Conference and consortium, deflation and disarmament, an imposed customs union and a disguised protectorate, are among the proffered prescriptions. Some of her advisers, notably those from Great Britain and the United States, who have strong reasons of their own for desiring rapidly to increase Europe's buying power, see the whole Continent sinking into disintegration, and bid us despair of all but the most drastic remedies.

Others, nearer to the scene, like the signatories of the Porto Rosa agreements, or more level-headed, like Mr. Hoover, who grasped and set out the economic facts with all their implications of human suffering, three years ago, when the rulers of Great Britain and America were blind to them, have won through to a relative optimism and bid us recognize, to quote from the recent report of the United States section of the Inter-American High Commission, of which Mr. Hoover is chairman, that "Europe has made great progress in agricultural, industrial, social and political stability since the war."

At such a moment it may be helpful to stand back for a while from the scene and to attempt to secure a general view of the situation. What is the nature of the problem with which the statesmen of Europe and America are confronted? What are the limits within which, whether by conference or

otherwise, they can modify the eco

hopes and the dangers involved in concerted operations thus set on foot? It is the object of this article to attempt a brief answer to these questions.

The present distresses of Europe, which have disorganized the commercial life of the whole world, and not least of North America, are not due primarily to this or that act of statesmanship or course of policy since the armistice; still less to any of the peace treaties. They are due primarily to the war. All wars are economically disastrous, and increasingly so in proportion to their length. But it was neither the length of the recent war nor the large area which it covered nor the number of combatants engaged that has caused its consequences to be so catastrophic to the European peoples. It is the character of its strategy. The war was not a contest between two similarly equipped belligerents. It was a contest between land-power and seapower. It was a siege—a siege in which the besiegers won. And the condition of a besieged area, on the morrow of defeat, is economic exhaustion.

Europe is an industrial continent. Her normal output of food-stuffs leaves one hundred million of her population unprovided for. The deficiency was met by imports from overseas, paid for out of the profits of trade and industry. Thus the siege, by cutting off central Europe from its overseas connections,

The issue of the war has proved once and for all that the world is now industrially interdependent, in that no single block of the earth's surface, if it is to maintain a civilized standard of life, to say nothing of an efficient system of defense, can dispense with materials drawn from all quarters of the globe; with the cotton of America and Egypt, the rubber of the tropics, the nickel of Canada, the copra of West Africa, the nitrates of Chile, and the jute of India. The growth of industrialism has made the world a single great society, and any action, such as the late war, which cuts off and isolates any one part of it, causes the severed member to wither. Berlin-Bagdad, boomed in 1915 as a great new land empire, independent of sea-power, the realm of a twentieth-century German Alexander or Napoleon, was soon discovered to be a prison-house in which men lacked the civilized facilities for working, for traveling, for eating, and even for washing. Many a German housewife who listened obediently in the old days to Prussian dreams of conquest knows today that soap depends on sea-power. This revelation of the potentialities of sea-power in modern industrial society opens up large issues of policy.

$ 2

These issues should be understood, and their implications realized, by the

clude a formidable increase in their power as against that of other nations, and therefore also in their international responsibilities. In the realm of strategy the war has already spelled the doom of the idea of naval supremacy by any one power, for such a power, however wisely and pacifically exercised, now that it has been shown what it involves, will not be tolerated by a world of self-respecting sovereign states. It is indeed fortunate for humanity that sea-going peoples have a manly regard for independence and little aptitude for tyranny. Otherwise the world might find itself at the mercy of a fit of naval Napoleonism.

Here, however, we are concerned not with strategy, but with economics. If the siege left Europe exhausted and impoverished, and, as regards a large part of her industrial population, unemployed, how should she extricate herself from her difficulties and once more return to normalcy?

Clear thinkers in 1918 and even before 1918 were in no doubt as to an answer. Hostilities once ended, the wise course, so they argued, was for the besiegers, or rather for the whole outside world, to help to get the besieged population back to work.

If the great schism produced by the war in the world's society was to be reknit, if the life-blood of commerce was once more to pulsate freely through the arteries of the world, steps must be taken to promote the re-stocking of Europe, even at the cost of large credit operations. And the natural organization to undertake this was the muchadvertised League of Nations. For it was not a task for this or that nation, still less for those of the besiegers, who were themselves exhausted by the

struggle. It was a job for the world as a whole, which had profited by the vindication of free government.

The means for carrying out an international scheme of European reconstruction did not require to be improvised. The means existed ready to hand in the Allied Maritime Transport Council. All that the new-born league would have needed would have been to take them over, for the organization devised by the besiegers for the more efficient surveillance of the beseiged area had of necessity included positive agencies which lent themselves to the purpose of reconstruction. The rationing of imports, the control of shippingspace, the selection and apportionment of commodities, in a word, the policy summed up in the phrase, "no cake until all have bread," had already been in operation for some time in the case of the neutral countries bordering the blockaded area. All that was needed was to apply to Germany and the other post-war governments of central and east-central Europe the machinery which had already proved its efficiency in the case of the Scandinavian states, Holland, and Switzerland.

The task was not attempted. The statesmen who might and should have taken the lead failed to rise to the opportunity. The league was a brandnew creation which must not be soiled by taking over tasks and adopting a technic already worked on by others, while the British premier, keener in his sense of an emergency than his American colleague, had turned his vision elsewhere and was organizing an election. Thus it was that, despite a timid effort made by the Italians, and in the face of preparations made by the men who had their hands on the machinery of the blockade, the morrow

of the siege, and the succeeding weeks and months, found no scheme of European reconstruction set on foot either by the besieging governments as a whole or by any one among them. Europe was left to get back to work as best she could. Encouragement and facilities for those who could have made best use of them, still less (what would have seemed a sacred duty) immediate aid to the French and Belgian populations who had the ill fortune to dwell on the battle-line of the world's freedom were not given; only charity to the hindmost. They could not have been left to die unheeded; yet charity, thus dispensed, after months of neglect of positive measures, was ill calculated to attract the interest or to spur the activities of those upon whom, in default of the governments, the main burden for the reconstruction of Europe was now to rest-the capitalists.

& 3

The Allied Powers consider that the restoration of the international commerce of Europe, as well as the development of the resources of all countries, is necessary to increase the amount of productive labor and lessen the suffering endured by the European peoples. A common effort by the most powerful States is necessary to render to the European system its vitality which is now paralysed. This effort ought to be applied to the suppression of all obstacles in the way of commerce. It ought to be applied also to granting large credits to the most feeble countries and to the coöperation of all for the restoration of normal production.

So runs the text of the resolution, telegraphed from Cannes on January 6, by which the European states (and, it was hoped, "the most powerful states"

outside Europe, also) were summoned to a conference at Genoa. What would such a summons have meant in January, 1919? And what does it mean to-day?

In 1919 the first clause in the summons, "the restoration of the international commerce of Europe," would have meant concerted provision of raw material. It would have involved the maintenance, for a brief transition period and with the necessary adaptations, of the interallied system of control over raw materials, and its extension, linked with a scheme of reparation to the populations of the invaded regions, to all the European states.

In 1919 the second clause, "a common effort by the most powerful states," would have meant concerted provision of credits. It would have involved the working out of a credit scheme which would have enabled the new democratic governments of central Europe, then fighting for their lives against Bolshevism and anarchy, to provide work and hope for their peoples. It would have dried up the morass of unemployment which drove thousands of decent citizens desperate and led some of the new governments, in self-defense, to dress their unemployed in uniforms and to inculcate an intolerant nationalism as an antidote to revolution.

In 1919 the third clause, "The suppression of all obstacles in the way of commerce," would have meant concerted provision for freedom of commercial intercourse. It would have inIt would have involved not indeed the suppression of all European custom-houses or the refusal of fiscal freedom to the newly liberated states, but at least a coöperative spirit and plan in European fiscal

policy. It would have prevented the orgy of unneighborliness which resulted in the Danube valley and elsewhere from the fact that every state was thrown upon its own devices and left to help itself as best it could, with the result that it had to mobilize what bargaining power it possessed in its own natural resources.

$ 4

Very different is the situation in 1922. In the first place, the new governments, then precariously established and working with improvised and necessarily inefficient staffs, are now firmly established. In 1919 there were twelve new administrations in the blockaded area with whom the Allies had to deal-in Germany, Czecho-Slovakia, Austria, Hungary, Jugoslavia, Bulgaria, Poland, Rumania, Lithuania, Latvia, Esthonia, and Finland. There is no one of these who might not at that time have been willing to accept some limitation upon its sovereignty in order to extricate itself from its immediate difficulties and to assure its survival and the survival of the cause it represented. Commercial conventions, providing if not for the free-trade union advocated by Mr. Keynes, at least for a common European policy in transport and other questions during the transition period, could have been evolved without undue difficulty.

But now the position has changed. The red cloud in the East has ceased to terrify. Conditions have solidified. Men's minds, no longer confused and distraught by the rush of events, have had time to become accustomed to the new frontiers. They are realizing that the map of the treaties has come to stay. Those who used to gibe at the

impossible shape of Czecho-Slovakia are remembering the far more grotesque conformation of the old Austria, which weathered many storms; and those who predicted a speedy fourth partition of Poland are realizing that in Poland, as in Ireland, the twentieth century is not the eighteenth.

Moreover, a spirit of dignity and self-respect has been developed which is likely to resent anything savoring of dictation by the Western powers. Its most significant manifestation, the Little Entente of Czecho-Slovakia, Jugoslavia, and Rumania, represents a movement of emancipation from the tutelage of London and Paris, and the transformation of what used to be a mere provincial slogan, "The Balkans for the Balkan peoples," into something more nearly resembling a Monroe Doctrine. British and American writers who still talk comprehensively of "Europe" and "the Continent" should realize that, in Europe as in the United States, a process of regional crystallization is taking place, and that the great east-central area, extending from the Baltic to the Adriatic and the Black Sea, consisting of the Western Slav peoples and their non-Teutonic neighbors, intends to speak with a voice of its own. It is at this moment the most vigorous, the most forward-looking, the most American portion of the Old World.

In the second plan, the work that could have been undertaken in 1919 by governmental agencies, whether national or international, has now been undertaken, piecemeal, but yet not ineffectively, by means of private capital. The Europe which the Big Three abandoned in 1919 was like a vast undeveloped area, a Morocco or a Mesopotamia, awaiting the irrigation of in

vestment. And in Europe, as in Asia and in Africa, the demand brought the supply, and concession-hunters, some of them clothed in Y. M. C. A. uniforms, others more decorously clad, flocked to the pickings.

Through transactions which individually were not recorded in the daily papers, but the cumulative effect of which has been steadily making itself felt, raw material and coal have found their way to the empty factories, good leather belting has replaced the shoddy substitute put in during the siege, transport facilities have been repaired, extended, and in part revolutionized, and the productive machine has once more been set in motion. The result is that President Harding, addressing a gathering of American farmers, can point to great European waterway schemes as an example and a stimulus for the Great Lakes-St. Lawrence project, and that the figures recently published by the League of Nations show an unemployment rate for the summer of 1921 in Germany of 2.2 per cent., compared with 13 per cent. for Great Britain and 26 per cent. for Sweden. "You reduced us to beggary and left us to die," remarked an Austrian business man bitterly to the present writer at Vienna last August, "but we have a shot left in our locker yet. He laughs last who laughs longest. Wait and see who it is that the war has ruined!"

The Genoa Conference was not then devised, as such a conference might have been devised in 1919, to promote the economic reconstruction of the besieged area, but to rescue the besiegers themselves from the plight in which their short-sightedness has involved them. The peoples of central and eastcentral Europe are now working and selling instead of idling or begging or