fighting; but they are not buying, or, rather, they are not buying where they used to buy, from the old workshops of the West. The two million unemployed in Great Britain represent the shrinkage of Great Britain's once profitable European market. Can she recover it, and with it her old predominant commercial position, or are we face to face with a permanent change in the current of the world's commerce, and must British manufacturers and workmen confront the prospect of permanent reductions in the volume of business and in the margin available for salaries and wages, together with a wholesale emigration? This is the terrible problem, the problem of what Lord Derby has well called the devastated area from Liverpool to Manchester and beyond, that haunts the politician who deliberately rejected the healing policies of a Lincoln in 1919. The same problem, though on a lesser scale, owing to the size of her internal market, is also facing the United States.

There are two answers to this problem. The first is currency; the second is national service. It is with the first alone that an international conference held at this date can deal.

No one of the states of continental Europe, we are told, is balancing its budget. How, then, are they meeting their expenses? By the aid of the printing-press. Some of them, like Germany, Austria, and Poland, are printing paper money on a huge scale; others, such as Czecho-Slovakia and Hungary, have attempted to set limits to the process. But the cumulative effect is undeniable. The public finances and the currencies of continental Europe are in inextricable confusion.

But this does not mean that the countries themselves are in confusion or unable to do business with countries of stabler and less debased currency. The internal effect of paper money is to levy a tribute, for the benefit of the government, on all who possess such money or securities quoted in terms of it. In other words, it taxes the ventier, or stock-holder, so to speak, automatically clipping piece after piece off every dollar that he possesses in the bank. To those whose money is stagnant, particularly to the old, the retired, to widows and other women with small incomes, the process, if carried as far as it has been carried in some countries, means nothing less than ruin. The dollar in the bank is reduced to a minute fraction of a cent. But to those who turn over their money rapidly and have the power, by bargaining or price-fixing, to adjust their earnings to its real value, inflation is not ruinous, but merely inconvenient, and the inconvenience arises more from the rapid oscillations of the national currency than from its actual decline in value. Central and east-central European countries are doing a large export business, so large that special antidumping legislation has been enacted against it in Great Britain, and they are doing it in terms of the currency of the countries to which the goods are sent, in dollars or sterling as the case may be. The same practice was followed by merchants in Central and South America in similar circumstances in times past.

But if their citizens can do good business and can undersell their Western competitors, it is obvious that the governments themselves cannot continue indefinitely to meet their obligations in this dangerously convenient

manner. Some way must ultimately be found of disposing of this vast accumulation of paper-money and of putting the public finances of the European states once more on a sound basis. This is eminently a subject for a general European discussion, although not necessarily at what Lord Grey has called a "lime-light" conference; nor are precedents wanting in the history of France and of North and South America for its solution. But such a solution, however desirable both for Europe and for general world stability, will not restore to Great Britain and America the European markets they have lost; for the competition to which they are exposed is due to more deeplying causes than a mere cheapening through inflation of the cost of production among their rivals. It is due to the strength of the spirit of national industrial service. To understand the full significance of this, a few words of retrospect are needed.

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For the last three or four generations, unmistakably since the eighteenseventies, intermittently since 1848, the predominant "progressive" force in European politics has been the socialist movement. It was a movement of town workmen protesting against the unfreedom and inhumanity of the growing industrial system, and its most resounding slogan was "the classwar"-the war between the wageearning class, "the proletariat," and the "bourgeois," or stock-holder, who owned the instruments and capital resources of production. It taught men to despise the appeal of nationality and patriotism, to recognize their common interest with "wage-slaves" in all parts of the world, and to look

forward with Messianic hope to a revolution which would sweep away the oppressors and establish the proletariat in the seat of power.

The war has given European socialism its death-blow. Events, which seemed for a brief period to be leading it to victory, have destroyed the authority which it exercised over the mind of the common man. The debacle is due to a variety of causes. The war itself involved an immense resurgence of the civic obligation, the traditional patriotism, latent in all classes, not least in the working class. Then, as the struggle proceeded, government control more and more superseded the well worn and much abused system of private management; and face to face with bureaucracy, the worker, always a conservative at heart, began to think more closely over the implications of socialization. Then, after an intolerable strain, came "the revolution," bringing with it not only in Russia, but in Germany, in Austria, and in Hungary, governments manned by socialists.

But they brought neither freedom nor happiness. They were, in fact, tied hand and foot by their dependence on oversea resources, and the "comrades" from abroad showed no disposition to help them. Help came at length, as has been described, through the despised machinery of capitalism, but it was help not to this or that class, but to employer and worker in a common need. Out of that common need is springing a common creed. Democratic, industrial thinkers in a Europe in which the ventier is prostrate and the relations of social classes have been transformed, are going back behind Karl Marx and his "class struggle" to the great liberal prophet Maz

zini, and finding in his gospel of industry as a coöperation in national service an inspiration for the life of their newly liberated communities.

This is a spirit against which the narrow, self-regarding routine of the older industrial peoples, for all their inherited skill, will compete in vain. What is needed in Great Britain and America to meet the industrial nationalism of the new democracies on equal terms is not subsidies to exporters or vast new syndicates, still less antidumping laws, but a return to the spirit of the Rochdale pioneers.

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This new spirit of economic nationalism is fed from a source which constitutes one of the chief dangers involved in the Genoa Conference project-the fear of domination by what the conference summons describes as "the most powerful states." The wheels of industry have been set revolving in central and east-central Europe largely by means of foreign capital. But that capital and the men behind it are not loved either by business men or workmen in the lands they invade, and the continuance of their power and, it need not be said, any attempt to extend it either through the control of national utilities or in the field of politics will lead to movements of national dignity and self-respect similar to that which in France, for a lesser cause, overthrew the Briand cabinet.

Europe from the Rhine to the Danube may have needed the irrigation of investment, but it is not a Mesopotamia, and Western bankers and cap

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tains of industry cannot hope to bestride it with majestic port and with exhortations to standardization and efficiency devised primarily in their own interest. This is the danger latent -sometimes indeed, to the student of manners, only too little latent-in proposals for syndicates and consortiums. Unless such schemes are devised with a scrupulous regard for the national independence of the democratic states concerned (Russia must, in this connection, be left out of account), they will not only fail, but they will stir up feelings of resentment that may retard necessary reforms. new republics in Europe do not intend to be half-slave and half-free, politically independent, but economically subservient to Western interests. As matters are developing, it is not improbable that the faith and fervor that have been abundantly poured out on the socialist movement will be transferred to the struggle against a European Wall Street. If so, and if the big interests take up the challenge, there can be no doubt as to the outcome, for the peoples of Europe have not shaken off Prussian militarism in order to let themselves be enmeshed in the more insidious empire of Big Business. And the peoples of America and Great Britain who have given of their best to make the world safe for democracy will be wise to watch with jealous eye the waking of the "International Finance Corporation" and other similar projected experiments, and to insure that their governments lend it no support which tends directly or indirectly to undermine the new-won liberties of Europe.