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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.






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

P. and A. Photos


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 volume 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 industry 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, chided 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 collect ing 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 Mar

shal Sir Henry Wilson and Mar

shal 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

the Turco-Egyptian War of 1832-41, in which Prussia, Austria, Russia, and Great Britain bore their part. They remained closed until the Great War. In August, 1914, the Turks opened them to the Goeben and Breslau, and the Germans abused their hospitality by hoisting the Turkish flag on these vessels and bombarding Russian Black Sea ports, thus bringing Turkey into the war. This question of the free use of the Straits by men-of-war is in need of settlement. It has been brought to a head of late when Greek war-vessels passed into the Black Sea and bombarded Samsoun.

The Turkish forts, mine fields, and mobile ordnance which defended the channels have been destroyed, but in order to insure security for merchant ships it is necessary to prevent any mobile ordnance likely to fire upon them from being mounted within range either of the Dardanelles or the Bosphorus. The method, under the Treaty of Sèvres, of insuring this condition is to establish "neutral zones" on both sides of each of these channels, and upon Britain has fallen the chief burden of the defense of these zones. Those on the European side we can call the Constantinople and Gallipoli zones, those on the Asiatic side the Scutari and Chanak zones, covering the Bosphorus and the Dardanelles, respectively. Their defense has been conducted impartially. The Kemalists were

driven off when they first invaded the Scutari zone last year, but, unfortunately, we could not ourselves provide sufficient troops for the purpose at the time, and, in conjunction with France and Italy, we called in the aid of the Greeks. Immediately afterwards, on their own responsibility, they embarked upon operations far into the interior of Asia Minor, which have ended in disaster, culminating in the sack of Smyrna by the Turks. We also kept the Greeks from violating the zones. When the Greek army in Thrace recently threatened the Constantinople zone, it was warned off by the British, French, and Italian High Commissions. The latest development, as I write this, is that the Kemalist Turks, flushed with their victory over the Greeks, have invaded the Chanak zone, and the French and Italians (who for some time have been supplying war material to the Kemalists) have withdrawn their detachments from that zone, leaving the British, unsupported, to defend an area which measures about thirty miles in width by ninety in length, extending from the Sea of Marmora to the Egean.

The future is in the lap of the gods. When the Kemalist Turks violated the Chanak zone, they had already been told by Sir Charles Harington, the British general commanding the Allied forces, that any attempt at such violation would be "resisted by all the naval and military

forces available," as the Greeks were told when they approached the Constantinople zone. The latest news is that the Turks are mounting guns at Erenkeui, south of Chanak, and within range of the channel. Let us hope that wise counsels will prevail and the zone will be reneutralized (to coin a new word). If not, it may become the scene of a conflict in which Britain-at present unsupported, but with assistance promised from Australia and New Zealand-will again bear the brunt of a conflict embarked upon, not in her own interests, but in the interests of other nations.

From the purely local point of view, it is clear that, given sea command, it is easier to pour troops from the sea into the zone than it is to reinforce an opposing army from Asia Minor, a country deficient both in communications and supplies. But the real point at issue is not the neutrality of the Straits or the sovereignty of the Turk over Constantinople (these points have been conceded), but the future Turkish frontier in Thrace.

If the League of Nations, with the help of America, can settle that question, it will come into its own by putting out a spark which may otherwise kindle a blaze in the Balkans, spreading into a conflagration likely to extend over Europe and Asia.

Woodford, Salisbury, England.
September 28, 1922.





ADICALISM is rebellion against the golden (capitalist) rule.

How strange that the golden rule, which means to us the rule for man's best conduct, may be used by some to mean the hated rule of gold or capitalism. One means fraternal good will, the other tyranny.

The world is full of strange contradictions. The Jew who has both oppressed and been oppressed is to-day as active as ever and as much feared and hated in Europe.

Propagandists, who bribe and are bribed, preach Christian charity and pass the hat for the benefit of human haters.

Countries which rest on a corner-stone of liberty and equality make strenuous efforts to foster classes and organizations which are pledged to destroy liberty of opportunity and freedom to labor.

Our souls are wrung because of the hard fate of European nations, but if we loan them money they fight over it and what is not divided up in commissions is appropriated for the demands of the day and not to build a solid to-morrow. The good man left his quiet home in 1914. After eight years of absence he is a wreck. He has fought and suffered or principle, but he has become vain,

greedy, lazy, full of advice for others and excuses for himself, extravagant, corrupt, and drunken.

Something must save him, restore him in mind and soul, make him again the honest, kind, truthful, peaceful citi


In our pride we have been prescribing medicine when it is a case for surgery. Something must reach his heart and soul.

The theory of the Christian religion fits the case perfectly, but we have seen how poorly it works in modern times. We are most of us nominal believers, but the fires have died out on the altars of the churches and the homes. The priesthood are interested in comfortable living and in self-preservation for themselves and their flocks. This preservation is only partially related to salvation. Salvation is only needed to offset damnation, which is no longer feared.

If we turn to the Old Testament, we find the Lord sending warnings to nations against too much prosperity, threatening to send wars, famines, and pestilence. The next pages tells us that he kept his word, the captains of industry went broke; the money loaners (oh, Isaac!) were ruined, and the midnight frolickers were one with the grafter in

begging bread. A multitude died, the rest went to work. Thus ended a chapter. Several other chapters relate the story with hardly enough variety to make interesting reading.

That is all old stuff. History repeats itself, perhaps, but really there isn't such a God, and he doesn't actually send warnings, does he? We must admit that we have risen above religious superstitions! We now approach all questions of the future with well-poised minds; but we don't like to break a looking-glass, and we positively will not sit thirteen at a table. Some one is smiling at us: perhaps it is the devil, who credits himself with doing a good job.

I did not intend to write on a religious subject, but what is the use of beating around the bush? The world is to-day without authority. It cannot exist, as at present organized, without authority. Unless some preacher comes to the front who can tell us of our sins and of a judgment to come; unless some Christ can, with whip in hand, drive us moneychangers from the temples of corruption, force us looters, liars, and diplomats back to work; unless some God will have pity on us miserable sinners, and incline our hearts to keep his laws of industry, sobriety, and fair dealing, we are done

for, and modern civilization, with its class graft, and idleness, vanity and viciousness, dishonest propaganda and pompous virtue, will jazz itself to de struction. Listen to the music! The world is on its way.

And now come a few tedious details to add to what you already know.

It is practically impossible for an honest man to compete for business now being placed by European nations. From ten to fifteen per cent must be paid to go-betweens; even then some one may bid higher.

A recent transaction was closed for a large lot of Government supplies; the price was one-third higher than the regular price. The terms were cash, and it was paid for. It is not always easy to know where material goes. Recently an order was placed in London by a Swedish company; the goods were shipped to Germany, and forwarded to Russia. Was it Russian gold, German gold, or Swedish gold that went to pay for it? How much "commission" fell to the lot of the officials and introducers along the route?

There is so much competition among

the sellers that all too often conscience is superseded by expediency. The easy way is to accept the suggestion of the buyer-it is also the rotten way. Munitions in some form are moving from Allied countries to Russia via German correspondence and influence. The things that Germany will need for military organizations either at home or in Russia are being procured, regardless of peaceful reasons. Some mechanical elements, some parts of explosive mechanisms, are going in quantities. An English electric manufacturer told me that some things in his line bought recently could be used only with munitions of war.

If you and I know this now, Poincaré has known it for some time. You say, "If the French had been less insistent Germany would be less defiant." The probable fact is that Germany is deliberately wrecking her finances and her prosperity rather than pay indemnities to France. France had two very plain courses-cancel claims on Germany or insist on their payment. The first involves ignominious retreat, national degradation, and a revolution at home The second means carrying out the Ver

sailles Treaty, with or without Allied assistance. This may bring on war, but war is probably more welcome than the triumph of the Teuton.

The British have a detached but negative attitude toward France. Not all are pro-Boche by any means, but in their present security they are impatient of impediments to business restoration. It is little to them to ask France to forget and forgive. I passed the Edith Cavel! statue to-day. If it had not already been built, I doubt if anything of the kind would be proposed just now. It would be considered as needlessly provocative.

Candidly, there is little hope of cooperation in the near future between France and England. Their conditions of security and interest are almost opposite. If a war breaks out on the Continent, England is not more apt to get into it than we are. Nobody has much with which to pay, and neither England nor America would profit by it. Indeed, the strain would probably burst some of our bubbles of inflation and we should illustrate the consequences of the wrath of God.

London, England.




HE visit of an Oxford Union debating team to American shores, as Mr. George Moore pointed out in these columns, is a new thing in the relations of English and American universities. It is a new thing for the Union. The visit is bound to start comparisons of standards and values. That these may be just and fruitful it is necessary to understand something of the unique place which the Oxford Union enjoys in England, both as a school for speakers and as a preparation for public life.

I have participated both in American intercollegiate debates and in the debates of the Oxford Union, and as a means of pleasure and development I incline to prefer the latter. But here I need only point out that the two systems are different. As ours is calculated on the basis of a public competition and outside judges and set discussion of a defined issue, so the English is fitted to the needs of a student debating society and cut to the parliamentary model. The Oxford Union is this society at Oxford. Founded in 1823, it is a general students' club, like the university unions in this country. But Oxford goes further, and adds a debating hall, modeled upon the House of Commons, a long galleried room with a high president's chair and Government and Opposition benches. Here the Union debates are held every Thursday of term, in a style, after a tradition, which belong to Oxford and Cambridge alone.

The Oxford procedure is that of a de


bating society; but the caliber is that of our best forensic work, and the atmosphere is the incommunicable one of a fine parliamentary tradition. At every meeting a motion, usually political, is debated "in public business" from halfpast eight to half-past eleven. It is phrased in general terms, and is accepted with no quibbling intention but in its broad issues. Two members propose it, and two oppose. These four, whose names appear on the notice paper, are, like the officers, in evening dress They speak throughout to "Mr. President," and refer to other members always in the third person and never by name. They speak for or against the motion on any ground that pleases them, and with much or little reference to what their colleague has said. They occupy ten to twenty minutes, but are not sharply limited. After the fourth speaker, the motion is open for debate by the house generally; and fifteen or twenty more members will have time for brief speeches before the hour arrives at which to close the debate. Then the question is put. The remaining members range themselves on the Government or Opposition benches, to be counted. Their total, together with the votes of those who have gone out through the Aye door or No door, makes the division and settles the fate of the motion. The average division is between 150 and 400, all Union members. Visitors attend only in the gallery.

The whole procedure has the stamp of individuality upon it. Within the outer

wall of ceremony, it is free and informal. No one is there to teach speakers how to stand or gesture. There is no rigid time limit. Humor flows freely, and almost always from out the argument. The audience, composed largely of the speak ers, pronounces judgment. As an audience it is the most critical (in no captious sense) that I ever spoke to. Though usually good-humored and always fair, it has a mind which must be grappled. And the point is, that every advance which one makes in power of speaking, every step in technique, is made in relation to the big central problem of driving an idea across that mind.

So much for the outlines of a Union evening. Its color is always different. The most personal humor and the best repartee come in question time, when the President announce "The officers will answer questions concerning the discharge of their official duties." At once a saturnine individual in a dinner coat rises from a back bench and drawls in his most insinuating tone, "Mr. President, can you tell me where flies go in the winter time?" The President can only say that there are none on him. "Mr. President," sings the slim Irishman who rises from the Committee bench, "may I ask you a question?" "Certainly, sir." "Will you come to tea Saturday?" The air of jaunty and sweeping generosity thrown into this query justifies the shouts of laughter which greet it. But the house is getting weary of the absurd. "Sir," says a tall man who is to s on the paper, "may I ask you a

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