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 THE 
 ECONOMIC CAUSES OF MODERN WAR 
 
 A STUDY OF THE PERIOD: 1878-1918
 
 MtiUiamS College 
 DAVID A. WELLS PRIZE ESSAYS 
 
 dumber 6 
 
 THE ECONOMIC CAUSES 
 OF MODERN WAR 
 
 A STUDY OF THE PERIOD: 1878-1918 
 
 BY 
 
 JOHN BAKELESS, M. A. 
 
 PRINTED FOR THE 
 
 DEPARTMENT OF POLITICAL SCIENCE 
 
 OF WILLIAMS COLLEGE 
 
 J&p ifloftat, l^arb anb Company, J^eto i^orfe 
 
 1921
 
 Copyright, 1921, by 
 MOFFAT, YARD & COMPANY 
 
 PRINTED IN THE TJ. S. A.
 
 TO 
 KATHERINE LITTLE BAKELESS
 
 INTRODUCTION 
 
 The present volume is an effort to trace the chain of 
 economic causes which produce modern wars. It is an 
 effort also to show that the same series of causes, at the 
 same time that they bring about wars, are working (some- 
 what less effectively) towards increasing international soli- 
 darity. And finally, it is a very modest attempt to indicate, 
 tentatively, the general lines on which the operation of these 
 economic causes in the first direction may be limited and 
 in the second forwarded. 
 
 Originally it was a study only of the economic causes of 
 war; but as the research progressed it speedily became ap- 
 parent that there was another side to the picture. By an 
 ironic paradox the same forces were producing two effects: 
 they were working toward war and peace at the same time. 
 
 The rise of industrialism has led to a struggle for markets 
 and for food supplies and raw materials. These have led 
 to international friction culminating in war, mainly through 
 questions of colonial policy. But since industrialism and 
 colonial expansion are impossible without a high degree of 
 financial inter-relationship among nations, and since the 
 interest of the financier is usually (but not by any means 
 always) in the preservation of peace for the sake of his in- 
 vestments' safety, the forces that generate wars also gen- 
 erate a force which tends to prevent them. Moreover, the 
 extreme complexity of these inter-relationships between 
 modern industrial states, through the need for international 
 transportation, communication, standardization of weights 
 and measures, publication of tariffs, and the like, has bred a 
 
 vii
 
 viii Introduction 
 
 spirit of co-operation among nations which is opposed to tie 
 war spirit. 
 
 But it is quite apparent that as matters have stood hither- 
 to, the economic causes are working a good deal faster 
 towards war than peace. The ratio of four peaceful years 
 to thirty-six years of war during the period 1878-1918 
 scarcely indicates that the war god is going out of business 
 immediately. It is for this reason that I have stressed the 
 causation of war, rather than its prevention ; and have tried 
 only in the concluding chapter to indicate very briefly 
 where the most promising remedy lies. For those who are 
 familiar with their writings, my debt to Mr. J. L. Garvin 
 of the London Observer and to Mr. H. N. Brailsford will be 
 too obvious to need the acknowledgment that I make most 
 gratefully. 
 
 The three quotations prefixed to the text serve to indicate 
 pretty accurately in advance the approach to the subject. 
 There is here no effort to advance a purely "economic theory 
 of history"; there is, however, an attempt to demonstrate 
 that the root of modern war lies in economic conditions, 
 even though other causes are sometimes operative to a less 
 extent. There is also a constant effort to strip off the dis- 
 guises which purely economic motives are likely to assume. 
 
 The study was begun while I was still in military service 
 at Camp Lee, Virginia. The duties of a battalion adjutant 
 having proved scarcely conducive to research, it was laid 
 aside and resumed some months later, after which it was 
 presented in skeletal form before the Seminar in the Phi- 
 losophy of History at Harvard. As a result of the criticisms 
 received there, several changes were made, and the subse- 
 quent revision has led to the introduction of much additional 
 data. 
 
 The manuscript has been read by Professor William 
 Ernest Hocking, of Harvard University, by Professor Walter
 
 Introduction ix 
 
 Wallace McLaren and Dr. James Washington Bell, of 
 Williams College, and by Mr. Lennox Mills, Rhodes Scholar 
 from British Columbia, greatly to its benefit and my own. 
 I owe to the Reverend Father Campbell, of the Society of 
 St. John the Evangelist, first hand information relative to 
 conditions in the Far East; to Dean J. H. Latane, of Johns 
 Hopkins University, and to Professor I. W. Howerth, of 
 the University of California, assistance in locating refer- 
 ences; to Dean Le Baron Russell Briggs, of Harvard Uni- 
 versity, aid in the revision of manuscript; and to Colonel 
 James B. Gowen, Executive Officer, General Staff College, 
 United States Army, the compilation of the list of wars 
 on page 46. 
 
 Although I am greatly indebted to these gentlemen for 
 many suggestions of the greatest value, the responsibility 
 both for statements of fact and for conclusions is, of course, 
 entirely my own. 
 
 John Bakeless. 
 Cambridge, Massachusetts, 
 26 October, 1920.
 
 CONTENTS 
 
 CHAPTER PAGE 
 
 Introduction vii 
 
 Kl. The Causes of Wars 1 
 
 X" II. The Economic Motives of Colonial Rivalry . 14 
 
 • III. The Economic Motives of the Wars of the 
 
 World: 1878-1914 38 
 
 V IV. The Economic Motives of the World War: 
 
 1914-1918 141 
 
 V. The Prevention of War by International 
 
 Finance 177 
 
 VI. Internationalism and Economic Conflict . . 196 
 
 VII. The League of Nations 212 
 
 • Bibliography 231 
 
 Index 250
 
 THE 
 ECONOMIC CAUSES OF MODERN WAR 
 
 A STUDY OF THE PERIOD: 1878-1918
 
 "The potent pressure of economic expansion is the motive 
 
 force in an international struggle." 
 
 — H. N. Brailsford. 
 
 "The desire for commercial privilege and for freedom from 
 commercial restraint is the primary cause of war." 
 
 — J. A. Hobson. 
 
 "Economic interpretation of history means, not that the 
 economic relations assert an exclusive influence, but that they 
 assert a preponderant influence in shaping the progress of society." 
 
 — E. R. A. Seligman.
 
 THE ECONOMIC CAUSES 
 
 OF 
 
 MODERN WAR 
 
 CHAPTER I 
 
 THE CAUSES OF WARS 
 
 Sharp distinction is always to be drawn between the real 
 and the apparent occasions of wars. The real, as contrasted 
 with the .ostensible causes, are not often clear and can seldom 
 be entirely understoodN No international conflict was ever 
 due to a single cause, but all have been rather the result of a 
 group of causes, of which only a few have ever become 
 
 apparent. 
 
 Nor are the incidents which precipitate wars likely to be 
 anything more than sparks, igniting magazines already 
 primed for explosion. A dispute with regard to a pig is 
 said at one time to have threatened war between the United 
 States and Great Britain, and on another occasion between 
 France and the Republic of Texas, then independent of the 
 United States. 1 Difficulties between Vienna and Belgrade 
 over the export of Serbian pigs had much to do with the 
 bitterness which culminated in the Sarajevo murder and 
 the World War. The cutting off by Spaniards of the ear 
 of an English sea captain named Jenkins was the imme- 
 diate cause of the war of 1738 between England and Spain, 
 
 *L W. Howerth: "The Causes of War," Scientific Monthly, 2:118:F '16. 
 See also D. W. C. Baker: A Texas Scrap-Book, p. 315. 
 
 1
 
 2 The Economic Causes of Modern War 
 
 which later became part of the War of the Austrian Succes- 
 sion, but which was first known as "Jenkins's Ear War." 1 
 Some of the fiercest fighting of the Nineteenth Century- 
 occurred during the war between Peru and Chile, which 
 followed a dispute over manure. The blowing up of the 
 battleship "Maine" in Havana harbor could never have 
 produced war between the United States and Spain had not 
 the two states been prepared for hostilities by a variety of 
 economic, idealistic, and humanitarian motives. Nor could 
 Bismarck's alteration of the Ems telegram have brought 
 about the Franco-Prussian War had not both countries 
 been already upon the verge of a conflict, from a number of 
 causes of varying natures, dynastic, nationalistic, economic, 
 and territorial. In all these cases, the incidents, tragic or 
 grotesque, to which the wars that followed have been directly 
 due, are evidently in no real sense the actual causes. For 
 them, one must look deeper and further back in history. 
 
 Religious differences; dynastic ambitions; efforts to 
 divert popular attention from domestic strife; "altruistic" 
 motives for the spread of a superior culture; the defense of 
 neutral rights; compliance with the terms of alliances; 
 efforts at national unification; struggles for national inde- 
 pendence; aid extended to rebels; ambition for hegemony 
 in the family of nations; affronts, real and fancied, to the 
 national honor; revenge, distrust, hatred, or mere misunder- 
 standings between nations, leading to increased armaments, 
 and culminating in "defensive" onslaughts upon one an- 
 other; the chauvinism of professional military or naval 
 castes; plotting against the peace and security of neighbor- 
 ing states ; and finally, a wide variety of economic motives, 
 over-population, immigration and emigration with their 
 attendant international friction, territorial expansion, colo- 
 
 1 Edward P. Cheyney: Short History of England, p. 557.
 
 The Causes of Wars 3 
 
 nies, trade rivalries, the needs of industrial states for mar- 
 kets, raw materials, and food supplies, security for vital 
 arteries of trade, access to the sea, "scientific" frontiers, and 
 the possession of strategic points — all these have been im- 
 portant causes of wars at one time or another. Although 
 certain of them seem more important at present, almost any 
 one can be found in some form or other, usually not very 
 thoroughly disguised, in the great war which has just come 
 to an end. 
 
 In the kingless and apparently godless world of 1920, 
 it is difficult to believe that either dynastic or religious 
 considerations could really produce wars; yet it is but a 
 few years since the divine right of kings was being pro- 
 claimed in all seriousness, and since Russian, Austrian, and 
 German troops were marching in the names of gods as 
 truly tribal as Allah and Yahweh ever were, to support 
 the threatened Romanoff, Hapsburg, and Hohenzollern 
 dynasties. During the same period, the Jehad, or Holy War, 
 was proclaimed in the Moslem world ; and although General 
 Allenby's campaign in Palestine can hardly be called a 
 Holy War, there is no denying that a strong religious 
 interest attached to it throughout the Christian world. 1 
 
 1 In 1866 Lecky regarded religious difficulties as a group of war causes 
 soon to become obsolete, for he wrote: "The great majority of wars 
 during the last 1,000 years may be classified under three heads — wars pro- 
 duced by opposition of religious belief, wars resulting from erroneous eco- 
 nomical notions, either concerning the balance of trade or the material 
 advantages of conquest, and wars resulting from the collision of the two 
 hostile doctrines of the Divine right of kings and the rights of nations. In 
 the first instance knowledge has gained a decisive, and in the second almost 
 a decisive victory. Whether it will ever render equally impossible political 
 combinations that outrage national sentiment is one of the great problems 
 of the future." — Lecky: Rationalism in Europe, vol. ii, pp. 219-220. 
 
 The history of the last fifty years renders his error as to the economic 
 factor so glaringly obvious that one is inclined to question the accuracy 
 of his conclusion as to the "decisive victory" which knowledge has gained 
 over religious hostilities. The civd war in Ireland is a case in point.
 
 4 The Economic Causes of Modern War 
 
 We must go further back in history to find wars which 
 have been fought with the religious motive well to the front, 
 but in all times and in all religions we find them. The Old 
 Testament teems with religious wars. Mohammedanism 
 has spread itself over half the world with the sword for 
 
 Mr. Oscar T. Crosby, President of the World Federation League, a 
 graduate of the United States Military Academy, who was for five years 
 a lieutenant of engineers in the United States Army, points to the com- 
 plex intermingling of faiths on both sides in the World War, as preclud- 
 ing the entrance of the religious motive. (International War, Its Causes 
 and Its Cure, p. 230.) His religious tabulation of the warring powers, 
 slightly enlarged, is as follows: 
 
 Allied Powers 
 
 British Empire — Protestant, Roman Catholic, Anglican Catholic, Ag- 
 nostic, Hindu, Mohammedan, Parsee, Buddhist, Jaina, Animist, Jewish, 
 Agnostic. 
 
 France — Roman Catholic, Agnostic, Protestant, Mohammedan, Buddhist, 
 Confucian, Animist, Jewish. 
 
 Russia — Greek Catholic, Protestant, Mohammedan, Buddhist, Armenian, 
 Jewish. 
 
 Italy — Roman Catholic, Agnostic, Jewish. 
 
 Japan — Buddhist, Shinto, Christian (of diverse shades), Agnostic. 
 
 America — Protestant, Anglican Catholic, Roman Catholic, Greek Cath- 
 olic, Jewish, Mohammedan, Agnostic. 
 
 Serbia — Greek Catholic. 
 
 Central Powers 
 
 Germany — Protestant, Roman Catholic, Agnostic, Jewish, Buddhist. 
 
 Austria — Roman Catholic, Protestant, Agnostic, Jewish. 
 
 Turkey — Mohammedan, Armenian, Jewish. 
 
 Bulgaria — Greek Catholic, Jewish. 
 
 The religious motive is no doubt of minor importance in the wars 
 of the modern world, but the well-known fact that the German General 
 Staff deliberately counted on a Mohammedan Holy War, together with 
 the other facts that I have given, serves to show that it is not dead by 
 any means. So astute an observer of international events as Dr. E. J. 
 Dillon remarks: "It is a fact — not yet realized even by the delegates 
 themselves — that distinctly religious motives inspired much that was done 
 by the Conference on what seemed political or social grounds." (The In- 
 side Story of the Peace Conference, p. 489.) Although Dr. Dillon later 
 (p. 496) regards "the plea that war may be provoked by such religious 
 inequality as still survives" as "unreal" it is evident that — however "re- 
 ligious inequality" may be consideredi — a force which is still so vital as 
 "religious motives" were at Paris, is seriously to be reckoned with.
 
 The Causes of Wars 5 
 
 mission ary. Christianity itself did not disdain to go crusad- 
 ing, and the history of Europe is filled with the battles of 
 Catholic and Protestant. 
 
 The clearest modern instance of a series of wars resulting 
 primarily from dynastic ambitions, is to be seen at the 
 beginning of the Nineteenth Century, in the Napoleonic 
 Wars. Although even here we do not have a case of wars 
 produced solely by dynastic ambition (for there were, of 
 course, other causes), we have at least an example of an 
 ambitious ruler, would-be founder of a dynasty, thirsty for 
 power, deliberately embroiling Europe for a period of many 
 years, for the sake of gratifying his own ambitions. 
 
 Not only may a ruler who regards the interests of his 
 dynasty as paramount engage in a war to enhance its 
 prestige, or to enlarge its domains; but he may also find 
 in war a convenient means of solidifying its power at home 
 by diverting popular attention from domestic difficulties. 
 The unanimity with which the widely diverging parties of 
 the German Empire, from Junker to Socialist, joined in 
 1914 for the period of the war, is a case in point. Nor is 
 warfare as a means of promoting harmony within the state 
 unknown even to republics. Immediately prior to the 
 outbreak of the American Civil War, Secretary Seward and 
 his followers are said to have been casting about for a for- 
 eign war as the most convenient means of allaying the grow- 
 ing discord between North and South. 1 Only in the union 
 before a common foe resulting from the Spanish-American 
 War did sectional hostility in the United States finally 
 vanish. 
 
 To talk of an "altruistic" war seems almost a contra- 
 diction in terms, and yet there can be no question that 
 France in the days of the First Republic was ready to carry 
 
 1 O. T. Crosby: International War, Its Causes and Its Cure, p. 335.
 
 6 The Economic Causes of Modern War 
 
 the gospel of "Liberte, egalite, fraternite," to an unwilling 
 world by force of arms, just as in the recent war our German 
 adversaries went forth with the avowed intention of bestow- 
 ing upon a benighted globe the inestimable advantages of 
 a superior Kultur. 
 
 Phrases like "the white man's burden," — which, as we 
 shall presently see, is a highly profitable load — are efforts 
 to cast the cloak of altruism over the stark economic 
 motivation of European colonial conflicts. England in 
 Egypt and Africa, the United States in the Philippines, 
 Italy in Tripoli, France in Tunis, Algiers, Morocco, and 
 Indo-China, insist that they are altruistically and with 
 sublime self-abnegation doing their share in caring for the 
 
 ". . . new-caught, sullen peoples, 
 Half-devil and half-child." 
 
 War also assumes an ethical aspect when the warring 
 powers profess to be engaged in a struggle on behalf of 
 the rights of neutrals, as was the case when the United 
 States went to war with Great Britain in 1812 in defense 
 of neutral rights at sea, or when in 1914 Belgium struck in 
 defense of her neutrality, or Great Britain (partly) in 
 defense of the same neutrality. But Great Britain, in 
 addition to the enormously important economic motives 
 to be discussed later, was also engaged by alliance to uphold 
 Belgian neutrality, one of the numerous examples afforded 
 by the World War of compliance with the terms of an 
 existing alliance as an occasion, though not a true cause, 
 of war. 
 
 What appears to be an innate human tendency to group 
 in increasingly large units, has contributed its share to the 
 wars of the world. The ancient world grouped and re- 
 grouped itself, at the price of endless warfare, again and 
 again, as Assyrian, Babylonian, and Egyptian Empires rose
 
 The Causes of Wars 7 
 
 and fell. Out of the large unit which was the Roman 
 Empire came the grouping and regrouping of the Holy 
 Roman Empire. 
 
 The last century has seen the unification of the German 
 Empire, the unification of Italy, and the settling, once for 
 all, of the question of the unity of the United States. 
 Sometimes such processes of national unification can be 
 brought about by agreement. More often, in the past, 
 unification has come through war. It was the wars of 
 1864, 1866, and 1870 that made possible the union of the 
 scattered German states; it was through battle that a United 
 Italy came together; and it was only after four years of 
 bitter warfare that our own country became forever a 
 united land. 
 
 Colonies and dependencies, and even countries which are 
 merely political associates, can usually become free and 
 independent states only by appeal to arms. The peaceful 
 separation of Sweden and Norway was a most unusual 
 incident. Every Republic in North and South America won 
 its freedom with the blood of its citizens. Greece, Serbia, 
 Bulgaria, Montenegro, Roumania, have one by one cast off 
 the yoke of Turkish suzerainty through war. Because the 
 desire for national independence leads to conflict, we have 
 within the last three years seen one small state after another 
 split from the empire of which it had hitherto been a part, 
 and with an army in the field assert its right to an inde- 
 pendent existence. 
 
 When a subject nation is thus engaged in a war for 
 independence, other powers, already hostile to its suzerain 
 from a variety of reasons, may make use of the occasion to 
 come to the assistance of the rebels, paying off old scores 
 under the convenient cloak of idealism. Thus it was that 
 France sent troops to the aid of the rebellious American 
 colonies of her traditional foe, Great Britain; and both in
 
 8 The Economic Causes of Modern War 
 
 European and South American countries the United States 
 has been credited with a similarly Machiavellian policy in 
 the Cuban intervention. 
 
 The rise and fall of German hegemony in Europe, com- 
 prised within the period 1862-1918, 1 furnished an excellent 
 example of a series of wars fought for the sake of the leader- 
 ship of one nation among the rest. Under Bismarck's adroit 
 statecraft, the war of 1864 aggrandized Prussia at the 
 expense of Denmark, and furnished the spark which, judi- 
 ciously fanned, burst into flame in the war with Austria in 
 1866. With the defeat of Austria, Prussia won the hege- 
 mony among the scattered German states, and after that, 
 by the defeat of France in the Franco-Prussian War, the 
 hegemony of Europe. Since then a series of threats, demon- 
 strations, diplomatic crises, and war scares have gone to the 
 maintenance of that hard-won hegemony, culminating at 
 last in the grand debacle of the present war and the dis- 
 appearance of German leadership. 
 
 The desire to maintain the hegemony of a nation leads 
 its statesmen to be highly sensitive when that extremely 
 nebulous quantity known as the "national honor" is in- 
 volved, and to be ready to threaten war over incidents 
 trifling in themselves, but regarded as tending to belittle 
 the prestige of the nation and to open the way to further 
 and more serious infringements of its dignity by the offend- 
 ing nation. A case in point is the scuffle at Casablanca in 
 which a German consul's cane was broken. That broken 
 cane very nearly brought all Europe into war. 
 
 Mutual hatred or the desire for revenge between nations 
 is another potent cause of war. The forty years of sus- 
 picion between France and Germany, the policy of 
 
 1 From Bismarck's accession in 1862 to the office of Chancellor to the 
 King of Prussia, to the signing of the armistice which ended the World 
 War in 1918.
 
 The Causes of Wars 9 
 
 "revanche," the rankling wound of the economic and senti- 
 mental loss of Alsace-Lorraine, have all but produced war 
 again and again and again. The distrust of Germany which 
 implanted itself in the English mind between 1890 and 
 1914, and the growing dislike and jealousy of England 
 which made itself apparent a little before, if not quite 
 simultaneously, in Germany, served to open the way for 
 hostilities. 
 
 Of the numerous causes from which such national dis- 
 trusts may grow, the most prolific is the sheer difficulty of 
 one nation in understanding another. The mere barrier 
 of language, where it exists, is in itself a contributing cause, 
 since there is no opportunity for the two peoples to know 
 and understand each other. Where this barrier does not 
 exist, there is unfortunately, an appalling opportunity for 
 friction through differences of custom, habits, manner of life, 
 all of which may in the end lead to bitterness because of the 
 very fact that through community of language, adverse 
 utterances in the journals of one nation are readily com- 
 prehended and copied by those of the other. 
 
 Where international hatred, distrust, or jealousy exists, 
 the national armament is certain to be increased. It was in 
 obedience to this law that France fortified her northern 
 frontier, that England added continually to her fleet, and 
 that the work of the German Flottenverein resulted in the 
 building of the one fleet capable of rivalling that of Great 
 Britain. Likewise, where these national jealousies exist, a 
 professional military caste is almost certain to spring up, 
 its whole life given to preparation for war — a caste always 
 on the lookout for war (with which its whole prospect of 
 preferment is bound up), favoring war, and quite capable 
 of indiscretions which may bring it about. Such was the 
 case in Germany prior to 1914; such was the case to a much
 
 10 The Economic Causes of Modern War 
 
 less degree in France; such was the case to some degree in 
 the British fleet. 
 
 National jealousies and hatreds, with the perpetual virus 
 of a military or naval hierarchy, even if the last be not all- 
 powerful, distrust and suspicion between the nations in- 
 volved, have as their results constant uneasiness and ever- 
 growing tension of the national nerves. This ends in 
 ultimatums, war-scares, and "defensive attacks" to take 
 advantage of speedier mobilization — all, sometimes, over 
 disagreements which were trifling in their origin, or at least 
 capable of peaceful solution, but which have at last bred 
 terrific conflicts. 
 
 All this leads naturally to what has always been one of 
 the chief reasons for warfare — the economic. From the 
 earliest days, when primitive tribes fought one another for 
 hunting grounds, for slaves, or for loot, economic considera- 
 tions have been involved in war. Economics and finance 
 do not merely enter into the provocation of modern war, 
 but are themselves among the means by which it is carried 
 on. The blockade is a device which was long ago discovered, 
 but today trade and tariff wars precede the use of force, and 
 economic pressure helps to force the enemy into submission. 
 
 That economic conditions have stimulated war in all ages 
 is a commonplace of history. The great mercantile powers 
 of the world have always fought one another, whether for 
 markets, over trade routes, or out of the sheer bitterness 
 engendered of their commercial contests. But it has re- 
 mained for the economic foes of our day to penetrate 
 into the furthermost corners of the earth with quarrels and 
 bickerings which have in the end been productive of the 
 bloodiest of wars, to carry "civilization" — and the surplus 
 products of their industries — throughout the world, merci- 
 lessly crushing the unfortunate natives that have stood in 
 their way, and in the end coming into armed conflicts with
 
 The Causes of Wars 11 
 
 one another because of the demand of each for more and 
 yet more opportunity for economic expansion. 
 
 Without going to the extremes of the out-and-out expo- 
 nents of the economic theory of history, one may say with 
 safety that there has never been a war into which economics 
 did not enter to some degree, and that there has seldom 
 been a war into which economics did not enter to a great 
 degree. 
 
 Pressure of population has always been a potent cause 
 of wars. It was this that sent the Goth and Hun south 
 to the Mediterranean as the Roman Empire tottered to its 
 fall — the pressure of other populations, behind them, press- 
 ing out of Asia, It is this that has caused modern wars. A 
 fecund nation grows so rapidly that it has no longer room 
 within its borders for its citizens. Then comes either emi- 
 gration, with its consequent loss to the state of its citizens, 
 or else expansion into the domains of a neighboring state. 
 Encroachment upon another's territories means war, inevi- 
 tably. Colonization means war, too, either with other 
 colonizing powers, or with the natives whom the new set- 
 tlers displace. 
 
 As the states of Europe have grown in population beyond 
 the capacity of their own soil to feed them, they have turned 
 from agriculture to industry. They have had to look beyond 
 their borders for food for their populations, for raw mate- 
 rials for their industries, and for markets for their wares. 
 They have required access to the sea, and strategic points 
 along the trade routes by which these things are brought 
 to them. 
 
 It is the increase of population, followed by the rise 
 of industrialism, and the consequent economic interde- 
 pendence in vital commodities without guaranties of eco- 
 nomic security save by force, that have rendered war inevi-
 
 12 The Economic Causes of Modern War 
 
 table in the modern world. The imperative need of food 
 supplies, of raw materials, of markets, and the insecurity of 
 a world organization which makes it possible for any of 
 these to be cut off at any moment by a hostile fleet or 
 army, lead to a frantic effort for the acquisition of the 
 portions of the earth where raw materials and food supplies 
 are to be had, as well as to the quest of colonies as pros- 
 pective consumers of the wares produced by the father- 
 land in excess of its own (and general European) consump- 
 tion. 
 
 This is the situation which stimulates the trade rivalries 
 that serve to embitter national quarrels already existing 
 for other reasons. Witness the increasing national hatred 
 between Great Britain and Germany, which grew apace as 
 German enterprise and scientific methods gradually dis- 
 placed the British in the markets of the world. Out of 
 trade rivalry comes colonial rivalry, colonial wars waged 
 by the mother countries for the possession and safeguarding 
 of their domains, and in the end, wars between the great 
 colonial powers themselves because of quarrels engendered 
 in their colonies. Witness Fashoda, witness Agadir, and 
 witness the whole miserable business of the Far and Near 
 East. 
 
 The chapters that follow are an effort: 
 
 First, to trace the economic forces that have driven Euro- 
 pean nations into constant collision with native tribes and 
 with one another in the backward lands of the earth — 
 primarily overpopulation, followed by manufacturing 
 beyond their own capacity to use, with resultant shortage 
 of food supplies and raw materials; 
 
 Second, to examine the actual working in history of this 
 theoretical chain of war causes, by a study of the origins 
 of the wars of the period 1878-1918;
 
 The Causes of Wars 13 
 
 Third, to set forth the paradox by which international 
 finance both produces and prevents wars; 
 
 Fourth, to show the way in which the economic causes 
 of wars affect internationalism, and their relation to the 
 League of Nations.
 
 CHAPTER II 
 
 THE ECONOMIC MOTIVES OF COLONIAL RIVALRY 
 
 Ever since states began, they have founded colonies, 
 although the objects and methods of the colonization have 
 radically differed, as has the status of the colonies in rela- 
 tion to the parent nations. Ancient Greek colonization, for 
 example, was a very different process in every respect from 
 the colonization of our own day, for the Greeks — to whom 
 the state was necessarily a city — regarded it as being natur- 
 ally a small organization, and drew the obvious inference 
 that the surplus population was to be accommodated only 
 by the founding of a new state. Hence the classic colony 
 consisted of a body of emigrants from the parent state, who 
 withdrew from it and went elsewhere to set up a new tt6\ls 
 which should carry on the traditions, customs, ideals, habits 
 of life of the old state, but without any political connection. 
 Thus were founded all the colonies which dotted the 
 shores of the iEgean; and thus it was that Carthage grew 
 from Phoenicia. 
 
 This was the earliest and most natural method of coloniza- 
 tion, but it was not the only one; nor was it — especially 
 as means of communication gradually improved — the only 
 natural one, for to the bonds of blood, customs, and religion 
 could well be added that of political connection. A proto- 
 type of the classic colonizing tradition is the city of Miletus, 
 with her daughter cities flourishing all about her; and of 
 the modern tradition, the British Empire, which has grown 
 gradually but surely through the centuries by the most suc- 
 cessful application that the world has yet seen, of the more 
 modern method. 
 
 14
 
 The Economic Motives of Colonial Rivalry 15 
 
 A change, then, has come over the methods of founding 
 and administering colonies, and it is a change which has 
 grown directly out of the increasing complexity of modern 
 civilization. Not only has there been a change in methods, 
 but new motives also have come to make themselves felt. 
 
 The most important, and indeed the fundamental cause 
 of the demand for colonies is the growth of the populations 
 of European states beyond the capacities of the territories 
 of the various nations to support them. Throughout the 
 entire continent an increase of population has been going 
 on, in some countries more rapidly than in others, but in 
 almost all fast enough to cause the numbers of the popula- 
 tion to exceed by far the productive capacity of their own 
 land. The population of Prussia would double itself by 
 natural increase in 49.2 years; that of England in 59.1 
 years; that of Italy in 65.7 years; that of Austria in 74.1; 
 and — though the population of France lags behind — even 
 there in a period of 591 years a similar increase would 
 result. 1 
 
 Evidently a constantly increasing pressure on the means 
 of subsistence must follow in all nations ; nor is the pressure 
 upon the other European states relieved, nor the colonial 
 or military rivalry lessened, by the slow rate of increase 
 in a single nation. By a paradox, the political effects of a 
 rising birth rate in Germany and a falling birth rate in 
 France have been precisely the same; for Germany, like 
 every other European Power, has believed herself compelled 
 to seek an outlet for population in a world empire; and 
 France has been forced to look to new colonies for the native 
 troops with which to meet the long-expected onslaught of 
 
 1 A. Newsholme: The Elements of Vital Statistics, p. 15. Professor F. W. 
 Taussig gives slightly different figures: 59 years for England and Wales; 65 
 years for Italy; but 990 years for France. (Principles of Economics, vol. 
 ii: p. 215.)
 
 16 The Economic Causes of Modern War 
 
 her more fecund neighbor. 1 In each case the practical 
 result has been identical — a demand for colonies, conse- 
 quent rivalry with other Powers having the same ends in 
 view, jealousy, and friction because the lands available 
 for European colonization are limited. 
 
 The German efforts to build up a world empire during the 
 latter part of the Nineteenth and the first part of the 
 Twentieth Centuries offer the clearest example of the forces 
 which have been at work throughout Europe generally, — 
 though not everywhere so clearly. 
 
 The characteristic fecundity of the Teuton has been one 
 of the most important causes of the German demand for 
 colonial expansion. Although the German birth rate has 
 been falling since 1876 when it stood at 41.0 per 1,000 of 
 the population of the whole Empire, the death rate has 
 been falling, too ; and this, together with state and municipal 
 efforts to check infant mortality has kept the population 
 constantly increasing. Within a hundred years it has 
 tripled, and 6,000,000 Germans have come to the United 
 States alone. 
 
 The following table for the decades preceding and fol- 
 lowing the establishment of the Empire, shows not only the 
 rise and fall of the birth rate, but also the maintenance of 
 a rate always sufficiently high to indicate a growth in 
 population : 2 
 
 1851-1860 35.3 per 1000 inhabitants 
 
 1861-1870 37.2 " 
 
 1871-1880 39.1 " 
 
 1881-1890 36.8 " " 
 
 1891-1900 36.2 " 
 
 1 The ratio between the two populations is given by Dr. E. J. DilloD as 
 standing at present at about 6:4 and advancing perceptibly to 7:4. (The 
 Inside Story of the Peace Conference, p. 422.) 
 
 3 W. H. Dawson: Evolution oj Modern Germany, p. 309.
 
 The Economic Motives of Colonial Rivalry 17 
 
 The compensation which the rapidly falling death rate 
 offered for the more slowly falling birth rate, and the con- 
 sequent maintenance of the population increase at more 
 than its old rate, may even more clearly be seen from the 
 following table of the years between 1870 and 1905: x 
 
 Year Population Increase Per Cent. 
 
 1870 40,818,000 *** *** 
 
 1875 42,729,000 1,911,000 4.7 
 
 1880 45,236,000 2,507,000 5.9 
 
 1885 46,858,000 1,622,000 3.6 
 
 1890 49,42S,000 2,570,000 5.5 
 
 1895 52,280,000 2,852,000 5.8 
 
 1900 56.367,000 4,087,000 7.8 
 
 1905 60,641,000 4,274,000 7.6 
 
 It is evident that sooner or later a nation faced by such 
 a situation must either submit to losses of its citizens by 
 emigration to less thickly settled lands, and to their eventual 
 absorption by the newer country; or else it must expand 
 its own territories by colonization. 
 
 It is not Germany alone which has faced a similar condi- 
 tion. Continuing and increasing pressure of population is 
 readily apparent in the following table of the yearly aver- 
 ages of the excess of births over deaths, which indicates 
 essentially similar population problems in the four principal 
 European states: 2 
 
 Germany Great Britain Italy France 
 
 1861-1870 408,333 365,499 183,196 93,515 
 
 1871-1880 511,034 431,436 191,538 64,063 
 
 1881-1890 551,308 442,112 307,082 66,982 
 
 1891-1900 730,265 430,000 339,409 23,961 
 
 1901-1910 866,338 484,822 369,959 46,524 
 
 Great Britain, with its beggarly 120,000 square miles of 
 
 1 W. H. Dawson: Evolution of Modern Germany, p. 336. 
 a E. J. Dillon: Inside Story of the Peace Conference, p. 428. The data 
 are derived from U Information.
 
 18 The Economic Causes of Modern War 
 
 land, could scarce afford standing room for all the men of 
 English blood who have gone out to people a quarter of the 
 globe. Japan, already overcrowded, is obeying the inevitable 
 impulse to expansion, and even the United States — as yet 
 hardly aware of the existence of a population problem — is 
 sending emigrants from its territory with a population 
 density of 30 to the square mile to the farm lands of 
 Canada where the density is only two persons to the square 
 mile. 1 
 
 Overpopulation, by the stern logic of necessity, presents 
 the modern state with the alternative either of seeing some 
 of its best blood absorbed in other less populous lands and 
 forever lost to it, or else of founding colonies in which the 
 emigrants crowded out of the homeland may settle to build 
 up a new part of the mother country, maintaining the old 
 traditions and customs, forming a part of the political organ- 
 ization, and opening new markets for the output of the 
 industries of the older state. 
 
 For there is a second motive, resulting from the increase 
 in population, for the scramble after colonies among the 
 great Powers in the last fifty years. An overpopulated 
 state cannot be agricultural; it must turn to industry, and 
 no state which is predominately industrial can hope to find 
 a market within its own frontiers for all the goods that it 
 produces. Its own citizens cannot consume, or cannot afford 
 to consume, all that they make. The business men of such 
 a state, finding their products going begging at home, seek 
 for markets abroad, and invariably, not content with sales 
 in foreign countries which are too often hopelessly hindered 
 by tariff regulation, they demand the establishment of 
 colonies as outlets for their wares. 
 
 Such is the condition which has arisen out of the gradual 
 
 1 Contrast this with 780 to the square mile in Saxony, 659 in Belgium, 
 474 in Holland.
 
 The Economic Motives of Colonial Rivalry 19 
 
 transformation of a great part of Europe into an industrial 
 region, a transformation which has itself grown, in part 
 at least, out of the increase of population. The increase of 
 German population and the development of German indus- 
 trialism have gone hand in hand with a decrease of German 
 agriculture, since an agricultural country cannot be densely 
 populated. When a people exceed a certain number, they 
 must turn to the close living of an industrial community 
 in order to exist, which means that they must produce far 
 more than their factories have made before, and that they 
 must consequently exceed their own capacity to use. 
 
 There arises in this way an industrial state of the modern 
 type, with an increasing population and a decreasing do- 
 mestic food supply, a state which must perforce look outside 
 its own boundaries for its raw materials and its markets, 
 and which must find them lest it starve. 1 For only in ex- 
 change for products sold abroad can it obtain the food which 
 it must have to feed its people. 
 
 The dire straits to which Holland, although a neutral 
 country, was reduced during the war, through the closing 
 of lines of transportation, shutting her off from markets 
 previously open, vividly illustrates the common European 
 situation. Although the rich black soil of the country had 
 at one time sufficed for the needs of the Dutch citizens, 
 they, like other European nations, had come to be depend- 
 ent on outside sources of supply when the war broke out. 
 
 These sources, one by one, were closed, more gradually 
 than in the case of the belligerent states, but none the less 
 actually and in some respects even more completely. In 
 
 1 M. Maurice Ajam, head of the Comite de Commerce Francais avec 
 l'AUemagne, while in Germany in September, 1913, summed up the situa- 
 tion in a single sentence shorter than this one of my own: "Si l'AUemagne 
 n'exporte pas, elle meurt." Ajam: Probleme Economique Franco-Alle- 
 mande, p. 25.
 
 20 The Economic Causes of Modern War 
 
 1918, moved by the menace of the submarine, the Dutch 
 began to raise wheat. In one week the government slaugh- 
 tered 50,000 cattle to keep them from starving, for there 
 was no more fodder. If Holland raises wheat she must 
 import fodder; if she raises fodder, she must import wheat, 
 for her land is limited in area. It was difficult or impossible 
 under war conditions to import either, and as a result of 
 the slaughter of the cattle, the people lived for eighteen 
 months practically without meat, upon an allowance of 
 one-half pound of fat in ten days, one-tenth of a litre of 
 milk a day, two pounds of bread in five days. The bread 
 was made of potatoes, beans, peas, linseed — anything that 
 was to be had as a wheat substitute. Consumption and 
 dysentery ravaged the population, weakened physically 
 from the food shortage; and in the last months of the war 
 famine was a reality. 
 
 Yet Holland had always been accounted a rich and pros- 
 perous country. It was both rich and prosperous in 1914; 
 but it was not economically self-sufficing. It suffered be- 
 cause it relied on outside sources of food supply. 
 
 But the industrial state — and every great Power in 
 Europe is an industrial state in this sense — must look beyond 
 its boundaries not only for the food that feeds its citizens, 
 but also for the food that feeds its mills. There is not a 
 state in Europe that does not look beyond its own borders 
 for food, raw materials, and markets — in spite of the brave 
 attempts made by Germany to be economically self-suffic- 
 ing during the war. 
 
 Such a state must find raw materials, ore, lumber, dye 
 stuffs, all that it uses in its industries. If it cannot get 
 these commodities, its mills must cease to operate, its work- 
 ers lie idle, and domestic disaster result. 
 
 A perfect example of this state of affairs may be seen in 
 the German Empire at the outbreak of the war. Being a
 
 The Economic Motives of Colonial Rivalry 21 
 
 manufacturing state, Germany required immense quanti- 
 ties of lumber, cotton, wool, silk, copper, platinum, mercury, 
 manganese, aluminum, sulphur, and other raw materials, 
 only a few of which could be found at all, and none in suffi- 
 cient quantities, within her borders. Being a manufactur- 
 ing state, hence a state rapidly ceasing to be agricultural, she 
 required also foodstuffs adequate to the support of a popu- 
 lation which the national fecundity was causing to increase 
 constantly. She produced large quantities of coal. Iron, 
 thanks to the annexation of the French provinces, she could 
 supply in quantity almost sufficient for her needs; but the 
 growth of German industry, unless the productivity of the 
 mines kept pace with it, would in the end make difficulty 
 even here. 
 
 The statistics of import and export for the two years 
 immediately preceding the outbreak of the war, serve best 
 to show exactly what was happening: 
 
 In millions of marks : 1 
 
 Imports 1912 1913 Exports 1912 1913 
 
 Raw cotton 579.8 607.1 Machinery and parts. 630.3 680.3 
 
 Wheat 395.8 417.3 Iron and iron goods .. 580.9 652.2 
 
 Raw wool 405.9 412.7 Coals 436.6 516.4 
 
 Barley 444.2 390.4 Cotton goods 421.6 446.5 
 
 Copper 313.0 335.3 Woollen goods 253.4 270.9 
 
 In other words, Germany was unable to produce her own 
 raw materials, and had to look abroad for the raw cotton and 
 wool for her textile industries; but was able to export the 
 same commodities, manufactured, at a figure in excess of 
 the value of the imports (representing, of course, the labor 
 of skilled mechanics), even after the needs of the domestic 
 population had been satisfied. It is also significant to note 
 that Germany did not export any food products, except 
 refined sugar ; and one may perhaps pause to reflect that the 
 
 1 Statesman's Yearbook, 1916, p. 957.
 
 
 22 The Economic Causes of Modern War 
 
 "iron goods" of which more than 600,000,000 marks were 
 exported in 1913, included, among other products, Krupps' 
 armor plate and artillery. 
 
 The vast disproportion existing between the export and 
 the import of foodstuffs is to be seen with equal plainness 
 in the same years. Thus, in 1912, the importations of 
 agricultural products and foodstuffs in general were 7,100,- 
 262,000 marks and in 1913 they were 7,036,738,000. As 
 against this, the exports of the same commodities for the 
 same years were 1,475,087,000 and 1,728,157,000 marks 
 respectively. 1 Germany was, in other words, a state com- 
 pletely dependent upon other states for the raw materials 
 in her most important industries, and for almost all the 
 food of a population which averages 310 to the square mile. 
 
 A great part of these imports, interference with which 
 would strike at the very life of industry and so at the life 
 of the nation itself, came by sea — by the sea which was con- 
 trolled by the chief commercial rival of the empire. At any 
 time the British fleet could have stopped German industry. 
 Until the war broke out in 1914 and the blockade shut down, 
 it did not do so; but the industrial chiefs of the German 
 Empire, working night and day to force their way into 
 British markets and win them for their own, cast anxious 
 eyes across the North Sea at the great fleet that waited, 
 waited. 
 
 Germany's difficulties were not peculiarly her own, for 
 in precisely similar fashion the United Kingdom itself is 
 dependent upon imports for the maintenance of the indus- 
 trial system. Cut off from importation — as Germany tried 
 to leave her through the submarine campaign — the indus- 
 tries of Great Britain would be paralyzed while British 
 
 1 Statesman's Yearbook, 1915, p. 950.
 
 The Economic Motives of Colonial Rivalry 23 
 
 workers starved. Raw materials and food alike must come to 
 Britain from the lands beyond the sea. Upon the supply of 
 cotton from America depends the prosperity of the great 
 Lancashire textile mills. For iron, silk, wool, cotton, lum- 
 ber, and, most of all, for foodstuffs, Great Britain, like her 
 enemy, had to turn to other lands. 
 
 Contrast of the imports and exports of foodstuffs and 
 raw materials, revealing the enormous excess of the former, 
 demonstrates the total dependence of the population of 
 the United Kingdom on external sources of supply, and 
 their helplessness the instant the lines of communication are 
 cut. The excess of the imports of foodstuffs and raw 
 materials over exports, and the corresponding excess of the 
 exports of manufactures over imports, both show the entire 
 dependence of an industrial state upon the world outside, 
 whether for food, raw materials, or markets for manu- 
 factures. The following table makes this clear : 1 
 
 In thousands oj pounds sterling: 
 
 Imports Exports 
 
 1914 1915 1914 1915 
 
 Food, drink and tobacco 296,969 381,901 44,390 47,380 
 
 Raw materials 236,532 287,341 110,571 106,929 
 
 Manufactured articles 160,490 181,515 362,723 314,569 
 
 The condition of France as regards imports and exports 
 is essentially the same. The former are mainly food and 
 raw materials; the latter primarily manufactured goods. 
 The Republic is compelled to rely almost entirely upon 
 other states for the supplies upon which her population 
 and her industry depend. The figures of import and export 
 of food, raw materials, and manufactures differ only in 
 detail from those of Great Britain and Germany. The 
 basic problem is identical with that of other European 
 Powers. Statistics for 1912 and 1913, the two years imme- 
 
 1 Statesman's Yearbook, 1916, p. 80.
 
 24 
 
 The Economic Causes of Modern War 
 
 diately preceding the World War, illustrate a situation long 
 existent: * 
 
 In millions of francs: 
 
 Imports 
 1912 1913 
 
 Food products 72 76 
 
 Raw materials 193 197 
 
 Manufactured goods . . 64 67 
 
 Exports 
 1912 191S 
 
 Food products 33 33 
 
 Raw materials 77 75 
 
 Manufactured goods . . 138 144 
 
 The most important commodities involved are: 1 
 
 In millions of francs: 
 
 Imports 
 
 1912 1913 
 
 Cereals 366.8 613.4 
 
 Wool 684.6 698.8 
 
 Raw silk 319.1 317.3 
 
 Raw cotton 567.1 541.2 
 
 Hides and furs 222.3 233.5 
 
 Coal and coke 501.4 575.2 
 
 
 Exports 
 
 
 1912 
 
 1913 
 
 Textiles (wool) . . 
 
 . . . 190.7 
 
 211.3 
 
 Textiles (silk) ... 
 
 ...292.3 
 
 374.7 
 
 Textiles (cotton) . 
 
 ...384.7 
 
 367.4 
 
 Skins and furs . . . 
 
 . . .321.2 
 
 315.7 
 
 Automobiles 
 
 ...207.1 
 
 217.5 
 
 Raw wool 
 
 ...362.5 
 
 294.2 
 
 In an even worse plight is Italy, a state which, with a 
 grave population problem and with large industries still 
 capable of great development, is totally dependent on 
 foreign sources for such indispensable commodities as iron, 
 coal, and cotton. Precisely as in the case of Germany, Eng- 
 land, and France, Italy is dependent, for the continuance of 
 industry and for feeding her civilian population, upon the 
 keeping open of lines of transportation, which includes the 
 sea lanes by which the greater part of her imports come to 
 her, and by which her exports reach their markets. 
 
 The economic difficulties of Europe are not confined to 
 that continent. Step by step they have followed the adop- 
 tion of western modes of life in the island Empire of Japan. 
 Like European states, Japan has swiftly come to feel her 
 boundaries binding her too closely, and the same series of 
 
 1 Statesman's Yearbook, 1914, p. 835.
 
 The Economic Motives of Colonial Rivalry 25 
 
 causes have been at work in the east as in the west — the 
 more clearly because of the brevity of the period within 
 which these changes have come about. 
 
 The population of Japan has increased very rapidly, and 
 is growing today at the rate of nearly 600,000 a year. 
 Estimates fix the number of Japanese in 1828 as 27,200,000. 
 The population is known to have been 34,000,000 in 1875, 
 and in 1903, including Formosa and the Pescadores, 
 50,000,000.* The density is 387 per square mile, only a little 
 less than that of Great Britain, and the rate of increase is 
 34.2 per thousand, or 40 per cent, higher than that of Great 
 Britain and very nearly that of the German Empire, to 
 which in many respects Japan presents a close analogy. 2 
 The strides in population have gone on far more rapidly in 
 the urban manufacturing centres than in the agricultural 
 districts. 
 
 Such a growth of population must inevitably tax the 
 capacity of any land, but the limit has been reached sooner 
 in Japan than in Europe, because the islands of the Empire 
 contain so little arable land. Allowing for the greatest 
 possible agricultural extension, fully 80 per cent, of the 
 whole area is such that it can never be tilled 3 and the per 
 capita share of land suitable for cultivation is but one- 
 half acre to each citizen. 4 It is small wonder, then, that it 
 
 1 These figures are from K. Asakawa: The Russo-Japanese Conflict, p. 
 2. They are largely based on the Fourth Financial and Economical Annual 
 of Japan, 1904, published by the Department of Finance. 
 
 a See R. P. Porter: Japan, the Rise of a Modern Power, p. 272, whose 
 figures are based on the 1913 census. 
 
 3 R. P. Porter: Japan, the Rise of a Modern Power, p. 269. 
 
 4 These and the following figures are from K. Asakawa : The Russo- 
 Japanese Conflict, pp. 3-5. They are derived from articles in the Koku- 
 min Shimbun {National News), February 5, 10, 19, 1904, the Toyo 
 Keizai Shimpo (Oriental Economist), May 5, 1903, pp. 17-19, and the 
 Twentieth Century, pp. 119 ff. For the sake of convenience, I have re- 
 duced them all to bushels, with the ratio, 1 koku = 4.9629 bushels.
 
 26 The Economic Causes of Modern War 
 
 has been necessary for the new industrial state to begin to 
 look abroad for food supplies, precisely as the states of 
 Europe have been constrained to do. 
 
 Rice is the staple article of diet of the people, who of 
 course differ in their needs differ in some respects from 
 Europeans. In 1877 the production had been 132,013,000 
 bushels, but as the need for more food was felt, it was made 
 possible, mainly through improved methods of cultivation, 
 and with a land increase of only 465,000 acres, to raise this 
 to 210,000,000 bushels in 1903. In the same period the pro- 
 duction of barley, rye, and wheat (known collectively as 
 mugi) rose from 47,644,000 bushels to 94,295,000 bushels. 
 But little more land was available, and although the pains- 
 taking Japanese farmers were getting all that could be wrung 
 from the paddy fields, the state already was forced to import 
 both rice and mugi, for consumption already far exceeded 
 production. Asakawa's estimates place the annual con- 
 sumption of rice in 1903 at about 228,300,000 bushels, and 
 of mugi at about 106,700,000. 
 
 How thoroughly the Mikado's people were becoming de- 
 pendent on external sources of supply for a variety of com- 
 modities may be seen from the following table of the im- 
 ports of food and raw materials: 1 
 
 In yen: m2 m3 
 
 Cotton 79,784,772 69,517,894 
 
 Wool 3,397,564 4,811,811 
 
 Rice 17,750,817 51,960,033 
 
 Wheat 240,050 4,767,832 
 
 Flour 3,278,324 10,324,415 
 
 Beans 4,956,000 7,993,411 
 
 Oil-cakes 10,121,712 10,739,359 
 
 Japanese imports today are, like those of European states, 
 mainly food and raw materials, and the exports very largely 
 
 l K Asakawa: The Russo-Japanese Conflict, p. 9. 1 yen = $.4984.
 
 The Economic Motives of Colonial Rivalry 27 
 
 manufactures, although silk, tea, and copper offer excep- 
 tions. The latest information available is contained in the 
 following table: * 
 
 In thousands of yen: 
 
 Imports 
 
 1918 1919 
 
 Raw cotton 515,559 667,867 
 
 Rice 89,776 162,220 
 
 Wool 60,146 61,304 
 
 Iron 204,789 156,579 
 
 Sugar 34,244 58,184 
 
 Oil-cakes 92,255 135,189 
 
 Beans and peas .... 20,396 35,213 
 
 Exports 
 1918 1919 
 
 Cotton manuf 396,213 394,294 
 
 Raw silk 370,337 623,919 
 
 Silk manuf 70,178 101,539 
 
 Matches 27,743 32,968 
 
 Refined sugar 23,252 21,627 
 
 Tea 23,058 18,402 
 
 Copper 37,749 19,647 
 
 As in Europe, so in Japan, a population which was 
 speedily coming to be purely industrial, could live only by 
 importing its foodstuffs and raw materials, paying for them 
 with its manufactures. Foreign trade had grown between 
 1873 and 1903 from 49,742,831 yen to 606,637,959 yen, and 
 even in 1903, 84.6 per cent, of this trade consisted of manu- 
 factured articles. 2 In 1919 British calculations gave a total 
 foreign trade of 427,219,194 pounds sterling. 3 
 
 For these three reasons, then, a great modern state must 
 possess colonies: to provide room for overflow of popula- 
 tion within the national area; to bring under the national 
 flag the sources of foodstuffs and raw materials; and to 
 provide markets for the manufactures of the parent state. 
 The United States, to be sure, furnishes an apparent excep- 
 tion to this rule. Our tradition is anti-imperialistic. We 
 are without an empire and we do not at present 4 desire to 
 
 1 Statesman's Yearbook, 1920, p. 1028. 
 
 a K. Asakawa: The Russo-Japanese Conflict, pp. 2-3. 
 
 ' Statesman's Yearbook, 1920, p. 1027. 
 
 *The possession of the Panama Canal has led the United States into a 
 course of action which may prove the germ of an imperialistic policy in 
 the Caribbean Sea. Rear-Admiral Colby N. Chester, U.S.N., has char- 
 acterized these waters and the Gulf of Mexico as "the larger Panama Canal 
 Zone." American influence is paramount in Cuba; Porto Rico has been
 
 28 The Economic Causes of Modern War 
 
 possess one ; but this is merely the attitude of a new people 
 in a vast and as yet only partially developed country, where 
 the pressure of population has scarcely begun to make itself 
 felt, where the phenomenon of production beyond domestic 
 needs has barely appeared, and where our immense wealth 
 in natural resources leaves us largely untouched by the 
 problem of raw materials and food supplies. 
 
 To the states of Europe, however, these problems are ever- 
 present. They require new lands where their citizens, 
 crowded out at home by the growth of the population, may 
 settle, where new markets and new supplies of raw materials 
 for the industries, and of foodstuffs for the people, of the 
 fatherland, may be found. That their citizens should 
 emigrate to other lands and be permanently lost to them 
 is intolerable; and even though markets, raw materials, 
 and foodstuffs might all be found in the territories of other 
 nations (usually hedged about with tariff restrictions), 
 none the less each state, facing the perpetual possibility of 
 war, wishes to be economically self-sufficient within its 
 own dominions. 
 
 Colonies they had to have; colonies they came to possess; 
 and, once obtained, the colonies with the routes that led 
 to them had to be defended. Out of this sprang the com- 
 petition in military and naval armaments; and the effort 
 to construct great fleets necessarily involved a scramble for 
 naval bases and strategic points only a shade less undigni- 
 fied than that for colonies. 
 
 South America, Asia, and Africa were the undeveloped 
 
 annexed; the Virgin Islands purchased from Denmark; the Canal Zone 
 leased from the Republic of Panama; Fonseca Bay leased for 99 years 
 from Nicaragua ; and administrative or financial supervision begun over 
 the Dominican Republic and Haiti. See J. H. Latane; From Isolation to 
 Leadership, pp. 132-133, and Admiral Chester's address, "The Present 
 Status of the Monroe Doctrine," in the Annals oj the American Academy 
 of Political and Social Science, 54:20-27, Jy., '14.
 
 The Economic Motives of Colonial Rivalry 29 
 
 lands that could be exploited. American pride leads us to 
 believe that it is our veto upon further colonization in 
 South America, expressed in the Monroe Doctrine, that 
 has prevented European expansion there; but it is at least 
 significant to note that upon each of the three occasions 
 when the Doctrine has been tested, the European Balance 
 of Power has operated to uphold it and to prevent the seiz- 
 ure of territory or the establishment of a recognized "sphere 
 of influence." 1 Whether because of the Monroe Doctrine 
 
 "The three chief tests of the doctrine have been: 1. The French in- 
 vasion oj Mexico, 1861-1866. Designed to place Maximilian on the throne, 
 the attempt ended in the withdrawal of the French troops supporting 
 the ill-fated Empire, under the combined influence of American threats 
 and Napoleon Ill's fear of the rising power of Prussia, which crushed 
 Denmark in 1864 and Austria in 1866. American representations were by- 
 no means to be neglected at this time, however, since the United States 
 had at its disposal, after the collapse of the Confederacy, a large and 
 well-trained army. 
 
 2. The Venezuelan boundary controversy with Great Britain in 1895. 
 Great Britain yielded her claim to extend the Guiana boundary at the 
 expense of Venezuela, but three dates make her motives fairly clear. 
 President Cleveland's Message to Congress on this subject was trans- 
 mitted December 17, 1895. The Jameson Raid in the Transvaal occurred 
 December 29, and the famous telegram of sympathy from the German 
 Kaiser to President Kruger was sent January 3, 1896. 
 
 3. The blockade of Venezuela by Great Britain, Italy, and Germany. 
 This has been regarded as a ballon d'essai on the part of Germany, with 
 a view to subsequent colonization in South America if the United 
 States failed to stand firm in support of the Monroe Doctrine. When, 
 however, Italy and Great Britain withdrew and accepted arbitration of 
 their claims, the British navy stood behind the Doctrine. 
 
 Professor J. H. Latane's comment on the role of the European Balance 
 of Power in maintaining the Monroe Doctrine is applicable here: "While 
 England has from time to time objected to some of the corollaries de- 
 duced from the Monroe Doctrine, she has on the whole been not unfa- 
 vorably disposed toward the essential features of the policy. The reason 
 for this is that the Monroe Doctrine has been an open-door policy and 
 has thus been in general accord with the British policy of free trade. 
 The United States has not used the Monroe Doctrine for the establish- 
 ment of exclusive trade relations with our southern neighbors. . . . There 
 has, therefore, been little rivalry between the United States and the 
 Powers of Europe in the field of South American commerce. Our in-
 
 30 The Economic Causes of Modern War 
 
 or because of the mutual jealousy among the European 
 Powers, or because of the strength of the British navy, the 
 fact remains that the further acquisition of territory in the 
 Americas by European states has been blocked since the 
 announcement of the Doctrine by President Monroe in 
 1823. 
 
 Only Asia and Africa, then, lay open to the colonizing 
 powers, and in both continents the lands of the native states 
 have been gobbled up mercilessly, on the flimsiest pretexts 
 and seldom with any real justification of the high-sounding 
 talk of "vital interests," "spheres of influence," "the advance 
 of civilization," and "the white man's burden." 
 
 But if colonies are to furnish an outlet for a surplus popu- 
 lation and for surplus manufactures, if they are to supply 
 the mother country with the raw materials necessary to 
 her industries, the trade routes leading to them must be 
 free at all times. Great Britain, the first in the modern 
 colonial field had seen this before the rest of the European 
 states, and with a powerful fleet, with her troops safely 
 ensconced in half the strategical locations of the earth, and 
 with commanding positions on all the trade routes to her 
 most important colony, India, she possessed the command 
 over the sea lanes of which the other powers more and more 
 came to feel the need. 
 
 terest has been political rather than commercial. We have prevented 
 the establishment of spheres of influence and preserved the open door. 
 This situation has been in full accord with British policy. Had Great 
 Britain adopted a high tariff policy and been compelled to demand com- 
 mercial concessions from Latin-America by force, the Monroe Doctrine 
 would long since have gone by the board and been forgotten. Americans 
 should not forget the fact, moreover, that at any time during the past 
 twenty years Great Britain could have settled all her outstanding dif- 
 ficulties with Germany by agreeing to sacrifice the Monroe Doctrine and 
 give her rival a free hand in South America. In the face of such a com- 
 bination our navy would have been of little avail. . . ." — J. H. Latane: 
 From Isolation to Leadership, pp. 52-53.
 
 The Economic Motives of Colonial Rivalry 31 
 
 With the exception of the Kiel and Panama Canals, there 
 is not a strategic point upon the trade routes of the world 
 that Great Britain does not control; and today the German 
 dominance over the former has been ended, while the 
 foreign policy of the United States is such that the Ameri- 
 can ownership of the Panama Canal is an adequate guar- 
 anty of the safety of British trade without putting the 
 Empire to the trouble of controlling it. 
 
 The best single instance of the importance to modern 
 industrial nations of trade routes in general, and of the 
 command of the approaches to rich colonies in particular, is 
 to be seen in the British policy of winning every one of 
 the approaches to India, Throughout the entire Nine- 
 teenth Century and until their design was accomplished in 
 the Twentieth, British diplomats have bent every effort 
 towards securing the points of dominance along every 
 possible avenue leading to the Indian Empire, whether on 
 land or sea, The policy may have been to a degree uncon- 
 scious in the statesmen who initiated it; but in later stages 
 its objects have been defined with perfect clearness, until 
 in the first twenty years of the present century the work of 
 over a hundred years was brought to completion. The last 
 and frankest statement of this century-long effort of Great 
 Britain was made by Winston Spencer Churchill, in an 
 interview given to an American journalist during the war: 
 
 "History will vindicate the Dardanelles expedition. It was 
 planned with the sole idea of cutting and keeping closed the Ger- 
 man road to India." 1 
 
 Because of India, Great Britain made war on Napoleon 
 in the Mediterranean, in Egypt, and in Syria. When Mo- 
 hammed Ali set out from Egypt to overthrow the Ottoman 
 
 1 Isaac F. Marcosson : Adventures in Interviewing, p. 154.
 
 32 The Economic Causes of Modern War 
 
 Empire, he found a British army confronting him in Syria, 
 just as Napoleon had, and for the same reason — to prevent 
 any threat to the safety of the Indian Empire which is 
 economically all-important to Britain. At the Congress of 
 Berlin the English asked only for the possession of certain 
 of the approaches to India — Malta, the Cape of Good Hope, 
 Mauritius, the Seychelles, and Ceylon. In defiance of public 
 opinion and the common sentiment of Christendom, British 
 foreign policy opposed the aspirations of the Balkan states 
 for independence and condoned the barbarous massacres 
 of Christians by the Turks, lest the route across the Isthmus 
 of Suez (safe enough whilst the important Ottoman Empire 
 held Constantinople) should be threatened by its weaken- 
 ing, and lest Russia might then establish herself instead of 
 Turkey on the Golden Horn, at a time when Russian expan- 
 sion south and east through Asia was regarded as threaten- 
 ing to India. 
 
 It was to prevent such an occurrence that Disraeli was 
 ready to start another war with Russia, did in fact set the 
 British fleet in motion, rather than permit the Treaty of San 
 Stefano to stand, and Russia to push nearer to the possession 
 of Constantinople. Because the proposed construction of 
 the Suez Canal opened a new route to India which would be 
 in possession of another Continental Power, Great Britain 
 opposed it; but when — protest having been without avail, 
 and the canal having been constructed — the Prime Minister, 
 Disraeli, was able to buy hurriedly from the bankrupt Khe- 
 dive of Egypt enough of the stock to give the Empire an 
 opportunity to control the canal, English foreign policy 
 made an abrupt aboutface. 
 
 No longer was the Ottoman Empire useful as a guardian 
 of India, and her quondam friend was the first to attack the 
 integrity of the imperial territories. Cyprus first, then 
 Egypt, with only the flimsiest disguises, were transferred to
 
 The Economic Motives of Colonial Rivalry 33 
 
 British hands, and only then did the Balkan policy change, 
 and only then were the oppressed Balkan nations permitted 
 to seek what were, for one in the game of international 
 politics, "legitimate aspirations." 
 
 For the further protection of India, Great Britain entered 
 upon an effort for the control of the passages into the Indian 
 Ocean, the Gulf of Bengal on the east, and the Arabian Sea 
 on the west, and of the passages from the Indian Ocean into 
 these two smaller bodies of water. Soon it was found neces- 
 sary to secure control of the shores of the Arabian Ocean 
 and of the Gulf of Siam, and then the policy began to be 
 extended to the Hinterland as well. 
 
 Surely, however, the enormous fleet of Great Britain was 
 sufficient to protect the sea lanes leading to India, once it 
 was assured that no hostile power could possibly find footing 
 on the neighboring coasts. No, for a modern fleet in being, 
 imposing as its power may be, is in another sense a very 
 delicate and sensitive mechanism. The modern war vessel, 
 like any other complex mechanism, gets out of order easily. 
 Difficulties with engines, electric lighting, electric ammuni- 
 tion supply, electric fire control, injuries to hull, to wireless, 
 to superstructure, to bulkheads, — any one of these may 
 reduce the most powerful fighting structure afloat to rela- 
 tive impotence. Because of this, a great Power must have 
 naval bases scattered throughout the world, points where 
 a warship may find drydocks, skilled mechanics, and an 
 opportunity to refit. 
 
 More than this, there is the perpetual problem of fuel 
 supply. The quantity of coal used by a Dreadnaught or a 
 battle cruiser is tremendous; and even though the modern 
 oil-burning vessels have modified the fuel factor so as to 
 extend the cruising radius, they must in the end face the 
 same problems. It must be remembered that, although in 
 time of peace a warship may revictual and refuel in any
 
 34 The Economic Causes of Modern War 
 
 port, in time of war international law (which in this point, 
 at least, is likely to be observed) permits the supply by a 
 friendly Power of only 24 hours' fuel, or of enough to permit 
 the vessel to reach its nearest home port. 
 
 Since fleets are planned and administered for use in time 
 of war, naval bases must be located with reference to their 
 needs under such conditions, and therefore if the British 
 fleet is to protect India, there must be naval bases in the 
 Mediterranean, in the Far East, and conveniently near the 
 Indian Ocean. Not only this, but, since the needs of a 
 possible hostile fleet would be essentially identical with those 
 of the British fleet, against which it would operate in these 
 very waters, foreign naval bases must be excluded from this 
 territory. The obvious solution is to grab all points 
 available, if not for British use, then to keep other powers 
 from gaining a foothold. 
 
 So it is that from a fundamentally economic motive — the 
 protection of a profitable colony — we find the acquisitions 
 of a century accounted for, some won while the evolution 
 of modern navies was barely beginning to make the problems 
 of the naval policies of today apparent, others the spoil 
 of very recent years. This is why we find on the routes to 
 India a veritable chain of British possessions: Gibraltar, 
 dominating the entrance to the Mediterranean, Malta, 
 Cyprus, guarding the trade lanes within the sea, the 
 approaches to Egypt and the Suez Canal, and through them, 
 the approaches to India itself. Egypt has long been in 
 British hands for all its nominal allegiance to the Sultan; 
 even this cloak is now thrown off. Beyond the canal lie 
 Aden, Perim, and the Sudan, all in British control, all 
 guarding India, all making for the convenience of the 
 British power in wartime — all the logical outgrowth of a 
 colonial policy which is itself the outgrowth of economic 
 need.
 
 The Economic Motives of Colonial Rivalry 35 
 
 In the west, Sokotra, the Seychelles Islands, and others, 
 and the Bahrain Islands in the Persian Gulf, keep out 
 intruders. At the southern extremity of India, Ceylon 
 (itself an economic asset as well as a strategic) serves for 
 defense, as do the islands in the Bay of Bengal; and further 
 to the east, Singapore, the Malay Peninsula, and the north 
 shore of Borneo ward off attack by way of the Pacific. 
 
 In order to establish a strategic frontier to the north, 
 mainly in fear of Russian aggression, Great Britain has 
 worked for years, with constant wars against natives not 
 wholly appreciative of the advantages of British Kultur, 
 and with equally constant friction with Russia and the 
 eternal possibility of a Russian war. During the years be- 
 tween 1875 and 1903 Baluchistan was gradually brought 
 under British rule. Afghanistan, extending north and east, 
 one of the two main keys to India, was forced to accept 
 British dominion with nominal independence, after inva- 
 sions in 1839, 1842, 1878, and 1880. In 1907 the Anglo- 
 Russian agreement further strengthened the British hold 
 on India by eliminating the possibility of imperialistic 
 aggression from the north. 
 
 Tibet is not yet British, but it has already been invaded 
 by expeditionary forces, and would undoubtedly have been 
 the scene of further massacres (for that is what the combats 
 between trained British troops and the untrained and in- 
 effective Tibetan natives amounted to) had not the agree- 
 ment of 1907 put an end to territorial rivalry and given at 
 least a temporary assurance that — with the prospect of Rus- 
 sian seizure put away — there could be no threat to India 
 from a province under the suzerainty of the weak Chinese 
 Empire. 
 
 Nepal and Bhutan, except for Afghanistan the only re- 
 maining "independent" states on the Indian border, are 
 secured to the British by large subsidies and strictly enforced
 
 36 The Economic Causes of Modem War 
 
 promises of "good behavior/' Part of the latter was an- 
 nexed in 1864 and in Bhutan there has been a British 
 Resident for a century. 
 
 India furnishes an example 01? a large scale of the way 
 in which the necessity for the possession of colonies in turn 
 leads to the necessity for a fleet, which in its turn leads to 
 the need for naval bases; and it furnishes an example, too, 
 of the way in which the protection of trade routes demands 
 the control of every important point along them that the 
 colonial Power can secure. It shows also the likelihood of 
 native wars for the "rectification" of a "scientific" frontier. 
 
 The creation of a fleet by one power for the protection of 
 its colonies is an implied threat to the safety of the colonies 
 of other powers and to their trade, through the eternal 
 possibility of the stoppage of the sea lanes. If the threat- 
 ened powers possess fleets or begin to build them, we have 
 the germs of naval rivalry, in itself an incentive to war 
 through mutual fear, through mutual jealousy, and through 
 the chauvinism of the rival naval castes. 
 
 All of this springs from colonization and the protection of 
 trade routes, and we have seen the chain of economic 
 causation by which the need for colonies and the imperative 
 necessity of foreign trade grows from overpopulation, creat- 
 ing an industrial civilization, which brings about excessive 
 production and the need for food, raw materials, and markets 
 beyond those that the home state can furnish. In other 
 words, the disputes over colonies which have lain at the 
 root of the wars and likewise of the international dissen- 
 sions which have threatened wars for the last half century, 
 have — whatever their immediate and ostensible causes — 
 had an economic root in rivalry for markets and raw mate- 
 rials. National rivalry, naval rivalry, military rivalry, colo- 
 nial rivalry are but different forms of the fundamental and
 
 The Economic Motives of Colonial Rivalry 37 
 
 underlying economic rivalry among modern nations. Such 
 economic rivalry is the natural result of growing populations 
 and of production beyond their own needs among the states 
 of Europe, which have become increasingly industrial and 
 decreasingly agricultural because of this very growth of 
 population. 
 
 Having examined the general principles out of which wars 
 have sprung, and having seen how it is, in general, that 
 modern wars may be produced, let us examine, one by one, 
 the wars of the last quarter of the Nineteenth Century and 
 of the beginning of the Twentieth Century. In each we 
 shall discover an economic factor, whether immediate or 
 derived. In each we shall find causes other than economic; 
 but in every one (ranging from minor conflicts with native 
 tribes in the pursuit of colonial policies, to hostilities be- 
 tween two great Powers, and finally to the catastrophe of 
 the World War) we shall find the economic factor, more or 
 less disguised. 
 
 Let us not be deceived by words. "Legitimate aspira- 
 tions," "national ambitions," "hegemony," "special inter- 
 ests," "spheres of influence," "national security" — most of 
 these are nothing save high-sounding phrases, gracefully 
 glossing over stark economic desires, needs, greeds, ambi- 
 tions, and savagely bitter rivalries.
 
 CHAPTER III 
 
 THE ECONOMIC MOTIVES OF THE WARS OF THE WORLD! 
 
 1878-1914 
 
 The year 1878 is one of the most momentous in European 
 history, marking as it does the beginning of the movements 
 which ended in the formation of the two great alliances 
 whose feuds, jealousies, and suspicions found their natural 
 culmination in the World War of 1914. It is from the 
 Congress of Berlin, held in this year to readjust the peace 
 terms imposed upon Turkey by the victorious Russians in 
 the Treaty of San Stefano, that the epoch of tremendous 
 armaments under which Europe has groaned for the last 
 half century may properly be dated. Wars there have been 
 before this date, and preparations for war, but never on 
 such a scale as have developed in our own time through the 
 national rivalries fostered by underlying economic conflicts. 
 
 The Congress of Berlin marks the close of the period of 
 nationalist revolutions and wars in Europe. With one or 
 two exceptions, all the European states had attained sta- 
 bility in their constitutional systems. From this time on, 
 diplomatic ambition tended more and more to extra-Euro- 
 pean interests; but the alliances that resulted from the 
 Treaty of Berlin did not make easier the solution of the 
 vexing questions of international economics that were to 
 come. Our planet had grown into an economic whole. 
 There was no precedent in statecraft for such a world sit- 
 uation. 
 
 The root of half the international unrest in Europe is to 
 be found in this treaty, in the hatreds, dissatisfactions, and 
 
 38
 
 The Wars of the World: 1878-1914 39 
 
 injustices which it created; and the wars which have suc- 
 ceeded it, show with greater clearness than ever before the 
 importance of the economic factor in the causation of war. 
 
 The Congress of Berlin itself may be said to have arisen 
 from economic causes, for it was the result of British in- 
 sistence upon blocking the Russian movement towards Con- 
 stantinople — a policy which was itself of economic origin. 
 The desire of Russia for the possession of Constantinople 
 is the natural demand of an enormous hinterland for an 
 outlet upon warm water. Russia, primarily an agricultural 
 land, has always been denied access to the sea, in spite of 
 her thousands of miles of coast. Archangel, her northern 
 port, is insufficient because of the ice which closes it for half 
 the year. The port of Vladivostok, opening on the Pa- 
 cific, had not then been established, and even today is in- 
 adequate to satisfy the needs of the Empire; and the Baltic 
 ports were too few in number to serve as outlets for so 
 large a territory. Constantinople is so situated that it 
 can at any time command complete control over the com- 
 merce of southern Russia, passing from the Black Sea out 
 into the Mediterranean. The Sultan's interdict upon the 
 passage of war vessels, effectually enclosing the Black Sea 
 fleet and facilitating the British defense of the Suez Canal, 
 eliminated Russia as a naval power in the Mediterranean, 
 since operations conducted from a Baltic base were wholly 
 out of the question. Russian eagerness for the possession 
 of this historic city has been an assumption in international 
 politics for a century at least. 
 
 So much for the economic motives on one side; they 
 found themselves blocked by economic motives almost as 
 powerful on the other — an economic rivalry which made 
 itself felt in Continental and colonial affairs constantly un- 
 til the final adjustment of Anglo-Russian differences in 
 1907. British fear of the results in India of Russian ex-
 
 40 The Economic Causes of Modern War 
 
 pansion had made it a cardinal principle of foreign policy 
 to check Slavic expansion in any direction, and especially 
 towards Constantinople, which then dominated the land 
 routes now followed by the Suez Canal. It is largely in 
 following out this fundamentally economic policy that 
 Great Britain had fought Russia in the Crimea in 1854-56 ; 
 and after the building of the Canal and its passage into 
 British hands, it was more than ever important that no 
 power should be allowed to establish itself on the Bosphorus 
 which might ever be either capable or desirous of threat- 
 ening the vital artery that led straight to the richest colony 
 of imperial Britain. 
 
 At the outbreak of the war with Turkey in 1877, the 
 Tsar had given his word that he had "not the smallest wish 
 or intention to be possessed of Constantinople." The Turks 
 capitulated early in the following year, as the Russian ar- 
 mies were moving out of Adrianople against the last line 
 of defense remaining in front of the Turkish capital; and 
 in the peace of San Stefano, Russia, flushed with victory, 
 had imposed terms of peace which left Constantinople to 
 the Turks indeed, but which carried Slavic territory to 
 their very doors, by the erection of an enlarged Bulgaria 
 which would include all of eastern Rumelia, and which 
 would extend Russian influence so near to the all-impor- 
 tant city as to be, in the British view, dangerous in the ex- 
 treme. 
 
 The Treaty of San Stefano was unsatisfactory to the 
 other Great Powers for a variety of reasons. To Great 
 Britain, the weakening of Turkey which would result from 
 it, meant the possibility of Russian development which 
 might become threatening to her colonial possessions; and 
 this fear, economic in origin, was enhanced by the creation 
 of the new Bulgarian state, which, it was thought with 
 good reason, would be a mere appanage of Russia and
 
 The Wars of the World: 1878-1914 41 
 
 which would certainly be an extension of Slavic power. To 
 Austria-Hungary the treaty was equally unsatisfactory, be- 
 cause it increased Russian influence in the Balkans to such 
 an extent that the Austrian ambition for the development 
 of her influence in the regions in which lay some of her 
 most important markets might have to be modified or 
 abandoned. 
 
 Bismarck, professing entire disinterestedness, but really 
 desirous of having a finger in the international pie for the 
 sake of maintaining the German hegemony which he had 
 so dearly bought, offered his services as a mediator (or, 
 in his own phrase, as an "honest broker"), between the 
 conflicting interests of the Powers. The Congress of Ber- 
 lin met for its first session at two o'clock in the afternoon 
 of June 13, 1878. After a month of stormy sessions (dur- 
 ing which the Russian plenipotentiary, Prince Gortchakoff, 
 and the English Prime Minister, Lord Beaconsfield, both 
 threatened to break off negotiations) the Treaty of Berlin 
 was finally patched together. England checked Russia at the 
 Bosphorus, for Macedonia was secured to Turkey, thus 
 keeping the Slavs at a distance from Constantinople and 
 the route to India. Bulgarian boundaries were so drawn 
 as still more to halt the extension of Slavic power. Aus- 
 tria-Hungary secured her "rights" in Bosnia-Herzegovina, 
 the privilege of administration and the right of maintain- 
 ing a military force in the neighboring Sanjak of Novi- 
 Bazar, which was later to acquire a peculiar economic im- 
 portance in connection with the Bagdad railway. 
 
 The most immediate and obvious international result of 
 the treaty was the abrupt ending of the era of good feeling 
 which had hitherto existed between Russia and the new 
 German Empire, an event which roused Bismarck to the 
 necessity of securing an Austrian alliance against the Rus- 
 sian attack which seemed imminent. On October 7, 1879,
 
 42 The Economic Causes oj Modern War 
 
 this alliance was concluded. Its most important provi- 
 sions were: 
 
 "1. Should, contrary to the hope and against the sincere wish 
 of the two High Contracting Parties, one of the Empires be at- 
 tacked by Russia, the High Contracting Parties are bound to 
 stand by each other with the whole of the armed forces of the 
 Empires, and, in consequence thereof, only to conclude peace 
 jointly, and in agreement. 
 
 "2. Should one of the High Contracting Parties be attacked 
 by another Power, the other High Contracting Party hereby 
 binds itself, not only not to stand by the aggressor of its High 
 Ally, but to observe at least an attitude of benevolent neutrality 
 towards its High Contractor. 
 
 "3. If, however, in such a case, the attacking Power should 
 be supported by Russia, either in the form of active co-opera- 
 tion or by military measures menacing to the party attacked, the 
 obligation defined in Clause I of reciprocal help with the entire 
 armed strength comes immediately into force in this case also, 
 and the war will then also be waged jointly by the Two High 
 Contracting Parties until the joint conclusion of peace." 
 
 Germany was thus secured against attack by Russia, or 
 by Russia aided by France; and assured, too, of the neu- 
 trality of Austria in the event of an attack by either of 
 those powers acting alone. 
 
 To make assurance doubly sure, Bismarck still desired a 
 third member of the alliance, and he turned to Italy as the 
 only available power. To reconcile the Italians to becom- 
 ing the allies of Austria, their traditional foes, the astute 
 German Chancellor had recourse to playing upon the eco- 
 nomic desires of France and Italy and stirring up the latent 
 colonial rivalry between them. Realizing perfectly that 
 both states wished to expand in Tunis, he is said to have 
 given France secretly to understand, in 1882, that there 
 would be no German opposition to her occupancy of that 
 land; and then to have taken advantage of the Italian in-
 
 The Wars of the World: 1878-1914 43 
 
 dignation at being anticipated in colonization by the 
 French, to draw a third member into the German-Austrian 
 alliance. 
 
 The existence of such a Triple Alliance was a tacit threat 
 to the other Powers of Europe. It could be met only by 
 the formation of a rival alliance, and towards this inev- 
 itable event history gradually shaped itself. France and 
 Russia formed a Dual Entente in 1891, almost ten years 
 afterwards. England, by the agreement with France in 
 1904 and with Russia in 1907, became practically a part of 
 a league which, not so closely knit as was its rival, is best 
 described in the phrase usually applied to it — the Entente. 
 
 In the Congress of Berlin we have, then, the origin of 
 the two alliances which have divided Europe ever since. 
 The history of the wars of Europe, from this time on, is 
 the history of the colonial ambitions, commercial enter- 
 prises, economic difficulties, of one or the other of them. 
 Although never until 1914 did the two great groups of 
 powers come to grips, yet every one of the component states 
 has been involved again and again in wars in which the 
 economic motive was predominant; and in each case the 
 issue has been affected by the existence of the alliances 
 and the ever-present possibility of the two groups' be- 
 coming involved as wholes. During this period the in- 
 dustrial changes of the century became complete. From 
 1878 we have a new relationship in the affairs of Europe, 
 and from this year we may begin our survey of the eco- 
 nomic rivalries which have produced its wars. 
 
 Two more events mark the year 1878 as significant in 
 the history of Europe. One was the return from Africa 
 of Henry M. Stanley, sent thither by the New York Herald 
 to find the missionary, David Livingstone. Though it lies 
 at the very doors of Europe, though its northern coast had
 
 44 The Economic Causes of Modern War 
 
 supported a flourishing civilization when all Europe was a 
 wilderness, and though eight generations of European mari- 
 ners had circumnavigated the continent on their way to 
 India, Africa was an almost unknown land. That it had 
 been permitted to remain so while distant America was 
 growing into a great state, is due to the peculiarly in- 
 hospitable character of the coasts. The vast and fertile in- 
 terior plateau is nearly everywhere shut away from the sea, 
 either by parched deserts or malarial swamps, while the 
 great rivers, with courses interrupted either by falls or 
 rapids, hold out little inducement to the navigator. Ex- 
 cept for English and Dutch settlements at the extreme 
 south, the French in the extreme north, a few trading 
 centres on the West Coast, and some all but derelict Portu- 
 guese stations in Angola and Mozambique, the whole con- 
 tinent lay available for exploitation by European powers 
 upon whom economic pressure was just beginning to be 
 galling. Only in the light of the last fifty years can the 
 true significance of Stanley's return be appreciated. It 
 meant the opening up of a Continent, old but new, and of 
 a host of economic rivalries which were to imperil the peace 
 of the whole globe. 
 
 The other event was the announcement of the invention 
 by the English metallurgist, Sidney Gilchrist Thomas, of 
 a new method of manufacturing steel of the first quality 
 from phosphorus-bearing ore. Continental ironmasters, 
 especially the Germans, had profited little from Sir Henry 
 Bessemer's earlier discovery of a method of converting pig 
 iron into steel, for Bessemer had based his process on ex- 
 periments upon English ores without phosphorus, and it 
 was inapplicable to the rich ore deposits of Lorraine, which 
 contained much of this element. Although the English 
 manufacturers failed to appreciate the enormous signifi- 
 cance of Thomas's new process, their German rivals were
 
 The Wars of the World: 1878-1914 45 
 
 more alive to its value; and with it as a foundation they 
 began the vast development of the German iron industry 
 which won world supremacy in the most important com- 
 modity of the Age of Steel. It was by the adoption of an 
 Englishman's invention and the seizure of the French iron 
 fields that they were able to win it. Thomas, through his 
 discovery, was unwittingly helping to initiate the struggle 
 for iron fields which was one of the most important phases 
 of the forty years of bitter economic rivalry that followed, 
 culminating in a world war. 
 
 More convincing than a priori discussion of the economic 
 causes which produce war, is examination of the history 
 of the period since 1878 and a study of the genesis of the 
 wars that have occurred during that time. How does the 
 theory of the economic chain of causation which makes war 
 inevitable bear application to the events of history? The 
 question is to be answered only after scrutiny of the fun- 
 damental causes of the wars that have actually been fought. 
 According to the theory outlined in the last two chapters, 
 the great wars of the period should be traceable — not di- 
 rectly, perhaps, but always ultimately — to economic causes. 
 Rivalry for colonies, the desire for trade routes, the at- 
 tempt to secure the naval bases essential to both of them, 
 naval rivalry born of colonial policy, the desire for mar- 
 kets, food, or raw materials — these should be found, if the 
 chain of causation is valid, at the root of the wars that have 
 been fought since the world became an economic unit — 
 roughly, since the Treaty of Berlin. 
 
 An exhaustive list of the military operations since 1878 
 shows that during forty years there have been only four in 
 which the world was everywhere at peace: 1886, 1888, 1889, 
 and 1910.
 
 46 The Economic Causes of Modern War 
 
 Wars of the World: 1878-1918 l 
 
 1878-1882— Afghan Wars (Great Britain and Afghanistan). 
 1879-1883— Nitrate War (Chile against Peru and Bolivia) . 
 1879 — Zulu War (British campaign against the Zulus). 
 1880-1881— First Boer War (Great Britain and Boer settlers). 
 1881 — Russian operations in Turkestan. 
 
 1882-1885 — French colonial wars in Annam. 
 1882-1898— British occupation of Egypt. 
 
 1883 — Military revolt in Spain. 
 
 1884 — Russian operations in Afghanistan. 
 
 1885 — Serbo-Bulgarian War. 
 1885 — Bulgarian Revolution. 
 
 1887 — First Abyssinian War (Italian invasion of Abys- 
 sinia). 
 
 1890 — War between Guatemala and San Salvador. 
 
 1891 — Military revolt in Portugal. 
 
 1891 — Chilean Revolution. 
 
 1892 — Revolts in Argentina. 
 
 1892 — French operations in Dahomey. 
 
 1892 — Revolt in Venezuela. 
 
 1893 — Hawaiian Revolution. 
 1893 —Revolt in Sicily. 
 
 1893 — Spanish operations against Moors. 
 
 1893 — Brazilian Revolution. 
 
 1893 — Argentine Revolution. 
 
 1894 — Hottentot Revolt in German Southwest Africa. 
 1894-1895— Chino- Japanese War. 
 
 1896 — Insurrection in Crete. 
 
 1896 — Anti-Armenian riots in Constantinople. 
 
 1895-1896 — Ashantee War (Great Britain against Ashantee 
 
 tribesmen) . 
 1896 — British bombardment of Zanzibar. 
 1896 — Revolt in Philippines. 
 
 1896 — Second Abyssinian War (Italians against Abys- 
 
 sinians) . 
 
 1897 —Greco-Turkish War. 
 
 lr This list is from data compiled in the library of the General Staff 
 College, United States Army.
 
 The Wars of the World: 1878-1914 47 
 
 1895-1898 — Cuban Insurrection. 
 
 1898 — Spanish-American War. 
 
 1899-1900 — Philippine Insurrection. 
 
 1899-1902 — Second Boer War (Great Britain against Transvaal 
 
 and Orange Free State). 
 1900-1901 — Boxer Uprising and Allied Relief of Peking. 
 
 1901 — Colombian Revolution. 
 
 1902 — British operations in Somaliland. 
 
 1903 — British operations in Tibet. 
 
 1903-1908 — Herero Rising (German operations against natives 
 
 of German Southwest Africa). 
 1904-1905 — Russo-Japanese War. 
 1908-1909— Civil War in Morocco. 
 1908 — Italian operations in Somaliland. 
 
 1908 — Haitian Revolution. 
 
 1909 — Rebellion in Santo Domingo. 
 1909 — Civil War in Nicaragua. 
 
 1911 — Italo-Turkish War. 
 
 1912 — Mutiny of native troops in French Morocco. 
 1912 — Mexican Revolution. 
 
 1912-1913— First and Second Balkan Wars. 
 1914-1918— World War. 
 
 For convenience, this list may be reduced by the elimi- 
 nation of racial riots, revolutions in South American states, 
 and minor wars with savage tribes. Study of the causes 
 of such minor military operations as are involved in these 
 trifling conflicts and in the revolutions of unsettled states, 
 sheds little light on the main problems of the causes of 
 international war. Operations against savages which are 
 directly due to the invasions of white settlers, are obvi- 
 ously the outcome of the economic conditions sketched in 
 the last chapter, which make necessary the colonization 
 that is necessarily resisted by the natives of the colonized 
 lands. A few such campaigns, selected so as to be typical 
 of all, are sufficient to illustrate the strictly economic char- 
 acter of these struggles. Yet the list of the wars of the last
 
 48 The Economic Causes of Modern War 
 
 forty years, thus reduced, must be sufficiently extended to 
 include all the major international conflicts of the period 
 and the more important wars of colonization. With these 
 eliminations, twenty wars remain to be considered: 
 
 The Principal Wars: 1878-1918 
 
 1878-1882— Afghan Wars. 
 1879 —Zulu War. 
 1879-1883— Nitrate War. 
 1880-1881— First Boer War. 
 1882-1898— British Occupation of Egypt. 
 1882-1885— French Colonial Wars in Annam. 
 1885 — Serbo-Bulgarian. 
 1887 — First Abyssinian War. 
 1894-1895— Chino-Japanese War. 
 1895-1898— Cuban Insurrection. 
 
 1896 — Second Abyssinian War. 
 
 1897 —Greco-Turkish War. 
 
 1898 — Spanish-American War. 
 1899-1902— Second Boer War. 
 1900-1901— Boxer Uprising. 
 1903-1908— Herero Rising. 
 1904-1905 — Russo-Japanese War. 
 1911-1912— Italo-Turkish War. 
 1912-1913— Balkan Wars. 
 1914-1918— World War. 
 
 One fact leaps to light immediately: namely, that five 
 of these conflicts, omitting the World War of 1914-1918, 
 have occurred — whether rightly or wrongly — as a result 
 of the spread of the British imperial dominion, made nec- 
 essary by economic pressure. These are the Afghan W T ars 
 of 1878-1882, which, as we have already seen, had to do 
 with safeguarding the rich British possessions in India; the 
 Zulu War of the same year, which was made necessary by 
 the spread of British rule in South Africa; the Egyptian
 
 The Wars of the World: 1878-1914 49 
 
 War of 1882, which, with the subsequent fighting in the 
 Sudan, was a natural consequence of the British interfer- 
 ence in Egypt, a measure in itself intimately connected with 
 the protection of the Suez Canal and the trade route to 
 India; and the two Boer Wars in South Africa, one lasting 
 from 1880 to 1881, and the second from 1899 to 1902, and 
 taxing the resources of the entire Empire, both results of 
 the friction growing out of the British colonial policy. 
 
 Seven more of the wars upon the list have their origin di- 
 rectly in colonies or colonial administration : the two Abys- 
 sinian Wars, the Cuban Insurrection of 1895-1898, leading 
 directly to the Spanish-American War, the little colonial 
 war of the French in Annam, the Herero Rising in Ger- 
 man Southwest Africa, and the Italian-Turkish fighting 
 over Tripoli in 1911. 
 
 Both the Chino-Japanese and the Russo-Japanese Wars 
 were the direct outcome of imperial expansion and of eco- 
 nomic rivalry, for the first resulted from the rivalry of the 
 two nations in Korea, and from Chinese supineness before 
 Occidental greed, which aroused Japan's fears for herself; 
 and the second from economic difficulties in Korea and 
 China. 
 
 Fourteen of these twenty wars can be seen at first 
 glance to have been at least partly economic in their origin, 
 for they have resulted from colonial expansion, which we 
 have seen is due to economic needs; and since the war be- 
 tween the United States and Spain was a result of the 
 economically caused Cuban Insurrection, it, too, may be 
 set down at once as having economic conditions at its root, 
 without consideration of the economic interests of the 
 United States in Cuba, which were officially avowed as one 
 of the reasons for entering upon hostilities. To these, two 
 more must be added : the Nitrate War between Chile, Peru, 
 and Bolivia, which was avowedly a quarrel over territories
 
 50 The Economic Causes of Modern War 
 
 in which valuable minerals existed, and the war of 1914- 
 1918, the greatest and most terrible of all, presenting the 
 most complex network of colonial rivalries, economic strug- 
 gles, tariff discriminations, naval rivalries, efforts to secure 
 raw materials, and other causes which have their roots in 
 economics. Apparently, then, on cursory examination, 
 sixteen of the twenty wars since the Congress of Berlin 
 have had self-evident economic causes. 
 
 In scrutinizing the origins of these wars, one by one, 
 three groups of facts are to be determined: first, the sev- 
 eral causes which contributed to each war; second, the 
 existence of an economic motive for risking hostilities; and 
 third, the importance of this economic motive in relation to 
 the other causes. Frequently the underlying cause of hos- 
 tilities does not appear directly, and a war appears to be 
 solely the result of non-economic factors, until the imme- 
 diate causes, upon further examination, are seen to be the 
 outcome of trade rivalry or the desire to protect economi- 
 cally important colonies, and hence, in their essence, eco- 
 nomic. The first, taken in chronological sequence, is the 
 Afghan War of 1878-1882. 
 
 THE AFGHAN WAR, 1878-1882 
 
 The two British wars in Afghanistan, the first in 1838- 
 1842, and the second in 1878-1882, rose directly out of the, 
 rivalry of Great Britain and Russia in their colonial expan- 
 sion. The Russian Empire had spread itself gradually 
 across Siberia and southward at the same time that the 
 British Empire was spreading through India and north- 
 ward, so that collision came, as was inevitable, in Persia 
 and Afghanistan, which lay as buffer states between the 
 two expanding Powers. The comparison made by Lord 
 Lytton just after his appointment as Viceroy of India, in
 
 The Wars of the World: 1878-1914 51 
 
 a speech to an Afghan envoy, is very applicable, although 
 scarcely calculated to soothe the feelings of the Amir of 
 Afghanistan. The little native state, said the representa- 
 tive of the British Crown, was in the predicament of "an 
 earthen pipkin between two iron pots." 
 
 The Afghan wars were wars of defense — defense of the 
 rich British dominions in India against possible Russian 
 aggression through Afghanistan, with no consideration 
 whatever for the rights and preferences of the Afghan na- 
 tion as to the role it was to play. They were the result 
 of the colonial and economic rivalry then existing between 
 two great and constantly expanding empires. They were 
 fought to secure the safety of a rich colony which was 
 necessary to the economic needs of Great Britain. 
 
 Afghanistan lies in the hill country to the north, and 
 through it, three passes open into India, of which the most 
 important is the famous Khyber Pass. So long as Russia 
 remained the enemy of Great Britain, the mere possibility 
 of her establishing herself in Afghanistan was a direct 
 threat to the safety of the Indian Empire; but although 
 Russian intrigues looking to this result had long been in 
 progress, they had met with no success. 
 
 The Afghans are a proud and savage race of mountain- 
 eers, fanatic in their adherence to the Moslem faith, bit- 
 terly opposed to the presence of foreign influence in their 
 country, good fighters; and the Amir, aside from the ir- 
 regulars furnished by the hill tribes, had at his command, 
 in 1879, an army of about 120,000 men. In 1838-1842 the 
 British had attempted armed intervention in the internal 
 affairs of Afghanistan, with a view to setting up in Kabul, 
 the capital, a government which would be favorable to 
 them. The attempt ended in almost complete failure and 
 disaster.
 
 52 The Economic Causes of Modern War 
 
 The international situation in 1878, after the Russian 
 successes against the Turks and the Treaty of San Stefano, 
 had further alarmed the British and had brought the 
 Afghan question to a crisis. It was evident that a 
 Russian onslaught upon India would come through 
 Afghanistan if it ever came; but as to the best method 
 of meeting it, there were two opinions. Military leaders 
 and high officials of the Indian Civil Service had long held 
 that the protection of the British frontier was best left in 
 the hands of the Afghans themselves, who would certainly 
 resent the presence in their country of a Russian invading 
 force. The Russians would thus have to make their way 
 through a mountainous country without railways, exposed 
 not only to the attack of the regular Afghan army, but also 
 to the forays of hill tribes, which, even when hostile to the 
 Amir's forces, would join with them against a foreigner. 
 After their own experience in 1838-1842, the British of- 
 ficers were not disposed to underestimate the fighting quali- 
 ties of the Afghan. The Russian invading army, then, 
 could meet the British only after a long and difficult march, 
 and after waging with Afghanistan a war which might in- 
 duce the Afghans to accept British assistance. It was felt 
 by the exponents of this view that the effort to obtain a 
 "strategic" or "scientific" frontier at the expense of Afghan- 
 istan would be more than offset in its advantages by the 
 hostility thus incurred among the natives, by the uncer- 
 tainty of communications, and by the increase of the dis- 
 tances between the British advanced posts and their bases 
 in India proper. 
 
 In the words of the distinguished British war correspond- 
 ent, Archibald Forbes, who accompanied the troops in both 
 campaigns: 1 
 
 1 Archibald Forbes: The Afghan Wars, p. 162.
 
 The Wars of the World: 1878-1914 53 
 
 "The relations between Shere Ali (Amir of Afghanistan) and 
 the successive Viceroys of India were friendly, although not 
 close. The consistent aim of the British policy was to main- 
 tain Afghanistan in the position of a strong, friendly, and inde- 
 pendent state, prepared in certain contingencies to co-operate in 
 keeping at a distance foreign intrigue or aggression; and while 
 this object was promoted by donations of money and arms, to 
 abstain from interference in the internal affairs of the country, 
 while according a friendly recognition to the successive occu- 
 pants of its throne, without undertaking indefinite liabilities in 
 their interest. The aim, in a word, was to utilize Afghanistan as 
 a 'buffer' state between the northwestern frontier of British India 
 and Russian advances from the direction of Central Asia." 
 
 About 1867, however, there began to creep in among 
 army officers the notion that advanced posts in Afghanis- 
 tan would be an advantage in meeting Russian attack. 
 In general it met with little approval among professional 
 soldiers in the Indian Army; but the scheme did find favor 
 in London with the members of the Cabinet, the Conserva- 
 tive party being then in power, and became the subject of 
 a good deal of Parliamentary discussion. In 1876 the pol- 
 icy of a "scientific frontier" — which meant interference in 
 Afghanistan — was introduced by the Beaconsfield-Salisbury 
 Cabinet, and Lord Lytton went out to India with instruc- 
 tions to abandon the former policy of "masterly inactiv- 
 ity" as regarded the border. 
 
 The occupation by the British of Quetta, on the frontier, 
 and military preparations there, were quite naturally re- 
 garded by the Afghans as the prelude to an invasion. While 
 negotiations with the Amir were in progress, his envoy died 
 and the British envoy, Sir Louis Pelly, was recalled by 
 Lytton on the ground that the Amir was intriguing with 
 the Russian General Kaufmann, at Tashkand, on the Rus- 
 sian border of Afghanistan. Lord Salisbury authorized the 
 Viceroy to protect the border as seemed best to him, "with-
 
 54 The Economic Causes of Modern War 
 
 out regard to the wishes of the Amir or the interests of 
 his dynasty." After the Congress of Berlin the Russians 
 were forced to give up the concentration of troops which 
 had been begun on the Afghan border; but they profited 
 by the estrangement from the British Government pro- 
 duced by Lord Lytton's truculent policy, to send an em- 
 bassy to Kabul, which was received by the Amir with open 
 arms. 
 
 The British demand that a mission from India should 
 also be received at Kabul was refused and the envoys were 
 turned back at the frontier. The Indian Government sent 
 an ultimatum which, unless a favorable reply was returned 
 by November 20, 1879, was to be followed by immediate 
 hostilities. The Amir sent no reply, and three British ar- 
 mies moved to the attack. Warfare continued until May 
 30, when the Treaty of Gundamuk was signed, by the terms 
 of which the British Government in India secured the stra- 
 tegic frontier on the most exposed border of the most im- 
 portant of the British possessions, for which it had been 
 intriguing. Afghanistan, losing its character of an inde- 
 pendent buffer state, became to all practical intents a de- 
 pendency of the British Crown. The control of foreign 
 affairs was vested in the British Government and the Amir 
 consented to accept a British Residency and to guarantee 
 its safety, the British in their turn pledging themselves not 
 to interfere in the internal affairs of the native state. Three 
 districts, together with the strategically all-important 
 Khyber and Michnai Passes were ceded to Great Britain. 
 Commercial relations between Afghanistan and India were 
 to be encouraged and the Amir accepted an annual subsidy 
 of 60,000 pounds. 
 
 The treaty endured for a little more than three months 
 before the Afghan hatred of the foreigner blazed out and 
 the entire British mission was massacred. The second
 
 .The Wars oj the World: 1878-1914 55 
 
 Afghan campaign, which ended with the British victory at 
 Candahar, September 1, 1882, completely crushed the na- 
 tive state, which was saved by the accession to power in 
 England of the Liberal Party, pledged to reverse in most 
 respects the foreign policy of their Conservative prede- 
 cessors, of which the Afghan aggression was an integral 
 part. Lord Lytton resigned as Governor-General of India. 
 The Conservative Premier's scheme for an advanced fron- 
 tier in Afghanistan, which had always had high military 
 opinion against it, was abandoned at the very moment 
 when the territory was in the hands of the British army. 
 The Empire retained only the Pisheen and Subu Valleys, 
 abandoning both the Khyber Pass and the Kuram Valley, 
 after two costly campaigns, the expenditure of twenty 
 million pounds sterling, and the loss of many lives, return- 
 ing practically to the status quo ante and very nearly to 
 the old policy of "masterly inactivity." 
 
 In 1884-1885 the old question of the safety of India and 
 the economic rivalry of the expanding imperial powers came 
 very near to causing another war. Russia seized Penjdeh 
 from the Afghans, and only the threatening condition of 
 internal affairs in Ireland and South Africa prevented a 
 British declaration of war. 
 
 Should the Afghan War be regarded as an economic war? 
 Directly, no. Indirectly, yes. It grew out of a frontier 
 dispute, but it was fundamentally the result of the same 
 need for economic expansion which originally led to the 
 acquisition of India and which made its wealth essential to 
 the British Empire. Had there been no policy of imperial 
 expansion on the part of either Russia or Great Britain, 
 which was, of course, the outcome of economic causes and 
 in the deepest sense a true economic rivalry, there would 
 have been no Afghan Wars. 
 
 The wars in Afghanistan are results of the friction due
 
 56 The Economic Causes of Modern War 
 
 to economic causes between Great Britain and Russia, 
 which existed in the latter part of the Nineteenth and the 
 first years of the Twentieth Century. This rivalry ex- 
 pressed itself in difficulties over Constantinople, intrigues 
 in native states, and colonial expansion; but in every case 
 the difficulties were the outcome of economic requirements 
 — primarily a Russian effort to secure ports in warm water 
 and to establish Slavic power over the waterway at Con- 
 stantinople, blocked by English determination to protect at 
 all costs the trade route to India and the land frontier of 
 the richest of all colonies. Raw materials, notably the 
 Baku oil wells, also came to be involved before the Anglo- 
 Russian Agreement of 1907 finally removed the roots of the 
 difficulty. 
 
 THE ZULU WAK, 1879 
 
 The Zulu War of 1879, which resulted in the pacifica- 
 tion by force of the natives and the ultimate incorporation 
 of Zululand with the colony of Natal, has been variously 
 represented as a necessary measure of defense and as the 
 violent extension of the imperial domains. In either event, 
 it falls at once into the class of wars which have an eco- 
 nomic motive in that they are the inevitable concomitants 
 of colonial expansion; for wherever the white man, forced 
 by economic need, spreads his rule into the more sparsely 
 settled portions of the earth, he meets inevitably the re- 
 sistance of the native population. Even though the war be 
 regarded as necessary to the defense of Natal, it is still an 
 outcome, though less direct, of the economic forces which 
 originally occasioned the colony's establishment. Elimi- 
 nate the economic need and you eliminate at a stroke both 
 the colony and the problem of its defense. 
 
 On the borders of the British colony of Natal lay the
 
 The Wars of the World: 1878-1914 57 
 
 native state of the Zulus, ruled by its native king accord- 
 ing to tribal customs. In 1873, after the close of a civil 
 war among the Zulus, the king Cetewayo was induced, prob- 
 ably with an eye to the material advantages of British 
 friendship, to go through the form of accepting a tinsel 
 crown from an English official. Between 1873 and 1879 
 the Zulus were arming and organizing a drilled and disci- 
 plined army. There was no conceivable enemy for the 
 natives to fight except the British and therefore, after they 
 had refused to yield to the British demand for disarmament, 
 imperial troops were directed against them. The capture 
 of the British camp at Isandhlwana and the desperate 
 defense of Rooke's Drift were followed by a series of 
 victories for the army commanded by Lord Chelmsford. 
 
 The Zulus were quickly crushed, Cetewayo captured, and 
 sent to St. Helena. He was allowed to return to his people 
 four years afterward; and following a period of hesitation 
 by the colonial administration, Zululand became a part of 
 Natal in 1897. 
 
 The war is typical of the type of hostilities that break 
 out almost inevitably as the result of the spread of the 
 white man, for economic reasons, into the territory of white 
 or half savage races. Economic pressure in the colonizing 
 country and the pressure of other European nations lead 
 to an attempt to expand, which brings in its train the need 
 for crushing by force the native races, unwilling to be dis- 
 possessed. Even these little wars, then, are properly to 
 be classed among those caused by economic pressure. 
 
 THE NITRATE WAR, 1879-1883 
 
 The desire of Chile to secure a share in the nitrate trade, 
 of Bolivia to hold nitrate deposits in the Desert of Ata- 
 cama, and of Peru to maintain her supremacy in the guano
 
 58 The Economic Causes of Modern War 
 
 trade, explain the motivation of the Nitrate War, or War 
 of the Pacific, which began with Chile's declaration of war 
 on the other two republics, April 5, 1879, and ended with 
 Chilean victory, in the Treaty of Ancon, October 20, 1883. 
 The far-reaching and long-enduring character of the eco- 
 nomic difficulty and the way in which it tends to re-appear 
 with each successive unsettlement of international relations 
 is shown by the re-opening of this question in 1918 during 
 the World War. 
 
 The use of guano as a fertilizer in agriculture had been 
 known to the prehistoric inhabitants of Peru, whose Inca 
 rulers carefully regulated its collection and use. Specimens 
 were first brought to Europe by Alexander von Humboldt 
 in 1804. In the middle of the last century, it came into 
 general use as a fertilizing material of peculiar value, being 
 rich in nitrogenous and phosphate compounds, mainly de- 
 rived from the long accumulation of the droppings of sea- 
 fowl on South American coasts and islands where the cli- 
 mate is dry and the rainfall slight. Until 1874 most of 
 the Peruvian guano was obtained from the Chincha Islands, 
 about twelve miles off the coast of Peru. Each of the is- 
 lands, from five to six miles in circumference, was covered 
 with guano deposits, to a depth of 200 feet, in successive 
 strata ranging in thickness from three inches to a hundred 
 feet. 
 
 Guano thus formed the staple article of Peruvian export, 
 and the largest single source of revenue, the exports rang- 
 ing from $9,000,000 to $15,000,000 yearly in the years im- 
 mediately before and after 1870. 1 But two causes operated 
 to reduce this highly profitable industry, on which the 
 wealth of Peru largely hinged — the exhaustion of the de- 
 posits, partly due to failure properly to protect the guano 
 
 1 Statesman's Yearbook, 1874, pp. 552-553.
 
 The Wars of the World: 1878-1914 59 
 
 birds, and the discovery of other and cheaper sources of 
 commercial fertilizers in the phosphate beds of the United 
 States, the potash deposits of Germany, and the nitrate beds 
 now owned by Chile. It was these deposits, now Chilean, 
 which led to the Nitrate War. 
 
 Nitrate of soda, known commercially as "nitrate" or 
 "Chile saltpetre," comes from the rainless districts of Chile 
 and Peru, and the largest deposits are found in the prov- 
 inces which were the prizes of the war, Tacna, Arica, and 
 Tarapaca. They are believed to be due either to the evap- 
 oration of an ancient sea, or to be the saline residue of 
 the evaporation of fresh water streams. Although exports 
 from the few which were known had been made as early 
 as 1830, the wide extent and enormous value of the de- 
 posits were not realized until the latter half of the century. 
 
 The beginning of difficulties that led to war was a dis- 
 pute relative to the frontier between Chile and Bolivia, 
 which at that time held a small strip of seacoast near 
 Cobija, between 22° and 23° south latitude. While the re- 
 publics had been Spanish provinces under the imperial 
 colonial administration, the need of strict delimitation of 
 the frontier had never been felt, and when they won their 
 independence, the republican governments usually tacitly 
 accepted the old boundaries. The Desert of Atacama, a 
 stretch of arid territory lying along the Pacific coast be- 
 tween 22° and 27° south latitude, had been the ill-defined 
 boundary between the provinces of Peru and Chile under 
 the Spanish regime; and when in 1825 the Republic of Bo- 
 livia was created, it received the northern portion of the 
 desert and the town of Cobija, in order that it might have 
 access to the sea. The southern boundary of Bolivia was 
 no more accurately located than that of the Spanish prov- 
 ince had been, and the Chilean constitution of 1833 claimed 
 merely land "from the Desert of Atacama to Cape Horn"
 
 60 The Economic Causes of Modern War 
 
 — a northern boundary lying vaguely somewhere in a des- 
 ert extending over five degrees. 
 
 Undetermined as was the delimitation, it sufficed so long 
 as the Desert of Atacama was believed to be waste land 
 of no value ; but in 1842, as the Peruvian guano trade grew, 
 the Chilean government dispatched an expedition to ex- 
 amine the coast and find out whether there was any guano 
 in Chilean territory. Immediately after the explorations, 
 Chilean vessels began surreptitiously loading guano in 
 desert territory claimed by Bolivia. The Bolivians now 
 asserted their claims to the desert and in 1866, after 
 much disagreement, under the spur of the Spanish effort 
 to win back the lost colonies, a treaty fixed the boundary 
 at the 24° south latitude, but at the same time stipulated 
 that the territory between 23° and 25° should be joint 
 property of the two republics, the revenue on the mines 
 and the guano and nitrate deposits to be equally di- 
 vided. The Bolivian government undertook the collection, 
 while full rights of supervision and inspection were accorded 
 to Chile. 
 
 Such an agreement speedily led to disputes and after 
 more diplomatic correspondence, Chile in 1872 renounced 
 her claims to revenue on condition that the safety of 
 Chilean capital and of subjects engaged in the mines should 
 be guaranteed. In 1874 this agreement was incorporated 
 in a treaty. Most of the mines were actually being worked 
 by Chilean capital and by Chilean labor. 
 
 While the diplomats were busy, new nitrate deposits were 
 discovered in the desert, which rapidly began to displace 
 guano in the market. The effect on the guano trade of 
 Peru was so unfavorable that in 1873 the Peruvian Govern- 
 ment, in an effort to offset it, restricted the output of its 
 own nitrate mines to 4,500,000 quintals (hundredweight) 
 yearly, and proposed that both Chile and Bolivia should
 
 The Wars of the World: 1878-1914 61 
 
 restrict their mines similarly, either by direct legal limita- 
 tion or by the imposition of prohibitive export duties. 
 
 This would have been highly favorable to the guano 
 trade, but since that was of minor importance to Chile as 
 compared with the trade in nitrate, the suggestion was 
 refused. Bolivia also declined, maintaining the treaty 
 obligations which prevented restrictions on the mines in her 
 territory owned by Chilean subjects, under the agreement 
 of 1874. 
 
 In the same year, however, the government entered into 
 a secret treaty with Peru, maintaining the interests of the 
 two states against Chile. 1 Efforts to bring the Argentine 
 Republic into the coalition failed, although the relations 
 between Argentina and Chile were strained then and for 
 some years afterward over the Andes boundary question. 
 
 While the Dictator Malgarejo was in power in Bolivia, 
 the Compania de Salitre y Ferrocarril de Antafagasta (An- 
 tafagasta Saltpetre and Railways Company), a Chilean 
 corporation, secured from him a very generous conces- 
 sion in the Desert of Atacama. The successors of the dic- 
 tator, after his fall, sought to reduce this; and the taxes 
 that they fixed upon the company drew diplomatic pro- 
 tests from Santiago. The Bolivian Government had im- 
 posed a tax of ten centavos per hundredweight on nitrate 
 exported by the company, in lieu of the previous tax of 
 ten per cent of the profits. The Chilean protest was based 
 on the Treaty of 1874, which provided that there should be 
 no increase in the taxes of citizens of Chile resident in 
 Bolivia. The Bolivian Government yielded, but presently 
 declared the concession of the powerful Antafagasta com- 
 pany void, and ordered the confiscation of its property. 
 
 1 The text of this treaty is published twice in President Arthur's Mes- 
 sage to Congress of 1882, Submitting Papers Relating to the War in South 
 America, pp. 85 and 208.
 
 62 The Economic Causes of Modern War 
 
 Chile presented a 48-hour ultimatum, and at its expira- 
 tion debarked 500 troops at Antafagasta. 1 
 
 The Chilean army now occupied an advanced post on 
 the Peruvian frontier and within easy striking distance of 
 the important deposits of nitrate and guano in the Depart- 
 ment of Tarapaca. The Peruvian Government immediately 
 offered mediation between Chile and Bolivia. 
 
 When the offer was first made, no suspicion existed in 
 Chile of the alliance that had been formed between their 
 economic rival and the mediating power; but rumors of 
 the secret treaty led to a demand upon the government of 
 Peru for a declaration of neutrality which forced admis- 
 sion of the existence of a treaty which bound Peru to assist 
 Bolivia. The war spirit had been rising in all three states. 
 The Peruvian mediator had been received with marked hos- 
 tility by the Chilean populace. Chile declared war with 
 both Peru and Bolivia, April 5, 1879. 
 
 The situation had been complicated by diplomatic ex- 
 changes between Chile and Argentina over the Andes 
 boundary question, which had led so close to war that the 
 Chilean fleet actually steamed south towards the Straits 
 of Magellan and was recalled on the settlement of the dif- 
 ficulties with Argentina just in time to be turned against 
 Peru. The war, after a few months land and sea fighting, 
 was everywhere a Chilean victory. Chile mastered the sea 
 after a six months struggle. The Chilean army drove the 
 Peruvians out of the Department of Tarapaca, and in two 
 engagements won Tacna and Arica, thus gaining control 
 of practically all of the nitrate and guano fields. Neutral 
 
 'It is said (Diego Barras Arana: Histoire de la Guerre du Pacifique, 
 p. 50) that although President Doza of Bolivia received on February 
 20 the news of the Chilean occupation of Antafagasta, he did not per- 
 mit it to be made public until Ash Wednesday, six days later, when it could 
 not interfere with the pre-Lenten carnival period. Only after that time 
 did the Bolivian cabinet begin to plan a course of action.
 
 The Wars of the World: 1878-1914 63 
 
 efforts at mediation failed. Chile, in actual possession of 
 the nitrate deposits, demanded territorial concessions to 
 which Peru would not yield. It was not until Lima was 
 taken and the government overthrown that Chile finally 
 attained her territorial aspirations. Bolivia, in a separate 
 peace, gave up her seacoast. After a new government had 
 been organized in Peru, the Treaty of Ancon l was signed, 
 by which Tarapaca was ceded unconditionally, and Tacna 
 and Arica for ten years, at the end of which a plebiscite was 
 to be held. This has never been done and Chile still re- 
 tains possession. 
 
 The conquest has been of vast economic value to Chile. 
 From 1879 to 1899, inclusive, the duty on the nitrate ex- 
 ports alone was $557,033,576 in Chilean money and the 
 value of the exports themselves $1,406,741,330. 2 It has 
 been estimated that from 1900 to 1935 the nitrate export 
 duties will reach $1,656,200,000. Surveys by the Chilean 
 government in 1899 showed sufficient nitrate in Tarapaca 
 to permit the exportation of 1,400,000 tons a year for 
 thirty-five years to come. 
 
 The economic character of such a war is self-evident. 
 The boundary question between Chile and Bolivia had ex- 
 isted for a long time without ever having been seriously 
 considered, much less leading to any signs of hostilities. It 
 was only when the valuable mineral deposits were found 
 that the states became sufficiently concerned over their 
 boundaries to attempt to fix them, and the rivalry between 
 the miners of Peruvian guano and Chilean nitrate fanned 
 
 1 The text of this and the Bolivian treaty are to be found in The Ques- 
 tion of the Pacific, by V. M. Maurtua and F. A. Pezet, p. 139 and p. 204, 
 respectively. 
 
 'These figures are based on Chilean statistics, but the calculations are 
 by the Peruvian Alejandro Garland. With further amplifications they 
 may be found in The Question of the Pacific, pp. 150-151.
 
 64 The Economic Causes of Modern War 
 
 the flames. The questions discussed in the diplomatic 
 interchanges that preceded the war were wholly economic; 
 and the Antafagasta incident which precipitated hostilities 
 at last, was a blow by Chile in defense of her nitrate 
 interests. In the Treaty of Ancon, it was the possession of 
 Taena, Arica, and Tarapaca, with their nitrate deposits, 
 upon which the victors were intent. 
 
 THE BRITISH OCCUPATION OF EGYPT, 1882-1898 * 
 
 u The origin of the Egyptian question in its present phase 
 was financial," says the first sentence of Lord Cromer's 
 Modern Egypt. The conclusion of the Governor-General 
 is justified, for it rests on a more thorough acquaintance 
 with Egyptian affairs than is possessed by any other man. 
 The British occupation offers one of the clearest examples 
 possible of the role played by economics and finance, and 
 of the struggles and rivalries which grew out of them, in 
 producing wars. The entrance of the British came about 
 mainly because of the inability of the Khedive, Ismail 
 Pasha, to meet the enormous debts in which he had in- 
 volved himself through his extravagant luxury; but there 
 are other reasons besides this for the British to be estab- 
 lished in Egypt. One is directly economic, the need for raw 
 materials, especially cotton, of which Egypt sends a million 
 bales a year to the British textile factories, and which is 
 equally desirable either to the French or to the German 
 textile mills. The other is indirectly economic — the old 
 story of the protection of the highways to India, which 
 may be threatened through the economic jealousy of 
 any power which holds Egypt. The Suez trade route 
 
 1 Though the actual occupation took place in 1882, these dates are 
 made to include the subsequent fighting in the Sudan, which was the 
 logical step following the occupation and intimately related to it.
 
 The Wars of the World: 1878-1914 65 
 
 antedates the Canal, an overland road having been devel- 
 oped and encouraged under British auspices, and discour- 
 aged by the French, who looked upon it as tending to lessen 
 the prospects of beginning the cherished project of their 
 great engineer, de Lesseps. The British hold on Egypt is 
 also a protection to the colonies elsewhere in Africa. 
 
 British interference in Egypt dates from the Napoleonic 
 wars, when the Emperor tried to use that land as a base of 
 attack upon India and British trade in the Mediterranean 
 — an attempt which was frustrated by Nelson's destruc- 
 tion of the French fleet in the Battle of the Nile, and the 
 crushing of the French army in possession of the country. 
 England again interfered in 1807 to assist the Nationalist 
 Party, but was defeated by Mohammed Ali, who had just 
 forced the Sultan to recognize him as Pasha of Egypt. 
 
 Ismail Pasha, whose extravagance at last compelled for- 
 eign intervention, succeeded to the throne in 1863 and re- 
 ceived the title of Khedive from the Sultan in 1867. Prior 
 to his accession to the khedival throne, he had been living 
 as a country gentleman with large landed estates, to which 
 he was applying the most modern agricultural methods and 
 from which he was deriving large returns. His habits of 
 luxury and extravagance were such, however, that even 
 when these profits were increased by the revenues of the 
 Egyptian state, they were not sufficient. The tax rose un- 
 der his rule from 40 to 60 piastres, coin by coin wrung out 
 under the lash from the miserable fellaheen, who were fre- 
 quently compelled to mortgage their petty properties to 
 the money-lenders who invariably accompanied the tax- 
 gatherers on their rounds. 
 
 Finding the taxes insufficient, Ismail resorted to con- 
 fiscation, in which indirect methods were necessitated by 
 his fear of the intervention of European Powers. In an 
 Oriental country the opportunities for coercion and intimi-
 
 66 The Economic Causes of Modern War 
 
 dation are so extensive that within a few years Ismail, 
 employing methods little better than barefaced seizure, had 
 been able so to harass the owners of estates which he de- 
 sired that they had been compelled to part with them for 
 practically nothing. In this way he had come into per- 
 sonal possession of about one-fifth of the land of Egypt. 
 
 Confiscation was not so successful a method of increas- 
 ing his income as the Khedive had hoped, for as his es- 
 tates increased, the possibility of strict oversight of their 
 management and accounts diminished, and he was so robbed 
 on every hand by his own administrators that he found 
 himself almost as straitened as ever. After a little pre- 
 liminary negotiation with native money lenders and with 
 Greeks in Alexandria, he turned to Europe for loans. 
 
 The transactions were in the hands of Nubar Pasha, an 
 individual quite devoid of scruple, who managed the busi- 
 ness so adroitly that of the total of 96,000,000 pounds ster- 
 ling that he borrowed, only 54,000,000 reached the Khedive. 
 A great part of all this money was raised in Great Britain, 
 largely through the agency of the English Rothschilds, es- 
 pecially the loans after 1871, when French finance was con- 
 cerned chiefly with paying off the Prussian indemnity. Al- 
 though the money was borrowed in the name of the 
 Egyptian government and became a part of the public debt 
 of Egypt, almost all of it went to the private uses of the 
 Khedive himself. 
 
 In 1876 the debt amounted to 89,000,000 pounds sterling, 
 a tremendous sum for a country with only 6,000,000 popula- 
 tion and with an area of only 5,000,000 acres under culti- 
 vation. 1 It must be remembered that until the British 
 came, the area of Egypt watered by the Nile (the only 
 arable portion) was comparatively small. Since that time 
 
 'W. Basil Worsfold: The Future oj Egypt, p. 44.
 
 The Wars of the World: 1878-1914 67 
 
 the building of the Assouan dam and the creation of a 
 scientific irrigation system have greatly increased the pro- 
 ductive capacity of the country. 
 
 In thirteen years, Ismail added nearly 86,000,000 pounds 
 to the debt of the country, and had raised the tax rate 
 many times. These taxes were levied directly upon the 
 fellaheen, the native farmers, who were the only real pro- 
 ducers of wealth in the country, from whom the money 
 was wrung with the most systematic brutality. Never was 
 a country so systematically and pitilessly drained of its 
 wealth. Even the bits of gold which by native custom 
 formed the chief treasure of every Egyptian woman were 
 taken; the few small savings of the peasants were gobbled 
 up by the rapacious collectors; and the helpless workers, 
 man and woman alike, were set to work again, almost upon 
 the level of slaves. 
 
 Had even a portion of the money thus being recklessly 
 borrowed abroad and extorted from the people at home 
 been expended in public works, there would have been at 
 least some defense for the khedival government, but this 
 was not the case. With the exception of the Suez Canal, 
 only about ten per cent of the loans ever went into the 
 development of the country; and even the contribution 
 of 3,000,000 pounds to the Canal was made only after arbi- 
 tration by Napoleon III when the government had failed 
 to carry out its contract to grant areas of land and to supply 
 forced labor to the Canal Company. 
 
 Evidently this state of affairs could not continue in- 
 definitely. The country had been taxed to its capacity, but 
 still it was a notorious fact that the revenue was not meet- 
 ing the ordinary costs of administration and at the same 
 time paying the interest on the money which the Khedive 
 had borrowed in Europe and squandered on his private dis- 
 sipations.
 
 68 The Economic Causes of Modern War 
 
 The obvious thing to do was to proclaim openly the in- 
 ability of the government to meet its obligations and leave 
 the European creditors to make what terms they could. 
 But Egypt was not an independent state. It was bound, 
 first as a subject state of the Turkish Empire, and second, 
 by the special treaties or "Capitulations" * which granted 
 special rights or privileges to the subjects of various Euro- 
 pean states when resident within Turkish territories. 
 Since the government of the Ottoman Empire was on a 
 plane not very much higher than that of Egypt, there was 
 small hope that interference from above would straighten 
 out the tangle; but in the agreements of the "Capitula- 
 tions" the European Powers concerned, principally Eng- 
 land, France, Austria, and Italy, had an excuse for inter- 
 fering on behalf of their investors. 
 
 The "Capitulations" had originally been entered into in 
 order to protect the citizens of fourteen European Powers, 
 and of the United States and Brazil, when resident within 
 the Turkish Empire, from the maladministration of jus- 
 tice by the native courts. An agreement with the Egyp- 
 tian Government had about this time led to the establish- 
 ment of a court which combined the authority of the 
 various consular courts in tribunals of a new sort, known 
 as the Tribunaux Mixtes, constituted by khedival decree on 
 January 1, 1876, and given jurisdiction in civil cases as well 
 
 *The first of these treaties was made with France in 1536 (renewed 
 1673 and 1740), when the Turkish Empire was at the height of its powers. 
 The second was with England in 1583, followed by others granted to 
 Holland in 1613, Austria in 1718 (renewed 1784), and Russia in 1784. 
 During the Eighteenth Century nearly every European Power secured a 
 Capitulation, and during the Nineteenth Century the new states, Bel- 
 gium, Greece, and the United States, also secured them. Though the 
 treaties differ in minor details, their provisions are in general the same: 
 liberty of residence, inviolability of domicile, liberty to travel, freedom of 
 commerce and religion, immunity of local jurisdiction, and exclusive extra- 
 territorial jurisdiction over foreigners of the same nationality.
 
 The Wars of the World: 1878-1914 69 
 
 as in the criminal cases with which alone the consular 
 courts had concerned themselves. The authority was to 
 extend to cases at law between natives and foreigners. 
 
 At the same time an effort by the Powers to ascertain 
 the exact condition of the finances of Egypt — known to 
 be unsatisfactory — led to the Cave Report, presented in 
 March, 1876, incomplete but sufficient to demonstrate the 
 need of international action of some kind in order to pro- 
 tect the European creditors of Egypt by receiving as a 
 whole, the revenues that the Khedive had set aside to meet 
 the debt. With this object in view, the Khedive author- 
 ized on May 2, 1878, the Caisse de la Dette, which was 
 made up in the beginning of three officials representing 
 France, Austria, and Italy. 
 
 The concerted action of the Powers in establishing these 
 two international authorities improved the situation so far 
 as the creditors of Egypt were concerned, for not only was 
 the revenue for the payment of the debt to be more hon- 
 estly and efficiently administered; but in the future com- 
 plaints which might be brought against the Egyptian Gov- 
 ernment would be tried before a court which derived its 
 authority not from that government itself, but from Eu- 
 rope. This was the peculiar importance of the Tribunaux 
 Mixtes. 
 
 As the bad faith of Ismail became more and more ap- 
 parent, England and France, which were most concerned 
 in the Suez Canal and in the development of Egypt in gen- 
 eral, interfered directly in the administration of the coun- 
 try; and created the Goschen-Joubert mission to re-exam- 
 ine the financial situation and find a way of paying 
 off the debt. A plan was submitted in November, only 
 to be found useless because of the deception practiced by 
 Ismail, who had furnished false data. In 1878 the inves-
 
 70 The Economic Causes of Modern War 
 
 tigation of a Commission armed with full powers to ex- 
 amine every detail of Egyptian finance, including the 
 sources of revenue and the methods of administration, 
 showed clearly that Ismail would never be able to meet 
 the obligations of the state. The Khedive having been so 
 indiscreet as to attempt obduracy before the European 
 proposals for reducing the interest due on the debt, was 
 deposed by international action in June, 1879, and his son 
 Tewfik Pasha put in his place. 
 
 After Ismail had been deposed, England and France 
 jointly assumed responsibility for the control of the na- 
 tive government in Egypt, and Tewfik Pasha 1 was given 
 to understand that no other Powers would be allowed to 
 interfere. The recommendations which had been made by 
 the Financial Commission were followed out and a Law of 
 Liquidation was passed which remained in force, with 
 slight modifications, made in 1885, until 1904. When the 
 decree of the Khedive promulgated the new law with the 
 approval of the governments of England, France, Austria, 
 Germany, Italy, and Russia in 1880, it had been found 
 that since 1876 the debt had been increased by nearly 
 10,000,000 pounds, making a total of 98,376,660 pounds. 
 This sum was divided into four debts, which stood at the 
 following figures in 1881 : 2 
 
 *In Moslem countries descent is ordinarily to the oldest living male 
 member of the family, according to Turkish law. A Firman of the Sublime 
 Porte, May 27, 1866, had substituted father-to-son descent by primogeni- 
 ture, in the special case of the hereditary rulers of Egypt. 
 
 2 W. Basil Worsfold: The Future oj Egypt, p. 50. Before the World 
 War upset exchange values, the Egyptian pound was the equivalent of 
 $4.94307 in American money, as compared with an equivalent value of 
 $4.86656 for the pound sterling. The Egyptian coinage is used only in 
 Egypt, and the pound is divided into 100 piastres of ten ochr-el-guereh, 
 each of four paras. It contains 7.4375 grammes of fine gold as compared 
 with 7.32238 grammes in the pound sterling. See V. Gonzales: Modern 
 Foreign Exchange, p. 19.
 
 The Wars oj the World: 1878-1914 71 
 
 In pounds sterling 
 
 
 In 
 
 pounds Egx 
 
 Capital Amount 
 
 Rate 
 
 
 Interest 
 
 Privileged Debt ....22,587,800 
 
 5% 
 
 
 1,157,024 
 
 Unified Debt 57,776,340 
 
 4% 
 
 
 2,253,265 
 
 Domains Loan 8,499,620 
 
 5% 
 
 
 455,310 
 
 Daira Debt 9,512,900 
 
 4% 
 
 
 370,322 
 
 98,376,660 4,235,921 
 
 In addition to these sums, Egypt was made liable to 
 an additional sum of 1,000,000 pounds a year, called for by 
 the tribute to Turkey, interest due England on the Suez 
 Canal shares, and minor obligations not included in the 
 Consolidated Debt. 
 
 This arrangement left the Egyptian government with an 
 annual income of less than 4,000,000 pounds above the 
 charges, with which to carry on the business of the coun- 
 try. The revenues and charges stood as follows: 1 
 
 Total receipts from all sources 9,229,965 pounds 
 
 Charges for debt and tribute 5,345,341 " 
 
 Balance available 3,884,624 " 
 
 By 1880, the sum of 1,000,000 pounds had been paid off 
 the debt, but the sweeping economics and retrenchments 
 necessary to accomplish this and the impossibility of re- 
 lieving the taxpayers of their burdens, led to an identifica- 
 tion in the popular mind of the Europeans with the Turkish 
 oppressors, and the national movement, originally anti- 
 Turkish, broke out in a fierce revolt against the Dual Con- 
 trol. Headed by Arabi Pasha, the Egyptian Minister of 
 War, and deriving support among the people from the wave 
 of Mohammedan fanaticism soon to sweep the Sudan under 
 the Mahdi, the rebellion reached such proportions that the 
 khedival government and everything that the French and 
 British had been able to accomplish, was threatened. 
 
 ^bid., p. 51.
 
 72 The Economic Causes of Modern War 
 
 After a massacre at Alexandria in which fifty Christians 
 were killed, the British fleet bombarded the city. On the 
 22nd the Khedive dismissed Arabi from office and the min- 
 ister promptly declared a Holy War on his own responsi- 
 bility. Between August 3rd and 26th, the British took 
 possession of the Suez Canal completely — the coveted di- 
 rect route to India — and troops were sent in from Malta, 
 Cyprus, India, and England. Lord Wolseley landed at 
 Alexandria August 13th, proclaimed that he was there to 
 uphold the authority of the Khedive, and on September 
 13th crushed the Egyptian army at Tel-el-Kebir. Cairo 
 was taken the next day and the British occupation had 
 begun. 
 
 France and Italy * had both declined to accept the invi- 
 tation of Great Britain to participate; and the entrance of 
 the British therefore put an end to the Dual Control, leav- 
 ing the responsibility for the administration of the state 
 in their hands. The situation was further complicated by 
 the fact that Egypt had during all this time been a subject 
 state of the Turkish Empire, with which Great Britain at 
 that time still desired to maintain friendly relations, in 
 order to keep Russia out of Constantinople and away from 
 the all-important route to India. 
 
 The British occupation was declared to have been under- 
 taken solely to "restore the authority of the Khedive"; 
 but since the only authority left to that unhappy official 
 had come to be exercised through the medium of the Dual 
 Control, the occupation actually meant that henceforward 
 Britain would rule in Egypt. The French were jealous of 
 
 1 Italian popular sympathy at this time was all with the Egyptians, and 
 an Italian legion was actually being raised by Menotti Garibaldi to aid 
 the Egyptians in their struggle for freedom from foreign control. A 
 decided coolness between the two states existed for several years after 
 the occupation.
 
 The Wars of the World: 1878-1914 73 
 
 British occupancy and continued to protest at intervals 
 until the agreement of 1904. On January 3, 1883, Lord 
 Grenville, then Minister for Foreign Affairs, addressed a 
 communication to the Powers in which he said: 
 
 "Although for the present a British force remains in Egypt 
 for the preservation of public tranquillity, Her Majesty's Gov- 
 ernment are desirous of withdrawing it as soon as the state of 
 the country and the organization of proper means for the main- 
 tenance of the Khedive's authority will permit of it. In the 
 meantime, the position in which Her Majesty's Government are 
 placed towards His Highness imposes upon them the duty of 
 giving advice with the object of securing that the order of things 
 to be established shall be of a satisfactory character and pos- 
 sess the elements of stability and progress." 
 
 A year later the Egyptian Government was given to un- 
 derstand that the "advice" which it received from Great 
 Britain must be regarded as compulsory. After this the 
 position of Egypt was wholly anomalous, for the Khedive, 
 though ruling a dependency of the Turkish Empire, and 
 owning allegiance to the Sultan, could take no steps with- 
 out the approval of the British. 
 
 More war was to follow. The immense region to the 
 south of Egypt, the Sudan, never very completely under 
 khedival control, broke into revolt, the tribesmen having 
 been inflamed by a religious leader who proclaimed himself 
 a Mahdi or Savior. The inefficient force of Egyptian sol- 
 diery together with a small British force under General 
 Hicks was cut to pieces. In 1884 General Gordon, an Eng- 
 lish soldier of eccentric magnetic qualities calculated to 
 appeal to the public, and of a great deal of experience in 
 dealing with native tribes, was sent almost alone into the 
 Sudan with the idea that he would be able to restore Brit- 
 ish control. On his arrival at Khartoum he discovered that
 
 74 The Economic Causes of Modern War 
 
 the situation was far worse than had been represented, and 
 almost immediately afterward found himself besieged by 
 the Mahdi and his fanatic dervishes. 
 
 The popular voice in England demanded a relief expe- 
 dition, but the government was so dilatory and hesitant 
 that none was started until September, 1884. Pushing for- 
 ward under great difficulty, it reached Khartoum January 
 28, 1885, two days after the city had been taken and Gor- 
 don, with all his men, massacred. 
 
 After this there was no more warfare in connection with 
 the British occupation until 1896, the Sudan was aban- 
 doned, and the occupation was confined to improving the 
 financial, economic, and social conditions of the Khedive's 
 dominions. In this year, General Sir Herbert Kitchener 
 (afterward Lord Kitchener of Khartoum) was sent into the 
 Sudan with 20,000 troops to reconquer it for the Khedive, 
 a task which he accomplished after two years of fighting. 
 
 That the colonial rivalries of France and Britain did not 
 at this time result in war was due wholly to the internal 
 political conditions of France, divided into two bitterly op- 
 posed factions after the revelations of the Dreyfus trial. 
 The French had, in the hope of taking advantage of con- 
 ditions in the Sudan to round out their colonial domain, 
 sent Major Marchand with only eight officers and one hun- 
 dred twenty men from the Upper Congo, with orders to 
 traverse the district intervening and stop at the Nile. Ac- 
 complishing his mission successfully, the French officer ar- 
 rived at the little town of Fashoda (the present Kodok) 
 in July, 1898. Two months later Kitchener's army, fresh 
 from its victory over the Mahdi, marched in from the south 
 and raised the British flag not more than a thousand yards 
 from the headquarters of Major Marchand. 
 
 Asserting the authority of the Khedive, Kitchener di- 
 rected Marchand to haul down his flag and leave the ter-
 
 The Wars of the World: 1878-1914 75 
 
 ritory, to which the French commander replied that he 
 received his orders from his military superiors and could 
 not leave without their direction. The issue thus passed 
 to London and Paris. The French ministry asserted that 
 the Khedive had lost his rights in the Sudan by allowing 
 the Mahdists complete sway for an entire decade, and that 
 therefore Great Britain could have no claim. The English 
 laid claim to the entire Nile Valley, in the name of the 
 Khedive, and held that the suppression of the revolt by 
 Kitchener's army constituted a full and valid claim to re- 
 main in possession. Here was a clear case of the clash of 
 colonial interests of two Powers, both led to seek expansion 
 because of economic pressure at home. 
 
 Popular opinion was aroused to a pitch which made war 
 seem inevitable; but in the end France had to yield, and 
 the respective spheres of influence were delimited by an 
 agreement of March 21, 1899, which secured to the British 
 an undisputed influence throughout Egypt. 
 
 Until 1904, when England and France once for all ad- 
 justed their colonial rivalries and ambitions, the French 
 looked with jealous eyes upon the English occupancy, es- 
 pecially as the land came more and more to be in fact a 
 real possession of the British Crown, in spite of its nominal 
 acknowledgment of Turkish suzerainty. After the agree- 
 ment in 1904, this jealousy ceased, and France no longer 
 asked embarrassing questions with regard to the reiterated 
 British intention of leaving Egypt to itself. The British 
 were in possession, and the British meant to stay. War 
 with Turkey at last afforded an excuse for ending the fic- 
 tion of dependence upon the Ottoman Empire; and Egypt 
 at last became in name as she had been in fact for years, 
 a dependency of Great Britain. 
 
 The occupation of Egypt by the English, together with 
 the fighting which it caused, first with the Egyptian army
 
 76 The Economic Causes of Modern War 
 
 and later with the Mahdi and his followers in the Sudan, 
 is clearly economic and financial in its origin, as Lord 
 Cromer said. Undertaken as a means of settling the rival 
 claims to payment of the creditors of the various coun- 
 tries who were interested in the Egyptian Debt, it led to a 
 permanent hold upon a country which aided England in 
 the quest of raw materials for her textile industry — soon 
 to be hard pushed by German rivalry — and made still more 
 complete the jealous hold upon India which guarded it 
 from dangerous economic rivals; and it facilitated the de- 
 fense of other African possessions. The occupation is but 
 one more in the long series of similar exploits to which Euro- 
 pean states have been driven in their dealings with weaker 
 nations because of their economic needs and economic ri- 
 valries. 
 
 SERBO-BULGARIAN WAR, 1885 
 
 The wars and constant prospects of wars in the Balkans, 
 which have kept Europe in a turmoil during the last half 
 century and which contributed to the great catastrophe of 
 the late war, are due very largely to racial, territorial, re- 
 ligious, and political motives, but the economic element 
 is not lacking. The Balkan states have fought because 
 they liked to fight, because they were jealous of one 
 another, because they sought territorial expansion in order 
 to bring a single race under a single government of its 
 own ; but they have not fought over colonies or trade routes,, 
 or spheres of influence, or naval bases. 
 
 It has been the economic rivalries of other nations, find- 
 ing expression in the Balkans, rather than economic rival- 
 ries among the Balkan states themselves which have stirred 
 up a large proportion of the trouble which has led to wars in 
 this turbulent portion of the globe.
 
 The Wars of the World: 1878-1914 77 
 
 The war between Serbia and Bulgaria in 1885 at first 
 sight appears to have little to do with illustrating the 
 economic causation of war. It arose through Serbian 
 jealousy of the expansion of Bulgaria. At the Congress 
 of Berlin, it will be remembered, the provisions of the 
 Treaty of San Stefano, which gave Eastern Rumelia to Bul- 
 garia, were withdrawn, and Bulgaria was restricted to nearly 
 her old boundaries. In 1885 the Rumelians, who were Bul- 
 garian by blood and restive under Turkish rule, and who 
 had long been desirous of amalgamation with Bulgaria, 
 arrested their Turkish governor-general and issued a proc- 
 lamation declaring the union of the two Bulgarias. Prince 
 Alexander, hesitating to defy Turkey, was at length pre- 
 vailed upon not to follow his first inclination to seek the 
 Sultan's consent ; and, yielding to the evident wishes of his 
 people, marched to Philippopolis and declared it a part of 
 his kingdom. 
 
 Turkey at first threatened war, and Greece and Serbia 
 began to mobilize. The latter state was at first believed to 
 be preparing to attack Turkey, and it was not until 
 a very short time before the opening of hostilities that the 
 Bulgars realized that King Milan was in fact preparing 
 to make war upon them. The enlargement of Bulgaria by 
 the addition of Rumelia had been so great that the other 
 two states felt that they would be outshadowed unless they 
 also received territorial compensations. Certainly the new 
 Bulgaria was large enough to deprive Serbia of any pre- 
 tensions to hegemony in the Balkans that she may have 
 entertained. 
 
 The war was very brief. When it was realized at Sofia 
 that a Serbian attack was imminent, troops were hurriedly 
 sent to the border. On the 14th of November, 1885, the 
 Serbians advanced across the frontier, forced the Dragoman 
 Pass on the 15th, and reached the plain of Sofia on the
 
 78 The Economic Causes of Modern War 
 
 16th. In the meantime, a large part of the Bulgarian army- 
 had been held on the Turkish frontier to await develop- 
 ments, until the Sultan made it clear that he did not intend 
 war. From the 17th to the 19th the Battle of Slivnitza 
 raged, at the end of which the Serbians were driven off 
 with heavy losses. At the end of the battle, fresh troops 
 from Rumelia came up. The Serbians were swiftly pur- 
 sued, the Dragoman Pass retaken, and the last stand of the 
 invaders crushed at the Battle of Picot, November 26-27th. 
 The next day, as the victorious Bulgarians were beginning 
 to carry the war into Serbia, the Austrian minister to Bel- 
 grade appeared with an armistice agreement, and the inti- 
 mation that Austria was prepared to come to Serbia's as- 
 sistance if the Bulgarians did not grant peace. The war 
 ended. 
 
 This brief conflict is not so free from economic rivalry 
 as at first appears. The Austrian desire to protect the de- 
 feated Serbians was largely due to the fear of Bulgarian 
 success as a probable expansion of the Russian sphere of 
 influence in the Balkans, where the Dual Monarchy was 
 even then finding some of her most valuable markets. Ser- 
 bia, moreover, was one of the most exclusively Austrian 
 markets and as such had a distinct claim upon the larger 
 state at that time. Thus even in the welter of racial and 
 religious hatreds in the Balkans, economic factors find a 
 place. 
 
 THE ABYSSINIAN WARS OF 1887 AND 1896 
 
 The two wars waged by Italy in an effort to establish a 
 colonial empire in Africa at the expense of Abyssinian inde- 
 pendence are economic wars, as colonial wars must always 
 be. They are the outcome of the fierce economic rivalry 
 of Europe which found its expression in the mad scramble
 
 The Wars of the World: 1878-1914 79 
 
 for colonies, following the opening up of Africa so rapidly 
 that Italy presently found herself with a grave overpopula- 
 tion problem, while most of the territory of the world 
 available for expansion was rapidly being pre-empted. 
 
 The Abyssinian wars are unsuccessful wars and they are 
 the outcome of an unsuccessful colonial policy which had, 
 up to 1906, cost the state a total of 17,591,567 pounds ster- 
 ling, with comparatively little return. 
 
 While the partitioning of Africa had been in progress, 
 Italy had looked on with longing eyes, until in 1884 an 
 indirect intimation was given by the British Foreign Of- 
 fice that Italian occupation of territory on the littoral of 
 the Red Sea would not be opposed. Secured on land by 
 the power of the Triple Alliance and at sea by the prom- 
 ise of British support, Italy felt safe in putting into 
 effect a colonial policy of her own, born of the desire to 
 share in the economic rivalry and colonial profits of the 
 great Powers of the world. 
 
 In 1885 two points were occupied, Beilul and Massowa, 
 with the British man-of-war "Condor" standing by to ob- 
 serve and report what went on, but in opposition to the 
 advice specifically given to the Italian Consul-General in 
 Egypt by Lord Cromer. Encroachments on Abyssinian 
 territory called forth protests from the Ethiopian King 
 John and in 1887 500 Italian soldiers were wiped out by 
 the Abyssinians at Dogali. A punitive force of 20,000 sent 
 out from the colony accomplished little, suffered much 
 from fever, and was at length recalled. When King John 
 died in 1889, Italian influence was promised to Menelik of 
 Shoa, one of the aspirants to the crown, in return for his 
 favor; and Italy, feeling secure in her new possessions, 
 established the new colony of Eritrea. Victories over the 
 natives followed at Agordat in 1893, Cassala in 1894 and 
 Senafe in 1895. The continued encroachments of the Ital-
 
 80 The Economic Causes of Modern War 
 
 ians were rousing resentment among the Abyssinians, so 
 that by the end of the year, large native armies were threat- 
 ening the outposts of the colony, a force of 2,350 Italians 
 had been routed, and the garrison at Makala was forced 
 to surrender. 
 
 In the Battle of Adowah, March 1, 1896, General Bara- 
 tieri, governor of the colony, was completely defeated by 
 King Menelik, with a loss of nearly 5,000 killed, including 
 two generals, and more than 1,500 captured. 
 
 Italy was unable to make further attempts against the 
 integrity of Abyssinian territory and in 1906 an agreement 
 between France, Great Britain, and Italy finally settled 
 the limits of the colony. All in all, Italy's colonial ven- 
 ture has been a failure economically, having served none of 
 the purposes of a colony and having cost dearly in blood 
 and in treasure. 
 
 Eritrea does not attract the Italian emigrant, for of the 
 300,000 inhabitants only 2,800 are Europeans. It does not 
 produce revenue, but on the contrary drains the treasury 
 at a rate of about 320,000 pounds a year. 1 The exports and 
 imports are not sufficient to be profitable. 
 
 Although the economic ends of the Italian colonial wars 
 prior to the occupation of Tripoli in 1911 were not achieved, 
 the causes of the wars remain clear enough. Italy sought 
 economic expansion with the same motives and the same 
 methods as the other European Powers, and though the 
 Italians failed in their attempts in Abyssinia, their eco- 
 nomic motives remained to find expression later in the more 
 successful war in Tripoli. The unfortunate Abyssinians who 
 died defending their native country were merely a few more 
 natives suffering because of the need for economic expan- 
 sion among European states. 
 
 1 Cambridge Modern History, vol. xii "The Latest Age," p. 271.
 
 The Wars of the World: 1878-1914 81 
 
 THE FRENCH WARS IN ANNAM, 1882-1885 
 
 The desultory warfare which went on intermittently be- 
 tween the French colonial troops and the natives of Annam 
 between 1874 and 1882 was a natural result of the French 
 penetration of this country in their effort to build up and 
 strengthen the Indo-Chinese colonies. All Europeans had 
 been expelled from Annam in 1824; but the conclusion of 
 the Anglo-French campaign in China, which ended in the 
 Treaties of Tientsin in 1858, offered excuse for a second 
 expedition for the capture of Sagon, where the French es- 
 tablished themselves in 1859, employing it as a base for the 
 spread of their power through the rest of Indo-China. 
 
 Fighting with the Annamese in 1873 resulted in a treaty 
 in the following year, made without reference to the suze- 
 rain power of China, which promised toleration of mis- 
 sionaries and the internal peace of the country. Further 
 difficulties of the missionaries provided a convenient ex- 
 cuse for the extension of imperial boundaries, with the 
 result that in 1882 French troops again interfered. 
 
 The Chinese unofficially encouraged irregular troops 
 known as the "Black Flags" to aid the forces of the An- 
 namese; and as the French came to realize this, their pro- 
 posals were made both directly to Pekin and to the 
 Annamese, in the first case for the cession of the southern 
 part, and in the latter for the cession of all of Tonkin. 
 
 The treaty was finally concluded with the Annamese, but 
 without approval from the Chinese imperial government, 
 which eventually repudiated it entirely. French troops at- 
 tacked the city of Sontai in spite of warning that the Chi- 
 nese would regard this as an act of war. Almost immedi- 
 ately afterward, the invaders also seized the towns of Hanoi 
 and Haiphong. The Annamese now renewed their war
 
 82 The Economic Causes of Modern War 
 
 against France, while negotiations for peace with the Chi- 
 nese were progressing. 
 
 An agreement had been reached and peace was believed 
 to have been secured when a misunderstanding with regard 
 to the frontier between French and Chinese troops pre- 
 cipitated an engagement in which the French were defeated. 
 A fleet promptly blockaded the coast of Formosa and fired 
 upon Chinese vessels at Foo-Chow. The French repre- 
 sentative at Pekin retired to Shanghai, while Chinese forces 
 were pouring into Tonkin. The French were finally victo- 
 rious, and a protocol signed April 4, 1885, gave France a 
 protectorate in Tonkin and charged her with the mainte- 
 nance of order there. 
 
 Until 1896 the French Indo-Chinese possessions were a 
 useless burden and a heavy drain on the exchequer of the 
 republic; but with the appointment of M. Doumer as Gov- 
 ernor-General, reforms began which placed the colony on 
 a sound financial basis. The foreign trade increased be- 
 tween 1893 and 1902 from 162,000,000 francs to 400,000,- 
 000 ; and the share of this which France received grew from 
 30,000,000 or less than a fifth, to 148,000,000 or more than 
 a third. 1 
 
 This petty colonial war is another example of the ex- 
 tension by force of arms of the boundaries of an industrial 
 state for economic ends. In Annam the expansion met 
 with eventual success, although at first apparently doomed 
 to a failure similar to that of Italy in Abyssinia. It is the 
 first of the four wars in the Far East since 1878, in all of 
 which the effects of economic pressure either in Europe or 
 Japan are to be seen. 
 
 1 These figures are from the Cambridge Modern History, vol. xii, The 
 Latest Age, p. 528.
 
 The Wars of the World: 1878-1914. 83 
 
 CHINO- JAPANESE WAR, 1894-1895 
 
 Jutting out between the Japan Sea and the Yellow Sea, 
 the southern extremity of Korea approaches so close to 
 the Mikado's territory that a powerful enemy, once estab- 
 lished there, may absolutely and completely dominate 
 Japan, since whoever holds Korea can in a few hours trans- 
 port his troops across the narrow strait for the invasion 
 of the islands. A naval Power, moreover, established in 
 Korea, dominates the Yellow Sea and the Sea of Japan, 
 and is able to select its time and hour to strike at any 
 place along the Japanese coast. The peninsula is there- 
 fore, in the hackneyed phrase, "a dagger pointed at the 
 heart" of Japan; and its possession is indispensable to 
 Japanese security. 
 
 But the economic importance of Korea to the expanding 
 island Empire far exceeds the military, for Japan, since the 
 awakening, has afforded a perfect example of the effects 
 of increasing population, followed by food shortage, excess 
 of production, and the consequent demand for territorial 
 expanse with a view to securing foodstuffs, raw materials, 
 markets, and room for colonial territory to relieve the sur- 
 plus population of the fatherland. Korea offered the most 
 logical ground for the expansion of the Island Kingdom. 
 It offered, too, a stepping-stone to Manchuria and the limit- 
 less Siberian wheat fields beyond. Its geographical posi- 
 tion made it practically a part of the chain of islands which 
 constitute the Mikado's dominions. It offered room for 
 colonization, it was rich in natural resources, and it was 
 inhabited by a gentle race easily to be dominated by the 
 sturdy and vigorous islanders who coveted it. There 
 were 3,185,000 acres of cultivated land, and 3,500,000 acres 
 arable but as yet not under cultivation. The crops could
 
 84 The Economic Causes of Modern War 
 
 be increased 150,000,000 yen by the application of scientific 
 methods, and could support an additional population of 
 from five to six millions. 1 Such a land was a tempting 
 prize for any Power, and especially to a nation gradually 
 beginning to feel the need for expansion. 
 
 This was the logic of the situation as it began to be clear 
 to the leaders of the Japanese in the years before the Chi- 
 nese War and as it became increasingly clear during the 
 years between that first conflict and the death grapple with 
 the Russian Bear. 
 
 The Chinese Empire laid claim to suzerainty over Korea. 
 As in Annam, this suzerainty had been asserted with vary- 
 ing degrees of strictness, but had come to amount to little 
 more than the sending of tribute to the Chinese capital. 
 Indeed, Korea had at one time acknowledged the suze- 
 rainty of China and Japan simultaneously and had contin- 
 ued still to submit to the government of her native em- 
 perors ! 
 
 Realizing the weakness of the Koreans, the Japanese in- 
 sisted upon treating with them as with an independent 
 state, since it would be perfectly possible to coerce the 
 native government into granting whatever trading priv- 
 ileges were desirable and probably eventually to find pre- 
 texts for interfering with the internal affairs of the penin- 
 sula and assuming the reins of government. All of this 
 was impossible so long as the Hermit Kingdom was for- 
 mally recognized as a tributary of the Chinese Empire. 
 
 Shots fired upon a Japanese naval vessel engaged in 
 survey of the Korean coast had in 1875 afforded excuse for 
 interference, but the opportunity was finally allowed to 
 pass, although in the following year a treaty of friendship 
 and commerce was signed. In 1884 an attack by native 
 
 *K. Asakawa: The Russo-Japanese Conflict, p. 27.
 
 The Wars of the World: 1878-1914 85 
 
 Koreans (whose intense dislike for foreigners extends even 
 to other members of the Mongolian race) upon the Japa- 
 nese legation, led to the dispatching of Japanese troops 
 to the kingdom, an example which China promptly fol- 
 lowed, with a view to asserting her authority and safe- 
 guarding her own interests. On April 18, 1885, the 
 Treaty of Tientsin was ratified, by which China was 
 brought to admit the independence of Korea and to agree 
 to send no more troops into the country without sending 
 notification to that effect to the Japanese Government, 
 which had already accomplished its main object in the 
 recognition of Korean independence. 
 
 In the years intervening between this treaty and the 
 war, a number of incidents occurred which served to fan 
 the flames. In 1889 the action of a Korean governor of 
 the province of Haingyondo cut off the export of rice to 
 Japan, which was no longer capable of providing all her 
 own foodstuffs and had become partly dependent on for- 
 eign supply. The removal of this restriction, which had 
 been the outcome of anti-foreign sentiment, and the pay- 
 ment of a claim of 110,000 yen in 1892 averted further dif- 
 ficulties at the time; but in 1894 the murder of Kun 
 Okkiun, a Korean political exile who had found refuge in 
 Shanghai, the conveyance of his body and the murderer 
 to Korea on a Chinese vessel, together with the enthusias- 
 tic reception by the Koreans of the murderer and the in- 
 sults offered to the body of his victim, stirred up feeling 
 between the two nations still further. In the same year 
 began the Tonghak movement in Korea, riots by anti- 
 foreign natives with which the government was unable 
 to cope. 
 
 The Chinese Resident offered the help of his government's 
 army to the Koreans and the troops began to move in; 
 but, following the provisions of the Treaty of Tientsin, the
 
 86 The Economic Causes of Modern War 
 
 Japanese Government was promptly advised. The Chi- 
 nese troops were disembarked June 8, 1894. By the 
 11th Japanese troops were also on the way. China having 
 refused to join in insisting upon internal reform in Korea, 
 Japan on the 20th of July presented the Korean Govern- 
 ment with an ultimatum demanding numerous changes. 
 
 Hostilities with China followed almost immediately, pre- 
 cipitated by the firing by Japanese war vessels upon Chinese 
 ships. There followed in quick succession Japanese vic- 
 tories at Assan, at Ping Yang, the naval victories of the 
 Yalu, the fall of Port Arthur, and of Wei-hai-wei. 
 
 Negotiations for peace began March 5, 1895, and the 
 Treaty of Shimonoseki was ratified May 8th, of the same 
 year. By the terms of this treaty, Korean independence x 
 was again specifically recognized, an indemnity of 200,000,- 
 000 tales was to be paid to the Japanese, and trading privi- 
 leges in China were granted them. Most important of all, 
 
 1 The Official Account of the Russo-Japanese War prepared by the Ger- 
 man General Staff, sums up succinctly the Japanese economic aims in this 
 war and the advantages to Japan of Korean independence: "Having 
 dropped her timid seclusion from the outer world, Japan, sooner or later, 
 was bound to assert her authority also abroad. The growing weight of 
 taxation arising from the expenditure for civil service, for the army, and 
 for the navy, and her rapidly increasing population, forced Japan to find 
 new markets beyond the limits of her island empire, and room for the 
 employment of her surplus population. For this purpose no country was 
 more favorably situated than Korea; ancient connection and tradition 
 pointed to that country. ... In the face of Korea's helplessness and 
 China's weakness, it was sure not to be difficult for Japan to jockey an 
 independent Korea according to her own sweet will, and to monopolize 
 Korean trade by virtue of her advantageous geographical position and the 
 ability of her merchants and tradesmen." English edition, pp. 3-4, Lieu- 
 tenant Karl von Donat, translator. 
 
 Thomas Cowen, an English journalist long resident in the East and 
 familiar with the statesmen of Japan, attributed to Marquis Ito the fol- 
 lowing summary of the conflicting claims of China and Japan in Korea: 
 "The claims of China over Korea were historical only — i.e., as the his- 
 tory of China reckons Korea among her tributaries and as China had the 
 greatest repugnance for changing the face of history as the worthy legacy
 
 The Wars of the World: 1878-1914 87 
 
 the Island of Formosa, the Pescadores, and the Liao-Tung 
 Peninsula, including Port Arthur, were ceded to Japan. 
 
 Nothing could show the economic motives of the war 
 more clearly and specifically than the terms of this treaty, 
 every one of the important provisions of which was of an 
 obviously economic character. Japan had now secured most 
 of the objects on which she had set her heart. An indepen- 
 dent Korea could easily be overawed to such an extent that 
 the Japanese could secure any concessions that they might 
 desire as regards trading privileges, immigration for the 
 relief of the congested population, and the supply of raw 
 materials. 
 
 From this time dates the Japanese monopoly of Korean 
 trade, which grew rapidly prior to the Russian war and has 
 increased enormously since then. The Chinese merchants, 
 who had withdrawn during the war, were speedily replaced 
 by enterprising subjects of the Mikado. The Chinese in 
 Korea were never again one-tenth so strong numerically, 
 as they had been before the war, and after its close their 
 commercial ventures were confined almost entirely to the 
 silk import trade on the west coast. 1 
 
 Moreover, a first step had been taken which might ulti- 
 mately open the way to annexation of Korea. The addition 
 of Formosa and the Pescadores served the territorial and 
 commercial aggrandizement of the Empire, and the acquisi- 
 tion of Port Arthur was of the very highest importance for 
 
 of ancestral emperors, so she was intent on claiming Korea as her vassal 
 state. The claims of Japan over Korea were economical — i.e., she did not 
 claim any regal authority over Korea; but from her geographical posi- 
 tion and the necessity of providing for her constantly increasing popula- 
 tion, she was intent on utilizing Korea as the best source from which 
 the defect in the home product of rice was to be supplied as well as the 
 nearest field in which the future sons of Japan might find employment." 
 See Thomas Cowen: The Russo-Japanese War. The italics are my own. 
 1 K. Asakawa: The Russo-Japanese Conflict, p. 15.
 
 88 The Economic Causes of Modern War 
 
 winning and holding economic and military supremacy in 
 the Far East. Its possession implied the power of Japan 
 to checkmate any of the European Powers which were con- 
 testing for the supremacy in the East. Not only did it 
 check the expansion of Russia, but it gave the Japanese 
 themselves abundant opportunity for expansion into Man- 
 churia, and, if the time should ever come, for the seizure 
 of Korea. To hold Port Arthur meant to possess a base 
 for attack upon both coasts. Most important of all, the 
 Power that held Port Arthur was in the best possible posi- 
 tion for winning the dominant influence in China, for 
 securing the lion's share of Chinese commerce and of the 
 exploitation of natural resources; and for preventing that 
 complete partition of the Chinese Empire among European 
 Powers which would be fatal to Japanese hegemony and 
 which Russian expansion was making more and more prob- 
 able within the next decade or two. 
 
 Precisely because it was so important to Japanese su- 
 premacy that the flag of the rising sun should float above 
 Port Arthur, it was equally important to the European 
 Powers which were rivals for economic privileges and influ- 
 ence in the Orient that it should not float there. If Japan 
 were once to establish herself in this stronghold, her oppor- 
 tunities for mastering the trade of the Far East surely 
 would be such that her European economic rivals would of 
 necessity fall behind. Russia, France, and Germany, there- 
 fore, united in "advising" Japan to return it to the Chinese 
 and to accept an increase in the amount of the indemnity 
 by way of compensation. 
 
 This action on the part of the Powers, whose economic 
 rivalry with Nippon was supported by greatly superior 
 armaments, coming at the moment of triumph of a proud 
 nation which had for the first time proved its capacity for 
 using the new methods of western warfare, precipitated a
 
 The Wars of the World: 1878-1914 89 
 
 storm of fury throughout the island Empire. In every 
 class the nation had been permeated with the ambition to 
 win hegemony in the East, and the importance of retaining 
 Port Arthur was as clear to every one as were the motives 
 of the three European nations in withholding it. 
 
 The Japanese press, which even then shared many of the 
 less desirable characteristics of the American newspaper, 
 published many bitter articles. 1 Pamphlets attacking the 
 Powers and demanding retention of the port, appeared on 
 every hand. Only a country thoroughly under police con- 
 trol could have avoided being swept into war by the sheer 
 weight of popular excitement; and as it was, the newspaper 
 censors worked overtime. Newspapers were suspended right 
 and left, but new ones sprang up in their places to reiterate 
 their patriotic utterances until they, too, were suppressed. 
 
 The Mikado's government had to yield and knew it, for 
 Japan was not yet ready to meet western nations in a trial 
 of skill with western armaments. Yield they did, but from 
 that time on, every Japanese knew that the struggle was to 
 be between Russia and Japan for the trade and supremacy 
 of the Far East, since it was Russia which was held respon- 
 sible for the joint action of the three governments. 
 
 There followed an orgy of territory-grabbing by European 
 nations which served to show the keenness of the economic 
 rivalry that had come to exist among states which felt the 
 pressure of their industries behind them, in their efforts to 
 find new portions of the earth to exploit. More and more 
 Japan became convinced of the dangers of her position from 
 the military as well as from the economic point of view, 
 realizing that it was only her proved power which spared 
 her the fate of helpless China. Germany secured Tsing- 
 Tao, France Kuang-chan-wan, Great Britain the whole of 
 
 1 A detailed account of the popular excitement may be found in Thomas 
 Cowen's The Russo-Japanese War, p. 34.
 
 90 The Economic Causes of Modern War 
 
 the Kowlung Peninsula, north of Hongkong, 1 and then 
 upon the Japanese evacuation, Wei-hai-wei. The bit- 
 terest blow that the pride of the Japanese in their achieve- 
 ments ever received was the subsequent negotiation be- 
 tween China and Russia giving to the latter state not only- 
 trading rights in Manchuria which made her a still more 
 serious economic rival, but also that very coveted position 
 in Port Arthur from which the Japanese themselves had 
 been driven by Russian diplomatic maneuvres only a short 
 time before. After that there was no thought of anything 
 but war with Russia, and a continuous, determined prepa- 
 ration for that conflict when its day should come. 
 
 THE BOXER UPRISING, 1899-1900 
 
 The Boxer Rebellion is commonly represented in the 
 West as an outburst of fanaticism due to accidental infringe- 
 ment by Europeans upon ancestor worship and similar 
 Chinese "superstitions" and to resentment of the activity 
 of the missionaries; so that the Relief Expedition which 
 marched to Pekin is thought merely to have put down an 
 unjustified and brutal native rising. 
 
 Not only is this view wide of the truth, but it neglects 
 entirely all the underlying and some of the immediate 
 causes of the outburst initiated by the Chinese society, the 
 "Fists of Righteous Harmony." It does not do justice to 
 the painfully real grievances of the Chinese and it repre- 
 sents altogether too glowingly the altruistic motives of the 
 European Powers, whose economic rivalry and greed in 
 seizing everything Chinese upon which they could lay 
 
 1 Great Britain secured Hongkong by treaty in 1842; a foothold of 
 about five miles on the Kowlung Peninsula in 1860; and the whole 
 peninsula in 1898.
 
 The Wars of the World: 1878-1914 91 
 
 hands had had a great deal to do with provoking the out- 
 break. 
 
 The extent to which economic causes were operative as 
 well as their importance, can be seen with perfect clear- 
 ness by a study of the international situation in the Far 
 East between the Treaty of Shimonoseki and the begin- 
 ning of the Boxer troubles. 
 
 If there were cynics among the statesmen of the Chinese 
 Foreign Office, they must have realized at once that the 
 compulsion exercised upon Japan to secure the evacuation 
 of Port Arthur was not prompted by disinterested concern 
 for the integrity of Chinese territory. Scarcely had the 
 Japanese departed when the economic rivalry of the Powers 
 of Europe began to show itself and their demands began 
 to be heard. First in the field was Russia, suggesting a loan 
 to the Chinese Government to be applied to the payment 
 of the Japanese war indemnity. Loans, when they cannot be 
 met by disorganized native governments, offer admirable 
 excuses for seizing territory; and if the governments do 
 prove able to meet their obligations, the loans are still 
 beneficial to the financiers who arrange them. That was 
 why the Tsar generously offered to help the Chinese pay the 
 war indemnity imposed by Japan. The loan was one of 
 400,000,000 francs, at 4 per cent., and was sufficient to pay 
 half of the indemnity. It was arranged nominally through 
 the Russo-Chinese Bank, which was thus brought into 
 prominence and which soon extended through Siberia and 
 the Far East, maintaining thirty branches and serving as a 
 cloak for the commercial schemes of the Russian Govern- 
 ment. 
 
 In 1897 two obscure German missionaries were most 
 opportunely killed by the Chinese. Germany promptly 
 landed troops and seized the bay of Kiao-Chau on the coast 
 of the Yellow Sea, the operations being commanded by the
 
 92 The Economic Causes of Modern War 
 
 same Admiral von Diedrichs who later encountered Dewey 
 at Manila. Just what connection this had with making 
 reparation to the families of the dead missionaries is not 
 quite clear; but at any rate Germany had obtained a foot- 
 hold which was the beginning of her share in the economic 
 struggle in the Far East and of further exploitation of the 
 country. China was browbeaten into leasing, with full 
 rights of sovereignty, the bay and contiguous territory to 
 Germany for a period of ninety-nine years, within which, 
 time many things could (and did) happen. Established in 
 the principal port of the province, Germany immediately 
 began a process of penetration by means of railways and 
 mining concessions. 
 
 In 1898 announcement was made that the Russian fleet 
 had received "permission" to winter at Port Arthur, then 
 in Chinese hands, and in the following May, under threat 
 of hostilities, China ceded Port Arthur and Dalni, the 
 strategically and economically highly important tip of the 
 Liao-Tung Peninsula. There was an ominous silence from 
 the Japanese Foreign Office, but a frenzy of indignation 
 broke out anew among the people of Japan. 
 
 In the meantime, Great Britain and France, far from 
 seeking to maintain the integrity of the helpless Chinese 
 Empire, had themselves been seeking their share of the 
 spoils. Great Britain, not content with her recent acqui- 
 sitions, Kowlung and Wei-hai-wei, now demanded a pledge 
 from China that the Yangtse Valley should never be alien- 
 ated to any other power, and thus secured the dominance of 
 British commercial interests in that fertile region. Japan 
 made similar demands as regarded the widely separated 
 provinces of Fukien and Amur. 
 
 In April, just before Russia had secured Port Arthur, 
 France handed in her demands — nothing less than a ninety- 
 nine year lease of Kwang Chau for use as a coaling station,
 
 The Wars of the World: 1878-1914 93 
 
 railway rights to Yunnanfui from Tonkin, and a promise 
 not to alienate to any other power the provinces of Kwan 
 Tung, Kwangsi, Yunnan, or the Island of Hainan, and, 
 finally, further extension of French rights in the vicinity of 
 Shanghai. The last demand was of particular gravity in 
 its consequences because, with characteristic European in- 
 difference to native beliefs, the lines proposed interfered 
 with a native cemetery and therefore with the peaceful re- 
 pose of the ancestors worshipped by the Chinese of Shang- 
 hai. This was one of the incidents which particularly en- 
 raged the native populace. 
 
 The Chinese Empire consists altogether of eighteen 
 provinces. Thirteen of these had now been invaded by the 
 toreigners, among them the most populous, the most 
 wealthy, and the most desirable — holding within their 
 borders the most important waterways, harbors, mines, 
 and all of the economic centres to which foreign commerce 
 could gain access. 
 
 In view of all this aggression, which was purely the out- 
 come of the economic rivalry existing among European 
 nations, it is at least comprehensible that the Chinese were 
 maddened with hatred of the foreigner. The war with Japan 
 had been brought on by the Manchu Government, and since 
 most of it had been fought in Manchuria, a district which 
 was peculiarly their own, the great mass of the inhabitants 
 of the Empire had regarded it with comparative indifference 
 as a concern of the dynasty rather than of the Chinese. 
 Until very recently, indeed, patriotism in the sense in 
 which a Westerner thinks of it was not known in China; 
 but these demands of the foreign powers were spread 
 throughout the country and affected every one. 
 
 Besides the irritation produced by foreign intrusion in a 
 nation which for years had sought to keep to itself, there 
 were other causes of dissatisfaction. The burden of taxa-
 
 94 The Economic Causes of Modern War 
 
 tion to meet what remained of the indemnity and the 
 interest of the Russian loan with which one-half had been 
 paid, was crushing. The economic balance in China, al- 
 ways in a rather precarious state, was disturbed by two 
 years of bad weather with consequent bad crops, and added 
 to the complexity of the financial situation. Thousands 
 were reduced to the verge of famine ; rebellion, brigandage, 
 and piracy increased; and many of the malcontents went 
 over to the growing Boxer Society, attributing their woes 
 wholly or in part to the foreigner. 
 
 Even the patience of the government began to give out, 
 so that when in 1899 Italy — always belated in the colonial 
 field — put in a claim for a coaling station at Sanmun on 
 the Chekiang coast, together with a railway and mining 
 grant in the province, she met with blunt refusal. The 
 Italian Government hesitated to use force, and so desisted, 
 the more so as these efforts were looked on with disapproval 
 by the Powers already secure in their own possessions. 
 
 When, shortly after his accession, the new Emperor began 
 to show a tendency to adopt the methods and ways of life of 
 the hated "foreign devils" — who had shown themselves 
 devilish enough in their greed and unscrupulousness, 
 Heaven knows! — and actually issued a series of edicts 
 intended to make sweeping reforms throughout the state, 
 it was too much. The Dowager Empress, by a coup d'etat, 
 put herself at the head of the government, by a polite 
 fiction exercising her sway through the Emperor, and gave 
 covert encouragement to the Harmonious Fists. In 1899 
 the Society broke into open violence, tortured and killed 
 missionaries and converts in great numbers, and in the sum- 
 mer of 1900 laid siege to the foreign legations in Pekin. 
 American and Japanese troops had served to check the 
 progress of the Boxers somewhat, and the besieged lega- 
 tions were finally relieved by an expedition composed of
 
 The Wars of the World: 1878-1914 95 
 
 Japanese, French, German, Russian, American, and British 
 forces. 
 
 The rising having been finally suppressed and peace re- 
 stored, the Powers imposed an indemnity upon China, and 
 entered into an agreement for the mutual maintenance of 
 Chinese integrity from that time onward, and for the pre- 
 vention of further European encroachment upon her ter- 
 ritory. 
 
 The whole rebellion was one more case of protest by the 
 natives of a weaker land against exploitation at the hands 
 of foreigners. It was territorial aggression and economic 
 greed growing out of European rivalry which lay at the 
 root of the trouble, and the contributing difficulties, 
 friction with missionaries, ancestor worship, and the rest, 
 were merely the immediate occasions. 
 
 "Of all immediate causes of this last upheaval of China 
 against the Occident," says Clements, 1 "these aggressions 
 were the most important factor. Had they never occurred 
 it is doubtful whether there would have been a rebellion." 
 
 European greed had attained to such a pitch that every 
 possible way of extorting profit from the helpless native 
 government was employed. Engrossed in their own rival- 
 ries, the states of Europe had paid scant heed to the suffer- 
 ing and natural resentment of the Chinamen. Commercial 
 servitude, loss of sovereignty, the forcible extortion of 
 ninety-nine year leases, foreign dominance in their finest 
 harbors, the hypothecation of the likin and salt revenues, 
 special contracts and concessions to foreign promoters, the 
 eternal talk of partition, diplomatic wrangles and demands 
 for "spheres of influence," indemnities demanded on grounds 
 which no European Power would have thought of tolerating 
 if applied to itself, — these were some of the forms in which 
 
 1 Paul H. Clements : The Boxer Rebellion, p. 26.
 
 96 The Economic Causes of Modern War 
 
 the economic hostility of the Great Powers appeared to 
 China. It was this that the Chinese resented in war, a 
 war which must be laid at the door of the ambition for 
 economic expansion of the great nations of the world. 
 
 THE RUSSO-JAPANESE WAR, 1904-1905 
 
 The conflict between Russia and Japan is the result of the 
 clash of their economic interests, purely and simply. The 
 growing population and industry of Japan required more 
 than the Korean territory for which the Chinese war had 
 been fought. Manchuria was needful also. But Russia 
 likewise sought to expand in Korea and Manchuria. It 
 was necessary for her to do so for various economic reasons 
 — to possess more natural resources, to win a larger place 
 in the markets of the Orient, and to secure ice-free ports. 
 It was necessary for Japan to expand in the same direction. 
 The growth of her population and her manufactures, and 
 her need for food supplies and for markets made this im- 
 perative. It was because of these things that the Japanese 
 dreamed of supremacy in the East. It was life and death 
 to them that they should be supreme. 
 
 Other incidents which fanned popular hatred and led 
 on to war were the outgrowths of this fundamental eco- 
 nomic clash. The Japanese desire to retain Port Arthur 
 in 1895 was not primarily military or naval; it was rather 
 economic — a way in which to begin expansion in Manchu- 
 ria, a way to Korea, and most of all, a way to halt the 
 Russian rival. For exactly the same reasons, Russia desired 
 the stronghold. When she could, she took it from China 
 by threat of war. When Japan in her turn was strong 
 enough, she, too, took it from Russia by force of arms. 
 
 Japan, it is true, desired to prevent the partition of 
 China, but this desire was economic in its origin, certainly
 
 The Wars of the World: 1878-1914 97 
 
 not altruistic. The partition of China among the Great 
 Powers, towards which Russian policy was obviously tend- 
 ing and which would have favored Russian economic in- 
 terests, would have ended the Japanese hopes of expan- 
 sion. What happened in Shantung when the Germans 
 secured Tsing-tao gave fair warning of what might be 
 expected throughout China if the powers once divided it 
 among themselves; and Russian expansion in Manchuria, 
 without opposition, made it fairly clear that in the end 
 China would be divided unless something happened to put 
 an end to the encroachments of the Slav. Japan's object 
 was to delay the partition until she was herself strong 
 enough to prevent it by force. 
 
 The gradual development of Russian power in Eastern 
 Asia can be traced from the Seventeenth Century, but 
 none of the lands then acquired served to satisfy the coun- 
 try's greatest economic need — ports free from ice the year 
 round. This has always been the principal difficulty in 
 the way of the more complete development of Russian com- 
 mercial possibilities. The Baltic ports, which open com- 
 mercial relations with the states of Scandinavia and central 
 Europe, and an outlet (always under the possibility of Ger- 
 man control) to the Atlantic, are few in number and are 
 ice-bound part of the year. Archangel, to the north, is six 
 months choked with ice, and Vladivostok to the east is 
 only a little better. In the south, Russia has ports on the 
 Black Sea, but all this commerce must pass back and forth 
 under the perpetual menace of the Dardanelles. The foreign 
 trade of southern Russia exists only by virtue of the whims 
 of the Power that holds Constantinople. 
 
 The logical step for Russia was to secure possession of 
 the straits, which have for centuries been in the hands of 
 the gradually decaying Ottoman Empire. Economic and 
 naval considerations made its possession extremely desirable,
 
 98 The Economic Causes of Modern War 
 
 for not only did all the commerce of the south of Russia 
 pass this way, where it could be cut off at any time, but the 
 Turkish rule closing the passage to all warships, bottled up 
 the Black Sea fleet and prevented the exertion of Russian 
 naval power in the Mediterranean, except after a very long 
 voyage from the Baltic. But British economic and naval 
 considerations stand in the way. Constantinople, it cannot 
 be too often repeated, lies on the trade route to India. 
 British wealth measured in millions passes back and forth 
 within easy striking distance along that route. It is an 
 artery in which flows the very life blood of the British 
 Empire. Great Britain will never permit a strong Power 
 to establish herself there. The impotent Turk? Well and 
 good. But Russia? Never. 
 
 Through all the centuries the great mass of Slavs, the 
 largest population in Europe, literally numberless, inhabit- 
 ing a country of rich natural resources with hundreds of 
 miles of the best farming land, have remained closed 
 up within a country which has no ports. Blocked to the 
 north, west, and south, the trend of the Russian has per- 
 force been towards the east. For the Slav, too, there has 
 been a Drang nach Osten. Vladivostok, the Mistress of 
 the East, was a beginning, but it was not enough, for even 
 this port is not ice-free, and Russia must touch warm water 
 somewhere before her economic future can be assured. 
 In her Asiatic as in her European politics, this one motif is 
 ever-recurrent. In one form or another it is continually 
 turning up. 
 
 The occupation of Saghalin, to the exclusion of Japan, 
 is but the following out of this policy, but it was further 
 south, to the Yellow Sea, that Russian ambition really 
 turned. Along these coasts, in warm water, there were 
 several ports through which Russian enterprise might build 
 up a commerce that would make the Slav supreme in the
 
 The Wars of the World: 1878-1914 99 
 
 Far East and bring to his country a boundless wealth. 1 
 In Korea there were Gensan, Mansampo, an ideal naval 
 base, and Chemulpo; and in Manchuria, Port Arthur, 
 Dalni, and Tei-lien-wai. To secure one of these only, 
 would be success; to secure all of them would be a triumph; 
 and towards these ends Russian policy was directed steadily 
 until the defeat which Japan had long been planning put 
 an end forever to Slav dreams of eastern hegemony. 
 
 Russia had secured Vladivostok in 1860 and had secured 
 at the same time the cession from China of a slip of coast 
 extending from the province of Amur to Korea. In the 
 following year an attempt to occupy the Straits of Tsushima 
 was foiled by the British. The southern part of Saghalin 
 was taken in 1875 and in 1885 an effort was made to secure 
 Port Lazarev in Korea, while British attention was being 
 distracted by a diversion along the Afghan frontier. 
 
 The beginning of the Trans-Siberian Railway in 1891, 
 an enormous undertaking, was one of the most important 
 steps in carrying forward the Russian trend to the East. 
 The Tsar's government now used its influence at Pekin, 
 enhanced since the interference with the Japanese at Port 
 Arthur, to gain the right to run the railway across Chinese 
 territory in a straight line to Vladivostok, instead of taking 
 the more circuitous northern route. Not only did this 
 measure make the line shorter and the cost of construction 
 less, but it practically assured to the Russians the control 
 of a strip of territory roughly 800 by 400 miles in extent, 
 since the existence of the railway without military protec- 
 tion was not to be thought of, and since the opportunities 
 
 * General Kuropatkin, writing after the war, said, "The question of 
 obtaining an outlet on the Pacific Ocean was discussed in Russia some 
 time ago. It was thought that an exit to ice-free seas would eventually 
 be a necessity in view of the immense growth of our population." The 
 Russian Army and the Japanese War, p. 146.
 
 100 The Economic Causes of Modern War 
 
 of exercising authority were greatly increased by the com- 
 ing of the railway. In 1896 Japan suggested the delimita- 
 tion of Russian and Japanese spheres of influence, Russia 
 to have Manchuria and Japan Korea; but the Tsar's gov- 
 ernment declined to accede. Two years later Russia 
 acquired Port Arthur, under the circumstances already de- 
 scribed, thus administering the bitterest blow possible to 
 Japanese pride. 
 
 The humiliation of the Japanese quite aside, this action 
 opened a new source of friction in that Russia now wished 
 to connect Kwan Tung in which Port Arthur is situated, 
 with Vladivostok, 600 miles to the north. Manchuria 
 and Korea, through which the proposed line would have to 
 pass, thus acquired a new interest. 
 
 In spite of the extensive immigration of Japanese into 
 Korea that had been going on for some years, a lively com- 
 merce with Japan, and the presence in the Hermit Kingdom 
 of Japanese troops detailed to guard the legation and tele- 
 graph line from Fu-san to Seoul, Russian influence spread 
 more and more. Russian officers and civil servants began 
 to find temporary employment; and in China a large com- 
 mercial organization was formed, with Russian officers at 
 the head, to exploit the timber on the lower Yalu. 
 
 During the Boxer disturbances, Russia found a further 
 opportunity for extending her influence by sending troops 
 into Manchuria to protect the Trans-Siberian Railway 
 where it crossed Chinese territory and for the suppression 
 of revolts which might spread across the frontier. Alarmed 
 by the Anglo-Japanese defensive alliance of 1902, Russia 
 concluded an agreement with France in the same year, and 
 then in order to strengthen her favor at Pekin and avoid 
 conflict with other European Powers, drafted a treaty with 
 China for the withdrawal of the troops in Manchuria, at
 
 The Wars oj the World: 1878-1914 101 
 
 the same time guarding sufficiently against the exploitation 
 of the province by other nations. The withdrawal was pur- 
 posely carried out so slowly as to be practically non-effec- 
 tive. 
 
 By the end of the year 1902 the strength of the Japanese 
 army and navy was so increased that the Foreign Office 
 felt secure in adopting a bolder front. Up to this time the 
 patience of the Japanese had been so great as to be ominous, 
 had it been interpreted aright. Now, however, with a 
 strong army and navy ready to strike instantly, and with a 
 treaty with Great Britain which would operate to prevent 
 a repetition of the European intervention which followed 
 the Treaty of Shimonoseki, Japan was ready for the war 
 which her statesmen had long recognized as inevitable. 
 
 In July of 1903 the Japanese Foreign Office commenced 
 negotiations with Russia for the regulation of affairs in 
 Korea, where the economic rivalry of the two Powers was 
 most obvious, and also in Manchuria, demanding recogni- 
 tion of the independence and inviolability of both China 
 and Korea, recognition of the preponderating influence of 
 Japan in Korea, and Russia in Manchuria, limitations of 
 the troops of both powers in their respective territories, 
 and an open door for Japan in Manchuria and for Russia 
 in Korea, In order to gain time while the last section of 
 the railway around Lake Baikal was being completed, 
 Russia delayed her answer. Japan stood firm while Russia 
 sought to evade the issue. Proposals and counterproposals 
 passed, while the Russian troops in the East were being 
 increased in number, and the concessionaires on the Yalu 
 pushed their work. Realizing that her military preponder- 
 ance was being jeopardized and that time was precious, 
 and forced, moreover, by the warlike spirit of the people, 
 Japan demanded a definite date for a reply to her last
 
 102 The Economic Causes of Modern War 
 
 proposals, responding to further Russian efforts at tem- 
 porizing by the recall of her ambassador. 
 
 Without the formality of a declaration of war, Japanese 
 war vessels delivered an attack at Port Arthur, while simul- 
 taneously, General Kuroki's army landed in Korea; and 
 for the first time a modern army of an Asiatic Power was 
 pitted against that of a European Power. The Russians 
 were driven back on the Yalu, were besieged in Port 
 Arthur, defeated at Liao-Yang, and again at Mukden. At 
 sea the Port Arthur fleet, the Vladivostok fleet, and the 
 Baltic fleet were successively destroyed. 
 
 The terms of peace, which were concluded at Portsmouth, 
 New Hampshire, September 5, 1905, gave Japan the 
 territory necessary to her economic development, the pos- 
 session of Port Arthur, and revenge for the European inter- 
 vention of two years before, together with the Russian 
 lease of the Liao-.Tung Peninsula, the Russian railways in 
 lower Manchuria, and the southern half of the Island of 
 Saghalin. 
 
 With her supremacy in the East assured, Japan was 
 enabled to carry through the economic program which she 
 had mapped out, quite as ruthlessly as any European Power. 
 Insurrections in Korea led at length to the abolition of the 
 kingdom in 1910 and the establishment in its stead of the 
 Japanese Province of Chosen. The acquisition of Shantung 
 as a result of the Treaty of Paris has carried out almost to 
 the full the economic development desired by the states- 
 men of Japan. 
 
 The series of wars in the Far East is plainly the out- 
 come of economic conditions, and the final conflict which 
 definitely established Japanese hegemony, is evidently due 
 to the direct clash of two rival policies of expansions made 
 necessary by economic pressure. Even when we include 
 among the motives of the Japanese the fear of being swal-
 
 The Wars of the World: 1878-1914 103 
 
 lowed up and made a colony in the process of Russian 
 growth, European economic need, real or fancied, is still 
 the cause. The war broke out because of the existence of 
 two sets of economic purposes which from their very nature 
 led to conflict. 
 
 If confirmation of the economic character of these wars 
 were needed, it would be found in the events which fol- 
 lowed. The war with China had resulted in the practical 
 expulsion of Chinese merchants from Korea. The second 
 war was followed within five years by formal annexation, 
 which added political domination to the economic penetra- 
 tion that had amounted to nearly the same thing, in the 
 years succeeding the victory of the Mikado's forces. As 
 Chinese economic interests had been ended in the provinces 
 that Japan had marked for herself, so were the Russian. 
 
 Slowly at first, but none the less steadily (and in the 
 years succeeding annexation, much more rapidly) infiltra- 
 tion of Japanese settlers into the old Kingdom of Korea, 
 which now became the new province of Chosen, began to 
 relieve the overcrowding of the growing populace at home. 
 In 1895, immediately after the Chinese War, there were 
 but 10,463 Japanese in Korea. 1 Gradually their number 
 increased, until immediately after the war with Russia there 
 were from 40,000 to 50,000. After the war immigration 
 grew at the rate of from 20 per cent, to 39 per cent, annually, 
 until in 1918 there were 20.6 Japanese to every square ri 
 (5.95501 square miles, or 15.42347 square kilometres) and 
 they formed 1.87 per cent, of the total population. In 
 other words, each square ri in Japan had contributed about 
 twelve persons to each square ri in Korea. 2 In the city of 
 Seoul alone, one-sixth of the population was Japanese and 
 
 1 Statesman's Yearbook, 1897, p. 731. 
 1 Japan Yearbook, 1918, p. 684.
 
 104 The Economic Causes of Modern War 
 
 the total number there equalled all those in the country 
 before the Russo-Japanese War. 1 
 
 Comparison of the statistics of Japanese immigration and 
 those of other countries during the years immediately 
 before the World War and the first two years after, leaves 
 no doubt as to what was occurring: 2 
 
 Year Japanese Other Nationalities 
 
 1912 243,727 16,589 
 
 1913 271,591 17,439 
 
 1914 291,217 18,025 
 
 1915 303,659 17,100 
 
 The efficiency of the Japanese administrators, merchants, 
 and technical experts resulted in an enormous improvement 
 of the handling of the natural resources of the country, 
 particularly after the formal occupation. The foreign trade 
 of the country grew from 59,000,000 yen in 1910 to 131,000,- 
 000 in 1917. 3 
 
 A few years before the Chinese War the shares taken by 
 the various countries in the import trade of Korea stood as 
 follows: Great Britain 57 per cent., Japan 19 per cent., 
 China 12 per cent., Germany 8 per cent., other states 4 per 
 cent. 4 The defeat of China and the growth of industry, 
 joined with the enterprise of the Japanese, speedily changed 
 all that. At the outbreak of the war with Russia, Japan 
 had gained approximately a third of the import trade 
 and was receiving almost all of the exports. By 1914, 
 290,000 tons of iron ore were being taken each year 
 
 1 Statesman's Yearbook, 1916, p. 1113. This authority adds: "There 
 has been a large immigration of Japanese into the Peninsula of recent 
 years and a considerable exodus of Koreans into the neighboring Russian 
 and Chinese territory." 
 
 2 Japan Yearbook, 1918, p. 684. These are Japanese figures, compiled 
 by Professor Y. Takenob of Waseda University. 
 
 3 Charles H. Sherrill: Have We a Far Eastern Policy? p. 179. 
 
 4 Statesman's Yearbook, 1892, p. 442.
 
 The Wars of the World: 1878-1914 105 
 
 from the Korean mines all used by the Government 
 Steel Works at Wakamatsu, which will eventually rely upon 
 Korea for half its raw material. The Korean production 
 of such rare but important metals as tungsten and molyb- 
 denum all go to Japan. 1 Even in 1901 and 1902 this devel- 
 opment of commercial relations was going on rapidly, as is 
 indicated by the following table : 2 
 
 In pounds sterling: 
 
 Total Korean Japanese Total Korean Japanese 
 
 Year Exports Share Imports Share 
 
 1901 1,080,345 970,663 635,085 247,624 
 
 1902 1,130,429 1,041,395 695,020 280,843 
 
 How far Japanese trade has progressed since the annexa- 
 tion, the following table demonstrates: 3 
 
 In yen: 
 
 Total Korean Japanese Total Korean Japanese 
 
 Year Exports Share Imports Share 
 
 1910 19,913,843 15,378,643 39,782,756 25,348,085 
 
 1911 18,856,955 13,340,551 54,087,682 34,058,434 
 
 1912 20,985,617 15,369,009 67,115,447 40,756,013 
 
 1913 30,878,944 25,022,544 71,580,247 41,214,749 
 
 1914 45,667,340 29,421,949 53,606,448 39,865,572 
 
 1915 49,492,000 40,900,000 59,199,000 41,535,000 
 
 1916 56,801,000 42,964,000 74,456,000 52,459,000 
 
 1917 83,774,000 64,725,000 102,886,000 72,096,000 
 
 1918 154,189,148 137,204,875 158,309,363 117,273,413 
 
 In trade and in immigration, in the export of her manu- 
 factured goods and the import of food and raw materials, 
 and in the gradually increasing outlet of her population, 
 Japan's Korean policy demonstrates the economic pressure 
 that forced the Empire on to her successful wars. 
 
 'Japan Yearbook, 1918, pp. 692-693. 
 
 a British Diplomatic and Consular Reports, Annual Series, No. 2999, p. 8. 
 Quoted by K. Asakawa: The Russo-Japanese Conflict, p. 16. 
 
 3 The statistics, from 1910 to 1912, inclusive, are from the Japan Gazette, 
 p. 329; from 1913 to 1914, inclusive, from the Statesman's Yearbook, 1915, 
 pp. 1105-1106; from 1915 to 1917, inclusive, from the Japan Yearbook, 
 1918, p. 689; and for 1918 from the Statesman's Yearbook, 1920, p. 1033.
 
 106 The Economic Causes of Modern War 
 
 THE BOER WARS, 1880-1881, 1899-1902 
 
 Analysis of the causes of the Boer War of 1899-1902, and 
 of the less important war that preceded it, is difficult be- 
 cause of the complexity and variety of the factors involved. 
 The more ardent British patriots have denied any ambi- 
 tions on the part of their country, whether economic or 
 imperial, and have presented the war as the outcome of 
 a simple desire to secure justice and the Transvaal citizen- 
 ship and franchise for their oppressed fellow-countrymen. 1 
 If this claim is to be admitted, we have the remarkable 
 spectacle of a great state warring with a smaller state in 
 order to enable its own subjects to divest themselves of their 
 native citizenship and take up that of the hostile state! 
 
 On the other hand, distinguished British economists have 
 asserted (did, indeed, assert while the war was still in 
 progress) that the Empire was being made a catspaw for 
 a selfish group of financiers who were promoting their own 
 financial interests at the expense of the two nations. 2 The 
 fact that there existed throughout the war a strong English 
 pro-Boer party, which included some of the most eminent 
 living Englishmen, serves to give color at least to this belief, 
 and to indicate that the causes of the war were far from 
 being idealistic. 
 
 *Sir Arthur Conan Doyle (The Great Boer War, p. 26) says: "Our 
 foreign critics with their misapprehension of the British colonial system 
 can never realize that whether the four-colored flag of the Transvaal or 
 the Union Jack of a self-governing colony waved over the gold mines 
 would not make the difference of one shilling to the revenue of Great 
 Britain." 
 
 2 J. A. Hobson in a volume (The War in South Africa, p. 197) published 
 while the war was still in progress, declared: "We are fighting in order to 
 place a small international oligarchy of mine owners and speculators in 
 power at Pretoria." In a later passage he returns to his theme: "This 
 war is a terrible disaster for every one else in England and South Africa, 
 but for the mine owners it means a large increase of profits from a more 
 economical working of the mines and from speculative operations."
 
 The Wars of the World: 1878-1914 107 
 
 Undoubtedly the economic factor did enter to a large 
 degree, and, as I shall presently show, undoubtedly it was 
 the underlying, if not the immediate cause of the war. It 
 is equally true, of course, that the British citizens, like all 
 the miners resident in the Transvaal, were suffering from a 
 discrimination which the most thoroughgoing pro-Boer 
 could scarcely have regarded as either just or fair. 
 
 We may outline four general theories of the causation 
 of the war, after which a survey of the undisputed facts 
 in the case should enable us to choose between them. These 
 theories are: 
 
 1. That the Transvaal was the actual if not the apparent 
 aggressor, and that it was probably instigated by jealous 
 Continental powers, especially Germany, with possible 
 promises of assistance which did not materialize. 
 
 2. That the British Government was deliberately used by 
 financiers and mine-owners in the Rand, and driven forward 
 by a popular rancor which was deliberately created by 
 interested persons. 
 
 3. That imperialistic motives prompted Great Britain 
 to round out her South African dominions by the forcible 
 inclusion of the two Boer states, which by geographical logic 
 belonged with the British colonies there. 
 
 4. That both governments handled a complex interna- 
 tional situation clumsily, misunderstood and distrusted 
 one another, and so blundered into a situation from which 
 neither could extricate itself without war. 
 
 It will be observed at the outset that the first three of 
 these motives for war are directly or indirectly economic. 
 The jealousy of European powers, which certainly did en- 
 courage the Boers, was largely over colonial matters, which 
 have already been shown to have their roots in economic 
 rivalries. The deliberate use of the government's war
 
 108 The Economic Causes of Modern War 
 
 power by the financiers is patently and obviously economic, 
 and the theory that imperialistic ambitions prompted 
 Britain to the crushing of the Boer states is equally eco- 
 nomic in its ultimate origin, since economics lies at the base 
 of modern imperialism. Only if we are willing to believe 
 that pure and simple blundering on the part of both gov- 
 ernments, embittered by racial hatred, was the whole cause 
 of the war, can we escape the entrance of economics, in some 
 form or other, into the Boer War. 
 
 The Boers, or Afrikanders as they had come to call them- 
 selves, were the descendants of Dutchmen who had settled 
 in South Africa in the Eighteenth Century and had been 
 reinforced by a few Frenchmen, Huguenots or emigres 
 driven out of France by the political and religious disturb- 
 ances there. In 1836-39, in order to escape the incoming 
 British, they had retired further into the heart of Africa, 
 in what was known as the Great Trek, and had established 
 themselves without any formal state organization. In 1877 
 their territories were annexed by the British and the change 
 in their status was quietly accepted. In the latter part of 
 1880, however, enraged by the non-fulfillment of promises 
 made them when the British took possession, the Boers rose 
 and — defeating at Majuba Hill the few troops that could 
 be gathered against them — threw off British sovereignty 
 completely in 1881. 
 
 It is said that the Boers when they took possession of 
 their new lands, soon came to realize the value of the gold 
 deposits there, but that they concealed their knowledge 
 from the rest of the world, in order that they might con- 
 tinue the peaceful agricultural life to which they were 
 accustomed, and avoid the incursion of Uitlanders which 
 was certain to follow if the existence of these very rich 
 deposits should become known. 
 
 Diamonds had been discovered in South Africa between
 
 The Wars of the World: 1878-1914 109 
 
 1867 and 1871, and as early as 1879 Lord Wolseley had 
 prophesied that extensive gold fields would eventually 
 be found in the Transvaal. Five years later the accuracy 
 of his judgment was proved by the discovery of immense 
 quantities of precious metal in the mountains of the Trans- 
 vaal known as the Rand, and during the next two years 
 (1884-86) as exploration and prospecting was carried fur- 
 ther, the deposits were gradually found to be of greater 
 and greater richness. 
 
 Uitlanders — the term applied by the Boer inhabitants 
 of the Transvaal and the Orange Free State to all non- 
 Boers — poured in from all sides. Most of them were 
 British, but all nationalities were represented among them. 
 The Boers bitterly resented their presence, in spite of the 
 greatly increased wealth which the gold mines — in almost 
 every case worked by Uitlanders — brought to their state. 
 The rate at which this increase in revenue to the state 
 proceeded may be seen from the following table, which 
 begins a few years after the gold craze and continues 
 almost to the outbreak of the war: * 
 
 In pounds sterling: 
 
 Year Revenue Expenditure 
 
 1889 1,577,445 1,201,135 
 
 1890 1,229,060 1,386,461 
 
 1891 967,191 1,350,073 
 
 1892 1,255.829 1,188,765 
 
 1893 1,702,684 1,302,054 
 
 1894 2,247,728 1,734,728 
 
 1895 3,539,955 2,679,095 
 
 1896 4,807,513 4,671,393 
 
 1897 4,480,217 4,394,066 
 
 This revenue was derived almost wholly from the gold 
 mines, a large proportion in direct taxes and the rest in 
 indirect; and as the Uitlanders owned almost all of the 
 
 1 J. A. Hobson: The War in South Africa, p. 84.
 
 110 The Economic Causes of Modern War 
 
 mines they soon found themselves paying seven-eighths of 
 the taxes to support a state in which they had no repre- 
 sentation. They demanded the franchise, which was the 
 last concession in the world that the Boers were prepared 
 to give, since the great numbers of the Uitlanders would 
 have given them control of the state which the Boers felt 
 that they had carved for themselves out of Africa, and 
 which they thought should belong to them in perpetuity. 
 
 The exasperation of the Uitlanders at this denial of what 
 they regarded as their political rights was accentuated by 
 the fact that whilst Britishers in the two Dutch republics 
 were denied the franchise, the Dutch residents of the British 
 colonies enjoyed political equality; and since the colonies 
 had been placed on a self-governing basis in 1872, and their 
 Dutch population outnumbered the English, the Boers were 
 able to run the government to suit themselves. The novel 
 situation was in this way presented of a Dutch majority 
 ruling a British minority in British territory and a Dutch 
 minority ruling a British majority in Dutch territory! 
 
 British exasperation grew when later legislation made it 
 increasingly clear that the Boers had no intention of ever 
 granting any share in the government to the newcomers. 
 The requirements for naturalization were made more and 
 more strict, so that, whereas previously two years' resi- 
 dence had been sufficient to qualify for citizenship, in 1882 
 this was raised to five and in 1890 to fourteen years. 
 
 In addition to these fundamental grievances, the Uit- 
 landers had others — an alleged corruption in the Boer Gov- 
 ernment, which certainly was very slack ; the fact that they 
 possessed no control over the type of education given their 
 children; the denial of a free press; the denial of the right 
 of public meeting; disability from jury duty; and harassing 
 of the mining interests by special legislation directed against 
 them. Besides all this there was the perpetual problem of
 
 The Wars of the World: 1878-1914. Ill 
 
 native labor, which the Boer sanction of the liquor traffic 
 among the blacks made increasingly difficult. 
 
 The Dynamite Monopoly offered another cause of griev- 
 ance, more fancied than real, but sufficient to inflame the 
 indignation of the Uitlanders against the government. 
 South Africa was at this time using one-half of the world's 
 supply of dynamite. Obviously the control of a trade of 
 such volume meant tremendous profits for the firm that 
 enjoyed it. Such a monopoly had in 1888 been granted 
 to one Lippert, who made it over to a French company. 
 This was cancelled in 1893 and what was in form a gov- 
 ernment monopoly was established. This gave most of 
 the trade to the South African Explosives Company, which 
 was affiliated with Nobel's Dynamite Trust, and made a 
 profit of some forty shillings a case, paying about five 
 shillings of this to the government. The exact nature of 
 the agreements governing this company have never been 
 made clear, and the mystery that was allowed to exist 
 certainly justified the suspicions of corruption entertained 
 by the mine owners, who found themselves forced to pay a 
 high price for the explosives without which their gold 
 mining could not go on. 
 
 In 1887 the right to construct and operate all railways 
 in the Transvaal was awarded to the Netherlands South 
 African Railway Company; and the choice of the route 
 for the new road was left to President Kruger. Two ports 
 were available as the seaboard terminals: Delagoa Bay, 
 in Portuguese territory, directly to the east, and Port 
 Elizabeth in British territory further to the south. Kruger 
 chose the first and thus further alienated English sym- 
 pathy, since the volume of the trade of South Africa was 
 in this way inevitably diverted to the Portuguese and in a 
 large measure this important trade route was left at the 
 mercy of the Boers.
 
 112 The Economic Causes oj Modern War 
 
 Besides winning the distrust of its neighbors, the Boer 
 Government had also incurred the hostility of the capitalists 
 who were at the head of the Rand mines. The control of 
 these companies had gradually been centred in the hands 
 of a comparatively small group, some of them Englishmen 
 as in the cases of Rudd and Cecil Rhodes, but a large 
 number, if not a majority, Jewish by race and German by 
 birth. Wernher, Beit & Co., more commonly known as 
 the "Eckstein Group," controlled twenty-three mines and 
 three other concerns active in other financial fields, domi- 
 nating capital with an actual market value of 76,000,000 
 pounds. This group also exercised a large measure of con- 
 trol in the Consolidated Goldfields (Beit, Rudd, and Cecil 
 Rhodes) which controlled a group of nineteen mines and 
 had a nominal capital of 18,120,000 pounds, and also in S. 
 Neumann & Co., with a capital of 8,806,500 pounds. The 
 same men were more or less concerned in other corpora- 
 tions, including the Rothschild Exploration Company. 
 The exact ramifications of these groups are of course not 
 to be determined exactly, but the facts are known to have 
 been about as stated, and at any rate serve to indicate the 
 degree to which the gold fields had been brought into the 
 hands of a comparatively small number of powerful finan- 
 ciers. There were also the J. B. Robinson mines, nine- 
 teen in number, with a total nominal capital of 14,317,500 
 pounds. Last of all, it must be borne in mind that most of 
 these men were among the owners and life governors of 
 DeBeers, the diamond interests. 
 
 International financiers practically owned the Transvaal, 
 and although the exact nationalities of the various share- 
 holders have never been determined with any precision, 
 it is at least probable that French and German holdings 
 exceeded the British. Liquor, dynamite, and gambling
 
 The Wars of the World: 1878-1914 113 
 
 interests were in the hands of the same groups of capitalists 
 that controlled the mines. 
 
 Friction between the Boers who held the political rights 
 and resented the presence of foreign capital, and the capi- 
 talists whom they taxed, was natural and to be expected ; but 
 it is not so entirely true as has been believed, that the 
 taxation was unjust. The mines were taking out of the 
 Transvaal 100,000,000 pounds a year, and were paying 
 dividends of from 60 per cent, to 100 per cent, per annum. 
 The direct tax upon this was 2.5 per cent, of the mine 
 profits. 
 
 It was easy enough for these powerful groups to secure 
 control of the press and to do a great deal by means of it 
 to stir up anti-Boer sentiment in spite of the legal restric- 
 tions which the government exercised. Cecil Rhodes, to- 
 gether with Messrs. Eckstein and Barnato, had acquired 
 a leading interest in the Cape Argus, the evening paper at 
 Cape Town, and with this as a nucleus gradually built up 
 a chain of newspapers which included the Johannesburg 
 Star, the Bulawayo Chronicle, the Rhodesia Herald, the 
 African Review, and the Kimberley Diamond Fields Adver- 
 tiser. Having a group of newspapers whose circulation 
 reached almost every part of South Africa, this group could 
 very easily reach public opinion in both Boer and British 
 territory and stir up the people as was desired. Hostile to 
 the Boer Government, the capitalists were able to secure 
 the publication of inflammatory articles which had much 
 to do with the eventual outbreak of the war. 
 
 It is perhaps not possible to determine to what degree 
 the British Government was actuated by a desire to extend 
 the Empire further in South Africa, but it is at least sig- 
 nificant that by the acquisition of the Transvaal and the 
 Orange Free State at the close of the war, the British pos- 
 sessions in South Africa were properly rounded out into a
 
 114 The Economic Causes of Modern War 
 
 coherent bloc which included practically everything south 
 of the Zambesi River. 
 
 The situation which existed was such that war was 
 bound to come sooner or later. In 1895 a group of Uit- 
 landers planned a rebellion which was to give them control 
 of the government, since the impossibility of political 
 adjustments which would give the franchise to others than 
 the Boers was seen to be quite impossible. Dr. Jameson, 
 lieutenant to Cecil Rhodes, who was at that time premier of 
 the Cape Colony, gathered a force of 500 police, with three 
 field guns, on the border of the Transvaal, for the assist- 
 ance of the rebels. The rising of the Uitlanders having 
 been postponed, Jameson boldly led his troops across the 
 frontier, on as mad a raid as has ever been attempted. 
 Within two days he and his men were prisoners. Boer 
 resentment was bitter; and, since the raiding force was 
 made up of the colonial police, Rhodes was accused of 
 conniving at an exploit of the preparations for which he 
 could scarcely have been ignorant. 
 
 The relations between the British colonies and the Boer 
 states went from bad to worse. The diplomacy on both 
 sides was futile and blundering, so that when in April, 
 1898, the Uitlanders petitioned the British Government to 
 secure political rights for them, a clash could hardly be 
 avoided ; and when in October the Boers sent an ultimatum 
 demanding the withdrawal of British troops from the 
 border, hostilities had to follow. 
 
 The British were miserably unprepared for war. The 
 weakness of the forces then in South Africa furnish the 
 best possible reason for believing that they neither wished 
 nor expected it, for there were available only two cavalry 
 regiments, three field batteries, and six and a half infantry 
 battalions, about 6,000 men in all. Against them, accord- 
 ing to the figures of the British Intelligence Service, the
 
 The Wars of the World: 1878-1914 115 
 
 Boers could muster 32,000 men in the Transvaal, 22,000 in 
 the Orange Free State, which cast its lot in with the sister 
 republic, and about 100 guns. Mercenary troops and rebels 
 from the British domains, in addition to these, brought the 
 total to about 100,000 men. 
 
 The war opened with Boer triumphs, and it was not 
 until they had been borne down by sheer force of numbers 
 that the Transvaal and the Orange Free State submitted. 
 In all, Britain was compelled to send a total of 450,000 
 men to South Africa. The two republics, losing their inde- 
 pendence, became integral parts of the British Empire, 
 but received in all respects the most generous terms and 
 have in the end, as the events of 1914 showed, been suc- 
 cessfully assimilated. 
 
 Re-examination, bearing all these facts in mind, of the 
 four theories of the origin of the war previously stated, 
 serves to show the dominance of the economic motive in 
 one form or another. Without underestimating in any way 
 the infinite capacity of diplomats to blunder, it is impossible 
 to attribute to this alone the outbreak of the war. Even 
 diplomats cannot do quite so badly as that. 
 
 Instigation from the Continent probably played a com- 
 paratively minor role in egging the Boers on to war, 
 although the famous telegram from the German Kaiser to 
 President Kruger at the time of the Jameson raid serves 
 to show that the chancellories of Europe were at least not 
 blind to the situation in South Africa, and the opportuni- 
 ties it offered for embarrassing Great Britain, their economic 
 and colonial rival. Financiers did profit exceedingly by the 
 war, and it is idle to assume that they were blind to this 
 prospect, or inactive in bringing it about. Nor is it too 
 much to believe that Great Britain was not wholly indiffer- 
 ent to the possibility of rounding out her South African 
 dominions.
 
 116 The Economic Causes of Modern War 
 
 Whether one accepts one or all of these causes as the 
 genesis of the war, the importance of economic pressure as 
 a cause of war remains, for (setting aside the view which 
 attributes the whole difficulties brought about by diplo- 
 matic blunders) all of the causes have an economic root. 
 Certainly the friction between the Boer government and 
 the capitalists grew out of trade rivalry, as did the difficul- 
 ties over the diversion of trade from the British colonies to 
 the rival Portuguese port, through the construction of the 
 Netherlands Railways. 
 
 The first war between the British and the Boers was an 
 evident case of hostilities following imperial expansion. 
 The basal economic character of such expansion has been 
 shown. The second Boer War must also be set down as 
 another example of a conflict due fundamentally to eco- 
 nomic causes. 
 
 THE CUBAN INSURRECTION AND SPANISH-AMERICAN WAR, 
 
 1895-1898 
 
 Nothing could have been further from the thoughts of 
 the average patriotic American in 1898 than economic con- 
 siderations or trade rivalry in connection with the war with 
 Spain. It was regarded in America — with a good deal of 
 justice — as a conflict undertaken from altruistic motives. 
 Its object was to put an end to intolerable conditions exist- 
 ing at our very doors, the exploitation of a helpless people 
 by a brutal and wholly corrupt and inefficient administra- 
 tion. 
 
 The American troops who embarked for Cuba believed 
 firmly that they were going to liberate the down-trodden 
 from a cruel enemy. To suggest that behind the whole 
 series of events lay economic troubles and that economic 
 greed and rivalry were at the root of the war, would have
 
 The Wars of the World: 1878-1914 117 
 
 appeared simple blasphemy; yet had the economic causes 
 been inoperative, the Cuban insurrection would never have 
 begun, and the consequent war between the United States 
 and Spain would never have been necessary. 
 
 There had, to be sure, been previous insurrections on the 
 island, but none of proportions comparable to that which 
 broke out in 1898, because none had such a weight of 
 misery as a driving force behind them. It was the altera- 
 tions in the status of the sugar market of the world, the 
 benighted colonial policy of Spain, and the wholly selfish 
 exploitation of Cuba by Spanish greed, together with tariff 
 discrimination unfavorable both to the United States and 
 to Cuba, which produced the poverty, wretchedness, and 
 dissatisfaction that caused the insurrection. 
 
 The island of Cuba is an agricultural land, almost wholly 
 dependent upon its single staple crop, sugar-cane, which 
 constitutes four-fifths of its produce. The other fifth is 
 mainly tobacco. During the period immediately preceding 
 the outbreak of the insurrection of 1895, partly as the 
 result of a new method of seed-selection devised by Louis 
 Vilmorin, the European production of beet sugar had been 
 enormously increased, with the result that the demand for 
 Cuban sugar-cane fell off with great rapidity. The amount 
 of sugar made from European beets rose from 200,000 tons 
 in 1850 to 3,841,000 tons in 1894, 1 but the world's consump- 
 tion had not increased proportionately. The Cuban market 
 
 Albert G. Robinson: Cuba and the Intervention, p. 31. Sugar had been 
 discovered in beet roots in 1747, by Andreas Sigismund Marggraf, of the 
 Berlin Academy of Sciences. His pupil, Franz Carl Achard, established 
 the first beet-sugar factory in 1801 at Cunern, near Breslau, in Silesia. 
 Napoleon's policy increased prices and gave an impetus to the industry, 
 but his fall nearly wrecked it in Germany, the French manufacturers' 
 more scientific methods enabling them to survive. In the Nineteenth 
 Century, Vilmorin devised a method of testing beets for seed, by floating 
 them in a brine strong enough to sustain all except those containing an 
 unusual quantity of sugar.
 
 118 The Economic Causes of Modern War 
 
 was almost destroyed. At the same time, tobacco growing 
 in Egypt, Turkey, and other Asiatic countries had increased, 
 and Europe was being supplied more and more from these 
 regions because of their greater accessibility and the lower 
 cost of transportation. 
 
 This left the United States almost the sole market for 
 Cuba; but at the same time the American production both 
 of beet and cane sugar, and also of tobacco was developing, 
 though not sufficiently to shut out the Cuban plantations 
 entirely from their northern market. 
 
 The natural result was a fall in the price of Cuban sugar, 
 and a very heavy reduction in the profits of the planters, 
 together with general unsettling of the economic condition 
 of the island, which was productive of a great deal of 
 misery. The situation demanded retrenchments, economies, 
 and the application of scientific methods of production to 
 an extent which the Cubans were not capable of accom- 
 plishing. 
 
 The planters looked to the Spanish Government for a 
 readjustment of conditions which were seriously affecting 
 the prosperity of the island; but they found small help 
 in the venal, corrupt, and clumsy Spanish colonial admin- 
 istration. Spain, in the Nineteenth Century, was still pur- 
 suing the same policy that had cost her an empire in the 
 Seventeenth. Learning nothing from the colonial experi- 
 ments which had built up the British Empire in the very 
 lands where her own possessions had gone to ruin, the 
 Spanish Government continued to regard colonies as exist- 
 ing solely for the enrichment of the mother country, and 
 administered Cuba accordingly — blindly, stupidly, and with 
 an incredible inefficiency. 
 
 Although the only remaining outlet for the sugar cane 
 grown in Cuba was the United States, Spain continued to 
 maintain a system of tariff discrimination which diverted
 
 The Wars of the World: 1878-1914 119 
 
 to the manufacturers of Catalonia the Yankee millions 
 paid into the hands of the Cubans for sugar cane. Coal, 
 iron, manufactured goods, the island imported from abroad. 
 The United States, almost within sight of the Cuban coast, 
 possessed all these, and as Cuba's principal customer, might 
 well have expected the major portion of Cuban trade in 
 return. 
 
 To prevent this very exchange from taking place, Spain 
 had so adjusted her tariff system that everything which the 
 Cubans bought must come from Spanish merchants. In 
 many cases the only way in which American goods could 
 be sent into Cuba was by shipment to Spain and then by 
 re-shipment back across the Atlantic. The Spanish mer- 
 chants, assured by their paternalistic government of a 
 monopoly of the Cuban market, took advantage of their 
 favorable situation to charge exorbitant prices. The result 
 in Cuba was the reduction of industry, with consequent 
 poverty, misery, idleness, and general unrest. 
 
 Bad as the economic situation was, other causes for dis- 
 content among the islanders existed. The government was 
 inefficient and corrupt. The Spanish governor of the little 
 island received more in pay and allowances than the Presi- 
 dent of the United States. The government posts were in 
 the main held by Spaniards, especially the more lucrative; 
 and Cubans who were able to find a way into the govern- 
 ment usually despaired of improvement and followed the 
 example in corruption set them by their Spanish masters. 
 Managed as it was, from above, and managed not for the 
 benefit of its people, but for the profit of Spain, the colony's 
 taxation system speedily developed into another fruitful 
 source of discontent. The taxes were heavy, and the Cubans 
 regarded them as unjust. 
 
 In 1868-1878 the vaguely felt discontent which had 
 always smouldered in the island burst out in a rebellion
 
 120 The Economic Causes of Modern War 
 
 that dragged along for ten years, but was confined alto- 
 gether to the eastern provinces. There had been previous 
 revolts, but the memory of this one remained vivid. Then 
 came the economic crisis and the suffering which attended 
 it. Spain did nothing to remedy, through political adjust- 
 ment, the economic evils that dragged on year after year. 
 Prior to 1894 the United States tariff still allowed a degree 
 of reciprocity to Cuba, in spite of the discrimination against 
 America in the tariffs of Spain; but on August 27, 1894, 
 the passage of the Wilson Bill x put an end to this conces- 
 sion and made the economic condition of the Cubans still 
 more precarious. The situation had been bad enough when 
 the Spanish tariffs made Cuba a dumping ground for 
 Spain; it became intolerable when a second tariff system 
 still further affected the sugar. Planters began to decrease 
 their acreage, and the laborers thus thrown out of employ- 
 ment, formed a group of malcontents who were fertile 
 breeding ground for insurgent propaganda. 
 
 The inefficiency and amazing folly of the Spanish admin- 
 istration becomes apparent when it is considered that the 
 revolution which in the end deprived Spain of one of the 
 most fertile islands in the world, grew fundamentally out 
 
 1 A contemporary account by the former American minister to Spain 
 attributes the revolution entirely to this bill: "There can be no doubt 
 that the economic crisis that followed that event (i.e., the passage of the 
 bill) precipitated the present revolution. When exposed without miti- 
 gation to two systems of hostile tariffs, at a time when the price of cane 
 sugar had been reduced by competition to a very low point, the Cuban 
 producers threw up their hands in despair, and the bands of laborers 
 thus deprived of work were the first to swell the ranks of the insur- 
 gents. . . . When, therefore, we arrive at the final cause that drove the 
 Cubans into the present revolution, we discover that the rising really grew 
 out of a struggle for bread — a struggle for bread in one of the most 
 favored spots in the world, produced in the main by economic laws wedded 
 to the obsolete doctrine that the commerce of a colony is a possession 
 which the parent state has a right to manipulate in its own interest re- 
 gardless of the fate of the colony itself." — Hannis Taylor: "Review of 
 the Cuban Question," North American Review, 165:616-617, N., '97.
 
 The Wars of the World: 1878-1914 121 
 
 of a struggle for food in a land which might have been one 
 of the most productive in the world. Selfishness, greed, 
 stupidity, expressed in a blind neglect of the economic situa- 
 tion in the fertile island — these caused the Cuban insurrec- 
 tion and the American intervention which had to follow. 1 
 
 When the army of Gomez began hostilities in 1895 it did 
 not have the support of the entire Cuban population. Only 
 gradually did it come to win the backing of all classes, or 
 of most, at any rate; and it was not until two years later 
 that complete independence from Spain was made the 
 avowed object of the insurrection, which thus became a 
 revolution. Autonomy was proclaimed by the rebels in 
 November, 1897. 
 
 The Cuban native army, although greatly inferior in 
 numbers and equipment to the Spanish regulars operating 
 against it, had very much the better of it, owing to the fact 
 that it was operating in friendly territory, could obtain 
 supplies more easily, and was much more mobile owing to 
 its superior ability to move through the jungles. In order 
 to deprive the rebels of these advantages as far as possible, 
 Weyler, the Spanish Captain-General, adopted a policy of 
 concentration, stripping the country of every inhabitant, 
 
 1 The views expressed on this point and the analysis of the causes of 
 the war by Albert G. Robinson are interesting. He says: "It is an im- 
 portant fact, though generally overlooked, that repressive economic laws 
 have been in every case the provoking cause of Cuban revolt. Unlike 
 those of her neighbors in Latin America, Cuba's insurrections have never 
 been the outcome of purely political conditions. Nor have they ever 
 been the result of individual ambition. Spain's colonial policy was, in 
 every instance, the cause of Cuban revolt. In that policy, she violated 
 a fundamental principle of government. She assumed that the subject 
 existed solely for the benefit of the sovereign. In establishing her col- 
 ony she sought only her own financial advantage. Other colonizing coun- 
 tries learned, through experience, the folly of such a policy. Spain never 
 learned it, and has now lost her insular possessions." — Albert G. Robinson: 
 Cuba and the Intervention, p. 2.
 
 122 The Economic Causes oj Modern War 
 
 and moving men, women, and children forcibly into con- 
 centration camps where they suffered extreme privations. 
 
 It must be remembered that the Insurrectos, too, had 
 adopted a policy very much the same, and that they had 
 put into effect in 1895 a policy of economic warfare which 
 involved a deliberate devastation of their own country 
 in order to hamper the Spaniards. 
 
 There can be no question that the American intervention 
 was prompted in the main by humanitarian motives. The 
 brutality of Spanish administration had inflamed public 
 opinion in the United States, which was carefully played 
 upon by Cuban juntos and by the sensational press. The 
 island of Cuba swarmed with American special corre- 
 spondents, all engaged in sending back to their newspapers 
 the most emotional stories possible. 
 
 It was this primarily that brought about American inter- 
 vention in 1898; and this was the only cause for war of 
 which the public was aware. But this was not actually the 
 sole American motive. For at least a hundred years it 
 had been realized by various American statesmen that 
 Cuba belonged economically to the United States, and 
 proposals for acquiring possession of it had been made 
 from time to time. 
 
 In President McKinley's famous message to Congress 
 dealing with the subject of intervention, in April, 1898, the 
 economic motive appears explicitly in the third of his 
 reasons for interference: 
 
 "Third, the right to intervene may be justified by the very 
 serious injury to the commerce, trade, and business of our peo- 
 ple, and by the wanton destruction of property and devastation 
 of the island." 
 
 The "serious injury" amounted to the practical wiping 
 out of American trade in Cuba, which at the beginning
 
 The Wars of the World: 1878-1914 123 
 
 of the rebellion had been nearly $100,000,000 annually. 1 
 Even in the absence of a direct economic motive affecting 
 the interests of the United States themselves, the interven- 
 tion in Cuba may properly be regarded as due to economic 
 causes, simply because it was a result of the insurrection; 
 and since this revolt grew directly from economic causes, 
 the intervention may certainly be said to have grown indi- 
 rectly from them. 2 The entire conflict was due to Spanish 
 exploitation of a fertile colony. If economic justice had 
 prevailed in Cuba there would have been no insurrection, 
 certainly not a revolt sufficiently widespread to give rise 
 to the reign of brutality in its suppression which brought 
 the United States into the war. 
 
 The Cuban Revolution and the Spanish-American War 
 were both the outcome of economic rivalry, with three main 
 phases: first, between the European and Cuban sugar 
 industries; second, between the economic interests of the 
 colony and those of the mother country ; and third, between 
 American and Spanish manufacturers, with advantage on 
 the side of the latter, through tariff discrimination. 
 
 THE GRECO-TURKISH WAR, 1897 
 
 The war between Greece and Turkey in 1897, which 
 ended in Greek defeat after only thirty days of campaign- 
 ing, was too trifling an affair to deserve much attention. 
 Yet it is of interest because it shows how, even in wars 
 waged for racial or political reasons, economic conditions 
 still contrive in some measure to find entrance. 
 
 * Hannis Taylor : "A Review of the Cuban Question in its Economic, 
 Political, and Diplomatic Aspects," North American Review, 165:611, 
 N., '97. 
 
 3 "The Cuban Insurrection against Spain, and thus indirectly the Span- 
 ish-American War, was the outcome of the sugar situation." E. R. A. 
 Seligman: The Economic Interpretation oj History, p. 86.
 
 124 The Economic Causes of Modern War 
 
 In the conflicting interests and the jealousies of the great 
 Powers involved in this war, moreover, the old element of 
 European international discord, which we have seen springs 
 in large measure from economic causes, again comes into 
 play. England loses ground with the Ottoman Empire, 
 whose favor is all-important to keep Russia out of Con- 
 stantinople and away from the route to the rich lands of 
 India. Germany seeks to curry favor with the Porte in 
 order to facilitate the Drang nach Osten and the relief of 
 German over-population, the excess of manufactures, and 
 the need for markets and raw materials. Russia, ever with 
 an eye to Constantinople and the necessity of securing her 
 southern trade routes, vies with Germany in seeking to 
 establish herself in the good graces of the Sultan. All of 
 this diplomacy has an origin in the economic difficulties of 
 the great Powers. 
 
 Yet the motives which led the venal Greek statesmen 
 into war upon the Turk were not primarily economic. The 
 difficulties arose over the ever-perplexing Cretan question, 
 and were not wholly concerned even with territorial 
 aggrandizement by possession of the island. The motives 
 were very largely religious and racial, for the Cretans were 
 brothers in blood of the Greeks and in the main the popu- 
 lation of the island professed the Christian faith ; but they 
 were under the rule of the Sultan, who evaded whenever 
 possible his agreement to assign a Christian Vali to govern 
 them. 
 
 Turkish rule in Crete was no better than Turkish rule has 
 ever been anywhere. The Cretans were oppressed; they 
 thought themselves over-taxed ; and the government of the 
 island was corrupt. There had been numerous revolts, of 
 which the most recent and the most vigorous had been 
 suppressed successfully by the Ottoman government. Dur-
 
 The Wars of the World: 1878-1914 125 
 
 ing the year between this revolt and the beginnings of the 
 difficulties between Greece and Turkey, there had been 
 several massacres of Christians, which roused a powerful 
 pro-Cretan sentiment in Greece, although it must be ad- 
 mitted that when the opportunity came, the Christians in 
 Crete showed themselves quite as ready to massacre Mos- 
 lems as ever Moslems had been to massacre them. 
 
 In 1896 a Greek patriotic society, the Ethnike Hetaira, 
 which had for one of its objects the relief of Crete, began 
 to increase in power. It was not in essence different from 
 the Serbian patriotic society which Austria alleged in 1914 
 had been instrumental in the murder of the Archduke 
 Ferdinand. The existence of such societies is inevitable 
 wherever a coherent racial unit is forcibly amalgamated 
 with an alien civilization and government, although in this 
 case it springs up in independent Greece rather than in 
 the oppressed land of Crete itself. As in Serbia, so in 
 Greece, the army was largely represented in the member- 
 ship — to such an extent that three-quarters of the com- 
 missioned personnel is said to have belonged. This society 
 had a great deal to do with rousing the sentiment of the 
 Greek nation, and when in 1897 there were more massacres, 
 war was the most natural consequence. 
 
 The armies of the two powers massed on the Thessalian 
 frontier and the incidents that are the usual accompani- 
 ments of simultaneous mobilizations took place. Firing 
 across the frontier did not serve to allay popular excite- 
 ment. 
 
 February 11, 1897, the Greek navy, under the command 
 of the Crown Prince, was sent to oppose the landing of 
 Turkish relief on the island, with orders to use force if 
 necessary. Two days later, Greek troops under the com- 
 mand of Colonel Vassos, moving to occupy the island, began
 
 126 The Economic Causes of Modern War 
 
 hostilities. The Greeks, after a few preliminary successes, 
 were hopelessly defeated. Turkey won back again portions 
 of Thessaly which had been ceded to Greece in 1881, and 
 the defeated nation was compelled to give up for a time its 
 hope of annexing Crete. 
 
 Although the ostensible and actual primary causes of 
 the war were racial and religious, as well as humanitarian, 
 it cannot be said that they were the only ones. Crete be- 
 longed to Greece, not only racially, but also geographically 
 and economically. It is a very rich island, and the Turkish 
 maladministration had not been so bad but that the land 
 retained its wealth. It would have made a highly desirable 
 economic addition to Greek territory, for Greece is not 
 blessed with much fertile land. 
 
 The Hon. E. A. Bartlett summed up the economic situa- 
 tion in a paragraph : "Crete is a rich island which has been 
 very lightly taxed under the much abused Turk. The 
 Greeks desired to annex Crete, which they regard as a 
 milch cow to be milked and bled for the benefit of Greece." l 
 
 THE HERERO RISING, 1903-1908 
 
 After the original annexation in 1885, German occupation 
 of Southwest Africa had been disturbed only by an insignifi- 
 cant Hottentot revolt, suppressed in 1894, and a few local 
 risings. This quiet possession of a colony whose commer- 
 cial value was slowly developing, was broken in October, 
 1903, by an insurrection among the Bondelzwart natives, 
 in the extreme south of the German dominions. Colonel 
 Theodor Leutwein, the German governor, in his effort to 
 crush the rebellion as speedily as possible, practically 
 stripped Damaraland, in the north, of troops, giving oppor- 
 
 J E. A. Bartlett: The Battlefields of Thessaly, p. 17.
 
 The Wars of the World: 1878-1914 127 
 
 tunity to the Herero natives for a revolt which had long 
 been planned and prepared. 
 
 Its motive was chiefly impatience with German rule, the 
 inevitable clash between the colonizing white man, driven 
 out of Europe by economic necessity, and the native whom 
 he seeks to displace. This elementary cause for rebellion 
 had been aggravated by abuses by the white traders, bru- 
 tality of some of the officials, and encroachments on tribal 
 lands. 
 
 By New Year's Day, 1904, Colonel Leutwein had sup- 
 pressed the rising among the Bondelzwarts, but on the 
 12th day of January, the Hereros attacked the settlers in 
 their country, murdering the families and devastating the 
 farms. To deal with them, reinforcements had to be sent 
 from Germany. The German army, lacking the long expe- 
 rience of colonial warfare possessed by the British, and for 
 centuries trained in the tradition of European warfare only, 
 did not adapt itself well to the guerilla tactics of the 
 Hereros. In spite of a defeat in one pitched battle, the 
 natives were able to terrorize the countryside until in 
 October, 1904, a rising of Hottentots occurred to encourage 
 them further. The German policy of Schrecklichkeit now 
 adopted, provoked a third revolt, this time among Hotten- 
 tot tribes hitherto quiet. The war dragged on until 1907, 
 when German success led to a reduction of forces in the 
 colonies; and hostilities were finally concluded in 1908. 
 
 Since it was a result of German colonial policy made 
 necessary by the economic requirements of the new Empire, 
 the Herero rising, like other conflicts between colonizing 
 powers and natives reluctant to be dispossessed, is to be 
 classed among the wars whose cause is fundamentally 
 economic. In no essential respect does it differ from other 
 wars of colonization.
 
 128 The Economic Causes oj Modern War 
 
 ITALO-TURKISH WAR, 1911 
 
 Italy's war with Turkey to secure Tripoli was wholly the 
 outcome of economic causes, principally the desire of the 
 Italians to have a share in the undeveloped lands of the 
 globe, in which their commercial rivals were rapidly out- 
 stripping them. 
 
 Nowhere can there be found a more perfect example of 
 the way in which over-population produces emigration and 
 compels a state either to seek an enlargement of its domains, 
 or else to watch its citizens drift away and be absorbed 
 into the civilization of other lands. In addition to the need 
 for a colony where the surplus of Italian population might 
 settle, a second economic motive for war existed in the 
 Tripolitan mineral deposits and the possibility of extensive 
 agricultural development under scientific management 
 which the Italians felt themselves capable of introducing. 
 At the bottom of the whole affair, besides the other eco- 
 nomic interests, lay the pressure of the population of Italy. 
 
 Italy's imperial ambitions were so late in developing 
 that when her statesmen sought room in the globe where 
 their country and its trade might expand, they found most 
 of the available territory already occupied by states too 
 powerful to be dispossessed. The failure in Abyssinia is 
 an obvious example, as is Italian inability to secure a share 
 when the Powers were engaged in the scramble for Chinese 
 territory. As the Italian nation came to unity in the years 
 following the Risorgimento of 1860-1861, imperial ambi- 
 tions arose, not merely because there was a feeling that the 
 dignity of the united nation demanded possessions over- 
 seas, comparable to those of other Powers of Europe, 
 but because an economic need for expansion in competition 
 with the other Powers began to make itself felt. 
 
 No other nation, not even Germany, has faced an emi-
 
 The Wars of the World: 1878-1914 129 
 
 gration problem so serious as that in Italy, nor has any 
 people shown itself more adaptable in settling in foreign 
 lands. By means of an uncanny "wireless" the working 
 classes in Italy, from which the emigrants mainly come, 
 seem to know to a nicety the exact conditions of the labor 
 market of the world, and precisely the right time to emi- 
 grate. 
 
 The tide of emigration has turned chiefly to the United 
 States, but great numbers have gone to the Argentine 
 Republic and to the French colony in Tunis — by the logic 
 of geography an Italian dominion, into which, to the fury 
 of Italian imperialists, France, with Bismarck's secret con- 
 nivance, forced her way. 
 
 The loss of Italian citizens going to other countries 
 rose between 1878 and 1900 from 96,000 to 352,782 and in 
 1906 reached its maximum of 787,977. In the following 
 year it declined only a little, to 704,675; and in 1909 it 
 declined still further to 625,637. Since then the emigration 
 each year has hovered between 500,000 and 600,000/ These 
 rates of emigration present a rough parallel to the rising 
 excess of births over deaths during the years between 1880- 
 1910. 2 
 
 For the purposes of Italy, Tripoli was the only space 
 left on the coasts of the Mediterranean, and to its acquisi- 
 tion Italian statesmanship accordingly turned itself. 
 
 Only a few weeks before the outbreak of hostilities, an 
 editorial comment in the Rassegna Nazionale (Florence) 
 summed up the Italian attitude toward the war in two 
 succinct paragraphs: 
 
 "If tomorrow France should rule over the entire northern 
 coast of Africa, not only would this cause added dangers for us 
 
 'Algar Thorold: "The Expansion of Italy," Edinburgh Review, 220:67: 
 Jy., '14. 
 
 2 See table on p. 17.
 
 130 The Economic Causes of Modern War 
 
 in case of hostilities — which it is to be hoped may never take 
 place — when France could attack us from the French and Afri- 
 can coasts and from Corsica, but also in time of peace we should 
 be seriously annoyed by our relegation to secondary rank as a 
 Mediterranean power, and loss of prestige. As well, we should 
 be bound in an iron girdle that would render any industrial and 
 economic expansion of almost treble difficulty. 
 
 "Every publicist recognizes the necessity of re-establishing the 
 balance of power by means of an action on our part in Tripoli- 
 tania, but some maintain that this action should be limited to 
 an economic penetration without embroiling our relations with 
 Turkey and without embarking on any colonial adventure. But 
 is this possible?" 
 
 Of course it was not possible. The Ottoman Empire had 
 Tripoli and intended to hold it. But the Ottoman Empire 
 was weak and disorganized, still confused as a result of the 
 revolt of the Young Turks three years before. Italy had 
 the force to take what she wanted from a weaker nation 
 and did so, — following the very practical principles of inter- 
 national ethics. 
 
 There is one defense to be made of Italy's appeal to force 
 — aside from the obvious and sufficient justification that she 
 needed Tripoli. That is, that efforts at a peaceful and merely 
 economic penetration of the country had been thwarted at 
 every step by the Turkish Government, whether from anti- 
 foreign prejudice, or, as is more likely, from a well-grounded 
 fear that the entrance of Italy in an economic role might be 
 the prelude to political intervention supported by force if 
 necessary, for the Turk has dealt with Europe through 
 many centuries and is wise in the ways of the practical dip- 
 lomat. 
 
 Italian immigrants, who had been going to Tripoli as 
 well as to Tunis, had undeniably been ill-treated by the 
 Turkish officials. Legal or illegal, the Turk used any means 
 to discourage the coming of Italians. Turkish subjects who
 
 The Wars of the World: 1878-1914 131 
 
 ventured to sell lands to the infidel suffered from threats 
 or actual imprisonment. Turkish troops used force to pre- 
 vent native laborers from giving their services to the Ital- 
 ian settlers. 
 
 In spite of this, Italy had already made considerable 
 peaceful progress in Tripoli when war finally broke out. 
 Bi-monthly mail service by steamer from Sicily had been 
 established to all the principal ports of Tripoli. In Bergasi 
 there was an Italian post office with a savings bank and free 
 Italian schools. Institutions of about the same sort had 
 been set up in other parte of Tripoli and the Banca di 
 Roma maintained Tripolitan branches and had done a 
 great deal towards the economic development of the country. 
 
 In 1911 the hour for striking the blow to secure the 
 colonies was as favorable as could be expected. The Sub- 
 lime Porte was in even more difficulties than usual. Affairs 
 had not yet got well settled after the revolt of the Young 
 Turks. Spain and France were arranging what amounted 
 practically to the partition of the Turkish possessions in 
 Morocco. Bulgaria, also quick to take advantage of this 
 state of affairs, had but recently declared her complete 
 independence. 
 
 Europe, beginning to breathe again after the crisis at 
 Agadir, which had threatened a war that might well have 
 become general, was suddenly confronted, before its chan- 
 cellories had received any intimation of what was afoot, 
 with the Italian war. Events moved with amazing swift- 
 ness. An Italian ultimatum was presented to the Porte on 
 September 28, 1911; Turkish efforts to temporize were 
 rejected; and on the following day war was declared. A 
 fleet under the Due d'Abruzzi blockaded the port of Pre- 
 visa in the Adriatic, and 40,000 troops were thrown into 
 Tripoli with a speed and certainty that showed the smooth- 
 ness of the working of the Italian staff, the result of
 
 132 The Economic Causes of Modern War 
 
 maneuvres held with this very purpose only the year before. 
 Austria demanded that her ally should be content with car- 
 rying the war into Africa only, and that Turkish territory 
 should otherwise be respected. Great Britain refused to 
 allow Turkish troops to pass through Egypt (still nominally 
 under Turkish suzerainty) on their way to Tripoli — all this 
 within a week. 
 
 Turkey was hopelessly defeated and was forced to yield 
 to the Italian demands. Her misfortunes in Africa pre- 
 pared the way for those of the following year in the 
 Balkans. 
 
 Though pressure of population was the primary reason 
 for the Tripolitan war, the possibility of future food sup- 
 plies from agricultural development in Tripoli under 
 Italian direction, and of new markets for the growing 
 industrial life of Italy must have been potent considerations 
 in the minds of the Italian statesmen who willed the war. 
 Although carried out on a smaller scale and with less con- 
 sistent success than that of the other Powers, Italian 
 colonial policy has sprung from the same economic necessity 
 as theirs. 
 
 THE BALKAN WARS, 1912-1913 
 
 In the Balkans, war fills about the same place in the 
 scheme of things that baseball does in America. This is a 
 consideration that must be borne in mind constantly, when 
 one attempts to estimate the motives which have made this 
 group of little states a veritable hornet's nest for Europe 
 and which in the end set the whole world by the ears. Among 
 all the rivalries, economic, racial, religious, nationalistic, 
 which have produced the turmoil of the Balkans, the pure 
 love of fighting among its warlike inhabitants has not been 
 the least. 
 
 In the welter of races, nationalities, religions, and ideals
 
 The Wars oj the World: 1878-1914 133 
 
 which make up the Balkan states of Montenegro, Serbia, 
 Bulgaria, Rumania, Greece, and the Turkish vilayets 
 which in combination are referred to as Albania and Mace- 
 donia, there is ample cause for constant wars and threats 
 of war. Only during the Nineteenth Century did the Balkan 
 states win their independence of Turkish rule, and only 
 gradually have they built up agriculture and the begin- 
 nings of industry sufficient to make their commerce great 
 enough to create any economic problem at all. 
 
 The Balkan wars have been produced by the love of 
 fighting. They have been produced by the hatred of the 
 Moslem for the Christian and of the Christian for the 
 Moslem. They have been produced by the brutality and 
 corruption of the Turk in his administration of his 
 provinces. They have been produced in retaliation for mas- 
 sacres — both Christian and Moslem. They have been pro- 
 duced in the effort to bring races together under the same 
 government. They have been the reaction against oppres- 
 sive taxation. But among all these, the economic causes 
 which have produced war cannot be lost to sight. Balkan 
 problems would have settled themselves long since, were it 
 not for the interference of European Powers; and the 
 motive for this intervention is economic. That the eco- 
 nomic rivalries of the great Powers have had most to do 
 with the prevention of Balkan pacification and of the ade- 
 quate provision for the economic needs of Serbia, Monte- 
 negro, and Bulgaria, has been evident for years. 
 
 Until the year 1912, Turkey, although unable to main- 
 tain its suzerainty over its erstwhile vassals, had pursued 
 with surprising success the policy of divide et impera, play- 
 ing off one Balkan state against another, watching with 
 satisfaction their difficulties among themselves, and taking 
 advantage equally of the jealousies and rival ambitions of 
 the Powers of Europe.
 
 134 The Economic Causes of Modern War 
 
 In 1912 a great light burst upon the statesmen of the 
 little principalities. They realized for the first time to 
 what an extent their bickerings among themselves were 
 playing into the hands of the common foe, and they com- 
 promised. March 15, 1912, a treaty between Serbia and 
 Bulgaria put an end to the ill-feeling that had existed since 
 the war of 1885, and provided for joint action against the 
 Turk. In September of the same year a similar treaty was 
 made between Greece and Bulgaria. Montenegro, though 
 not formally bound by treaty, came to an understanding, 
 tacit and implied, though not formally expressed. 
 
 Hitherto the rivalry of the states had concerned itself 
 chiefly with Macedonian vilayets still under Turkish rule, 
 but populated by representatives of all the Slavic races in 
 the Balkans, in sufficient number to give each state reason 
 for claiming the same territory. By the terms of the 
 treaties this rivalry was ended, and the lands to which each 
 had a claim were specifically delimited. 
 
 The ambitions of the great Powers in the Balkans may 
 be stated — too sketchily for complete accuracy — about as 
 follows: Russia followed an intermittent policy of expan- 
 sion toward Constantinople, and continued to follow a 
 Pan-Slav policy through which she hoped to maintain her 
 hegemony among the Slavic nations. She saw, moreover, in 
 Kavalla, a way of escaping the menace to her commerce 
 and her naval power implied in the Ottoman hold upon 
 the Dardanelles. So far as sharing in the trade of the 
 Balkans was concerned, the Russian economic interests 
 were slight. 
 
 Austria-Hungary sought to expand southward to the 
 iEgean and along the Adriatic at the expense of Serbia, 
 eyeing with especial longing the port of Salonika, on whose 
 possession the Serbs were equally bent. Serbian domina- 
 tion on the eastern shore of the Adriatic would jeopardize
 
 The Wars of the World: 1878-1914 135 
 
 Austria's sole route to the sea from Trieste and Fiume. To 
 the Dual Monarchy the port of Salonika would mean a 
 ready means of release for Hungarian and Austrian com- 
 merce, hampered by insufficient access to the sea. To 
 Serbia the same port meant also the long-desired access to 
 the sea and release from the complete dependence upon 
 Austrian markets which the Austrians sought to impose on 
 their smaller, land-locked neighbor. 
 
 German economic policy in the Balkans in most respects 
 paralleled that of Austria. The formulation of the Mittel- 
 Europa scheme and of the Drang nach Osten gave the Bal- 
 kans a peculiar importance to both powers, since domina- 
 tion there was essential to the penetration of the Near 
 East. If the Berlin-to-Bagdad Railway were ever com- 
 pletely built, a long section would have to run through this 
 territory, which would be most valuable under either the 
 German or the Austrian flag — a prospect rudely interrupted 
 by the formation of the strong Balkan Confederacy. 
 
 Great Britain, for economic reasons and from strategic 
 considerations which had their basis in economic considera- 
 tions, had long sought to check Russian expansion, especially 
 the acquisition of Constantinople, which controlled the 
 route to India. The importance of Constantinople de- 
 termined the policy of the British Empire toward Turkey, 
 and hence toward the Balkans. 
 
 The economic motives for warfare among the Balkan 
 states themselves consisted mainly in desire for the adjust- 
 ment of obvious inequalities. Montenegro, a tiny princi- 
 pality, rocky and mountainous, with only a few fertile 
 valleys, and with but a small opening upon the Adriatic 
 coast, turned longing eyes toward the fertile plains of Mace- 
 donia. In the end she hurried into hostilities with Turkey, 
 risking annihilation if the support of the other Balkan 
 states should fail, because of the realization on the part of
 
 136 The Economic Causes of Modem War 
 
 the King's advisers, General Martinovich and M. Pla- 
 menatz, that if Europe took in hand the reform of Mace- 
 donia, where conditions had for years been a crying scandal 
 in international affairs, there would be no hope of Monte- 
 negrin accessions. 
 
 Bulgaria needed a larger seacoast. She had, to be sure, 
 secured a footing on the coast of the Black Sea, but she, too, 
 aspired to reaching the iEgean, where the Turkish domi- 
 nance at least would be less repressive, and in this ambition 
 the Bulgarian and Austrian economic interests came into 
 a sharp rivalry. Bulgaria also had a lively appreciation of 
 the value of the fertile plains of Macedonia. 
 
 The condition of Serbia was the most precarious of all 
 the future allies. Unlike the others, she was absolutely 
 cut off from the sea, and her statesmen dreamed of re- 
 storing the ancient boundaries of the glorious days of the 
 Serbian Empire. She was an important market for Austria- 
 Hungary and the economic relationship existing was so close 
 that most of the Serbian purchases were in Austrian mar- 
 kets. Situated as she was, the whims of the more powerful 
 state could at any time cause inconvenience and irritation, 
 or a situation even more serious. The closing of the 
 Austrian frontiers to Serbian exports of pigs 1 had incensed 
 the entire nation. So difficult was the economic position of 
 the Serbs because of their restricted boundaries, that M. 
 Milanovich at one time feared to risk a rupture with Tur- 
 key lest it should mean a complete economic isolation. 
 
 Greece still coveted nominal as well as actual possession 
 of Crete, for the sake of its fertility as well as for racial 
 reasons. There had been, besides, difficulties in the Balkans 
 with regard to railway questions, in which the Turkish 
 power had made difficulties, notably in the case of the Bul- 
 
 1 See p. 173.
 
 The Wars of the World: 1878-1914 137 
 
 garian effort to connect railways with Salonika and the 
 Greek effort to secure better connections with Europe. 
 
 With such a tangle of rival economic interests, made more 
 complex by the gravity of racial and religious problems, 
 it is small wonder that war followed immediately upon the 
 completion of the agreements among the Balkan states 
 which made them powerful enough to dare attack their 
 erstwhile suzerain. The necessary spark was furnished 
 by the peculiarly brutal atrocities at Kochana, the culmi- 
 nation of a long series of massacres. 
 
 Montenegro plunged boldly into the war alone, October 
 8, 1912, hoping for the support of the other states, and 
 knowing her cause lost if she did not secure it. Within 
 ten days war existed between Turkey and all the Balkan 
 states except Rumania. 
 
 The success of the Allies was beyond all their expecta- 
 tions. Serbian troops drove southward and secured the 
 coveted outlet to the Adriatic at Durazzo, November 28th, 
 thereby checkmating Austrian ambitions for southward 
 expansion. Montenegro forced its way to Scutari. Greece 
 engaged the Turkish navy and seized Salonika, November 
 8th. The Bulgarians, in two pitched battles, Kirk Kilisse, 
 October 22-24, and Lule Burgas, October 29-31, drove 
 the Turks behind the Tchataldja lines, the last defenses of 
 Constantinople. 
 
 Turkish requests for mediation led to a peace conference 
 in London, December 16, 1912, where the Powers of Europe 
 were represented as well as the belligerents. The economic 
 rivalry which existed between Serbia and Austria appeared 
 in the difficulties over Durazzo, which the Serbs insisted 
 upon retaining, with a corridor to the sea, and which the 
 Austrians knew would affect their interests in Albania, and 
 along the Adriatic. Austria threatened to mobilize. The 
 Entente Powers supported the Balkan states, but Serbia had
 
 138 The Economic Causes of Modern War 
 
 at length to give up her port, with assurances of access to 
 the sea. January 6th, Turkey, finding the negotiations 
 going against her, offered protest. The Balkan allies sus- 
 pended discussion and resumed hostilities. 
 
 Bulgarians and Serbs forced their way to Adrianople; 
 and Montenegro, defying Europe, took Scutari. Greece had 
 kept up a show of hostilities even while the conference was 
 in progress. May 30, 1913, peace was finally made after 
 a second conference in London, which began May 3. 
 War immediately broke out among the lately allied states 
 over the distribution of the spoils, Serbia having been 
 deprived of what she had expected, through the jealousy 
 of Austria, which had led to the erection of the independent 
 state of Albania, blocking Serbia from the sea. This was 
 the outcome of economic difficulties of long standing. The 
 chief advantage to Austria was the retention of her monop- 
 oly of Serbian trade so long as the Serbs were cut off from 
 other nations by their lack of a port. Bulgaria was willing 
 to attack Serbia rather than give up any of the gains of the 
 war, which were greatly to her commercial advantage. 
 
 The economic causes of the Balkan Wars fall into two 
 categories, the desire for expansion of the great Powers 
 and those of the Balkan states themselves. It is true that 
 the Powers whose interference frustrated the efforts of the 
 smaller states did not contemplate immediate territorial 
 aggrandizement at the expense of the states that they 
 bullied. Both Germany and Austria, however, looked for 
 this eventually, in connection with their efforts to build 
 up empires which would supply them with the food, mar- 
 kets, and raw materials that they required. Their Balkan 
 policies were necessary to the furtherance of this design. 
 Russia was involved mainly through her desire to gain 
 access to the Mediterranean; and England through her 
 perpetual concern over Constantinople, even after the
 
 The Wars oj the World: 1878-1914 139 
 
 Anglo-Russian understanding of 1907. French interests 
 were involved because of the large sums loaned in the 
 Balkans. 1 Evidently, with the possible exception of France, 
 all were directly brought into the negotiations and to the 
 verge of conflict, because of the familiar need of territorial 
 expansion and the defense of colonial territory already 
 acquired. The French motives were financial. 
 
 Although the pressure of population among the Balkan 
 states was not serious, their economic motives did not other- 
 wise greatly differ from those of the other powers. They, 
 too, sought to satisfy what they regarded as their economic 
 requirements. 
 
 The vast importance of economic pressure as an element 
 in the causation of the wars of the world since 1878 is 
 now evident, not merely from a priori examination of the 
 situation of the states of Europe, as regards population, 
 manufactures, and the supply of food and raw materials, 
 but also from the study of the origin of the twenty 
 most important conflicts of the period. In none of these 
 is an important economic motive lacking. 
 
 Whether the cause of hostilities be the eternal clash be- 
 tween colonist and native, as in the Zulu War, the Abys- 
 sinian Wars, the fighting in Annam, the Boxer Rebellion, 
 and the Herero Rising; whether it be an imperial impulse 
 to acquire further territory or to safeguard investors, as 
 in the Boer Wars and the Occupation of Egypt, the Nitrate 
 War, the Greco-Turkish and Italo-Turkish Wars, the Bal- 
 kan Wars, and the series of wars in the Far East; or whether 
 it be an effort to win a strategic frontier for commercially 
 profitable territory already acquired, — as was Great Britain's 
 attempt on Afghan lands for the protection of India — the 
 quarrel is economic at its root. 
 
 'These loans amounted to 1,000,000,000 francs in 1912. See p. 193.
 
 140 The Economic Causes of Modern War 
 
 If every state possessed a stationary population such as 
 that of France, and immigration problems were thus ended ; 
 if every state were economically self-sufficing as regards 
 food and raw materials, and had unhindered access to the 
 markets of the world — there would be no need for colonies 
 and spheres of influence. With them would vanish the 
 squabbles over naval bases, the ruthless crushing of weak 
 native states, the safeguarding of lines of transport, and the 
 ever-present spectre of national starvation and unemploy- 
 ment should they be cut. In one fashion or another, as 
 this survey of recent history has shown, such difficulties 
 have been at the root of all hostilities. 
 
 In all of the great wars, an economic problem can be seen 
 as the fundamental cause which makes conflict necessary, 
 and though not always apparent to the peoples who are 
 being led into war nor to the soldiers who fight, it is usually 
 clear enough to the statesmen whose negotiations break 
 off as war begins. It is equally apparent to any one who 
 closely scrutinizes, not merely the record of political events 
 and diplomatic interchanges, but the statistics which show 
 the movements of emigration and immigration, the sources 
 of food supplies and raw materials, and the commercial 
 reports which indicate the never-ceasing struggle for mar- 
 kets.
 
 CHAPTER IV 
 
 THE ECONOMIC MOTIVES OF THE WORLD WAR: 1914-1918 
 
 Underneath all the clamor about making the world 
 safe for democracy, the sins of militarism, the guilt of the 
 German, the neutrality of Belgium, and the saving of 
 civilization from the beast, has lain the economic motive, 
 in the World War as in all others. 
 
 Never has economic rivalry during the years preceding 
 hostilities been more evident as a war-cause, although the 
 ethical and idealistic questions at stake have served to 
 obscure it; and the governments involved (even when most 
 solicitous for the safeguarding of their economic interests) 
 have quite naturally preferred to direct popular attention 
 to other portions of their policy. 
 
 Not until the Peace Conference did the peoples of the 
 various warring countries, and particularly of the United 
 States, begin to realize how vast were the economic ques- 
 tions and interests underlying the war. 
 
 Great Britain, no doubt, did go to war to safeguard Bel- 
 gium — the more so because only thus could the safety of 
 her own territory be assured. (She has been by no means 
 so much concerned over the safety of small peoples in other 
 portions of the globe.) France, no doubt, fought to ward 
 off the German hordes bent upon carrying Kultur to Paris, 
 even though the French themselves had not hesitated to 
 carry their own civilization to other benighted portions of 
 the globe by force of arms. Austria-Hungary, undoubtedly, 
 was righteously indignant over the murder of the Crown 
 Prince Ferdinand. Even Germany was not wholly insin- 
 
 141
 
 142 The Economic Causes oj Modern War 
 
 cere in insisting that she fought of necessity, ringed about 
 by armed foes, jealous of her progress and seeking her de- 
 struction in order to eliminate from the field their most 
 formidable competitor; for Germany was the most formi- 
 dable competitor of most of the industrial countries of the 
 world. 
 
 The origins of the war are to be found in the economic 
 rivalries of the great Powers, not to the exclusion of the 
 idealistic war aims which have been put forth, but none 
 the less really and actually. The murder of the Crown 
 Prince at Sarajevo or the invasion of Belgium did not cause 
 the war or the participation of any particular nation. These 
 events precipitated war in the same sense in which a sharp 
 tap upon a test tube will precipitate a salt from a chemical 
 solution just upon the point of saturation. The funda- 
 mental causes lie behind that. 
 
 Colonial rivalries in Asia, Africa, and the islands scat- 
 tered here and there about the globe; friction over spheres 
 of economic influence; difficulties over coaling stations and 
 the safeguarding of trade routes; displacing by one nation 
 of another in a favorite and long-accustomed field — all these 
 have contributed to the era of fear, hate, and distrust that 
 broke into war at last. Out of commercial rivalries and 
 rival merchant fleets have grown up hostile navies. Out 
 of ill-adjusted economic frontiers and the resultant suffer- 
 ing have grown great military establishments. In the end 
 war had to come. 
 
 The surprising thing is not that the World War came at 
 last, but that it did not come long before. The Casablanca 
 affair in 1908; the Austrian violation of the Treaty of Ber- 
 lin in the seizure of Bosnia and Herzegovina in 1908; the 
 Agadir incident in 1911; the wars in the Balkans in 1912- 
 1913, might any one of them have set the world ablaze, 
 and every one of them did actually come near doing so.
 
 The World War: 1914-1918 143 
 
 These incidents were of minor importance in themselves — 
 a German consul's broken cane, the annexation of two small 
 provinces, the presence of a gunboat in an African harbor, 
 the quarrels of a few small nations. But each one of them 
 raised the spectre of a world war because the economic 
 rivalry existing among all of the great Powers of Europe 
 had led to friction so bitter and mutual distrust so general, 
 to political rivalries, military rivalries, naval rivalries, so 
 fierce, that the death of a single man could bring the whole 
 world into death grips. 
 
 In order to simplify their treatment, the fundamental 
 economic causes of the World War may be classified thus: 
 
 Anglo-German trade rivalry. 
 
 Franco-German trade rivalry. 
 
 The Drang nach Osten and the Bagdad Railway. 
 
 Austrian and Italian economic ambitions. 
 
 In all of these the group of economic motives already 
 familiar is to be observed. Out of these four springs all of 
 the international friction which reached its logical culmina- 
 tion in 1914. Out of the rivalry between Great Britain 
 and Germany come the quarrelling over colonies and the 
 growth of armaments, military and naval; out of them 
 come the mutual distrust of the two nations, fear, then 
 hatred, then war. In France there was the "revanche" 
 because of the two lost provinces; yet even this was one 
 part national sentiment to nine parts economics — princi- 
 pally the question of coal and iron. "Revanche" might have 
 been wholly forgotten, too, had not the German colonial 
 system begun to gall France with its machinations in 
 Morocco. Out of the Drang nach Osten came a part of the 
 Balkan troubles, British and French fears for commercial 
 supremacy and the safety of oversea dominions. The Bag- 
 dad Railway, a mere private commercial enterprise in the
 
 144 The Economic Causes of Modern War 
 
 beginning, became an economic and military threat to 
 France, England, and Russia. The Italian and Austrian 
 ambitions for economic expansion have all added to the 
 unrest in the Balkans. To Austria's own commercial am- 
 bitions is due the suppression of Serbia which bred the 
 resentment that found expression in an assassin's bullet 
 and a world at war. 
 
 ANGLO-GERMAN TRADE RIVALRY 
 
 Germans and German sympathizers were convinced in 
 August, 1914, that whatever the reasons alleged, the real 
 cause of British entrance into the war was jealousy of the 
 commercial development of modern Germany and the de- 
 termination to crush at all costs the most serious trade 
 rival that had ever faced the British Empire. 1 The thesis 
 rested on the assumption, first, that Germany and Great 
 Britain were necessarily bitter foes, one of which must 
 destroy the other; and second, that Great Britain, without 
 
 1 This idea is repeated in the war utterances of leaders in all depart- 
 ments of German thought, economists, historians, politicians, soldiers, 
 even theologians and clergymen. It formed the main theme of Count 
 Reventlow's pamphlet Der Vampir des Festlandes that Great Britain's 
 consistent policy during three centuries had been to destroy her commer- 
 cial rivals as they successively arose, Spanish, Dutch, French, and last of 
 all the Germans. 
 
 In his volume England and Germany, published as a defensive com- 
 mentary on his earlier work, Germany and the Next War, General von 
 Bernhardi again gives voice to this view, "England, this land which claims 
 as its own private property all liberty, all justice, all spiritual superior- 
 ity, has conspired to overthrow and destroy Germany, which never vio- 
 lated England's rights. And why? Only because German commerce seems 
 to be growing burdensome to England." {England and Germany, p. 76.) 
 
 Professor Otto Hinze, the historian, of the University of Berlin, reit- 
 erates the same view: "For almost twenty years the successful compe- 
 tition of German industry in the commerce of the world has aroused the 
 jealousy, the envy and the hatred of British business men and of the 
 government which they control. . . . We desired to develop slowly in 
 peaceful competition with England, until one day the older World Power
 
 The World War: 1914-1918 145 
 
 resort to arms, could not stand the competition which the 
 tremendous advance of Germany had brought against her. 
 There is no denying that the loss of markets and the de- 
 crease of trade in certain commodities, and the alarming 
 way in which German goods had forced their way into mar- 
 kets long regarded as exclusively British, were viewed with 
 
 would recognize Germany as possessing equal rights in determining the 
 politics of the world. This development England sought to preclude by 
 the war." (Modern Germany in Relation to the Great War, pp. 53-54.) 
 
 Friedrich Naumann, a prominent member of the Reichstag, writes: "We 
 are unloved because we have found a method of work in which now 
 and for a long time to come no other European nation can imitate us, 
 and which consequently the others do not regard as fair." (Central Eu- 
 rope, p. 118.) 
 
 The collection of German war utterances made by the Dane, J. P. Bang, 
 under the title Hurrah and Hallelujah, teems with variations on the same 
 theme. The distinguished theologian, Adolf Harnack, in the compilation 
 Das Grossere Deutschland (P. Rohrback, editor) declares: "England is 
 leading the tremendous world war against us, and doing so from base 
 competitive envy" (p. 164). 
 
 In a collection of war sermons, Deutsche Reden in Schwerer Zeit, Otto 
 von Gierke exclaims: "The tremendous progress of Germany in commerce, 
 industry, etc., called forth the envy of their neighbours, and they leagued 
 themselves in the infamous attempt to strangle Germany by their supe- 
 rior force, an attempt emanating from the degenerate English shop- 
 keeper soul, which craftily pulled the strings, until at last it summoned 
 up courage for its unheard-of treachery" (p. 150). 
 
 Dean G. Tolzien of Schwerin, in a similar compilation, Vaterlandische 
 Evangelische Kriegsvortrdge, echoes the same notion: "Is there any one 
 who does not know why England declared war? Why? As Russia from 
 greed of power, as France from a craving for revenge, so England from 
 jealousy. From shop-keeper spite. Because she wanted to earn the thirty 
 pieces of silver" (p. 126). 
 
 In this connection an extract from the famous leader in the London 
 Saturday Review of September 11, 1897, is extremely apropos: "A mil- 
 lion petty disputes build up the greatest cause of war the world has ever 
 seen. If Germany were extinguished tomorrow, the day after tomorrow 
 there is not an Englishman in the world who would not be the richer. 
 Nations have fought for years over a city or a right of succession; must 
 they not fight for two hundred and fifty million pounds of commerce? 
 . . . England has awakened to what is alike inevitable and her best hope 
 of prosperity. 'Germaniam esse delendam.' " (Saturday Review, 84:278- 
 279: S. 11, '97.) That passage was widely read and long remembered 
 across the North Sea.
 
 146 The Economic Causes of Modern War 
 
 a good deal of consternation as well as anger in Great 
 Britain. The situation was summed up by Mr. H. G. Wells, 
 when he wrote: x 
 
 "We in Great Britain are now intensely jealous of Germany. 
 We are intensely jealous of Germany not only because the Ger- 
 mans outnumber us and have a much larger and more diversi- 
 fied country than ours, and lie in the very heart and body of 
 Europe, but because in the last hundred years, while we have 
 fed on platitudes and vanity, they have had the energy and 
 humility to develop a splendid system of national education, 
 to toil at science and art and literature, to develop social organ- 
 ization, to master and better our methods of business and in- 
 dustry, and to clamber above us in the scale of civilization. 
 This has humiliated and irritated rather than chastened us, and 
 our irritation has been greatly exacerbated by the swaggering 
 bad manners, the talk of 'Blood and Iron' and Mailed Fists, the 
 Welt-Politik rubbish that inaugurated the new German phase. 
 
 "The British middle-class, therefore, is full of an angry, vague 
 disposition to thwart that expansion which Germans regard very 
 reasonably as their natural destiny ; there are all the possibilities 
 of a huge conflict in that disposition. . . ." 
 
 German trade in all parts of the world had grown miracu- 
 lously while English trade had developed at a rate which 
 was normal enough, but which bore no comparison to the 
 rapid rise of Teutonic commerce. In the forty years fol- 
 lowing the Franco-Prussian War, the trade of the new 
 Empire increased 170 per cent., while the trade of Great 
 Britain increased 130 per cent. Even during the first decade 
 of the Twentieth Century, when the first outburst of Ger- 
 man activity was over, the rate of increase continued to be 
 in excess of that of her rival on the other side of the North 
 Sea. 
 
 1 An Englishman Looks at the World, pp. 36-37. This book, published 
 only a few weeks before the outbreak of the war, contains some aston- 
 ishingly shrewd forecasts of what has actually taken place.
 
 The World War: 1914-1918 147 
 
 The rate at which this went on is easily seen in the sta- 
 tistics for the years following the Franco-Prussian War: x 
 
 In millions of pounds sterling {20 marks, 1 -pound) : 
 
 United Kingdom Germany 
 
 Imports Re-exports Exports Imports Exports 
 
 1870 303 44 200 173 125 
 
 1880 411 63 223 142 145 
 
 1890 420 64 263 214 166 
 
 1900 523 63 291 302 239 
 
 1910 678 104 430 465 382 
 
 Even in the cotton trade Germany had overtaken and 
 all but outstripped Great Britain, for while between 1885 
 and 1886 the British port of Liverpool had handled 2,558,- 
 798 bales and the correspondingly important German port 
 of Bremen only 530,451, after the German progress began, 
 in the single year 1911-1912, Liverpool handled only 3,690,- 
 800 bales as against Bremen's 2,792,000. The long-estab- 
 lished British textile industry was being hard put to it by 
 the new German factories; and supremacy in the iron 
 industry had long since been wrested from the United 
 Kingdom, the success of the competitors being made possible 
 by the Lorraine iron fields and the invention of the Eng- 
 lishman, Thomas. 
 
 Finally, German progress came to touch British pride 
 and pocket-book alike at their most sensitive spot. Directed 
 by Albert Ballin and his co-workers, the German maritime 
 fleet began to offer serious competition on the sea which 
 Britons have for generations claimed^ to rule. It is only 
 a generation since Germany bought her ships in England. 
 She was now building her own vessels and carrying her 
 own goods in them. The Hamburg-American and North 
 German Lloyd became two of the largest shipping concerns 
 in the world. 
 
 1 B. E. Schmitt: England and Germany, p. 99. The German figures for 
 1870 are actually for 1872, the earliest available. The statistics imme- 
 diately succeeding are from the same work.
 
 148 The Economic Causes of Modern War 
 
 Added to this was the poverty and misery of certain 
 classes of society in the British Isles, part of which was 
 due to the collapse of business enterprises owing to the 
 superior efficiency of the competing Germans. The realiza- 
 tion that twelve million people, according to the statement 
 of a British publicist, 1 lived on the verge of hunger, increased 
 the bitterness which the English felt. The seriousness of 
 German rivalry was kept before their attention by the con- 
 tinued discussion of measures proposed to keep the Ger- 
 mans from securing the markets that were left to imperial 
 Britain. 
 
 It is absurd, on the other hand, to regard the British 
 Empire as completely outstripped in the economic contest 
 and because of its hopelessness forced to resort to arms and 
 appeal to the strength of its superior fleet in order to main- 
 tain its position in the economic world. The figures for 
 export and import of the two countries in the years between 
 1899 and 1913 give the lie to this without need of further 
 argument: 2 
 
 In millions o) pounds sterling: 
 
 United Kingdom Germany 
 
 Imports Re-exports Exports Imports Exports 
 
 1899 485 65 264 289 218 
 
 1900 524 63 291 302 239 
 
 1901 522 68 280 286 225 
 
 1902 528 65 283 290 241 
 
 1903 543 69 291 316 255 
 
 1904 551 70 301 343 265 
 
 1905 565 78 330 372 292 
 
 1906 607 85 376 422 324 
 
 1907 645 92 426 450 355 
 
 1908 593 80 377 404 324 
 
 1909 625 91 378 443 343 
 
 1910 678 104 430 465 382 
 
 1911 680 102 454 477 405 
 
 1912 745 112 487 550 454 
 
 1913 769 109 525 534 495 
 
 1 Sir Hugh Campbell-Bannerman, in his speech at Perth, June 5, 1903. 
 a B. E. Schmitt: England and Germany, p. 102.
 
 The World War: 1914-1918 149 
 
 It is evident at a glance not only that Great Britain has 
 been in the lead so far as volume of business is concerned 
 but also that, except for the depression resulting from the 
 Boer War, her rate of increase has not been very far behind 
 that of her rival. 
 
 In 1914 Germany was having economic difficulties of her 
 own. The period of expansion with which the year 1912 
 had opened was followed by disaster because of railway dis- 
 organization, and the financial difficulties resulting from the 
 war in the Balkans. Shortage of capital, which had first 
 made its appearance at the time of the Agadir crisis, was 
 very noticeable in 1913, reaching such an extent that gov- 
 ernment bonds did not readily secure buyers. The value 
 of the new industrial enterprises decreased from 134,000,000 
 pounds in 1911 and 146,000,000 pounds in 1912, to 87,000,- 
 000 in 1913. Westphalian manufacturers were compelled to 
 reduce production; Bavarian industries were in difficulty; 
 and the baskets, cane, furniture, granite, and paint which 
 had been going to the British market were supplanted by 
 British manufactures. The unemployment problem was 
 beginning to show itself at the same time that the cost of 
 living rose. 
 
 The existence of such a situation makes it evident that 
 Great Britain could not possibly have been solely actuated 
 in entering the war by mere trade jealousy. This fact is 
 even more clearly shown by the opposition of more than 
 half the British manufacturers to a protective tariff, which 
 would have ended the difficulty with German "dumping" 
 and would have lessened the severity of competition gener- 
 ally. There were the best of indications in 1914 that the 
 worst danger from Germany to British commerce was 
 over; and at all events the cost of the war was far greater 
 than any economic loss could have been. 
 Yet no one can seriously deny that the commercial rivalry
 
 150 The Economic Causes of Modern War 
 
 had both directly and indirectly a very considerable influ- 
 ence in producing the war, even though in itself alone it 
 might not have produced the four years of fighting. It 
 fostered bitterness and ill-feeling between the two coun- 
 tries, and — a fact of especial importance — it was the pri- 
 mary cause of the naval rivalry which led to the fear of 
 German invasion — a veritable nightmare among a certain 
 class of Englishmen. 1 
 
 The German navy was built as German commerce grew 
 and German colonies and trade routes needed protection. 
 It was a response to an economic need, but it was also 
 a threat to the very existence of the island empire that 
 can live only so long as its fleet controls the seas. It 
 is not possible within the limits of this essay to trace the 
 rise of Germany's fleet and the alarm which it occasioned in 
 England. The important point for our purposes is that 
 it was the inevitable outcome of the spread of German com- 
 merce over the globe, and that the naval rivalry which had 
 so very much to do with causing the Great War is really 
 only a slightly disguised kind of economic rivalry. 
 
 FRANCO-GERMAN TRADE RIVALRY 
 
 Prevalent ideas regarding the relations between France 
 and Germany since the cession of Alsace and Lorraine in 
 1870 have been so colored by the "revanche" that it offers 
 the most convenient starting point for a discussion of the 
 points of economic friction between the two countries. The 
 "revanche" has been popularly thought of as a matter of 
 national sentiment, and the eyes of the_ world have been 
 fixed oftener upon the wreaths before the statue of Strass- 
 
 1 Richard Harding Davis's story of three college boys who don German 
 uniforms, terrorize the United Kingdom, and cause a complete mobiliza- 
 tion of the British army, is an exaggeration, to be sure, but not a dis- 
 tortion of the British state of mind.
 
 The World War: 1914-1918 151 
 
 burg among the cities of France, than upon the iron fields 
 of Lorraine. 
 
 The French desire for the re-possession of Lorraine has 
 been due to something besides the natural patriotic desire 
 to see the lost provinces again under the tricolor, just as the 
 desire of the Germans to retain it has been due to a per- 
 fectly practical and unsentimental appreciation of its value. 
 From the mines of Lorraine came 21,000 of the 28,000 tons 
 of iron ore that Germany was consuming annually. Be- 
 sides the iron, there are coal deposits in these territories 
 sufficient, when combined with the output of the West- 
 phalian deposits, to provide the entire German Empire 
 with all the fuel that is required by all its industries. 
 
 The Germans, notwithstanding, desired more than they 
 already possessed of the French iron fields, for their geolo- 
 gists in 1871 had made the fatal blunder of supposing that 
 all the iron ore on the Briey plateau was inside the boundary 
 line fixed by the treaty. Subsequent discoveries showed that 
 by far the richer deposits still remained in French hands. 
 
 Since 1900 the French iron fields at Briey have con- 
 tributed heavily to the republic's production of ore. 
 Since 1907 France has ceased to be an importer of iron 
 and has begun exportation to Belgium, Holland, and Ger- 
 many itself. The German business men, who sought both 
 to check French expansion and to reap what advantage they 
 could from the situation, had by 1910 acquired partial 
 control over about one-fifth of the Briey mines. 1 
 
 In 1910 Germany possessed 3,608,000 tons of ore remain- 
 ing in the mines scattered in various parts of the Empire, 
 as against 3,300,000 tons of French ore in mines temptingly 
 
 1 Krecke: "Eisenerz und Kohle in Franzosisch-Lothringen," Stahl und 
 Eisen, 1910, p. 8. Quoted by E. F. Gay: "French Iron and the War," 
 Military Historian and Economist: i : 308 : Jy., '16.
 
 152 The Economic Causes of Modern War 
 
 close to the German frontier. 1 It was these mines that 
 during the recent war determined the German strategists 
 to win Nancy and to hold the Briey and Longwy basins 
 at all costs. 
 
 One circumstance alone hindered the French: their de- 
 pendence for coal upon the deposits of Westphalia. In this 
 respect their iron industry remained subject to a degree 
 of German control, a situation which it was in their power 
 to remedy by purchases in the English market and by 
 further development of their own resources. 
 
 The immense development of the German iron industry 
 is due to the discovery of the English metallurgist, Sidney 
 Gilchrist Thomas. The Lorraine ores contain a great deal 
 of phosphorus, which unless removed from the steel in the 
 process of converting, renders it too brittle to be of use. 
 The Bessemer process, based on experiments with the Eng- 
 lish ores, which are free from phosphorus, could not effect 
 this removal, and consequently the value to the German 
 Empire of the recently-seized Lorraine iron fields was im- 
 paired. The necessity for importing either the purer 
 grades of ores from Spain and Sweden, or else Bessemer 
 steel already converted from England, had hindered German 
 industry. 
 
 Thomas, who had studied the problem of the elimination 
 of phosphorus since 1870, reached a practical solution in 
 1875. He secured the co-operation of his cousin, Percy 
 Gilchrist, and in 1877 took out his first patent, making 
 formal announcement of his new method in 1878. His 
 invention, which employed a lining of magnesia or mag- 
 nesia limestone in the converter, attracted little attention 
 in England; but it was regarded as of so much importance 
 among Continental iron-masters, to whom the phosphorus 
 
 1<( Iron Ore Resources of the World," Stockholm, 1910: i:xxv. Also 
 quoted by Gay, loc. cit.
 
 The World War: 1914-1918 153 
 
 problem was of dire importance, that a single steamer is 
 said to have brought two applicants for his patent rights. 
 
 The tremendous impetus which gave Germany world 
 supremacy in the iron industry within a comparatively short 
 period, dates from this year. The Bessemer process had 
 been practically valueless to the Germans. Once the new 
 method was adopted, the Lorraine fields, where iron and 
 coal lay near together, were almost ideal for iron production. 
 
 The iron and coal which were making the wealth of 
 Germany prior to the beginning of the war in 1914, and 
 which she guarded so carefully that she retained the use 
 of them during most of the period of hostilities, were in the 
 very territory which had been wrung from France. From 
 lack of the minerals that were being mined in territories 
 that they regarded as being rightfully their own, the French 
 until 1907 found their industries gravely hampered. Even 
 the enormous development of the iron fields in the Meurthe- 
 et-Moselle district, which the Germans failed to take in 
 1870, did not reconcile them to the loss of the Lorraine 
 fields. 
 
 This is one of the reasons why the policy of "revanche" 
 did not die out. In the minds of the people "revanche" 
 meant a patriot's desire to see the hereditary foe humbled 
 and the lost provinces again restored to France. But in 
 the minds of the masters of French industry and the jour- 
 nalists who formed the popular mind, "revanche" — what- 
 ever else it may have meant — implied the restoration with- 
 in French boundaries of the deposits of coal and iron 
 which industrial growth demanded, and the protection of 
 the fields which were already theirs. 
 
 The situation of the British steel manufacturers was 
 equally precarious, although few of them realized it until 
 long after the Thomas process had been adopted abroad. 
 At first confident that the United Kingdom's leadership in
 
 154 The Economic Causes of Modern War 
 
 the production of steel by the Bessemer process would never 
 be menaced, they presently found their rivals across the 
 North Sea developing the business at a rate far exceeding 
 their own. Between 1890 and 1910 the German steel busi- 
 ness grew approximately seven times as rapidly as the 
 British in actual production. 1 The German iron-masters 
 equalled the British in 1893, and at the outbreak of the war 
 were producing about three times as much as their quondam 
 superiors. Even in the production of pig iron, where the 
 Thomas process gave no advantage, the production equalled 
 the British in 1903, and was double its volume in 1912. 
 The Germans had regained the supremacy in iron which 
 they had enjoyed before the Thirty Years' War. The situa- 
 tion was almost as galling to the British manufacturers as 
 it was to the French. 
 
 The Morocco question, which repeatedly led Europe to 
 the verge of war, was partly a result of the Franco-German 
 conflict over iron. Moroccan exports are mainly agricul- 
 tural ; but the German iron-masters, facing a probable short- 
 age of ore in the very near future and casting about the 
 world for deposits from which to make up their lack, 
 coveted the mines, as yet unworked, known to exist in 
 that country. Besides the iron, there were copper, lead, 
 antimony, silver, gold, and sulphur deposits available for 
 the Power that could secure to itself the mastery there. 
 
 Dominance in Morocco, situated conveniently on the 
 opposite littoral of the Mediterranean, meant to France an 
 opportunity for building up her colonial trade still further; 
 and — in view of her almost stationary population — the 
 prospect of obtaining from the warlike tribesmen of the 
 country, native troops with which to meet the German 
 
 1 These and the following figures are taken from an article by Pro- 
 fessor Hermann Schumacher of the University of Bonn, "Germany's In- 
 ternational Economic Position," in Modern Germany, p. 105.
 
 The World War: 1914-1918 155 
 
 attack which sooner or later had to come. The deposits 
 of iron and the possibility of agricultural development 
 were as attractive to the French as to the Germans. Moroc- 
 co was, moreover, the outlet for the commerce of Northern 
 Africa and the Sahara. 
 
 Because its frontiers marched with those of the other 
 French African possessions, and because of the ready access 
 by sea from France, it was the next logical step in the colo- 
 nial policy of France. Great Britain, enjoying the second 
 largest share in the country's trade, had given up her claim, 
 and had in the agreement of 1904 tacitly admitted the pros- 
 pect of the entrance of the French. A similar agreement 
 with Spain recognized the prior rights of France. 
 
 The German share of Moroccan commerce averaged only 
 about nine per cent of the yearly total. The future pros- 
 pects of the iron trade, to which strategic and political con- 
 siderations were added, were the mainsprings of the Em- 
 pire's policy. Morocco was peculiarly desirable to an over- 
 populated country because it was one of the few portions 
 of the earth's surface suited to habitation by white men, 
 and as yet unoccupied. Strategically, the establishment 
 of a German protectorate would have been dangerous to 
 the French possessions in Algiers and to the sea routes to 
 France. Politically, it was felt that the security of the 
 German Empire required a constant reminder to the rest of 
 Europe of the fact of Teutonic hegemony. Practically, 
 these considerations took the form of constant thwarting 
 of French economic aspirations in Morocco. 
 
 Although the iron rivalry and the friction in Morocco 
 were the chief reasons for the ill-feeling that ended at last 
 in war, commercial relations on the Continent itself did not 
 tend to lessen the tension in the relations of the two states. 
 England, Belgium, and Germany, by the logic of geography, 
 are the principal customers of France. Even when the
 
 156 The Economic Causes of Modern War 
 
 French dependence on the Westphalian coal deposits is set 
 aside, the commercial relations existing between the two 
 chief political rivals of Europe were necessarily close. 
 
 It was not a comfortable situation. There were large 
 numbers of the smaller French manufacturers whose sales 
 did not extend beyond the limits of the republic ; and these 
 men, knowing that their own trade could not be injured, 
 and finding themselves hampered by the German importa- 
 tion, were ever ready to encourage agitation against the 
 purchase of German goods. In many sections of the press 
 and in certain governmental circles, they found ready 
 encouragement. 
 
 In France as in England, as the growth of German in- 
 dustry continued, Germany's capacity for turning out 
 articles which were serviceable, if not perfectly made, and 
 for selling them at low price, gravely affected domestic 
 merchants. The same device to counteract this was adopted 
 as in England. Imported goods were stamped with the 
 name of the country of their origin, a measure which did 
 not in the least serve to restrict the spread of the German 
 goods, and may even have been useful as an advertisement. 
 When the French sought to boycott German products, 
 they found the same device being employed against them- 
 selves across the Rhine. 
 
 After the Agadir crisis there was another effort in France 
 to check the progress of German economic infiltration. As 
 a result, French sales in Germany remained almost sta- 
 tionary, while German sales in France climbed steadily. 
 The failure of this attempt is evident in the statistics which 
 show Germany and France nearly even in their mutual 
 exports and imports in the year before the crisis, and Ger- 
 many climbing rapidly ahead in the years afterward. The 
 French had barely abandoned their futile policy of commer-
 
 The World War: 1914-1918 157 
 
 cial hostility when the World War burst upon them. Re- 
 duced to tabular form, the sales of the two countries for 
 the years 1910, 1911, and 1912 stand as follows: x 
 
 France to Germany Germany to France 
 
 1910 804,000,000 francs 860,000,000 francs 
 
 1911 819,000,000 965,000,000 
 
 1912 814,000,000 981,000,000 
 
 German tariffs were cleverly devised to close the frontier 
 against the importation of many articles. By analyses of 
 wines, demanded under conditions which, by indirect means, 
 made importation to Germany difficult, and by similar 
 devices of the same sort, the Germans contrived to throw a 
 network of hindrances around French business, while at 
 the same time finding it possible to keep their own goods 
 flowing into France. Efforts by the French to retaliate in 
 kind were not successful; and in most cases the conflict hurt 
 their commerce rather than that of the Germans'. Part 
 of the French difficulty was undoubtedly due to the poor 
 organization of their commercial service in foreign coun- 
 tries. In Germany this was organized in a single bureau 
 in the Foreign Office, while in France it was parcelled out 
 among the Ministries of Finance, Commerce, and Foreign 
 Affairs. 
 
 Such was the motivation of the series of crises which led 
 nearer and nearer to war at Tangier in 1905, after the Alge- 
 ciras Conference in 1906, at Casablanca in 1908, and at 
 Agadir in 1911. In each case the fundamental issues were 
 economic, in each case only a spark was needed to create 
 a world war, yet not until 1914 did the final impetus come, 
 though all had been prepared by many years of economic 
 hostility. 
 
 1 These figures are adapted from M. Ajam's book, Lc Problcme Eco- 
 nomique Franco- Allemand, p. 11.
 
 158 The Economic Causes of Modern War 
 
 THE "DRANG NACH OSTEN" 
 
 One of the most evident phenomena attending the Ger- 
 man economic expansion was the Drang nach Osten, or 
 trend toward the East, which had come about from nat- 
 ural economic causes and had finally been incorporated into 
 the conscious policy of the Empire. It might properly be 
 used to include the economic penetration of Russia which 
 had been going on for many years when the Great War 
 broke out in 1914; for without political action of any sort, 
 but by a mere process of infiltration, the Germans had come 
 to control a large part of Russian industry and commerce. 
 
 More generally, however, the phrase is used to indicate 
 the German effort gradually to build up at least an eco- 
 nomic bloc, and if possible to exercise political power at the 
 same time, in the more or less defined territory known as 
 Mittel-Europa. With Germany, and more particularly 
 Prussia, as a nucleus, it was proposed to build up an Em- 
 pire which should extend from the Baltic to the Persian 
 Gulf. The Teutonic blood of Austria was to be included, 
 economic and political relations with the Balkan states were 
 to be so manipulated as to bring them under Teuton domi- 
 nance; the Turkish Empire was to receive the same treat- 
 ment; and through the agency of the Bagdad Railway, all 
 of Asia Minor and the Tigris-Euphrates valley were to be- 
 come the domain of German trade. 
 
 The extremists believed that this new and compact state 
 should include among its northern ports, Amsterdam, Rot- 
 terdam, and Antwerp, — geographical and economic parts of 
 the German Empire, whose political separation was an ac- 
 cident against which Germany became increasingly restive 
 as her commerce grew. Salonika and Trieste were looked 
 upon as potential German ports to the south. 
 
 With a population of more than 80,000,000 and with im-
 
 The World War: 1914-1918 159 
 
 mensely strengthened frontiers, with an internal market 
 nearly as large as that of the United States, and with an 
 impetus to industry which would result from the immense 
 enlargement of the Zollverein, the German Empire would be 
 strengthened to such a point that she could defy the whole 
 world, whether in armed or economic warfare. 
 
 The importance attached to the Tigris-Euphrates valley 
 was agricultural. Here was the home of the earliest civi- 
 lizations known to man. This area had at one time sup- 
 ported a large population, and preliminary agricultural 
 survey seemed to indicate that only proper scientific 
 administration would be required to make it do so again. 
 German efficiency was to be used in the building up of 
 an irrigation system which would literally make the desert 
 blossom like the rose. 
 
 In Mittel-Europa's new territories were to be produced 
 the supplies which would solve the food problem and the 
 raw materials problem of Germany. Here her settlers 
 would find the outlet denied them in the unhealthy German 
 colonies, unsuited to white settlers; and here also there 
 would open new markets for German industry. 
 
 Mittel-Europa was to become an economically self-suf- 
 ficing unit. In its southern and eastern extremities it 
 would have its new and undeveloped lands — new lands be- 
 cause they were so very old that the traces of their former 
 development had all but disappeared. At the northern end 
 would be the centre of governmental control and admin- 
 istration, the industries which the raw materials from the 
 east and south would feed, and for which they would af- 
 ford markets; and here also would be the denser indus- 
 trial centres of population in the hoped-for state. 
 
 In the Ukraine the new state would find additional iron 
 ore, wheat, hemp, and the raw materials for textiles. Of im- 
 mense importance were the large deposits of manganese,
 
 160 The Economic Causes of Modern War 
 
 a rare metal almost wholly lacking in Germany, necessary 
 to the development of an independent steel industry, of 
 which the Empire had been importing 500,000 tons a year 
 before the war. From the Caucasus, which was to be 
 joined to Turkey, would come more manganese and copper, 
 and from its famous wells the oil that is all-important to 
 modern industry and to modern navies. Raw cotton also 
 was to be had here, and the territory offered an opportunity 
 for economic penetration of Central Asia. 
 
 The possession of the Baltic provinces and of Poland 
 would add political domination to economic penetration al- 
 ready effected, and would also assure the supply of flax, 
 a textile utilized by the Germans to supply the wool and 
 cotton which they lack. At least a measure of economic 
 control over the Rumanian grain and oil fields was also 
 contemplated. 
 
 Since even this would have left the new Teutonic Em- 
 pire at a loss for such products as rubber and vegetable 
 fats, a measure of tropical expansion — possible in the mod- 
 ern world only at the expense of other colonizing nations 
 — must have been contemplated. 
 
 The development and extension of the Bagdad Railway 
 would link Berlin, Byzantium (Constantinople called by 
 its old name for the sake of the alliteration) and Bagdad, 
 so that the whole new Empire would be closely bound 
 together by rapid transport. Outlets to the sea would not 
 be lacking, in the Baltic and the North Sea, in the Mediter- 
 ranean, and far to the south in the Persian Gulf. Com- 
 merce with the north, east, south, west, to all the ends of 
 the earth, would be open. 
 
 Intimately linked with this whole scheme, and so es- 
 sential to it that one cannot be discussed without the other, 
 was the Bagdad Railway, or the "BBB" as it came to be 
 called from the three cities which it was to link.
 
 The World War: 1914-1918 161 
 
 THE BAGDAD RAILWAY 
 
 The history of the Bagdad Railway may be dated from 
 the year 1888, when a concession was granted by the Sul- 
 tan's government to the Societe du Chemin de Fer Ottoman 
 d'Anatolie, a syndicate of Germans, for the construction of 
 a railway line from Haidar Pasha to Angora, a total dis- 
 tance of 576 kilometres (about 360 miles). At the same 
 time a short railway line which had been built a few years 
 before to give the Sultan readier access to his shooting 
 box, was taken over by the company and made a part of 
 the new line, which was under construction between 1889 
 and 1893, when it was finally completed. No sooner had 
 this been accomplished than a further concession was made, 
 permitting the extension of the line as far south as Konia. 
 Work on this section was completed in 1896. 
 
 By this time the internationally important possibilities 
 of the new line (which appears in the beginning to have 
 been a mere commercial venture without international sig- 
 nificance) were beginning to be apparent in Europe. In 
 1898 the Kaiser paid a visit to the Sultan, which bore fruit 
 in the following year when announcement was made of a 
 concession for the extension of the new railway clear across 
 Asia Minor with a terminus at the head of the Persian 
 Gulf. In the same year Great Britain quietly established 
 a protectorate over Koweit, a tiny principality under the 
 partial suzerainty of the Sultan, which offered the most 
 logical terminus for the railway. In 1902, three years after 
 the railway scheme had been officially announced by the 
 German company, the Sultan gave his final approval. In 
 the following year, German tentative offers were made to 
 the French and the English for their participation in the 
 construction of the railway, the offer being intended to
 
 162 The Economic Causes of Modern War 
 
 show that the building of the road had no sinister economic 
 significance. Although both the English and the French 
 Governments had at one time or another taken a friendly- 
 attitude toward the project and had been on the point of 
 entering into it, the popular protests or those of financiers 
 who perceived the danger to India and the colonial pos- 
 sessions menaced by the railroad, had in every case been 
 too strong. So bitter, indeed, was the feeling in France 
 that the stock of the corporation was not admitted to 
 sale in the Paris Bourse, although very considerable French 
 investments in the company were made some years later. 
 
 Their offers having been refused, the German company 
 began the construction of the new line alone, and in 1904 
 track was laid to Burgulu in the Taurus Mountains and 
 the task of tunnelling through them was begun. Having 
 gone thus far, the Germans suspended work for a period 
 of five years, resuming their construction in 1909. Two 
 years later, the British, regretting their precipitancy in 
 neglecting the German offer of participation in the build- 
 ing of the road, made a settlement whereby they were to 
 construct the connecting line from Bassorah to the Per- 
 sian Gulf. As the result of a visit of the Tsar to Potsdam 
 in December, 1910, Russia in the following summer with- 
 drew her opposition to the railway, indicated her willing- 
 ness to build connecting lines in Persia, and later turned 
 over her reservations for construction in northern Asia 
 Minor to a group of French financiers. In 1912 German 
 lines were laid eastward from Aleppo and reached as far 
 as the Euphrates valley, and in 1914 a line was laid east- 
 ward from Bagdad. 
 
 The railway had gradually become a part of the Ger- 
 man Drang nach Osten, although it is almost certain that 
 when originally begun it was what it professed to be, a
 
 The World War: 1914-1918 163 
 
 commercial scheme, pure and simple. 1 It is evident, how- 
 ever, that the possible economic and political importance 
 of this line had come to be realized by the Foreign Office 
 at Berlin, and that the government stepped in behind the 
 financiers. In no other way can the part which the Kaiser 
 played in 1898 be interpreted. 
 
 The completion of the railroad as proposed would be 
 of the very greatest importance to Germany. Financed by 
 German business men and built by German engineers, it 
 would mean extremely large orders for supplies, placed 
 with German firms, and a correspondingly large boom in 
 German industry. The proposed line was to be some- 
 thing over 1,700 miles long, and was to throw out impor- 
 tant branch lines to Smyrna, Alexandretta, Aleppo, Damas- 
 cus, and Mecca, thus binding Asia Minor solidly into one, 
 and doing the binding with German bonds. Although no 
 formal sphere of German influence had been set up, it was 
 evident that the completion of the road could not fail to 
 have this effect. 
 
 The German business men who were building the line 
 were protected against loss by an agreement with the 
 Turkish Government, which guaranteed 4,500 francs per 
 kilometre for the construction of the line, an arrangement 
 under which they profited handsomely, selling their priv- 
 ileges to a subsidiary company for 3,200 francs and retain- 
 ing the difference. It was realized from the very begin- 
 ning (in England with much disquietude) that the coun- 
 
 1 Baron von Hertling even declared that the main motive of the Ger- 
 mans was interest in archeology! On April 30, 1907, he said: "It is true 
 that a German corporation obtained the concession for this railway from 
 the Ottoman Government in 1904, and we have every inducement to use 
 German capital in opening up that old centre of civilization for the 
 purposes of science and exploration, but that political considerations are 
 involved would never occur to me." W. H. Dawson, Evolution of Mod- 
 ern Germany, p. 346.
 
 164 The Economic Causes of Modern War 
 
 try could not afford a traffic heavy enough in the begin- 
 ning to pay the cost of the management nor the very con- 
 siderable guarantees of operating expenses which the Turks 
 had made; but it was certain to stimulate trade and to 
 facilitate the movement of the population to the interior 
 of Asia Minor. 
 
 To Germany it meant a solid steel band of German in- 
 fluence from Constantinople to Bagdad, and eventually, 
 from Berlin to Bagdad. If the scheme of Mittel-Europa 
 became a reality, the "BBB" of which the Germans talked 
 so boastfully in the cafes would be realized. Germany was 
 to be dominant economically and politically in an enor- 
 mously rich region which was in the end to solve many of 
 the pressing problems at home with one stroke. Over- 
 population, the need for markets, food, and raw materials, 
 — they would all be taken care of. The carrying trade of 
 the road might well include, also, a portion of the trade to 
 India, which might be diverted from the slower water route 
 through the Suez Canal to the fast overland railway service. 
 
 The Bagdad Railway, which has been called the most 
 important single cause of the Great War, is the creation 
 of geography. From Haidar-Pasha on the coast of Asia 
 Minor opposite Constantinople, south through the Taurus 
 Mountains, east to Moussoul, and thence south down the 
 Tigris to Bagdad, it follows a route that gives the power 
 that holds it the possession of all Asia Minor. To hold this 
 small western extremity of Asia has always been of the 
 highest strategic importance, since from it attack can be 
 launched speedily and successfully at any time, either to 
 eastward or to westward. To control Asia Minor is to 
 command Egypt, Syria, and Palestine on one side, and all 
 of the potentially fertile Tigris-Euphrates valley and the 
 open sea route to India on the other. 
 
 The earliest records of the race show Asia Minor play-
 
 The World War: 1914-1918 165 
 
 ing this role of the decisive Hinterland, the actual key to 
 the more fertile and important lands that border it on 
 either side. As early as 1900 B. C, Hittite warriors from 
 the rugged lands of Asia Minor were menacing Assyria, 
 Babylonia, and Egypt. The conquerors of the ancient 
 world, marching to their victories, passed by the route which 
 centuries later modern engineers were to lay out for the 
 Bagdad Railway. To Alexander the Great this route 
 opened the way for the conquest of India. The first bat- 
 tles of the Crusaders were fought in the heart of Asia 
 Minor — Nicea, Antioch, and only after that Jerusalem. 
 Then as now, the all-important Hinterland dominated com- 
 pletely the regions lying along its borders. 
 
 It was because of this domination that Great Britain 
 objected to the building of the proposed road, one terminus 
 of which would be within twelve hours of Egypt and the 
 other only four days' voyage from Bombay. The building 
 of the railway would yield German industry profit from 
 the supply of material; and the gradual opening up of 
 the country to the commerce of the Empire would keep 
 the German power perpetually at the doors of the two 
 most important British dependencies. The safeguarding 
 of the route to India — a consideration of the highest eco- 
 nomic importance, largely dominant in the foreign policy 
 of Great Britain for a full century — was again uppermost. 
 
 The adroitness with which the British had secured a pro- 
 tectorate over Koweit, with deep harbors and excellent 
 docking facilities, the most available of the two possible 
 termini for the road at the head of the Persian Gulf, had 
 in some measure offset this danger. The Germans would 
 now be forced to establish themselves at Fao, the one re- 
 maining town, if they were to reach the Gulf at all, and 
 the new British protectorate would serve admirably at 
 any time as the basis for naval action against them.
 
 166 The Economic Causes of Modern War 
 
 The Germans never reached the Persian Gulf. Imme- 
 diately before the outbreak of the World War, an agree- 
 ment was made whereby Germany was to have economic 
 and financial control of the railroad only as far south as 
 Bagdad ; the line south to Bassona was to be international ; 
 and Great Britain was to control the road thence to the 
 Persian Gulf. With the outbreak of the war, all the years 
 of effort came to nothing. 
 
 These semi-political and semi-economic causes for the 
 British objections to the building of the railroad do not 
 exhaust the purely economic objections which existed quite 
 apart from the tacit threats to Egypt, the Suez Canal, and 
 India. In several directions the completion of the road 
 would be a blow at British business interests which the 
 British Government was resolved to prevent if possible. 
 
 The guarantees which the Turkish Government had made 
 to the entrepreneurs of the new railroad were obviously too 
 liberal, in view of its probable earning capacity for years 
 to come. It was clear that the finances of the Turkish 
 Government would be subjected to a severe strain to meet 
 the kilometric guarantee, and that in order to do this the 
 taxation would have to be increased. A part of the bur- 
 den was certain to fall upon British commerce, which was 
 very extensive in Turkey, and which, being — as the Brit- 
 ish alleged — better made and certainly more expensive than 
 the competing German commodities, would be less capable 
 of maintaining the foothold already won. The trade mark 
 "Made in Germany" was already pushing the British prod- 
 ucts hard enough in other parts of the world. If the Bag- 
 dad Railway was to increase the severity of German com- 
 petition, the British public would have none of it. 
 
 If, too, the kilometric guarantee were to increase fur- 
 ther the difficulties and confusion of Turkish finance, Brit- 
 ish investors, who held considerable interests in these re-
 
 The World War: 1914-1918 167 
 
 gions, had reason enough to desire to see the building of 
 the road checked. 
 
 There was still another reason for the British objections 
 to the completion of the line. Britain, as a maritime power, 
 had for years held the monopoly of the carrying and pas- 
 senger trade of the world afloat. In late years the develop- 
 ment of the German maritime power had threatened this. 
 Now the prospect of a partial diversion of travel from the 
 British merchant fleet plying through the Suez Canal to 
 India and the East was a further blow, alike intolerable to 
 the pride and the pocket-book of the British. 
 
 Economic considerations were equally powerful in preju- 
 dicing the French against the railway, even though the 
 company had in 1902 offered to assign to French capitalists 
 40 per cent, of stock, the same amount that had been re- 
 served for the Germans. The Bagdad Railway was a Ger- 
 man undertaking and the power for its management was 
 certain to be retained in German hands. It would inevit- 
 ably end in the establishment of German economic domina- 
 tion in the region which it traversed. The French had an 
 economic domination of their own along the Mediterranean 
 coast of Asia Minor from Smyrna to Beirut. For a time 
 they might be able to hold their own, because of their direct 
 access by waterways to this district, but in the end it was 
 realized that the German control of the all-important 
 territory covered by the railway, would seriously threaten 
 this influence if it did not annihilate it entirely. 
 
 The equable partition between Germany and France of 
 the trade of Turkey was a hopelessly Utopian proposal, for 
 there was no doubt as to the increasing importance of Ger- 
 many, not only in Constantinople but throughout Asia 
 Minor. The importance of maintaining French prestige in 
 the Orient was itself a commercial necessity, for out of it 
 an increase of commerce was to grow.
 
 168 The Economic Causes of Modern War 
 
 For centuries the French had held their own in this re- 
 gion, and had even built railways from the coast for short 
 distances into the interior, notably the Smyrna-Kassaba 
 line, which came under French influence in 1893, the Mer- 
 sina-Adana line, in which there were large French holdings, 
 the line from Jaffa to Jerusalem, which was exclusively 
 French and was built in 1892, the Beirut-Damascus line 
 (later extended north and south until it totalled 361 miles) 
 completed in 1910. 
 
 Railways projected by the French would have built up 
 a complete system touching the holy cities and reaching 
 the profitable passenger traffic of pious Moslems who are 
 quick at catching at western means of shortening the pil- 
 grimage to Mecca, which every good Mohammedan makes 
 at least once in his life. The French roads would have in- 
 cluded 1,000 miles of rail, and would have been almost as 
 ambitious as the German project. They had been designed 
 to spread French economic influence and to promote the 
 fortunes of French commercial houses; but the comple- 
 tion of the Bagdad road would necessarily lead to their 
 absorption and Germanization. 
 
 In ways even more direct, French prosperity would be* 
 affected. A great deal of the English travel to India went 
 by way of Marseilles instead of taking ship at Liverpool. 
 This meant that the travelers passed through most of 
 France on their way and this constant stream enriched the 
 French railways, hotels, and merchants by sums which were, 
 taken in aggregate, very considerable. But if the Bag- 
 dad Railway became a reality and evolved into the pro- 
 posed Berlin-to-Bagdad route, a large part of this travel 
 would be lost to France, for the tourists would then take 
 the more direct route by way of Ostend, Cologne, Munich, 
 and Vienna. The profits which the thrifty French were 
 accumulating would go to the hated Germans.
 
 The World War: 1914-1918 169 
 
 In Russia there were the gravest possible military rea- 
 sons why the Bagdad Railway should not be built. As 
 matters stood, Russia was in control of the theatre of a 
 possible war against the Turks. War vessels of the Black 
 Sea fleet could leave either Sebastopol or Odessa as a base, 
 and could appear before the defenses of Constantinople 
 within thirty or forty hours' hard steaming. In the event 
 of war, Russian attack by land could be directed against 
 Erzerum, Sivas, and Angora, and although this would in- 
 volve fairly long marches, the difficulties of transport in 
 the way of Turkish mobilization were such that the Slavic 
 armies could reach these strategic points in force before 
 the Turks could concentrate. The Bagdad Railway, es- 
 pecially if run via the northern route at first proposed and 
 then abandoned by reason of Russian protests, would 
 change all this and would make it possible for Turkish 
 forces to be concentrated with much more rapidity than 
 before. The value of Asia Minor as a reservoir of mili- 
 tary strength for the Sultan had hitherto been impaired 
 because of the difficulties involved in transport. In the 
 Russo-Turkish War in 1877 the Turkish 6th Army Corps 
 reached the line only after two months of forced marches, 
 with great loss of effectives, and too late to be of use. Had 
 the Bagdad road been in existence at that time, Russia 
 might have lost the war. 
 
 The new road struck also at Russian economic interests, 
 especially in view of the project for the construction of 
 a branch of the great Trans-Siberian Railway into the Cau- 
 casus. Great quantities of traffic would certainly be di- 
 verted from the proposed Russian railroad. As in the case 
 of all the other Powers, the increased German dominance 
 certain to result from the economic penetration of Turkey 
 and Asia Minor would serve to check what progress Rus- 
 sia had already made and to forbid all hopes for the future.
 
 170 The Economic Causes of Modern War 
 
 Even the allies of Germany were fearful of the Bagdad 
 scheme, which meant in the end German predominance 
 throughout the Balkans. Since the trend of Austrian eco- 
 nomic development was southward, the government looked 
 without favor on undue extension of German economic in- 
 fluence through the very lands where its own ambitions 
 lay. Italy, likewise, though not directly affected, had had 
 enough experience with the Salonika-Monastir line, Ger- 
 man-controlled throughout, and with German methods of 
 economic penetration as demonstrated in the Banca Nazi- 
 onale, which though Italian-owned was German-controlled, 
 to be fearful both of too great German preponderance and 
 of interference with Italian ambitions in Albania and es- 
 pecially as regarded Salonika. 
 
 In this way it came about, through the mutual eco- 
 nomic rivalry, greed, and distrust of the Great Powers and 
 of the merchants who are their citizens, that the Bagdad 
 Railway, in itself a great commercial enterprise with tre- 
 mendous capacities for usefulness, was the bane of 
 Europe for nearly twenty years. It is another illustration 
 of the working of economic pressure in international rela- 
 tions and the importance of economic highways. The route 
 which the railway followed was the key to the East which 
 all the Powers coveted. 
 
 AUSTRIAN AND ITALIAN ECONOMIC AMBITIONS 
 
 The economic relations of Austria before the World War 
 were closest with Hungary, her partner state in the Dual 
 Monarchy, and with her ally, the German Empire. Al- 
 though points of conflict between the German and Aus- 
 trian economic policies existed, economic partnership had 
 in the main been added to political alliance, — an arrange-
 
 The World War: 1914-1918 171 
 
 ment without which the Mittel-Europa scheme would have 
 been impossible. 
 
 Austria and Hungary, the two members of the Dual 
 Monarchy, are mutually complementary economic units, 
 Hungary being chiefly an agricultural and Austria chiefly 
 an industrial state. Between 1884 and 1891, nearly 84 per 
 cent, of Hungarian imports came from Austria, whilst 71 
 per cent, to 75 per cent, of Hungarian exports went to 
 Austria. In later years even this slight disproportion van- 
 ished, so that the statement could be made in November, 
 1906, that Hungary exported nearly 40,000,000 pounds ster- 
 ling of agricultural produce yearly to Austria, and received 
 in return almost the same amount of manufactured 
 products. 1 
 
 The disruption of the Dual Monarchy would be nothing 
 short of a catastrophe for Hungary, which is hampered in 
 her outlook to the sea and surrounded by other agricul- 
 tural states, which have no need for her cereals, cattle, and 
 other raw products. To a less extent, through the loss 
 of markets and the increase in the price of agricultural 
 products, Austria is equally bound to Hungary by eco- 
 nomic forces. Each is necessary to the other, and each 
 suffers the same difficulty in gaining access to the sea. 
 
 No more striking example than this could be found of 
 the importance of economics in promoting either peaceful 
 or hostile relations between states. In spite of their racial 
 differences and the very serious disagreements that at times 
 have arisen, these two dissimilar states are held together 
 by their very dissimilarity, the perfection with which each 
 is the economic complement of the other. The strength of 
 the economic bond in such a case serves only to empha- 
 size the power of economic rivalry, when it exists, in causing 
 and embittering the hostilities of nations. 
 
 1 Geoffrey Drage : Austria-Hungary, p. 202.
 
 172 The Economic Causes of Modern War 
 
 Like Germany, Austria looked southward for the future 
 development of her markets. An industrial state, she 
 found in the backward states of the Balkans lying at her 
 doors, the agricultural, non-industrial peoples whose prod- 
 ucts were of use to her and who could buy her own sur- 
 plus. To this end was directed the Austrian policy of con- 
 tinuous meddling in the Balkans, for the continuance of 
 supremacy there was all-important to her industries. 
 
 Cut off as Austria was from access to the sea, with only 
 a few ports on the Adriatic, the Balkans offered the most 
 accessible territory for economic penetration. The great 
 highway of the Danube led to the heart of their most fer- 
 tile regions. In the very nature of things, Austria could 
 not look for a world-wide commerce such as that of the 
 more fortunate states with more complete approach to the 
 great highways of the world. Even her efforts to secure 
 additional ports on the Dalmatian coast (although they 
 might, had they been successful, have lessened the friction 
 rising from her interference in the Balkans) brought her 
 inevitably into conflict with Serbia, equally desirous of out- 
 let in the same territories, and with Italy, seeking them as 
 a base for entrance into Balkan markets. 
 
 In Serbian trade the Austrians had won almost com- 
 plete supremacy during the last years of the Nineteenth 
 and the first years of the Twentieth Century. So com- 
 plete was the dependence of the Serbs upon their north- 
 ern neighbor that they bought from her almost everything 
 from scientific instruments to packing cases. Only in their 
 purchases of war materiel, to the disgust of the iron-mas- 
 ters of Skoda, did they persist in turning to France. 
 
 It was the completeness of their economic mastery over 
 their smaller neighbor that made it desirable in Austrian 
 eyes that the Serbians should remain cut off from the sea. 
 Quite aside from the fact that they themselves coveted the
 
 The World War: 1914-1918 173 
 
 same seacoast for which the Serbians hoped, was the im- 
 portant consideration that the granting of a port to Serbia 
 would mean the necessity of sharing profits of Serbian trade 
 with the merchants of other nations, who would then be 
 able to come in by sea. This trade monopoly was the 
 mainspring of Austrian policy towards Serbia, though it 
 was complicated by the fear of irredentism among the 
 Slavic subjects of the Empire. It explains the interference 
 after the Bulgarian victory at Slivnitsa in 1885, the constant 
 balking of Serbian struggles to reach the sea, and the evi- 
 dent desire to absorb the whole territory of the little state 
 if opportunity offered. 
 
 In 1905 the monopolists went a step too far. At that 
 time Austria-Hungary was receiving 90 per cent, of the 
 Serbian exports, mainly agricultural products, cattle, and 
 pigs. Incensed at the negotiation of a commercial treaty 
 with Bulgaria by which tariff duties between the two states 
 were to be abolished, as well as by the continued Serbian 
 orders from the French arsenal at Creusot, the Austrian 
 Government refused to renew the commercial treaty which 
 was the foundation of Serbian foreign trade. The frontier 
 remained closed for more than two years. Serbian ruin, of 
 which the more powerful northern neighbor was confi- 
 dent, was averted by the combined efforts of the Serbian 
 Ministry of Commerce, the Skuptshina (Parliament), and 
 the whole people. New outlets were found by way of the 
 Danube and the Turkish railway to Salonika. A single 
 French business man guaranteed the purchase of 150,000 
 pigs a year. 1 France, Italy, Belgium, Germany, and Egypt 
 began to replace the Austrian market. This was the be- 
 
 1 Yves Guyot: Causes and Consequences of the War, p. 19. There is 
 a further discussion of this incident by the same author, "La Question 
 d'Orient et les Confiits Economiques," Journal des Economistes, xxxvi: 
 178-198, N. '12.
 
 174 The Economic Causes of Modern War 
 
 ginning of Serbian economic independence, but it was only 
 a beginning; and it added to the Austrian determination 
 to restore the old dependence. 
 
 Commercial success in the other Balkan states, though 
 not approaching the domination which obtained in Serbia, 
 had been very great. Although in Bulgaria the seacoast 
 made it possible for British commerce to dispute the field, 
 the Bulgarians bought from Austria their iron, bags, jew- 
 elry, crockery, and similar goods, as well as agricultural 
 machinery and war materiel, both important articles of 
 trade in the Balkans. Rumania bought machinery and tex- 
 tiles, paying for them with the proceeds of her Austrian 
 sales of such agricultural products as corn and butter. The 
 Montenegrin trade alone failed to reach large proportions, 
 principally because the country was too small to make trade 
 profitable. 
 
 Important though their own commerce was, the Balkans 
 were equally important as the overland route to Asia Minor. 
 Austrian policy was directed to keeping the little Sanjak 
 of Novi-Bazar in Turkish hands in order that the "BBB," 
 running all the way through friendly territory, might open 
 the way to increasing trade. The subsequent Serbian seiz- 
 ure of this little strip of land made a future war for its re- 
 covery almost certain. Austrian exports to Turkey and the 
 Near East consisted of manufactured goods, textiles, glass- 
 ware, ready-made clothes, fezzes, sugar, woollens, and 
 petroleum; and the imports in return were principally to- 
 bacco, opium, skins, and maize. The progress of both 
 Austrian and Hungarian products was so rapid that in the 
 last years before the Balkan Wars their sugar began to 
 supplant that from Russia, and the jute trade, which had 
 formerly been controlled by Scotch and Indian merchants, 
 was also falling into their hands. The sales of Hungarian 
 petroleum rivalled those of the Russian wells. Thus Aus-
 
 The World War: 1914-1918 175 
 
 trian policy in the Balkans clashed with that of Russia, 
 and Great Britain, although the political motives of the 
 Slavic Power were of more importance than the economic. 
 
 With Italy, the partner of Austria and Germany in the 
 Triple Alliance, the clash of interests was more evidently 
 economic. The developing Italian industries looked across 
 the narrow Adriatic to the Balkans for a part of their mar- 
 kets. It was as a base for economic penetration of the 
 agricultural lands lying to the east that Italy desired to 
 possess the Dalmatian coast, not merely as a site for naval 
 bases, which would give supremacy in the Adriatic. In- 
 deed, even the desire to make this sea an Italian lake was 
 as much economic as strategic in its origin, for such a con- 
 summation would have crippled Austrian trade in the Bal- 
 kans and the Near East, whilst giving a proportionate ad- 
 vantage to Italian trade. Once Italy's power was estab- 
 lished along this important strip of territory, railways run- 
 ning into the heart of the Balkans would soon be carrying 
 the surplus products of her industry. 
 
 It was for similar reasons that Italy desired Trieste and 
 as much of Kustenland as she could obtain. Possession of 
 this port would put the Italians in a position to dictate the 
 terms of their rival's exports in time of peace, and to cut 
 them off entirely in time of war. Possession of either Dal- 
 matia or Trieste would go far toward securing commercial 
 supremacy. Possession of both by either Power would put 
 the other at its mercy. Desire for national union urged 
 the Italians on to Trieste. In both Dalmatia and Trieste 
 the strategic considerations were of the highest importance ; 
 but it was economic motives that were paramount. 
 
 What has been true of the lesser wars of the Nineteenth 
 and Twentieth Centuries may be seen to be true also of 
 this latest and greatest of wars. It was rooted in economic 
 causes. The political rivalries, the naval rivalries, the
 
 176 The Economic Causes of Modern War 
 
 colonial rivalries are only the expression of the underlying 
 economic struggle. 
 
 Through the whole web and woof of the diplomacy which 
 leads up to the final war, we have the thread of economic 
 conflict. Economic questions were perpetually under dis- 
 cussion in the diplomatic interchanges of the years before 
 the war; and even when the stakes at issue seem entirely 
 political or military, they can usually be seen to have an 
 economic origin. The statesman who seeks to extend the 
 boundaries of a colony to include some especially valuable 
 territory, the soldier who demands a strategic position to 
 defend that colony, or the sailor who asks for a naval base, 
 — all are seeking, consciously or unconsciously, the same 
 thing: relief from economic pressure by further expansion.
 
 CHAPTER V 
 
 THE PREVENTION OF WAR BY INTERNATIONAL FINANCE 
 
 Four things make modern warfare possible: man-power, 
 armaments, food, and finance. It is obvious that without 
 men, arms, and food, no wars could ever have been waged ; 
 and it is equally evident that these three essentials can 
 be secured only by the state that can raise the necessary 
 money. For soldiers, even though they be conscripts, must 
 be paid ; and the food that they eat and the weapons that 
 they use, must be bought. In earlier days, because of the 
 relatively small forces in the field and their relatively un- 
 pretentious equipment, the cost of arms was less and the 
 financial problem correspondingly simple; but the enor- 
 mous cost of war on the vast modern scale makes finance 
 of supreme importance. Without money and credit, no 
 state can go to war today. So much, at least, is clear. 
 
 The relation of finance to war has never been completely 
 understood, and the views upon the question prevailing 
 today are, in their extreme forms, widely contradictory. 
 Mr. Norman Angell would have us believe that sound busi- 
 ness sense, on a profit-and-loss basis, requires the aboli- 
 tion of war. Extremists on the other side defend the thesis 
 that the malevolent power of greedy bankers, who see in 
 war a chance for gain, stands behind the diplomats in every 
 outbreak of hostilities. Writers of this school aver that 
 international finance has become so powerful that states- 
 men are helpless to enter upon a war in the face of oppo- 
 sition from the financiers; whereas another group, without 
 denying either the power of international financiers or the 
 
 177
 
 178 The Economic Causes of Modern War 
 
 degree of dependence of one state upon another prevailing 
 in the field of international finance, assert that finan- 
 ciers and statesmen together may drift helplessly into a 
 war which none of them desire, but which they are power- 
 less to avoid. 
 
 In spite of the contradictory character of these views, it 
 is easy to see that international finance, by virtue merely 
 of the enormous complexity of its inter-relations, is of ne- 
 cessity a stabilizing influence in the relations between 
 states; and that in general its influence — which upon occa- 
 sion is tremendous — is likely to be used for the preserva- 
 tion of peace, because of the chaos to which war on the 
 modern scale necessarily reduces the whole intricate sys- 
 tem. 
 
 The extent to which the general staff of a modern army 
 considers the money market may be seen in the elaborate 
 planning which has been given to the financial support of 
 the army prior to most of the modern wars of history. 
 Probably the best known example is the German reserve 
 of gold which was for years hoarded in the Julius Tower 
 at Spandau, and which is believed to have been greatly 
 increased in the years preceding the outbreak of the war 
 in 1914. This immense gold reserve, which amounted to 
 6,000,000 pounds, mostly from the French indemnity after 
 the War of 1870, remained at Spandau until 1913, when 
 it was transferred to the Reichsbank at Berlin, and de- 
 posited there together with 12,000,000 pounds in gold and 
 silver, to be kept apart from the commercial reserves of 
 the bank and used only in time of war. 
 
 It is certain that the German General Staff had given 
 a great deal of thought and study to the financial aspects 
 of the Great War. War costs, war loans, and war expenses 
 had been carefully taken into consideration, as well as the 
 probable effect of a declaration of war upon the money
 
 The Prevention of War by International Finance 179 
 
 market, at the same time that the problems usually con- 
 sidered more strictly military were being worked out. 
 
 This is by far the most elaborate example of financial 
 preparation for war, but there are numerous others, as well 
 as examples of the disastrous results of failure to provide 
 financially, in time of peace, for possible wars. 
 
 Members of Lord Elgin's Commission on the South 
 African War expressed the opinion that if the War Office 
 had had at its disposal the sum of 10,000,000 pounds a few 
 months before the outbreak of hostilities, to be spent with 
 the consent of the Cabinet as the only necessary sanction 
 (thus avoiding the publicity attendant upon Parliamentary 
 action) the preparations that could then have been made 
 would have cut down the cost of the war by 100,000,000 
 pounds, and might have prevented hostilities entirely. As 
 is well known, the declaration of war, when it did come, 
 found the British hopelessly unprepared in South Africa and 
 with a miserably inadequate force ready to take the field. 
 
 The painstaking quality of the long preparation of the 
 Japanese for their war upon Russia in 1904-1905, was shown 
 in nothing more characteristically than in the thought and 
 foresight that they expended in their financial plans for 
 the struggle. The war between Russia and Japan was de- 
 termined by economic and financial considerations at every 
 step. It is well known that in spite of her military and 
 naval successes Japan must have succumbed to Russia in 
 the end for lack of funds, had not the disorganized con- 
 dition of the larger state forced her to sue for peace while 
 the troops of the Mikado were still victorious. Largely 
 because the Russian treasury was still unexhausted, whereas 
 the Japanese knew their own financial shortage, and be- 
 cause the English bankers gave signs of being unwilling to 
 make further loans, the victor's plan of making the enemy 
 pay by indemnity for the cost of his defeat had to be aban-
 
 180 The Economic Causes of Modern War 
 
 doned. For financial reasons, Japan did not wish to con- 
 tinue the struggle. 
 
 Long before the negotiations with Russia which preceded 
 hostilities had reached a critical stage, the Japanese De- 
 partment of Finance had elaborated its program. At the 
 commencement of the war the Bank of Tokio held a total 
 of 11,696,000 pounds, as compared with 105,000,000 pounds 
 held by the Bank of Russia and the Imperial Treasury- 
 combined. Although the cost of the war to the Japanese 
 was 200,000,000 pounds, the Bank of Japan still retained 
 almost the same reserve as at the beginning of the war, 
 10,444,000 pounds, a decrease of only a little more than a 
 million after more than a year of war against a larger and 
 incomparably a richer foe. During the latter part of May, 
 1904, a temporary diminution occurred and the reserve 
 reached 6,800,000 pounds; but the government, while mak- 
 ing every effort to withdraw as little gold as possible from 
 London, kept the reserve of their own bank replenished 
 constantly, and made every effort to prevent any possible 
 depression of the money market. 1 
 
 Although the Russian preparation for the war had been 
 characterized by none of the foresight of the Japanese, the 
 value of a large gold reserve in time of war was completely 
 demonstrated. Because of the millions of gold which they 
 held, the Russians were able to borrow as cheaply in France 
 and Germany as the Japanese were able to borrow in Eng- 
 land. It was the incompetency of the military and naval 
 service and the disorganization within the government and 
 among the people which defeated Russia, It is probable 
 that had the war continued, the advantages of the larger 
 reserve would have been more and more convincingly dem- 
 onstrated. 
 
 1 These figures are derived from an article by Edgar Crammond: 
 "Financial Preparation for War," Nineteenth Century: 74:929: N., '13.
 
 The Prevention of War by International Finance 181 
 
 The importance of finance to military leaders results from 
 the necessity of borrowing huge sums for any considerable 
 war because of the tremendous costs of modern armaments. 
 In the last years of the Great War the expenditures of the 
 Allied Powers were so enormous that their own financial re- 
 serves were exhausted; and they were forced to turn first 
 to Great Britain and then, when even the resources of Lon- 
 don, the financial capital of the world, began to fail, to 
 the United States, especially after her entrance made Amer- 
 ican resources available. In similar fashion, the Central 
 Powers were forced to turn to Germany. The vastness of 
 modern war expenditures, and the extent to which the richer 
 nations were compelled to assist their allies, may be seen 
 in the following table: l 
 
 Gross Costs Among Active Belligerents 
 
 Gross Advances to Allies Net. Cost 
 
 United States $32,080,266,968 $9,455,014,125 $22,625,252,843 
 
 Great Britain 44,029,011.868 8,695,000,000 35,334,000,000 
 
 Rest of Empire ... 4,493,813,072 *** 4,493,813,072 
 
 France 25,812,782,800 1,547,200,000 24,312,782.800 
 
 Russia 22,593,950,000 *** 22,593,950,000 
 
 Italy 12,413.998.000 *** 12,413,998,000 
 
 Other Allies 3,963.867,914 *** 3,963.867,914 
 
 Total $145,387,690,622 $19,697,214,125 $125,690,476,497 
 
 Germany $40,150,000,000 $2,375,000,000 $37,775,000,000 
 
 Austria-Hungary .. 20,622,960,600 *** 20,622,960,600 
 Turkey and Bul- 
 garia 2,245,200,000 *** 2,245,200,000 
 
 Total 63,018,160,600 2,375,000,000 60,643,160,600 
 
 Grand total ...$208,405,851,222 $22,072,214,125 $186,333,637,097 
 
 The cost of putting in the field a single division has been 
 estimated by the General Staff of the United States Army 
 as follows: 2 
 
 1 E. L. Bogart: Direct and Indirect Costs oj the Great World War, p. 
 267. 
 2 War Department Document No. 527 (W. C. D. 8121-39).
 
 182 The Economic Causes of Modern War 
 
 One Infantry Division 
 
 Signal supplies $293,751.35 
 
 Quartermaster supplies 3,283,121.37 
 
 Engineer supplies 18,439.67 
 
 Ordnance supplies 4,435,771.20 
 
 Medical supplies 110,059.09 
 
 Total $8,141,142.68 
 
 One Cavalry Division 
 
 Signal supplies $283,456.37 
 
 Quartermaster supplies 4,716,974.81 
 
 Engineer supplies 17,070.77 
 
 Ordnance supplies 3,892,553.94 
 
 Medical supplies 135,145.92 
 
 Total $9,045,201.81 
 
 The cost of war, being so tremendous, will tax the finan- 
 cial resources of even the wealthiest nation ; and if the war 
 is to continue for any considerable period, the share of in- 
 ternational finance in keeping armies in the field will be- 
 come so important that the bankers, if they wish, will be 
 able to control the duration of hostilities. 
 
 The astonishing extent to which the modern financial 
 world is inter-related and inter-dependent (it is said that 
 more than twenty-five per cent, of the world's securities 1 
 are held by the bankers of nations other than those of the 
 corporations and governments issuing the securities) in it- 
 self exerts a natural stabilizing influence upon international 
 relations. 
 
 The large amounts of the investments which have been 
 placed by European investors in countries other than their 
 
 la The total foreign investments of the surplus-investing countries of the 
 world aggregate between $26,000,000,000 and $29,000,000,000. As the world's 
 negotiable securities according to M. Alfred Neymarck, were, in 1907, ap- 
 proximately $111,000,000,000, it will be seen that over 25 per cent, of the 
 investments of different nations is in bonds and stocks of the outre-mer 
 class." Charles F. Speare: "Foreign Investments of the Nations," North 
 American Review: 190-83: Jy., '09.
 
 The Prevention of War by International Finance 183 
 
 own, is partly due to a desire in certain countries to escape 
 taxes on domestic securities; but it is also due to the finan- 
 cial necessities of the case. In France, where saving has 
 proceeded much faster than expenditure, owing to the na- 
 tional thrift, foreign investment is an established policy. 
 
 As German colonial development began soon after the 
 Franco-Prussian War, the Germans placed their invest- 
 ments in numerous foreign countries, employing the billion 
 dollar indemnity as a base of capital supply for their pur- 
 pose. The business men of the German Empire carried out 
 this policy to a greater degree than those of any other na- 
 tion, and sometimes came near recklessness in their willing- 
 ness to invest in out-of-the-way corners of the world. Un- 
 able to find a sufficient field for investment in their own 
 colonies, they were often able to find profitable fields even 
 in the colonies of their enemies. Five years before the 
 Great War began, the German investments abroad were es- 
 timated at $5,000,000,000, and they grew rapidly in the 
 years immediately preceding the war. 
 
 The world-wide expanse of British colonies has made it 
 possible for a good deal of the Empire's capital to be kept 
 under the British flag, and in general this capital has been 
 invested only where populations were increasing and the 
 purchasing power was growing. This condition is also 
 partly a result of the immense amount of exporting done 
 by the British and of the fact that London is the centre 
 of the world's money market. At the time when the Ger- 
 man foreign investments had reached $5,000,000,000, the 
 British investors were enjoying an annual income of $500,- 
 000,000 from a total of $14,000,000,000 investments 
 abroad. 1 
 
 1 These and the following figures are in the main derived from an article 
 by Charles F. Speare: "Foreign Investments of the Nations," North Amer- 
 ican Review: 190:82-92: Jy., '09.
 
 184 The Economic Causes of Modern War 
 
 The principal British fields of investment may be indi- 
 cated about as follows: 
 
 British Investments Abroad 
 
 United States and Canada $5,850,000,000 
 
 Africa 2,675,000,000 
 
 Asia 2,255,000,000 
 
 Australia 1,735,000,000 
 
 Europe (Continental) 1,025,000,000 
 
 South America 750,000,000 
 
 The excess of saving over expenditure which has resulted 
 from the characteristic thrift of the French has brought 
 to the republic a large share of foreign investment. This 
 has not only been a matter of quid pro quo, but an outcome 
 of the necessities of the case. The desire to avoid the con- 
 stantly increasing taxation on securities held at home, and a 
 general feeling that the spread of Socialism might even- 
 tually threaten capital invested within the bounds of the 
 republic, has also led to foreign investment. 
 
 The widely distributed area in which the $7,000,000,000 
 of French foreign investments were placed only a few years 
 before the European war broke out, serves to indicate the 
 wide distribution of French influence and is one reason 
 why the Paris Bourse has always been so easily affected by 
 rumors of war. The greater share of French money has 
 gone to Russia, because of the cordial relations which have 
 existed between the two countries since they came to real- 
 ize their common danger from the growing power of the 
 German. How very widely these investments are scat- 
 tered about the globe may be observed in the following 
 table : 
 
 French Investments Abroad 
 
 Russia $1,750,000,000 
 
 Egypt and Suez 600,000,000 
 
 Spain and Cuba 500,000,000 
 
 Austria-Hungary 600,000,000 
 
 Turkey 450,000,000
 
 The Prevention of War by International Finance 185 
 
 Argentine, Brazil, and Mexico 500,000,000 
 
 Italy 400,000,000 
 
 Great Britain 250,000,000 
 
 Portugal 200,000,000 
 
 U. S. and Canada 350,000,000 
 
 Belgium, Holland and Switzerland 225,000,000 
 
 South Africa 200,000,000 
 
 China, Japan 150,000,000 
 
 Germany 100,000,000 
 
 Sweden, Norway, and Denmark 100,000,000 
 
 Other states 700,000,000 
 
 The investments of the United States have been prin- 
 cipally confined to the western hemisphere. Mexico, South 
 America, and the West Indies have received the lion's share 
 of American capital that has been invested abroad, — not 
 so large a proportion of the country's wealth as is the case 
 in European countries, because of the large field for in- 
 vestment at home, due to the continuing development of 
 a country still comparatively new. The few hundred mil- 
 lions which American financiers invested in Europe before 
 the outbreak of the war gave the balance of financial power 
 to the United States, were more than offset by the heavy 
 investments of Europeans in this country. 
 
 Money is international in the modern world because in 
 all civilized countries the common basis is gold. A credit 
 which is based on gold is an international credit; and a 
 commerce which is based on money and on credit, there- 
 fore ultimately on gold, is international. This common 
 bond among the nations is made stronger by the astonish- 
 ingly complex system of agencies through which the money, 
 credit, and commerce of the world are bound up together. 
 The dollar, the pound, the franc, the mark, the ruble, and 
 the crown recognize no frontiers. 
 
 Because of the degree of this interdependence, a disturb- 
 ance in the peace of the world, no matter where, is certain
 
 186 The Economic Causes of Modern War 
 
 to be reflected in the Bourses of Europe. The most recent 
 example, prior to the Great War, is to be found in the Bal- 
 kan disturbances in 1912, when the mere rumors of the 
 mobilization of the little Balkan states were sufficient to 
 depress the money market in all the great European powers. 
 On the first of October there was a severe panic on the 
 Berlin Bourse and another in Vienna, which later extended 
 to Paris. London at first stood firm in spite of the severe 
 pressure that resulted from the difficulties on the Conti- 
 nent, but when Montenegro began hostilities the series of 
 panics in Paris, Berlin, and Vienna resulted in a wave of 
 selling against which London could not stand, so that on 
 Saturday, October 12th, even the English money market 
 had to succumb. 
 
 In view of the disastrous results of the minor warfare of 
 the Balkans, which was the outcome of the financial inter- 
 dependence of the world and also of the tangle of alliances 
 and economic rivalries of Europe, the world-wide financial 
 confusion which resulted when the Great War broke out 
 in 1914 is not surprising. The Balkan scare had left the 
 fear of war heavy among European financiers, so that there 
 was nearly a panic in Vienna after the murder of the Arch- 
 duke Ferdinand, which was only averted because the Mon- 
 day following the murder (committed on Sunday) was a 
 holiday, giving time to take preventive measures. Between 
 July 2nd and 13th there was very heavy selling and a de- 
 cline on the 20th. Three days later there was a war panic 
 in both Berlin and Paris, with reflexes in London and New 
 York. The Vienna exchange had to close the day before 
 the Austrian declaration of war on Serbia, and the Mon- 
 treal, Toronto, and Madrid exchanges closed the day of the 
 declaration (July 28th). On the 29th the Berlin Bourses 
 discontinued quotations and the next day the panic had 
 reached London and the Bourses were closed in Petrograd
 
 The Prevention of War by International Finance 187 
 
 and all the South American countries. The London Stock 
 Exchange and the New York Stock Exchange had to close 
 on July 31st. 
 
 Even though the capacity of international finance for 
 preventing wars be doubted, these facts make it evident 
 that it is seldom to the advantage of financiers to encour- 
 age them. The results are disastrous because of the vast 
 and intricate network of international investments and the 
 danger which even the prospects of war can create. Finan- 
 cial relations, therefore, tend to exert a stabilizing influence 
 upon the political relations of the states of the world. In- 
 ternational finance has certainly often failed to prevent 
 wars; but because of its international character it will or- 
 dinarily seek to keep peace unbroken. 
 
 So close are the bonds which unite the nations that an 
 eminent British statesman once suggested that in the event 
 of hostilities between England and the United States, the 
 British might begin their efforts to injure American com- 
 merce and finance by burning the warehouses at Liver- 
 pool, while the Americans retaliated in similar fashion on 
 the warehouses in New York! 
 
 In spite of the writings of a certain school of theorists 
 who have tried to make their readers see the financier as a 
 sort of Mephistopheles forever at the statesman's elbow 
 urging him on to war as a profitable investment, and in 
 spite of the undoubted effects of economic rivalry in creat- 
 ing war, there is certainly another side to the picture. No 
 state in the modern world can wage war without the as- 
 sistance of the international financiers. Although financier 
 and statesman may be carried together into a war which 
 they cannot prevent in spite of the probable wrecking of 
 the commercial life of the nation, the weight of the finan- 
 cial interests is likely to be against war if only because of 
 the importance of the money interests at stake.
 
 188 The Economic Causes of Modern War 
 
 Yet it is quite clear that international finance has had a 
 good deal to do with the desires for concessions and spheres 
 of influence which have caused so many wars. It is also 
 certain that in many cases when a refusal to grant war 
 loans to foreign nations would have halted hostilities, the 
 financiers have seen the opportunity for a good investment 
 in foreign governments' bonds and have not chosen to ex- 
 ercise their power. One may imagine the probable predica- 
 ment of Japan in 1904 had the English financiers refused 
 to float her loans; and there is more than a suspicion that 
 the ending of the war came in part because credit was be- 
 ginning to fail. 
 
 Before the World War it was thought that the magni- 
 tude of the commercial and financial relations between 
 England and Germany might prevent a war between the 
 two states in spite of the many causes of increasing fric- 
 tion. The distinguished English statistician, Edgar Cram- 
 mond, could write in November, 1913, less than a year be- 
 fore the outbreak of hostilities: x 
 
 "London accepting firms lend enormous sums for the purpose 
 of financing the trade of Germany, Italy, Austria, and other 
 European countries. By means of acceptances, London finances 
 one Power alone (Germany) to the extent of about 70,000,000 
 pounds at any given moment. This money has been borrowed 
 from the English Joint Stock Banks by the accepting houses, 
 and if war should break out, say, between Great Britain and 
 Germany, the London accepting firms would be placed in a 
 highly dangerous position. They would have made themselves 
 liable for the payment to the Joint Stock Banks, within, say, 
 three months of the outbreak of war, of the sum of 70,000,000 
 pounds against bills drawn on German account. The accepting 
 houses could not, of course, pay the whole of this vast sum unless 
 they received it in the ordinary course of business from their 
 
 1 Edgar Crammond: "Financial Preparation for War," Nineteenth Cen- 
 tury: 74:939: N., '13.
 
 The Prevention of War by International Finance 189 
 
 German clients. In the circumstances named, it is more than 
 doubtful whether the German clients could or would pay this 
 amount and in that event what would be the position of the 
 London accepting firms and the English Joint Stock Banks?" 
 
 Three years earlier the same writer had prophesied ex- 
 actly what came true ten years after his prophecy ; namely, 
 enormous German losses from an unsuccessful war with 
 Great Britain: 1 
 
 "War with Great Britain, if unsuccessful, would involve enor- 
 mous losses to the German people. ... A very large amount of 
 British capital is employed in financing the trade of the German 
 Empire; and the economic ties which bind the two countries are 
 of the most intimate character. A rupture of these relations 
 would prove disastrous to both countries." 
 
 Read in the light of subsequent events, these passages 
 serve to show the over-reliance that was placed upon the 
 financial bond. None the less, the effect of this inter-re- 
 lation in the world's finances has been felt on the side of 
 peace on several occasions. 
 
 Although international finance has failed on numerous 
 occasions to prevent war, and has on equally numerous oc- 
 casions made no especial effort to prevent it, it has also 
 been successful in checking hostilities before they began. 
 The preponderant influence of the United States in South 
 American countries is not entirely due to the armed might 
 of her army and navy; for it is certainly true that the 
 enormous investments of American business concerns in 
 those countries make for the maintenance of peace, partly 
 through the power of finance, and partly because of the 
 implied threat of intervention should the holdings of Amer- 
 ican capitalists come to harm. The important point for 
 
 1 Edgar Crammond: "Finance in Time of War," Quarterly Review, 
 213:323, O., 10.
 
 190 The Economic Causes of Modern War 
 
 present purposes, is the fact that international finance in 
 the western hemisphere is certainly operating to avoid war. 
 
 The possibility of another aspect of American finance in 
 the countries of South America is, however, only too fa- 
 miliar. It is well known that American financial interests 
 have repeatedly been powerful in urging the intervention 
 of the United States in Mexico, at the certain expense of 
 a long and bloody war. Other of the more powerful com- 
 panies engaged in South American trade have been sus- 
 pected both of fomenting revolution and of attempting to 
 use naval power to further their own interests once dis- 
 order has begun. 
 
 Instances are not lacking in European history of the 
 influence of international finance, either in postponing, lim- 
 iting, or preventing war altogether. Credits withheld from 
 Philip II by the merchants of Genoa, as a result of the 
 persuasion of English merchants, at the time when the 
 outfitting of the Spanish Armada was in progress, delayed 
 the sailing of that formidable fleet for a year, during which 
 the English preparations for meeting it had progressed so 
 far that it could be defeated. These early international 
 financiers, to be sure, did not prevent the war, yet not only 
 did they postpone it, but they also shortened its duration 
 and directly affected its outcome. 
 
 What could be done three hundred years ago when every 
 country was more nearly self-sufficient than any country 
 is today, both economically and financially, can be accom- 
 plished much more readily and completely at present. The 
 coldly commercial motives (without considering others) 
 which urge financiers to undertake such action are far more 
 powerful, now that the possibilities for the unsettling of 
 commerce and finance by war are so greatly increased, and 
 now that the destructiveness and costliness of war are so 
 much greater.
 
 The Prevention of War by International Finance 191 
 
 Even in the middle of the Nineteenth Century, Napoleon 
 III had to give up his plans to undertake the expulsion of 
 the Austrians from Italy, because the mere rumor of the 
 proposed campaign caused a panic on the Bourse. Nearly 
 half a century afterward the resentment of the French over 
 colonial friction with the English in the Sudan and Cen- 
 tral Africa was palpably allayed by the rise in value of 
 Egyptian bonds, due to the British occupation. The 
 French investments in these securities had been very heavy. 
 When it is considered that at the time of the Fashoda in- 
 cident (1898), public opinion in France would have sup- 
 ported a war with England had the internal condition of 
 the republic made it possible, but that within six years it 
 had been modified sufficiently to permit the Entente Cor- 
 diale to be established, the possibilities of international 
 finance in the pacification of public opinion and in pre- 
 venting war become evident. 
 
 One of the most recent examples of the prevention of 
 war by financial influence is the action of the French bank- 
 ers at the time of the war scare after the Agadir incident 
 in 1911. The precise details of the transactions which went 
 on at the time are shrouded in a businesslike reticence, 
 but the essentials are sufficiently known to make it pos- 
 sible to deduce with accuracy what occurred. 
 
 As the German attitude over Morocco became more and 
 more threatening and the prospect of a European war was 
 imminent, the French bankers began quietly to withdraw 
 their enormous investments in Germany, continuing this 
 process until the economic pressure reached such a stage 
 that the situation was relieved. So severely were the ef- 
 fects of this pacific financial maneuvre felt in Germany 
 that many business houses were on the point of failure, 
 until the Reichsbank came to the rescue. 
 
 The gunboat "Panther" had been sent to Agadir on July
 
 192 The Economic Causes of Modern War 
 
 1st, initiating a crisis which involved all of political, mili- 
 tary, naval, and financial Europe. German industrial en- 
 terprises, already heavily in debt to France, and having 
 been accustomed to meet their growing needs with further 
 borrowing, found themselves by September and October in 
 need of 300,000,000 francs, when all French credit was re- 
 fused them. They were compelled to turn to the United 
 States and to pay from six to seven per cent, for money 
 which they might ordinarily have borrowed from French 
 banks at three and four per cent. 1 
 
 This example of the characteristic French method of 
 meeting a strained situation in international affairs — "rat- 
 tling the purse" as opposed to the characteristic tactics of 
 the German Empire in "rattling the sabre" — serves to show 
 what can be accomplished by a group of able, resolute, and 
 patriotic financiers, holding the right investments, at a 
 moment of extreme national peril. 
 
 The dual role which international finance plays is shown 
 in this incident by the fact that it is also quite probable 
 that other financial interests, both French and German, 
 may have had a great deal to do with precipitating this 
 very crisis for their own ends. Socialists alleged, during 
 the progress of the crisis, that a secret understanding ex- 
 isted between certain French and German financiers, and 
 that the government was allowing itself to be made a cats- 
 paw. 
 
 The French, because of their large foreign investments 
 (larger, probably than the British, since many of these are 
 not strictly foreign but merely colonial) and also because 
 a large part of their investments are in the bonds of other 
 governments, can exert a greater pressure than most other 
 nations. The influence that French finance could exert 
 over Russia in the years before the war is evident; and 
 
 *W. M. Fullerton: Problems of Power, p. 216.
 
 The Prevention of War by International Finance 193 
 
 there was a similar power of the purse among the Balkan 
 nations. 
 
 The nature of this financial power had been illustrated 
 before Agadir in the flare-up in the Near East in 1909, 
 when the balance of power remained in Paris because of 
 the action of the French financiers in demanding peace as 
 a quid pro quo for their relief of the prospective belliger- 
 ents in their time of financial stress. A journalist com- 
 menting on these incidents at the time observed that: 
 "France could almost dictate, if she wished, the political 
 policies of half a dozen European countries, the bulk of 
 whose debt she holds." 1 At the time of the Balkan scare 
 of 1912, French loans to Rumania, Bulgaria, and Serbia 
 aggregated 1,000,000,000 francs. 2 
 
 In the recent friction between China and Japan, the 
 Chinese, knowing their military impotence as matters 
 stood, have had recourse to economic and financial pres- 
 sure. Persisted in unofficially in spite of edicts from Pekin, 
 this pressure did succeed in producing a mitigation of the 
 rigors of Japanese policy. In South China, where the 
 measures were most effective, Japanese imports fell in Oc- 
 tober, 1919, to 87,000 yen as against 611,000 yen for the 
 same month of the previous year. 3 No industrial state can 
 withstand such pressure. 
 
 It is clear that international finance, by its mere com- 
 plexity, exerts an immense influence in stabilizing the 
 relations between nations, and that if circumstances are fa- 
 vorable and the financiers involved are willing, it can pre- 
 vent war, seeing it has already done so on several occasions. 
 
 Impressed with these undeniable facts, however, numer- 
 
 1 Charles F. Speare: "Foreign Investments of the Nations," North Amer- 
 ican Review: 190:92: Jy., '09. 
 
 2 L' Information, January 10, 1913. 
 
 'Charles H. Sherrill: Have We a Far Eastern Policy? p. 265.
 
 194 The Economic Causes of Modern War 
 
 cms writers have expected too much of the financier. A 
 writer in the ardently pacifist New York Independent, com- 
 menting on the Agadir affair, wrote: 1 
 
 "It is becoming every day more clear that the great financial 
 interests of the world can 'hold up' war when they once make 
 up their minds to do it. We do not overlook the fact that ru- 
 mors of war . . . instantly exert a depressing influence upon 
 financial operations. . . . 
 
 "What is chiefly needed today is a policy of daring and resolu- 
 tion on the part of the leaders of finance, industry, and public 
 opinion. . . . The moment that the great financial interests say 
 the word, it will become suicidal for any nation, however obsessed 
 with notions of its own greatness, to break the peace." 
 
 The very incident upon which this journal was com- 
 menting, however, illustrates both of the ways in which 
 international finance may be of influence in international 
 relations. There is reason enough for believing that finance 
 had much to do alike with provoking and allaying this 
 crisis. 
 
 It is a more just view to regard international finance 
 as either a safeguard or a menace to peace, according to 
 circumstance. It is a powerful force, but it is a force that 
 is in the hands of its controllers, the bankers, and it may 
 make either for peace or for war, as they desire. Invest- 
 ments in the bonds of a backward nation, as in the case 
 of Egypt, may well lead to hostilities when it becomes im- 
 possible for the creditors to collect without the armed as- 
 sistance of their governments. 
 
 The view sometimes expressed, that the destruction of 
 the financial system of an invaded state would react so 
 powerfully upon the aggressor as to ruin his own finances, 
 falls to the ground when it is considered that there is no 
 real reason why the financial and banking system of an 
 
 independent: 71:104-105; Je. 13, '11.
 
 The Prevention of War by International Finance 195 
 
 invaded state should be at all interfered with by the in- 
 vader, who proceeds with his wholly military occupation 
 without meddling with finance. 
 
 The belief that the expense of modern wars may deter 
 states from entering upon them, must be dismissed or modi- 
 fied in view of the evidence of 1914 and of previous his- 
 tory which goes to show that monetary difficulties have 
 usually been overcome somehow by states which felt war 
 necessary. Wars have often cost infinitely more than the 
 statesmen who engaged in them expected, but in most 
 cases they have been able to find means of struggling 
 through to the end. 
 
 Financial difficulties have not always in the past been 
 sufficiently a bogey to prevent wars; nor has the influence 
 of financiers been invariably cast against war. On the 
 other hand, the stabilizing influence of international finan- 
 cial relations, and the examples of their prevention of war 
 offer evidence of their value in preserving peace.
 
 CHAPTER VI 
 
 INTERNATIONALISM AND ECONOMIC CONFLICT 
 
 The doctrine of internationalism is peculiarly the prod- 
 uct of European civilization and of the Nineteenth and 
 Twentieth Centuries. It is an idea which has grown up 
 simultaneously with the development of the bitter economic 
 conflicts between nations resulting from industrialism, and 
 an idea which has derived added force from the appalling 
 character of the wars of the period. At no other time in 
 history could the idea of the "family of nations" have 
 been so thoroughly comprehended, and at no other time 
 could the tendency toward a higher unity than that of 
 mere nationality have been stronger, than in the Europe 
 which has just passed through the greatest and bloodiest 
 \yar ever fought. 
 
 Nations hitherto have been concerned mainly with their 
 own development. They have looked on one another either 
 as rivals or as possible allies^ to be used in attaining na- 
 tional ends and cast aside as soon as they ceased . to be 
 useful — a theory of international relations which has by 
 no means disappeared. The idea of the family of nations 
 and of the community of many of their characteristics and 
 of their civilization, is a peculiarly modern thing. A sort 
 of internationalism existed among the small city states of 
 ancient Greece, held together by the common tie of their 
 Hellenic blood and meeting at stated periods in what were 
 probably the first international events, the Olympic games. 
 But the ideas of internationalism, of the community of 
 
 196
 
 Internationalism and Economic Conflict 197 
 
 interests of the whole world, and of the possibility of a 
 world state not based on conquest, have developed only 
 within the last century. 
 
 Geographic conditions have nowhere been so favorable 
 to the rise of the international spirit as in Europe. In the 
 Orient, barriers interposed between the developing civi- 
 lizations of China, Japan, and India, so that each could 
 in isolation build up its peculiar, self-contained culture, 
 seeking nothing from other lands, and feeling the need of 
 nothing. On the European continent there were no such 
 barriers, no mountain ranges large enough to be insur- 
 mountable, and rivers such as the Rhine, Meuse, Scheldt, 
 and Danube, whose courses served rather to connect than 
 to divide the peoples of the continent. 
 
 Here there grew up a group of nations nearly equal in 
 power, no one sufficiently stronger than the others to main- 
 tain a long-continued supremacy. During the very period 
 in which the suspicions, distrusts, and economic struggles 
 whose course has been traced in the preceding chapters, 
 were at their height, there was also developing among these 
 states another idea. This found expression in the "Con- 
 cert of Europe," invoked again and again during the Nine- 
 teenth Century in lieu of recourse to arms, for the settle- 
 ment of questions of common concern. During the years 
 following the downfall of Napoleon, the Concert acted on 
 numerous important questions, sometimes in perfect har- 
 mony, more often with many differences, but always in 
 recognition of the existence of questions in which all the 
 Powers had interests and in whose settlement each was en- 
 titled to a voice. This unity sprang out of the alliance 
 which had been formed to overthrow Napoleon, and it con- 
 tinued, though with unanimity somewhat abated, through- 
 out the greater part of the century. 
 
 The chief contribution that this principle made to Euro-
 
 198 The Economic Causes of Modern War 
 
 pean politics was the establishment of the custom of Con- 
 gresses at which the diplomats of the various states met 
 to discuss and decide upon the issues arising between them. 
 At the height of its prestige the Concert occupied almost 
 the position of an international tribunal capable of deal- 
 ing with all matters which concerned Europe as a whole. 
 Its purpose was the maintenance of peace through the 
 recognition of the principle that all the states of Europe 
 had a vital interest in territorial changes, which should on 
 that account be settled by general agreement rather than 
 by agreement only between the two Powers immediately 
 involved. 
 
 After the Congress of Berlin in 1878, divisions began to 
 be formed among the Great Powers, resulting finally in the 
 formation of the Triple Alliance and the Triple Entente. 
 The "Concert of Europe" had become the "Balance of 
 Power." Two groups of states — the members of each hav- 
 ing patched up the economic and political rivalries as best 
 they could, and each group having fairly well-defined and 
 conflicting economic objects — confronted one another. 
 Each protested earnestly its desire for peace; each prepared 
 constantly for war. 
 
 The disruptive results of these economic rivalries and 
 of the Balance of Power in which they were expressed could 
 not undo the work that had already been begun. The seed 
 of the idea of internationalism had been sowed, and it bore 
 fruit continuously throughout the Nineteenth Century in 
 various forms of international co-operation for the com- 
 mon benefit of all nations. 
 
 In the century between 1814 and the outbreak of the 
 World War, sixty-four official conferences were held, in 
 which the representatives of from three to fifty states met 
 to consider subjects of common international interest vary- 
 ing from the control of the African slave trade to the ex-
 
 Internationalism and Economic Conflict 199 
 
 change of works of art. 1 In addition to these official con- 
 ferences, in which the envoys represented the governments 
 of Europe and of the world, there were more than seven 
 hundred international conferences, congresses, confedera- 
 tions, and alliances, in which the delegates represented pri- 
 vate interests only. The subjects for consideration at 
 these gatherings included serious social questions, such as 
 the control of alcohol and of prostitution, the promotion of 
 peace, race hygiene, the suppression of duelling, eugenics, 
 juvenile courts, as well as subjects of religious, profes- 
 sional, or artistic interest. There were thirty-two religious 
 gatherings (which purported to be international in char- 
 acter, although at many of them few nations were repre- 
 sented) and thirty-seven international conferences for the 
 consideration of educational questions. Between 1847 and 
 1913 there were nearly two hundred fifty conferences on 
 various scientific subjects, including medicine, entomology, 
 linguistics, embryology, psychic research, pathology, radiol- 
 ogy and the like, holding sessions which varied in number 
 from one to twenty-eight. There were almost as many con- 
 ferences on economic subjects, among which were included 
 congresses to discuss colonial agronomy, metallurgy, agricul- 
 ture, railways, marine work, textiles, cattle breeding, 
 ceramics, and seed testing. Almost without exception these 
 conferences met in European capitals, and the countries 
 represented were principally European, although the 
 greater part of the world came to be represented, espe- 
 cially in those held more recently. 
 
 The increased ease of communication, which was the re- 
 sult of the growth of railway, telephone, telegraph, cable, 
 and the newspaper, added greatly to the international spirit. 
 It accounts for the increased frequency with which the 
 
 1 Exhaustive lists of these conferences are given in the appendix to 
 J. C. Fanes: The Rise of Internationalism, pp. 181-202.
 
 200 The Economic Causes of Modern War 
 
 international conferences came to be held, until in the 
 year before the Great War broke out, no less than forty- 
 one conferences were held in various parts of Europe, in- 
 ternational in character and considering a wide variety 
 of economic, professional, social, and artistic questions. 
 
 The movement towards internationalism took concrete 
 form, too, in the organization of numerous unions, bureaus, 
 and conventions for the accomplishment of a number of 
 scientific and mercantile purposes which were best to be 
 carried out by a number of states acting in co-operation. 
 Among the most important of these were the General Post- 
 al Union, the Metric Convention, the Central Office of 
 International Transport, and the International Union for 
 the Publication of Tariffs, each of which had an obvious 
 economic significance. 
 
 The General Postal Union was founded at Berne in 
 1874, with twenty-one states as members. Four years later 
 it was replaced by the Universal Postal Union, meeting at 
 Paris; and the convention has since been revised by Con- 
 gresses meeting at Lisbon in 1885; Vienna, 1891; Washing- 
 ton, 1897; and Rome, 1906. 
 
 Considerations of convenience in view of the growing 
 volume of international business relations led to the es- 
 tablishment of the Metric Convention in 1875, with rati- 
 fications by practically all the Powers of the world, and 
 to the erection of the International Bureau of Weights and 
 Measures with a central office at Paris, under the control 
 of an international committee. 
 
 Convenience in business relations led in 1890 to the 
 formation of the Union for the Publication of Tariffs at 
 Brussels, maintaining a permanent bureau in the city of 
 its origin so that information may readily be obtained as 
 to the tariffs of the countries of the world. A more 
 strictly European international bureau is the Central Of-
 
 Internationalism and Economic Conflict 201 
 
 fice of International Transport, a railway union of all the 
 continental powers for the purpose of harmonizing their 
 rail systems. 
 
 Such international organizations are necessary and are 
 possible because of the increasing complexity of the com- 
 mercial and financial relations of the world. The modern 
 economic system has a side other than the fierce struggle 
 sketched in the previous chapters. It is true that con- 
 flict between the economic interests of the European na- 
 tions, as they have expanded into the far parts of the 
 world, has led to constant war, because of fear for the safety 
 of food supplies, raw materials, and markets. But this ex- 
 pansion of the modern world, with its consequent interde- 
 pendence of states, has, it is equally true, led to a growth 
 of the international spirit. 
 
 The same economic forces that have led to constant war 
 in all quarters of the earth are, through the complexity of 
 organization which they involve, fostering the international 
 spirit. International trade cannot go on without inter- 
 national co-operation. 
 
 Modern industrialism tends to create internationalism in 
 some measure, simply because it has grown to such an ex- 
 tent that its trade necessarily oversteps frontiers. The 
 type of internationalism produced by our present indus- 
 trial and economic system is so far from ideal that we 
 seldom think of it as being international at all. It is dif- 
 ferent from the ideal and wholly Utopian world state that 
 is usually associated with the word "internationalism," that 
 we fail to recognize it. Utopia is only an extreme of in- 
 ternationalism, however, and internationalism may exist 
 without extremes. 
 
 Although, when contrasted with the international ideal, 
 the condition of the world since 1878 — with its wars, its bit- 
 ter commercial rivalries, its quarrels over colonies and
 
 202 The Economic Causes of Modern War 
 
 spheres of influence — appears a chaos, one has but to con- 
 trast it with an extreme nationalism to see that a very- 
 real and fairly extensive degree of internationalism has 
 actually existed for a long time. The self-sufficing nation 
 — whether economically or culturally — no longer exists. If 
 we contrast the Europe of 1840 with the exclusively na- 
 tionalistic Japan of the same date, the degree to which 
 internationalism had even then grown up is at once ap- 
 parent. 
 
 Internationalism has been a very real thing in the worlds 
 of science, art, and literature for a long time. Trade be- 
 tween the nations and the necessity for external markets 
 and external sources of food and raw materials have grown 
 so largely within the last half century that commerce has 
 become international. Business and industry have ignored 
 frontiers to an extent never approached before in the his- 
 tory of the world. 
 
 The political interweaving of the world by military force 
 is an old story. The absolute dependence of the various 
 countries of the present world through finance and com- 
 merce^ — so complete that every state is influenced imme- 
 diately and obviously by the economic conditions prevail- 
 ing in other states — is a new story. This condition has come 
 about through the rise of industrialism, with the conse- 
 quent necessity of expansion into all parts of the globe. 
 Commerce has become an international agency and the 
 business men and financiers of the various nations begin 
 to find frontiers rather a hindrance than a help. Even 
 French and German financiers have ventured to co-oper- 
 ate in Morocco. 
 
 It is because of this fact that the tendency has begun 
 to standardize so far as possible the commercial conven- 
 iences of the whole world. Here is to be found the origin 
 of railroad agreements, international tariff agencies, inter-
 
 Internationalism and Economic Conflict 203 
 
 national rates of exchange, international units of measure, 
 and the rest of the means of co-operation between individ- 
 uals of different states and the states themselves. It is 
 not without significance that the American decimal mone- 
 tary system was taken over in toto by the Canadians, in 
 preference to the more complicated English system. A 
 century ago there would have been no need for an inter- 
 national coinage comparable to the need today, nor for 
 the publication of international tariffs and an international 
 system of weights and measures. International trade, in- 
 deed, existed, but the industrial life of most of the states 
 of Europe did not then depend upon it, nor could the pre- 
 vention of importation or exportation cause widespread suf- 
 fering among the people of a whole nation, as it can today. 
 An apparent exception to this is to be found in the con- 
 dition of the British Isles, which would even then have 
 suffered from lack of food. But even here the alteration 
 which the modern industrial changes and the consequent in- 
 ternational dependence have brought about is very marked. 
 The Revolution in America could cause little industrial 
 unsettlement in England in 1776, even though imports 
 from the colonies were interfered with. The American 
 Civil War, less than a century later — the inter-relation of 
 precisely the same territories — could cause so much British 
 suffering as to provoke the thought of intervention, a re- 
 sult of the growing complexity of the world's economic sys- 
 tem, and the growing interdependence among nations. 
 
 At first thought it seems that such a state of affairs — 
 in which the interests of the nations are continually be- 
 coming more and more closely united and in which the 
 frontiers are an annoyance if not a hindrance to the busi- 
 ness men who are the dominant powers in the life of most 
 industrial states — would automatically produce Utopia
 
 204 The Economic Causes of Modern War 
 
 overnight. If the nations of the world are so inter-united 
 that they cannot get along without one another, we might 
 well expect to wake up some morning to find that by a 
 gradual progress of world evolution they have merged into 
 one, and that the federation of the world has arrived in 
 the guise of an economic necessity. 
 
 How far this is from being the actual case, the con- 
 tinuing wars, whose genesis can be so easily traced to eco- 
 nomic causes, suffice to show. Neither the tendency toward 
 internationalism arising from economic conditions, nor the 
 tendency toward wars arising from the same source, can be 
 denied. Contradictory though they are, they co-exist; and 
 they are both the outcome of the same cause: the pres- 
 sure of population, out of which grows industrialism. An 
 industrial state of society means an enormously complex 
 dependence of civilized nations on one another and on un- 
 developed territory. Such interdependence means both 
 co-operation and conflict. A strange pair of twins from 
 the same mother — internationalism and war. 
 
 Both are the results of the economic system of the day. 
 From it internationalism arises because of the necessity for 
 commercial relations with other states and their dependen- 
 cies, and from the community of interests which is thus 
 brought about. From it economic rivalry, with its result- 
 ant wars, arises because of the clash of interests between 
 industrial Powers contesting for markets, raw materials, 
 and food. 
 
 Examples of the co-existence of co-operation and conflict 
 are frequent enough in recent history. Germany and 
 France were political and economic rivals in many spheres. 
 The hostility existing between them — it had been an ad- 
 mitted fact of world politics for years — would in the end 
 lead to hostilities. In Africa, in the Far East, in Alsace 
 and Lorraine, in the frontier restrictions on imports and
 
 Internationalism and Economic Conflict 205 
 
 exports, economic rivalry produced a sharp clash of inter- 
 ests. German industry grew and nourished on the iron de- 
 posits taken from the correspondingly crippled French in- 
 dustry. The economic hostility between the two was clear 
 enough and its share in producing war has been amply 
 demonstrated. 
 
 At the same time that this rivalry was growing up, how- 
 ever, there was also growing up between them a com- 
 munity of interests which arose out of their commercial 
 relations. Since Germany and France, despite their dif- 
 ferences, had to trade with one another, the Metric Con- 
 vention, — an international measure and a step, however 
 slight, — to the breaking down of national barriers, had to 
 be adopted because it was a convenience for commerce. 
 One cannot imagine a pair of isolated states such as China 
 and Japan in 1840 finding necessity for such a convention, 
 because no international trade relations of any considerable 
 extent existed. Similarly, the tariff publications, the agree- 
 ments with regard to cables, wireless, mails, railways, — 
 all measures tending to bring the nations of the world 
 closer and closer together — have grown out of the inter- 
 nationalism of trade resulting from the very industrialism 
 which was breeding simultaneously the wars that tore the 
 nations apart. 
 
 The situation is a paradox on a world-wide scale. 
 
 Bitter as was the Anglo-German struggle in the years 
 before 1914, there was real co-operation. Admitted fact 
 as the rivalry between English and German trade has been 
 for years, economic links bound the two nations so strongly 
 that a portion of the British public neither felt nor under- 
 stood the menace of Germany. While one division of Brit- 
 ish sentiment was opposing the passage of a protective 
 tariff, another was demanding it to safeguard British in- 
 dustry from German "dumping." While half of Britain
 
 206 The Economic Causes of Modern War 
 
 could not sleep o' nights for fear of German dreadnaughts, 
 the other half was peacefully consuming the very goods 
 which those dreadnaughts were built to protect in transit. 
 For German "dumping" would never have been possible 
 had British citizens refused to buy. That they did not 
 refuse to buy is best shown by the results of the British 
 and French laws requiring the "Made in Germany" stamp 
 on all German goods. Intended to check German trade 
 by warning the consumer that he was not patronizing home 
 industries, the stamp became instead the best advertise- 
 ment of the German manufacturers. Industrialism was 
 producing a world-wide contradiction. It was creating in- 
 ternationalism and international war at the same time. 
 
 One other illustration of this paradox is to be seen in 
 the organization of the working class. The rise of indus- 
 trialism has produced simultaneously an incentive to a new 
 type of internationalism and an incentive to a new type of 
 war. International organization of the workers has roused 
 both a class consciousness that ignores frontiers, and the 
 advocacy of a war between classes. The Internationale, 
 created by an industrial proletariat, has gone a long way 
 since the days of Karl Marx, Friedrich Engels, and the 
 Communist Manifesto, with its plea, "Workers of the 
 world, unite." 
 
 The workers of the world have united, or at least they 
 are uniting; and they are developing among themselves the 
 "international mind." Thoroughly devoted to the princi- 
 ple that at the root of all wars lie the interests of the capi- 
 talists of the various countries (a class which they regard 
 as leagued in an international community of interests), 
 the leaders of the radical wing of labor before the war 
 sought their own union in the Internationale which, with 
 its headquarters at Brussels, had been organized and active 
 for more than half a century.
 
 Internationalism and Economic Conflict 207 
 
 International finance and international working-class or- 
 ganization are two conflicting forces to which nationality 
 is coming to mean less and less. They both make for in- 
 ternational solidarity. But finance may stimulate (as well 
 as prevent) wars between states; and the leaders of the 
 Internationale have not hesitated to preach another kind 
 of war — not between states, but between classes. The at- 
 tempt of German and French socialists to stop the war in 
 1914, failure though it was, has an enormous future sig- 
 nificance. 
 
 The interest of the wage-earner in internationalist or- 
 ganization is very large. From the workers come the rank 
 and file of armies, who endure a maximum of the misery 
 and enjoy a minimum of the glory and profit of war. Only 
 through the indirect and not always apparent channel of 
 extension of the national industry, does the worker profit, 
 if he profits at all, from the wars of economic rivalry. 
 Hence the growth of the international movement among 
 the working classes in recent years; and hence the efforts 
 of French and German socialists to prevent the outbreak of 
 the World War — an effort which is pregnant with future 
 possibilities. 
 
 That the tendency toward international solidarity which 
 economic and financial inter-relationship and the scien- 
 tific and artistic community of tastes and interests through- 
 out the world produces, has not prevented wars; and that 
 international economic rivalry has been productive of so 
 many wars, suggests a comparison of economic rivalry be- 
 tween states, with economic rivalry within the state itself. 
 Why have most individual nations developed to the point 
 where their cohesive forces are sufficient to prevent civil 
 war? Why has internationalism never developed to the
 
 208 The Economic Causes of Modern War 
 
 place where it can accomplish the same thing in interna- 
 tional relations? 
 
 In any state, internal commercial rivalries exist which 
 are analogous to the larger economic conflicts of the world 
 powers. In the larger political organisms of the world, 
 in states like the British Empire or even the United States, 
 internal economic rivalries may exist to a very consider- 
 able degree. The tariff laws of the British dominions or 
 the tariff wars that raged among the American states prior 
 to the formation of the Union, are sufficient demonstra- 
 tion of the fact. Sometimes, as in the United States, un- 
 derlying economic causes may lead to civil war; but these 
 cases are rare in the modern world. There are not many 
 civil wars, whereas since 1878 there have been only four 
 years when the world was wholly free from international 
 struggle. Why do international economic rivalries lead to 
 war, in spite of the strong international solidarity that has 
 gradually grown up in Europe and the world at large, 
 whilst only occasionally do economic difficulties within na- 
 tions lead to civil war? 
 
 The answer is to be found in the tradition, of very re- 
 cent origin, sanctioning the intervention of diplomats, sup- 
 ported by the armed power of their states, in the economic 
 interests of their nationals. The commercial attache, that 
 curious link between the consular and diplomatic services, 
 is a newcomer in the embassies. Commercial rivalry has 
 not been left upon an entirely economic basis ; but political 
 power has been thrown into the scale to help the economic 
 interests of the fatherland where competition was prov- 
 ing too much for its merchants. Within states there is no 
 such governmental effort to secure "special interests" and 
 "legitimate aspirations." Massachusetts does not seek to 
 assure supply of raw materials to her textile mills by
 
 Internationalism and Economic Conflict 209 
 
 threatening to use her militia to secure an exclusive "sphere 
 of influence" in the cotton fields of Georgia. 
 
 Not only has trade followed the flag; but on a good 
 many occasions the flag has gone post-haste to the rescue 
 when trade has found itself in difficulty. Great Britain had 
 forty per cent, of the trade of Morocco ; France had twenty ; 
 Germany had nine; — the Kaiser sent a gunboat. The Turks 
 in Tripoli hampered Italian commercial penetration — the 
 Italians seized Tripoli. The extension of Russian, Ger- 
 man, French, and British commercial interests in China 
 was not left to the individual enterprise of the merchants 
 themselves. Spheres of influence were demanded, and gov- 
 ernmental assistance was granted them. 
 
 The intervention in Egypt was largely a matter of help- 
 ing out European investors who had made a bad bargain. 
 If the same investors had bought wild-cat mining stock in 
 the United States there would have been no intervention, 
 any more than there was intervention when the Volstead 
 Act rendered valueless the very considerable European 
 holdings of stock in American brewing companies. But 
 when the Khedive's creditors lost, after having loaned to a 
 backward and notoriously unbusinesslike native adminis- 
 tration, they appealed to their governments. 
 
 Protection of nationals whose properties are threatened 
 by disorder in the backward states in which they have in- 
 vested (the sort of thing that the United States has re- 
 peatedly done in the smaller countries of South America) 
 is much the same. Intervention of this kind, ostensibly 
 necessary, has led often in the past to attempts at per- 
 manent occupation, which rouse the jealousy of other 
 Powers, economic rivals of the occupying Power, and lead 
 on to eventual hostilities. 
 
 There is good reason for questioning the ultimate value 
 of such interference by governments. Certainly the peace
 
 210 The Economic Causes of Modern War 
 
 of the world would have been served if the financiers of 
 European countries had been given to understand long 
 since that their bad investments would not be recouped 
 by their countries' armies and navies. It remains to be 
 shown that economic progress would not have gone on at 
 the same rate if the merchants who aspired to trade con- 
 cessions in undeveloped quarters of the globe had been per- 
 mitted to take their own risks and win their own profits 
 or losses in free competition with their natural rivals from 
 other states, without placing themselves under the pro- 
 tection of their governments. 
 
 Perhaps the development of such backward lands as 
 China or of savage lands like the African territories, might 
 not have proceeded under these conditions. There might, 
 indeed, have been anti-foreign risings which would have 
 led to massacres so appalling that armed intervention would 
 have been necessary. The observed historic fact remains 
 that where native risings have occurred (the Boxer Re- 
 bellion is a standing example) they have been caused by 
 the intolerable demands of foreign states and not by the 
 mere presence of foreign merchants. 
 
 Japan, it is true, was opened to the western world by 
 force; but it is a noteworthy fact that Japan, having by 
 force been able to defend her national integrity, has made 
 more progress, economic, social, political, and intellectual, 
 than any of the districts of the world which have been 
 farmed out as "concessions" or "spheres of influence." 
 
 There is no denying that where economic rivalry has 
 been inimical to the spirit of internationalism, that condi- 
 tion has usually arisen through the rivalries of governments 
 over economic questions rather than through the rivalries 
 of individual merchants or corporations unassisted. 
 
 The trade rivalries of Germany and England on the Con- 
 tinent and in their interchange of products, it is also true,
 
 Internationalism and Economic Conflict 211 
 
 contributed to war; but they were only a small part of the 
 causation of the war and they stirred up ill-feeling only 
 in portions of both populations. German aggression in 
 Africa, China, the Balkans — the result of political and dip- 
 lomatic exertions on behalf of German merchants and in- 
 dustries^ — stirred the whole British public. The commer- 
 cial rivalries of Germany and France on the Continent had 
 little governmental recognition, and they led to compara- 
 tively little ill-feeling. The Moroccan difficulties stirred 
 the whole populations of both states. 
 
 If political interference in economic conflicts could be 
 prevented or limited, the checking of internationalism 
 would be correspondingly prevented or limited; and the 
 natural trend to solidarity between the nations because of 
 their growing economic ties, ready communication, and 
 their intellectual and artistic community, would be given 
 freer play for the binding together of all peoples.
 
 CHAPTER VII 
 
 THE LEAGUE OF NATIONS 
 
 The principal economic cause of war is the interde- 
 pendence of nations without guarantee of security save by 
 their own armed strength. Almost every state in the mod- 
 ern world is completely dependent upon other states or 
 upon colonies overseas for some commodity which is ab- 
 solutely essential for its life, yet which may be cut off at 
 any time by military or naval reverses in the event of war. 
 
 Every nation in Europe, as we have seen, must look out- 
 side its own boundaries for a large proportion of its food 
 supply, for its markets, and for the raw materials with- 
 out which its industries cease and its population starves. 
 Germany and England look to the United States for cot- 
 ton. Both states look abroad for large parts of their sup- 
 plies of other raw materials. France imports huge quan- 
 tities; and the absolute dependence of small manufactur- 
 ing states like Belgium is abject. 
 
 The food situation has been much the same in all Euro- 
 pean states. The United Kingdom had for a hundred 
 years been only a few weeks ahead of starvation, hopelessly 
 and helplessly dependent upon the ships which from the 
 ultimate ends of the earth bring in her foodstuffs. Be- 
 fore the war Germany had to import 16 per cent, of her 
 grain consumption and the importations of the smaller 
 states were proportionately much larger. The Swiss nor- 
 mally imported 78 per cent, of their grain, the Dutch 66 
 per cent., the Norwegians 65 per cent., the Danes 28 per 
 cent, and the Swedes 14 per cent. Even the rich soil of 
 
 212
 
 The League of Nations 213 
 
 Spain was insufficient to meet the needs of the people. 1 
 Any state with military or naval power sufficient to cut the 
 trade routes may starve its neighbors at will. 
 
 That modern states should be dependent upon the whims 
 of their neighbors for the prosperity and happiness, even 
 for the safety of their citizens, is an intolerable condition, 
 which none the less existed at the outbreak of the World 
 War in every European nation, and which exists today. 
 
 Instances are not far to seek. The Austrian attempt to 
 ruin the farmers of Serbia by closing the frontier to their 
 pigs, is a single grotesque but striking example. 2 The 
 misery caused among the textile workers of England when 
 the American Civil War cut off the cotton supply and 
 forced the closing of the mills, is another; and in this 
 case the economic pressure became so severe that it very 
 nearly led to British intervention on behalf of the South- 
 ern States. 
 
 The subsequent British attempt to encourage cotton 
 growing within the imperial dominions is a striking ex- 
 ample of the effort of a state which finds its dependence 
 on other nations too dangerous to be endured, to become 
 economically self-sufficing. The seriousness with which the 
 British recognized the menace to their textile industry of 
 its reliance upon American cotton, is to be seen in the 
 speech from the throne of Edward VII, February 2, 1904. 
 The King said: 
 
 'The insufficiency of the raw materials upon which the great 
 cotton industry of this country depends, has inspired me with 
 great concern. I trust that the efforts which are being made 
 in various parts of my Empire to increase the area under culti- 
 vation may be attended with a large measure of success." 
 
 'Sir George Paish: A Permanent League of Nations, pp. 62 and 75. 
 2 See p. 173.
 
 214 The Economic Causes of Modern War 
 
 The efforts to remedy the dependent condition of the 
 cotton industry have been successful to the extent of in- 
 creasing the proportion of the cotton used by English tex- 
 tile mills grown within the borders of the Empire to a very 
 considerable extent; but stiU 11,000,000 of the 16,000,000 
 bales of cotton consumed annually come from the United 
 States. 1 The degree of dependence upon the United States 
 is still disquieting, and only the navy provides a security 
 which in these days of invention and in view of the prob- 
 able future development of the use of aircraft in war, is 
 more tenuous than a naval power cares to admit. 
 
 Other examples might be multiplied without end. Per- 
 haps the most striking evidence of the interdependence of 
 nations ana tne imperative necessity of providing security 
 of some kind, may be seen in the suffering caused in the 
 South in 1914 when the war prevented the export of 
 American cotton to the German market, enabling the 
 British to buy what they needed at depressed prices, with 
 results very similar to those in England during the Civil 
 War. As Englishmen had suffered in one great war be- 
 cause they could not buy cotton, so Americans suffered in 
 another and a greater because they could not sell it. As 
 England had then proposed to resort to force, so now Gov- 
 ernor Colquitt, of Texas, in a fiery outburst, proposed send- 
 ing "American ironclads to England's door," to enforce the 
 rights of the cotton-growers of the United States. 
 
 In all these instances the situation is the same. Nations 
 are vitally interwoven, one with the other. Almost any 
 state can strike directly at the economic interests of any 
 other — interests so important that serious interference with 
 them produces nation-wide calamity. No agency exists 
 to guarantee security against these occurrences at any 
 time; and the nations of the world, unwilling to endure so 
 
 X J. Arthur Hutton: The Cotton Crisis, p. 12.
 
 The League of Nations 215 
 
 perilous a condition, resort to armaments to provide, by 
 their own individual strength, such security as is possible. 
 At the same time, they seek to acquire undeveloped terri- 
 tory to supply their needs; and in their efforts come into 
 conflict. The train of miseries that the World War brought 
 with it shows how little this method avails. 
 
 Interdependence is not in itself a cause of conflict. It is, 
 on the contrary, as has been shown in the preceding chapter, 
 the true cause for much of the progress already made in 
 international co-operation. If the insecurity of the supply 
 of commodities necessary to an industrial state can be 
 removed, the interdependence of the states is the best pos- 
 sible link to bind them together. But security is indispen- 
 sable. How is security to be assured, and the economic in- 
 terdependence necessary to a complex civilization left to 
 proceed naturally, becoming in the end a device for the 
 preservation of peace? 
 
 It must be remembered in the first place that economic 
 rivalry need not lead to the type of political rivalry which 
 has found expression in the colonization and quarrels of 
 the last fifty years. Except for the desire to keep its citi- 
 zens under its own flag, a state has no need for seeking 
 colonies, providing i\vat the steady inflow of raw materials 
 and food, and the permanent accessibility of markets are 
 assured. 
 
 But if free exports and imports are not assured, an indus- 
 trial state must, under the pressure of an iron necessity, 
 seek to obtain colonies and strategic possessions on sea lanes 
 and trade routes by land, in order to provide for its own 
 safety. But granted this freedom of importation and ex- 
 portation, the chain of war-causes — over-population, pro- 
 duction beyond the capacity of the domestic market, food 
 shortage, and lack of raw materials — which has been almost 
 inevitable in modern Europe, ceases to be a danger. The
 
 216 The Economic Causes of Modern War 
 
 fear of excessive production ends when free access — not to 
 the home markets of competing industrial states, perhaps. — 
 but to the colonial markets of the world, is offered to the 
 merchants of every nation, subject to no restriction save 
 their own commercial capacity and skill. The danger of 
 food shortage, similarly, vanishes when the highways of the 
 world are kept open by a power capable of crushing any 
 single nation that ventures to interfere with their freedom. 
 The lack of raw materials ceases to be a menace for the same 
 reason and under the same conditions. 
 
 A fact which must be kept in mind always is that the 
 wars which have broken out as a result of economic rivalry, 
 have arisen from competition for trade or colonies or conces- 
 sions in the politically backward portions of the earth. 
 Germany and England met in competition in European as 
 well as in colonial markets, and (although it is admitted 
 that this rivalry contributed to ill feeling and helped cause 
 hostilities) it is quite evident that it was not this purely 
 trade competition (unaided by diplomacy or naval and 
 military demonstrations) that produced the war. The 
 kind of economic rivalry which menaces peace is that 
 which grows up as the nations compete with one another 
 in the more remote or undeveloped corners of the earth, 
 railways in Asia Minor, lumber on the Yalu, the fertile 
 Yangtse valley, Egypt, Morocco, and the Balkans. 
 
 Except for iron and coal, Europe in general looks to these 
 undeveloped countries for all its raw materials and food. 
 European Powers are not very fearful of possible hindrance 
 to export or import among themselves; for, large as these 
 exchanges may be in bulk and important as they may be 
 financially, they are not so important to livelihood as are 
 the raw materials and the food brought from the far-off, 
 unprogressive lands, where the war that halted European 
 progress was bred.
 
 The League of Nations 217 
 
 If a condition could be brought about throughout the 
 globe in which industry were at all times certain of free 
 access to supplies of the all-important raw materials and 
 at the same time assured of adequate markets, most inter- 
 national friction would disappear. Such a condition does 
 not demand the adoption of universal free trade by any 
 means, but it does require the elimination of protective 
 tariffs except for the development of home industries, and 
 the total abolition of exclusive colonial tariffs. 1 General 
 concession of most favored nation treatment in colonies 
 is essential. 
 
 Suppose that an organization had existed during the 
 last fifty years sufficiently powerful to provide Great Britain, 
 Germany, France, Japan, and Russia with trustworthy 
 
 1 It is by no means demonstrated, of course, that free trade (to which 
 Cobden referred as "the best human means for ensuring real and enduring 
 peace") would actually do all that has been claimed for it. At the same 
 time, it would certainly lead to an enormous reduction of the rivalry and 
 friction from which war grows, if applied to colonies. From two sources 
 so widely removed from one another as Lord Cromer and the Fabian 
 Society, I take the following opinions: 
 
 "No experience has, therefore, as yet been acquired, which would en- 
 able a matured judgment to be formed as to the extent to which Free 
 Trade may be regarded as a preventive to war. . . . All that has 
 been proved is that numerous wars have taken place during a period of 
 history when Protection was the rule and Free Trade the exception; 
 though the post hoc ergo propter hoc fallacy would, of course, be involved, 
 if on that account it were inferred that the protection of national indus- 
 tries has necessarily been the chief cause of war. . . . 
 
 "Whereas exclusive trade tends to exacerbate international relations, 
 Free Trade, by mutually enlisting a number of influential material in- 
 terests in the cause of peace, tends to ameliorate those relations, and 
 thus, pro tanto, to diminish the probability of war." — E. B. Cromer: 
 "Free Trade in Relation to Peace and War," The Nineteenth Century and 
 After: 68:384-87, S., '10. 
 
 With especial reference to colonial questions, Mr. L. S. Woolf sums this 
 attitude up succinctly: "With free access to the flags of all nations, 
 with complete liberty of commerce, with no concessions of commercial 
 monopolies and privileges, we should hear less of Far Eastern Questions, 
 of the partition of China of Persia and Bagdad and Morocco." L. S. 
 Woolf, International Government, p. 28.
 
 218 The Economic Causes of Modern War 
 
 guarantee of a steady supply of the raw materials that their 
 industries required, of sufficient food for their populations, 
 and of access, with free competition, to the markets of all 
 colonies, with sea lanes and land routes permanently open, 
 unhampered by diplomatic or political interference, or 
 force of any kind. 
 
 Even such a guarantee might not have eliminated some 
 points of international friction. There is no reason to 
 doubt that the successful exploits of the German in "dump- 
 ing" would have led to resentment. But all over the world 
 there would have been a lessening in tension in the inter- 
 national situation because of the absence of the fear and sus- 
 picion produced by years of colonial rivalry and reinforced 
 by incident after incident, year after year, until the nations 
 were ready for war upon trifling provocation because of 
 rivalries whose economic origin the popular mind had all 
 but forgotten. 
 
 Given guarantees of raw materials, food supplies, and 
 open markets, the world might have been spared the whole 
 sorry business in the Far East. The policy of the open door 
 would have obtained, and neither Russia nor Japan would 
 have needed hegemony in the military or naval sphere in 
 order that her merchants might carry on trade. In the 
 Near East, with the security of the trade routes and sea 
 lanes already guaranteed, the fear of the British for India 
 would have disappeared, and with it a century of struggle. 
 The suspicions of the other nations would have decreased; 
 and at least the political results of their economic rivalry 
 in Asia Minor would have ceased. The contest for the 
 market which followed would have been merely a struggle 
 between business men, without diplomatic interference, of 
 the sort that goes on within all states among native mer- 
 chants. 
 
 Guarantees of trade routes would have done away with
 
 The League of Nations 219 
 
 half the danger of the Bagdad Railway, from either military 
 or economic reasons, and the projected road might have 
 become a business enterprise of great value to all the 
 nations. 
 
 In the Balkans, guarantees of access to the sea would 
 have reduced friction and altered the situation entirely. 
 The friction in Persia and Morocco would have disappeared, 
 as would also the scramble for naval bases, for the protec- 
 tion of sea-borne commerce would no longer devolve upon 
 the various states, since the security of the sea lanes would 
 be certain. 
 
 It must be remembered that in international politics 
 the starkly economic motive is likely to be glossed over 
 with finer-sounding phrases. A large proportion of the 
 international crises, therefore, in which the "national hon- 
 or has been affronted, or the "legitimate aspirations" 
 thwarted, are at bottom economic, and the conflicts which 
 result are really disguised economic rivalries. Most of the 
 wars and threats of war which arise ostensibly as the results 
 of causes other than the economic, are actually of such ori- 
 gin that they vanish once economic security is permanently 
 won. 
 
 The interdependence of the nations of the world has 
 become a commonplace; but obvious as this fact is, its 
 equally important corollary is likely to escape attention. 
 Unless guarantees can be provided for every nation, that 
 nothing save its own ill-doing will interfere with the free 
 flow of supplies upon which its very life depends, the states 
 will continue to plot to provide this security for them- 
 selves, and the rivalry thus engendered over the portions 
 of the earth unoccupied by civilized peoples will lead 
 always to arbitration by artillery. 
 
 The narrow margin of failure of the German submarine
 
 220 The Economic Causes of Modern War 
 
 campaign against England indicates still more. It shows 
 that even a powerful Empire (which has a partial economic 
 independence of the rest of the world) is still far from com- 
 plete security. For though it can withdraw with measurable 
 success from dependence on the rest of the world, it must 
 suffer as bitterly as any other if its enemies are able to 
 interfere with its lines of transport. 
 
 Recent developments of aerial warfare teach that in 
 the future such interference with railway communication 
 will probably become as easy a matter, even in uninvaded 
 country, as interference has hitherto been by sea. The 
 bare degree of security that has existed by virtue of the 
 might of individual nations is still further diminished, and 
 the problem of providing a sufficient guarantee of economic 
 security to all nations is further complicated. 
 
 The existing order of international interdependence with- 
 out security means nervousness among statesmen, bitter 
 economic hostility, out of which come distrust, fear, sus- 
 picion, the scramble for colonies, and spheres of influence, 
 and the whole miserable business that breeds war. So 
 long as nations are dependent one upon another and yet are 
 not secure in that inevitable relation, war will continue. 
 
 It is clear that interdependence, even if it could be 
 reduced, can never be done away with so far as such raw 
 materials as minerals, lumber, wool, cotton, and the like, 
 or so far as food supplies are concerned. The alternatives 
 are : either to become reconciled to the continuance of wars, 
 growing more and more destructive and wasteful as science 
 advances; or else to provide an agency capable of offering 
 security — at least such an approximation that the nations 
 may reasonably yield it a fair degree of reliance. 
 
 The peace problem, as the destructiveness of war in- 
 creases, is rapidly becoming something more than a mere 
 question of ameliorating the lot of the race. It is a prob-
 
 The League of Nations 221 
 
 lem of racial survival. The wars of the last hundred years 
 have been deadly, destructive, and wasteful enough ; but the 
 World War involved the whole race. There is prospect 
 of the future application to warfare of still more efficient 
 aircraft, of new chemical devices, and of the possibility of 
 spreading disease among armies and civilian populations 
 by means of bacteria. The continuance of wars and the 
 continuance of the race are incompatible. Either we must 
 find a way to stop killing each other, or there will speedily 
 be none of us left to kill. 
 
 In other words, it is imperative that a mechanism of 
 some kind be devised for assuring to every nation which is 
 in any vital respect dependent on another or on colonies, 
 that the freedom of import and export will never be denied 
 it. Such a step would put an end to economic rivalry be- 
 tween states, and leave merely the legitimate competition 
 of individual business men. 
 
 If there is to be a League of Nations, it must have an 
 extended economic program and the force to assure that 
 it will be respected. If we are not to have a political 
 League of Nations, at least there must be a board of inter- 
 national economic control of some sort which will do away 
 with the economic conflict of the sort that the last fifty 
 years have seen. The world is now an economic unit with 
 interests of which no part can be considered separately 
 from any other; and all the logic of history and evolution 
 points to a closer and closer interweaving of these interests. 
 Economics long ago overstepped political frontiers. 
 
 The whole problem of economic rivalry and the wars that 
 it produces is solved when security is assured to interde- 
 pendent nations. 
 
 It is evident that none of the expedients hitherto 
 attempted have in any sense solved this difficulty. Neither
 
 222 The Economic Causes oj Modern War 
 
 the Concert of Europe nor the Balance of Power has 
 availed to prevent war after war, in each of which the 
 economic motive has appeared, caused by the inequitable 
 conditions which lead the business man in the end to turn 
 to the diplomat and the soldier for aid in carrying out his 
 purposes. Only an international organization of some sort, 
 a very powerful organization, can provide such security as 
 has been indicated in the preceding paragraphs. One 
 thinks naturally of the League of Nations, even though the 
 Covenant which establishes it has not stressed greatly the 
 economic problems that the future international relations 
 will involve. The League is the only agency capable of 
 a task so gigantic. If it is to exist at all, no other organ- 
 ization can attempt to render this service, for the co- 
 existence of a power sufficient to guarantee economic se- 
 curity would menace the League itself. 
 
 The practicability of such an international economic 
 union as is postulated in proposals for free access to all 
 parts of the colonial world, for guarantee of food supplies, 
 for raw materials, and open colonial market, has already 
 been tested in practice on a scale almost as large as that 
 proposed. Not all the nations of the world, it is true, were 
 in the economic union of the Allies, but certainly fairly 
 safe deductions can be made from a co-operation which 
 involved Great Britain, the United States, France, Italy, 
 Japan, and the smaller Allied Powers. When the United 
 States entered the war, the economic system that had been 
 begun by the Allies reached a culmination such as had never 
 been dreamed of. Embracing two hemispheres and most 
 of the nations of the globe, it was more powerful than any 
 similar organization that had ever existed or been imagined. 
 Food, war materiel, the raw materials of industry, trans- 
 portation — all came under the control of this gigantic eco- 
 nomic union.
 
 The League of Nations 223 
 
 The economic co-operation of the Allied Powers amounted 
 to an inter-continental administration which held dominion 
 over almost all the commerce of the world, drawing its sup- 
 plies, not merely for military purposes, but for the supply of 
 industry and the food of the civil population, from every 
 quarter of the globe. Nothing like it had ever been seen 
 before. Nothing quite like it had ever been imagined. 
 But there it was, and during the last part of the war it did 
 its work in a fashion that, while battles were still being 
 fought, pointed the way to their prevention in the future. 
 
 The economic union which had such an enormous sig- 
 nificance was a development of the first tentative efforts 
 towards co-operation that began as soon as the magnitude 
 and probable duration of the war were appreciated by the 
 Allied Governments. The Food Control, the Inter-Allied 
 Munitions Council, the Inter-Allied Maritime Transport 
 Council, and finally, the Program Committees, were a grad- 
 ual growth, and when the war finally closed they were at 
 the very height of their efficiency. Had the war gone on 
 a little longer a Raw Materials Council would undoubtedly 
 have been added to the others to deal with the raw ma- 
 terials of chief importance not already administered by the 
 Munitions Council, notably wool, cotton, hides, leather, 
 tobacco, paper, timber, petroleum, flax, hemp, jute, coal and 
 coke. 
 
 The economic organization of the Allies is important 
 because it offers both precedent and model for the peace- 
 time handling of the same problem. The Food Control took 
 its final international shape in 1918, when the Council of 
 Four was set up. This body included the four Food Con- 
 trollers of principal importance, namely, those of the 
 United States, Great Britain, France, and Italy. In 1917 
 a scientific commission had already been organized to find, 
 if possible, methods of solving the food problems of the
 
 224 
 
 The Economic Causes of Modern War 
 
 Allies, and during the same year another body took over the 
 control of meats and fats. The business of this organization 
 was to administer the buying and distribution of meats, 
 butter, cheese, oils and fats of all kinds, and canned goods. 
 A wheat executive worked in America through two agencies. 
 
 The vexing problem of transport was handled by the 
 Inter- Allied Maritime Transport Council, which was formed 
 after the Paris Conference in 1917. In the very beginning, 
 the French wished to make of this a paramount economic 
 body. Through the nature of its work, it came in the end 
 to make its influence felt through the whole organization 
 of the Allies and to become almost supreme. 
 
 In charge of each of the twenty-one chief raw materials 
 was a Program Committee, by which the varying claims 
 of the Allies were adjudged and a division made of the com- 
 mon stock, so far as it would go. The list of commodi- 
 ties thus administered included: 1 
 
 1. Cereals 
 
 2. Oils and seeds 
 
 3. Sugar 
 
 4. Meats and fats 
 
 5. Nitrates 
 
 6. Aircraft 
 
 7. Chemicals 
 
 8. Explosives 
 
 9. Non-ferrous metals 
 
 10. Mechanical transport 
 
 11. Steel 
 
 12. Tin 
 
 13. Wool 
 
 14. Cotton 
 
 15. Hides and leather 
 
 16. Tobacco 
 
 17. Paper 
 IS. Timber 
 
 19. Petroleum 
 
 20. Flax, hemp, and jute 
 
 21. Coal and coke 
 
 Co-ordinated by the Food Control 
 
 Co-ordinated by the Munitions 
 Council 
 
 The use of these was to have been 
 co-ordinated by a Raw Materials 
 Council 
 
 'J. L. Garvin: Economic Foundations of Peace, ch. iv.
 
 The League of Nations 225 
 
 Because a Raw Materials Council was never formally 
 organized, it must not be inferred that the handling of the 
 problem of the international distribution of these commodi- 
 ties was not in all respects the same as in the case of others. 
 Many raw materials were already being administered by 
 the Munitions Council, especially metals and ores; and the 
 military authorities of the various nations, of course, had a 
 great deal to say with regard to the distribution of wool, 
 hemp, flax, hides, and tanning materials, which were of 
 direct concern to the armies in the field. 
 
 Inadequate as such an outline of the prodigious task of 
 administering the economic affairs of most of the world 
 during the most trying period of its history must be, it is 
 none the less sufficient to indicate the nature of interna- 
 tional economic co-operation in time of peace. The two 
 difficulties of food supply and raw materials, which are 
 most pressing in peace, were adjusted with a minimum of 
 friction amid the pressing claims of many nations in time 
 of war. The adjustment was made by the Program Com- 
 mittees as a result of economic study of the previous con- 
 sumption of each country, of its needs, and of its own 
 capacity for producing the particular commodity in question. 
 
 This task, difficult alike because of its greatness and the 
 delicacy of the questions involved, was successfully accom- 
 plished with administrative machinery which had to be 
 improvised under the trying conditions of war-time. A 
 more completely organized economic union in the future, 
 armed with like plenary powers and fuller opportunities 
 for investigation, should be able, in case of need, to adjudi- 
 cate fully and justly the conflicting claims to raw materials 
 and to food supplies of various countries. 
 
 But it is not likely that so complicated a machinery will
 
 226 The Economic Causes of Modern War 
 
 be required. Freedom of access to all countries in the Far 
 East, the Near East, and in Africa, with adequate guaran- 
 tees of security against being isolated from these markets 
 and sources of supply by interference with transport, will 
 leave these matters very largely to the adjustment of ordi- 
 nary business competition. Under these conditions inter- 
 national economic rivalry need no more lead to hostilities 
 than ordinary competition within a state leads to war 
 among its citizens. 
 
 During the World War there was in operation on a prac- 
 tical basis, a League of Nations with economic as well as 
 political functions. Military, naval, and economic power 
 alike were wielded by the League of the Allies; but it was 
 only because of the economic organization that the success 
 of the military and naval power was possible. 
 
 The League as at present constituted does not make com- 
 plete provision for even an approach to such an economic 
 program, but it does take the necessary first step toward 
 such a policy. 'Tree trade spheres" or "spheres of equal 
 opportunity" have not been created in the colonial storm 
 centres, nor has the principle of the open door in China 
 been specifically reasserted — measures which if taken would 
 serve at once to reassure all the industrial nations, large 
 or small, that are haunted with the perpetual fear of find- 
 ing the world closed against them. The freedom of the seas 
 has not been won, nor have merchant vessels been placed 
 on the same footing of immunity from seizure as private 
 property on land. 
 
 The protest against this state of affairs, coming largely 
 from German sources, has been regarded with natural dis- 
 trust. Yet the protests made by the Germans have an 
 element of truth in them; and they express what many of 
 the smaller nations think and keep to themselves. A para-
 
 The League of Nations 227 
 
 graph from Matthias Erzberger's book, The League of 
 Nations, is typical of this group of complaints: x 
 
 "The sovereignty of one Power or group of Powers over the 
 great trade routes of the ocean cannot be reconciled with the 
 equal privileges of all nations. ... If violence is to be banished 
 from international life, one nation alone must not possess the 
 means of enforcing its will, as represented by the possession of 
 all the straits and coaling stations, and their protection by 
 means of warships. The seas must be free. They should belong 
 to all the nations in equal measure." 
 
 In another passage the author returns to the same 
 theme: 2 
 
 "So long as the sea-power of one nation exceeds the sea-power 
 of every other nation, so long as one nation holds in her hands 
 all the important straits and sea routes, so long as one nation 
 possesses practically all the coaling stations on the great trade 
 routes, so long will there exist a menace to all other nations. 
 Even if the menace is not operative in time of peace, it is, merely 
 by the fact of the existence of the military resources from which 
 it arises, a latent political power which is contrary to the sense 
 of international equality of rights at sea, arouses distrust, and 
 poisons the political atmosphere." 
 
 The tone of these complaints is perfectly familiar; and 
 the important thing about them is that very familiarity. 
 These are exactly the same things that the Germans said 
 before the war. The menace to sea routes and therefore to 
 industry brought about the building of the German fleet 
 and was one of the important underlying causes of the 
 World War. Herr Erzberger's book, however, has appeared 
 since peace was made, a circumstance which is a reminder 
 that nothing has been done to remove this danger to the 
 
 'Matthias Erzberger: The League of Nations, p. 161. I have omitted 
 italics in some places. 
 'Ibid., p. 216.
 
 228 The Economic Causes of Modern War 
 
 peace of the world. Untaught by the evils from which we 
 have but now emerged, we are going blindly onward in the 
 old path. A complete guarantee by the League of all 
 trade routes, both by land and sea, joined with immediate 
 access to colonial markets and raw materials, would cer- 
 tainly go a long way toward assuring permanent peace. 
 
 The extent to which the League of Nations does make 
 provision for economic readjustment with a view to the 
 reduction of hostility is very slight, even though it offers 
 hope for future development. Among the six bodies which 
 carry on its business, there is none that is specifically eco- 
 nomic in its functions. With the possible exception of 
 Mandataries and the Mandatary Commission, none of 
 these six bodies, the Executive Council, the Body of Dele- 
 gates, the Military and Naval Commission, the Bureau of 
 Labor, the Mandatary Commission, and the Permanent 
 Secretariat have any power whatever to deal with the most 
 important group of international questions. 
 
 In the Covenant of the League only three articles even 
 touch economic questions. These are: 
 
 ARTICLE XVI 
 
 "Should any of the High Contracting Parties break or dis- 
 regard its covenants under Article XII, it shall thereby, ipso 
 facto, be deemed to have committed an act of war against all 
 the other members of the League, which hereby undertake im- 
 mediately to subject it to the severance of all trade or financial 
 relations, the prohibition of all intercourse between their na- 
 tionals and the nationals of the covenant-breaking state, and 
 the prevention of all financial, commercial, or personal inter- 
 course between the nationals of the covenant-breaking state and 
 the nationals of any other state, whether a member of the 
 League or not. . . . 
 
 "The High Contracting Parties agree further that they will 
 mutually support one another in the financial and economic
 
 The League of Nations 229 
 
 measures which may be taken under this article, in order to 
 minimize the loss and inconvenience resulting from the above 
 measures, and that they will mutually support one another in 
 resisting any special measures aimed at one of their number by 
 a covenant-breaking state and that they will afford passage 
 through their territory to the forces of any of the High Con- 
 tracting Parties who are co-operating to protect the covenants 
 of the League." 
 
 ARTICLE XIX 
 
 "... Other peoples, especially those of Central Africa, are at 
 such a state that the mandatory . . . will also secure equal op- 
 portunities for the trade and commerce of the other members of 
 the League." 
 
 ARTICLE XXI 
 
 "The High Contracting Parties agree that provision shall be 
 made through the instrumentality of the League to secure and 
 maintain freedom of transit and equitable treatment for the 
 commerce of all states members of the League, having in mind 
 among other things, special arrangements with regard to the 
 necessities of the region devastated during the war of 1914-18." 
 
 This is the extent of the specific provision for the adjust- 
 ment of economic difficulties, which we have seen to be 
 the most prolific cause of wars. The Covenant recognizes 
 the power of economic and financial pressure against a 
 refractory state. Articles XIX and XXI contain at least 
 a recognition of the need for free access to colonies for all 
 powers, and of the importance of the freedom of trade 
 routes. But the League fails to secure these essentials. 
 The problem of security remains unsolved. As it stands at 
 present, the League is only a beginning, perhaps all that 
 could be expected at the present time. 
 
 Even if the League succeeds in solving the vexed prob- 
 lems of raw materials, food, markets, and trade routes, 
 there will remain the difficulty of finding room for the
 
 230 The Economic Causes of Modern War 
 
 surplus populations of states which are unwilling to see 
 their citizens domiciled under foreign flags. For this the 
 only solution is further colonial readjustment, without 
 affecting international freedom of approach to markets in 
 colonies, but so altering the boundaries that there may be 
 room in the world for all the nationalities to maintain their 
 coherence. 
 
 Whether it endures or whether it ends in failure, the pres- 
 ent League is at least an attempt at the solution of the 
 problems. At least it offers ground for hope that a way 
 may yet be found for relief of the economic friction that 
 has caused so much warfare in the past, through the recog- 
 nition of the need of all the nations of the world for 
 security in their inevitable economic interdependence.
 
 BIBLIOGRAPHY
 
 General Reference Histories 
 
 Wars from 1878 to 1918 
 
 Causes of War 
 
 League of Nations 
 
 General
 
 BIBLIOGRAPHY 
 
 (Note: The volumes listed here include most of the authorities con- 
 sulted. A few statistical reference books have been omitted, and 
 contemporary articles from various journals have been listed only 
 •when of especial importance. References to others are invariably 
 given in foot-notes.) 
 
 GENERAL REFERENCE HISTORIES 
 
 Cambridge Modern History, Vol. XII: The Latest Age, Cam- 
 bridge University Press, 1917. — An authoritative work but 
 with a marked British bias. 
 
 Hazen, Charles Downer: Europe Since 1815, New York, 
 Henry Holt & Co., 1910. — Useful but rather fragmentary. 
 
 Hazen, Charles Downer: Modern European History, New 
 York, Henry Holt & Co., 1917. — Elementary in its style 
 but affording a good general survey of the history of the 
 period. 
 <Holt, Lucius Hudson, and Chilton, Alexander Wheeler: 
 History of Europe from 1862 to 1914, New York, Macmil- 
 lan, 1917. — A concise and accurate history. A study of 
 political sequences, with excellent military studies by Cap- 
 tain Chilton, the junior author. 
 
 Rose, J. Holland: The Development of the European Na- 
 tions, 1870-1914, New York and London, Putnams, 1916. 
 A general study of European history during approximately 
 the period covered by the present volume. 
 
 WARS FROM 1878 TO 1918 
 
 AFGHAN WAR 
 
 Adye, Sir J. M.: Indian Frontier Policy, London, Smith, Elder 
 & Co., 1897. — A discussion of the Afghan question from the 
 point of view of an English colonial official. 
 
 Causes of the Afghan War, Being a Selection of the Papers Laid 
 Before Parliament, London, 1879. The editor is not named. 
 
 233
 
 234 The Economic Causes of Modern War 
 
 Dacosta, John: A Scientific Frontier, London and Calcutta, 
 W. H. Allen, 1891. — This work is violently condemnatory 
 of British policy. 
 
 Forbes, Archibald: The Afghan Wars, 1839-1842 and 1878- 
 1880, New York, Scribners, 1892. — Contains a keenly crit- 
 ical study of the causes of the war by a correspondent who 
 has probably seen more fighting than any other European. 
 
 Second Afghan War, Account by the British Army Intelligence 
 Service, London, Murray, 1908. 
 
 ZULU WAR 
 
 Colenso, Frances Ellen: History of the Zulu War and Its 
 Origin, London, Chapman Hall, 1880. — An account by the 
 daughter of Bishop Colenso, the distinguished Biblical critic. 
 A defense of the natives. 
 
 Gibson, J. Y.: The Story of the Zulus, New York, Longmans, 
 1911. An impartial statement of facts. 
 
 Johnston, Sir Harry: Britain Across the Seas: Africa, Lon- 
 don, National Society's Depository, 1910. — Imperialistic. 
 
 Norris-Newman, Charles L.: In Zululand with the British 
 Throughout the War of 1879, London, W. H. Allen, 1880 — 
 A contemporary account. 
 
 Wilmot, A.: History of the Zulu War, London, Richardson & 
 Best, 1880. — British colonial point of view. 
 
 the nitrate war 
 
 Anon.: Difficulty Between Chile on the One Hand and Peru 
 and Bolivia on the Other, n.d. — A pamphlet issued as 
 Chilean propaganda in English. 
 
 Anon.: Guerre entre Le Chili, he Perou, et La Bolivia, Paris 
 Imprimerie Nouvelle, 1879. — A contemporary collection of 
 Chilean documents and comments favorable to Chile from 
 the European press. 
 
 Anon.: "The Tacna-Arica Controversy," The Covenant, a 
 Quarterly Journal of the League of Nations: i: 426-429: 
 Apr., '20. — A non-partisan summary of the origin and pres- 
 ent status of the dispute.
 
 Bibliography 235 
 
 Alzamara, I.: Peru and Chile, n.d. — A reprint from La Re- 
 forma Social. — Comment on the renewal of the dispute 
 during 1918, by a former Vice-President of Peru. 
 
 Arano, Diego Barros: Histoire de la Guerre de la Pacifique, 
 Paris, Librairie Militaire de J. Dumaine, 1881. — Primarily 
 a military study, but, like most military histories, contains 
 a succinct chapter on war causes. 
 
 Arthur, Chester A.: Message from the President of the 
 United States, Transmitting Papers Relating to the War in 
 South America and Attempts to Bring About a Peace, 
 Washington, Government Printing Office, 1882. — Contains 
 numerous documents extremely ill-arranged. 
 
 Boyd, R. Nelson: Chili: Sketches of Chili and the Chilians 
 During the War, London, W. H. Allen & Co., 1881. — A clear 
 but not very comprehensive chapter on the dispute over the 
 nitrate lands. The date of the declaration of war is errone- 
 ously given. 
 
 Le Leon, M.: Souvenirs a L'Armee Chilienne, Paris, Librairie 
 Militaire, L. Baudoin et Cie., 1883. — A study by a French 
 naval officer. 
 
 Mantua, V. M., and Pezet, F. A.: The Question of the Pa- 
 cific, Philadelphia, Press of Geo. F. Lasher, 1901. — A Peru- 
 vian statement, containing an excellent map. 
 
 Official: Diplomatic Debate of 1918, Valparaiso, South Pa- 
 cific Mail, 1918. — Documents of the foreign offices. 
 
 OCCUPATION OF EGYPT 
 
 Arminjon, Pierre: La Situation Economique et Financiere de 
 L'Egypte, Le Soudan Egyptien, Paris, E. Pichon, 1911. A 
 French statistical study. 
 
 Bourgeois, Roger: La Crise Egyptienne, These, Paris, A. Rous- 
 seau, 1913. — A similar piece of work. 
 
 Cromer, Evelyn Baring, First Earl of: Modern Egypt, New 
 York, Macmillan, 1916. — Authoritative first-hand account. 
 Naturally imperialist. 
 
 Eid, Alfred: La Fortune Immobiliere de L'Egypte et sa Dette 
 Hypothecaire, Paris, F. Alcan, 1907. — A careful study.
 
 236 The Economic Causes of Modern War 
 
 Gavillot, J. C. Aristide: L'Angleterre Ruine UEgypte, Paris, 
 
 J. Andre et Cie., 1895. — Unnecessarily Anglophobe. 
 Haekal, Mohamed Husein: La Dette Publique Egyptienne, 
 
 These, Paris, A. Rousseau, 1912. — A condensed view of 
 
 Egyptian finances. 
 Milner, Alfred: England in Egypt, New York, Macmillan, 
 
 1912. — Interesting expression of English opinion. 
 Noailles, A. M. R. A., Vicomte de: Les Anglais en Egypte, 
 
 Paris, 1898. — Significant because of source and date. 
 Worsford, W. Basil : The Future of Egypt, Collins' Clear Type 
 Press, n.d. — Concise statement of the British attitude today. 
 
 ABYSSINIAN WARS 
 
 Baldissera, Antonio: Rapport sur les Operations Militaires de 
 la Campaigne D'Afrique, Paris, H. Charles-Lavauselle, 1898. 
 — First-hand account by an Italian official. 
 
 Berkeley, George Fitz-H.: The Campaign of Adowa, West- 
 minster, A. Constable & Co., 1902 — A general study. 
 
 Castonnet des Fosses, Henri: L'Abyssinie et les Italiens, 
 Paris, P. Tequi, 1897. — A brief summary of colonial policy. 
 
 Pellenc, Capt. A. J. J. A.: Les Italiens en Afrique, Paris, L. 
 Baudoin, 1897. — A French military study. 
 
 CHINO-JAPANESE WAR 
 
 Ariga, Nagao: La Guerre Sino-Japonaise au Point de Vue du 
 Droit International, Paris, A. Pedone, 1896. — A study by a 
 Japanese university professor. 
 
 Bujac, Emile: La Guerre Sino-Japonaise, Paris, Henri-Charles 
 Lavauselle, 1904. — French military criticisms. 
 
 Burleigh, Bennett: The Empire of the East, London Chap- 
 man and Hall, 1905. — A popular account by a famous British 
 war correspondent. 
 
 Sauvage, Lieutenant: La Guerre Sino-Japonaise, Paris 
 Libraire Militaire de L. Baudoin, 1897.— Intended for mili- 
 tary use but excellent on the causes of the war. 
 
 "Vladimir" (pseud.) : The Chino- Japanese War, New York, 
 Scribners, 1896. — Valuable study of the causes; the choice of 
 a Russian pseudonym is prophetic.
 
 Bibliography 237 
 
 BOXER REBELLION 
 
 Bland, J. P. 0.: China Under the Empress Dowager, Philadel- 
 phia, J. B. Lippincott, 1910. — General survey of the events 
 preceding the war. 
 
 Cheminon, Jules: Les Evenements Militaires en Chine, Paris, 
 P. R. Chapelot, 1902. — Survey of causes. 
 
 Clement, Paul H.: The Boxer Rebellion, a Political and Dip- 
 lomatic Review, New York, Columbia University, 1915. — 
 By far the best book on the subject. A careful study and 
 analysis of the causes of the war and an evaluation of their 
 relative importance. 
 
 Holcombe, Chester: The Real Chinese Question, New York, 
 Dodd, Mead & Co., 1900. — Investigation of Chinese con- 
 ditions. 
 
 Landor, A. H. S.: China and the Allies, New York, Scribners, 
 1901. — Both sides of the question presented. 
 
 RUSSO-JAPANESE WAR 
 
 Asakawa, Kanichi: The Russo-Japanese Conflict, Boston, 
 Houghton, Mifflin & Co., 1904. — Acute analyses of the eco- 
 nomic motives on both sides, with thorough documentation 
 and many statistics. 
 
 "Chausseur" (Pseud.) : A Study of the Russo-Japanese War, 
 London, William Blackwood & Sons, 1915. — Survey of rela- 
 tions between the two powers. 
 
 China Yearbook, 1919-20, London, George Routledge & Son, 
 New York, E. P. Dutton. — A useful reference book. 
 
 Cowen, Thomas: The Russo-Japanese War, London, Edward 
 Arnold, 1904. — Contains frequent expression of Marquis 
 Ito's opinions not otherwise obtainable. 
 
 Japan Yearbook (Y. Takenob, ed.), Japan Yearbook Office, 
 Tokyo, 1918. 
 
 Japan Yearbook, 1913-1914, Japan Gazette Co., Yokohama, 1914. 
 — Both these contain much useful information. 
 
 Kinai, M.: The Russo-Japanese War (Official Reports), Tokyo, 
 The Shimbashido, n. d. — An excellent Japanese account.
 
 238 The Economic Causes of Modern War 
 
 Kuropatkin, General Alexei Nikolayevttch : The Russian 
 Army and the Japanese War, Captain A. B. Lindsay, trans., 
 New York, E. P. Dutton, 1909. 
 
 McCormick, Frederick: The Tragedy of Russia in Pacific 
 Asia, London, Grant Richards, 1909. Of value only as a 
 study of Russian policy. 
 
 McLaren, W. W.: A Political History of Japan During the 
 Meiji Era, 1867-1912, London, George Allen & Unwin, Ltd., 
 New York, Scribners, 1916. First-hand information by an 
 American economist familiar with the people and the 
 country. 
 
 Millerand, Thomas: Democracy and the Eastern Question, 
 New York, The Century Company, 1919. — Examination of 
 the Eastern question with special reference to the United 
 States. 
 
 Pinon, Rene: La Lutte pour le Pacifique, Paris, Perrin et Cie., 
 1916. — A study of the origins and results of the war apart 
 from its incidents. Some attention to American problems 
 in the Philippines. 
 
 Porter, R. P.: Japan, the Rise of a Modern Power, Oxford, 
 The Clarendon Press, 1918. — Economic analysis. 
 
 Ross, Colonel Charles: An Outline of the Russo-Japanese 
 War, London, Macmillan, 1912. — Not very acute account 
 of causes but a good working outline, as its name implies. 
 
 Sherrill, Charles H.: Have We a Far-Eastern Policy? New 
 York, Scribners, 1920. The author is an American diplomat. 
 
 German General Staff: Official Account of the Russo-Japa- 
 nese War, Lieutenant Karl von Donat, translator. — A vo- 
 luminous work, but with an excellent account of the causes in 
 fairly brief compass. 
 
 CUBAN INSURRECTION AND SPANISH-AMERICAN WAR 
 
 Bujac, Emile: La Guerre Hispano-Americaine, Paris, H. 
 Charles-Lavauselle, 1899. — A European view of the conflict. 
 
 Callahan, James M.: Cuba and Its International Relations, 
 Baltimore, Johns Hopkins University Press, 1899. — Inter- 
 esting as a contemporary account.
 
 Bibliography 239 
 
 Chadwick, French E.: Relations of the United States and 
 Spain, New York, Scribners, 1911. — Deals mainly with 
 diplomacy. 
 
 Draper, Andrew Sloan: Rescue of Cuba, New York, Silver 
 Burdett and Co., 1910. — A little economic information. 
 
 Gossip, G. H. D.: "The Mournful Case of Cuba," Fortnightly 
 Review: 69: 832-843: May, '98. Much valuable data. 
 
 Latane, J. H.: America as a World Power, New York, Harpers, 
 1907. — A general consideration of America's new role with 
 some attention to Cuba. 
 
 Latane, J. H.: Diplomacy of the United States with Regard to 
 Cuba, American Historical Association, Annual Report, 1897, 
 pp. 217-277. — Mainly diplomatic. 
 
 Lodge, Henry Cabot: The War with Spain, New York, 
 Harpers, 1899. — Interesting because of the author's position. 
 
 Matheson, Fred J.: "The United States and Cuban Inde- 
 pendence," Fortnightly Review: 69: 816-832: May, '98. 
 
 Morrison, Charles: The War with Spain, Philadelphia, J. 
 B. Lippincotts, 1899. — Contemporary but rather popular. 
 
 Robinson, Albert G.: Cuba and the Intervention, New York, 
 Longmans, 1905. — Covers the whole period of the disturb- 
 ance and investigates the economic causes completely. 
 
 Taylor, Hannis: "A Review of the Cuban Question in its 
 Economic, Political, and Diplomatic Aspects," North Ameri- 
 can Review: 165:610-612, N., '97. 
 
 GRECO-TURKISH WAR 
 
 Bartlett, Sir Ellis Ashmead: The Battlefields of Thessaly, 
 
 London, John Murray, 1897. — The author has evident 
 
 Turkish sympathies. 
 Bikelios, Demetrios: he Role et les Aspirations de la Grece 
 
 dans la Question d'Orient, Paris, Au Cercle Saint-Simon, 
 
 1885. — The Greek account. 
 Bickford-Smith, R. A. H.: Greece Under King George, London, 
 
 R. Bentley & Son, 1893. — Incidental references to incidents 
 
 preceding the war. 
 Ministere des Affaires Etrangeres: Documents Diplomatiques, 
 
 1897. — Like most diplomatic interchanges, fails to make 
 
 clear the concealed economic motive.
 
 240 The Economic Causes of Modern War 
 
 OlKONOMOPOULOS, ElIAI 'lo-TOpLCL TOV 'EX\r]VOTOVpKOV TToXe/JLOV 
 
 Athens, 1918. — A lengthy Greek account of the war. 
 
 THE BOER WARS 
 
 Cana, Frank R.: South Africa from the Great Trek to the 
 Union, London, Chapman and Hall, 1909. — An English 
 version characterized by great fairness to the Boers. 
 
 Cappen, James: Britain's Title to South Africa, London, Mac- 
 millan, 1901. — British imperialistic bias. 
 
 Cecil, Evelyn, M. P.: On the Eve of the War, London, John 
 Murray, 1900. — An English politician's ideas. 
 
 Cook, Edward T.: The Rights and Wrongs of the Transvaal 
 War, London, Edwin Arnold, 1902. — Fair effort at giving 
 both sides. 
 
 Doyle, Sir Arthur Conan: The Great Boer War, New York, 
 McClure, Phillips, and Co., 1912. — Ardently imperialistic. 
 
 Eybers, G. W.: Select Constitutional Documents Illustrating 
 South African History, London, George Routledge & Sons, 
 Ltd., New York, E. P. Dutton, 1918. — A good source book. 
 
 Fisher, W. E. Garrett: The Transvaal and the Boers, London, 
 Chapman and Hall, 1900. — General history. 
 
 Hobson, J. A.: The War in South Africa, Its Causes and Its 
 Effects, New York, Macmillan, 1900. — An economic inter- 
 pretation by a distinguished British economist, who accuses 
 international financiers of deliberately precipitating the war. 
 
 Wilmot, Hon. A.: Manual of South African History, London, 
 Kegan Paul, Trench, Triibner & Co., 1901. — Especially use- 
 ful for the earlier parts of the history of the Boers. 
 
 Mitchell, L.: Life and Times of the Right Honorable Cecil 
 John Rhodes, New York, Kennerley, 1910. — A study of 
 Rhodes' life is indispensable to understanding South African 
 history. 
 
 herero rising 
 
 Calvert, Albert Frederick: Southwest Africa During the 
 German Occupation, 1884-1914, London, T. W. Laurie, 1915. 
 — Contains a brief statement of the facts. 

 
 Bibliography 241 
 
 Leutwein, Theodor: Die Kampfe mit Hendrik Witboi, Leip- 
 zig, R. Voigtlander, 1912. — Colonel Leutwein's account of 
 the first Hottentot rising, which preceded the Herero Rising. 
 
 Sander, L.: Geschichte der Deutsches Kolonial-Gesellschaft 
 fur Sudwest-Afrika, Berlin, Dietrich Reimer, 1912. 
 
 Articles under "German Southwest Africa" in the New Interna- 
 tional Encyclopedia and the Encyclopedia Britannica. 
 
 ITALO-TURKISH WAR 
 
 Barclay, Sir Thomas: The Turco-Italian War, London, Con- 
 stable, 1912. Both causes of the war and the operations are 
 discussed. 
 
 Bratjn, Ethel: What I Saw in Tripoli, London, T. F. Unwin, 
 1914. — Study of the country, people, and resources. 
 
 Foerster, Robert F.: Italian Emigration of Our Times, Cam- 
 bridge, Harvard University Press, 1919. — An exhaustive 
 investigation of the Italian population question. 
 
 Lapworth, Charles: Tripoli and Young Italy, London, S. 
 Swift & Co., 1912. — Examination of the relationship between 
 Tripoli and Italy, the Italian need for the country, causes 
 of the war, resources, etc. 
 
 Mehier de Mathiuisieulx, Henri: La Tripolitaine d'Hier et 
 de Demain, Paris, Hachette et Cie., 1912. — A French view 
 which is important because of the Franco-Italian colonial 
 relations. 
 
 THE BALKAN WARS 
 
 Baucabeille, B. P. L.: La Guerre Turco-Balkanique, Paris, 
 
 Chapelot, 1914. — A fairly complete account. 
 Becker, G.: La Guerre C ontemporaine dans les Balkans et la 
 
 Question d'Orient, Paris, Berger Levrault, 1899. Much 
 
 valuable data on the causes of the wars. 
 Campbell, Cyril: The Balkan War Drama, New York, Mc- 
 
 Bride & Co., 1913. Attention given to incidents rather 
 
 than causes of the war. 
 Carnegie Endowment for Peace: Enquete dans les Balkans, 
 
 Rapport, Paris, G. Cres et Cie., 1914. — A study of causes.
 
 242 The Economic Causes of Modern War 
 
 Devas, Georges: La Nouvelle Serbie, Paris, Berger-Levrault, 
 
 1918. Special study of Serbian difficulties and progress. 
 Fellion, Georges: Entre Slaves, Paris, Societe des Ecrivains, 
 
 Frangais, 1894. — Useful for the Serbo-Bulgarian War. 
 Forbes, Nevill: The Balkans (with A. Toynbee, D. Mitrany, 
 
 D. G. Gogart), Oxford, Clarendon Press, 1915. — Dr. Forbes 
 
 is a distinguished Slavic scholar, better able to understand 
 
 the Balkans than those who do not speak their languages. 
 Fox, Frank: The Balkan Peril, London, Black, 1915. — The 
 
 European significance of the Balkan troubles. 
 Leffan, R. D. G.: The Serbs, Guardians of the Gate, Oxford, 
 
 Clarendon Press, 1918. — A good handbook for Serbian his- 
 tory. 
 Loiseau, Charles: he Balkan Slav et la Crise Autrichien, 
 
 Paris, Perrin et Cie., 1898. — A French criticism of Austrian 
 
 policy. 
 Miller, William: The Balkans, New York, Putnams, 1911. — 
 
 Description of the condition of the Balkan states before the 
 
 outbreak of the wars of 1912-1913. 
 Mozet, Alfred: Le Monde Balkanique, Paris, E. Flammarion, 
 
 1917. A good deal of discussion of the wars and their 
 
 genesis. 
 Rankin, Colonel Reginald: Inner History of the Balkan War, 
 
 London, Constable & Co., 1914. — Investigation of the causes 
 
 of the wars. 
 Regenspurgsky, Colonel Karl: La Guerre Serbo-Bulgare de 
 
 1885, Lieutenant Barth, Translator, Paris, Berger-Levrault, 
 
 1897. — Expression of an Austrian army officer's views. 
 von Huhn, Major Arthur Ernst: The Struggle of the Bulgars 
 
 for Natural Independence under Prince Alexander, London, 
 
 John Murray, 1886. 
 
 the world war 
 
 Ajam, Maurice: Le Probleme Bconomique Franco- Allemande, 
 Paris, Perrin et Cie., 1914. — Author's official position and 
 intimate knowledge makes the book of value. 
 
 Bang, J. P.: Hurrah and Hallelujah, Jessie Biicher, translator, 
 New York, George H. Doran Co., 1917. — A compilation of
 
 Bibliography 243 
 
 German war utterances, giving an accurate view of one side, 
 at least, of the national mind. 
 
 Compilation : Modern Germany in Relation to the Great War, 
 New York, Kennerley, 1916. — Most of the contributors are 
 university professors. 
 
 Compilation : Out of Their Own Mouths, New York and Lon- 
 don, D. Appleton & Co., 1917. — German war utterances, 
 some of which throw light on the attitude toward England. 
 
 Cheradame, Andre: he Plan Pangermaniste Demasque, Paris, 
 Plon-Nourrit et Cie., 1916. — Well-known French expose of 
 extreme Pan-German ambitions. 
 
 Cheradame, Andre: La Question d 'Orient, Paris, Plon-Nourrit, 
 et Cie., 1915. — The attitude of all the Powers toward the 
 Bagdad Railway. 
 
 Davis, William Stearns: The Roots of the War, New York, 
 Century Company, 1918. — Concise and accurate volume by 
 an American scholar. 
 
 Eckel, Edwin C: Coal, Iron, and War, New York, Holt, 1920. 
 — The most recent book on this important subject. 
 
 Frank, Glenn, and Stoddard, Lothrop: The Stakes of the 
 War, New York, Century Company, 1918. — A compilation 
 of economic, historic, and political data, extremely well 
 arranged. 
 
 Gay, E. F.: "French Iron and the War," Military Historian and 
 Economist: 1:306-309: July, 16. A brief but illuminating 
 summary based largely on German sources and the report of 
 the Stockholm Geological Congress of 1910. 
 
 Guyot, Yves: The Causes and Consequences of the War, F. 
 Appleby Holt, translator, London, Hutchinson & Co., 1916. 
 — Much attention to economics. 
 
 Jastrow, Morris: The War and the Bagdad Railway, Phila- 
 delphia, J. P. Lippincott, 1918. — Historical and geographical. 
 
 Jeans, W. T.: The Creators of the Age of Steel, New York, 
 Scribners, 1884. — A chapter devoted to Sidney Gilchrist 
 Thomas. 
 
 Natjmann, Friedrich: Central Europe, Christabel Meredith, 
 translator, New York, Knopf, 1917. — A prominent Ger- 
 man, member of the Reichstag, gives his opinions as to 
 Germany's situation.
 
 244 The Economic Causes of Modern War 
 
 Nystrom, Anton: Before, During, and After 1914, H. G. 
 de Walterstorff, translator, London, William Heinemann, 
 1915. — A chapter on overpopulation and its dangers. 
 
 Pinon, Rene: France et Allemagne, 1870-1913, Paris, Perrin 
 et Cie., 1906. — A useful documentation of the Moroccan 
 crisis. 
 
 Schmitt, Bernadotte Everly: England and Germany, 1740- 
 1914, Princeton, University Press, London, Humphrey Mil- 
 ford, 1916. Valuable but rather pro-English. 
 
 Seeley, J. R.: The Expansion of England, London, Macmillan, 
 1914. Explanation of British colonization. 
 
 Seligman, E. R. A.: An Economic Interpretation of the War, 
 New York, D. Appleton & Co., 1915. — Much valuable in- 
 vestigation of the economic causes of the World War. 
 
 von Bernhardi, General Friedrich: Germany and England, 
 New York, G. W. Dillingham, 1915. — Explanatory volume 
 to Germany and the Next War. Indicates German fear of 
 British trade. 
 
 CAUSES OF WAR 
 
 Anon.: Historical Illustration of the Origin and Consequences 
 
 of War, London Peace Society Tracts, No. 10, 1838. Out 
 
 of date but not without value. 
 Crosby, Oscar T. : International War, Its Causes and Its Cure, 
 
 London, Macmillan, 1919. — The most exhaustive book on 
 
 the subject. The author is a former army officer. 
 Hall, H. Fielding: Nature of War and Its Causes, London, 
 
 Hunt and Blackett, 1917. — A good general survey of the 
 
 field. 
 Howerth, I. W.: "The Causes of War," Scientific Monthly: 
 
 2:118-124, F., '16. An interesting review of this phase of the 
 
 subject. 
 Oliver, F. S.: Ordeal by Battle, London, Macmillan, 1915. — 
 
 Conventional "war book" but with a fair discussion of the 
 
 general causes of wars.
 
 Bibliography 245 
 
 LEAGUE OF NATIONS 
 
 Berry, Lieutenant Trevor T.: The Hope of the World, Lon- 
 don, P. S. King & Son, 1919. — An accurate estimate of the 
 significance of raw materials. 
 
 Butler, Sir Geoffrey: A Handbook to the League of Nations, 
 London, Longmans Green, 1919. — Conventional historico- 
 legal discussion. Good outline of the machinery of the 
 League and a convenient grouping of documents. 
 
 Brailsford, Henry Noel: A League of Nations, New York, 
 Macmillan, 1917. — Examination of the economic conditions 
 which make a league necessary. 
 
 Covenant, The, A Quarterly Journal of the League of Nations, 
 Nos. 1, 2, and 3. Discussion of problems affecting the 
 League as they arise. Many maps and a full appreciation 
 of economic conditions affecting the relations of states. 
 
 Crozier, Alfred Owen: League of Nations: Shall It Be an 
 Alliance or a Nation of Nations? New York, Le Couver 
 Press Co., 1919. — Advocates "territorial surgery" and inter- 
 nationalization of important waterways. 
 
 Crozier, Alfred Owen: Nation of Nations — A Way to Peace. 
 Cincinnati, Stewart Kidd & Co., 1915. — Assertion of the 
 practical value of the League. 
 
 Dwight, W. Morrow: The Society of Free States, New York, 
 Harper, 1919. Like Mr. Garvin, the author reads a moral 
 from the economic co-operation of the Allies in war-time. 
 
 Erzberger, Matthias: The League of Nations, New York, Holt, 
 1919. — A clear expression of the German attitude. Especial- 
 ly to be examined because of its economic complaints. 
 
 Garvin, J. L.: The Economic Foundations of Peace, London, 
 Macmillan, 1919. — Insists on economic justice as the only 
 ground of permanent peace. Rather incoherently written 
 as a whole, but of the greatest value. 
 
 Hamilton, General Sir Ian: The Millennium, London, Ed- 
 ward Arnold, 1919. — "I have arrived at a grand junction 
 where on the one hand I see reflected into the sky Old 
 Glory floating side by side with our own Imperial Standard; 
 and on the other, darkness — darkness." 
 
 Hobson, J. A.: Towards International Government, New York, 
 Macmillan, 1915. — An economist's view.
 
 246 The Economic Causes of Modern War 
 
 La Fontaine, Henri: The Great Solution, Magnissima Charta, 
 Boston, World Peace Foundation, 1916. — A political rather 
 than economic study of the League. 
 
 Lawrence, T. J.: The Society of Nations, Its Past, Present, and 
 Possible Future, New York, Oxford University Press, 1919. 
 — Historical and legal. 
 
 Milhaud, Edgard: La Societe des Nations, Paris, Bernard 
 Grasset, 1917. — One chapter on the economic sanction. 
 
 Minor, Raleigh C: A Republic of Nations, New York, Oxford 
 University Press, 1918. — A review of current opinion. 
 
 Official Journal, Nos. 1, 2, and 3. — Documents of the League of 
 Nations. 
 
 Paish, George: A Permanent League of Nations, London, T. 
 Fisher Unwin, 1918. — Discussion of the importance of 
 economic interdependence and international trade as affect- 
 ing war and peace. 
 
 Sayre, Francis Bowes: Experiments in International Admin- 
 istration, New York, Harpers, 1919. — Chiefly historical. 
 
 Smuts, Lieutenant General the Rt. Hon. Jan C.: The 
 League of Nations, a Practical Suggestion, New York, Nation 
 Press, 1919. — A careful and able discussion of economic and 
 financial aspects is included. 
 
 Stall ybrass, W. T. S.: A Society of States, New York, E. P. 
 Dutton, 1919. — Economic conditions wholly neglected. 
 
 Wells, H. G.: Idea of a League of Nations, Boston, Atlantic 
 Monthly Press, 1919. — A group of eminent collaborators 
 have assisted the author; they deduce the necessity of the 
 League from the nature of our civilization. 
 
 Woolf, Leonard S. (editor) : Framework of a Lasting Peace, 
 London, Allen and Unwin, 1917. — Contains the Hague 
 Minimum Programme, the Fabian Society's Draft Treaty, 
 and other proposals. 
 
 GENERAL 
 
 Alfassa, Maurice: L'Apres Guerre, Paris, Belin Freres, 1918. — 
 
 Economic effects of the war. 
 Angell, Norman (Pseud.) : Foundations of International 
 
 Polity, London, William Heinemann, 1914. — War held to be 
 
 unprofitable.
 
 Bibliography 247 
 
 Angell, Norman (Pseud.) : The Great Illusion, New York, 
 Putnams, 1910. — Development of the author's well-known 
 pacifism and theory of the economic prevention of war. 
 
 Barker, J. Ellis: Economic Statesmanship, London, John Mur- 
 ray, 1918. — Study mainly of after-war problems. 
 
 Brown, Philip M.: International Realities, New York, Scrib- 
 ners, 1917. — Advocates a gentler sort of Realpolitik. 
 
 Bourne, Randolph S.: Towards an Enduring Peace, American 
 Association for International Conciliation, 1916. — A valuable 
 symposium. 
 
 Brailsford, Henry Noel: The War of Steel and Gold, A Study 
 of the Armed Peace, New York, Macmillan, 1915. — Dis- 
 passionate investigation of the effects of economics and 
 finance on international relations. 
 
 Chester, Rear- Admiral Colby C: "Present Status of the 
 Monroe Doctrine," Annals of the American Academy of 
 Political and Social Science, July, 1914. 
 
 Clark, J. Maurice, Hamilton, Walter H., and Moulton, 
 Harold G.: Readings in the Economics of War, Chicago, 
 University of Chicago Press, 1918. — A collection of most 
 suggestive material, mainly journalistic. 
 
 Dawson, W. H.: Evolution of Modern Germany, New York, 
 Scribners, 1914. — An excellent study of German develop- 
 ment. 
 
 Dickinson, G. Lowes: The Choice Before Us, New York, 
 Dodd, Mead & Co., 1917. — Causation of wars and preven- 
 tion of future wars. 
 
 Dillon, E. J.: The Inside Story of the Peace Conference, New 
 York, Harpers, 1920. — Vivid picture of the Conference, with 
 discussion of economic interests among others, by an eminent 
 authority. 
 
 Drage, Geoffrey: Austria- Hungary, London, John Murray, 
 1909. — Much information on economic relations. 
 
 Faries, John Cuthbert: The Rise of Internationalism, New 
 York, W. D. Gray, 1915. — The Appendix contains a collec- 
 tion of material not accessible elsewhere. 
 
 Fullerton, William M.: Problems of Power, New York, 
 Scribners, 1913. — Published immediately before the war.
 
 248 The Economic Causes of Modern War 
 
 Contains a full discussion of the world situation, as it existed 
 then. 
 
 Gibbons, Herbert Adams: The New Map of Europe, Century- 
 Company, 1914. 
 
 Gibbons, Herbert Adams: The New Map of Africa, Century 
 Company, 1916. 
 
 Gibbons, Herbert Adams: The New Map of Asia, Century 
 Company, 1920. — A series of anti-imperialistic researches 
 into the imperialism of all nations. 
 
 Haskins, Charles Homer, and Lord, Robert Howard: Some 
 Problems of the Peace Conference, Harvard University Press, 
 1920. First-hand information by two eminent authorities. 
 
 Hassall, Arthur: History of British Foreign Policy from the 
 Earliest Times to 1912, Edinburgh and London, W. Black- 
 wood & Son, 1912. — Covers the field thoroughly. 
 
 Hirst, F. W.: The Political Economy of War, London, J. M. 
 Dent, 1916. — The only existing text-book. It neglects, 
 however, the economic causes. 
 
 Hutton, J. Arthur: The Cotton Crisis, Manchester, British 
 Cotton-Growing Association, 1904. — Exposition of the 
 British difficulties with regard to cotton. 
 
 Keynes, John Maynard: The Economic Consequences of the 
 Peace, New York, Harcourt, Brace & Howe, 1920. — Insist- 
 ence upon economic justice as a basis of peace. 
 
 Latane, J. H.: From Isolation to Leadership, Garden City, 
 Doubleday Page & Co., 1918. — Study of the evolution of 
 the international status of America. 
 
 Lawson, W. R.: Modern War and War Taxes, Edinburgh and 
 London, W. Blackwood & Sons, 1912. — Refutation of Mr. 
 Norman Angell's theories. 
 
 Lambrino, Georges: Finance de Guerre, Paris, Sirey, 1913. — 
 The relationship between finance and war. 
 
 Lippman, Walter: The Stakes of Diplomacy, New York, Holt, 
 1915. — An admirable statement of the need of economic 
 expansion and its relation to war. 
 
 Muir, Ramsay: The Expansion of Europe, Boston, Houghton 
 Mifflin & Co., 1917. — Traces the motives and effects of im- 
 perialism.
 
 Bibliography 249 
 
 Robinson, E. V. D.: "War and Economics," Political Science 
 Quarterly: 15:581-629: D., '00. Deals mainly with ancient 
 wars. Highly suggestive. Good bibliography. 
 
 Seligman, E. R. A.: The Economic Interpretation of History, 
 New York, Columbia University Press, 1903. Carries fur- 
 ther the notions of Karl Marx. 
 
 Veblen, Thorstein B.: An Inquiry into the Nature of Peace 
 and the Terms of Its Perpetuation, London and New York, 
 Macmillan, 1917. — Theories of a well-known American 
 writer.
 
 INDEX
 
 INDEX 
 
 d'Abruzzi, Due, 131 
 
 Abyssinian Wars, 46, 48, 49, 78-80 
 
 Access to sea, 172, 173 
 
 Achard, Franz Carl, 117 
 
 Aden, 34 
 
 Adowah, Battle of, 80 
 
 Adrianople, 138 
 
 Adriatic, 137 
 
 Aerial warfare, 220 
 
 Afghanistan 
 
 frontier, 99 
 
 invasions, 35, 46, 48, 50-56 
 Africa 
 
 Central, 191, 229 
 
 development of, 210 
 
 France in, 204, 185 
 
 freedom of access, 226 
 
 Germany in, 204 
 
 opening of, 43, 44, 79 
 
 slave trade, 198 
 
 South, 185 
 
 Stanley, Henry M., in, 43, 44 
 African Review, 113 
 Afrikanders, see Boers 
 Agadir incident, 12, 142, 149, 156, 
 
 157, 191, 192, 193 
 Agordat, Battle of, 79 
 Agriculture, 11, 199 
 Agronomy, 199 
 Ajam, Maurice, quoted, 19-n 
 Albania, 133, 137, 170 
 Alcohol, international congress on, 
 
 199 
 Aleppo, 162 
 
 Alexander the Great, 165 
 Alexander, Prince of Bulgaria, 77 
 Alexandria, massacre at, 72 
 Algeciras Conference, 157 
 Algiers, 155 
 Ali, Mohammed, 65 
 Ali, Shere, 53 
 Allenby, General, 3 
 Alliance, see Triple Alliance 
 Allies, economic union of, 222 
 Alsace-Lorraine, 9, 44, 150, 204 
 America, see United States 
 America, South, British investments 
 in, 184 
 
 American cotton, 23, 212-214 
 Amsterdam, port of, 158 
 Amir of Afghanistan, 51, 53, 54 
 Amur, 92, 99 
 Ancestor-worship, 93, 95 
 Ancon, Treaty of, 58, 63, 64 
 Andes boundary question, 62 
 Angell, Norman, quoted, 177 
 Anglo-French Entente, 75 
 Anglo-German trade rivalry, 142, 
 
 144-150, 166, 210 
 Anglo-Japanese Alliance, 100 
 Anglo-Russian Agreement, 35, 39, 
 
 56, 139 
 Angora, 161, 169 
 Annam, French in, 46, 48, 49, 81, 
 
 82, 139 
 Antafagasta, 61, 64 
 Anti-imperialist tradition, Ameri- 
 can, 27 
 Antimony, 154 
 Antwerp, port of, 158 
 Armenia 
 
 religion in, 4 
 
 riots in, 46 
 Arabian Ocean, 33 
 Arabi Pasha, 71, 72 
 Archangel, port of, 39, 97 
 Argentina 
 
 Chilean relations with, 62 
 
 French investments in, 185 
 
 revolts in, 46 
 Arica, 59, 64 
 Armada, Spanish, 190 
 Army, Afghan, 52 
 Art, international conference on, 
 
 199 
 Asakawa, K., quoted, 26 
 Ashantee War, 46 
 Asia 
 
 British investments in, 184 
 
 Central, 160 
 Asia Minor 
 
 economic penetration, 164 
 
 economic unity, 163 
 
 railways, 216 
 
 Russian railway rights, 162 
 
 strategic value, 164, 165 
 
 Turkish military reservoir, 169 
 Assan, Japanese victory at, 86 
 
 253
 
 254 
 
 Index 
 
 Assouan dam, 67 
 
 Assyria, 6, 165 
 
 Atacama, Desert of, 57, 59, 60, 61 
 
 Attache, commercial, 208 
 
 Australia, British investments in, 
 
 184 
 Austria-Hungary 
 
 Bagdad Railway, 170 
 
 Balkan policy, *134, 135, 137, 172 
 
 Berlin, Treaty of, 41 
 
 Bulgarian trade, 174 
 
 Capitulations, 68 and n. 
 
 economic ambitions, 143, 144, 170- 
 175 
 
 economic situation, internal, 171 
 
 Egyptian Debt, 68 
 
 financial relations with Great 
 Britain, 188 
 
 French investments in, 184 
 
 Hapsburg dynasty, 3 
 
 markets, 78, 135, 138, 172 
 
 Mittel-Europa, 158 
 
 Rumanian trade, 174 
 
 Serbo-Bulgarian War, 78 
 
 Turkish trade, 174 
 
 Wars of 1864 and 1866, 8 
 
 War with Serbia, 186 
 Austrian Succession, War of the, 2 
 Automobiles, French export of, 24 
 
 B 
 
 Babylonia, 6, 165 
 
 Bacteria in war, 221 
 
 Bagdad Railway, 135, 158, 160, 161- 
 
 170, 174, 218, 219 
 Bahrein Islands, 35 
 Baku, oil wells at, 56 
 Balance of Power, 29, 198, 222 
 Balkans, the 
 
 Austrian ambitions in, 172 
 
 French loans in, 139 
 
 friction in, 219 
 
 German aggressions in, 211 
 
 Italian ambitions in, 175 
 
 Russian influence in, 41 
 Balkan Wars (1912-1913), 46, 48, 
 
 132-139, 142, 174 
 Ballin, Albert, 147 
 Baltic Sea, 160 
 Baluchistan, 35 
 Banca di Roma, 131 
 Bankers in war, 177, 178 
 Bank of Russia, 180 
 Bank of Tokio, 180 
 Barley, 21, 26 
 Barnato, 113 
 
 Bartlett, Sir E. A., quoted, 126 
 Bases, see Naval bases 
 
 Baskets, Bavarian, 149 
 
 Bassona, 166 
 
 Bassorah, 162 
 
 Battleships, damages to, 33 
 
 Bavarian industries, 149 
 
 Beaconsfield, Lord, see Disraeli 
 
 Beaconsfield-Salisbury Cabinet, 53 
 
 Beans, 26, 224 
 
 Beets, see Sugar 
 
 Beilul, occupation of, 79 
 
 Beirut-Damascus line, 168 
 
 Belgium 
 
 Balkan trade, 173 
 
 Capitulations, 68 
 
 defense of neutrality, 6 
 
 French investments in, 185 
 
 invasion of, 141, 142 
 
 iron imports, 151 
 
 population density, 18-n. 
 Belgrade, 1 
 Bergasi, 131 
 Berlin Bourse, 186 
 Berlin, Congress of, 32, 38, 39, 41, 
 
 43, 54, 77, 198 
 Berlin, Treaty of, 42, 45, 142 
 von Bernhardi, General, quoted, 
 
 144-n. 
 Bengal, Gulf of. 33, 35 
 Bessemer, Sir Henry, 44 
 Bessemer process, 152 
 Bhutan, 35, 36 
 
 Bismarck, 2, 8, 8-n., 41, 42, 129 
 Black Sea, 39 
 Blockade, 22 
 Boer War, 46, 48, 49. 106-116, 139, 
 
 149, 179 
 Bolivia, 49, 57, 59, 60, 61, 62, 63 
 Bombay, 165 
 Bondelzwart natives, 126 
 Bosnia-Herzegovina, 41, 142 
 Bosphorus, 40, 41 
 Boxer Rebellion, 46, 48, 90-96, 100, 
 
 139, 210 
 Boycott 
 
 Chinese. 193 
 
 Franco-German, 156, 157 
 Brazil, French investments in, 185 
 Bremen, port of, 147 
 Breslau, 117 
 
 Brewing companies, American, 209 
 Briey. iron district, 151—152 
 British Empire, see Great Britain 
 Bulawayo Chronicle, 113 
 Bulgaria 
 
 Balkan Wars, 133, 134, 136, 139 
 
 Battle of Slivnitza. 173 
 
 debt to France, 193 
 
 establishment of, 40 
 
 freedom, 7
 
 Index 
 
 255 
 
 Bulgaria (continued) 
 
 religion in, 4 
 
 revolution in, 46 
 Burgulu, 162 
 Byzantium, see Constantinople 
 
 Caisse de la Dette, 68 
 Campbell-Bannerman, Sir Hugh, 
 
 quoted, 148 
 Canada 
 
 British investments in, 184 
 
 French investments in, 185 
 
 population density, 18 
 Canal Zone, Panama, 28-n. 
 Cane, see Sugar 
 Cane, Bavarian, 149 
 Cape Argus, 113 
 Cape Colony, 114 
 Capital, German shortage of, 191 
 Capitalists, in South Africa, 107, 
 
 112, 113 
 Capitulations, 68, 68-n 
 Caribbean, 27-n 
 Carthage, 14 
 
 Casablanca incident, 8, 142, 157 
 Cassala, Battle of, 79 
 Caste, military and naval, 9, 10 
 Catalonia, 119 
 Cattle, international conference on, 
 
 199 
 Caucasus, 160 
 Causes of war, listed, 2 
 Cave Report, 69 
 Ceramics, international conference 
 
 on, 199 
 Cereals, 24, 224 
 Cetewayo, 57 
 Ceylon, 32, 35 
 Cheese, 224 
 Chelmsford, Lord, 57 
 Chemicals, 224 
 Chemistry, in war, 221 
 Chester, Admiral, quoted, 27-n 
 Chile 
 
 declaration of war, 58, 62 
 
 economic aims, 57, 63 
 
 explorations for guano, 60 
 
 nitrate, 59, 61-64 
 
 revolution in, 46 
 China 
 
 development of, 210 
 
 early civilization, 197 
 
 financial pressure on Japan, 
 193 
 
 foreign demands in, 90-94 
 
 French investments in, 185 
 
 German aggressions, 211 
 
 China (continued) 
 
 Japanese War, 46 > 48 > 49 > 83-90 
 
 Korean claims, 49 
 
 open door in, 226 
 
 partition of, 96, 97, 209, 217-n 
 
 Russian loan, 91 
 
 seizure of territory, 89 
 
 share in Korean trade, 103, 104 
 
 Thibet, suzerainty in, 35 
 Chincha Islands, 58 
 Chinese Empire, 93 
 Chosen, see Korea 
 Christianity, in war, 4 
 Churchill, Winston Spencer, quoted, 
 
 31 
 Civil War, American, 5, 203, 208, 
 
 213 
 Clements, Paul H., quoted, 95 
 Cleveland, President, 29-n 
 Coal, 21, 224 
 Cobden, quoted, 217 
 Cobija, 59 
 Coke, 224 
 Cologne, 168 
 Colonies 
 
 agronomy in, 199 
 
 causes of war, 3, 7, 11, 12, 50, 56 
 
 classic, 14 
 
 defense of, 28, 30, 37 
 
 India, 30-36 
 
 methods of founding, 15 
 
 need of, 27, 139, 215 
 
 overpopulation, 18 
 
 readjustment, 230 
 
 rivalry for, 142 
 Colombia, revolution in, 47 
 Colquitt, Governor, quoted, 214 
 Commercial attache, 208 
 Concert of Europe, 197, 198, 222 
 "Condor," H. M. S., 79 
 Confederacy, 29-n 
 
 Conferences, international, 19S, 199 
 Conservative Party, 53 
 Consolidated Goldfields, 112 
 Constantinople, 32, 39, 40, 41, 56, 
 72, 97, 98, 124, 134, 135, 138, 
 164, 167 
 Co-operation, economic, of Allies, 
 
 222-226 
 Copper 
 
 German supply, 21 
 
 Japanese supply, 27 
 
 in Morocco, 154 
 Corsica, 130 
 Cotton 
 
 American, 23, 212-214 
 
 British supply, 23, 212, 213, 214 
 
 Caucasian, 160 
 
 Egyptian, 64
 
 256 
 
 Index 
 
 Cotton (continued) 
 
 French supply, 24, 212 
 
 German supply, 21, 212 
 
 in Civil War, 203 
 
 in World War, 203 
 
 Japanese supply, 26 
 Courts, juvenile, 199 
 Covenant, League of Nations, 222 
 Cowen, Thomas, quoted, 86-n 
 Crammond, Edgar, quoted, 188, 189 
 Credit, industrial, 185 
 Crete, 46, 124, 125, 126 
 Creusot, 173 
 Crimea, 40 
 
 Cromer, Lord, 79; quoted, 64, 217-n 
 Crosby, Oscar, quoted, 4 
 Crown-Prince, Austrian, see Ferdi- 
 nand 
 Crown-Prince, Greek, 125 
 Crusades, 4 
 Cuba 
 
 American influence in, 27-n 
 
 American intervention, see Span- 
 ish-American War 
 
 economic conditions in, 116, 118 
 
 insurrection, 46, 48, 116-123 
 
 juntos, 122 
 
 reciprocity, 120 
 
 Spanish administration, 120, 122, 
 123 
 
 sugar situation, 118 
 Cunern, 117 
 Cyprus, 32, 34 
 
 D 
 
 Dahomey, French operations in, 46 
 
 Dalmatia, 122, 175 
 
 Dalni, 92, 99 
 
 Damaraland, 126 
 
 Damascus, 168 
 
 Danube, 172, 173, 197 
 
 Dardanelles, 97, 134 
 
 Dardanelles expedition, 31 
 
 Davis, Richard Harding, quoted, 150 
 
 Death rate, German, 16 
 
 DeBeers, 112 
 
 Debt, Egyptian 
 
 cause of war, 76 
 
 Consolidated Debt, 71 
 
 loans, 66 
 
 totals, 70, 71 
 Descent, in Moslem countries, 70 
 Diamonds, South African, 108, 109 
 Diamond Fields Advertiser, 113 
 von Diedrichs, Admiral, 92 
 Delagoa Bay, 111 
 Denmark 
 
 French investments in, 185 
 
 Denmark (continued) 
 grain imports, 212 
 Virgin Islands, 28, 29-n 
 War of 1864, 8 
 
 Dillon, E. J., quoted, 4-n, 16-n 
 
 Disraeli, 32, 41 
 
 Dogali, Italian defeat at, 79 
 
 Dominican Republic, 28-n 
 
 Doumer, M., 82 
 
 Dowager Empress, 94 
 
 Doyle, Sir Arthur Conan, quoted, 
 106-n 
 
 Dragoman Pass, 77, 78 
 
 Drang nach Osten, 124, 135, 143, 
 158-60, 162 
 
 Drang nach Osten, Slavic, 98, 99 
 
 Dreadnaughts, 33 
 
 Dual Control, in Egypt, 71, 72 
 
 Dual Entente, 43 
 
 Dual Monarchy, see Austria-Hun- 
 gary 
 
 Duelling, international conference 
 on, 199 
 
 Durazzo, 137 
 
 Dutch, in British colonies, 110 
 
 ''Dumping," German, 149, 218 
 
 Dynamite Monopoly, 111 
 
 Dynastic ambitions, war cause, 5 
 
 E 
 
 East, see Far East and Near East 
 Eckstein Group, 112, 113 
 Economic penetration, 156, 160, 169, 
 
 172 
 Economic theory of history, viii, 11 
 Economic union, 222-226 
 Edward VII, quoted, 213 
 Egypt 
 
 allegiance, 34 
 
 Bagdad Railway, danger from, 
 164, 165 
 
 British occupation, 46, 48, 64-76, 
 139, 216 
 
 debt, 70, 71, 76 
 
 Fashoda incident, 12, 74, 75, 191 
 
 finances investigated, 69 
 
 foreign investments in, 194 
 
 French investments in, 184, 191 
 
 loans, 66, 68 
 
 neutrality in Tripolitan War, 132 
 
 raw materials in, 64, 76 
 
 revenues, 65 
 
 revolt in, 72 
 
 Sudan, wars in, 73-75 
 
 tobacco, 118 
 Egyptian Empire. 6 
 Elgin Commission, 179 
 Emigration, 28, 129
 
 Index 
 
 257 
 
 Empire 
 
 Assyrian, 6 
 
 Babylonian, 6 
 
 Chinese, 35, 93 
 
 Egyptian, 6 
 
 German, 7, 25 
 
 Holy Roman, 7 
 
 Indian, 31 
 
 Japanese, 24, 25 
 
 Ottoman, 32, 158 
 
 Roman, 11 
 
 Russian, 50 
 Ems telegram, 2 
 Engels, Friedrich, 206 
 England, population, 15 and 15-n 
 Entente, 43, 75 
 
 Entomology, international confer- 
 ence on, 199 
 Eritrea, Italian colony, 79, 80 
 Erzberger, Matthias, quoted, 227 
 Erzerum, 169 
 Ethnike Hetaira, 125 
 Eugenics, 199 
 
 Euphrates Valley, 158, 159, 162, 164 
 Europe, British investments in, 184 
 Explosives, 224 
 Exports, see Imports 
 
 Fabian Society, 217-n 
 
 Fao, 165 
 
 Far East, 12, 139, 204, 218, 226 
 
 Fashoda incident, 12, 74, 75, 191 
 
 Fats, 224 
 
 Fellaheen, 67 
 
 Ferdinand, Archduke, 125, 142, 186 
 
 Finance in war 
 
 Boer War, 106, 116, 179 
 
 dual role, 177, 178, 187, 192 
 
 Russo-Japanese War, 179, 180 
 
 World War, 181 
 Financial difficulties in war, 194 
 "Fists of Righteous Harmony," see 
 
 Boxers 
 Fiume, 135 
 Flax, 224, 225 
 Fleet, British, 9, 22, 30, 33 
 Fleet, German, 9, 147, 227 
 Fleet, Russian, 169 
 Fleets, damages to, 33 
 Flottenverein, 9 
 Flour, Japanese, 26 
 Fonseca Bay, 28-n 
 Foochow, French fleet at, 82 
 Food 
 
 British imports, 23 
 
 Control, 223, 224 
 
 French imports, 23, 24 
 
 Food (continued) 
 
 German imports, 22 
 
 Holland's needs, 20 
 
 Italian situation, 132 
 
 Japanese situation, 25-27, 83, 84 
 
 supply, general European, 212 
 Forbes, Archibald, quoted, 52 
 Foreign investments 
 
 American, 185, 190 
 
 British, 183, 184, 192 
 
 French, 184, 185, 192 
 
 German, 183 
 Formosa 
 
 cession to Japan, 87 
 
 French blockade, 82 
 France 
 
 Bagdad Railway, 167 
 
 Balkan loans, 139-n 
 
 Balkan trade, 173 
 
 Berlin, Treaty of, 42 
 
 birth rate, 18 
 
 Capitulations, 68 
 
 Chinese demands, 92, 93 
 
 Egyptian debt, 68 
 
 first Republic, 5 
 
 Food control, 223 
 
 foreign investments, 183, 190, 192, 
 193 
 
 Franco-German trade rivalry, 150— 
 158, 204 
 
 Franco-Prussian War, 8, 178, 183 
 
 Haiphong, 81 
 
 Hanoi, 81 
 
 imports and exports, 23, 24 
 
 iron, 151 
 
 Mexico, 29-n 
 
 Morocco, 202, 209, 211, 216, 219 
 
 population, 15, 15-n 
 
 press, in war, 2 
 
 railways in Asia Minor, 168 
 
 religions in, 4 
 
 Russian loan, 180 
 
 Texan dispute, 1 
 Freedom of the sea, see Sea 
 Free trade, 217 and 217-n 
 Frontier, economic, 142 
 Frontier, "scientific," 36, 52, 142 
 Fruit, canned, 224 
 Fuel, naval, 33, 34 
 Fukien, province of, 92 
 Furniture, Bavarian, 149 
 Furs, see Hides 
 
 G 
 
 Garibaldi, Menotti, 72-n 
 General Staff, American, 181, 182 
 General Staff, German, 4-n, 178 
 Genoa, merchants of, 190
 
 258 
 
 Index 
 
 Gensan, 99 
 
 Georgia, raw materials in, 209 
 
 Germany 
 
 agriculture, decrease of, 20 
 
 American loans, 192 
 
 Balkan policy, 135, 139 
 
 Balkan trade, 173 
 
 Berlin, Treaty of, in, 42 
 
 birth rate, 15, 16, 17, 18 
 
 Chinese demands, 92, 93 
 
 coal, 21 
 
 competition with British, 142 
 
 cotton, 21 
 
 "dumping," 218 
 
 financial relations, 185, 188, 189 
 
 foreign investments, 183 
 
 hegemony, 8 
 
 imports and exports, 148, 212 
 
 iron, 21, 151 
 
 in Korea, 104 
 
 in Morocco, 155, 209 
 
 raw materials, 21 
 
 religions in, 4 
 
 Russian loans, 180 
 
 shortage of capital, 149 
 
 trade increase, 146, 147 
 
 war reserve, gold, 178 
 Gibraltar, 34 
 
 von Gierke, Otto, quoted, 145-n 
 Gilchrist, Percy, 152 
 Glassware, 174 
 Gortchakoff, Prince, 41 
 Gold 
 
 discovered in Rand, 108 
 
 German war reserve, 178 
 
 in Morocco, 154 
 
 Wolseley, Sir Garnet, on, 109 
 Gold-credit, 185 
 Golden Horn, 32 
 Gomez, General, 121 
 Good Hope, Cape of, 32 
 Gordon, General, 73, 74 
 Goschen-Joubert mission, 69 
 Goths, 11 
 
 Grain imports, 212 
 Granite, Bavarian, 149 
 Great Britain 
 
 attitude on Bagdad Railway, 167 
 
 Balkan policy, 135 
 
 birth rate, 18 
 
 Chinese demands, 90-92 
 
 financial relations, 188, 189 
 
 food control, 223 
 
 foreign investments, 183, 184 
 
 French investments, 185 
 
 imports and exports, 148 
 
 Japanese alliance, 100 
 
 Japanese loans, 180 
 
 Korean trade, 104 
 
 Great Britain (continued) 
 
 Moroccan interests, 155, 209 
 
 religions in, 4 
 
 rivalry, internal economic, 208 
 
 trade increase, 146, 147 
 
 trade routes, 30 
 
 Venezuela boundary, 29-n 
 
 trade increase, 146, 147 
 Greco-Turkish War, 46, 48, 123-126, 
 
 139 
 Greece 
 
 ancient, 196 
 
 Bulgarian treaty, 134 
 
 Capitulations, 68-n 
 
 colonization, ancient, 14 
 
 Crete, 136 
 
 freedom, 7 
 
 hostilities during London Confer- 
 ence, 138 
 
 races, 133 
 Guano, 58, 60 
 Guatemala, 16 
 Guiana boundary, 29-n 
 Gundamuk, Treaty of, 54 
 
 Haidar-Pasha, 161, 164 
 Hainan, Island of, 93 
 Haingyondo, Province of, 85 
 Haiphong, French seizure of, 81 
 Haiti, 28-n, 47 
 
 Hamburg-American line, 147 
 Hanoi, French seizure of, 81 
 Hapsburg dynasty, 3 
 Harmony, Fists of Righteous, see 
 
 Boxers 
 Hawaiian Revolution, 46 
 Hegemony, German, 8, 155 
 Hemp, 159, 224, 225 
 Herald, New York, 43 
 Herero Rising, 46, 48, 49, 126, 127, 
 
 139 
 von Hertling, Baron, quoted, 163-n 
 Herzegovina, see Bosnia-Herze- 
 govina 
 Hicks, General, 73 
 Hides, 24, 174, 224, 225 
 Hinze, Professor Otto, quoted, 144-n 
 Hittites, 165 
 
 Hobson, J. A., quoted, 106-n 
 Holland 
 
 Capitulations, 68-n 
 
 French investments in, 185 
 
 grain imports, 212 
 
 iron imports, 151 
 
 population, 18-n 
 
 suffering in World War, 19, 20 
 Holy Roman Empire, 7
 
 Index 
 
 259 
 
 Hongkong, seizure of, 90-n 
 
 Hottentot Rising, 46, 127 
 
 Huguenots, 108 
 
 von Humboldt, Alexander, 58 
 
 Hungary, see Austria-Hungary 
 
 Huns, h 
 
 Hygiene, racial, 199 
 
 Imperialism, American, 27 and 27-n 
 Importation and shipping, Council 
 
 for, 224 
 Imports and exports 
 
 Austrian, 174 
 
 British, 23, 148 
 
 freedom of, 215 
 
 French, 23 
 
 German, 21, 22, 148 
 
 Italian, 24 
 
 Japanese, 24 
 
 Korean, 105 
 Incas, Peruvian, 58 
 Indemnity, French, 178 
 Independent, New York, quoted, 
 
 194 
 India 
 
 civilization, early, 197 
 
 danger from Bagdad Railway, 
 162, 164, 165, 166 
 
 defense of, 64, 72, 76, 97, 218 
 
 frontier, 51-53 
 
 routes to, 30-36, 41, 49 
 
 Russian ambitions, 32, 35, 39 
 
 travel to, 168 
 
 value to Great Britain, 30-36, 
 218 
 Indian Ocean, 33 
 Indo-China, French in, 81, 82 
 Industries 
 
 Austrian, 172 
 
 Bavarian, 149 
 
 colonial requirements of, 18 
 
 growth of, 11, 156 
 Industrialism 
 
 British, 203 
 
 effect of, 11 
 
 French, 205 
 
 German, 205 
 
 internationalism, relation to, 201 
 
 overpopulation, cause of, 18 
 
 population, relation to, 204 
 Industrial states, 18, 19 
 Insurrection, Cuban, 46, 48, 49, 116— 
 
 123 
 Insurrectos, 122 
 
 Intelligence Service. British, 114 
 Interdependence of nations, 202, 
 213-218, 220 
 
 International conferences (1914), 200 
 Internationale, 206 
 Internationalism, doctrine of, 196 
 Internationalism, economic origin of, 
 
 204 
 International finance — see Finance 
 International law, 34 
 Intervention in backward states, 
 
 209 
 Investments, foreign 
 
 American, 185 
 
 amounts, 182 
 
 British, 183, 184 
 
 French, 183, 184, 185 
 Ireland, civil war in, 3 
 Iron 
 
 British supply, 23 
 
 German supply, 21 
 
 Japanese supply, 27 
 
 Korean exports, 104, 105 
 
 Lorraine fields, 147, 151 
 
 Ukraine fields, 159 
 Irredentism, Serbian, 173 
 Isandhlwana, 57 
 Ismail Pasha 
 
 bad faith of, 69 
 
 canal stock sale, 32 
 
 deposed, 70 
 
 extortion, 67 
 
 extravagance, 64, 65, 209 
 
 seizure of land, 66 
 Italy 
 
 Abyssinian Wars, 46, 48, 49, 78-80 
 
 Bagdad Railway, 170 
 
 Balkan interests, 173, 175 
 
 birth rate, 18 
 
 Chinese demands, 94 
 
 economic ambitions, 143, 144 
 
 Egyptian debt, 69 
 
 Egyptian sympathies, 72-n 
 
 Emigration, 129 
 
 financial relations with Great 
 Britain, 188 
 
 food control, 223 
 
 French investments in, 185 
 
 imports and exports, 24 
 
 population increase, 15, 15-n 
 
 religions in, 4 
 
 Triple Alliance, 42 
 
 Tunis. 42 
 
 Turkish War, 29, 46, 48, 49, 128- 
 132, 139 
 
 Venezuelan Boundary, 29-n 
 Ito, Marquis, quoted, 86-n 
 
 Jaffa-Jerusalem Railway, 168 
 Jameson Raid, 29-n, 114
 
 260 
 
 Index 
 
 Japan 
 
 agriculture, 25, 26 
 
 British Alliance, 100 
 
 British loans, 179, 180 
 
 Chinese War, 46, 48, 49, 83-90 
 
 civilization, early, 197 
 
 finance, in Russian War, 179, 180 
 
 foreign trade, 27 
 
 French investments in, 185 
 
 imports and exports, 24—27 
 
 in Korea, 103, 104, 105 
 
 opening of, 210 
 
 press in, 89 
 
 population, 17, 25 
 
 religions in, 4 
 
 Russian War, 46, 48, 96-105, 179, 
 180 
 Jenkins's Ear War, 1, 2 
 Johannesburg Star, 113 
 John, King of Abyssinia, 79 
 Joint stock banks, English, 188, 189 
 Julius Tower, 178 
 Juntos, Cuban, 122 
 Jute, 174, 224 
 Juvenile courts, 199 
 
 K 
 
 Kabul, 51 
 
 Kaiser Wilhelm II, 29-n, 115, 161, 
 
 163, 209 
 Kaufmann, General, 53 
 Kavalla, 134 
 Khartoum, 73, 74 
 Khedive, see Ismail Pasha 
 Khyber Pass, 51, 54, 55 
 Kiao-Chau, seizure of, 91, 92 
 Kiel Canal, 31 
 Kirk Kilisse, 137 
 Kitchener, Lord, 74, 75 
 Kochana, atrocities at, 137 
 Kodok (Fashoda), 74 
 Koku, English equivalent, 25-n 
 Konia, 161 
 Korea 
 
 area and crops, 83 
 
 Chinese claims, 84 
 
 economic difficulties in, 49 
 
 imports and exports, 105 
 
 internal reform, 86 
 
 Japanese economic aims, 86, 87, 
 87-n 
 
 Japanese influx, 103, 104 
 
 population, 103 
 
 Russo-Japanese rivalry in, 96 
 
 Tonghak troubles, 85 
 
 trade, 104 
 
 value to Japan, 83 
 Koweit, British protectorate, 161, 
 165 
 
 Kowlung Peninsula, 90, 90-n 
 
 Kriiger, President, 29-n, 111, 115 
 
 Kriiger Telegram, 115 
 
 Krupps, 7, 22 
 
 Kuang-chan-wan, 89 
 
 Kultur, British, 35 
 
 Kultur, German, 6, 141 
 
 Kuram Valley, 55 
 
 Kuroki, General, 102 
 
 Kuropatkin, General, quoted, 99-n 
 
 Kiistenland, 175 
 
 Kwang Chau, 92 
 
 Kwangsi, 93 
 
 Kwang Tung, 93, 100 
 
 Lancashire, textile mills, 23 
 Language, 9 
 
 Latane, J. H., quoted, 29-n 
 Lead, in Morocco, 154 
 League of Nations 
 
 Covenant of, 222, 228 
 
 economic program, 221, 228 
 
 economic union, 222-226 
 
 Erzberger, Matthias, quoted, 226 
 
 German protests, 226 
 Leather, 224 
 
 Lecky, W. E. H., on war causes, 3-n 
 Legations in Pekin, 94 
 Leutwein, Colonel Theodor, 126, 127 
 de Lesseps, Ferdinand, 65 
 Liao-Tung Peninsula, 87, 92, 102 
 Lima, capture of, 63 
 Linguistics, international conference 
 
 on, 199 
 Lippert dynamite concession, 111 
 Liverpool, port of, 147, 168, 187 
 Livingstone, David, 43 
 Loans 
 
 Egyptian, 66, 68 
 
 French in Balkans, 139 
 
 Japanese, 180 
 
 Russian, 91, 180 
 
 in World War, 181 
 London, financial centre, 181-183, 
 
 186, 188 
 London Stock Exchange, 187 
 Longwy, iron district, 152 
 Lorraine, 147, 151 
 Lule Burgas, 137 
 Lumber, 220 
 Lytton, Lord, 50, 53, 54, 55 
 
 M 
 
 Mahdists, 73, 75, 76 
 Malgarejo, Dictator, 61 
 Mauritius, 32
 
 Index 
 
 261 
 
 Martinovich, General, 136 
 
 Macedonia, 41, 133, 136 
 
 Madrid Stock Exchange, 186 
 
 Majuba Hill, 108 
 
 "Maine," U. S. S., 2 
 
 Maize, 174 
 
 Makela, Italian surrender at, 80 
 
 Malta, 32, 34 
 
 Manchuria, 93, 96, 101 
 
 Mandatary Commission, 228 
 
 Manchu Government, 93 
 
 Manganese, 159, 160 
 
 Mansampo, 99 
 
 Man-power, in war, 177 
 
 Marchand, Major, 74 
 
 Margraf, Andreas Sigismund, 117-n 
 
 Maritime Transport Council, 223, 
 
 224 
 Markets 
 
 American, 120 
 
 Austrian, 78, 135, 138, 172 
 
 Balkan, 138 
 
 British, 145, 148 
 
 Cuban, 117, 118 
 
 German, 138, 145, 214 
 
 Italian, 132 
 
 need of, 11, 12, 27 
 
 Spanish, 119, 123 
 
 struggle for, 140 
 
 unhampered access to, 215 
 
 war cause, 27 
 Marseilles, 168 
 Marx, Karl, 206 
 Massacre, Afghan, 54 
 Massacre, Turkish, 32 
 Massachusetts, textile industry, 208 
 Massowa, occupation of, 79 
 Materiel, Serbian purchases, 172 
 Maximilian, 29-n 
 McKinley, President, quoted, 122 
 Meats, 224 
 Mecca, 168 
 Medicine, international conference 
 
 on, 199 
 Menelik of Shoa, 79, 80 
 Merchant fleet, British, 167 
 Metallurgy, international conference 
 
 on, 199 
 Metric Convention, 200 
 Meuse River, 197 
 Mexico 
 
 American interests, 190 
 
 French invasion, 29-n 
 
 French investments in, 185 
 Michnai Pass, 54 
 Milan, King of Serbia, 77 
 Mittel-Europa, 135, 158 
 Missionaries, German, murdered, 91 
 Molybdenum in Korea, 105 
 
 Money, international, 185 
 Monroe Doctrine, 29-n 
 Monroe, President, 30 
 Montenegro, 
 
 economic problems, 133, 135, 136 
 
 freedom of, 7 
 
 war with Turkey, 133, 137 
 Morocco 
 
 Agadir incident, 12, 142, 149, 156, 
 157, 191, 192, 193 
 
 civil war in, 47 
 
 commerce, 155 
 
 Franco-German relations, 202, 209, 
 211, 216, 219 
 
 iron and minerals in, 154 
 
 revolt of troops, 47 
 
 trade percentages, 209 
 
 Woolf, L. S, quoted, 217-n 
 Moslems, 133 
 Moussoul, 164 
 Mugi, 26 
 Munich, 168 
 Munitions Council, 223, 224, 225 
 
 N 
 
 Napoleon, 5, 65, 117, 197 
 
 Napoleon III, 29-n, 67, 191 
 
 Natal, in Zulu War, 56 
 
 Naumann, Friedrich, quoted, 145-n 
 
 Naval bases, 28, 33. 34, 36, 45, 219 
 
 Naval rivalry, Anglo-German, 150 
 
 Near East, 12, 135, 193, 218, 226 
 
 Nelson, 65 
 
 Nepal, 35 
 
 Netherlands Railway, 111, 116 
 
 Neumann and Company, 112 
 
 Neutrality, Belgian, 6 
 
 Newsholme, A., quoted, 15-n 
 
 New York, 187 
 
 New York Herald, 43 
 
 New York Stock Exchange, 186, 
 187 
 
 Neymarck, Alfred, quoted, 182-n 
 
 Nicaragua, 28-n, 47 
 
 Nile River, 66 
 
 Nippon, see Japan 
 
 Nitrates, 63. 224 
 
 Nitrate War, 46, 48, 57-64, 139 
 
 Nobel's Dynamite Trust, 111 
 
 Non-ferrous metals, 224 
 
 North German Lloyd, 147 
 
 North Sea, 160 
 
 Norway 
 French investments in, 185 
 grain imports, 212 
 separation from Sweden, 7 
 
 Novi-Bazar, Sanjak of, 4, 174 
 
 Nubar Pasha, 66
 
 262 
 
 Index 
 
 o 
 
 Odessa, 169 
 
 Oil, 33, 160, 224 
 
 Oil cakes, 26, 27 
 
 Okkium, Kun, 85 
 
 Old Testament, religious wars in, 4 
 
 Olympic games, 196 
 
 Opium, 174 
 
 Orange Free State, 109, 113, 115 
 
 Oriental civilization, 197 
 
 Origin of war, see War 
 
 Ostend, 168 
 
 Ottoman Empire, 130 
 
 Overpopulation, see Population 
 
 Paint, Bavarian, 149 
 
 Palestine, 3 
 
 Panama Canal, 27-n, 28-n 
 
 Panama, Republic of, 28 
 
 Pan-Slav policy, 134 
 
 "Panther," German gunboat, 191 
 
 Paper, 224 
 
 Paris Bourse, 162, 184, 186, 191 
 
 Paris Conference (1917), 224 
 
 Paris, Treaty of, 102 
 
 Passenger trade, British, 167 
 
 Pathology, international conference 
 
 on, 199 
 Peace Conference, 141, 199 
 Pekin, Relief Expedition, 90, 94, 95 
 Pelly, Sir Louis, 53 
 Penjdeh incident, 55 
 Perim, 34 
 Persia, 217-n, 219 
 
 Persian Gulf, 35, 160, 162, 165, 166 
 Peru 
 
 guano, 57, 60 
 
 Incas, 58 
 
 nitrate of soda in, 69 
 
 Nitrate war, 2, 57-64 
 
 restrictions on nitrate, 60 
 
 treaty with Bolivia, 61 
 Pescadores, cession of, 87 
 Petrograd Bourse, 186 
 Petroleum, 174, 224 
 Philip II, 190 
 Philippines, 46, 47 
 Philippopolis, Bulgarian occupation, 
 
 77 
 Phoenicia, 14 
 Phosphate beds, 59 
 Picot, Battle of, 78 
 Pigs as war cause, 1 
 "Pig War," 136, 173, 213 
 Ping Yang, Battle of, 86 
 Plomenatz, 136 
 
 Population 
 
 American, 18 
 
 birth rate, 15-18 
 
 British, 17 
 
 colonies, relation to, 15, 128-130, 
 230 
 
 death rate, 17 
 
 French, 15-18, 140 
 
 German, 15-18, 158 
 
 increase of, 11, 14, 17 
 
 Italian, 17, 79, 128-130 
 
 Japanese, 18, 25, 27 
 
 over-population, 18, 124 
 
 stationary, 15 
 
 surplus, l5, 230 
 Port Arthur 
 
 cession to Japan, 87 
 
 fall of, 86 
 
 importance, 88, 96, 99 
 
 Japanese loss of, 89, 91 
 
 Russian seizure, 90, 92 
 
 siege of, 102 
 Port Elizabeth, 111 
 Port Lazarev, 99, 100 
 Porto Rico, 27-n 
 Portsmouth, Treaty of, 102 
 Portugal 
 
 African colonies, 111 
 
 French investments in, 185 
 
 military revolt in, 46 
 Postal Union, 200 
 Pound Egyptian, 70-n 
 Poverty, British, 148 
 Press, Japanese, 89 
 Pressure, economic, 139 
 Pressure, financial, 191-193 
 Pro-Boer Party, 106 
 Program Committee, 223, 224, 225 
 Prostitution, international confer- 
 ence on, 199 
 Prussia 
 
 War of 1864, 7 
 
 Population, 15 
 Psychic research, international con- 
 ference on, 199 
 
 Q 
 
 Quetta, occupation of, 53 
 
 R 
 
 Radiology, international conference 
 
 on, 199 
 Railways, see Trans-Siberian, and 
 
 Bagdad. 
 Railways, international conference 
 
 on, 199 
 Rand, 107
 
 Index 
 
 263 
 
 Rassegna Nazionale, quoted, 129, 
 
 130 
 "Rattling the purse," 192 
 Raw materials 
 
 access to, 217 
 
 Afghan War, relation to, 56 
 
 American, 28 
 
 British, 23 
 
 Council, 223-225 
 
 Egyptian, 64, 67 
 
 French, 23, 24 
 
 German, 22, 164 
 
 industrial requirements, 11, 12, 
 27 
 
 Japanese, 104, 105 
 
 Mittel-Europa, 159 
 
 Tripolitan, 128 
 
 Ukrainian, 159 
 Red Sea, Italy on, 79 
 Reichsbank, 178, 191 
 Relief Expedition to Pekin, 90 
 Religion, war cause, 3, 3-n, 4, 4-n 
 "Revanche," 9, 143, 150, 153 
 Revenge, war cause, 8 
 Reventlow, Count von und zu, 
 
 quoted, 144-n 
 Rhine River, 197 
 Rhodes, Cecil, 112, 113, 114 
 Rhodesia Herald, 113 
 Rice, 26, 27 
 Risorgimento, 128 
 Robinson, Albert G., quoted, 117-n, 
 
 121-n 
 Robinson Mines, 112 
 Roman Empire, 11 
 Romanoff dynasty, 3 
 Rooke's Drift, 57 
 Rothschild Exploration Company, 
 
 112 
 Rotterdam, port of, 158 
 Rumania 
 
 Balkan Wars, 133 
 
 debt to France, 193 
 
 freedom, 7 
 
 grain and oil fields, 160 
 
 trade with Austria, 174 
 Rumelia, Eastern, 77 
 Russia 
 
 Agriculture, 39 
 
 Anglo-Russian agreement, 35, 39 
 
 Bagdad Railway, 169 
 
 Balkan policy, 41, 134 
 
 British relations, 50, 52 
 
 Chinese demands, 9l 
 
 expansion in Asia, 32, 97 
 
 finance, Japanese War, 179, 180 
 
 French investments in, 184, 192 
 
 German economic penetration, 
 158 
 
 Russia (continued) 
 
 India, aggressions on, 35 
 
 Japanese War, 46, 48, 96-105 
 
 loan, to China, 91 
 
 loans, from France and Germany, 
 180 
 
 religions in, 4 
 Russo-Chinese Bank, 91 
 Russo-Turkish War, 169 
 
 S 
 
 Saghalin, Russia in, 98, 99 
 
 Saigon, capture of, 81 
 
 Salisbury, Lord, 53 
 
 Salonika, 134, 135, 137, 158 
 
 Salonika-Monastir Railway, 170 
 
 Santo Domingo, 47 
 
 Sanjak of Novi-Bazar, see Novi- 
 
 Bazar 
 Sanmun, 94 
 
 San Stefano, Treaty of, 40, 52, 77 
 Sarajevo, 1, 142 
 
 Saturday Review, quoted, 145-n 
 Saxony, population, 18-n 
 Scandinavia, Russian commerce 
 
 with, 97 
 Scheldt River, 197 
 Scutari, 137, 138 
 Sea, freedom of, 36, 215, 216 
 Sea-power, 227 
 Sebastopol, 169 
 
 Seed-testing, international confer- 
 ence on, 199 
 Seligman, E. R. A., quoted, 123-n 
 Senafe, Battle of, 79 
 Seoul, Japanese population, 104 
 Serbia 
 
 access to sea, 173 
 
 Austrian trade, 172 
 
 Austrian War, 186 
 
 Balkan Wars, 133, 137 
 
 Bulgarian treaty, 134 
 
 debt to France, 193 
 
 economic independence, 136, 174 
 
 freedom, 7 
 
 irredentism, 173 
 
 "Pig War," 1, 136, 173, 213 
 
 religions in, 4 
 Serbo-Bulgarian War, 46, 48, 76-78 
 Seward, Secretary, 5 
 Seychelles, 32, 35 
 
 Shimonoseki, Treaty of, 86, 91, 101 
 Shanghai, French rights in, 93 
 Shantung, Germans in, 97 
 Shantung, Japan in, 102 
 Shere Ali, 53 
 Shipping Council, 224 
 Siam, Gulf of, 33
 
 264 
 
 Index 
 
 Siberia, wheat in, 83 
 
 Sicilian Revolt. 46 
 
 Sicily, 131 
 
 Silk, 27 
 
 Silver, in Morocco, 154 
 
 Sivas, 169 
 
 Skins, see Hides 
 
 Skoda works, 172 
 
 Skuptschina, Serbian, 173 
 
 Slave trade, 198 
 
 Slivnitza, 78, 173 
 
 Smyrna-Kassaba Railway, 168 
 
 Socialism, 184 
 
 Societe du Chemin de Fer Ottoman 
 
 d'Anatolie, 161 
 Sokotra, 35 
 Somaliland, 47 
 Sontai, French attack on, 82 
 South African Explosives Company, 
 
 111 
 South African War, see Boer War 
 South America, 28, 29, 29-n 
 Spain 
 
 American War, 5, 46, 48, 116-123 
 
 Armada, 190 
 
 colonial administration, 118, 122 
 
 French investments in, 184 
 
 grain imports, 213 
 
 iron, 152 
 
 military revolt, 46 
 Speare, Charles F., quoted, 182-n 
 Stanley, Henry M., 43, 44 
 Steel, 224 
 
 Submarines, 22, 219, 220 
 Sudan, 34, 49, 73, 191 
 Suez Canal, 32, 34, 39, 40, 49, 64, 67, 
 
 69, 72 
 Suez, French investments in, 184 
 Sugar, 21, 27, 117, 118, 174, 224 
 Sulphur, in Morocco, 154 
 Sultan of Turkey, 161 
 Sweden 
 
 iron, 152 
 
 French investments in, 185 
 
 grain imports, 212 
 
 separation from Norway, 7 
 Switzerland 
 
 French investments in, 185 
 
 grain imports, 212 
 Syria, 164 
 
 Tacna, 59, 64 
 Tangier, 157 
 Tanning materials, 225 
 Tarapaca, 59, 62-64 
 Tariffs, 123, 158, 200 
 Tariff wars, 157 
 
 Tashkand, 53 
 
 Taurus Mountains, 162 
 
 Taussig, F. W., quoted, 15-n 
 
 Taxes, Boer, 113 
 
 Taylor, Hannis, quoted, 120-n 
 
 Tchataldja lines, 137 
 
 Tea, 27 
 
 Tei-lien-wai. 99 
 
 Tel-el-Kebir, 72 
 
 Testament, Old, religious wars in, 4 
 
 Tewfik Pasha, 70 
 
 Texas, Republic of, 1 
 
 Textiles, 24, 147, 174, 199 
 
 Thibet, 35, 47 
 
 Thomas, Sidney Gilchrist, 44, 45, 
 
 147, 152, 153 
 Throne, speech from the, 213 
 Tientsin, Treaty of, 85 
 Tigris-Euphrates Vallev, 158, 159, 
 
 164 
 Timber, 224 
 Tin, 224 
 
 Tobacco, 118, 174, 224 
 Tokio, Bank of, 180 
 Tolzien, G., quoted, 145-n 
 Tonghak movement, 85 
 Tonkin, 82, 93 
 
 Toronto Stock Exchange, 186 
 Trade increase, 146, 147 
 Trade routes, 30, 36, 45, 215, 216, 
 
 218, 219, 227 
 Transit, freedom of, 229 
 Transport, 220, 223, 224 
 Trans-Siberian Railway, 99, 100, 
 
 169 
 Transvaal, 29-n, 106, 107, 109, 111, 
 
 115 
 Trek, Great, 108 
 Tribunaux Mixtcs, 68, 69 
 Trieste, 135, 158, 175 
 Triple Alliance, 43 
 Tripoli, 49, 80, 209 
 Tsar of Russia, 40, 91, 162 
 Tsingtao, 89, 97 
 Tsushima, Straits of, 99 
 Turkestan, Russians in, 46 
 Turkey 
 
 Bagdad Railway, 163, 166, 169 
 
 Balkan policy, 133 
 
 delay of 6th Army Corps, 169 
 
 French investments in, 184 
 
 Greek War, 46, 48, 123-126 
 
 Italian War, 46, 48, 128-132 
 
 Macedonia, 41 
 
 Mittel-Europa, 158, 160 
 
 religions in, 4 
 
 Russian War, 40 
 
 tobacco in, 118, 174 
 
 Tripolitan interests, 49
 
 Index 
 
 265 
 
 Tungsten, Korean, 105 
 Tunis, 42, 129, 130 
 
 U 
 
 Uitlanders, 108, 109, 110, 114 
 Ukraine, raw materials in, 159 
 Undeveloped lands, menace of, 216 
 Unemployment, German, 149 
 Unification, national, 6, 7 
 Union, international economic, 222- 
 
 226 
 United Kingdom, see Great Britain 
 United States 
 
 British investments in, 184 
 
 Capitulations, 68 
 
 Food Control, 225 
 
 foreign investments, 185, 190 
 
 French investments in, 185 
 
 imperialism, 27, 27-n 
 
 internal rivalry, 208 
 
 investments in South America, 
 189, 190 
 
 loans to Germany, 192 
 
 population, 18, 27 
 
 Spanish War, 116-123 
 
 Vassos, Colonel, 125 
 Venezuela, 29-n, 46 
 Vienna, 1, 168 
 Vienna Bourse, 186 
 Vilmorin, Louis, 117, 117-n 
 Virgin Islands, 28-n 
 Vladivostok, 39, 97, 98, 99, 209 
 
 W 
 
 Wakamatsu Steel Works, 105 
 Wales, population, 15-n 
 War 
 
 "altruistic," 5, 6 
 
 armaments, 9, 177 
 
 causes, 1-14 
 
 causes, list of, 3, 4 
 
 War (continued) 
 
 dynastic, 4 
 
 economic motives of, 11, 45, 63, 
 64, 76, 77, 80, 83, 86-n, 87, 91, 
 96, 103, 107, 123, 124, 128, 135, 
 138-140, 143, 150, 175, 176, 204 
 
 finance, 10, 177-180, 185-189, 194, 
 195 
 
 food in war, 177 
 
 hatred as cause, 10 
 
 inventions in, 221 
 
 language, 9 
 
 man-power in, 177 
 
 prevention of, 190-192, 194 
 
 religion in, 4 
 
 unification, national, 7 
 Wei-hai-wei, 86, 90 
 Wells, H. G., quoted, 146 
 Wernher, Beit and Company, 112 
 Westphalian coal, 152, 156 
 Westphalian manufactures, 149 
 Weyler, General, 121 
 Wheat, 21, 26, 159, 224 
 White man's burden, 6 
 Wilhelm II, see Kaiser Wilhelm 
 Wilson Bill, 119 
 Wolseley, Lord, 72, 109 
 Wool, 21, 24, 26, 174, 220, 224, 225 
 Woolf, L. S., quoted, 217-n 
 
 Yalu, Battle of the, 86 
 
 Yalu River, 101, 216 
 
 Yangtse Valley, 92, 216 
 
 Yellow Sea, Russian interests in, 98 
 
 Young Turks, 130, 131 
 
 Yunnan, 93 
 
 Z 
 
 Zambesi River, 114 
 Zanzibar, bombardment of, 46 
 Zollverein, German, 159 
 Zulu War, 46, 48, 56, 139
 
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