Chapter X: Section 58: , Article I., of the German military penal code. We have seen (1)

the Belgians hanging by their own red handkerchiefs, and we have with our own hands fed the multitude that had been deprived of everything. On the other hand, Germany has up to date been most scrupulous in her behavior toward us. In the past she has never done us any harm. We may not like her, but she has in a very careful way avoided all friction and has treated us with great consideration.

In view of all this, in view of the very sober attitude of our people upon all matters of our daily life, in view of these historical reflections, which have a very decided influence, would it be quite fair without any provocation on the side of Germany to go forth and attack her in the back, now that she is in such very dangerous straits? I repeat that this may not be the exact sentiment of all of my countrymen, but I believe that very many of us feel things that way. Perhaps we disagree in minor details, but we agree about the main issue.

We love our country. For centuries we have fought to maintain our individual civilization against the large neighbors who surround us. We try to live up to our good reputation as a home for all those who suffer. The people who are made homeless by Germany come to us and we try to feed them on such grain as the British Government allows to pass through the Channel. We try to continue in our duty toward all our neighbors, even when they declare the entire North Sea (in which we also have a certain interest) as a place of battle and blow up our ships with their mines. We patiently destroy the mines which swim away from our neighbors' territorial waters and land upon our shores. In short, we perform a very difficult act of balancing as well as we can. But it seems to us that under difficult circumstances we are following the only correct road which can lead to the ultimate goal which we wish to reach--the lasting respect of all those who will judge us without prejudice and malice.

It is very kind of Mr. Wells to offer us territorial compensation, but we respectfully decline such a reward for the sort of attack which was popular in the days of the old Machiavelli.

HENDRIK WILLEM VAN LOON.

New York, Feb. 26, 1915.

Hungary After the War

By a Correspondent of The London Times

[From The London Times, Jan. 20, 1915.]

The allied powers are agreed that the European resettlement must be inspired by the principle of nationality. It will be but just if Hungary suffers severely from its application, for during the past forty years no European Government has sinned so deeply and persistently against that principle as has her Magyar Government. The old Hungary, whose name and history are surrounded by the glamour of romance, was not the modern "Magyarland." Its boasted constitutional liberties were, indeed, confined to the nobles, and the "Hungarian people" was composed, in the words of Verböczy's Tripartitum Code, of "prelates, barons, and other magnates, also all nobles, but not commoners." But the nobles of all Hungarian races rallied to the Hungarian banner, proud of the title of civis hungaricus. John Hunyádi, the national hero, was a Rumane; Zrinyi was a Croat, and many another paladin of Hungarian liberty was a non-Magyar. Latin was the common language of the educated. But with the substitution of Magyar for Latin during the nineteenth century, and with the growth of what is called the "Magyar State Idea," with its accompaniment of Magyar Chauvinism, all positive recognition of the rights and individuality of non-Magyar races gradually vanished.

The Magyar language itself is incapable of expressing the difference between "Hungarian" and "Magyar." The difference is approximately the same as between "British" and "English." The "Magyar State" set itself to Magyarize education and every feature of public life. Any protest was treated as "incitement against the Magyar State Idea" and was made punishable by two years' imprisonment. It was as though a narrow-minded English Administration should set itself to obliterate all traces of Scottish, Welsh, and Irish national feeling; or as though the Government of India should ignore the existence of all save one race and language in our great dependency.

In comparison with the Government of "Magyarland," the Government of Austria was a model of tolerance. In Austria, Poles and Ruthenes, Czechs, Germans, Italians, Serbo-Croatians, and Slovenes were entitled to the public use of their own languages and enjoyed various degrees of provincial self-government. The Austrian side of every Austro-Hungarian banknote bore an indication of its value in every language of the empire, whereas the Hungarian side was printed in Magyar alone. This was done in order to foster the belief that Hungary was entirely Magyar.

In reality, Hungary is as polyglot as Austria. Exact statistics are not obtainable, since the Magyar census returns have long been deliberately falsified for "Magyar State" reasons. Roughly speaking, it may, however, be said that, in Hungary proper, i.e., exclusive of Croatia-Slavonia, where the population is almost entirely Serbo-Croatian, there are perhaps 8,500,000 Magyars, including nearly 1,000,000 professing and a large number of baptized Jews. Against this total there are more than 2,000,000 Germans, including the numerous colonies on the Austrian border, the Swabians of the south, and the Saxons of Transylvania; more than 2,000,000 Slovaks, who inhabit chiefly the northwestern counties; between three and four million Rumanes, living between the Theiss and the Eastern Carpathians; some 500,000 Ruthenes, or Little Russians, who inhabit the northeastern counties; some 600,000 Serbs and Croats in the central southern counties; 100,000 Slovenes along the borders of Styria and Carinthia; and some 200,000 other non-Magyars, including about 90,000 gypsies, who speak a language of their own. Taking the population of Hungary proper at 18,000,000, the Magyars are thus in a minority, which becomes more marked when Croatia-Slavonia with its population of 2,600,000 southern Slavs is added.

It would have been possible for the Magyars, after the restoration of the Hungarian Constitution under the Dual Settlement of 1867, to have built up a strong and elastic Transleithan polity based on the recognition of race individualities and equality of political rights for all. The non-Magyars would have accepted Magyar leadership the more readily in that they had been dragooned and oppressed by Austria during the period of reaction after 1849 as ruthlessly as the Magyars themselves. Deák and Eötvös, who were the last prominent Magyar public men with a Hungarian, as distinguished from a narrowly Magyar, conception of the future of their country, pleaded indeed for fair treatment of the non-Magyars, and trusted to the attractive force of the strong Magyar nucleus to settle automatically the question of precedence in the State. But in 1875, when Koloman Tisza, the father of Count Stephen Tisza, took office, these wise counsels were finally and definitely rejected in favor of what Baron Bánffy afterward defined as "national Chauvinism." Magyarization became the watchword of the State and persecution its means of action. Koloman Tisza concluded with the monarch a tacit pact under which the Magyar Government was to be left free to deal as it pleased with the non-Magyars as long as it supplied without wincing the recruits and the money required for the joint army. The Magyar Parliament became almost exclusively representative of the Magyar minority of the people. Out of the 413 constituencies of Hungary proper more than 400 were compelled, by pressure, bribery, and gerrymandering, to return Magyar or Jewish Deputies. The press and the banks fell entirely into Jewish hands, and the Magyarized Jews became the most vociferous of the "national Chauvinists."

Nothing like it has been seen before or since--save the Turkish revolution of 1908, when the Young Turks, under Jewish influence, broke away from the relatively tolerant methods of the old régime and adopted the system of forcible "Turkification" that led to the Albanian insurrections of 1910-12, to the formation of the Balkan League, and to the overthrow of Turkey in Europe.

The bitter fruits of the policy of Magyarization are now ripening. The oppressed Rumanes look not toward Austria, as in the old days when their great Bishop Siaguna made them a stanch prop of the Hapsburg dynasty, but across the Carpathians to Bucharest; the Serbo-Croatians of Hungary, Croatia-Slavonia, and Dalmatia, whose economic and political development the Magyars have deliberately hampered, turn their eyes no longer, as in the days of Jellatchich, toward Vienna, but await wistfully the coming of the Serbian liberators; the Ruthenes of the northeast hear the tramp of the Russian armies; the Slovaks of the northwest watch with dull expectancy for the moment when, united with their Slovak kinsmen of Moravia and their cousins, the Czechs of Bohemia, they shall form part of an autonomous Slav province stretching from the Elbe to the Danube. For the Magyars, who have thrown to the winds the wisdom of the wisest men, fate may reserve the possession of the fertile and well-watered Central Hungarian plain. There they may thrive in modesty and rue at their leisure the folly of having sacrificed their chance of national greatness to the vain pursuit of the "Magyar State Idea" under the demoralizing influence of Austro-German imperialism.

THE WATCHERS OF THE TROAD

By HARRY LYMAN KOOPMAN

Where Ilium's towers once rose and stretched her plain,
What forms, beneath the late moon's doubtful beam,
Half living, half of moonlit vapor, seem?
Surely here stand apart the kingly twain,
Here Ajax looms, and Hector grasps the rein,
Here Helen's fatal beauty darts a gleam,
Andromache's love here shines o'er death supreme.
To them, while wave-borne thunders roll amain
From Samos unto Ida, Calchas, seer
Of all that shall be, speaks: "Not the world's end
Is this, but end of our old world of strife,
Which, lasting until now, shall perish here.
Henceforth shall men strive but as friend and friend
Out of this death to rear a new world's life."

The Union of Central Europe

An Argument in Favor of a Union of the States Now Allied With Germany

By Franz von Liszt

Professor Franz von Liszt, author of the following article, is
Director of the Criminal Law Seminar of the University of
Berlin, and is regarded as one of the leading experts on
criminal law in Germany. The article was published in the Neue
Badische Landes-Zeitung of Mannheim, and evoked bitter
criticism from many imperialistic quarters in the German
press.

When new directions of development are first taken in history, it usually requires the lapse of several decades before we understand them in their true importance, and it takes much longer before proper terms describing them are adopted generally. In the interim, misconceptions of all kinds are the necessary consequence of clouded perception and confused terminology, especially when, for purposes of party politics, there figures in a greater or less degree a certain unwillingness to understand.

Such misunderstandings are not devoid of danger in times of peace; they may become pregnant with fate when, as in our day, the leading nations of the earth stand at the threshhold of a great change in their history. I am anxious, therefore, to defend against objections raised with more or less intentional misunderstanding the thoughts which I expressed in my recently published essay, "A Central European Union of States as the Next Goal of German Foreign Policy."

Let us for once put aside the word "Imperialism." Surely we are all agreed as one that it is an absolute essential of life for the German Empire to carry on world-politics, (Weltpolitik.) We have been engaged in that since the eighties of the nineteenth century. The first colonial possessions which the German Empire obtained were the fruits of a striving for world-politics that had not yet at that time come to full and clear consciousness.

But, conscious of our goal, we did not attempt the paths of world-politics until the end of the last century. At the celebration of the twenty-fifth anniversary of the German Empire, on Jan. 18, 1896, our Kaiser uttered the words: "The German Empire has become a world empire, (Aus dem deutschen Reich ist ein Weltreich geworden.)" And the German Empire's groping for its way in world-politics found its expression in the first naval proposal of Tirpitz in the year 1898.

At that time the Imperial Chancellor Prince Hohenlohe expressly designated the policy of the German Empire as "world politics." Thereby a goal was sketched for the development of the German Empire. We have not lost sight of it since then, keeping unconfused despite many an illusion and many a failure. And today we all live in the firm faith that the world war, which we are determined to bring to a victorious conclusion by the exertion of all our forces as a people, will bring us the safe guarantee for the attainment of our goal in world politics.

On that score, then, there is absolutely no difference of opinion. But there does appear to be considerable difference of opinion as to the conception of world politics. Under that name one may mean a policy directed toward world domination (Weltherrschaft.) For that kind of world politics the word "Imperialism," borrowed from the period of Roman world domination of the second century of the Christian era, fits precisely.

Imperialism aims, directly or indirectly, through peaceful or forceful annexation or economic exploitation, to make the whole inhabited earth subject to its sway. Imperialistic is the policy of Great Britain, which has subjected one-fifth of the inhabited area of the earth to its sway and knows no bounds to the expansion of English rule. Imperialistic, too, is the policy of Russia, which for centuries has been extending its huge tentacles toward the Atlantic and toward the Mediterranean, the Pacific, and the Indian Oceans, never sated.

Such world domination has never endured permanently; it can endure least of all in our days, in which an array of mighty armed powers stand prepared to guard their independence. World domination sooner or later leads inevitably to an alliance of the States whose independence is threatened; and thereby it leads to the overthrow of the disturber of the peace. That, as we all confidently hope, will be the fate of England as well as of Russia in the present war....

World politics, however, may mean something else; policies based upon world value, (Weltgeltung.) The policy based on world domination differs from that based on world value, in that the former denies the equal rights of other States, while the latter makes that its premise. The State that asserts its rights to world values demands for itself what it concedes to the others: its right to expand and develop its political and economic influence, and to have a voice in the discussion whenever the political or economical relations of the various States at any point in the inhabited globe approach a state of change....

In this sense has the German Empire heretofore engaged in world politics in contrast with Russia and England. That it cannot be carried on successfully without overseas colonies, a strong foreign fleet, naval bases, and telegraphic connections through cable or wireless telegraph apparatus, needs no further elucidation. For this sort of world politics also the name "Imperialism" may be used. But such use of the word is misleading; I shall therefore hereafter avoid it.

And herein I think I have uncovered the deeper reason for an early misunderstanding of great consequence. It seems as though in a certain--to be sure, not a very great or very influential--circle of our German fellow-citizens the opinion prevails that the German Empire should substitute its claims for world domination for those of England. Such a view cannot be too soon or too sharply rebuked.

The claim for world domination would set the German Empire for many years face to face with a long series of bloody wars, the issue of which cannot be in doubt a moment to any one familiar with history. The enforcement of this claim, moreover, would of itself be the surrender of the German spirit to the spirit of our present opponent in the war. The idea of world domination, imperialism in the true sense of the word, is not a product grown on German soil; it is imported from abroad. To maintain that view in all seriousness is treachery to the inmost spirit of the German soul.

Perhaps I am mistaken in taking it for granted that such thoughts are today haunting many minds. Perhaps it is merely a matter of misapplied use of a large sounding word. In that case, however, it is absolutely necessary to create clear thinking. I take it for granted that I am voicing the sentiments of the souls of the vast overwhelming majority of Germans when I say: "We shall wage the war, if need be, to the very end, against the English and Russian lust for world domination, and for Germany's world value (Weltgeltung.")

But forthwith there appears a further difference of opinion, to be taken not quite so seriously, which I shall endeavor to define as objectively as possible. The German conservative press seems to be of the opinion that the goal for the winning of which we are waging the great war, and concerning which we are all of one mind, will be definitely attained immediately upon the conclusion of the war.

I, on the other hand, am convinced that in order permanently to insure for ourselves the fruits of victory, even after a victorious conclusion of the war, we shall need long and well planned labors of peace....

In my essay I used the statement: "England's claim for the domination of the sea, and therein for the domination of the world, remains a great danger to the peace of the world." To this view I adhere firmly. Let us take it for granted that the most extravagant hopes of our most reckless dreamers are fulfilled, that England is crowded out of Egypt, Mesopotamia, Persia, and is involved in a long-lasting war with the native Indians. An impossibly large dose of political naïveté is needed in order to make us believe that England would take this loss quietly for all time.

We may differ on the question whether we should meet England's efforts for rehabilitation of her world dominion in warlike, or, as I take it, in peaceful ways; but it would be an unpardonable piece of stupidity for us to rock ourselves to sleep in the mad delusion that those efforts would not be exerted. Even were England forced to her knees, she would not immediately give up her claim for world domination. We must count upon that.

And, counting upon that, we must estimate our own forces very carefully; rather account them weaker than they really are, than the reverse. I did that in my essay, and that is why the conservative press was so wrought up over it. To be sure, it carefully avoided discussing my reasons.

I started from the conception of world power which is fairly well established in the present political literature. From a point of view taken also by conservative writers I demanded as a characteristic of world power, in addition to the size of territories and the number of population, above all, the economic independence that makes it possible for a State, in a case of need, to produce, without export or import, all foodstuffs, necessities, raw materials, and all the finished or half-finished products it needs for its consumers in normal times, as well as to insure the sale of its surplus.

It is patent that this economic independence is influenced by the geographical position of the fatherland and its colonies. Now, I defended the theory (and my opponents made no attempt to confute it) that even after a victorious war the German Empire would not have fully attained this economic independence; that, accordingly, after the conclusion of peace, we must exert every effort to insure this economic independence in one way or another.

As to the course which we must follow to attain this goal, there may be various opinions. I proposed the establishment of a union of Central European States. The conservative press characterized that as "utterly pretentious."...

If the course I have proposed is considered inadvisable, let another be proposed. But on what colonies, forsooth, do those gentlemen count, that could furnish us with cotton and ore, petroleum and tobacco, wood and silk, and whatever else we need, in the quantity and quality we need? What colonies that could offer us--do not forget that--markets for the sale of our exporting industries? Even after the war we shall be dependent upon exports to and imports from abroad.

And so there is no other way of safeguarding our economic independence against England and Russia than by an economic alliance with the States that are our allies in this war, or at least that do not make common cause with our enemies. Aside from the fact, which I shall not discuss here, that only such an alliance can insure a firm position for us on the Atlantic Ocean, which in the next decades is bound to be the area of competition for the world powers.

Politics are not a matter of emotion, but of calm, intelligent deliberation. Let us leave emotional politics to our enemies. It is the German method to envisage the goal steadily, and with it the roads that lead to that goal. Our goal is not world domination. Whoever tries to talk that belief into the mind of the German people may confuse some heads that are already not very clear; but he cannot succeed in substituting Napoleon I. for Bismarck as our master teacher.

Our goal can only be the establishing of our value in the world among world powers, with equal rights to the same opportunities. And in order to attain this goal we must, even after the conclusion of peace, exert all our forces. A people that thinks it can rest on its laurels after victory has been won runs the risk sooner or later of losing that for which its sons shed their blood on the field of battle. With the conclusion of peace there begins for us anew the unceasing peaceful competition and the maintenance and strengthening of the world value which we have won through the war. German imperialism is and will remain the work of peace.

TWO POOR LITTLE BELGIAN FLEDGLINGS

By PIERRE LOTI.

Translation by Florence Simmonds.

[From King Albert's Book.]

At evening, in one of our southern towns, a train full of Belgian refugees ran into the station, and the poor martyrs, exhausted and bewildered, got out slowly, one by one, on the unfamiliar platform, where French people were waiting to receive them. Carrying a few possessions caught up at random, they had got into the carriages without even asking whither they were bound, urged by their anxiety to flee, to flee desperately from horror and death, from unspeakable mutilation and Sadic outrage--from things that seemed no longer possible in the world, but which, it seems, were lying dormant in pietistic German brains, and had suddenly belched forth upon their land and ours, like a belated manifestation of original barbarism. They no longer possessed a village, nor a home, nor a family; they arrived like jetsam cast up by the waters, and the eyes of all were full of terrified anguish. Many children, little girls whose parents had disappeared in the stress of fire and battle; and aged women, now alone in the world, who had fled, hardly knowing why, no longer caring for life, but moved by some obscure instinct of self-preservation.

Two little creatures, lost in the pitiable throng, held each other tightly by the hand, two little boys obviously brothers, the elder, who may have been five years old, protecting the younger, of about three. No one claimed them, no one knew them. How had they been able to understand, finding themselves alone, that they, too, must get into this train to escape death? Their clothes were decent, and their little stockings were thick and warm; clearly they belonged to humble but careful parents; they were, doubtless, the sons of one of those sublime Belgian soldiers who had fallen heroically on the battlefield, and whose last thought had perhaps been one of supreme tenderness for them. They were not even crying, so overcome were they by fatigue and sleepiness; they could scarcely stand. They could not answer when they were questioned, but they seemed intent, above all, upon keeping a tight hold of each other. Finally the elder, clasping the little one's hand closely, as if fearing to lose him, seemed to awake to a sense of his duty as protector, and, half asleep already, found strength to say, in a suppliant tone, to the Red Cross lady bending over him: "Madame, are they going to put us to bed soon?" For the moment this was all they were capable of wishing, all that they hoped for from human pity--to be put to bed.

They were put to bed at once, together, of course, still holding each other tightly by the hand; and, nestling one against the other, they fell at the same moment into the tranquil unconsciousness of childish slumber.

Once, long ago, in the China Sea, during the war, two little frightened birds, smaller even than our wrens, arrived, I know not how, on board our ironclad, in our Admiral's cabin, and all day long, though no one attempted to disturb them, they fluttered from side to side, perching on cornices and plants.

At nightfall, when I had forgotten them, the Admiral sent for me. It was to show me, now without emotion, the two little visitors who had gone to roost in his room, perched upon a slender silken cord above his bed. They nestled closely together, two little balls of feathers, touching and almost merged one in the other, and slept without the slightest fear, sure of our pity. And those little Belgians sleeping side by side made me think of the two little birds lost in the China Sea. There was the same confidence and the same innocent slumber--but a greater tenderness was about to watch over them.

What the Germans Desire

Not Conquest, but a New Economical System of Europe

By Gustaf Sioesteen

The subjoined letter from Berlin, published originally in the
Swedish Goteborgs Handels-Tidnung of Oct. 26, 1914, was
immediately translated by the British Legation in
Stockholm--this is the official English translation--and sent
by the legation to Sir Edward Grey. THE NEW YORK TIMES CURRENT
HISTORY is informed from a trustworthy source that the article
is interpreted in London as expressing the real aims of
Germany at the end of the war, should that power be
successful. The founding of a commercial United States of
Europe by means of an economical organization with new
"buffer" States to be created between the German Empire and
Russia, and with the other smaller European States, would be,
according to this interpretation, the purpose of Germany at
the conclusion of a victorious war. The passage in the Berlin
correspondent's letter declaring that only such an enormous
central European customs union, in the opinion of leading
German statesmen, "could hold the United States of North
America at bay" in order that, after this present war, the
"world would only have to take into account two first-class
powers, viz., Germany and the United States of America," is of
peculiar interest to Americans.

BERLIN, Oct. 21.

Counting one's chickens before they are hatched is a pardonable failing with nations carrying on war with the feeling that their all is at stake. When sorrow is a guest of every household, when monetary losses cause depression, and the cry arises time after time, "What will be the outcome of all this?" then only the fairest illusions and the wildest flights of fancy can sustain the courage of the masses.

These illusions are not only egotistical but, curiously enough, altruistic, since mankind, even when bayoneting their fellow-creatures, want to persuade themselves and others that this is done merely for the benefit of their adversary. In accordance with this idea, in the opinion of all parties, the war will be brought to an end with an increase of power for their native country, as also a new Eden prevail throughout the whole civilized world.

The enemies of Germany, though they have hitherto suffered an almost unbroken series of reverses in the war, have already thoroughly thrashed out the subject as to what the world will look like when Germany is conquered. In German quarters the press has likewise painted the future, but the following lines are not intended to increase the row of fancy portraits, but merely to throw light on what is new in the demands conceived.

My representations are founded on special information, and I deem it best to make them now, when the most fantastic descriptions of the all-absorbing desire of conquest on the part of Germany have circulated in the press of the entire world.

Among other absurdities it has been declared that Germany intends to claim a fourth of France, making this dismembered country a vassal State, bound to the triumphal car of the conqueror by the very heaviest chains. It is incredible, but true, that such a statement has been made in the press by a Frenchman, formerly President of the Council.

In direct opposition to the fictitious demands of the Germans, I can advance a proposition which may sound paradoxical, viz., that the leading men in Germany, the Emperor and his advisers, after bringing the war to a victorious issue, will seriously seek expedients to _avoid_ conquests, so far as this is compatible with the indispensable demands of order and stability for Europe.

First, as regards France. The entire world, as also the Germans, are moved to pity by her fate. Germany has never entertained any other wish than to be at peace with her western frontier. A considerable portion of France is now laid waste, and in a few weeks millions of soldiers will have been poured into still wider portions of this beautiful country. On what are the inhabitants of these French provinces to exist when the German and French armies have requisitioned everything eatable? Germany cannot feed the inhabitants of the French provinces occupied, nor can the Belgians do so, I imagine, for the provisions of Germany are simply sufficient for their own needs, England preventing any new supply on any large scale.

This is a totally new state of things in comparison with 1870, when Germany was still an agrarian country and had, moreover, a free supply on all her frontiers.

Can the French Government allow a considerable portion of their own population actually to starve, or be obliged to emigrate to other parts of France, there to live the life of nomads at the expense of England, while the deserted provinces are given over to desolation?

The idea prevails here that the French will compel their Government to enter on and conclude a separate treaty of peace when the fatal consequences of the war begin to assume this awful guise. England does not appear to have considered that this would be the result of her system of blockade.

The German conditions of peace as regards France will be governed by two principal factors with respect to their chief issues.

The first is the complete unanimity of the Emperor and the Chancellor that _no population, not speaking German, will be incorporated in the German Empire, or obtain representation in the Diet_. Germany already has sufficient trouble with the foreign element now present in the Diet. Consequently there can be no question of any considerable acquisition of territory from France, but the demands of Germany simply extend to the _iron-ore fields of Lorraine_, which are certainly of considerable value. For France these mining fields are of far less consideration than for Germany, whose immense iron trade is far more in need of the iron mines.

The second factor is that the Germans, owing to the strong public opinion, _will never consent to Belgium regaining her liberty_. The Chancellor of the Empire has, as long as it was possible, been opposed to the annexation of Belgium, having preferred, even during hostilities, to have re-established the Belgian Kingdom. It is significant that the military authorities have prohibited the German press from discussing the question of the future of Belgium. It is evident that there has prevailed a wish to leave the question open in order to insure a solution offering various possibilities. But subsequent to the discovery of the Anglo-Belgian plot, as previously stated, all idea of reinstating Belgium has been discarded.

The annexation of Belgium, however, makes it possible to grant France less stringent conditions. So long as Belgium--under some form of self-government--is under German sway there is no hope of revenge of France, and the conviction prevails here that after this war France will abstain from her dreams of aggrandizement and become pacific. Germany can then make reductions in the burdens laid on her people for military service by land.

To arrange the position of Belgium in relation to Germany will be a very interesting problem for German policy.

It is obvious that the annexation of Belgium cannot be defended from the point of view of the principle of nationality. The Belgians--half of them French, half of them Flemish--undoubtedly deem themselves but one nation. As a mitigating circumstance in favor of the annexation it is urged--above and beyond the intrigues carried on by Belgium with the English--that Belgium, in days of yore, for a long time formed a portion of the German Empire, and that the inhabitants of the little country, to a considerable degree, gain their livelihood by its being a land of transit for German products. Nationally, the annexation is not to be defended, but geographically, economically, and from a military point of view it is comprehensible.

At the east front of the central powers very different conditions prevail. _Austria has no desire to make the conquest of any territory_; indeed, just the contrary, would probably be willing to cede a portion of Galicia in favor of new States. _Germany has not the slightest inclination to incorporate new portions of Slav or Lettish regions._ Both Germans and Austrians wish to establish free _buffer States_ between themselves and the great Russian Empire.

Not even the Baltic provinces, where Germans hold almost the same position as the Swedes in Finland, form an object for the German desire of conquest, but her wish is to make them, as also _Finland_, an independent State. Furthermore, the Kingdom of _Poland_ and a Kingdom of _Ukraine_ would be the outcome of decisive victories for the central powers.

What Germany would demand of these new States, whose very existence was the outcome of her success at arms, would simply be an _economical organization in common with the German Empire_, an enormous central European "Zollverein" ("Customs Union") with Germany at its heart. It is only such a union, in the opinion of leading German statesmen, which could hold the United States of North America at bay, and after this present war, moreover, the world would only have to take into account _two_ first-class powers, viz., Germany and the United States of America.

A commencement of this new economical connection is being made by the negotiations entered on by representatives of _Austria-Hungary_ and _Germany_ concerning the proposed formation of a _Customs Union_. Since this union would include 120,000,000 individuals, it must be evident what an immense attraction it must exert on the surrounding smaller nations. _Switzerland_ and _Holland_ can scarcely escape this attraction, and the _Scandinavian countries_, it is said, would probably find it to their advantage, together with a liberated _Finland_, to form a _Northern Customs Union_, which later, on an independent basis, could _enter in close union with the vast "Zollverein" of Central Europe_.

This "Zollverein" would then include about 175,000,000 individuals. The adhesion of _Italy_ to the vast union would not be inconceivable, and then the combination of the United States of Europe, founded on a voluntary commercial union, would be approaching its realization.

Such a commercial union, embracing various peoples, could only lead to moderation in foreign politics, and would be the best guarantee for the peace of the universe. A brisk interchange of commodities, a fruitful interchange of cultural ideas would result from such a union, connecting the polar seas with the Mediterranean, and the Netherlands with the Steppes of Southern Russia.

All States participating in this union would gain thereby. But one European country would be the loser, _Great Britain, the land of promise for the middleman_; that, according to German comprehension, at present gains a living by skimming the cream from the trade industry of other nations by facilitating the exchange of goods, and making profits by being the banking centre of the world.

The Germans declare that there is no reason for such a middleman's existence in our day. The banking system is now so developed in all civilized lands that, for example Sweden can remit direct to Australia or the Argentine for goods obtained thence, instead of making payment via London and there rate, by raising the exchange for sovereigns to an unnatural height, so that, as matter of fact, England levies a tax on all international interchange of commodities.

In opposition to this glorious vision of the days to come, which the Germans wish to realize by their victories in war, there is the alluring prospect of the Allies that by their victory they will deal a deathblow to _German militarism_. While the English, with their 200,000 troops, are good enough to promise no conquest of German territory--what says Russia to this?--at the close of the war, in the opinion of the Britons, there would still remain 65,000,000 Germans right in the centre of Europe, organized as a kingdom burdened with a war indemnity to a couple of tens of milliards in marks.

This nation, however, strengthened by 15,000,000 Germans in Austria, would be the greatest bearers of culture in the wide world--the nation with the best technical equipment of all others, glowing with ambition, with military training second to none, and gifted with an immense rate of increase as regards population. This nation would be forced to lay down her arms, lying as it does between the overbearing gigantic realm in the east and the warlike French to the west. The idea is incomprehensible. The universe would behold a competition in armaments such as it had never seen.

A victorious Germany, on the other hand, would become less and less military, since she _would not need_ to arm herself to such an extent as now. She is already chiefly an industrial country. Her desire is to be wealthy, and wealth invariably smothers military instincts. Germany has set up far greater ideals as regards social developments than other countries, and all she asks is to be left in peace calmly to carry out these plans in the future. _German militarism can only be conquered by the victory being on her side, since she has no thought of military supremacy, but simply of founding a new economical organization in Europe._

GUSTAF SIOESTEEN.

ADDRESS TO KING ALBERT OF BELGIUM

By EMIL VERHAEREN.

Translation by Florence Simmonds.

[From King Albert's Book.]

Sire: This request to pay my respectful homage to you has given me the first real pleasure I have been permitted to feel since the good days of Liège. At this moment you are the one King in the world whose subjects, without exception, unite in loving and admiring him with all the strength of their souls. This unique fate is yours, Sire. No leader of men on earth has had it in the same degree as you.

In spite of the immensity of the sorrow surrounding you, I think you have a right to rejoice, and the more so as your consort, her Majesty the Queen, shares this rare privilege with you.

Sire, your name will be great throughout the ages to come. You are in such perfect sympathy with your people that you will always be their symbol. Their courage, their tenacity, their stifled grief, their pride, their future greatness, their immortality all live in you. Our hearts are yours to their very depths. Being yourself, you are all of us. And this you will remain.

Later on, when you return to your recaptured and glorious Belgium, you will only have to say the word, Sire, and all disputes will lose their bitterness and all antagonisms fade away. After being our strength and defender, you will become our peacemaker and reconciler. With deepest respect,

EMIL VERHAEREN.

Foreshadowing a New Phase of War

Financing the Allies and Small Nations Preparing for War

By Lloyd George, British Chancellor of the Exchequer

That there are "also other States preparing for war," and that
financial arrangements had been made for their participation
against Germany by the allied Governments of Great Britain,
France, and Russia; moreover, that Russia would be enabled
within a few months to export considerable quantities of her
grain and do her own financing--this statement preceded the
bombardment of the forts in the Dardanelles, probably to clear
the way for Russia's commerce--are the outstanding features of
the speech by Lloyd George presented below, foreshadowing a
new phase in the war. The speech was made in the House of
Commons on Feb. 15, 1915, to explain the results of the
financial conference between the allied powers to unite their
monetary resources, held in Paris during the week of Feb. 1.
It may be regarded as one of the most momentous utterances of
the war.

PARLIAMENTARY REPORT.

_The Chancellor of the Exchequer, (Mr. Lloyd George,)_ who was called upon by the Speaker, said: I shall do my best to conform to the announcement of the Prime Minister that the statement I have to make about the financial conference in Paris shall be a brief one, but I am afraid my right honorable friend assumed that we are all endowed with the extraordinary gift of compression which he himself possesses. [Laughter.] The arrangements that were made between the three Ministers for recommendation to their respective Governments commit us to heavy engagements, and it is, therefore, important I should report them in detail to the House, and find some reason why we should undertake such liabilities.

This is the most expensive war which has ever been waged in material, in men, and in money. The conference in Paris was mostly concerned with money. For the year ending Dec. 31 next the aggregate expenditure of the Allies will not be far short of £2,000,000,000. The British Empire will be spending considerably more than either of our two great allies--probably up to £100,000,000 to £150,000,000 more than the highest figure to be spent by the other two great allies. We have created a new army; we have to maintain a huge navy. We are paying liberal separation allowances. We have to bring troops from the ends of the earth; we have to wage war not merely in Europe, but in Asia, in North, East, and South Africa. I must say just a few words as to the relative position of the three great countries which led us to make the arrangements on financial matters which we recommend to our respective Governments. Britain and France are two of the richest countries in the world. In fact, they are the great bankers of the world. We could pay for our huge expenditure on the war for five years, allowing a substantial sum for depreciation, out of the proceeds of our investments abroad. France could carry on the war for two or three years at least out of the proceeds of her investments abroad, and both countries would still have something to spare to advance to their allies. This is a most important consideration, for at the present moment the Allies are fighting the whole of the mobilized strength of Germany, with perhaps less than one-third of their own strength. The problem of the war to the Allies is to bring the remaining two-thirds of their resources and strength into the fighting line at the earliest possible moment. This is largely, though by no means entirely, a question of finance.

Russia is in a different position from either Britain or France. She is a prodigiously rich country in natural resources--about the richest country in the world in natural resources. Food, raw material--she produces practically every commodity. She has a great and growing population, a virile and industrious people. Her resources are overflowing and she has labor to develop them in abundance. By a stroke of the pen Russia has since the war began enormously increased her resources by suppressing the sale of all alcoholic liquors. [Cheers.] It can hardly be realized that by that means alone she has increased the productivity of her labor by something between 30 and 50 per cent., just as if she had added millions of laborers to the labor reserves of Russia without even increasing the expense of maintaining them, and whatever the devastation of the country may be Russia has more than anticipated its wastage by that great act of national heroism and sacrifice. [Cheers.] The great difficulty with Russia is that, although she has great natural resources, she has not yet been able to command the capital within her own dominions to develop those resources even during the times of peace. In time of war she has additional difficulties. She cannot sell her commodities for several reasons. One is that a good deal of what she depends upon for raising capital abroad will be absorbed by the exigencies of the war in her own country. Beyond that the yield of her minerals will not be quite as great, because the labor will be absorbed in her armies.

There is not the same access to her markets. She has difficulty in exporting her goods, and in addition to that her purchases abroad are enormously increased in consequence of the war. Russia, therefore, has special difficulty in the matter of financing outside purchases for the war. Those are some of the difficulties with which we were confronted.

France has also special difficulties. I am not sure that we quite realize the strain put upon that gallant country [cheers] up to the present moment. For the moment she bears far and away the greatest strain of the war in proportion to her resources. She has the largest proportion of her men under arms. The enemy are in occupation of parts of her richest territory. They are within fifty-five miles of her capital, exactly as if we had a huge German army at Oxford. It is only a few months since the bankers of Paris could hear the sound of the enemy's guns from their counting houses, and they can hear the same sound now, some of them, from their country houses. In those circumstances the money markets of a country are not at their very best. That has been one of the difficulties with which France has been confronted in raising vast sums of money to carry on the war and helping to finance the allied States.

There is a wonderful confidence, notwithstanding these facts, possessing the whole nation. [Cheers.] Nothing strikes the visitor to Paris more than that. There is a calm, a serene confidence, which is supposed to be incompatible with the temperament of the Celt by those who do do not know it. [Laughter.] There is a general assurance that the Germans have lost their tide, and that now the German armies have as remote a chance of crushing France as they have of overrunning the planet Mars. [Cheers.] That is the feeling which pervades every class of the community, and that is reflected in the money market there. The difficulties of France in that respect are passing away, and the arrangement that has now been made in France for the purpose of raising sums of money to promote their military purposes will, I have not the faintest doubt, be crowned with the completest success. [Cheers.]

But we have a number of small States which are compelled to look to the greater countries in alliance for financial support. There is Belgium, which until recently was a very rich country, devastated, desolate, and almost entirely in the hands of the enemy, with an army and a civil government to maintain, but with no revenue. We have to see that she does not suffer [cheers] until the period of restoration comes to her, and compensation. [Cheers.] Then there is Serbia, with the population of Ireland--a people of peasants maintaining an army of 500,000 and fighting her third great war within two years, and fighting that with great resource, great courage, and bravery. [Cheers.] But she had no reserve of wealth, and now no exports with which she can purchase munitions of war outside, and she has hardly any manufactures of her own. That is the position as far as the smaller States are concerned.

_There are also other States preparing for war, and it is obviously our interest that they should be well equipped for that task._ They can only borrow in the French and English markets.

But we had our own special difficulties, and I think I ought to mention those. Two-thirds of our food supplies are purchased abroad. The enormous quantities of raw materials for our manufactures and our industries are largely absorbed in war equipment, and our ships in war transport. We cannot pay as usual in exports, freights, and services; our savings for the moment are not what they would be in the case of peace. We cannot, therefore, pay for our imports in that way. We have to purchase abroad. We have to increase our purchases abroad for war purposes. In addition to that we have to create enormous credits to enable other countries to do the same thing. The balance is, therefore, heavily against us for the first time. There is no danger, but in a conference of the kind we had at Paris I could not overlook the fact that it was necessary for us to exercise great vigilance in regard to our gold.

These were the complex problems we had to discuss and adjust, and we had to determine how we could most effectually mobilize the financial resources of the Allies so as to be of the greatest help to the common cause. For the moment undoubtedly ours is still the best market in the world. An alliance in a great war to be effective needs that each country must bring all its resources, whatever they are, into the common stock. An alliance for war cannot be conducted on limited liability principles. If one country in the alliance has more trained and armed men ready with guns, rifles, and ammunition than another she must bring them all up against the common enemy, without regard to the fact that the others cannot for the moment make a similar contribution. But it is equally true that the same principle applies to the country with the larger navy or the country with the greater resources in capital and credit. They must be made available to the utmost for the purpose of the alliance, whether the other countries make a similar contribution or not. That is the principle upon which the conference determined to recommend to their respective Governments a mobilization of our financial resources for the war.

The first practical suggestion we had to consider was the suggestion that has been debated very considerably in the press--the suggestion of a joint loan. We discussed that very fully and we came to the conclusion that it was the very worst way of utilizing our resources. It would have frightened every Bourse and attracted none. It would have made the worst of every national credit and the best of none. Would the interest paid have been the interest upon which we could raise money, the rate at which France could have raised money, or the rate at which Russia could raise money? If we paid a high rate of interest we could never raise more money at low rates. If instead of raising £350,000,000 a few weeks ago for our own purposes we had floated a great joint loan of £1,000,000,000, the House can very well imagine what the result would have been. We decided after a good deal of discussion and reflection that each country should raise money for its own needs within its own markets in so far as their conditions allowed, but that if help were needed by any country for outside purchases then those who could best afford to render assistance for the time being should do so.