dred years (a period of general peace and prosperity) invite some skepticism concerning the prompt payment of larger debts recently contracted. Furthermore, the present conflict has been in progress less than two years. Should it extend into a third year, obligations already vast will continue to increase. But if the nations cannot afford war, and yet month after month actually are making expenditures unfalteringly upon a scale much greater than that previously declared to be prohibitive, what losses have been incurred, and what debts are accumulating to be met in years to come? Analysis of the cost of war is distinctly a modern undertaking. In 1872, shortly after the end of the FrancoPrussian war, Sir Robert Giffen prepared an exhaustive analysis of the direct and indirect costs of that conflict. He demonstrated that the war losses sustained by France aggregated $2,916,000,000, and that Germany made a net profit from the war over all direct and indirect costs of approximately nine hundred million dollars. These results undoubtedly have been influential in shaping the subsequent policy of each nation. Direct and Indirect Cost of the War Following in the footsteps of Sir Robert Giffen so far as method of procedure was concerned, Mr. Edgar Crammond of the Royal Statistical Society read a paper before that distinguished body in March last, presenting an exhaustive analysis of costs of the present war compiled with as great accuracy as conditions permitted up to that time, and projected forward to July 31, 1915, in order to cover a complete year. This analysis presented the direct and indirect costs of war for each of the leading nations involved; but in computing the indirect costs the English economist fell into the error of including the capitalized value of human life lost, without including on the other side, or as part of the national wealth, the capitalized value of all male workers. Obviously, such a partial comparison proves extremely misleading. According to the sounder view, money value of men forms no part of national wealth. The rather doubtful computation of the money value of human life, if used at all, is most effective when used independently. According to the computation presented by Mr. Crammond, the direct and indirect cost of the war to July 31, 1915 (exclusive of the capitalized value of human life), was $36,039,000,000. This aggregate would naturally be increased by any excessive charges which occurred after Mr. Crammond prepared his paper and which he could not have foreseen. Such charges, for example, as those entailed by the German drive across Galicia and Poland and the wholesale destruction of property, fortresses, armaments, and munitions in the Russian border governments. At least two billions of dollars of additional loss must have been entailed by this campaign. To the English statistician's total, also, should be added $1,158,000,000 for the outlay of Italy, and the gross sum of a half billion for the expenditures of smaller belligerents and the costs of neutral border nations, resulting in a grand total of expenditure and loss of $39,696,774,000, to August 1, 1915. It is probable that, since July, expenditures for all the nations concerned have been steadily increasing. The British Chancellor of the Exchequer, speaking in September, estimated that the war debt of Great Britain would amount to $7,500,000,000 by April 1, 1916. In December it became evident that this estimate was too low, and in February the aggregate of credits required to carry on the war to June 1, 1916, was raised to $10,410,000,000. This illustrates the gathering volume of war costs and also the difficulties that attend attempts to measure war in the making. It seems reasonable, however, to conclude that the direct and some of the indirect loss to January 1, 1916, must have reached $55,000,000,000, and also that this total will have advanced to at least $80,000,000,000 by the end of the second year of war. Should the capitalized value of human life be taken into account as a factor of cost (and it undoubtedly represents one element of cost of such consequence that the nations cannot easily replace it), it will be of interest to observe very briefly the probable expenditure thus far made. In 1910 or 1911 the number of men within the age-groups of from 15 to 50 years in the nations at war was approximately 87,764,606. This aggregate included the defectives of all classes within the age-groups specified, estimated by one authority at 25 per cent. On the other hand, the return was for 1910 or 1911, so that allowance must be made for half a decade of increase. Permitting these two factors their accepted weight, the aggregate number of virile workers in 1916, regardless of war casualties, is 77,532,000. What is, the average value of this vast group of men? Sir Robert Giffen, whose computation of capitalized value of human life was offered in passing, as it were, since he did not include the result in the total costs of the Franco-Prussian war,-computed the average earning power of each active male at £40, or about $200. Reckoning the present value of an annuity of £1 on a single life at the age of 25, he arrived at a valuation per worker of £600. More recent writers discuss the value of human life from various standpoints, some arriving at the conclusion that workers are worth sums varying in different European countries from $1964 for a Russian to $4024 for an Englishman. Upon the basis of these figures, Mr. Crammond computed the aggregate value of human life lost to July 31, 1915, to be $11,475,000,000, or an average value of $2933 per man. If this valuation be applied to all the male workers of virile age in the six powers at war, specified above as numbering 77,532,000, it will appear that in 1914 the actual capitalized value of human life represented in the virile male element of the population was $227,401,356,000. It is impossible to compute accurately the number of human lives that have been lost thus far in the present war, and the roll of death is being constantly increased. Large numbers of men will be dying daily from wounds and exposure for many months after war has given way to peace. A considerable period must therefore elapse after the close of the conflict before an accurate record can be made of the loss of life. If, by the end of the second year, mortality from all causes and incapacity from illnesses or wounds approximates 40 per cent, this would mean an aggregate loss by that date of 12,000,000 of men. Upon that assumption, the capitalized value of human life lost during two years of war would be $35,196,000,000, or nearly one sixth of the total valuation of all males of virile age in the nations concerned. Increase of Debt from 1816 to 1914 in the Nations now at War It is not, however, with indirect costs that we are here principally concerned, but rather with the growing public indebtedness of the nations at war. Since the outbreak of hostilities, loans of immense sums have been secured by all the powers at frequent intervals. While it is possible to present with reasonable accuracy the amount of these obligations, it is clear that analysis of this rapidly increasing indebtedness would be assisted if some standard could be established by which to measure it. To some degree events at the close of the Napoleonic period, a century ago, resemble those of our own time. Hence the debt conditions which prevailed at the earlier date possess some interest. The national debt in 1816 of the nations which are now at war was as follows: 1 In 1816 or the nearest year for which figures are available. The total here shown should in reality be $8,457,180,000, since at the outbreak of the French Revolution the heavy national debt of France, amounting to $2,275,000,000, had been practically all repudiated. Principal significance attaches to the debt of Great Britain. It greatly exceeded the combined debts of the other powers, including the repudiated debt of France, indicating that for many years, both in victory and defeat, the British nation had borne the burden of financing the opposition to Napoleon. In 1793 the national debt of the United Kingdom approximated more than $1,000,000,000. This sum represented the debts of the Marlborough campaigns in the reign of Queen Anne, those of the first two Georges, and the debt which had been incurred in connection with the American Revolution. To this aggregate the expenses of the Napoleonic wars added $3,007,501,715, resulting in 1816 in the great aggregate indebtedness shown above. According to a computation recently made by Sir George Paish, the national wealth of Great Britain in 1816 was approximately $12,500,000,000. Hence the public debt was equivalent to about one third of the national resources; or, expressed in per-capita terms, the wealth was $625, and the indebtedness $224. In 1914, the national wealth of Great Britain was $88,000,000,000, a sevenor eight-fold increase in a century. This represents a per capita of slightly more than $1800. Consequently, if the proportion of debt to wealth which existed in 1816 should be reached by the end of this war, the debt per capita might amount to $654, representing an aggregate British national debt of $30,476,000,000, and still debt and wealth would apparently bear the same relation which they bore in 1816. Yet it does not follow that Great Britain, having carried a debt equal to one third of the national wealth in 1816, can duplicate this achievement in 1916. National wealth has greatly augmented, and it is therefore possible to increase the per-capita burden of debt; however, the extent to which the increase can be carried is another matter. In our own time national resources comprise many classes of wealth which did not exist in 1816. In the total for the latter year practically everything considered as wealth possessed some form of negotiable value, since wealth was composed of land, houses, cattle, or the property in daily use. Few public improvements existed in 1816, but the grand total of British wealth in 1916 naturally includes all public and VOL. 117 - NO.5 transportation improvements, which have been effected during the past century upon a great scale. Hence much of the wealth so confidently referred to by English economists as the basis for enormous loans is in reality of a type which could yield no returns whatever. This statement applies with equal force to the wealth of all other nations. When the United Kingdom emerged from the wars which finally destroyed the French Empire, unprecedented debt was the penalty of victory. The nation, however, was on the verge of an era of unexampled industrial expansion. It is perhaps not extreme to say that no other single piece of good fortune comparable with this ever came to the British nation. In the great industrial movement of the period, ushered in by the application of steam to manufacturing and transportation, Great Britain took the lead, and wealth increased by leaps and bounds. Within a short time the accumulated capital of the nation became so great that it easily bore the colossal indebtedness which had culminated with the close of the Napoleonic period. The government even began to make payments upon some of the obligations not 'permanent.' It cannot be expected that the British nation will be able in our time to duplicate this piece of extreme good fortune. No revolutionary expansion of resources is likely to follow the conclusion of the present war. Great Britain, indeed, will find it difficult merely to retain undiminished the great volume of trade previously secured. The other powers engaged in this war are similarly situated. Hence the debts which Great Britain and the other warring nations are assuming in such vast amounts, undoubtedly will prove for a long period embarrassing and persistent burdens. 1 Per-capita base includes debt repudiated in 1793. The total indebtedness of Germany, Italy, Austria, France, Great Britain, and Russia in 1914, if computed on the basis of the 1816 per capita, thus would have been less than the actual indebtedness by about one third. The aggregate national wealth of the six powers and Belgium amounted in 1914 to $378,000,000,000. If it be admitted that wealth increased during the century in all the other nations of this group in about the same proportion as that estimated by Sir George Paish for the United Kingdom, the aggregate wealth in 1816 of all six powers must have amounted approximately to $60,000,000,000. During the century, therefore, while population was increasing to two and a half times that existing in 1816, national wealth was increasing about sixfold. Hence some increase in the proportion of national indebtedness was to have been expected. The proportionate weight or percent Since 1816, the increase of popula- age of the total indebtedness formed in Inspection of these proportions tempts one to believe that the burden of indebtedness accumulated by the French kings and repudiated in the Revolution of 1793 represented after all nearly the normal proportion of indebtedness desired by the nation, since after one hundred years the proportion reached by including the repudiated debt has reappeared. In general, however, the change has been toward a rather significant uniformity, suggesting that the exceptional conditions represented by the lead of Great Britain in expenditure during the early period have disappeared. It should not be overlooked that the increase of absolute indebtedness during the century by all nations except Great Britain compels reckoning the debts existing in 1816 as still theoretically unpaid in 1914. In the case of Great Britain the early debt was reduced one third; but after the lapse of one hundred generally peaceful and singularly prosperous years, there still remains unpaid the equivalent of half the cost of attempting to conquer the American Colonies, and of all the debt incurred to finance the campaigns against Napoleon. Five of the six powers now at war began the century of peace with relatively small indebtedness; but on July 1, 1914, their aggregate debt was nearly thirteen times larger than that which existed in 1816. The rate of increase in debt in these nations was nearly twice that of national wealth. Consideration of the debt conditions prevailing at the close of the Napoleonic period, in comparison with those existing after the passage of about one hundred years, has thus resulted in the establishment of certain standards which permit some measurement, far from satisfactory though it be, of the war debts and aggregate indebtedness into which the powers engaged in this conflict are plunging. 1 Custom House standard: £ 4.86; Mark .238; Franc .183; Rouble .51; Lira .18. The first German loan realized 4,460 millions of marks, the second 9,060, the third 12,101. The fourth loan is now in process of flotation, and although the amount realized is unknown, it is an important factor of indebtedness. In the German debt here given the fourth loan is included as approximating the second-9,060 millions of marks. In the short space of less than two years the great powers of Europe now at war have contracted obligations one third greater than the aggregate of their indebtedness before the conflict began; yet the latter obligations had |