soon be as dead as feudalism. 
 There will be no great empires in the future ; 
 not even, in a material sense, any great nations, 
 or if so, they will be Russia and the United States, 
 not England, France, or Germany. The Euro- 
 pean War seems destined to bring about with a 
 rush that which, in any event, must have taken 
 place sooner or later, the reduction of the older 
 European countries to their true proportionate 
 value among the nations. For them, I am 
 convinced, the prestige of authority is doomed ; 
 that of influence alone remains attainable. That, 
 too, is threatened ; we may be destined to 
 suffer an eclipse like that which so long paralysed 
 Italy, which has not yet passed away from Spain. 
 But the cultures of France and England, be- 
 sides being dear to the people by whom they
 
 238 ENGLAND AND THE NEW ERA 
 
 have been created, are still, I am convinced, 
 of value to the world. And here it will be their 
 own fault if they fail to keep their places. It 
 lies with themselves, amid the inevitable destruc- 
 tion of many things that till recently appeared 
 permanent, to preserve and develop that which 
 is essential. 
 
 They say that the bee can only sting once ; 
 when it uses its sting it dies. It is so with the 
 form of militarism that has prevailed in Europe 
 during the last fifty years. We feel the burning 
 pain of the sting now, but the creature that gave 
 Europe the wound must soon crawl away to 
 die. And this is not because statesmen and 
 journalists proclaimed that the great struggle 
 was " a war to end war," not because the " big 
 four " after sitting long have hatched a parody 
 of the League of Nations, but because the bound- 
 less cost of the war has destro)^ed the economic 
 basis on which modern militarism rested. It 
 is no use drilling all the young men of a nation 
 and arming them with costly weapons, unless 
 the State has an almost inexhaustible reserve 
 of credit to put its armies in motion and retain 
 them in the field for years. The war has ruined 
 the credit of States ; the debts will exhaust 
 their tax-paying capacity. It will take genera- 
 tions, even of a disarmed Europe, before the 
 economic basis for such another war can be 
 reconstructed. This will surely become apparent
 
 THE NEW PATRIOTISM 239 
 
 soon, whatever men like M. Clemen ceau and 
 Mr. Churchill choose to think about the matter, 
 and militarism will be destroyed, for a time at 
 least. But on militarism rests Imperialism ; it 
 is, as I have elsewhere said, the " cement of 
 Empire." " Self-determination " is now a 
 fashionable idea. That matters little, what 
 matters is that by no other method can a nation 
 long be governed. Economic stress will sooner 
 or later compel Imperial countries to withdraw 
 their garrisons from the lands they have ruled, 
 just as in the decline of the Empire the Romans 
 did from Britain, leaving the inhabitants free 
 to do as they like. Where authority breaks 
 down, influence may remain, but only if the 
 influence is such as can command respect. To 
 all intents and purposes, such countries as India, 
 Egypt and Ireland, Algeria and Madagascar 
 must ere long become virtually as independent 
 as Poland or Czecho-Slovakia. 
 
 But this need by no means be the end of the 
 greatness of France and England. The ideal 
 of self-determination for all nations should 
 present no terrors for either of them, for there are 
 no more firmly rooted and stronger nationalities 
 in the world. For centuries they have been, 
 more than most other nations, free to develop 
 their own distinctive civilizations, to fashion 
 town and country after their own taste, to 
 gather a store of national memories, to build
 
 240 ENGLAND AND THE NEW ERA 
 
 up great literatures. They start off, therefore, 
 well placed in the race for national influence : 
 all that is wanted is for their peoples to realize 
 the changed position of the world without illusions 
 and without fear. The ideals current in England 
 for the last generation or so were never, I think, 
 very deeply rooted. The new Imperialism was 
 especially quite a recent growth ; fifty years 
 ago every one was a " little Englander," even 
 Disraeli. Possibly in another fifty years every- 
 body will be a little Englander again ; for though 
 it by no means follows that there will be any 
 formal dissolution of the Empire, I feel it is 
 morally certain that English men and women 
 will soon have no authority whatever in the 
 affairs of any country but their own, not in those 
 of Ireland or even of Scotland. You cannot 
 now stop the flood of nationalism ; it will go 
 on to its completion. What we can do is to insist 
 upon self-determination for England. We have 
 as good a right to it as any one. We can import 
 into our own affairs the spirit of hope and 
 confidence with which the younger nations are 
 becoming inspired. After all, the Imperialist 
 fever was never a very English affair : it was far 
 more an enthusiasm of Anglo-Indians, cosmo- 
 politan financiers, ex-Governors-General, and 
 Colonial Prime Ministers. W T hat could these 
 know of England who never England knew ? 
 Are the young men and women of England
 
 THE NEW PATRIOTISM 241 
 
 ready for this Great Adventure ? Are we, as 
 in Milton's time, " a nation not slow and dull, 
 but of a quick, ingenious, and piercing spirit ; 
 acute to invent, subtile and sinewy to discourse, 
 not beneath the reach of any point that human 
 capacity can soar to " ? If so, Young England 
 will welcome the new condition of things, and 
 find in it an inspiration. Here and there, in 
 the ocean of history, appear islets of splendid 
 achievement, cities like Athens and Florence, 
 where it would seem impossible to throw a stone 
 in the street without danger of hitting an im- 
 mortal genius. Is it accident that causes this ? 
 Must the unconscious stream of Time forever 
 guide the finest particles of human dust into a 
 few isolated pockets of pure gold ? Or is it 
 rather some happy combination of circumstances 
 that frees for a moment the latent creative spirit 
 of man ? The latter seems to me the more 
 reasonable explanation. If so, what an oppor- 
 tunity now lies open to the youth of England ! 
 The new society will not be one in which a few 
 educated men rule over an army of ignorant 
 slaves, but a nation of free men and women. 
 Hitherto such an opportunity has been granted 
 to small minorities of men only, hardly ever, 
 I think, to women. Not until several genera- 
 tions have passed away will it be possible to 
 say with authority whether women share in 
 greater or less degree than men in the creative 
 
 16
 
 242 ENGLAND AND THE NEW ERA 
 
 capacity of the race or how widespread is the 
 faculty of creation among men themselves. 
 Democracy, which means the granting of full 
 opportunity to all, implies as great an extension 
 of the possibilities of human life as the Baconian 
 philosophy in the sphere of natural science. 
 History preserves an imperfect record of those 
 who actually achieved great things ; it tells 
 us nothing of the numberless " might have 
 beens " of science and of art. To seize the 
 opportunity now before the nation is an act of 
 faith, but surely not of a faith unfounded in 
 reason. The effort needed to overcome the 
 strength of established things, the elation of 
 spirit natural to a great people victorious in a 
 political struggle for the ownership of its own 
 land, may well supply the incentive, and wide- 
 spread education and equal freedom give the 
 needed power for a great triumph of the creative 
 genius of the English people. 
 
 We older people have made a lamentable 
 failure of our generation ; it has ended and 
 everything characteristic of it is likely soon 
 to end in a general ruin. The young men and 
 women of the land, however, on whom the penalty 
 of our failure has fallen, have shown that they 
 have it in them to do better things than we. 
 They are called to finer work even than they 
 did in the crisis of war. What is required of 
 them now is a new patriotism, a spirit of Creative
 
 THE NEW PATRIOTISM 243 
 
 Adventure, the free spirit of Mr. H. G. Wells 
 in action. 
 
 The city of their fathers' imaginings has 
 fallen in ruins. Again, they are on the open 
 road ; they are free to shape an England after 
 the desire of their hearts. Other nations, hither- 
 to enslaved, are starting on the same journey. 
 The greater they become the better it will be 
 for the world and for England. Let us not 
 envy while we emulate them, but let us prove 
 our worth by outstripping them. Let us stand 
 fast only by essentials, determined not to lose 
 our leadership in the things that matter, but 
 to raise in England the most splendid civiliza- 
 tion the world has ever seen.
 
 APPENDIX 
 
 THERE are two points arising out of the pro- 
 posals made in the fifth chapter which call for 
 further comment. As far as buildings and other 
 improvements are concerned, the records of 
 the Land Valuation Department may be accepted 
 as a basis for purchase, but this is not true in the 
 case of the site value itself. A very considerable 
 part of the 6,000,000,000 arises, not from 
 the actual income derived from the land, 
 but is due to anticipations of its increased 
 value when sold for building purposes. The 
 State would, therefore be overcharged if the 
 Lloyd George valuation were accepted as it 
 stands as a basis of compensation for site value. 
 There may be other ways of arriving at a fair 
 adjustment, but I may suggest that, in taking 
 over " undeveloped " land, i.e. land which could 
 be used for some more productive purpose, 
 but is at present idle or only used for agriculture, 
 the rate of compensation should not exceed 
 50 per acre, that being the amount left free 
 of undeveloped land duty by the Budget of 
 1910. 
 
 344
 
 APPENDIX 245 
 
 The second point has been suggested in the 
 text, but not fully dealt with. The holders of 
 old Consol and similar investments that existed 
 before the war have been badly hit in two ways. 
 The capital value of their holdings has shrunk 
 very greatly and the buying power of their 
 incomes heavily declined. They are thus, as 
 I have said, in a pitiable condition. In so far 
 as the rise in prices is permanent, the latter 
 hardship is only their share in the general loss, 
 though it falls with great severity on them. 
 Even on this side, however, as well as for the 
 general benefit of the community, something 
 might be done to ease the situation. For the 
 credit of the country the pound sterling should 
 be restored to its full exchange value as against 
 the dollar or any foreign currency at the earliest 
 possible moment, by recalling excessive paper 
 currency and restoring gold payments. To 
 effect this purpose it will not be necessary 
 to recall all the Treasury notes, but only put 
 the banks in a position to supply gold or notes 
 at their customers' option. Such a deflation 
 of the currency would have a considerable effect 
 in reducing prices and be a relief to the holders 
 of Government stock and all people of limited 
 means. THE STATE SHOULD PAY HONEST MONEY. 
 
 The State should also take action to restore 
 the selling value of Government stock by buying 
 freely any that comes into the market until
 
 246 ENGLAND AND THE NEW ERA 
 
 the price rises to par. There is of course an 
 ultimate profit to the nation in buying stock 
 which some day may have to be redeemed at 
 100 when the holder is willing to sell it at 
 80 or 85. At the same time the mere fact 
 that Government stock is below par reflects 
 on the financial soundness of the Government. 
 Taxation, heavily graduated against large in- 
 comes, should be kept at a rate high enough 
 to buy any 5 per cent, stock that comes into 
 the market until par value has been reached, 
 and then to purchase old Consols whenever 
 it is profitable to do so, until Government 
 securities are again " gilt-edged," in the sense 
 that the holders can immediately change them 
 into gold at par in any Post Office. This posi- 
 tive policy has its negative counterpart ; when 
 parity between the nominal and real value of 
 Government securities is restored, the Govern- 
 ment should refuse to buy at a premium, however 
 slight. It would then be time to reduce the 
 rate of interest. A STATE BOND FOR 100 
 
 SHOULD BE WORTH 100, NEITHER MORE NOR 
 
 LESS.
 
 Printed in Great Britain fry 
 
 UNWIX BBOTHEBB, LIMITED 
 WOEIKO AND LONDON
 
 THE ADVANCE of SOUTH AMERICA 
 
 A few notes on some interesting books dealing with the past 
 history ; present and future possibilities of the great Continent 
 
 When in 1906 Mr. Fisher Unwin commissioned the 
 late Major Martin Hume to prepare a series of 
 volumes by experts on the South American Re- 
 publics, but little interest had been taken in the 
 country as a possible field for commercial develop- 
 ment. The chief reasons for this were ignorance as 
 to the trade conditions and the varied resources of 
 the country, and the general unrest and unstability of 
 most of the governments. With the coming of the 
 South American Series of handbooks the financial 
 world began to realize the importance of the country, 
 and, with more settled conditions, began in earnest 
 to develop the remarkable natural resources which 
 awaited outside enterprise. Undoubtedly the most 
 informative books on the various Republics are those 
 included inTHE SOUTH AMERICAN SERIES, each of which 
 is the work of a recognized authority on his subject. 
 
 " The output of books upon Latin America has in 
 recent years been very large, a proof doubtless ot 
 the increasing interest that is felt in the subject. 
 Of these the ' South American Series ' is the 
 most noteworthy." 'The Times. 
 
 "When the 'South American Series' is completed, 
 those who take interest in Latin-American affairs 
 will have an invaluable encyclopaedia at their 
 disposal." Westminster Gazette. 
 
 " Mr. Unwin's 4 South American Series ' of books 
 are of special interest and value to the capitalist 
 and trader." The Chamber of Commerce Journal. 
 
 Full particulars of the volumes in the " South 
 American Series," also of other interesting books on 
 South America, will be found in the pages following. 
 
 T. FISHER UNWIN LD,, i ADILPHI TERRACE, LONDON, W.C. t
 
 THE SOUTH AMERICAN SERIES 
 
 CHILE. By G. F. SCOTT ELLIOTT, M.A., F.R.G.S. 
 
 With an Introduction by MARTIN HUME, a Map and 
 39 Illustrations. Cloth, i5/-net. [Fifth Impression. 
 
 " An exhaustive, interesting account, not only of the 
 turbulent history of this country, but of the present con- 
 ditions and seeming prospects." Westminster Gazette. 
 
 PERU. By C. REGINALD ENOCK, F.R.G.S. With 
 an Introduction by MARTIN HUME, a Map and 64 
 Illustrations. Cloth, 1 5/- net. [Fourth Impression. 
 
 " An important work. . . . The writer possesses a 
 quick eye and a keen intelligence ; is many-sided in 
 his interests, and on certain subjects speaks as an 
 expert. The volume deals fully with the de- 
 velopment of the country." The Times. 
 
 MEXICO. By C. REGINALD ENOCK, F.R.G.S. With 
 an Introduction by MARTIN HUME, a Map and 64 
 Illustrations. Cloth, I5/- net. [Fifth Impression. 
 
 " The book is most comprehensive ; the history, poli- 
 tics, topography, industries, resources and possibilities 
 being most ably discussed." The Financial News. 
 
 ARGENTINA. By W. A. HIRST. With an 
 Introduction by MARTIN HUME, a Map and 64 
 Illustrations. Cloth, I5/- net. [Fifth Impression. 
 
 " The best and most comprehensive of recent works 
 on the greatest and most progressive of the Re- 
 publics of South America." Manchester Guardian. 
 
 GUIANA. British, French and Dutch. By JAMES 
 RODWAY. With a Map and 32 Illusts. Cloth, i5/-net. 
 
 " Mr. Rodway's work is a storehouse of information, 
 historical, economical and sociological." The Times. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, W.C a
 
 THE SOUTH AMERICAN SERIES 
 
 BRAZIL. By PIERRE DENIS. Translated, and 
 with an Historical Chapter by BERNARD MIALL. 
 With a Supplementary Chapter by DAWSON A. 
 VINDIN, a Map and 36 Illustrations. Cloth, 
 I5/- net. [Third Impression. 
 
 " Altogether the book is full of information, which 
 shows the author to have made a most careful 
 study of the country." Westminster Gazette. 
 
 URUGUAY. By W. H. KOEBEL. With a Map and 
 55 Illustrations. Cloth, I5/- net. [Third Impression. 
 
 " Mr. Koebel has given us an expert's diagnosis of 
 the present condition of Uruguay. Glossing over 
 nothing, exaggerating nothing, he has prepared a 
 document of the deepest interest." Evening Standard. 
 
 COLOMBIA. By PHANOR JAMES EDER, A.B., 
 LL.B. With 2 Maps and 40 Illustrations. 
 Cloth, I5/- net. [Fourth Impression. 
 
 " Mr. Eder's valuable work should do much to 
 encourage investment, travel and trade in one 
 of the least-known and most promising of the 
 countries of the New World." Manchester Guardian. 
 
 ECUADOR. By C. REGINALD ENOCK, F.R.G.S. 
 With 2 Maps and 37 Illustrations. Cloth, 
 I5/- net. [Second Impression. 
 
 " Mr. Enock's very thorough and exhaustive volume 
 should help British investors to take their part in pro- 
 moting its development. He has studied and described 
 the country in all its aspects." Manchester Guardian. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, W.C. 2
 
 THE SOUTH AMERICAN SERIES 
 
 VENEZUELA. By LEONARD V. DALTON, F.G.S., 
 F.R.G.S. With a Map and 45 Illustrations. 
 Cloth, I5/- net. [Third Impression. 
 
 ' An exhaustive and valuable survey of its geography, 
 geology, history, botany, zoology and anthropology, 
 and of its commercial possibilities in the near 
 future." Manchester Guardian. 
 
 LATIN AMERICA: Its Rise and Progress. 
 By F. GARCIA-CALDERON. With a Preface by 
 RAYMOND POINCARE*, President of the French 
 Republic. With a Map and 34 Illustrations. 
 Cloth, I5/- net. [Fifth Impression. 
 
 President Poincare in a striking preface to 
 this book, says : " Here is a book that should 
 be read and digested by every one inter- 
 ested in the future of the Latin genius." 
 
 BOLIVIA. By PAUL WALLE. With 4 Maps 
 and 59 Illustrations. Cloth, ij/- net. 
 
 Bolivia is a veritable El Dorado, requiring only 
 capital and enterprise to become one of the 
 wealthiest States of America. This volume is 
 the result of a careful investigation made on 
 behalf of the French Ministry of Commerce. 
 
 PARAGUAY. ByW. H.KOEBEL. With a Map and 
 32 Illustrations. Cloth, 1 5/- net. [Second Impression. 
 
 " Gives a great deal of serious and useful information 
 about the possibilities of the country for the emi- 
 grant, the investor and the tourist, concurrently with 
 a vivid and literary account of its history." Economist. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, W.C. *
 
 THE SOUTH AMERICAN SERIES 
 
 CENTRAL AMERICA : Guatemala, Nicaragua, 
 Costa Rica, Honduras, Panama and Salvador. By W. 
 H. KOEBEL. With a Map and 25 Illus. [Second Imp. 
 
 " We strongly recommend this volume, not only to 
 merchants looking ahead for new openings for trade, 
 but also to all who wish for an accurate and interesting 
 account of an almost unknown world." Saturday Rev. 
 
 OTHER BOOKS ON SOUTH AMERICA 
 
 SPANISH AMERICA : Its Romance, Reality and 
 Future. By C. R. ENOCK, Author of " The Andes 
 and the Amazon," " Peru," " Mexico," " Ecuador." 
 Illustrated and with a Map. 2 vols. Cl., 3<D/- net the set. 
 
 Starting with the various States of Central America, 
 Mr. Enock then describes ancient and modern 
 Mexico, then takes the reader successively along the 
 Pacific Coast, the Cordillera of the Andes, enters the 
 land of the Spanish Main, conducts the reader along 
 the Amazon Valley, gives a special chapter to Brazil 
 and another to the River Plate and Pampas. Thus 
 all the States of Central and South America are 
 covered. The work is topographical, descriptive 
 and historical ; it describes the people and the cities, 
 the flora and fauna, the varied resources of South 
 America, its trade, railways, its characteristics generally. 
 
 SOUTH AMERICA: An Industrial and Com- 
 mercial Field. By W. H. KOEBEL. Illustrated. 
 Cloth, i8/- net. [Second Impression. 
 
 "The book considers such questions as South 
 American commerce, British interests in the various 
 
 T. FISHER UNWIN LD. i ADELPHI TERRACB, LONDON, W.C.a
 
 BOOKS ON SOUTH AMERICA 
 
 Republics, international relations and trade, com- 
 munications, the tendency of enterprise, industries, 
 etc. Two chapters devoted to the needs of the 
 continent will be of especial interest to manufacturers 
 and merchants, giving as they do valuable hints as to 
 the various goods required, while the chapter on mer- 
 chandise and commercial travellers affords some sound 
 and practical advice." Chamber of Commerce Journal. 
 
 VAGABONDING DOWN THE ANDES. By 
 HARRY A. FRANCK, author of " A Vagabond 
 Journey Round the World," etc. With a Map and 
 176 Illustrations. Cloth, 2 5/- net. [Second Impression. 
 
 " The book is a brilliant record of adventurous 
 travel among strange scenes and with even more 
 strange companions, and vividly illustrates, by 
 its graphic text and its admirable photographs, 
 the real conditions of life in the backwood 
 regions of South America." Manchester Guardian. 
 
 " Mr. Franck is to be congratulated on having 
 produced a readable and even fascinating book. His 
 journey lay over countries in which an increasing 
 interest 'is being felt. Practically speaking, he may 
 be said to have started from Panama, wandered 
 through Colombia, spending some time at Bogota, 
 and then going on to Ecuador, of which Quito is 
 the centre. Next he traversed the fascinating 
 country of the Incas, from the borders of which 
 he entered Bolivia, going right across that country 
 till he approached Brazil. He passed through 
 Paraguay, cut through a corner of the Argentine 
 to Uruguay, and so to the River Plata and the now 
 well-known town of Buenos Ayres." Country Life. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, W.C.x
 
 BOOKS ON SOUTH AMERICA 
 
 IN THE WILDS OF SOUTH AMERICA: 
 
 Six Years of Exploration in Colombia, Venezuela, 
 British Guiana, Peru, Bolivia, Argentina, Paraguay 
 and Brazil. By LEO E. MILLER, of the American 
 Museum of Natural History. With 48 Full-page 
 Illustrations and with Maps. Cloth, 2i/- net. 
 
 This volume represents a series of almost continuous 
 explorations hardly ever paralleled in the huge areas 
 traversed. The author is a distinguished field 
 naturalist one of those who accompanied Colonel 
 Roosevelt on his famous South American expedition 
 and his first object in his wanderings over 1 50,000 
 miles of territory was the observation of wild life ; 
 but hardly second was that of exploration. The 
 result is a wonderfully informative, impressive and 
 often thrilling narrative in which savage peoples 
 and all but unknown animals largely figure, which 
 forms an infinitely readable book and one of rare value 
 for geographers, naturalists and other scientific men. 
 
 THE PUTUMAYO : THE DEVIL'S PARA- 
 DISE. Travels in the Peruvian Amazon Region 
 and an Account of the Atrocities committed upon 
 the Indians therein. By E. W. HARDENBURG, C.E. 
 Edited and with an Introduction by C. REGINALD 
 ENOCK, F.R.G.S. With a Map and 16 Illustrations. 
 Demy 8vo, Cloth, 10/6 net. [Second Impression. 
 
 " The author gives us one of the most terrible 
 pages in the history of trade." 'Daily Chronicle. 
 
 TRAMPING THROUGH MEXICO, GUATE- 
 MALA AND HONDURAS. By HARRY A. FRANCK. 
 With a Map and 88 Illustrations. Cloth, 7/6 net. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, W.C. 3
 
 BOOKS ON SOUTH AMERICA 
 
 MEXICO (STORY OF THE NATIONS). By 
 SUSAN HALE. With Maps and 47 Illustrations. 
 Cloth, 7/6 net. [Third Impression. 
 
 " This is an attractive book. There is a fascination 
 about Mexico which is all but irresistible. . . . The 
 authoress writes with considerable descriptive power, 
 and all through the stirring narrative never permits us 
 to lose sight of natural surroundings." Dub tin Review. 
 
 THINGS AS THEY ARE IN PANAMA. 
 By HARRY A. FRANCK. With 50 Illus. Cloth, 7/6 net. 
 
 THE SPELL OF THE TROPICS. POEMS. 
 By RANDOLPH H. ATKIN. Cloth, 4/6 net. 
 
 What Kipling is to India, and Robert W. Service 
 to Canada, Randolph H. Atkin is to South 
 America. Read his remarkable volume of poems, 
 descriptive of life in Central and South America. 
 
 BAEDEKER GUIDE TO THE UNITED 
 STATES. With Excursions to Mexico, Cuba, 
 Porto Rico and Alaska. With 33 Maps and 
 49 Plans. Fourth Edition, 1909. Cloth, 15;'- net. 
 
 IMPORTANT. Travellers to the ^publics of 
 South America will find JTESS ELY'S ENGLISH- 
 SPANISH and SPANISH-ENGLISH DIC- 
 TIONARY ana 1 tFESSELTS LATIN-ENGLISH 
 and ENGLISH-LATIN DICTION AR Y invaluable 
 books. 'Bound in cloth, pocket size, price ^.l- net each. Ask 
 for Wesselys Edition, published by Mr. T. Fisher Unwin. 
 
 T. FISHER UNWIN LD., i ADELPHI TERRACE, LONDON, .W.C. a