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ruled that under international law prohibition is effective in foreign vessels while in American ports.

This opinion in answer to the second question has been received with consid erable doubt and with some attempts at refutation. A careful reading, however, of Attorney-General Daugherty's opinion will, we think, convince most skeptics that the Attorney-General has correctly stated international law. A foreigner who comes to this country does not cease to be a foreigner subject to his own country's laws; but while he is here he is subject to American laws as well and must observe them or become liable to prosecution. He must, for instance, pay an income tax if he has an income that is taxable; he must obey police regulations; he must observe his obligations under contracts he makes; he must, in brief, do what the law directs as much as any citizen of the country. Likewise when a foreign vessels enters an American port she does not cease to be a foreign vessel, but she becomes subject to the laws of the country and is bound to obey those laws and to conform to the usages of the port. And, like a foreign individual, a foreign vessel is not only subject to the limitations of the law but is entitled to its protection. There could be no other way by which vessels of Sovereign independent nations could visit one another's ports. Diplomats representing sovereigns of their countries are immune to the law because they are subject to a higher and more sensitive control-namely, the code which governs the conduct of sovereigns. There is no such immunity granted to foreign citizens or foreign vessels.

The New York "World," widely known as a spokesman for the anti-prohibitionists, has expressed a common menta! confusion about this aspect of the question. We quote a paragraph from one of the "World" editorials:

Ships chartered in the United States, according to Mr. Daugherty, are subject to the laws of the United States, are, in fact, American territory; but ships chartered in foreign countries are not foreign territory. As soon as they enter American waters all vessels subject themselves to American law, which means, of course, the Volstead Act. How this comes about is not clearly explained. It would naturally be supposed that if an American ship were American territory a British ship would be British territory, and so on. Mr. Daugherty cannot have it both ways. On one point or the other he must change his mind or have it changed for him.

What the "World" seems not to know is the distinction between a vessel on the high seas and a vessel in port. An American vessel on the high seas is sub

ject to the laws of no other country but her own; but in the port of a foreign civilized country she becomes subject to such laws of that country as are applicable to her. So a British vessel in one of our ports becomes subject to our laws.

ernment has also removed all doubt as to the force of the Prohibition Law in American vessels. We trust that the American Government will see that the law as thus interpreted is observed.



ALF humorist, half philosopher, a good friend of ours wrote in his commonplace book a few weeks ago: "To-day, at high noon, saw two young women wearing skirts that reached down, down, down to their very heels. Experienced a sensation not only of bewilderment but of shock. Stared. Then averted my face. Was in the same mood, precisely, as the London fishwife who, on first seeing a girl in bicycle costume, cried, 'Garn! you shimeless 'ussy! You'll never get an 'usband!' . . . Something tells me that all this is laughable."

Two weeks later our friend wrote: "Several more young women have ventured out in long skirts, and wonderful is the effect on wearers of short skirts. A look of icy hate overspreads their countenances. I suppose it was with some such hate that Mr. Harold Hendee, having starred in "The Very Idea' and arrived in New York with that play, beheld the posters thereof inscribed, not with the name of Hendee, but with that of Mr. Ernest Truex."

Into the question of the method by THE BATTLE OF THE which our Prohibition Law shall be applied to foreign vessels the AttorneyGeneral, does not go in detail. Apparently he holds that the existence of intoxicating liquors on board a foreign vessel in an American port is illegal, no matter how those liquors may be stored. Under the law there is provision made for the transportation within the country of spirits and wine for other than beverage purposes, but, according to the Supreme Court quoted by the AttorneyGeneral, "there is no provision for the transshipment or carriage across the country from without;" and the law prohibits all possession or transportation of intoxicating liquor for beverage purposes. Even a prohibitionist from conviction may doubt whether the most drastic application of the law to foreign vessels can be practically enforced, and may conceivably hold that for all intents and purposes the spirit of the law will be observed if liquor in foreign vessels remain while in American ports under seal, and therefore non est. It may be argued that this would be inexpedient, as it would enable foreign vessels visiting America to carry and sell liquors on the high seas, while American vessels in competition with them would be prohibited from doing so. The object, however, of the Prohibition Law is not to control the habits and practices of other nations on territory subject to their jurisdiction. The argument that foreign vessels would have an advantage over their American competitors might be met by an American subsidy. Whether the application of prohibition to foreign vessels in our ports can be determined by administrative regulation or will require further legislation by Congress does not at the moment seem clear. All, "wet" and "dry" alike, will agree that, whether by statute or by legitimate administrative regulation, the principle of prohibition should be applied so as to promote, not the evasion of it, but its observance.

By the Attorney-General's ruling the American Government has asserted the right to require of foreign vessels the observance of the Prohibition Law within American waters; and this right the British Government has acknowledged. We trust that the American Government will exercise that right with justice and with reason. By the Attorney-General's ruling the American Gov

Meanwhile others besides the laughing philosopher had their say-especially our feminists. With great solemnity they predicted that the attempt to reintroduce long skirts would fail. "Women will never again submit," they told us. Yet long skirts have multiplied; uptown they already outnumber short skirts six to one, while philosophers remind us that masculine dictation from overseas directs these matters and quote George Fitch's remark, “Ever since the world began men have tried to invent something that women would refuse to wear. Thus far they have not succeeded."

But women have had short skirts ere this, and reverted to long skirts ere this-not always in obedience to masculine dictation, either. In 1898 students at Smith College adopted exactly the costume of the present-day "flappers." By their own choice they abandoned it. Who shall say but that women are now acting as freely? The reversion to long skirts set in just when we had come to sanction short skirts and a shrewd paragrapher had written: "To bring the flapper to terms approve of her. Then she'll stop it."

But she has only half stopped it. The

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battle of the skirts still rages-short ones versus long ones, with long ones predominating among women of the prosperous class and short ones predominating among women of the wageearning class. How will this end? Buffalo during the "bicycle summer" of 1895 bicycle girls on the prosperous West Side adopted short skirts. Immediately East Side girls did likewise. Whereupon the West Side went back to long skirts. So the East Side went back to long skirts also. Once let the short skirt imply a weekly envelope, and its day in America is done, for in America our wage-earning women are without caste pride. It takes Frenchwomen to develop that. How airily the little midinette trips forth, hatless and in attire jauntily proclaiming that she wins her bread by making artificial flowers or by delicately embroidering fine linen!

Less than a year ago a noted criminologist solemnly attributed the "crime wave" to the "scandalous dress of our women," and no one laughed. It has since dawned upon us that such utterances bespeak great folly. Perhaps we risk folly as great by suggesting thatconceivably, at least-the return of long skirts indicates a reinstatement of temporarily demoded standards in other realms besides those of fashion. But it is not fashion alone that shows change. From many sources come testimonies that "flapperism" has "passed the peak." Moreover, a change in fashion reflects a change in mood. Not all new fash

ions succeed; the trouser skirt of 1911 failed ignominiously; when a fashion succeeds, it is because it finds an honest welcome, and the mood that welcomes a return to long skirts would seem to be a reaction against what a popular novelist has termed "this freedom."

Doubtless the world will never again behold the "elegant female" of our grandmothers' day, but the tendency at present is toward a recovery of discarded dignities and refinements. If women have learned that they are free to dress as they choose and behave as they choose, they have also learned that an element quite apart from a more or less obscure morality (or psuedomorality) enters in-the element, that is to say, of good taste. Half our principles, when you come to think of it, rest, not upon moral considerations, but upon æsthetic considerations.

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instinct. The reins of a spirited horse fitted his fingers more naturally than the helm of a vessel. But even as a young man naval problems concerned him deeply. It was while he was a college undergraduate that he prepared and wrote the "History of the War of 1812," which has been accepted as part of the official record of the British Navy.

As Assistant Secretary of the Navy Roosevelt was a vital factor in the preparedness of Dewey's Asiatic Squadron. It was on February 25, 1898, that he sent his brief but sufficient cable to Dewey, which read in part: "Keep full of coal. In the event of declaration of war [with] Spain your duty will be to see that the Spanish Squadron does not leave the Asiatic coast, then offensive operation in Philippine Islands." This message sums up in brief almost the whole of the doctrine of Admiral Mahan, whose celebrated work on "The Influence of Sea Power Upon History" has become the Bible of naval statesmen. In less than forty words Mr. Roosevelt gives the essence of naval strategy. Prepare in time of peace. Strike at the enemy fleet to gain control of the sea. Let the war of position wait upon the attainment of naval supremacy.

This policy was sound in the days when Hannibal and Hasdrubal were forced by Roman naval supremacy to strike at the Republic on the Tiber across the difficult passes of the Alps. It was sound when Britain and France struggled half blindly for the Empire of India. It was sound when Washington urged the admirals of France to move upon the British fleet. It was sound when the pressure of the grand fleet at Scapa Flow, controlling the seas even while it lay at anchor, drove the German navy to futile and murderous warfare of a type which has crippled many nations but defeated none.

Sound in naval principle, Mr. Roosevelt was equally sound in naval practice. "The shots that hit are the shots that count," wrote Mr. Roosevelt in his autobiography, and it was to his credit that Sims was given the opportunity to introduce modern methods of target shooting into our Navy-methods which resulted in tripling the gun-for-gun effectiveness of our fleet in the years between 1902 and 1908.

Perhaps almost the greatest service which Roosevelt rendered our Navy was his order to the battleship fleet to proceed around the world. How this voyage aroused the interest of America in our Navy, the manner in which it impressed the Governments of Europe, and the expressions of friendship which it evoked from Japan are facts of recent


history with which every one is familiar. We have forgotten, however, the croaking pessimists who predicted the dissolution of the fleet and the immi nence of warfarce with the most powerful of Asiatic nations. Forgotten too are the words of Congressmen who attempted to withhold appropriations for the cruise until Mr. Roosevelt characteristically informed them that he "had enough money to take the fleet around to the Pacific anyhow, that the fleet would certainly go, and that if Congress did not choose to appropriate enough money to get the fleet back, why it would stay in the Pacific."

Mr. Roosevelt knew what his critics did not know, that the Navy was a peace power of the first magnitude. He knew the spirit of its men and of its officers. He trusted them, as to-day the Nation should trust and support their success


There is a framed letter hanging in the Outlook office signed by President Roosevelt and written from the White House in 1903 which sums up Roosevelt's doctrine of justice and strength as succinctly as the cable to Dewey summed up his understanding of naval power. The letter referred to reads in part as follows:

Good for you! Important though it is that we should get the Hague Tribunal to act in this case, where it can properly act, it is very much more important that we have a firstclass navy and an efficient, though small, army. No Hague court will save us if we come short in these respects.

Navy Day ought to mean more than the celebration of the feats of those who go down to the sea in ships. It ought to be a time for searching out the fundamental principles of international justice and a renewed comprehension of the fact that strength is compatible with righteousness.

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HOSE who desired to do so could have seen the "Money Power" in action at the Hotel Commodore, New York City, in the week beginning October 2, the occasion being the fortyeighth annual Convention of the American Bankers' Association.



There are those who entertain a very low opinion of the "Money Power," attributing to it all manner of base and ignoble designs on the prosperity of the country for its own financial profit. once held some such views myself. closer acquaintance with banks and bankers has brought to me the understanding that unsound banking methods do not succeed, while sound banking depends for its success on the prosperity of the country at large. When business goes to pot, bank loans follow. Also, I have learned that bankers themselves are very human, even though their contact with businesses of all kinds usually develops in them a breadth of view not often shared by other business men. Indeed, I am beginning to believe that it is this very breadth of view, in which small objectives are merged in the general ensemble of things, which is the source of much of the popular suspicion in which they are held.

As a proof of which I submit the attitude of the great international bankers toward the international debts. Vast profits might be realized by their funding and the flotation of the immense bond issues this would entail. Yet these bankers regard these debts as almost impossible of payment, as choking the economic recovery of the world, and look favorably on the proposal to write them off at least in great part-while popular opinion is against their cancellation. Many great speeches were made at

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this Convention on the all-engrossing subject of aiding in European economic revival-speeches which for solid merit would have stood out among those made at any international financial conference yet held but the address of the Hon. Reginald McKenna, chairman of one of the world's greatest banks, the London Joint City and Midland, Ltd., and former Chancellor of the Exchequer of the

British Empire, was easily the most important event of the meeting. He chose for his subject "The Reparations and the Interallied Debts." The simplicity to which he reduced the complex factors of international financial relationships, the exactness of his data, and the authority with which he spoke carried unwilling conviction to many that the methods heretofore applied to the untangling of the international web in which trade and finance are enmeshed are all wrong.

He set forth that Great Britain alone of the debtor nations is in a position enabling her to pay her foreign debts. Such debts can be liquidated only from assets accumulated abroad or by an excess of exports over imports. Britain alone possesses the assets abroad in vol. ume sufficient to pay.

And the payment of the German reparations is by the very nature of things limited to the same methods!

His estimate of German assets held abroad, and therefore available for reparation payments, is in substantial agreement with that of John Maynard Keynes-about a round billion dollars. Germany has already paid about twice that amount, largely by the sale of marks. Beyond this she cannot pay except by the extension of her export trade, which would enable her to accumulate other assets only to the amount by which her exports exceeded imports.

He described with great minuteness the method by which France discharged her indemnity to Germany fifty years ago, partly in gold and partly by the transfer of commercial bills of exchange and other foreign assets, unduly extending her own export and Germany's import trade. The gold transfused into Germany's circulating medium disar


Central News

EXECUTIVE COMMITTEE OF THE AMERICAN BANKERS ASSOCIATION Left to right, front row, James Reingold, of Denver; John R. Washburn; Donald A. Mullen, Secretary. Back row: Charles H. Meyer; Francis Coates, Jr., of Cleveland, Chairman; C. W. Allendoerfer, of Kansas City; T. J. Hartman, of Tulsa, Oklahoma; John R. Downey; Raymond F. McNally


ranged her price level. The great influx of imported goods depressed her industries. French trade and boomed, and he almost believed the remark attributed to Bismarck, that the next time he defeated France he would insist on Germany's paying an indemnity.

He believes the question of what Germany can ultimately pay is capable of being answered, but "the answer runs counter to the popular hopes, the popular passions, and to something more formidable still, a popular sense of natural justice which prescribes that the defeated enemy which planned the war should make good the damage suffered by the victors."

It is worth while to note that Britain's foreign investments which Mr. McKenna proposes to turn over to the United States are not to any great extent American investments, such assets having been sold early in the war to purchase war supplies here. They are mostly investments in other lands and payable in sterling. The problem of converting their sterling proceeds into dollars would still remain to plague the exchange market.

Regarding the implication that payment of the reparations and international debts by exporting goods must necessarily depress industry in the countries receiving the same, I hope to some time take a day or two off from my job of keeping tabs on foreign affairs, and clear up this paradox of a nation being impoverished by an inundation of desirable commodities, the mere statement of which is an affront to common sense.

Mr. McKenna had able assistance. President John McHugh, of the Mechanics and Metals Bank of New York, one-time head of a projected $100,000,000

foreign trade financing corporation which looked over the foreign trade field and decided there was too much risk and too little prospective profit therein to justify the venture, prepared the ground for the former Chancellor by laying bare the fact that much of the present commercial chaos was the result of selling goods abroad on credit in such volume that the international scale pans had become hopelessly unbalanced. He believed that without a revival of European production and export there was no remedy for the situation. He urged the cancellation of such part of the foreign debt as was incurred in prosecuting the war as a measure to restore world commercial and financial stability. He deprecated financing exports beyond balancing imports, but would give Europe a chance to pay for her purchases.

Thomas W. Lamont spoke in similar vein, condemning the action of Congress in so tying the hands of the Debt Refunding Commission that the only proposition it can make to the debtor nations is to "sign on the dotted line" agreements to make impossible payments. Of the new Tariff Law, he said it protects a lot of industries which do not need protection while cutting off from our farmers and manufacturers a lot of markets ready to buy our commodities.

the Convention can do no harm, and it may do some good:

We believe that the time has come for the Government of this country to formulate the principles on which it will be able to co-operate with other nations to bring about the needed rehabilitation of European countries and peace in the world.


Some of the speeches merit friendly criticism. The retiring President of the Association, Thomas B. McAdams, in an address marked by broad liberalism, Ichided the banker who fears to speak his mind lest some depositor disagree with him. This is hardly applicable to the present situation. The banker in charge of other people's money is scarcely to be blamed for being timorous about condemning a universal superstition which, like trade obstruction, blocks the progress of the world but is devoutly believed in by the great mass of business men. His advice to bankers to take a more active part in politics is economically sound, but I am not so sure of its practical wisdom, because I know the disposition of a large part of the people, influenced by yellow journals, to suspect any and all measures recommended by bankers as inspired by sinister motives.

While the spirit of liberalism was dominant in this Convention of the "Money Power," there were discords. The address of L. F. Loree, President of the Delaware and Hudson Railroad Company, was one of these discords. His criticisms of "Labor Unions" were undeniably sound, but marred by his very obvious hostility to them. Unions are very democratically organized, and officials hold their positions by producing results, or they go out. The unions will no more accept Mr. Loree's plan of State supervision than will some associations of capitalists, as, for example, the New York Stock Exchange. Really, it were better to demonstrate to them in a more friendly way the futility of their uneconomic methods, the real source and limitations of wages, and how a smaller money wage, with a fair readjustment of rents and prices, might purchase a better standard of living than they now enjoy. They are not the only people who believe prosperity is to be found in scarcity of and high prices for the thing they have to sell. Mr. Lamont's speech was a good antidote for that of Mr. Loree.

Despite the numerous expressions of optimism heard at the Convention, I thought I detected beneath the hopeful words a feeling of pessimism-an apprehension that, after all, the fears of an economic collapse in Europe repeatedly expressed by Frank A. Vanderlip may be well founded. This is not to say that the international bankers have no idea of how Europe may be saved, but they are by no means sanguine of getting done the things that must be done, which, as Mr. McKenna pointed out, run so contrary to the popular idea. It The following resolution adopted by is reported in the papers that "Washing

Alvin W. Krech, President of the Equitable Trust Company, of New York, speaking on "Keeping Faith with Europe," asserted that this faith would be kept when Europe "replaced the snarling and bickering and quarreling with sound principles, mutual understanding, and mutual co-operation." The thought that we might assist in allaying this quarreling may be detected in his criticism of our trade policy.

ton is cold to the suggestion of debt cancellation." It does indeed seem improbable that anything said in the speeches will affect American official action or public opinion for a considerable time to come, and they may produce an effect the opposite of that intended. Washington sees, not the impossibility of collecting the debts, which has been demonstrated before, but only that they are valid debts. It believes not Moses and the prophets; why should it believe mere bankers?

Mr. McKenna's subsequent remark that from her South African mines Great Britain could pay the interest and sinking fund on her debt in gold reminds me of the perfectly valid threat of another Englishman: "We'll pay the debt in gold until you are up to your

necks in it and cry for help." The prospect of such enormous additions to our present stock of gold is simply terrifying to the economist who sees its inevitable effect on our price levels.

Some interesting personages were among the 9,000 bankers from all parts of the country assembled there. John A. Stewart, with a century of life behind him, who was one of the Government's trusted advisers in the days of the Civil War, was among them. George F. Baker, reputed to be the only surviving charter member of the Association and now perhaps the most powerful financial magnate of them all, was another.

A lot of work of interest to bankers was done. The Convention recorded itself strongly against the extension of branch banking to the National banks,

though Walter E. Frew, President of the Corn Exchange Bank and newly elected head of the New York Clearing House Association, is quite as strongly in favor of it. Mr. McKenna in the course of his address, comparing the American and British banking systems, stated that the ten thousand or so banks in Great Britain are branches of thirty-nine central banks, five of the latter controlling three-quarters of them.

John Huegin Puelicher, President of the Marshall & Ilsley Bank, of Milwaukee, who took an active part in our war finances and has been prominent in banking and educational work through the American Institute of Banking, is the new President of the Association, succeeding Mr. McAdams.

New York, October 5, 1922.




HE friendship between Field Marshal Sir Henry Wilson and Marshal Foch made its mark upon the world's history. I had the little story which follows from Sir Henry Wilson's own lips, when we were serving together on the Directing Staff of the Army Staff College at Camberley. There, as at all similar establishments for the higher training of staff officers, in Britain and abroad, it was the practice to work out academically the possible military results of the policy of our own and other countries should that policy lead to war. The possible use of the British Expeditionary Force alongside the French army under the conditions which subsequently materialized in 1914 was one of the most interesting of our academic schemes.

Wilson used to talk it over with his friends at the French Staff College (Ecole Supérieur de Guerre). One day he said to Foch: "How many British soldiers would the French army want alongside it at first?" Foch replied: "One. He will be killed;" meaning of course that, if so, Britain would be in it to the last man. About 80,000 British troops stood at Mons in August, 1914, guarding the left of the French army against von Kluck's turning movement. Over 8,000,000 were in arms by the date of the armistice, four and a half years later, and over 800,000 had sacrificed their lives to the cause.

In one of Wilson's last public speeches as Chief of the General Staff, a post that he gave up a few weeks before he was murdered, he warned his country that when once a military force, however small, is sent to a foreign country it is impossible to foresee the extent of the military commitments involved. The position in Turkey reminds us of those words, and it is interesting to recall the events which led up to the present situation (September 28, 1922).

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Having served in Whitehall during the momentous years 1918 and 1919 when peace terms were being considered, I can vouch from personal knowledge for the fact that Britain did not wish to undertake the responsibility for guarding the Straits and for occupying Constantinople. It was hoped that America, known to be closely interested in the protection of minorities in Turkey, and not having been at war with that country, would have been willing to accept the charge; but soon it became clear that this hope was not to be fulfilled. The period intervening between those


days and the present can be dealt with briefly.

Just before the terms of the still-born Treaty of Sèvres were published, Mr. Lloyd George announced that the guardianship of the Straits was to be "our charge." Neither France nor Italy could spare the necessary troops. Guardianship of the Straits presumably means keeping the channels open for the safe passage of the merchant vessels of all nations. The position about warships is more complicated. The Straits were closed to them by an agreement between the European Powers which followed

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